[Federal Register Volume 68, Number 230 (Monday, December 1, 2003)]
[Rules and Regulations]
[Pages 67338-67352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-55531]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 10 and 163


Implementation of the Andean Trade Promotion and Drug Eradication 
Act

CFR Correction

    Title 19 of the Code of Federal Regulations, Parts 1 to 140 and 
Parts 141 to 199, revised as of April 1, 2003, is corrected by 
incorporating the following amendments, originally published at 68 FR 
14486-14500, Mar. 25, 2003. See also the Federal Register correction 
appearing in this part V.

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

0
1. In Parts 1 to 140, on page 82, the specific authority citation for 
Sec. Sec.  10.201 through 10.207 is revised to read, and a new specific 
authority citation for Sec. Sec.  10.241 through 10.248 and Sec. Sec.  
10.251 through 10.257 is added to read, as follows:

* * * * *
    Sections 10.201 through 10.207 also issued under 19 U.S.C. 3203;
* * * * *
    Sections 10.241 through 10.248 and Sec. Sec.  10.251 through 
10.257 also issued under 19 U.S.C. 3203.


0
2. On page 172, Sec.  10.201 is revised to read as follows:


Sec.  10.201  Applicability.

    Title II of Pub. L. 102-182 (105 Stat. 1233), entitled the Andean 
Trade Preference Act (ATPA) and codified at 19 U.S.C. 3201 through 
3206, authorizes the President to proclaim duty-free treatment for all 
eligible articles from any beneficiary country and to designate 
countries as beneficiary countries. The provisions of Sec. Sec.  10.202 
through 10.207 set forth the legal requirements and procedures that 
apply for purposes of obtaining that duty-free treatment for certain 
articles from a beneficiary country which are identified for purposes 
of that treatment in General Note 11, Harmonized Tariff Schedule of the 
United States (HTSUS), and in the ``Special'' rate of duty column of 
the HTSUS. Provisions regarding preferential treatment of apparel and 
other textile articles under the ATPA are contained in Sec. Sec.  
10.241 through 10.248, and provisions regarding preferential treatment 
of tuna and certain other non-textile articles under the ATPA are 
contained in Sec. Sec.  10.251 through 10.257.


0
3. On pages 172 and 173, in Sec.  10.202, the introductory text is 
amended by removing the reference ``10.208'' and adding, in its place, 
the reference ``10.207'', and paragraph (b) is amended by removing 
paragraphs (b)(1) through (b)(8) and adding, in their place, new 
paragraphs (b)(1) through (b)(4) to read as follows:


Sec.  10.202  Definitions.

* * * * *
    (b) * * *
    (1) Textiles and apparel articles which were not eligible articles 
for purposes of the ATPA on January 1, 1994, as the ATPA was in effect 
on that date, except as otherwise provided in Sec. Sec.  10.241 through 
10.248;
    (2) Rum and tafia classified in subheading 2208.40, Harmonized 
Tariff Schedule of the United States;
    (3) Sugars, syrups, and sugar-containing products subject to over-
quota duty rates under applicable tariff-rate quotas; or
    (4) Tuna prepared or preserved in any manner in airtight 
containers, except as otherwise provided in Sec. Sec.  10.251 through 
10.257.
* * * * *

0
4. On page 81, Sec.  10.208 is removed from the table of contents for 
part 10, and on page 177, Sec.  10.208 is removed.


0
5a. On page 81, a new center heading, followed by new Sec. Sec.  10.241 
through 10.248, is added to the table of contents for part 10 to read 
as follows:

Apparel and Other Textile Articles Under the Andean Trade Promotion and 
Drug Eradication Act

Sec.
10.241 Applicability.
10.242 Definitions.
10.243 Articles eligible for preferential treatment.
10.244 Certificate of Origin.
10.245 Filing of claim for preferential treatment.
10.246 Maintenance of records and submission of Certificate by 
importer.
10.247 Verification and justification of claim for preferential 
treatment.
10.248 Additional requirements for preferential treatment of 
brassieres.


0
5b. On page 207, a new center heading, followed by new Sec. Sec.  
10.241 through 10.248, is added to read as follows:

Apparel and Other Textile Articles Under the Andean Trade Promotion 
and Drug Eradication Act


Sec.  10.241  Applicability.

    Title XXXI of Public Law 107-210 (116 Stat. 933), entitled the 
Andean Trade Promotion and Drug Eradication Act (ATPDEA), amended 
sections 202, 203, 204, and 208 of the Andean Trade Preference Act (the 
ATPA, 19 U.S.C. 3201-3206) to authorize the President to extend 
additional trade benefits to countries that are designated as 
beneficiary countries under the ATPA. Section 204(b)(3) of the ATPA (19 
U.S.C. 3203(b)(3)) provides for the preferential treatment of certain 
apparel and other textile articles from those ATPA beneficiary 
countries which the President designates as ATPDEA beneficiary 
countries. The provisions of Sec. Sec.  10.241 through 10.248 of this 
part set forth the legal requirements and procedures that apply for 
purposes of obtaining preferential treatment pursuant to ATPA section 
204(b)(3) and Subchapter XXI, Chapter 98, HTSUS.


Sec.  10.242  Definitions.

    When used in Sec. Sec.  10.241 through 10.248, the following terms 
have the meanings indicated:
    Apparel articles. ``Apparel articles'' means goods classifiable in 
Chapters 61 and 62 and headings 6501, 6502, 6503, and 6504 and 
subheadings 6406.99.15 and 6505.90 of the HTSUS.
    Assembled or sewn or otherwise assembled in one or more ATPDEA 
beneficiary countries. ``Assembled'' and ``sewn or otherwise 
assembled'' when used in the context of production of an apparel or 
other textile article in one or more ATPDEA beneficiary countries has 
reference to a joining together of two or more components that occurred 
in one or more ATPDEA beneficiary countries, whether or not a prior 
joining operation

[[Page 67339]]

was performed on the article or any of its components in the United 
States.
    ATPA. ``ATPA'' means the Andean Trade Preference Act, 19 U.S.C. 
3201-3206.
    ATPDEA beneficiary country. ``ATPDEA beneficiary country'' means a 
``beneficiary country'' as defined in Sec.  10.202(a) for purposes of 
the ATPA which the President also has designated as a beneficiary 
country for purposes of preferential treatment of apparel and other 
textile articles under 19 U.S.C. 3203(b)(3) and which has been the 
subject of a determination by the President or his designee, published 
in the Federal Register, that the beneficiary country has satisfied the 
requirements of 19 U.S.C. 3203(b)(5)(A)(ii).
    Chief value. ``Chief value'' when used with reference to llama, 
alpaca, and vicu[ntilde]a means that the value of those materials 
exceeds the value of any other single textile material in the fabric or 
component under consideration, with the value in each case determined 
by application of the principles set forth in Sec.  10.243(c)(1)(ii).
    Cut in one or more ATPDEA beneficiary countries. ``Cut'' when used 
in the context of production of textile luggage in one or more ATPDEA 
beneficiary countries means that all fabric components used in the 
assembly of the article were cut from fabric in one or more ATPDEA 
beneficiary countries, or were cut from fabric in the United States and 
used in a partial assembly operation in the United States prior to 
cutting of fabric and assembly of the article in one or more ATPDEA 
beneficiary countries, or both.
    Foreign. ``Foreign'' means of a country other than the United 
States or an ATPDEA beneficiary country.
    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    Knit-to-shape components. ``Knit-to-shape,'' when used with 
reference to textile components, means components that are knitted or 
crocheted from a yarn directly to a specific shape containing a self-
start edge. Minor cutting or trimming will not affect the determination 
of whether a component is ``knit-to-shape.''
    Luggage. ``Luggage'' means travel goods (such as trunks, hand 
trunks, lockers, valises, satchels, suitcases, wardrobe cases, 
overnight bags, pullman bags, gladstone bags, traveling bags, 
knapsacks, kitbags, haversacks, duffle bags, and like articles designed 
to contain clothing or other personal effects during travel) and brief 
cases, portfolios, school bags, photographic equipment bags, golf bags, 
camera cases, binocular cases, gun cases, occupational luggage cases 
(for example, physicians' cases, sample cases), and like containers and 
cases designed to be carried with the person. The term ``luggage'' does 
not include handbags (that is, pocketbooks, purses, shoulder bags, 
clutch bags, and all similar articles, by whatever name known, 
customarily carried by women or girls). The term ``luggage'' also does 
not include flat goods (that is, small flatware designed to be carried 
on the person, such as banknote cases, bill cases, billfolds, bill 
purses, bill rolls, card cases, change cases, cigarette cases, coin 
purses, coin holders, compacts, currency cases, key cases, letter 
cases, license cases, money cases, pass cases, passport cases, powder 
cases, spectacle cases, stamp cases, vanity cases, tobacco pouches, and 
similar articles).
    NAFTA. ``NAFTA'' means the North American Free Trade Agreement 
entered into by the United States, Canada, and Mexico on December 17, 
1992.
    Preferential treatment. ``Preferential treatment'' means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States free of duty and free of any quantitative 
restrictions, limitations, or consultation levels as provided in 19 
U.S.C. 3203(b)(3).
    Wholly formed fabric components. ``Wholly formed,'' when used with 
reference to fabric components, means that all of the production 
processes, starting with the production of wholly formed fabric and 
ending with a component that is ready for incorporation into an apparel 
article, took place in a single country.
    Wholly formed fabrics. ``Wholly formed,'' when used with reference 
to fabric(s), means that all of the production processes, starting with 
polymers, fibers, filaments, textile strips, yarns, twine, cordage, 
rope, or strips of fabric and ending with a fabric by a weaving, 
knitting, needling, tufting, felting, entangling or other process, took 
place in a single country.
    Wholly formed yarns. ``Wholly formed,'' when used with reference to 
yarns, means that all of the production processes, starting with the 
extrusion of filament, strip, film, or sheet and including drawing to 
fully orient a filament or slitting a film or sheet into strip, or the 
spinning of all fibers into yarn, or both, and ending with a yarn or 
plied yarn, took place in the United States or in one or more ATPDEA 
beneficiary countries.


Sec.  10.243  Articles eligible for preferential treatment.

    (a) General. Subject to paragraphs (b) and (c) of this section, 
preferential treatment applies to the following apparel and other 
textile articles that are imported directly into the customs territory 
of the United States from an ATPDEA beneficiary country:
    (1) Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries, or in the United States, or in both, 
exclusively from any one of the following:
    (i) Fabrics or fabric components wholly formed, or components knit-
to-shape, in the United States, from yarns wholly formed in the United 
States or in one or more ATPDEA beneficiary countries (including 
fabrics not formed from yarns, if those fabrics are classifiable under 
heading 5602 or 5603 of the HTSUS and are formed in the United States), 
provided that, if the apparel article is assembled from knitted or 
crocheted or woven wholly formed fabrics or from knitted or crocheted 
or woven wholly formed fabric components produced from fabric, all 
dyeing, printing, and finishing of that knitted or crocheted or woven 
fabric or component was carried out in the United States;
    (ii) Fabrics or fabric components formed, or components knit-to-
shape, in one or more ATPDEA beneficiary countries from yarns wholly 
formed in one or more ATPDEA beneficiary countries, if those fabrics 
(including fabrics not formed from yarns, if those fabrics are 
classifiable under heading 5602 or 5603 of the HTSUS and are formed in 
one or more ATPDEA beneficiary countries) or components are in chief 
value of llama, alpaca, and/or vicu[ntilde]a;
    (iii) Fabrics or yarns, provided that apparel articles (except 
articles classifiable under subheading 6212.10 of the HTSUS) of those 
fabrics or yarns would be considered an originating good under General 
Note 12(t), HTSUS, if the apparel articles had been imported directly 
from Canada or Mexico; or
    (iv) Fabrics or yarns that the President or his designee has 
designated in the Federal Register as fabrics or yarns that cannot be 
supplied by the domestic industry in commercial quantities in a timely 
manner;
    (2) Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries, or in the United States, or in both, 
exclusively from a combination of fabrics, fabric components, knit-to-
shape components or yarns described in two or more of paragraphs 
(a)(1)(i) through (a)(1)(iv) of this section;

[[Page 67340]]

    (3) A handloomed, handmade, or folklore apparel or other textile 
article of an ATPDEA beneficiary country that the President or his 
designee and representatives of the ATPDEA beneficiary country mutually 
agree is a handloomed, handmade, or folklore article and that is 
certified as a handloomed, handmade, or folklore article by the 
competent authority of the ATPDEA beneficiary country;
    (4) Brassieres classifiable under subheading 6212.10 of the HTSUS, 
if both cut and sewn or otherwise assembled in the United States, or in 
one or more ATPDEA beneficiary countries, or in both, other than 
articles entered as articles described in paragraphs (a)(1) through 
(a)(3) and (a)(7) of this section, and provided that any applicable 
additional requirements set forth in Sec.  10.248 are met;
    (5) Textile luggage assembled in an ATPDEA beneficiary country from 
fabric wholly formed and cut in the United States, from yarns wholly 
formed in the United States, that is entered under subheading 
9802.00.80 of the HTSUS;
    (6) Textile luggage assembled in one or more ATPDEA beneficiary 
countries from fabric cut in one or more ATPDEA beneficiary countries 
from fabric wholly formed in the United States from yarns wholly formed 
in the United States; and
    (7) Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries from fabrics or from fabric components 
formed, or from components knit-to-shape, in one or more ATPDEA 
beneficiary countries from yarns wholly formed in the United States or 
in one or more ATPDEA beneficiary countries (including fabrics not 
formed from yarns, if those fabrics are classifiable under heading 5602 
or 5603 of the HTSUS and are formed in one or more ATPDEA beneficiary 
countries), including apparel articles sewn or otherwise assembled in 
part but not exclusively from any of the fabrics, fabric components 
formed, or components knit-to-shape described in paragraph (a)(1) of 
this section.
    (b) Dyeing, printing, finishing and other operations--(1) Dyeing, 
printing and finishing operations. Dyeing, printing, and finishing 
operations may be performed on any yarn, fabric, or knit-to-shape or 
other component used in the production of any article described under 
paragraph (a) of this section without affecting the eligibility of the 
article for preferential treatment, provided that the operation is 
performed in the United States or in an ATPDEA beneficiary country and 
not in any other country and subject to the following additional 
conditions:
    (i) In the case of an article described in paragraph (a)(1), 
(a)(2), or (a)(7) of this section that contains a knitted or crocheted 
or woven fabric, or a knitted or crocheted or woven fabric component 
produced from fabric, that was wholly formed in the United States from 
yarns wholly formed in the United States, any dyeing, printing, or 
finishing of that knitted or crocheted or woven fabric or component 
must have been carried out in the United States; and
    (ii) In the case of assembled luggage described in paragraph (a)(5) 
of this section, an operation may be performed in an ATPDEA beneficiary 
country only if that operation is incidental to the assembly process 
within the meaning of Sec.  10.16.
    (2) Other operations. An article described under paragraph (a) of 
this section that is otherwise eligible for preferential treatment will 
not be disqualified from receiving that treatment by virtue of having 
undergone one or more operations such as embroidering, stone-washing, 
enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, 
garment-dyeing or screen printing, provided that the operation is 
performed in the United States or in an ATPDEA beneficiary country and 
not in any other country. However, in the case of assembled luggage 
described in paragraph (a)(5) of this section, an operation may be 
performed in an ATPDEA beneficiary country without affecting the 
eligibility of the article for preferential treatment only if it is 
incidental to the assembly process within the meaning of Sec.  10.16.
    (c) Special rules for certain component materials--(1) Foreign 
findings, trimmings, interlinings, and yarns--(i) General. An article 
otherwise described under paragraph (a) of this section will not be 
ineligible for the preferential treatment referred to in Sec.  10.241 
because the article contains:
    (A) Findings and trimmings of foreign origin, if the value of those 
findings and trimmings does not exceed 25 percent of the cost of the 
components of the assembled article. For purposes of this section 
``findings and trimmings'' include, but are not limited to, sewing 
thread, hooks and eyes, snaps, buttons, ``bow buds,'' decorative lace 
trim, elastic strips, zippers (including zipper tapes), and labels;
    (B) Interlinings of foreign origin, if the value of those 
interlinings does not exceed 25 percent of the cost of the components 
of the assembled article. For purposes of this section ``interlinings'' 
include only a chest type plate, a ``hymo'' piece, or ``sleeve 
header,'' of woven or weft-inserted warp knit construction and of 
coarse animal hair or man-made filaments;
    (C) Any combination of findings and trimmings of foreign origin and 
interlinings of foreign origin, if the total value of those findings 
and trimmings and interlinings does not exceed 25 percent of the cost 
of the components of the assembled article; or
    (D) Yarns not wholly formed in the United States or in one or more 
ATPDEA beneficiary countries if the total weight of all those yarns is 
not more than 7 percent of the total weight of the article.
    (ii) ``Cost'' and ``value'' defined. The ``cost'' of components and 
the ``value'' of findings and trimmings or interlinings referred to in 
paragraph (c)(1)(i) of this section means:
    (A) The price of the components, findings and trimmings, or 
interlinings when last purchased, f.o.b. port of exportation, as set 
out in the invoice or other commercial documents, or, if the price is 
other than f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (2) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the freight, insurance, packing, and other costs incurred in 
transporting the components, findings and trimmings, or interlinings to 
the place of production if included in that price; or
    (B) If the price cannot be determined under paragraph (c)(1)(ii)(A) 
of this section or if Customs finds that price to be unreasonable, all 
reasonable expenses incurred in the growth, production, manufacture, or 
other processing of the components, findings and trimmings, or 
interlinings, including the cost or value of materials and general 
expenses, plus a reasonable amount for profit, and the freight, 
insurance, packing, and other costs, if any, incurred in transporting 
the components, findings and trimmings, or interlinings to the port of 
exportation.
    (iii) Treatment of yarns as findings or trimmings. If any yarns not 
wholly formed in the United States or one or more ATPDEA beneficiary 
countries are used in an article as a finding or trimming described in 
paragraph (c)(1)(i)(A) of this section, the yarns will be considered to 
be a finding or trimming for purposes of paragraph (c)(1)(i) of this 
section.
    (2) Special rule for nylon filament yarn. An article otherwise 
described under paragraph (a)(1)(i) through (iii), (a)(2), or (a)(7) of 
this section will not be

[[Page 67341]]

ineligible for the preferential treatment referred to in Sec.  10.241 
because the article contains nylon filament yarn (other than 
elastomeric yarn) that is classifiable in subheading 5402.10.30, 
5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 
5402.41.90, 5402.51.00, or 5402.61.00 of the HTSUS and that is entered 
free of duty from Canada, Mexico, or Israel.
    (d) Imported directly defined. For purposes of paragraph (a) of 
this section, the words ``imported directly'' mean:
    (1) Direct shipment from any ATPDEA beneficiary country to the 
United States without passing through the territory of any country that 
is not an ATPDEA beneficiary country;
    (2) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an 
ATPDEA beneficiary country, the articles in the shipment do not enter 
into the commerce of any country that is not an ATPDEA beneficiary 
country while en route to the United States and the invoices, bills of 
lading, and other shipping documents show the United States as the 
final destination; or
    (3) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an 
ATPDEA beneficiary country, and the invoices and other documents do not 
show the United States as the final destination, the articles in the 
shipment upon arrival in the United States are imported directly only 
if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.


Sec.  10.244  Certificate of Origin.

    (a) General. A Certificate of Origin must be employed to certify 
that an apparel or other textile article being exported from an ATPDEA 
beneficiary country to the United States qualifies for the preferential 
treatment referred to in Sec.  10.241. The Certificate of Origin must 
be prepared by the exporter in the ATPDEA beneficiary country in the 
format specified in paragraph (b) of this section. Where the ATPDEA 
beneficiary country exporter is not the producer of the article, that 
exporter may complete and sign a Certificate of Origin on the basis of:
    (1) Its reasonable reliance on the producer's written 
representation that the article qualifies for preferential treatment; 
or
    (2) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.
    (b) Form of Certificate. The Certificate of Origin referred to in 
paragraph (a) of this section must be in the following format:

BILLING CODE 1505-01-D

[[Page 67342]]

[GRAPHIC] [TIFF OMITTED] TR01DE03.016

BILLING CODE 1505-01-C

[[Page 67343]]

    (c) Preparation of Certificate. The following rules will apply for 
purposes of completing the Certificate of Origin set forth in paragraph 
(b) of this section:
    (1) Blocks 1 through 5 pertain only to the final article exported 
to the United States for which preferential treatment may be claimed;
    (2) Block 1 should state the legal name and address (including 
country) of the exporter;
    (3) Block 2 should state the legal name and address (including 
country) of the producer. If there is more than one producer, attach a 
list stating the legal name and address (including country) of all 
additional producers. If this information is confidential, it is 
acceptable to state ``available to Customs upon request'' in block 2. 
If the producer and the exporter are the same, state ``same'' in block 
2;
    (4) Block 3 should state the legal name and address (including 
country) of the importer;
    (5) Block 4 should provide a full description of each article. The 
description should be sufficient to relate it to the invoice 
description and to the description of the article in the international 
Harmonized System. Include the invoice number as shown on the 
commercial invoice or, if the invoice number is not known, include 
another unique reference number such as the shipping order number;
    (6) In block 5, insert the letter that designates the preference 
group which applies to the article according to the description 
contained in the CFR provision cited on the Certificate for that group;
    (7) Blocks 6 through 9 must be completed only when the block in 
question calls for information that is relevant to the preference group 
identified in block 5;
    (8) Block 6 should state the legal name and address (including 
country) of the fabric producer;
    (9) Block 7 should state the legal name and address (including 
country) of the yarn producer;
    (10) Block 8 should state the name of the folklore article or 
should state that the article is handloomed or handmade of handloomed 
fabric;
    (11) Block 9 should be completed if the article described in block 
4 incorporates a fabric or yarn described in preference group C or D 
and should state the name of the fabric or yarn that has been 
considered as being in short supply in the NAFTA or that has been 
designated as not available in commercial quantities in the United 
States. Block 9 also should be completed if preference group E or I 
applies to the article described in block 4 and the article 
incorporates a fabric or yarn described in preference group C or D;
    (12) Block 10 must contain the signature of the exporter or of the 
exporter's authorized agent having knowledge of the relevant facts;
    (13) Block 14 should reflect the date on which the Certificate was 
completed and signed;
    (14) Block 15 should be completed if the Certificate is intended to 
cover multiple shipments of identical articles as described in block 4 
that are imported into the United States during a specified period of 
up to one year (see Sec.  10.246(b)(4)(ii)). The ``from'' date is the 
date on which the Certificate became applicable to the article covered 
by the blanket Certificate (this date may be prior to the date 
reflected in block 14). The ``to'' date is the date on which the 
blanket period expires; and
    (15) The Certificate may be printed and reproduced locally. If more 
space is needed to complete the Certificate, attach a continuation 
sheet.


Sec.  10.245  Filing of claim for preferential treatment.

    (a) Declaration. In connection with a claim for preferential 
treatment for an apparel or other textile article described in Sec.  
10.243, the importer must make a written declaration that the article 
qualifies for that treatment. The inclusion on the entry summary, or 
equivalent documentation, of the subheading within Chapter 98 of the 
HTSUS under which the article is classified will constitute the written 
declaration. Except in any of the circumstances described in Sec.  
10.246(d)(1), the declaration required under this paragraph must be 
based on a Certificate of Origin that has been completed and properly 
executed in accordance with Sec.  10.244, that covers the article being 
imported, and that is in the possession of the importer.
    (b) Corrected declaration. If, after making the declaration 
required under paragraph (a) of this section, the importer has reason 
to believe that a Certificate of Origin on which a declaration was 
based contains information that is not correct, the importer must 
within 30 calendar days after the date of discovery of the error make a 
corrected declaration and pay any duties that may be due. A corrected 
declaration will be effected by submission of a letter or other written 
statement to the Customs port where the declaration was originally 
filed.


Sec.  10.246  Maintenance of records and submission of Certificate by 
importer.

    (a) Maintenance of records. Each importer claiming preferential 
treatment for an article under Sec.  10.245 must maintain in the United 
States, in accordance with the provisions of part 163 of this chapter, 
all records relating to the importation of the article. Those records 
must include a copy of the Certificate of Origin referred to in Sec.  
10.245(a) and any other relevant documents or other records as 
specified in Sec.  163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
treatment on an apparel or other textile article under Sec.  10.245(a) 
must provide, at the request of the port director, a copy of the 
Certificate of Origin pertaining to the article. A Certificate of 
Origin submitted to Customs under this paragraph:
    (1) Must be in writing or must be transmitted electronically 
through any electronic data interchange system authorized by Customs 
for that purpose;
    (2) If in writing, must be signed by the exporter or by the 
exporter's authorized agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:
    (i) A single importation of an article into the United States, 
including a single shipment that results in the filing of one or more 
entries and a series of shipments that results in the filing of one 
entry; or
    (ii) Multiple importations of identical articles into the United 
States that occur within a specified blanket period, not to exceed 12 
months, set out in the Certificate by the exporter. For purposes of 
this paragraph and Sec.  10.244(c)(14), ``identical articles'' means 
articles that are the same in all material respects, including physical 
characteristics, quality, and reputation.
    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port 
director

[[Page 67344]]

determined that a previously imported identical article covered by the 
Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:
    (i) An importation of an article for which the port director has in 
writing waived the requirement for a Certificate of Origin because the 
port director is otherwise satisfied that the article qualifies for 
preferential treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value does not 
exceed US$2,500, provided that, unless waived by the port director, the 
producer, exporter, importer or authorized agent includes on, or 
attaches to, the invoice or other document accompanying the shipment 
the following signed statement:

    I hereby certify that the article covered by this shipment 
qualifies for preferential treatment under the ATPDEA.
    Check One:

( ) Producer
( ) Exporter
( ) Importer
( ) Agent

----------------------------------
Name

----------------------------------
Title

----------------------------------
Address

----------------------------------
Signature and Date

    (2) Exception. If the port director determines that an importation 
described in paragraph (d)(1) of this section forms part of a series of 
importations that may reasonably be considered to have been undertaken 
or arranged for the purpose of avoiding a Certificate of Origin 
requirement under Sec. Sec.  10.244 through 10.246, the port director 
will notify the importer in writing that for that importation the 
importer must have in his possession a valid Certificate of Origin to 
support the claim for preferential treatment. The importer will have 30 
calendar days from the date of the written notice to obtain a valid 
Certificate of Origin, and a failure to timely obtain the Certificate 
of Origin will result in denial of the claim for preferential 
treatment. For purposes of this paragraph, a ``series of importations'' 
means two or more entries covering articles arriving on the same day 
from the same exporter and consigned to the same person.


Sec.  10.247  Verification and justification of claim for preferential 
treatment.

    (a) Verification by Customs. A claim for preferential treatment 
made under Sec.  10.245, including any statements or other information 
contained on a Certificate of Origin submitted to Customs under Sec.  
10.246, will be subject to whatever verification the port director 
deems necessary. In the event that the port director for any reason is 
prevented from verifying the claim, the port director may deny the 
claim for preferential treatment. A verification of a claim for 
preferential treatment may involve, but need not be limited to, a 
review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information regarding the country of 
origin of an article and its constituent materials, including, but not 
limited to, production records, information relating to the place of 
production, the number and identification of the types of machinery 
used in production, and the number of workers employed in production; 
and
    (3) Evidence to document the use of U.S. or ATPDEA beneficiary 
country materials in the production of the article in question, such as 
purchase orders, invoices, bills of lading and other shipping 
documents, and customs import and clearance documents.
    (b) Importer requirements. In order to make a claim for 
preferential treatment under Sec.  10.245, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the apparel or other textile article qualifies for 
preferential treatment. Those records must include documents that 
support a claim that the article in question qualifies for preferential 
treatment because it is specifically described in one of the provisions 
under Sec.  10.243(a). If the importer is claiming that the article 
incorporates fabric or yarn that was wholly formed in the United States 
or in an ATPDEA beneficiary country, the importer must have records 
that identify the producer of the fabric or yarn. A properly completed 
Certificate of Origin in the form set forth in Sec.  10.244(b) is a 
record that would serve these purposes;
    (2) Must establish and implement internal controls which provide 
for the periodic review of the accuracy of the Certificates of Origin 
or other records referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the ATPDEA beneficiary country to the United States. If the imported 
article was shipped through a country other than an ATPDEA beneficiary 
country and the invoices and other documents from the ATPDEA 
beneficiary country do not show the United States as the final 
destination, the importer also must have documentation that 
demonstrates that the conditions set forth in Sec.  10.243(d)(3)(i) 
through (iii) were met; and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this section justify the importer's claim for preferential 
treatment.


Sec.  10.248  Additional requirements for preferential treatment of 
brassieres.

    (a) Definitions. When used in this section, the following terms 
have the meanings indicated:
    (1) Producer. ``Producer'' means an individual, corporation, 
partnership, association, or other entity or group that exercises 
direct, daily operational control over the production process in an 
ATPDEA beneficiary country.
    (2) Entity controlling production. ``Entity controlling 
production'' means an individual, corporation, partnership, 
association, or other entity or group that is not a producer and that 
controls the production process in an ATPDEA beneficiary country 
through a contractual relationship or other indirect means.
    (3) Fabrics formed in the United States. ``Fabrics formed in the 
United States'' means fabrics that were produced by a weaving, 
knitting, needling, tufting, felting, entangling or other fabric-making 
process performed in the United States.
    (4) Cost. ``Cost'' when used with reference to fabrics formed in 
the United States means:
    (i) The price of the fabrics when last purchased, f.o.b. port of 
exportation, as set out in the invoice or other commercial documents, 
or, if the price is other than f.o.b. port of exportation:
    (A) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (B) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the freight, insurance, packing, and other costs incurred in 
transporting the fabrics to the place of production if included in that 
price; or
    (ii) If the price cannot be determined under paragraph (a)(4)(i) of 
this section or if Customs finds that price to be unreasonable, all 
reasonable expenses

[[Page 67345]]

incurred in the growth, production, manufacture, or other processing of 
the fabrics, including the cost or value of materials (which includes 
the cost of non-recoverable scrap generated in forming the fabrics) and 
general expenses, plus a reasonable amount for profit, and the freight, 
insurance, packing, and other costs, if any, incurred in transporting 
the fabrics to the port of exportation.
    (5) Declared customs value. ``Declared customs value'' when used 
with reference to fabric contained in an article means the sum of:
    (i) The cost of fabrics formed in the United States that the 
producer or entity controlling production can verify; and
    (ii) The cost of all other fabric contained in the article, 
exclusive of all findings and trimmings, determined as follows:
    (A) In the case of fabric purchased by the producer or entity 
controlling production, the f.o.b. port of exportation price of the 
fabric as set out in the invoice or other commercial documents, or, if 
the price is other than f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price, 
plus expenses for embroidering and dyeing, printing, and finishing 
operations applied to the fabric if not included in that price; or
    (2) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, plus 
expenses for embroidering and dyeing, printing, and finishing 
operations applied to the fabric if not included in that price, but 
less the freight, insurance, packing, and other costs incurred in 
transporting the fabric to the place of production if included in that 
price;
    (B) In the case of fabric for which the cost cannot be determined 
under paragraph (a)(5)(ii)(A) of this section or if Customs finds that 
cost to be unreasonable, all reasonable expenses incurred in the 
growth, production, or manufacture of the fabric, including the cost or 
value of materials (which includes the cost of non-recoverable scrap 
generated in the growth, production, or manufacture of the fabric), 
general expenses and embroidering and dyeing, printing, and finishing 
expenses, plus a reasonable amount for profit, and the freight, 
insurance, packing, and other costs, if any, incurred in transporting 
the fabric to the port of exportation;
    (C) In the case of fabric components purchased by the producer or 
entity controlling production, the f.o.b. port of exportation price of 
those fabric components as set out in the invoice or other commercial 
documents, less the cost or value of any non-textile materials, and 
less expenses for cutting or other processing to create the fabric 
components other than knitting to shape, that the producer or entity 
controlling production can verify, or, if the price is other than 
f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price, 
less the cost or value of any non-textile materials, and less expenses 
for cutting or other processing to create the fabric components other 
than knitting to shape, that the producer or entity controlling 
production can verify; or
    (2) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the cost or value of any non-textile materials, and less expenses for 
cutting or other processing to create the fabric components other than 
knitting to shape, that the producer or entity controlling production 
can verify, and less the freight, insurance, packing, and other costs 
incurred in transporting the fabric components to the place of 
production if included in that price; and
    (D) In the case of fabric components for which a fabric cost cannot 
be determined under paragraph (a)(5)(ii)(C) of this section or if 
Customs finds that cost to be unreasonable: all reasonable expenses 
incurred in the growth, production, or manufacture of the fabric 
components, including the cost or value of materials (which does not 
include the cost of recoverable scrap generated in the growth, 
production, or manufacture of the fabric components) and general 
expenses, but excluding the cost or value of any non-textile materials, 
and excluding expenses for cutting or other processing to create the 
fabric components other than knitting to shape, that the producer or 
entity controlling production can verify, plus a reasonable amount for 
profit, and the freight, insurance, packing, and other costs, if any, 
incurred in transporting the fabric components to the port of 
exportation.
    (6) Year. ``Year'' means a 12-month period beginning on October 1 
and ending on September 30 but does not include any 12-month period 
that began prior to October 1, 2002.
    (7) Entered. ``Entered'' means entered, or withdrawn from warehouse 
for consumption, in the customs territory of the United States.
    (b) Limitations on preferential treatment--(1) General. During the 
year that begins on October 1, 2003, and during any subsequent year, 
articles of a producer or an entity controlling production that conform 
to the production standards set forth in Sec.  10.243(a)(4) will be 
eligible for preferential treatment only if:
    (i) The aggregate cost of fabrics (exclusive of all findings and 
trimmings) formed in the United States that were used in the production 
of all of those articles of that producer or that entity controlling 
production that are entered as articles described in Sec.  10.243(a)(4) 
during the immediately preceding year was at least 75 percent of the 
aggregate declared customs value of the fabric (exclusive of all 
findings and trimmings) contained in all of those articles of that 
producer or that entity controlling production that are entered as 
articles described in Sec.  10.243(a)(4) during that year; or
    (ii) In a case in which the 75 percent requirement set forth in 
paragraph (b)(1)(i) of this section was not met during a year and 
therefore those articles of that producer or that entity controlling 
production were not eligible for preferential treatment during the 
following year, the aggregate cost of fabrics (exclusive of all 
findings and trimmings) formed in the United States that were used in 
the production of all of those articles of that producer or that entity 
controlling production that conform to the production standards set 
forth in Sec.  10.243(a)(4) and that were entered during the 
immediately preceding year was at least 85 percent of the aggregate 
declared customs value of the fabric (exclusive of all findings and 
trimmings) contained in all of those articles of that producer or that 
entity controlling production that conform to the production standards 
set forth in Sec.  10.243(a)(4) and that were entered during that year; 
and
    (iii) In conjunction with the filing of the claim for preferential 
treatment under Sec.  10.245, the importer records on the entry summary 
or warehouse withdrawal for consumption (Customs Form 7501, column 34), 
or its electronic equivalent, the distinct and unique identifier 
assigned by Customs to the applicable documentation prescribed under 
paragraph (c) of this section.
    (2) Rules of application--(i) General. For purposes of paragraphs 
(b)(1)(i) and (b)(1)(ii) of this section and for purposes of preparing 
and filing the documentation prescribed in paragraph (c) of this 
section, the following rules will apply:
    (A) The articles in question must have been produced in the manner 
specified in Sec.  10.243(a)(4) and the articles in

[[Page 67346]]

question must be entered within the same year;
    (B) Articles that are exported to countries other than the United 
States and are never entered are not to be considered in determining 
compliance with the 75 or 85 percent standard specified in paragraph 
(b)(1)(i) or paragraph (b)(1)(ii) of this section;
    (C) Articles that are entered under an HTSUS subheading other than 
the HTSUS subheading which pertains to articles described in Sec.  
10.243(a)(4) are not to be considered in determining compliance with 
the 75 percent standard specified in paragraph (b)(1)(i) of this 
section;
    (D) For purposes of determining compliance with the 85 percent 
standard specified in paragraph (b)(1)(ii) of this section, all 
articles that conform to the production standards set forth in Sec.  
10.243(a)(4) must be considered, regardless of the HTSUS subheading 
under which they were entered;
    (E) Fabric components and fabrics that constitute findings or 
trimmings are not to be considered in determining compliance with the 
75 or 85 percent standard specified in paragraph (b)(1)(i) or paragraph 
(b)(1)(ii) of this section;
    (F) Beginning October 1, 2003, in order for articles to be eligible 
for preferential treatment in a given year, a producer of, or entity 
controlling production of, those articles must have met the 75 percent 
standard specified in paragraph (b)(1)(i) of this section during the 
immediately preceding year. If articles of a producer or entity 
controlling production fail to meet the 75 percent standard specified 
in paragraph (b)(1)(i) of this section during a year, articles of that 
producer or entity controlling production:
    (1) Will not be eligible for preferential treatment during the 
following year;
    (2) Will remain ineligible for preferential treatment until the 
year that follows a year in which articles of that producer or entity 
controlling production met the 85 percent standard specified in 
paragraph (b)(1)(ii) of this section; and
    (3) After the 85 percent standard specified in paragraph (b)(1)(ii) 
of this section has been met, will again be subject to the 75 percent 
standard specified in paragraph (b)(1)(i) of this section during the 
following year for purposes of determining eligibility for preferential 
treatment in the next year.
    (G) A new producer or new entity controlling production, that is, a 
producer or entity controlling production who did not produce or 
control production of articles that were entered as articles described 
in Sec.  10.243(a)(4) during the immediately preceding year, must first 
establish compliance with the 85 percent standard specified in 
paragraph (b)(1)(ii) of this section as a prerequisite to preparation 
of the declaration of compliance referred to in paragraph (c) of this 
section;
    (H) A declaration of compliance prepared by a producer or by an 
entity controlling production must cover all production of that 
producer or all production that the entity controls for the year in 
question;
    (I) A producer would not prepare a declaration of compliance if all 
of its production is covered by a declaration of compliance prepared by 
an entity controlling production;
    (J) In the case of a producer, the 75 or 85 percent standard 
specified in paragraph (b)(1)(i) or paragraph (b)(1)(ii) of this 
section and the declaration of compliance procedure under paragraph (c) 
of this section apply to all articles of that producer for the year in 
question, even if some but not all of that production is also covered 
by a declaration of compliance prepared by an entity controlling 
production;
    (K) The U.S. importer does not have to be the producer or the 
entity controlling production who prepared the declaration of 
compliance; and
    (L) The exclusion references regarding findings and trimmings in 
paragraph (b)(1)(i) and paragraph (b)(1)(ii) of this section apply to 
all findings and trimmings, whether or not they are of foreign origin.
    (ii) Examples. The following examples will illustrate application 
of the principles set forth in paragraph (b)(2)(i) of this section.

    Example 1.  An ATPDEA beneficiary country producer of articles 
that meet the production standards specified in Sec.  10.243(a)(4) 
in the first year sends 50 percent of that production to ATPDEA 
region markets and the other 50 percent to the U.S. market; the cost 
of the fabrics formed in the United States equals 100 percent of the 
value of all of the fabric in the articles sent to the ATPDEA region 
and 60 percent of the value of all of the fabric in the articles 
sent to the United States. Although the cost of fabrics formed in 
the United States is more than 75 percent of the value of all of the 
fabric used in all of the articles produced, this producer could not 
prepare a valid declaration of compliance because the articles sent 
to the United States did not meet the minimum 75 percent standard.
    Example 2.  A producer sends to the United States in the first 
year three shipments of articles that meet the description in Sec.  
10.243(a)(4); one of those shipments is entered under the HTSUS 
subheading that covers articles described in Sec.  10.243(a)(4), the 
second shipment is entered under the HTSUS subheading that covers 
articles described in Sec.  10.243(a)(7), and the third shipment is 
entered under subheading 9802.00.80, HTSUS. In determining whether 
the minimum 75 percent standard has been met in the first year for 
purposes of entry of articles under the HTSUS subheading that covers 
articles described in Sec.  10.243(a)(4) during the following (that 
is, second) year, consideration must be restricted to the articles 
in the first shipment and therefore must not include the articles in 
the second and third shipments.
    Example 3. A producer in the second year begins production of 
articles that conform to the production standards specified in Sec.  
10.243(a)(4); some of those articles are entered in that year under 
HTSUS subheading 6212.10 and others under HTSUS subheading 
9802.00.80 but none are entered in that year under the HTSUS 
subheading which pertains to articles described in Sec.  
10.243(a)(4) because the 75 percent standard had not been met in the 
preceding (that is, first) year. In this case the 85 percent 
standard applies, and all of the articles that were entered under 
the various HTSUS provisions in the second year must be taken into 
account in determining whether that 85 percent standard has been 
met. If the 85 percent was met in the aggregate for all of the 
articles entered in the second year, in the next (that is, third) 
year articles of that producer may receive preferential treatment 
under the HTSUS subheading which pertains to articles described in 
Sec.  10.243(a)(4).
    Example 4. An entity controlling production of articles that 
meet the description in Sec.  10.243(a)(4) buys for the U.S., 
Canadian and Mexican markets; the articles in each case are first 
sent to the United States where they are entered for consumption and 
then placed in a commercial warehouse from which they are shipped to 
various stores in the United States, Canada and Mexico. 
Notwithstanding the fact that some of the articles ultimately ended 
up in Canada or Mexico, a declaration of compliance prepared by the 
entity controlling production must cover all of the articles rather 
than only those that remained in the United States because all of 
those articles had been entered for consumption.
    Example 5. Fabric is cut and sewn in the United States with 
other U.S. materials to form cups which are joined together to form 
brassiere front subassemblies in the United States, and those front 
subassemblies are then placed in a warehouse in the United States 
where they are held until the following year; during that following 
year all of the front subassemblies are shipped to an ATPDEA 
beneficiary country where they are assembled with elastic strips and 
labels produced in an Asian country and other fabrics, components or 
materials produced in the ATPDEA beneficiary country to form 
articles that meet the production standards specified in Sec.  
10.243(a)(4) and that are then shipped to the United States and 
entered during that same year. In determining whether the entered 
articles meet the minimum 75 or 85 percent standard, the fabric in 
the elastic strips and labels is to be disregarded entirely because 
the strips and labels constitute findings or trimmings for purposes 
of this section, and all of the fabric in the front subassemblies is 
countable

[[Page 67347]]

because it was all formed in the United States and used in the 
production of articles that were entered in the same year.
    Example 6. An ATPDEA beneficiary country producer's entire 
production of articles that meet the description in Sec.  
10.243(a)(4) is sent to a U.S. importer in two separate shipments, 
one in February and the other in June of the same calendar year; the 
articles shipped in February do not meet the minimum 75 percent 
standard, the articles shipped in June exceed the 85 percent 
standard, and the articles in the two shipments, taken together, do 
meet the 75 percent standard; the articles covered by the February 
shipment are entered for consumption on March 1 of that calendar 
year, and the articles covered by the June shipment are placed in a 
Customs bonded warehouse upon arrival and are subsequently withdrawn 
from warehouse for consumption on November 1 of that calendar year. 
The ATPDEA beneficiary country producer may not prepare a valid 
declaration of compliance covering the articles in the first 
shipment because those articles did not meet the minimum 75 percent 
standard and because those articles cannot be included with the 
articles of the second shipment on the same declaration of 
compliance since they were entered in a different year. However, the 
ATPDEA beneficiary country producer may prepare a valid declaration 
of compliance covering the articles in the second shipment because 
those articles did meet the requisite 85 percent standard which 
would apply for purposes of entry of articles in the following year.
    Example 7. A producer in the second year begins production of 
articles exclusively for the U.S. market that meet the production 
standards specified in Sec.  10.243(a)(4), but the entered articles 
do not meet the requisite 85 percent standard until the third year. 
The producer's articles may not receive preferential treatment 
during the second year because there was no production (and thus 
there were no entered articles) in the immediately preceding (that 
is, first) year on which to assess compliance with the 75 percent 
standard. The producer's articles also may not receive preferential 
treatment during the third year because the 85 percent standard was 
not met in the immediately preceding (that is, second) year. 
However, the producer's articles are eligible for preferential 
treatment during the fourth year based on compliance with the 85 
percent standard in the immediately preceding (that is, third) year.
    Example 8. An entity controlling production (Entity A) uses five 
ATPDEA beneficiary country producers (Producers 1-5), all of which 
produce only articles that meet the description in Sec.  
10.243(a)(4); Producers 1-4 send all of their production to the 
United States and Producer 5 sends 10 percent of its production to 
the United States and the rest to Europe; Producers 1-3 and Producer 
5 produce only pursuant to contracts with Entity A, but Producer 4 
also operates independently of Entity A by producing for several 
U.S. importers, one of which is an entity controlling production 
(Entity B) that also controls all of the production of articles of 
one other producer (Producer 6) which sends all of its production to 
the United States. A declaration of compliance prepared by Entity A 
must cover all of the articles of Producers 1-3 and the 10 percent 
of articles of Producer 5 that are sent to the United States and 
that portion of the articles of Producer 4 that are produced 
pursuant to the contract with Entity A, because Entity A controls 
the production of those articles. There is no need for Producers 1-3 
and Producer 5 to prepare a declaration of compliance because they 
have no production that is not covered by a declaration of 
compliance prepared by an entity controlling production. A 
declaration of compliance prepared by Producer 4 would cover all of 
its production, that is, articles produced for Entity A, articles 
produced for Entity B, and articles produced independently for other 
U.S. importers; a declaration of compliance prepared by Entity B 
must cover that portion of the production of Producer 4 that it 
controls as well as all of the production of Producer 6 because 
Entity B also controls all of the production of Producer 6. Producer 
6 would not prepare a declaration of compliance because all of its 
production is covered by the declaration of compliance prepared by 
Entity B.

    (c) Documentation--(1) Initial declaration of compliance. In order 
for an importer to comply with the requirement set forth in paragraph 
(b)(1)(iii) of this section, the producer or the entity controlling 
production must have filed with Customs, in accordance with paragraph 
(c)(4) of this section, a declaration of compliance with the applicable 
75 or 85 percent requirement prescribed in paragraph (b)(1)(i) or 
(b)(1)(ii) of this section. After filing of the declaration of 
compliance has been completed, Customs will advise the producer or the 
entity controlling production of the distinct and unique identifier 
assigned to that declaration. The producer or the entity controlling 
production will then be responsible for advising each appropriate U.S. 
importer of that distinct and unique identifier for purposes of 
recording that identifier on the entry summary or warehouse withdrawal. 
In order to provide sufficient time for advising the U.S. importer of 
that distinct and unique identifier prior to the arrival of the 
articles in the United States, the producer or the entity controlling 
production should file the declaration of compliance with Customs at 
least 10 calendar days prior to the date of the first shipment of the 
articles to the United States.
    (2) Amended declaration of compliance. If the information on the 
declaration of compliance referred to in paragraph (c)(1) of this 
section is based on an estimate because final year-end information was 
not available at that time and the final data differs from the 
estimate, or if the producer or the entity controlling production has 
reason to believe for any other reason that the declaration of 
compliance that was filed contained erroneous information, within 30 
calendar days after the final year-end information becomes available or 
within 30 calendar days after the date of discovery of the error:
    (i) The producer or the entity controlling production must file 
with the Customs office identified in paragraph (c)(4) of this section 
an amended declaration of compliance containing that final year-end 
information or other corrected information; or
    (ii) If that final year-end information or other corrected 
information demonstrates noncompliance with the applicable 75 or 85 
percent requirement, the producer or the entity controlling production 
must in writing advise both the Customs office identified in paragraph 
(c)(4) of this section and each appropriate U.S. importer of that fact.
    (3) Form and preparation of declaration of compliance--(i) Form. 
The declaration of compliance referred to in paragraph (c)(1) of this 
section may be printed and reproduced locally and must be in the 
following format:

BILLING CODE 1505-01-D

[[Page 67348]]

[GRAPHIC] [TIFF OMITTED] TR01DE03.017

BILLING CODE 1505-01-C

    (ii) Preparation. The following rules will apply for purposes of 
completing the declaration of compliance set forth in paragraph 
(c)(3)(i) of this section:
    (A) In block 1, fill in the year commencing October 1 and ending 
September 30 of the calendar year during which the applicable 75 or 85 
percent standard specified in paragraph (b)(1)(i) or paragraph 
(b)(1)(ii) of this section was met;
    (B) Block 2 should state the legal name and address (including 
country) of the preparer and should also include the preparer's 
importer identification number (see Sec.  24.5 of this chapter), if the 
preparer has one;
    (C) Block 3 should state the legal name and address (including 
country) of the ATPDEA beneficiary country producer if that producer is 
not already identified in block 2. If there is more than one producer, 
attach a list stating the legal name and address (including country) of 
all additional producers;
    (D) Blocks 4 and 5 apply only to articles that were entered during 
the year identified in block 1; and
    (E) In block 7, the signature must be that of an authorized 
officer, employee, agent or other person having knowledge of the 
relevant facts and the date must be the date on which the declaration 
of compliance was completed and signed.
    (4) Filing of declaration of compliance. The declaration of 
compliance referred to in paragraph (c)(1) of this section:
    (i) Must be completed either in the English language or in the 
language of the country in which the articles covered by the 
declaration were produced. If the declaration is completed in a 
language other than English, the producer or the entity controlling 
production must provide to Customs upon request a written English 
translation of the declaration; and
    (ii) Must be filed with the New York Strategic Trade Center, U.S. 
Customs Service, 1 Penn Plaza, New York, New York 10119.
    (d) Verification of declaration of compliance--(1) Verification 
procedure. A declaration of compliance filed under this section will be 
subject to whatever verification Customs deems necessary. In the event 
that Customs for any reason is prevented from verifying the statements 
made on a declaration of compliance, Customs may deny any claim for 
preferential treatment made

[[Page 67349]]

under Sec.  10.245 that is based on that declaration. A verification of 
a declaration of compliance may involve, but need not be limited to, a 
review of:
    (i) All records required to be made, kept, and made available to 
Customs by the importer, the producer, the entity controlling 
production, or any other person under part 163 of this chapter;
    (ii) Documentation and other information regarding all articles 
that meet the production standards specified in Sec.  10.243(a)(4) that 
were exported to the United States and that were entered during the 
year in question, whether or not a claim for preferential treatment was 
made under Sec.  10.245. Those records and other information include, 
but are not limited to, work orders and other production records, 
purchase orders, invoices, bills of lading and other shipping 
documents;
    (iii) Evidence to document the cost of fabrics formed in the United 
States that were used in the production of the articles in question, 
such as purchase orders, invoices, bills of lading and other shipping 
documents, and customs import and clearance documents, work orders and 
other production records, and inventory control records;
    (iv) Evidence to document the cost or value of all fabric other 
than fabrics formed in the United States that were used in the 
production of the articles in question, such as purchase orders, 
invoices, bills of lading and other shipping documents, and customs 
import and clearance documents, work orders and other production 
records, and inventory control records; and
    (v) Accounting books and documents to verify the records and 
information referred to in paragraphs (d)(1)(ii) through (d)(1)(iv) of 
this section. The verification of purchase orders, invoices and bills 
of lading will be accomplished through the review of a distinct audit 
trail. The audit trail documents must consist of a cash disbursement or 
purchase journal or equivalent records to establish the purchase of the 
fabric. The headings in each of these journals or other records must 
contain the date, vendor name, and amount paid for the fabric. The 
verification of production records and work orders will be accomplished 
through analysis of the inventory records of the producer or entity 
controlling production. The inventory records must reflect the 
production of the finished article which must be referenced to the 
original purchase order or lot number covering the fabric used in 
production. In the inventory production records, the inventory should 
show the opening balance of the inventory plus the purchases made 
during the accounting period and the inventory closing balance.
    (2) Notice of determination. If, based on a verification of a 
declaration of compliance filed under this section, Customs determines 
that the applicable 75 or 85 percent standard specified in paragraph 
(b)(1)(i) or paragraph (b)(1)(ii) of this section was not met, Customs 
will publish a notice of that determination in the Federal Register.

0
6a. On page 81, a new center heading, followed by new Sec. Sec.  10.251 
through 10.257, is added to the table of contents for part 10 to read 
as follows:

Extension of ATPA Benefits to Tuna and Certain Other Non-Textile 
Articles

Sec.
10.251 Applicability.
10.252 Definitions.
10.253 Articles eligible for preferential treatment.
10.254 Certificate of Origin.
10.255 Filing of claim for preferential treatment.
10.256 Maintenance of records and submission of Certificate by 
importer.
10.257 Verification and justification of claim for preferential 
treatment.


0
6b. On page 207, a new center heading, followed by new Sec. Sec.  
10.251 through 10.257, is added to read as follows:

Extension of ATPA Benefits to Tuna and Certain Other Non-Textile 
Articles


Sec.  10.251  Applicability.

    Title XXXI of Public Law 107-210 (116 Stat. 933), entitled the 
Andean Trade Promotion and Drug Eradication Act (ATPDEA), amended 
sections 202, 203, 204, and 208 of the Andean Trade Preference Act (the 
ATPA, 19 U.S.C. 3201-3206) to authorize the President to extend 
additional trade benefits to ATPA beneficiary countries that have been 
designated as ATPDEA beneficiary countries. Sections 204(b)(1) and 
(b)(4) of the ATPA (19 U.S.C. 3203(b)(1) and (b)(4)) provide for the 
preferential treatment of certain non-textile articles that were not 
entitled to duty-free treatment under the ATPA prior to enactment of 
the ATPDEA. The provisions of Sec. Sec.  10.251-10.257 of this part set 
forth the legal requirements and procedures that apply for purposes of 
obtaining preferential treatment pursuant to ATPA sections 204(b)(1) 
and (b)(4).


Sec.  10.252  Definitions.

    When used in Sec. Sec.  10.251 through 10.257, the following terms 
have the meanings indicated:
    ATPA. ``ATPA'' means the Andean Trade Preference Act, 19 U.S.C. 
3201-3206.
    ATPDEA beneficiary country. ``ATPDEA beneficiary country'' means a 
``beneficiary country'' as defined in Sec.  10.202(a) for purposes of 
the ATPA which the President also has designated as a beneficiary 
country for purposes of preferential treatment of products under 19 
U.S.C. 3203(b)(1) and (b)(4) and which has been the subject of a 
finding by the President or his designee, published in the Federal 
Register, that the beneficiary country has satisfied the requirements 
of 19 U.S.C. 3203(b)(5)(A)(ii).
    ATPDEA beneficiary country vessel. ``ATPDEA beneficiary country 
vessel'' means a vessel:
    (a) Which is registered or recorded in an ATPDEA beneficiary 
country;
    (b) Which sails under the flag of an ATPDEA beneficiary country;
    (c) Which is at least 75 percent owned by nationals of an ATPDEA 
beneficiary country or by a company having its principal place of 
business in an ATPDEA beneficiary country, of which the manager or 
managers, chairman of the board of directors or of the supervisory 
board, and the majority of the members of those boards are nationals of 
an ATPDEA beneficiary country and of which, in the case of a company, 
at least 50 percent of the capital is owned by an ATPDEA beneficiary 
country or by public bodies or nationals of an ATPDEA beneficiary 
country;
    (d) Of which the master and officers are nationals of an ATPDEA 
beneficiary country; and
    (e) Of which at least 75 percent of the crew are nationals of an 
ATPDEA beneficiary country.
    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    Preferential treatment. ``Preferential treatment'' means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States free of duty and free of any quantitative 
restrictions in the case of tuna described in Sec.  10.253(a)(1) and 
free of duty in the case of any article described in Sec.  
10.253(a)(2).
    United States vessel. ``United States vessel'' means a vessel 
having a certificate of documentation with a fishery endorsement under 
chapter 121 of title 46 of the United States Code.


Sec.  10.253  Articles eligible for preferential treatment.

    (a) General. Preferential treatment applies to any of the following 
articles, provided that the article in question is imported directly 
into the customs territory of the United States from an

[[Page 67350]]

ATPDEA beneficiary country within the meaning of paragraph (b) of this 
section:
    (1) Tuna that is harvested by United States vessels or ATPDEA 
beneficiary country vessels, that is prepared or preserved in any 
manner, in an ATPDEA beneficiary country, in foil or other flexible 
airtight containers weighing with their contents not more than 6.8 
kilograms each; and
    (2) Any of the following articles that the President has determined 
are not import-sensitive in the context of imports from ATPDEA 
beneficiary countries, provided that the article in question meets the 
country of origin and value content requirements set forth in 
paragraphs (c) and (d) of this section:
    (i) Footwear not designated on December 4, 1991, as eligible 
articles for the purpose of the Generalized System of Preferences (GSP) 
under Title V, Trade Act of 1974, as amended (19 U.S.C. 2461 through 
2467);
    (ii) Petroleum, or any product derived from petroleum, provided for 
in headings 2709 and 2710 of the HTSUS;
    (iii) Watches and watch parts (including cases, bracelets, and 
straps), of whatever type including, but not limited to, mechanical, 
quartz digital or quartz analog, if those watches or watch parts 
contain any material which is the product of any country with respect 
to which HTSUS column 2 rates of duty apply; and
    (iv) Handbags, luggage, flat goods, work gloves, and leather 
wearing apparel that were not designated on August 5, 1983, as eligible 
articles for purposes of the GSP.
    (b) Imported directly defined. For purposes of paragraph (a) of 
this section, the words ``imported directly'' mean:
    (1) Direct shipment from any ATPDEA beneficiary country to the 
United States without passing through the territory of any country that 
is not an ATPDEA beneficiary country;
    (2) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an 
ATPDEA beneficiary country, the articles in the shipment do not enter 
into the commerce of any country that is not an ATPDEA beneficiary 
country while en route to the United States and the invoices, bills of 
lading, and other shipping documents show the United States as the 
final destination; or
    (3) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an 
ATPDEA beneficiary country, and the invoices and other documents do not 
show the United States as the final destination, the articles in the 
shipment upon arrival in the United States are imported directly only 
if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.
    (c) Country of origin criteria--(1) General. Except as otherwise 
provided in paragraph (c)(2) of this section, an article described in 
paragraph (a)(2) of this section may be eligible for preferential 
treatment if the article is either:
    (i) Wholly the growth, product, or manufacture of an ATPDEA 
beneficiary country; or
    (ii) A new or different article of commerce which has been grown, 
produced, or manufactured in an ATPDEA beneficiary country.
    (2) Exceptions. No article will be eligible for preferential 
treatment by virtue of having merely undergone simple (as opposed to 
complex or meaningful) combining or packaging operations, or mere 
dilution with water or mere dilution with another substance that does 
not materially alter the characteristics of the article. The principles 
and examples set forth in Sec.  10.195(a)(2) will apply equally for 
purposes of this paragraph.
    (d) Value content requirement--(1) General. An article may be 
eligible for preferential treatment only if the sum of the cost or 
value of the materials produced in an ATPDEA beneficiary country or 
countries, plus the direct costs of processing operations performed in 
an ATPDEA beneficiary country or countries, is not less than 35 percent 
of the appraised value of the article at the time it is entered.
    (2) Commonwealth of Puerto Rico, U.S. Virgin Islands and CBI 
beneficiary countries. For the specific purpose of determining the 
percentage referred to in paragraph (d)(1) of this section, the term 
``ATPDEA beneficiary country'' includes the Commonwealth of Puerto 
Rico, the U.S. Virgin Islands, and any CBI beneficiary country as 
defined in Sec.  10.191(b)(1). Any cost or value of materials or direct 
costs of processing operations attributable to the Virgin Islands or 
any CBI beneficiary country must be included in the article prior to 
its final exportation to the United States from an ATPDEA beneficiary 
country as defined in Sec.  10.252.
    (3) Materials produced in the United States. For purposes of 
determining the percentage referred to in paragraph (d)(1) of this 
section, an amount not to exceed 15 percent of the appraised value of 
the article at the time it is entered may be attributed to the cost or 
value of materials produced in the customs territory of the United 
States (other than the Commonwealth of Puerto Rico). The principles set 
forth in paragraph (d)(4)(i) of this section will apply in determining 
whether a material is ``produced in the customs territory of the United 
States'' for purposes of this paragraph.
    (4) Cost or value of materials--(i) ``Materials produced in an 
ATPDEA beneficiary country or countries'' defined. For purposes of 
paragraph (d)(1) of this section, the words ``materials produced in an 
ATPDEA beneficiary country or countries'' refer to those materials 
incorporated in an article which are either:
    (A) Wholly the growth, product, or manufacture of an ATPDEA 
beneficiary country or two or more ATPDEA beneficiary countries; or
    (B) Substantially transformed in any ATPDEA beneficiary country or 
two or more ATPDEA beneficiary countries into a new or different 
article of commerce which is then used in any ATPDEA beneficiary 
country as defined in Sec.  10.252 in the production or manufacture of 
a new or different article which is imported directly into the United 
States. For purposes of this paragraph (d)(4)(i)(B), no material will 
be considered to be substantially transformed into a new or different 
article of commerce by virtue of having merely undergone simple (as 
opposed to complex or meaningful) combining or packaging operations, or 
mere dilution with water or mere dilution with another substance that 
does not materially alter the characteristics of the article. The 
examples set forth in Sec.  10.196(a), and the principles and examples 
set forth in Sec.  10.195(a)(2), will apply for purposes of the 
corresponding context under paragraph (d)(4)(i) of this section.
    (ii) Failure to establish origin. If the importer fails to maintain 
adequate records to establish the origin of a material, that material 
may not be considered to have been grown, produced, or manufactured in 
an ATPDEA beneficiary country or in the customs territory of the United 
States for purposes of determining the percentage referred to in 
paragraph (d)(1) of this section.

[[Page 67351]]

    (iii) Determination of cost or value of materials. (A) The cost or 
value of materials produced in an ATPDEA beneficiary country or 
countries or in the customs territory of the United States includes:
    (1) The manufacturer's actual cost for the materials;
    (2) When not included in the manufacturer's actual cost for the 
materials, the freight, insurance, packing, and all other costs 
incurred in transporting the materials to the manufacturer's plant;
    (3) The actual cost of waste or spoilage, less the value of 
recoverable scrap; and
    (4) Taxes and/or duties imposed on the materials by any ATPDEA 
beneficiary country or by the United States, provided they are not 
remitted upon exportation.
    (B) Where a material is provided to the manufacturer without 
charge, or at less than fair market value, its cost or value will be 
determined by computing the sum of:
    (1) All expenses incurred in the growth, production, or manufacture 
of the material, including general expenses;
    (2) An amount for profit; and
    (3) Freight, insurance, packing, and all other costs incurred in 
transporting the material to the manufacturer's plant.
    (5) Direct costs of processing operations--(i) Items included. For 
purposes of paragraph (d)(1) of this section, the words ``direct costs 
of processing operations'' mean those costs either directly incurred 
in, or which can be reasonably allocated to, the growth, production, 
manufacture, or assembly of the specific merchandise under 
consideration. Those costs include, but are not limited to the 
following, to the extent that they are includable in the appraised 
value of the imported merchandise:
    (A) All actual labor costs involved in the growth, production, 
manufacture, or assembly of the specific merchandise, including fringe 
benefits, on-the-job training, and the cost of engineering, 
supervisory, quality control, and similar personnel;
    (B) Dies, molds, tooling, and depreciation on machinery and 
equipment which are allocable to the specific merchandise;
    (C) Research, development, design, engineering, and blueprint costs 
insofar as they are allocable to the specific merchandise; and
    (D) Costs of inspecting and testing the specific merchandise.
    (ii) Items not included. For purposes of paragraph (d)(1) of this 
section, the words ``direct costs of processing operations'' do not 
include items which are not directly attributable to the merchandise 
under consideration or are not costs of manufacturing the product. 
These include, but are not limited to:
    (A) Profit; and
    (B) General expenses of doing business which either are not 
allocable to the specific merchandise or are not related to the growth, 
production, manufacture, or assembly of the merchandise, such as 
administrative salaries, casualty and liability insurance, advertising, 
and salesmen's salaries, commissions, or expenses.
    (6) Articles wholly the growth, product, or manufacture of an 
ATPDEA beneficiary country. Any article which is wholly the growth, 
product, or manufacture of an ATPDEA beneficiary country as defined in 
Sec.  10.252, and any article produced or manufactured in an ATPDEA 
beneficiary country as defined in Sec.  10.252 exclusively from 
materials which are wholly the growth, product, or manufacture of an 
ATPDEA beneficiary country or countries, will normally be presumed to 
meet the requirement set forth in paragraph (d)(1) of this section.


Sec.  10.254  Certificate of Origin.

    A Certificate of Origin as specified in Sec.  10.256 must be 
employed to certify that an article described in Sec.  10.253(a) being 
exported from an ATPDEA beneficiary country to the United States 
qualifies for the preferential treatment referred to in Sec.  10.251. 
The Certificate of Origin must be prepared by the exporter in the 
ATPDEA beneficiary country. Where the ATPDEA beneficiary country 
exporter is not the producer of the article, that exporter may complete 
and sign a Certificate of Origin on the basis of:
    (a) Its reasonable reliance on the producer's written 
representation that the article qualifies for preferential treatment; 
or
    (b) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.


Sec.  10.255  Filing of claim for preferential treatment.

    (a) Declaration. In connection with a claim for preferential 
treatment for an article described in Sec.  10.253(a), the importer 
must make a written declaration that the article qualifies for that 
treatment. The written declaration should be made by including on the 
entry summary, or equivalent documentation, the symbol ``J+'' as a 
prefix to the subheading of the HTSUS in which the article in question 
is classified. Except in any of the circumstances described in Sec.  
10.256(d)(1), the declaration required under this paragraph must be 
based on a complete and properly executed original Certificate of 
Origin that covers the article being imported and that is in the 
possession of the importer.
    (b) Corrected declaration. If, after making the declaration 
required under paragraph (a) of this section, the importer has reason 
to believe that a Certificate of Origin on which a declaration was 
based contains information that is not correct, the importer must 
within 30 calendar days after the date of discovery of the error make a 
corrected declaration and pay any duties that may be due. A corrected 
declaration will be effected by submission of a letter or other written 
statement to the Customs port where the declaration was originally 
filed.


Sec.  10.256  Maintenance of records and submission of Certificate by 
importer.

    (a) Maintenance of records. Each importer claiming preferential 
treatment for an article under Sec.  10.255 must maintain in the United 
States, in accordance with the provisions of part 163 of this chapter, 
all records relating to the importation of the article. Those records 
must include the original Certificate of Origin referred to in Sec.  
10.255(a) and any other relevant documents or other records as 
specified in Sec.  163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
treatment on an article under Sec.  10.255(a) must provide, at the 
request of the port director, a copy of the Certificate of Origin 
pertaining to the article. A Certificate of Origin submitted to Customs 
under this paragraph:
    (1) Must be on Customs Form 449, including privately-printed copies 
of that Form, or, as an alternative to Customs Form 449, in an approved 
computerized format or other medium or format as is approved by the 
Office of Field Operations, U.S. Customs Service, Washington, DC 20229. 
An alternative format must contain the same information and 
certification set forth on Customs Form 449;
    (2) Must be signed by the exporter or by the exporter's authorized 
agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:

[[Page 67352]]

    (i) A single importation of an article into the United States, 
including a single shipment that results in the filing of one or more 
entries and a series of shipments that results in the filing of one 
entry; or
    (ii) Multiple importations of identical articles into the United 
States that occur within a specified blanket period, not to exceed 12 
months, set out in the Certificate by the exporter. For purposes of 
this paragraph, ``identical articles'' means articles that are the same 
in all material respects, including physical characteristics, quality, 
and reputation.
    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port 
director determined that a previously imported identical article 
covered by the Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:
    (i) An importation of an article for which the port director has in 
writing waived the requirement for a Certificate of Origin because the 
port director is otherwise satisfied that the article qualifies for 
preferential treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value does not 
exceed US$2,500, provided that, unless waived by the port director, the 
producer, exporter, importer or authorized agent includes on, or 
attaches to, the invoice or other document accompanying the shipment 
the following signed statement:

    I hereby certify that the article covered by this shipment 
qualifies for preferential tariff treatment under the ATPDEA.
    Check One:

( ) Producer
( ) Exporter
( ) Importer
( ) Agent

----------------------------------
Name

----------------------------------
Title

----------------------------------
Address

----------------------------------
Signature and Date

    (2) Exception. If the port director determines that an importation 
described in paragraph (d)(1) of this section forms part of a series of 
importations that may reasonably be considered to have been undertaken 
or arranged for the purpose of avoiding a Certificate of Origin 
requirement under Sec. Sec.  10.254 through 10.256, the port director 
will notify the importer in writing that for that importation the 
importer must have in his possession a valid Certificate of Origin to 
support the claim for preferential treatment. The importer will have 30 
calendar days from the date of the written notice to obtain a valid 
Certificate of Origin, and a failure to timely obtain the Certificate 
of Origin will result in denial of the claim for preferential 
treatment. For purposes of this paragraph, a ``series of importations'' 
means two or more entries covering articles arriving on the same day 
from the same exporter and consigned to the same person.


Sec.  10.257  Verification and justification of claim for preferential 
treatment.

    (a) Verification by Customs. A claim for preferential treatment 
made under Sec.  10.255, including any statements or other information 
contained on a Certificate of Origin submitted to Customs under Sec.  
10.256, will be subject to whatever verification the port director 
deems necessary. In the event that the port director for any reason is 
prevented from verifying the claim, the port director may deny the 
claim for preferential treatment. A verification of a claim for 
preferential treatment may involve, but need not be limited to, a 
review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information regarding the country of 
origin of an article and its constituent materials, including, but not 
limited to, production records, information relating to the place of 
production, the number and identification of the types of machinery 
used in production, and the number of workers employed in production; 
and
    (3) Evidence to document the use of U.S. or ATPDEA beneficiary 
country materials in the production of the article in question, such as 
purchase orders, invoices, bills of lading and other shipping 
documents, and customs import and clearance documents.
    (b) Importer requirements. In order to make a claim for 
preferential treatment under Sec.  10.255, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the article qualifies for preferential treatment. Those 
records must include documents that support a claim that the article in 
question qualifies for preferential treatment because it meets the 
country of origin and value content requirements set forth in Sec.  
10.253(c) and (d). A properly completed Certificate of Origin in the 
form prescribed in Sec.  10.254(b) is a record that would serve this 
purpose;
    (2) Must establish and implement internal controls which provide 
for the periodic review of the accuracy of the Certificate of Origin or 
other records referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the ATPDEA beneficiary country to the United States. If the imported 
article was shipped through a country other than an ATPDEA beneficiary 
country and the invoices and other documents from the ATPDEA 
beneficiary country do not show the United States as the final 
destination, the importer also must have documentation that 
demonstrates that the conditions set forth in Sec.  10.253(b)(3)(i) 
through (iii) were met; and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this section justify the importer's claim for preferential 
treatment.

PART 163--RECORDKEEPING

0
8. In Parts 141 to 199, on page 284, in the Appendix to Part 163, three 
new listings are added in numerical order under section IV to read as 
follows:

Appendix to Part 163--Interim (a)(1)(A) List

* * * * *
    IV. * * *

Sec.  10.246 ATPDEA Textile Certificate of Origin
Sec.  10.248 ATPDEA Declaration of Compliance for Brassieres
Sec.  10.256 ATPDEA Non-textile Certificate of Origin
* * * * *

[FR Doc. 03-55531 Filed 11-28-03; 8:45 am]
BILLING CODE 1505-01-D