[Federal Register Volume 69, Number 125 (Wednesday, June 30, 2004)]
[Proposed Rules]
[Pages 39375-39376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14854]


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DEPARTMENT OF COMMERCE

International Trade Administration

DEPARTMENT OF THE INTERIOR

15 CFR Part 303

[Docket No. 040609177-4177--01]
RIN 0625-AA65


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

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

ACTION: Notice of proposed rulemaking and request for comments.

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SUMMARY: The Departments of Commerce and the Interior (the Departments) 
propose amending their regulations governing watch duty-exemption 
allocations and the watch and jewelry duty-refund benefits for 
producers in the United States insular possessions (the U.S. Virgin 
Islands, Guam, American Samoa and the Commonwealth of the Northern 
Mariana Islands) . The proposed rule would amend existing regulations 
by updating the maximum total value of watch components per watch that 
are eligible for duty-free entry into the United States under the 
insular program.

DATES: Written comments must be received on or before July 30, 2004.

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

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

SUPPLEMENTARY INFORMATION: The insular possessions watch industry 
provision in Sec. 110 of Pub. L. No. 97-446 (96 Stat. 2331) (1983), as 
amended by Sec. 602 of Pub. L. No. 103-465 (108 Stat. 4991) (1994); 
additional U.S. Note 5 to chapter 91 of the Harmonized Tariff Schedule 
of the United States (``HTSUS''), as amended by Pub. L. 94-241 (90 
Stat. 263) (1976) requires the Secretary of Commerce and the Secretary 
of the Interior (``the Secretaries''), acting jointly, to establish a 
limit on the quantity of watches and watch movements which may be 
entered free of duty during each calendar year. The law also requires 
the Secretaries to establish the shares of this limited quantity which 
may be entered from the Virgin Islands, Guam, American Samoa and the 
Commonwealth of the Northern Mariana Islands. After the Departments 
have verified the data submitted on the annual application (Form ITA-
334P), the producers' duty-exemption allocations are calculated from 
the territorial share in accordance with 15 CFR 303.14 and each 
producer is issued a duty-exemption license. The law further requires 
the Secretaries to issue duty-refund certificates to each territorial 
watch and watch movement producer based on the company's duty-free 
shipments and creditable wages paid during the previous calendar year.

Proposed Amendments

    We propose amending Sec.303.14(b)(3) by raising the maximum total 
value of watch components per watch that are eligible for duty-free 
entry into the U.S. from $500 to $800. The insular watch program 
producers requested an increase primarily due to a substantial increase 
in the price of gold and the weakness of the dollar against the euro 
over the last several years. Also, there has not been an adjustment in 
the maximum value since 1998. Raising the value levels of watch 
components that may be used in the assembly of duty-free watches will 
help producers maintain the level of diversity in the kinds of watches 
they assemble, thereby affording them an opportunity to maintain or 
hopefully increase shipments and raise territorial employment.

Administrative Law Requirements

    Regulatory Flexibility Act. In accordance with the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., the Chief Counsel for Regulation 
at the Department of Commerce has certified to the Chief Counsel for 
Advocacy, Small Business Administration, that the proposed rule, if 
promulgated as final, will not have a significant economic impact on a 
substantial number of small entities. There are currently four watch 
companies in the insular watch program, all of which are small 
entities. This rulemaking would update the total maximum value of watch 
components per watch that are eligible for duty-free entry into the 
U.S. Increases in the price of gold and a weakened dollar against the 
euro have driven up the price of gold watch components. Therefore, 
companies are faced with a difficult situation because if the value 
limit is exceeded, the watch becomes ineligible for the duty-free 
benefit under the program (due to the fact that the insular possessions 
are outside the Customs territory of the United States). Adoption of 
this rule would increase the maximum value of watch components per 
watch that would be eligible for duty-free treatment into the United 
States. This would allow producers to include higher-priced components 
in their watches. As a result, producers would realize an economic 
benefit in that they would regain greater flexibility in the types of 
watches they could produce, which, hopefully, will lead to increased 
sales and employment to help the insular economy. There would be no 
adverse economic impact from this proposed change.
    This proposed rule also would not change reporting or recordkeeping 
requirements. The changes in the regulations will also not duplicate, 
overlap or conflict with other laws or regulations. Consequently, the 
changes are not expected to meet of the RFA criteria of having a 
``significant'' economic effect on a ``substantial number'' of small 
entities, as stated in 5 U.S.C. 603 et seq. Therefore, a regulatory 
flexibility analysis was not prepared.
    Paperwork Reduction Act. This proposed rulemaking does not contain 
revised collection of information requirements subject to review and 
approval by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995. Collection activities are currently 
approved by the Office of Management and Budget under control numbers 
0625-0040 and 0625-0134.

[[Page 39376]]

    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information unless it 
displays a currently valid OMB Control Number.
    E.O. 12866. It has been determined that the proposed rulemaking is 
not significant for purposes of Executive Order 12866.

List of Subjects in 15 CFR Part 303

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

PART 303--WATCHES, WATCH MOVEMENTS AND JEWELRY PROGRAMS

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

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


Sec.  303.14  [Amended]

    2. Section 303.14 is amended by removing ``$500'' from the first 
sentence of paragraph (b)(3) and adding ``$800'' in its place.

James J. Jochum,
Assistant Secretary for Import Administration, Department of Commerce.
Nikolao Pula,
Acting Deputy Assistant Secretary for Insular Affairs, Department of 
the Interior.
[FR Doc. 04-14854 Filed 6-29-04; 8:45 am]
BILLING CODE 3510-DS-P; 4310-93-P