[Federal Register Volume 70, Number 91 (Thursday, May 12, 2005)]
[Rules and Regulations]
[Pages 24941-24946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9411]


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DEPARTMENT OF COMMERCE

International Trade Administration

15 CFR Parts 335 and 340

[Docket Number 001229368-5092-02]
RIN 0625-AA58


Imports of Certain Worsted Wool Fabric; Implementation of Tariff 
Rate Quota Established Under Title V of the Trade and Development Act 
of 2000

AGENCY: Department of Commerce, International Trade Administration.

ACTION: Final rule.

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SUMMARY: The Department of Commerce is issuing final regulations 
implementing Section 501(e) and Section 504(b) of the Trade and 
Development Act of 2000 (``the Act''). Section 501(e) requires the 
President to fairly allocate tariff rate quotas on the import of 
certain worsted wool fabrics, tariff rate quotas which were established 
by Sections 501(a) and 501(b) of the Act. Section 504(b) authorizes the 
President to modify the limitations on worsted wool fabric imports 
under the tariff rate quotas. The President has delegated to the 
Secretary of Commerce the authority to allocate the quantity of imports 
under the tariff rate quotas and to determine whether the limitations 
on the quantity of imports under the tariff rate quotas should be 
modified.

DATES: This rule is effective on June 13, 2005.

ADDRESSES: Copies of the documents relevant to this action are 
available for inspection during normal business hours in room 3100 in 
the Herbert Hoover Building, 14th and Constitution Avenue, N.W., 
Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Sergio Botero, Office of Textiles and 
Apparel, U.S. Department of Commerce, (202) 482-4058.

SUPPLEMENTARY INFORMATION:

This supplementary information section is organized as follows:

A. Background
B. Public Comments Received and Department of Commerce Responses
C. Action Being Taken by the Department of Commerce
D. Statutory and Executive Order Reviews

A. Background

    The Act creates two tariff rate quotas (TRQ), providing for 
temporary reductions for three years in the import duties on two 
categories of worsted wool fabrics suitable for use in making suits, 
suit-type jackets, or trousers: (1) for worsted wool fabric with 
average fiber diameters greater than 18.5 microns (new Harmonized 
Tariff Schedule of the United States (HTS) heading 9902.51.11), the 
reduction in duty is limited to 2,500,000 square meter equivalents or 
such other quantity proclaimed by the President; and (2) for worsted 
wool fabric with average fiber diameters of 18.5 microns or less (new 
HTS heading 9902.51.12), the reduction is limited to 1,500,000 square 
meter equivalents or such other quantity proclaimed by the President.
    The Act requires that the tariff rate quotas be allocated. More 
specifically, the President must ensure that the tariff rate quotas are 
fairly allocated to persons (including firms, corporations, or other 
legal entities) who cut and sew men's and boys' worsted wool suits, 
suit-type jackets and trousers in the United States and who apply for 
an allocation based on the amount of such suits cut and sewn during the 
prior calendar year.
    The Act requires that the President annually consider requests by 
U.S. manufacturers of certain worsted wool apparel to modify the 
limitation on the quantity of fabric that may be imported under the 
tariff rate quotas, and grants the President the authority to proclaim 
modifications to the limitations. In determining whether to modify the 
limitations, the President must consider specified U.S. market 
conditions with respect to worsted wool fabric and worsted wool 
apparel.
    In Presidential Proclamation 7383, of December 1, 2000, the 
President authorized the Secretary of Commerce: (1) to allocate the 
imports of worsted wool fabrics under the tariff rate quotas; (2) to 
annually consider requests from domestic manufacturers of worsted wool 
apparel to modify the limitation on the quantity of worsted wool 
fabrics that may be imported under the tariff rate quotas; (3) to 
determine whether the limitations on the quantity of imports of worsted 
wool fabrics under the tariff rate quotas should be modified and to 
recommend to the President that appropriate modifications be made; and 
(4) to issue regulations to implement relevant provisions of the Act.
    The Presidential Proclamation authorizing the Department of 
Commerce to issue regulations to implement these provisions was issued 
on December 1, 2000. Pursuant to the Act, the tariff rate quotas 
entered into force on January 1, 2001. Thus, there was good cause to 
find that in order to meet the statutory implementation date and to 
ensure that importers receive the benefit of the reduction in tariff 
rate as soon as possible, the otherwise applicable notice and comment 
procedures were impracticable and contrary to the public interest under 
5 U.S.C. 553(b)(B). Moreover, for the same reason, there was good cause 
to find that the effective date of the interim rule should not be 
delayed until 30 days after its publication under 5 U.S.C. 553(d)(3). 
While the interim regulations became effective on January 22, 2001, the 
Department of Commerce solicited comments on the interim regulations 
and expressed particular interest in comments concerning any impact the 
regulations might have on small or medium sized businesses.

B. Public Comments Received and Department of Commerce Responses

    The Department of Commerce received the comments described below 
from a number of parties, including businesses, trade associations and 
counsel for other interested parties. Comments specifically pertaining 
to the allocation of previous years' tariff rate quotas have been 
omitted as moot.
    Comment: Applicants should be allowed to include in reported 
production amounts worsted wool fabric cut and sewn on behalf of an 
owner.
    Response: The legislation states that the allocation is to be based 
on the amount of men's and boys' suits cut and sewn in the U.S. during 
the prior calendar year and shall be granted to persons (including, 
firms, corporations, or other legal entities) who cut and sew men's and 
boys' worsted wool suits and suit-like jackets and trousers in the 
United States. The fabric TRQ allocated to a licensee is intended for 
the licensee's own production, or production on its behalf by 
contractors using the licensee's owned fabric, and not for the cutting 
and sewing of garments for others with fabric they do not own.
    Comment: Persons involved in the production of men's and boys' 
worsted wool suits, suit-type jackets and trousers other than those who 
cut and sew such garments, such as importers of worsted wool fabric, 
should be allowed to apply for licenses.

[[Page 24942]]

    Response: The legislation states that the President is to ensure 
that such fabrics are fairly allocated to persons (including, firms, 
corporations, or other legal entities) who cut and sew men's and boys' 
worsted wool suits and suit-like jackets and trousers in the United 
States and who apply for an allocation based on the amount of such 
suits cut and sewn during the prior calendar year. Therefore, others 
such as importers of worsted wool fabric, are not eligible to apply for 
licenses.
    Comment: The definition of Worsted Wool Suits should be amended to 
make it clear that the reference to the 85 percent wool requirement is 
limited to the shell fabric and does not apply to the suit itself.
    Response: The definition of Worsted Wool Suits is amended in this 
rule to men's and boys' worsted wool suits, the outer surface of which 
contains at least 85 percent by weight worsted wool fabric.
    Comment: The applicant, rather than the importer of the worsted 
wool fabric, should certify that the fabric is suitable for making 
suits.
    Response: The requirement that the importer of the worsted wool 
fabric certify that the fabric is suitable for making suits, suit-type 
coats and trousers was established in Title V of the Trade and 
Development Act of 2000 and is presently set forth in the U.S. notes 
15b and 16b of sub-chapter II of chapter 99 of the Harmonized Tariff 
Schedule of the United States of 2005. Because the requirement was 
mandated by statute, the Department is unable to change the regulations 
to allow the applicant to provide the certification.
    Comment: The rule should specify the information to be supplied by 
a licensee to an importer in a written authorization pursuant to which 
the importer will import worsted wool fabric within the TRQ.
    Response: Written authorization guidelines from a licensee to an 
importer are included in the document A Conditions for License Use 
which is affixed to the back of each License issued by the Department 
of Commerce.

C. Action Being Taken by the Department of Commerce

    The Department of Commerce is revising 15 CFR Parts 335 and 340. 15 
CFR Part 335 sets forth regulations regarding the issuance and effect 
of licenses for the allocation of worsted wool fabric under the tariff 
rate quotas established by Section 501 of the Act. 15 CFR Part 340 sets 
forth regulations regarding the procedures for considering requests to 
modify the limitations on the quantity of imports of fabrics of worsted 
wool fabric under the tariff rate quotas established by Section 501 of 
the Act.

Part 335

    Section 501(e) of the Act requires that the worsted wool fabrics 
imported under the tariff rate quotas be ``fairly allocated'' to 
persons ``who cut and sew men's and boys' worsted wool suits and suit-
like jackets and trousers in the United States and who apply for an 
allocation based on the amount of such suits cut and sewn during the 
prior calendar year.'' As the Joint Explanation of the Committee of 
Conference (``Conference Report'') makes clear, Congress intended the 
tariff rate quotas to address the duty situation faced by U.S. wool 
suit manufacturers, in which worsted wool fabric is subject to 
considerably higher duties than worsted wool suits, a situation 
compounded by reductions in tariffs on wool suits under free trade 
agreements with Canada and Mexico.
    The Department of Commerce will annually solicit applications for 
licenses for an allocation of the forthcoming calendar year's tariff 
rate quotas on worsted wool fabrics on or around August 31 of the year 
preceding the tariff rate quota year, in order to allow companies to be 
informed of their allocation as early as possible while still allowing 
an allocation based on previous year production. The Department intends 
to make its determination regarding the allocation on or about November 
1 and to issue licenses no later than December 31 of the year preceding 
the tariff rate quota year.
    Each of the two tariff rate quotas will be allocated based on 
previous year production utilizing the worsted wool fabric that is the 
subject of the tariff rate quota. That is, the tariff rate quota on 
worsted wool fabric with average fiber diameters greater than 18.5 
microns (HTS 9902.51.11) will be allocated based on production 
utilizing this type of worsted wool fabric, while the tariff rate quota 
on worsted wool fabric with average fiber diameters of 18.5 microns or 
less (HTS 9902.51.12) will be allocated based on production utilizing 
this type of worsted wool.
    For reporting subsequent year production information, applicants 
will be required to report production based on micron count of the 
worsted wool fabric. In order to utilize the most current data possible 
for all years, and to meet the statutory requirement that the 
allocation be based on production during the prior calendar year, each 
tariff rate quota will be allocated based on production during the 
first six months of the previous calendar year, annualized.
    Pursuant to the statutory requirement, allocation will be limited 
to persons who cut and sew three types of garments during the calendar 
year of the application: (1) men's and boys' worsted wool suits; (2) 
men's and boys' worsted wool suit-type jackets; and (3) men's and boys' 
worsted wool trousers. Only manufacturers of all three types of 
garments will be eligible for an allocation. Pursuant to the statutory 
requirement that allocation be based on the men's and boys' worsted 
wool suits cut and sewn during the prior calendar year, in allocating 
the tariff rate quotas, only production of men's and boys' worsted wool 
suits will be considered. To be considered, a worsted wool garment's 
outer surface must contain at least 85 percent by weight worsted wool, 
which is consistent with the definitions of wool fiber and fabric in 
the Act and the Conference Report.
    In order to fairly allocate the tariff rate quotas, manufacturers 
that utilize imported worsted wool fabric in production will be 
provided a greater allocation than manufacturers that utilize domestic 
worsted wool fabric. This will allow the manufacturers that will 
actually use the imported fabric that is subject to the tariff rate 
quotas to obtain a relatively greater share of the fabric, as compared 
to manufacturers that use only domestic fabric. For the purpose of 
calculating allocations, suit production will be increased by the ratio 
of imported fabric used to total fabric used in the production of men's 
and boys' suits. For example, if an applicant uses imported fabric for 
30 percent of its worsted wool suits production, that applicant's suit 
production level will be increased by 30 percent for purposes of 
calculating the applicant's allocation.
    In order to ensure that the tariff rate quotas are fully utilized, 
a licensee that will not import the full quantity allocated to it is 
required to surrender the unused allocation to the Department of 
Commerce for reallocation. The quantity surrendered will be reallocated 
to licensees that apply for a reallocation on the same basis as the 
original allocation. A licensee that does not surrender unused 
allocation and fails to import at least 95 percent of the quantity 
allocated will be penalized in the subsequent year by a reduction in 
its allocation proportionate to the amount unused.

Part 340

    Section 504(b) of the Act requires the President to consider, on an 
annual basis, requests by U.S. manufacturers of

[[Page 24943]]

certain worsted wool apparel to modify the limit on importation under 
the tariff rate quotas. As the Act requires the consideration of such 
requests ``on an annual basis,'' a petition process will take place for 
each year the tariff rate quotas are in effect. Each year, the 
Department of Commerce will cause to be published in the Federal 
Register a notice soliciting requests by U.S. manufacturers for 
modification of the limit for the following year. The Department will 
then cause to be published in the Federal Register a notice soliciting 
comments by any interested person, including U.S. manufacturers of 
worsted wool fabric, wool yarn, wool top and wool fiber, regarding the 
requested modification or modifications. In order to allow 
manufacturers and other interested persons to submit the most current 
data possible and to allow the Department to make its determination 
prior to January 1, manufacturers will have 15 days to submit a request 
and interested persons will have 20 days to submit comments.
    Within 30 days of the end of the period for receiving public 
comments regarding requested modification or modifications, the 
Department will make a determination whether the limitations should be 
modified and recommend to the President that appropriate modification 
be made. The determination and recommendation will be based on the U.S. 
market conditions, particularly those factors set forth in the Act.

D. Statutory and Executive Order Reviews

    This final rule contains information collection requirements 
subject to the Paperwork Reduction Act (PRA). These information 
collection requirements have received PRA approval from the Office of 
Management and Budget (OMB) under control number 0625-0240. 
Notwithstanding any other provision of 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 subject to the requirements of 
the PRA unless that collection of information displays a currently 
valid OMB control number.
    The information collected will be used by the Department to 
allocate the tariff rate quota among U.S. manufacturers and to 
determine whether the tariff rate quota limitations should be modified. 
Responses to the collection of information are required for a 
manufacturer to receive an allocation of the tariff rate quota, to 
submit a request for a modification, and to comment on such a request. 
Confidentiality of information will be handled in accordance with 
Sec. 335.3(e) and 340.5(b). Records substantiating information provided 
in an application to receive an allocation must be retained. It is 
estimated that the annual public burden for the collection will 
average: (1) seven hours per application for an allocation of a tariff 
rate quota; (2) one hour per application for a reallocation; (3) 24 
hours per request for a modification of a limitation on the tariff rate 
quotas; and (4) 24 hours for comments on such a request. This includes 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information.
    Pursuant to Executive Order 12866, this final rule has been 
determined to be not significant.

Dated: May 5, 2005.


Joseph A. Spetrini
Acting Assistant Secretary for Import Administration.

List of Subjects

15 CFR Part 335

    Imports, Quotas, Reporting and recordkeeping, Tariffs, Textiles.

15 CFR Part 340

    Imports, Quotas, Reporting and recordkeeping, Tariffs, Textiles.

0
For the reasons stated in the preamble, 15 CFR Parts 335 and 340 are 
revised to read as follows:

PART 335--IMPORTS OF WORSTED WOOL FABRIC

Sec.
Sec. 335.1 Purpose.
Sec. 335.2 Definitions.
Sec. 335.3 Applications to receive allocation.
Sec. 335.4 Allocation.
Sec. 335.5 Licenses.
Sec. 335.6 Surrender, reallocation and license utilization 
requirement.
Sec. 335.7 Modifications of the limitation.

    Authority: Title V Pub. L. 106-200, 114 Stat. 299; Presidential 
Proclamation 7383, 65 FR 76551, 3 CFR, 2000 Comp., p.212.


Sec.  335.1  Purpose.

    This part sets forth regulations regarding the issuance and effect 
of licenses for the allocation of Worsted Wool Fabric under the Tariff 
Rate Quotas established by Section 501 of the Act.


Sec.  335.2  Definitions.

    For purposes of these regulations and the forms used to implement 
them:
    The Act means the Trade and Development Act of 2000 (Public Law No. 
106-200, 114 Stat 251).
    The Department means the United States Department of Commerce.
    HTS means the Harmonized Tariff Schedule of the United States.
    Imports subject to Tariff Rate Quotas are defined by date of 
presentation as defined in 19 CFR 132.1(d) and 19 CFR 132.11(a).
    Licensee means an applicant for an allocation of the Tariff Rate 
Quotas that receives an allocation and a license.
    Production means cutting and sewing garments in the United States.
    Tariff Rate Quota or Quotas means the temporary duty reduction 
provided under Section 501 of the Act for limited quantities of fabrics 
of worsted wool with average diameters greater than 18.5 micron, 
certified by the importer as suitable for use in making suits, suit-
type jackets, or trousers (HTS heading 9902.51.11), and for limited 
quantities of fabrics of worsted wool with average diameters of 18.5 
microns or less, certified by the importer as suitable for use in 
making suits, suit-type jackets, or trousers (HTS heading 9902.51.12).
    Tariff Rate Quota Year means a calendar year for which the Tariff 
Rate Quotas are in effect.
    Worsted Wool Fabric means fabric containing at least 85 percent by 
weight worsted wool.
    Worsted Wool Suits means men's and boys' worsted wool suits, the 
outer surface of which contains at least 85 percent by weight worsted 
wool fabric.
    Worsted Wool Suit-Type Jackets mean men's and boys' worsted wool 
suit-type jackets, the outer surface of which contains at least 85 
percent by weight worsted wool fabric.
    Worsted Wool Trousers means men's and boys' worsted wool trousers, 
the outer surface of which contains at least 85 percent by weight 
worsted wool fabric.


Sec.  335.3  Applications to receive allocation.

    (a) In each year prior to a Tariff Rate Quota Year, the Department 
will cause to be published a Federal Register notice soliciting 
applications to receive an allocation of the Tariff Rate Quotas.
    (b) An application for a Tariff Rate Quota allocation must be 
received, or postmarked by the U.S. Postal Service, within 30 calendar 
days after the date of publication of the Federal Register notice 
soliciting applications.
    (c) During the calendar year of the date of the application, an 
applicant must have cut and sewed in the United States all three of the 
following apparel products: Worsted Wool Suits, Worsted Wool Suit-Type 
Jackets, and Worsted Wool Trousers. The applicant may either have cut 
and sewn these products on its own behalf or had another person

[[Page 24944]]

cut and sew the products on the applicant's behalf, provided the 
applicant owned the fabric at the time it was cut and sewn. The 
application must contain a statement to this effect.
    (d) An applicant must provide the following information in the 
format set forth in the application form provided by the Department:
    (1)Identification. Applicant's name, address, telephone number, fax 
number, and federal tax identification number; name of person 
submitting the application, and title, or capacity in which the person 
is acting for the applicant.
    (2) Production. Name and address of each plant or location where 
Worsted Wool Suits, Worsted Wool Suit-Type Jackets, and Worsted Wool 
Trousers were cut and sewn by the applicant and the name and address of 
all plants or locations that cut and sewed such products on behalf of 
the applicant. Production data, including the following: the quantity 
and value of the Worsted Wool Suits, Worsted Wool Suit-Type Jackets, 
and Worsted Wool Trousers cut and sewn in the United States by 
applicant, or on behalf of applicant, from fabric owned by applicant. 
This data must indicate actual production (not estimates) of Worsted 
Wool Suits, Worsted Wool Suit-Type Jackets and Worsted Wool Trousers 
the outer surface of which contains at least 85 percent worsted wool 
fabric by weight with an average diameter of 18.5 microns or less. This 
data must also indicate actual production (not estimates) of Worsted 
Wool Suits, Worsted Wool Suit-Type Jackets and Worsted Wool Trousers 
the outer surface of which contains least 85 percent worsted wool 
fabric by weight with average diameter greater than 18.5 microns. 
Production data must be provided for the first six months of the year 
of the application. This data will be annualized for the purpose of 
making Tariff Rate Quota allocations.
    (3) Worsted Wool Fabric. Data indicating the quantity and value of 
the Worsted Wool Fabric used in reported production.
    (4) Certification. A statement by the applicant (if a natural 
person), or on behalf of applicant, by an employee, officer or agent, 
with personal knowledge of the matters set out in the application, 
certifying that the information contained therein is complete and 
accurate, signed and sworn before a Notary Public, and acknowledging 
that false representations to a federal agency may result in criminal 
penalties under federal law.
    (e) Confidentiality. Any business confidential information provided 
pursuant to this section that is marked ``business confidential'' will 
be kept confidential and protected from disclosure to the full extent 
permitted by law.
    (f) Record retention. The applicant shall retain records 
substantiating the information provided in paragraphs (d)(2), (3), and 
(4) of this section for a period of 3 years and the records must be 
made available upon request by an appropriate U.S. government official.


Sec.  335.4  Allocation.

    (a) Each Tariff Rate Quota (HTS 9902.51.11 and HTS 9902.51.12) will 
be allocated separately. Allocation will be based on an applicant's 
Worsted Wool Suit production, on a weighted average basis, and the 
proportion of imported Worsted Wool Fabric consumed in the production 
of Worsted Wool Suits.
    (b) For the purpose of calculating allocations, Worsted Wool Suit 
production will be increased by the percentage of imported fabric 
consumed in the production of Worsted Wool Suits to total fabric 
consumed in this production. For example, if an applicant uses 30 
percent imported fabric in the production of Worsted Wool Suits, that 
applicant's production level will be increased by 30 percent.
    (c) The Department will cause to be published in the Federal 
Register its determination to allocate the Tariff Rate Quotas and will 
notify applicants of their respective allocation as soon as possible. 
Promptly thereafter, the Department will issue licenses.


Sec.  335.5  Licenses.

    (a) Each Licensee will receive a license, which will include a 
unique control number. The license is subject to the surrender and 
reallocation provisions in Sec. 335.6.
    (b) A license may be exercised only for fabric entered for 
consumption, or withdrawn from warehouse for consumption, during the 
Tariff Rate Quota Year specified in the license. A license will be 
debited on the basis of date of entry for consumption or withdrawal 
from warehouse for consumption.
    (c) A Licensee may import fabric certified by the importer as 
suitable for use in making suits, suit-type jackets, or trousers under 
the appropriate Tariff Rate Quota as specified in the license (i.e., 
under the Tariff Rate Quota for fabric of worsted wool with average 
fiber diameters greater than 18.5 micron or the Tariff Rate Quota for 
fabric of worsted wool with average fiber diameters of 18.5 micron or 
less) up to the quantity specified in the license subject to the Tariff 
Rate Quota duty rate. Only a Licensee or an importer authorized by a 
Licensee will be permitted to import fabric under the Tariff Rate 
Quotas and to receive the Tariff Rate Quota duty rate.
    (d) The term of a license shall be the Tariff Rate Quota Year for 
which it is issued. Fabric may be entered or withdrawn from warehouse 
for consumption under a license only during the term of that license. 
The license cannot be used for fabric entered or withdrawn from 
warehouse for consumption after December 31 of the year of the term of 
the license.
    (e) The importer of record of fabric entered or withdrawn from 
warehouse for consumption under a license must be the Licensee or an 
importer authorized by the Licensee to act on its behalf. If the 
importer of record is the Licensee, the importer must possess the 
license at the time of filing the entry summary or warehouse withdrawal 
for consumption (Customs Form 7501).
    (f) A Licensee may only authorize an importer to import fabric 
under the license on its behalf by making such an authorization in 
writing or by electronic notice to the importer and providing a copy of 
such authorization to the Department. A Licensee may only withdraw 
authorization from an importer by notifying the importer, in writing or 
by electronic notice, and providing a copy to the Department.
    (g) The written authorization must include the unique number of the 
license, must specifically cover the type of fabric imported, and must 
be in the possession of the importer at the time of filing the entry 
summary or warehouse withdrawal for consumption (Customs Form 7501), or 
its electronic equivalent, in order for the importer to obtain the 
applicable Tariff Rate Quota duty rate.
    (h) It is the responsibility of the Licensee to safeguard the use 
of the license issued. The Department and the U.S. Customs Service will 
not be liable for any unauthorized or improper use of the license.


Sec.  335.6  Surrender, reallocation and license utilization 
requirement.

    (a) Not later than September 30 of each Tariff Rate Quota Year, a 
Licensee that will not import the full quantity granted in a license 
during the Tariff Rate Quota Year shall surrender the allocation that 
will not be used to the Department for purposes of reallocation through 
a written or electronic notice to the Department, including the license 
control number and the amount being surrendered. The surrender shall be

[[Page 24945]]

final, and shall apply only to that Tariff Rate Quota Year.
    (b) For purposes of this section, ``unused allocation'' means the 
amount by which the quantity set forth in a license, including any 
additional amount received pursuant to paragraph (d) of this section, 
exceeds the quantity entered under the license, excluding any amount 
surrendered pursuant to paragraph (a) of this section.
    (c) The Department will notify Licensees of any amount surrendered 
and the application period for requests for reallocation. A Licensee 
that has imported, or intends to import, a quantity of Worsted Wool 
Fabric exceeding the quantity set forth in its license may apply to 
receive additional allocation from the amount to be reallocated. The 
application shall state the maximum amount of additional allocation the 
applicant will be able to use.
    (d) The amount surrendered will be reallocated to Licensees that 
have applied for reallocation. The entire amount surrendered will be 
reallocated pro-rata among applicants based on the applicant's share of 
the annual allocation, but will not exceed the amount set forth in the 
reallocation application as the maximum amount able to be used.
    (e) A Licensee whose unused allocation in a Tariff Rate Quota Year 
exceeds five percent of the quantity set forth in its license shall be 
subject to having its allocation reduced in the subsequent Tariff Rate 
Quota Year. The subsequent Tariff Rate Quota Year allocation will be 
reduced from the quantity such Licensee would otherwise have received 
by a quantity equal to 25 percent of its unused allocation from the 
prior year. A Licensee whose unused allocation in two consecutive 
Tariff Rate Quota Years exceeds five percent of the quantity set forth 
in its license shall have its allocation reduced in the subsequent 
Tariff Rate Quota Year by a quantity equal to 50 percent of its unused 
allocation from the prior year.
    (f) No penalty will be imposed under paragraph (e) of this section 
if the Licensee demonstrates to the satisfaction of the Department that 
the unused allocation resulted from breach by a carrier of its contract 
of carriage, breach by a supplier of its contract to supply the fabric, 
act of God, or force majeure.


Sec.  335.7  Modifications of the limitation.

    In the event the limitation on the quantity of imports of Worsted 
Wool Fabric under the Tariff Rate Quotas is increased, the increase 
will be allocated on the same basis as the rest of the Tariff Rate 
Quotas. Licenses will be issued or adjusted accordingly.

PART 340--MODIFICATION OF THE TARIFF RATE QUOTA LIMITATION ON 
WORSTED WOOL FABRIC IMPORTS

Sec.
Sec. 340.1 Purpose.
Sec. 340.2 Definitions.
Sec. 340.3 Requests for modification.
Sec. 340.4 Comments regarding requested modification.
Sec. 340.5 Requests for modification and comments.
Sec. 340.6 Requests for additional information.
Sec. 340.7 Determination.

    Authority: Authority: Pub. L. 106-200, 114 Stat. 299; 
Presidential Proclamation 7383, 65 FR 76551, 3 CFR, 2000 Comp., p. 
212.


Sec.  340.1  Purpose.

    This part sets forth regulations regarding the procedures for 
considering requests to modify the limitations on the quantity of 
imports of fabrics of worsted wool under the Tariff Rate Quotas 
established by Section 501 of the Act. Section 504 of the Act requires 
annual consideration of such requests made by U.S. manufacturers of 
certain apparel products made of Worsted Wool Fabrics and grants the 
authority to modify the limitations.


Sec.  340.2  Definitions.

    For purposes of these regulations and the forms used to implement 
them:
    The Act means the Trade and Development Act of 2000 (Public Law No. 
106-200, 114 Stat 251).
    The Department means the United States Department of Commerce.
    HTS means the Harmonized Tariff Schedule of the United States.
    Imports subject to Tariff Rate Quotas are defined by date of 
presentation as defined in 19 CFR 132.1(d) and 19 CFR 132.11(a).
    Production means cutting and sewing garments in the United States.
    Tariff Rate Quota or Quotas means the temporary duty reduction 
provided under Section 501 of the Act for limited quantities of fabrics 
of worsted wool with average diameters greater than 18.5 micron, 
certified by the importer as suitable for use in making suits, suit-
type jackets, or trousers (HTS heading 9902.51.11), and for limited 
quantities of fabrics of worsted wool with average diameters of 18.5 
microns or less, certified by the importer as suitable for use in 
making suits, suit-type jackets, or trousers (HTS heading 9902.51.12).
    Tariff Rate Quota Year means a calendar year for which the Tariff 
Rate Quotas are in effect.
    Worsted Wool Fabric means fabric containing at least 85 percent by 
weight worsted wool.
    Worsted Wool Suits means men's and boys' worsted wool suits, the 
outer surface of which contains at least 85 percent by weight worsted 
wool fabric.
    Worsted Wool Suit-Type Jackets mean men's and boys' worsted wool 
suit-type jackets, the outer surface of which contains at least 85 
percent by weight worsted wool fabric.
    Worsted Wool Trousers means men's and boys' worsted wool trousers, 
the outer surface of which contains at least 85 percent by weight 
worsted wool fabric.


Sec.  340.3  Requests for modification.

    (a) On an annual basis, the Department will cause to be published a 
Federal Register notice soliciting requests from U.S. manufacturers of 
Worsted Wool Suits, Worsted Wool Suit-Type Jackets, and Worsted Wool 
Trousers to modify the limitations on the quantity of imports of 
fabrics of worsted wool under the Tariff Rate Quotas. Requests must be 
received, or postmarked, on a date no later than 15 calendar days after 
the date of the Federal Register notice.
    (b) A request shall include:
    (1) The name, address, telephone number, fax number, and Internal 
Revenue Service number of the requester;
    (2) The relevant worsted wool apparel product(s) manufactured by 
the person(s), that is, Worsted Wool Suits, Worsted Wool Suit-Type 
Jackets, or Worsted Wool Trousers;
    (3) The modification requested, including the amount of the 
modification and the limitation that is the subject of the request (HTS 
heading 9902.51.11 and/or 9902.51.12); and
    (4) A statement of the basis for the request, including all 
relevant facts and circumstances.
    (c) A request should include the following information for each 
limitation that is the subject of the request, to the extent available:
    (1) A list of suppliers from which the requester purchased 
domestically produced Worsted Wool Fabric during the 12 months 
preceding the request, the dates of such purchases, the quantity 
purchased, the quantity of imported Worsted Wool Fabric purchased, the 
countries of origin of the imported Worsted Wool Fabric purchased, the 
average price paid per square meter of the domestically produced 
Worsted Wool Fabric purchased, and the average price paid per square 
meter of the imported Worsted Wool Fabric purchased;
    (2) A list of domestic Worsted Wool Fabric producers that declined, 
on request, to sell Worsted Wool Fabric to

[[Page 24946]]

the requester during the 12 months preceding the request, indicating 
the product requested, the date of the order, the price quoted, and the 
reason for the refusal;
    (3) The requester's domestic production and sales for the most 
recent six month period for which such data is available and the 
comparable six month period in the previous year, for each of the 
following products: Worsted Wool Suits, Worsted Wool Suit-Type Jackets, 
or Worsted Wool Trousers;
    (4) Evidence that the requester lost production or sales due to an 
inadequate supply of domestically-produced Worsted Wool Fabric on a 
cost competitive basis; and
    (5) Other evidence of the inability of domestic producers of 
Worsted Wool Fabric to supply domestically produced Worsted Wool Fabric 
to the requester.


Sec.  340.4  Comments regarding requested modification.

    (a) If the Department receives a request or requests from a U.S. 
manufacturer under Sec. 340.3, the Department will cause to be 
published in the Federal Register a notice summarizing the request or 
requests and soliciting comments from any interested person, including 
U.S. manufacturers of Worsted Wool Fabric, wool yarn, wool top and wool 
fiber, regarding the requested modification. Comments must be received, 
or postmarked, on a date not later than 20 calendar days after the date 
of the Federal Register notice.
    (b) If the person submitting comments is a domestic producer of 
Worsted Wool Fabric, comments should include, to the extent available, 
the following information for each limitation with respect to which 
comments are being made:
    (1) A list of domestic manufacturers of Worsted Wool Suits, Suit-
Type Jackets, or Trousers for whom orders were filled during the twelve 
months prior to the submission of the comments, the date of such 
orders, the total quantity ordered and supplied in square meters of 
domestically produced Worsted Wool Fabric and of imported Worsted Wool 
Fabric, and the average price received per square meter of domestically 
produced Worsted Wool Fabric and of imported Worsted Wool Fabric for 
such orders.
    (2) A list of all requests to purchase Worsted Wool Fabric during 
the twelve months prior to the submission of the comments that were 
rejected by the person submitting the comments, indicating the dates of 
the requests, the quantity requested, the price quoted, and the reasons 
why the request was rejected;
    (3) Data indicating increase and/or decrease in production and 
sales for the most recent six month period for which data is available 
and the comparable six month period in the previous year of 
domestically-produced Worsted Wool Fabrics used in the production of 
Worsted Wool Suits, Suit-Type Jackets and Trousers.
    (4) Evidence of lost sales due to the temporary duty reductions on 
certain Worsted Wool Fabric under the Tariff Rate Quotas; and
    (5) Other evidence of the ability of domestic producers of Worsted 
Wool Fabric to meet the needs of the manufacturers of Worsted Wool 
Suits, Suit-Type Jackets and Trousers in terms of quantity, variety, 
and other relevant factors.


Sec.  340.5  Requests for modification and comments.

    (a) Requests for modification and comments must be accompanied by a 
statement by the person submitting the request or comments (if a 
natural person), or an employee, officer or agent of the legal entity 
submitting the request or comments, with personal knowledge of the 
matters set forth therein, certifying that the information contained 
therein is complete and accurate, signed and sworn before a Notary 
Public, and acknowledging that false representations to a federal 
agency may result in criminal penalties under federal law.
    (b) Any business confidential information provided pursuant to this 
section that is marked business confidential will be kept confidential 
and protected from disclosure to the full extent permitted by law. To 
the extent business confidential information is provided, a non-
confidential submission shall also be provided, in which business 
confidential information is summarized or, if necessary, deleted.


Sec.  340.6  Requests for additional information.

    The Department may request additional information from any 
manufacturer of Worsted Wool Suits, Suit-Type Jackets and Trousers, or 
manufacturer of Worsted Wool Fabric, wool yarn and wool top and fiber 
concerning information relevant to modifying the limitations.


Sec.  340.7  Determination.

    (a) Based on information obtained, including information on market 
conditions obtained pursuant to the monitoring required under Section 
504(a) of the Act, the Department shall consider the following United 
States market conditions as required by Section 504(b)(2) of the Act:
    (1) Increases or decreases in sales of the domestically-produced 
Worsted Wool Fabrics used in the manufacture of Worsted Wool Suits, 
Suit-Type Jackets and Trousers;
    (2) Increases or decreases in domestic production of such Worsted 
Wool Fabrics;
    (3) Increases or decreases in domestic production and consumption 
of Worsted Wool Suits, Suit-Type Jackets and Trousers;
    (4) The ability of domestic producers of Worsted Wool Fabrics to 
meet the needs of domestic manufacturers of Worsted Wool Suits, Suit-
Type Jackets and Trousers in terms of quantity and the ability to meet 
market demands for the apparel items;
    (5) Evidence that domestic manufacturers of Worsted Wool Fabrics 
used in the manufacture of Worsted Wool Suits, Suit-Type Jackets and 
Trousers have lost sales due to the temporary duty reductions on 
certain fabrics of worsted wool under the Tariff Rate Quota;
    (6) Evidence that domestic manufacturers of Worsted Wool Suits, 
Suit-Type Jackets and Trousers have lost sales due to the inability to 
purchase adequate supplies of worsted wool fabrics on a cost 
competitive basis; and
    (7) Price per square meter of imports and domestic sales of Worsted 
Wool Fabrics.
    (b) Not later than 30 calendar days after the end of the comment 
period provided for in Sec. 340.4(a), and on the basis of its 
consideration of the market conditions set forth in paragraph (a) of 
this section and other relevant factors, and using the facts available, 
the Department will determine whether the limitations on the quantity 
of imports under the Tariff Rate Quotas should be modified and 
recommend to the President that appropriate modifications be made. 
Consistent with section 504(b)(3)(B) of the Act, such modification 
shall not exceed 1,000,000 square meter equivalents for each of the 
Tariff Rate Quotas.
[FR Doc.05-9411 Filed 5-11-05; 8:45 am]
BILLING CODE 3510-DS-S