[Federal Register Volume 72, Number 231 (Monday, December 3, 2007)]
[Notices]
[Pages 67916-67918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23410]


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COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS


Request for Public Comment on the Due Diligence Requirement Under 
the Commercial Availability Procedures of the Dominican Republic-
Central America-United States Free Trade Agreement (CAFTA-DR)

November 28, 2007.
AGENCY: Committee for the Implementation of Textile Agreements 
(``CITA'').

ACTION: Request for Public Comment on the Due Diligence Requirement 
Under the CAFTA-DR Commercial Availability Procedures.

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SUMMARY: CITA requests public comment on the due diligence requirement 
under the CAFTA-DR Commercial Availability procedures. Comments should 
be submitted no later than January 2, 2008 to the attention of: R. 
Matthew Priest, Chairman, Committee for the Implementation of Textile 
Agreements, Room 3001, Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Richard Stetson, Office of Textiles 
and Apparel, U.S. Department of Commerce, (202) 482-2582.

SUPPLEMENTARY INFORMATION:

    Authority: Authority: Section 203(o)(4) of the Dominican 
Republic-Central America-United States Free Trade Agreement 
Implementation Act (``CAFTA-DR''); CAFTA-DR Commercial Availability 
Final Procedures (72 FR 13256, published March 21, 2007) (``Final 
Procedures'').

BACKGROUND:

    The CAFTA-DR Commercial Availability provision permits the use of 
non-originating CAFTA-DR products by implementing procedures that allow 
products to be placed on or removed from a product list, on a timely 
basis,

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and in a manner that is consistent with normal business practice. The 
Final Procedures provide that the procedures may be modified to address 
concerns that may arise as CITA gains experience in implementing them. 
CITA notes that these are administrative procedures rather than 
regulations, and can be modified as needed.
    A critical component to the efficient functioning of the Commercial 
Availability process is the requirement that a requester and a 
potential supplier engage in due diligence efforts, as provided under 
the Final Procedures, to determine whether a product is available in 
commercial quantities in a timely manner in the region. The due 
diligence provisions require communications between the requester and 
potential suppliers, supported by documentation, to ensure that a 
proper inquiry into a product's commercial availability has been 
undertaken prior to the filing of the request.
    Based on CITA's experience, there is a concern that, in certain 
cases, due diligence efforts have fallen short of those expected when 
the procedures were drafted; that product descriptions may not meet 
recognized standards; that potential suppliers may not be adequately 
substantiating their claims that they are to be able to supply 
requested products; and that CITA is not receiving complete information 
from interested entities regarding meaningful contact between 
requesters and potential suppliers necessary for CITA to make informed 
determinations.
    Therefore, CITA requests public comment and proposals on the 
operation of the due diligence requirement under the CAFTA-DR 
Commercial Availability procedures, including the following areas of 
concern:
    Communications between Requesters and Potential Suppliers: Past 
proceedings have exposed issues with regard to the nature of the 
communications between requesters and potential suppliers. 
Specifically, CITA notes that there is a lack of substantive dialogue 
between requesters and potential suppliers. CITA requests public 
comment as to how such communications should be conducted, in keeping 
with normal business practice, as well as the role that third party 
counsels and advisors should play in the communications between 
requesters and potential suppliers; whether only certain employees of 
the requester and potential supplier should be deemed as the 
appropriate contacts for communication regarding potential sales; and 
whether there should be direct dialogue between those appropriate 
personnel prior to submission of requests to CITA.
    Identification of Potential Suppliers: CITA is concerned that 
methods being used to identify potential suppliers and the means of 
contacting requesters and the potential suppliers have not been 
effective. For example, CITA has received requests that contain a 
general inquiry sent via email to all manufacturers within the CAFTA-DR 
region without regard to actual potential for supply. In prior cases, 
CITA has noted a concern regarding the detailed and confidential 
information requested of potential suppliers concerning their business 
plans. CITA seeks public comment regarding what methods of 
communications should be employed to satisfactorily determine whether 
there are potential suppliers and the types of information that can be 
requested of potential suppliers.
    Content of Communications between Requesters and Potential 
Suppliers: In the course of various proceedings, CITA notes that there 
have been issues regarding the content of communications between 
requesters and potential suppliers, namely the description of the 
product, such as production specifications and performance criteria. 
CITA seeks public comment regarding the requirements for a description 
of product specifications; whether industry accepted standards, such as 
ASTM (American Society for Testing and Materials) or AATCC (American 
Association of Textile Chemists and Colorists), should be referenced; 
and whether only measurable criteria and performance standards may be 
referenced in product descriptions. In the course of past proceedings, 
CITA has also noted a concern regarding potentially unreasonable 
demands regarding time lines for supplying requested products, and the 
provision of samples. CITA seeks public comment regarding whether and 
under what conditions potential requesters and potential suppliers 
should provide samples to each other; how reasonable time frames should 
be determined; and whether consideration should be given to time needed 
to develop a product new to a potential supplier.
    Substitutability of Products: In the course of past proceedings, 
CITA has noted concerns as to whether products similar to the requested 
product are substitutable. CITA seeks public comment regarding how 
potential suppliers should identify and describe potentially 
substitutable products; which specifications and performance criteria a 
potentially substitutable product would have to be meet; and reasonable 
justifications for rejecting potentially substitutable products.
    Commercial Availability of a Production Input vs. Downstream 
Product: CITA has found there is concern that a request actually is for 
a downstream product, but it is a production input whose commercial 
availability is in question. CITA seeks public comment regarding 
whether it should reject or deny requests when it becomes clear that a 
production input is not available in commercial quantities in a timely 
manner rather than the downstream product.
    Potential Suppliers' Responses to Requester's Inquiry: CITA has 
found that there is concern regarding the information provided by 
potential suppliers in responses with offers to supply and that 
potential suppliers are not demonstrating a legitimate intent to do 
business by providing a clear, detailed response to a request. CITA 
seeks public comment regarding what information a potential supplier 
should provide to substantiate an objection to a request and an offer 
to supply; whether a potential supplier should have produced the 
requested product within the past 24 months; what information is needed 
to substantiate that a potential supplier has the ability to supply; 
whether types of equipment, capacity, and other production information 
should be business confidential; and what constitutes a timely response 
to an inquiry and a legitimate interest to do business.
    CITA requests public comment on the operation of the due diligence 
requirement under the CAFTA-DR Commercial Availability procedures and 
the issues identified above. Comments must be in English, and must be 
received no later than January 2, 2008. Comments must be submitted 
electronically AND in writing.
    (1) An electronic mail (``email'') version of the comments must be 
either in PDF, Word, or Word-Perfect format, and sent to the following 
email address: OTEXA [email protected]. Comments must have a bolded 
heading stating ``Public Version'', and all business confidential 
information must be deleted and substituted with asterisks. No business 
confidential information should be submitted in the ``email'' version 
of the document.
    (2) The original signed comments must be mailed to the Chairman, 
Committee for the Implementation of Textile Agreements, Room H3001A, 
U.S. Department of Commerce, 14th and Constitution Avenue N.W., 
Washington, DC 20230. Any business confidential information upon which 
an interested person wishes to rely must be included

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in the original signed comments only. Brackets must be placed around 
all business confidential information. Comments containing business 
confidential information must have a bolded heading stating 
``Confidential Version.'' Attachments considered business confidential 
information must have a heading stating ``Business Confidential 
Information''. The Committee will protect from disclosure any business 
confidential information that is marked ``business confidential'' to 
the full extent permitted by law. Except for the inclusion of business 
confidential information, the two versions of comments should be 
identical.
    (3) All comments submitted via ``email'' will be made available for 
public inspection at the Office of Textile and Apparel, Room H3001A, 
the Department of Commerce, 14th and Constitution Avenue N.W., 
Washington, DC, between the hours of 8:30 a.m. and 5:00 p.m. on 
business days. In addition, the ``email'' version of the comments will 
be posted for public review on the Office of Textile and Apparel, 
CAFTA-DR Free Trade Agreement website http://otexa.ita.doc.gov/tradeagree2007.htm.

R. Matthew Priest,
Chairman, Committee for the Implementation of Textile Agreements.
[FR Doc. E7-23410 Filed 11-30-07; 8:45 am]
BILLING CODE 3510-DS