[Federal Register Volume 74, Number 12 (Wednesday, January 21, 2009)]
[Notices]
[Pages 3563-3566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-1215]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration


Imports of Certain Apparel Articles: Interim Procedures for the 
Implementation of the Earned Import Allowance Program Established Under 
the Andean Trade Preference Act of 2008

AGENCY: Department of Commerce, International Trade Administration.

ACTION: Interim Procedures, Request for Comments

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce is issuing interim procedures 
implementing provisions under the Andean Trade Preference Act of 2008 
(``the Act''), enacted in its entirety by Congress on October 3, 2008. 
Section 2 of the Act contains amendments to Title IV of the Dominican 
Republic-Central America-United States Free Trade Agreement 
Implementation Act (Public Law 109-53; 119 Stat. 495). Under Section 2 
of the Act, Title IV of the Dominican Republic-Central America-United 
States Free Trade Agreement Implementation Act is amended by adding 
Section 404 of the Act creating a benefit for eligible apparel articles 
wholly assembled in the Dominican Republic that meet the requirements 
for a ``2 for 1'' earned import allowance. The amendment requires the 
Secretary of Commerce to establish a program to

[[Page 3564]]

provide earned import allowance certificates to any producer or entity 
controlling production of eligible apparel articles in the Dominican 
Republic, such that apparel wholly assembled in the Dominican Republic 
from fabric or yarns, regardless of their source, and imported directly 
from the Dominican Republic may enter the United States duty-free, 
pursuant to the satisfaction of the terms governing issuance of the 
earned import allowance certificate by the producer or entity 
controlling production of eligible apparel articles in the Dominican 
Republic.

DATES: These interim procedures are effective as of December 1, 2008. 
Although these procedures are not subject to the requirement to provide 
prior notice and opportunity for public comment under 5 U.S.C. 
553(b)(A) (``Administrative Procedures Act''), Commerce will consider 
written comments received by 5:00 p.m. on March 23, 2009.

ADDRESSES: Comments should be addressed to: Janet Heinzen, Acting 
Deputy Assistant Secretary for Textiles and Apparel, Room 3001, United 
States Department of Commerce, Washington, D.C. 20230.

FOR FURTHER INFORMATION CONTACT: Robert Carrigg, Office of Textiles and 
Apparel, U.S. Department of Commerce, (202) 482-2573.

SUPPLEMENTARY INFORMATION:

BACKGROUND:

    The Department of Commerce is issuing interim procedures 
implementing Section 2 of the Act, which was enacted in its entirety by 
Congress on October 3, 2008. Section 2 of the Act contains amendments 
creating a benefit for apparel from the Dominican Republic in Title IV 
of the Dominican Republic-Central America-United States Free Trade 
Agreement Implementation Act (Public Law 109-53; 119 Stat. 495). These 
amendments are also cited as the Earned Import Allowance Program.
    Under Section 404 of the Dominican Republic-Central America-United 
States Free Trade Agreement Implementation Act, Title IV is amended by 
creating an uncapped benefit for eligible apparel articles wholly 
assembled in the Dominican Republic that meet the requirements for a 
``2 for 1'' earned import allowance. The Act requires that the 
Secretary of Commerce establish an Earned Import Allowance program 
under Section Title IV such that eligible apparel articles wholly 
assembled in the Dominican Republic from fabrics or yarns and imported 
directly from the Dominican Republic shall enter the United States free 
of duty, without regard to the source of the fabrics (not including 
denim), fabric components, or yarns from which the articles are made, 
if such apparel articles are accompanied by an earned import allowance 
certificate (``certificate'') that reflects the amount of credits equal 
to the total square meter equivalent (``SME``) of such apparel 
articles, in accordance with the program outlined below. The Secretary 
of Commerce has delegated his authority under the Act to implement and 
administer the Earned Import Allowance Program to the International 
Trade Administration's Office of Textiles and Apparel (``OTEXA'').
    This notice sets forth the interim procedures OTEXA will follow in 
implementing the provisions of the Earned Import Allowance Program. In 
accordance with these procedures, OTEXA will issue certificates to 
qualifying apparel producers to accompany imports of eligible apparel 
articles wholly formed in the Dominican Republic and exported from the 
Dominican Republic. Such certificates will be issued as long as there 
is a sufficient balance of SMEs available as a result of the purchase 
of qualifying woven fabrics, as defined below, intended for production 
of apparel in the Dominican Republic. OTEXA, promptly upon promulgation 
of these interim procedures, intends to begin the process of opening 
and administering qualifying apparel producers' accounts to issue 
certificates as appropriate.
    These procedures may be modified in the future to address concerns 
that may arise as OTEXA gains experience in implementing them. Pursuant 
to the Secretary's delegation of authority, OTEXA may reconsider, and/
or subsequently amend any determination to deposit credits or request 
to issue certificates that may have been procured by error, fraud, or 
similar faults.
Interim Procedures:
1. Introduction: OTEXA will issue a certificate to any producer or 
entity controlling production in the Dominican Republic (``qualifying 
apparel producer'') based on the following elements: (1) One SME credit 
shall be issued to a qualifying apparel producer for every two SMEs of 
qualifying woven fabric that the qualifying apparel producer can 
demonstrate that it purchased for the manufacture in the Dominican 
Republic of eligible apparel articles wholly assembled in the Dominican 
Republic. SME quantities are to be calculated by the use of the 
appropriate conversion factor, defined below. OTEXA shall, as requested 
by a qualifying apparel producer, create and maintain an account for 
such qualifying apparel producer, into which such credits shall be 
deposited. (2) Such qualifying apparel producer may redeem credits for 
certificates reflecting such number of credits as the qualifying 
apparel producer may request and has available. Requests for deposits 
of credits for purchases of qualifying woven fabrics as well as 
redemption of said credits for earned import allowance certificates 
will be made through a dedicated on-line system, known as the Dominican 
Republic 2 for 1 Earned Import Allowance Online System (``DR 2 for 1 
online system'').
2. Definitions:
a. The Act: The Andean Trade Preference Act of 2008.
b. Conversion Factor: Conversion factors listed in ``Correlation: U.S. 
Textile and Apparel Industry Category System with the Harmonized Tariff 
Schedule of the United States of America, 2008,'' or its successor 
publications, of the United States Department of Commerce.
c. Imported Directly from the Dominican Republic: Articles are 
``imported directly from the Dominican Republic'' if -
(1) the articles are shipped directly from the Dominican Republic into 
the United States without passing into the territory of any 
intermediate country; or
(2) the articles are shipped from the Dominican Republic into the 
United States through the territory of an intermediate country, and -
(A) the articles in the shipment do not enter into the commerce of any 
intermediate country, and the invoices, bills of lading, and other 
shipping documents specify the United States as the final destination; 
or
(B) the invoices and other documents do not specify the United States 
as the final destination, but the articles in the shipment -
    (i) remain under the control of the customs authority in the 
intermediate country;
    (ii) do not enter into the commerce of the intermediate country 
except for the purpose of a sale other than at retail; and
    (iii) have not been subjected to operations in the intermediate 
country other than loading, unloading, or other activities necessary to 
preserve the articles in good condition.
d. Qualifying Apparel Producer: An individual, corporation, 
partnership, association, or other entity or group that exercises 
direct, daily operational

[[Page 3565]]

control over the apparel production process in the Dominican Republic; 
or an individual, corporation, partnership, association or other entity 
that is not a producer and that controls the apparel production process 
in the Dominican Republic through a contractual relationship or other 
indirect means.
e. Qualifying Woven Fabric: For the purposes of these procedures, the 
term ``qualifying woven fabric'' means woven fabric of cotton, wholly 
formed in the United States from yarns wholly formed in the United 
States and certified by the producer or entity controlling production 
as being suitable for use in the manufacture of apparel items such as 
trousers, bib and brace overalls, breeches and shorts, skirts and 
divided skirts or pants, all the foregoing of cotton, purchased on or 
after August 1, 2007, expressly for production of apparel in the 
Dominican Republic, except that:
(1) fabric otherwise eligible as qualifying woven fabric shall not be 
ineligible asqualifying woven fabric because the fabric contains nylon 
filament yarn to which Section 213(b)(2)(A)(vii)(IV) of the Caribbean 
Basin Economic Recovery Act (``CBERA'') applies;
(2) fabric that would otherwise be ineligible as qualifying woven 
fabric because thefabric contains yarns not wholly formed in the United 
States shall not be ineligible as qualifying woven fabric if the total 
weight of all such yarns is not more than 10 percent of the total 
weight of the fabric, except that any elastomeric yarn contained in an 
eligible article must be wholly formed in the United States; and
(3) fabric otherwise eligible as qualifying fabric shall not be 
ineligible as qualifying fabric because the fabric contains yarns or 
fibers that have been designated as not commercially available pursuant 
to--
(a) article 3.25(4) or Annex 3.25 of the Agreement;
(b) Annex 401 of the North American Free Trade Agreement;
(c) section 112(b)(5) of the African Growth and Opportunity Act;
(d) section 204(b)(3)(B)(i)(III) or (ii) of the Andean Trade Preference 
Act;
(e) section 213(b)(2)(A)(v) or 213A(b)(5)(A) of the Caribbean Basin 
Economic Recovery Act; or
(f). any other provision, relating to determining whether a textile or 
apparel article is an originating good eligible for preferential 
treatment, of a law that implements a free trade agreement entered into 
by the United States that is in effect at the time the claim for 
preferential treatment is made.
f. Qualifying Apparel Articles: the term `eligible apparel articles' 
means the following articles classified in chapter 62 of the Harmonized 
Tariff System of the United States (and meeting the requirements of the 
rules relating to chapter 62 of the HTS contained in general note 29(n) 
of the HTS) of cotton (but not of denim): trousers, bib and brace 
overalls, breeches and shorts, skirts and divided skirts, and pants.
g. Wholly Assembled: A good is ``wholly assembled'' in the Dominican 
Republic if all its components, of which there must be at least two, 
pre-existed in essentially the same condition as found in the finished 
good and were combined to form the finished good in the Dominican 
Republic. Minor attachments and minor embellishments (for example, 
appliqu[eacute]s, beads, spangles, embroidery, and buttons) not 
appreciably affecting the identity of the good, and minor subassemblies 
(for example, cuffs, plackets, and pockets), shall not affect the 
determination of whether a good is ``wholly assembled'' in the 
Dominican Republic.
3. Submitting a Request to Open an Account: A qualifying apparel 
producer, as defined in section 2(d) of these procedures, may request 
that OTEXA open an account to which records of purchases of qualifying 
woven fabric, as defined in section 2(e) of these procedures may be 
deposited toward a balance from which to draw certificates. Such 
request should be made online, via the DR 2 for 1 online system, 
located on the OTEXA website. In making a request to open an account, 
the qualifying apparel producer must provide:
a. The full name and address of the qualifying apparel producer;
b. All designated contacts and contact information, and any designees 
authorized to have access to the account; and
c. A statement affirming the accuracy and authenticity of the 
information submitted to OTEXA.
    Once the application has been received by the DR 2 for 1 online 
system and reviewed and approved by OTEXA, the qualifying apparel 
producer will be assigned a unique user identification number, and a 
password to enable future access to its online account. The qualifying 
apparel producer may request to update contact and designee information 
in its account at any time through the DR 2 for 1 online system.
4. Submitting a Request to Deposit Credits. A qualifying apparel 
producer with an existing account may submit a request to deposit 
credits for purchases of qualifying woven fabric. The request must 
contain the following information:
a. The name of the qualifying apparel producer;
b. A complete description of the qualifying woven fabric;
c. The quantity, in SMEs, of the qualifying woven fabric;
d. A statement that the qualifying woven fabric is intended for the 
production of eligible apparel articles in the Dominican Republic; and
e. Supporting documentation: documentation, which, in their totality 
includes:
(1) the U.S. manufacturer of the qualifying woven fabric;
(2) the full description of the fabric in question, including any non-
U.S. components or inputs and their manufacturer;
(3) the name of the qualifying apparel producer as the ultimate 
consignee; and
(4) that the fabric purchased is intended for production of eligible 
apparel articles in the Dominican Republic.
f. An affirmation from the qualifying apparel producer as to the 
accuracy and authenticity of the information provided.
    The request must be submitted via the DR 2 for 1 online system. All 
supporting documentation must be submitted either electronically via 
the DR 2 for 1 online system, or via fax to 202-482-0858 or 202-482-
0667. OTEXA will review the request and supporting documentation and 
shall make a determination whether to approve or deny the request to 
deposit credits. Should there be insufficient information with which to 
make a determination, OTEXA may request additional information from the 
qualifying apparel producer, the manufacturer of the fabric at issue, 
or any other entity identified in supporting documentation, as provided 
by section 6.
5. Submitting a Request for an Earned Income Allowance Certificate. A 
qualifying apparel producer may request the issuance of a certificate 
via the DR 2 for 1 online system. The qualifying apparel producer must 
log on to the DR 2 for 1 online system to access its account, and 
submit a request to redeem credits and be issued a certificate. As long 
as there are sufficient credits available, a certificate will be 
automatically generated by the DR 2 for 1 online system, and the 
credits will be automatically withdrawn from the qualifying apparel 
producer's account. If there are insufficient credits in the qualifying 
apparel producer's account, the request for a certificate will 
automatically be denied by the DR 2 for 1 online system.

[[Page 3566]]

6. Verification of Submitted Information. OTEXA may, at any time, 
verify the information submitted by a qualifying apparel producer or 
its designee. OTEXA may require any textile mill or other entity 
located in the United States that exports to the Dominican Republic 
qualifying woven fabric, upon such export or upon request, 
documentation to OTEXA: (a) verifying that the qualifying woven fabric 
was exported to a producer in the Dominican Republic or to an entity 
controlling production; and (b) identifying such producer or entity 
controlling production, and the quantity and description of qualifying 
woven fabric exported to such producer or entity controlling 
production. OTEXA may also require that a producer or entity 
controlling production submit documentation to verify purchases of 
qualifying woven fabric. OTEXA may make available to each person or 
entity identified in documentation submitted under these provisions 
information contained in the documentation that relates to the purchase 
of qualifying woven fabric involving such person or entity. OTEXA may 
establish and impose penalties for the submission to OTEXA of 
fraudulent information under this program, other than a claim under the 
customs laws of the United States or under title 18, United States 
Code.
7. Contact Information: Questions regarding the Earned Import Allowance 
program or the DR 2 for 1 online system may contact OTEXA via email at 
[email protected], or by phone to the Office of Textiles and 
Apparel, U.S. Department of Commerce, (202) 482-3400.

Dated: January 15, 2009.
R. Matthew Priest,
Deputy Assistant Secretary for Textiles and Apparel.
[FR Doc. E9-1215 Filed 1-15-09; 4:15 pm]
BILLING CODE 3510-DS