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Senate Report 108-028 - MISCELLANEOUS TRADE AND TECHNICAL CORRECTIONS ACT OF 2003

19-010

Calendar No. 43

108TH CONGRESS

Report

SENATE

1st Session

108-28

--MISCELLANEOUS TRADE AND TECHNICAL CORRECTIONS ACT OF 2003

March 20, 2003- Ordered to be printed

Mr. GRASSLEY, from the Committee on Finance, submitted the following

R E P O R T

[To accompany S. 671]

[Including cost estimate of the Congressional Budget Office]

The Committee on Finance reported an original bill (S. 671) to amend the Harmonized Tariff Schedule of the United States to modify temporarily certain rates of duty, to make other technical amendments to the trade laws, and for other purposes, having considered the same, reports favorably thereon and recommends that the bill do pass.

CONTENTS Page

I. Background 2

II. Summary 2

Title I--Tariff Provisions 2

Title II--Other Trade Provisions 175

Title III--Protection of Intellectual Property Rights 180

III. Votes of the Committee 186

IV. Congressional Action 186

V. Budgetary Impact 187

VI. Regulatory Impact and Other Matters 192

VII. Changes in Existing Law Made by the Bill as Reported 192

I. BACKGROUND

On June 18, 2002, Chairman Max Baucus requested public comment on a package of technical corrections, temporary duty suspensions or reductions, liquidations and reliquidations, and other miscellaneous trade proposals introduced during the 107th Congress and referred to the Committee on Finance. The legislation, as amended, includes many of these bills which, based upon the comments submitted to the Committee on Finance by the public, the U.S. Customs Service, the U.S. Department of Commerce, the U.S. International Trade Commission (ITC), the United States Trade Representative and other agencies, the Committee has found to be non-controversial.

II. SUMMARY

SHORT TITLE AND TABLE OF CONTENTS

(SECTION 1)

Reason for change

This provision would enable U.S. manufacturers to reduce costs, making downstream product industries more competitive without jeopardizing any domestic manufacturer.

CHAPTER 2--EXISTING DUTY SUSPENSIONS AND REDUCTIONS

EXTENSION OF CERTAIN EXISTING DUTY SUSPENSIONS AND REDUCTIONS

(SECTION 1501)

(a) Existing duty suspensions--

Present law

(1) The temporary duty suspension for 3-amino-2-(sulfato-ethyl sulfonyl) ethyl benzamide (provided for in HTS heading 9902.30.90) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 6.5% ad valorem.

(2) The temporary duty suspension for MUB 738 INT (provided for in HTS heading 9902.32.91) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(3) The temporary duty suspension for 5-amino-N-(2-hydroxyethyl)-2,3-xylenesulfonamide (provided for in HTS heading 9902.30.31) would expire on December 31, 2001, after which time the product would be subject to an NTR duty rate of 0.4›/kg + 7.6% ad valorem.

(4) The temporary duty suspension for 2-amino-5-nitrothiazole (provided for in HTS heading 9902.29.46) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 6.5% ad valorem.

(5) The temporary duty suspension for 2-methyl-4,6-bis[(octylthio) methyl]phenol (provided for in HTS heading 9902.32.14) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 6.5% ad valorem.

(6) The temporary duty suspension for 4-[[4,6-bis(octylthio)-1,3,5-triazin-2-yl]amino]-2,6-bis(1,1-dimethylethyl)phenol (provided for in HTS heading 9902.32.30) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 6.5% ad valorem.

(7) The temporary duty suspension for calcium bis[monoethyl(3,5-di-tert-butyl-4-hydroxybenzyl) phosphonate] (provided for in HTS heading 9902.32.16) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 7.2% ad valorem.

(8) The temporary duty suspension for nicosulfuron formulated product (`Accent') (provided for in HTS heading 9902.38.69) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(9) The temporary duty suspension for DPX-E9260 (provided for in HTS heading 9902.33.63) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(10) The temporary duty suspension for DPX-E6758 (provided for in HTS heading 9902.33.59) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(11) The temporary duty suspension for carbamic acid (U-9069) (provided for in HTS heading 9902.33.61) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(12) The temporary duty suspension for 1N-N5297 (provided for in HTS heading 9902.29.35) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(13) The temporary duty suspension for an ultra-violet dye (provided for in HTS heading 9902.28.19) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(14) The temporary duty suspension for certain organic pigments and dyes (provided for in HTS heading 9902.32.07) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5.9% ad valorem.

(15) The temporary duty suspension for 4-hexylresorcinol (provided for in HTS heading 9902.29.07) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5.5% ad valorem.

(16) The temporary duty suspension for certain sensitizing dyes (provided for in HTS heading 9902.29.37) would expire on December 31, 2003, after which time the products would be subject to NTR duty rates of 6.5% and 7.2% ad valorem.

(17) The temporary duty suspension for certain cathode-ray tubes (provided for in HTS heading 9902.85.42) would expire on December 31, 2003, after which time the products would be subject to an NTR duty rate of 3% ad valorem.

(18) The temporary duty suspension for a fluorinated compound (provided for in HTS heading 9902.30.14) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6% ad valorem.

(19) The temporary duty suspension for a certain light absorbing photo dye (provided for in HTS heading 9902.29.55) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(20) The temporary duty suspension for methyl thioglycolate (provided for in HTS heading 9902.32.55) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 3.7% ad valorem.

(21) The temporary duty suspension for chloro amino toluene (provided for in HTS heading 9902.29.62) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 0.2›/kg + 7.7% ad valorem.

(22) The temporary duty suspension for bromine-containing compounds (provided for in HTS headings 9902.28.08, 9902.28.09, and 9902.28.10) would expire on December 31, 2003, after which time the products would be subject to NTR duty rates of 3.7% and 5.5% ad valorem.

(23) The temporary duty suspension for filter blue green photo dye (provided for in HTS heading 9902.32.62) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(24) The temporary duty suspension for 5-[(3,5-dichlorophenyl)-thio]-4-(1-methylethyl-1)-(4-pyridin lmethyl)-1H-imidazole-2-methanol carbamate (provided for in HTS heading 9902.32.99) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(25) The temporary duty suspension for (2E,4S)-4-(((2R,5S)-2-((4-fluorophenyl)-methyl)-6-methyl-5- ((5-methyl-3-isoxazolyl)-carbonyl y)amino)-1,4-dioxoheptyl)-amino)-5-((3S)-2-oxo-3-pyrrolidinyl)-2- pentenoic acid, ethyl ester (provided for in HTS heading 9902.32.97) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(26) The temporary duty suspension for Baytron M (provided for in HTS heading 9902.29.87) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(27) The temporary duty suspension for Baytron P (provided for in HTS heading 9902.39.15) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.1% ad valorem.

(28) The temporary duty suspension for certain ion-exchange resins (provided for in HTS heading 9902.39.30) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 3.9% ad valorem.

(29) The temporary duty suspension for thionyl chloride (provided for in HTS heading 902.28.01) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 3.7% ad valorem.

(30) The temporary duty suspension for DEMT (provided for in HTS heading 9902.32.12) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 0.2›/kg + 7.7% ad valorem.

(31) The temporary duty suspension for p-hydroxybenzoic acid (provided for in HTS heading 9902.29.03) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(32) The temporary duty suspension for iminodisuccinate (provided for in HTS headings 9902.29.83 and 9902.38.10) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5% ad valorem.

(33) The temporary duty suspension for mesamoll (provided for in HTS heading 9902.38.14) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.6% ad valorem.

(34) The temporary duty suspension for Baytron C-R (provided for in HTS heading 9902.38.15) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5% ad valorem.

(35) The temporary duty suspension for ortho-phenylphenol (OPP) (provided for in HTS heading 9902.29.25) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5.5% ad valorem.

(36) The temporary duty suspension for Vulkalent E/C (provided for in HTS heading 9902.38.31) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 4.6% ad valorem.

(37) The temporary duty suspension for desmedipham (provided for in HTS heading 9902.31.14) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 6.5% ad valorem.

(38) The temporary duty suspension for phenmedipham (provided for in HTS heading 9902.31.13) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 7.1% ad valorem.

(39) The temporary duty suspension for diclofop methyl (provided for in HTS heading 9902.30.16) expired on December 31, 2001, after which time the product became subject to an NTR duty rate of 6.5% ad valorem.

(40) The temporary duty suspension for R115777 (provided for in HTS heading 9902.33.40) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(41) The temporary duty suspension for imazalil (provided for in HTS heading 9902.29.10) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(42) The temporary duty suspension for Norbloc 7966 (provided for in HTS heading 9902.29.22) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(43) The temporary duty suspension for Fungaflor 500 EC (provided for in HTS heading 9902.38.09) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(44) The temporary duty suspension for Solvent Blue 124 (provided for in HTS heading 9902.32.73) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.4% ad valorem.

(45) The temporary duty suspension for 4-amino-2,5-dimethoxy-N-phenylbenzene sulfonamide (provided for in HTS heading 9902.29.73) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(46) The temporary duty suspension for Solvent Blue 104 (provided for in HTS heading 9902.32.72) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.4% ad valorem.

(47) The temporary duty suspension for sodium petroleum sulfonate (provided for in HTS heading 9902.34.01) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 3.7% ad valorem.

(48) The temporary duty suspension for isobornyl acetate (provided for in HTS heading 9902.29.71) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 4.8% ad valorem.

(49) The temporary duty suspension for certain TAED chemicals (provided for in HTS heading 9902.29.70) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 3.7% ad valorem.

(50) The temporary duty suspension for diethyl phosphorochidothioate (provided for in HTS heading 9902.29.58) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 3.7% ad valorem.

(51) The temporary duty suspension for 2,6-dichloroaniline (provided for in HTS heading 9902.29.17) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 0.2›/kg + 7.7% ad valorem.

(52) The temporary duty suspension for benfluralin (provided for in HTS heading 9902.29.59) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 0.2›/kg + 7.7% ad valorem.

(53) The temporary duty suspension for 1,3-diethyl-2-imidazolidinone (provided for in HTS heading 9902.29.26) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(54) The temporary duty suspension for diphenyl sulfide (provided for in HTS heading 9902.29.06) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(55) The temporary duty suspension for methoxyfenozide (provided for in HTS heading 9902.32.93) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(56) The temporary duty suspension for triazamate (provided for in HTS heading 9902.32.89) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.1% ad valorem.

(57) The temporary duty suspension for propiconazole (provided for in HTS heading 9902.29.80) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7% ad valorem.

(58) The temporary duty suspension for ¥-Bromo-¥-nitrostyrene (provided for in HTS heading 9902.32.92) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 0.4›/kg + 6.5% ad valorem.

(59) The temporary duty suspension for quino-line (provided for in HTS heading 9902.29.61) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 0.4›/kg + 7.5% ad valorem.

(60) The temporary duty suspension for (2-phenylphenol (provided for in HTS heading 9902.29.25) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5.5% ad valorem.

(61) The temporary duty suspension for 3-amino-5-mercapto-1,2,4-triazole (provided for in HTS heading 9902.29.08) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(62) The temporary duty suspension for (4,4-dimethoxy-2-butanone (provided for in HTS heading 9902.29.16) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 4% ad valorem.

(63) The temporary duty suspension for fenbuconazole (provided for in HTS heading 9902.32.87) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7% ad valorem.

(64) The temporary duty suspension for diiodomethyl-p-tolylsulfone (provided for in HTS heading 9902.32.90) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.1% ad valorem.

(65) The temporary duty suspension for propiophenone (provided for in HTS heading 9902.28.16) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.1% ad valorem.

(66) The temporary duty suspension for meta-chlorobenzaldehyde (provided for in HTS heading 9902.28.17) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7% ad valorem.

(67) The temporary duty suspension for 4-bromo-2-fluoroacetanilide (provided for in HTS heading 9902.28.15) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(68) The temporary duty suspension for 2,6,dichlorotoluene (provided for in HTS heading 9902.32.82) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5.5% ad valorem.

(69) The temporary duty suspension for cobalt boron (provided for in HTS heading 9902.80.05) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 4.4% ad valorem.

(70) The temporary duty suspension for ferroboron (provided for in HTS heading 9902.72.02) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 5% ad valorem.

(71) The temporary duty suspension for 4,4difluorobenzophenone (provided for in HTS heading 9902.32.85) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6% ad valorem.

(72) The temporary duty suspension for certain light absorbing photo dyes (provided for in HTS heading 9902.29.34) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(73) The temporary duty suspension for certain imaging chemicals (provided for in HTS heading 9902.29.38) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(74) The temporary duty suspension for 3,5-dibromo-4-hydoxybenzonitril (provided for in HTS heading 9902.28.18) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(75) The temporary duty suspension for cyclanilide technical (provided for in HTS heading 9902.29.64) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.1% ad valorem.

(76) The temporary duty suspension for fipronil technical (provided for in HTS heading 9902.29.98) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 7.2% ad valorem.

(77) The temporary duty suspension for 3,5-dibromo-4-hydoxybenzonitril ester and inerts (provided for in HTS heading 9902.38.04) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 6.5% ad valorem.

(78) The temporary duty suspension for P-nitro toluene-o-sulfonic acid (provided for in HTS heading 9902.29.23) expired on December 31, 2001, after which time the product would be subject to an NTR duty rate of 3.5% ad valorem.

(79) The temporary duty suspension for railway car body shells (provided for in HTS heading 9902.86.07) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 2.8% ad valorem.

(80) The temporary duty suspension for railway car body shells having an aggregate capacity of 140 passengers (provided for in HTS heading 9902.86.08) would expire on December 31, 2003, after which time the product would be subject to an NTR duty rate of 2.8% ad valorem.

Explanation of provision

This provision would amend the above HTS headings to extend those temporary duty suspensions until December 31, 2005.

Reason for change

This provision would enable U.S. manufacturers that use these products to continue to keep costs down, which would continue to make downstream product industries more competitive without jeopardizing any domestic manufacturer.

(b) Other modifications--

Present law

(1) There is a temporary duty reduction for certain cathode-ray tubes (provided for in HTS heading 9902.85.41).

(2) There is a temporary duty reduction for ethalfluralin (provided for in HTS heading 9902.30.49).

(3) There is a temporary duty suspension for DMDS (provided for in HTS heading 9902.33.92).

(4) There is a temporary provision for certain polyamides (provided for in HTS heading 9902.39.08).

(5) There is a temporary provision for Butalin (provided for in HTS heading 9902.38.00).

(6) There is a temporary provison for Pro-jet cyan 1 RO feed and Pro-jet fast black 287 NA paste/liquid feed.

(7) There is a temporary duty reduction for 2-Methyl-4-chlorophenoxyacetic acid (provided for in HTS heading 9902.29.81).

(8) There is a temporary duty suspension for Starane (provided for in HTS heading 9902.29.77).

(9) There is a temporary duty reduction for Trifluralin (provided for in HTS heading 9902.29.02).

(10) There are temporary provisions.

Explanation of provision

This provision would modify the existing duty suspensions and reductions identified above, as follows:

(1) The temporary duty reduction on certain cathode-ray tubes would be made a duty suspension until Decmeber 31, 2005.

(2) The temporary duty reduction for ethalfluralin would be made a duty suspension until December 31, 2005.

(3) Under the HTS heading 9902.33.92 for DMDS, 2933.59.80 would be changed to 2933.59.95 until December 31, 2005.

(4) The temporary provision for certain polyamides is amended by striking `forms of polyamide-6, polyamide-12, and polyamide-6,12 powders (CAS Nos. 25038-54-4, 25038-74-8, and 25191-04-1) (provided for in subheading 3908.10.00)' and inserting `ORGASOL polyamide powders (provided for in subheading 3908.10.00 or 3908.90.70)', until December 31, 2005.

(5) The temporary provision for Butralin is amended by striking `3808.31.15' and inserting `3808.30.15'.

(6) The temporary provision is amended by striking `January 1, 2001' and inserting `January 1, 2002.'

(7) The temporary duty reduction for 2-methyl-4-chlorophenoxyacetic acid would be reduced to 1.8%, until December 31, 2005.

(8) The temporary duty suspension for Starane would be made a duty reduction to 1.5% until December 31, 2005.

(9) The temporary duty reduction for Trifluralin would be made a duty suspension until December 31, 2005.

(10) The temporary heading 9902.29.02 is redesignated as heading 9902.05.30. The temporary heading 9902.39.07 is redesignated as heading 9902.05.31.

Reason for change

These provisions would enable U.S. manufacturers that use these products to reduce costs, making downstream products more competitive without jeopardizing any domestic manufacturer.

SUBTITLE B--OTHER TARIFF PROVISIONS

(SECTION 1618)

Present law

Certain identified entries of posters entered during the period from June 19, 2000 to May 18, 2001 were liquidated by U.S. Customs.

Explanation of provision

This provision would provide for the liquidation or reliquidation of certain identified entries of posters entered during the period from June 19, 2000 to May 18, 2001.

Reason for change

LIQUIDATION OR RELIQUIDATION OF CERTAIN ENTRIES

Explanation of provision

Section 1707(a): Merchandise Not Conforming to Sample or Specifications--This provision amends Section 313(c) of the Tariff Act of 1930 (19 U.S.C. section 1313(c)) by simplifying the process of filing for duty drawback for rejected merchandise and by eliminating the need for drawback certificates under certain circumstances.

Section 1707(b): Time Limitation on Exportation or Destruction--This provision amends Section 313(i) of the Tariff Act of 1930 (19 U.S.C. Section 1313(i)) by expanding the products that are eligible for drawback.

Section 1707(d): Packaging Material--This provision amends Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313(q)) by allowing U.S. exporters to claim drawback on certain imported packaging materials.

Section 1713 (e): Limitation on Liquidation--This provision amends Section 504 of the Tariff Act of 1930 (19 U.S.C. 1504) by establishing a statutory time frame for the liquidation of drawback claims.

Section 1707(f): Penalties for False Drawback Claims--This provision amends Section 593(h) of the Tariff Act of 1930 (19 U.S.C. 1593(h)) by creating a three-year limit on the length of time that a repetitive negligent violation can be counted against an offender under subsection (c) as well as under subsection (g).

Reason for change

Section 1707(a): Merchandise Not Conforming to Sample or Specifications--This provision simplifies the process of filing for duty drawback for commercially interchangeable products in three ways. First, it provides for the recovery of duties on imported merchandise that is subject to ultimate sale at the retail level. The provision therefore clarifies that drawback is allowed on products that do not conform to the appropriate sample or specifications as requested by the importer, or that are ultimately sold in the U.S. at retail and are returned to the foreign exporter/supplier for any reason, whether due to a manufacturing or other defect in the merchandise, regardless of whether the defect occurred prior to or after the importation. Included is a methodology for claiming drawback in such situations that is more in line with commercial realities.

Second, it removes the antiquated requirement for merchandise to be returned to the custody of U.S. Customs, and replaces it with the requirement for exportation or destruction under the supervision of U.S. Customs, a change that would bring Section 313(c) of the Tariff Act of 1930 (19 U.S.C. section 1313(c)) more in line with the requirements of other subsections. However, the imported goods must be exported within one year of importation.

Third, it provides for ease of administration for both Customs and the trade by specifying that drawback certificates are not required if the drawback claimant and the importer are the same party, or if the drawback claimant is a successor to the importer.

(SECTION 1801)

Under current law, Section 212 of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702), in determining whether a country should be named as a CBERA beneficiary country, or maintain its status as such, the country must meet both mandatory and discretionary criteria. Under these programs, one of the discretionary criteria is that the President take into account `the extent to which such country provides under its laws adequate and effective means for foreign nationals to secure, exercise, and enforce exclusive rights in intellectual property, including patent, trademark and copyright rights.' (Section 212(c)(9))

Caribbean Basin Partnership Trade Act (CBPTA)--Under current law, the discretionary intellectual property criterion requires the President to take into account `the extent to which the country provides protection of intellectual property rights consistent with or greater than the protection afforded under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) described in section 101(d)(15) of the Uruguay Round Agreements Act.'

Explanation of provision

This provision would conform this CBERA and CBTPA discretionary criteria to that already pertaining to intellectual property in the Special 301 provisions of the Trade Act of 1974 which, in Section 182, provides that `[A]a foreign country may be determined to deny adequate and effective protection of intellectual property rights, notwithstanding the fact that the foreign country may be in compliance with the specific obligation of the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section 101(d)(15) of the Uruguay Round Agreements Act (URAA).' (Section 182(d)(4)). While the CBERA criterion in current law (that law was passed in 1983) does not refer to TRIPS, the CBTPA amendments to the CBERA do add reference to TRIPS. However, that language--`consistent with or greater than' TRIPS--would be amended to conform to the original formulation provided in Special 301.

Reason for change

This amendment would conform both the CBERA and CBTPA intellectual property criteria to the criteria already existing in Special 301. When Congress amended the Trade Act of 1974 to implement the WTO Agreement, it amended the Special 301 provisions to ensure that the test for what was determined to be `adequate and effective' protection of intellectual property rights would not, as a bilateral matter, be necessarily satisfied merely by a country meeting its obligations under the TRIPS agreement in the WTO. In introducing this Section 301 amendment as a part of the URAA, the Administration highlighted the purpose of the change, that it `clarifies that a country may be identified as a priority foreign country [under Special 301] even if it is in compliance with the TRIPS Agreement. The TRIPS Agreement does not cover all aspects of intellectual property protection that may affect U.S. persons seeking to protect or enforce rights abroad. Moreover, the long transition periods in that Agreement may permit a country to continue to deny adequate and effective protection of intellectual property during that transition.' Statement of Administrative Action at 362 contained in House Document 103-316 (1994). What is `adequate and effective' protection must necessarily be a flexible and evolving criterion, changing with new technological innovations in intellectual property-based products and services and with new opportunities to pirate them, as well as with evolving international norms. Since the adoption of the `adequate and effective' language in the CBERA and GSP program in 1983 and 1984, there have been vast changes in technology, particularly, for example, the vast growth of digital technology and the Internet, which were virtually unknown at that time. Congress recognized that the TRIPS agreement, whose provisions were drafted essentially in 1990 (and with the technology in place at that time in mind), must be the floor of what constitutes adequate and effective protection, not the ceiling.

The CBTPA amendments to the CBERA contain the `consistent with or greater than' TRIPS formulation which not only differs substantively from the Special 301 formulation, but might be read as inconsistent from it in that it could imply that merely complying with TRIPS obligations may be sufficient to secure or maintain the country's status as a beneficiary of the additional CBTPA benefits. To ensure clarity on this point, the language has been amended to conform to the preferable Special 301 formulation.

ADEQUATE AND EFFECTIVE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS UNDER THE ATPA

(SECTION 3005)

Present law

Under current law, Section 203(d)(9) of the Andean Trade Preferences Act (ATPA) (19 U.S.C. 3202), in determining whether a country should be named as an ATPA beneficiary country, or maintain its status as such, the country must meet both mandatory and discretionary criteria. Under these programs, one of the discretionary criteria is that the President take into account `the extent to which such country provides under its laws adequate and effective means for foreign nationals to secure, exercise, and enforce exclusive rights in intellectual property, including patent, trademark and copyright rights.'

Under current law, Section 204 of the Andean Trade Promotion and Drug Eradication Act (ATPDEA), the discretionary intellectual property criterion requires the President to take into account `the extent to which the country provides protection of intellectual property rights consistent with or greater than the protection afforded under the Agreement on Trade-Related Aspects of Intellectual Property Rights described in section 101(d)(15) of the Uruguay Round Agreements Act (URAA).'

Explanation of provision

This provision would conform this ATPA and ATPDEA discretionary criteria to that already pertaining to intellectual property in the Special 301 provisions of the Trade Act of 1974 which, in Section 182, provides that `[A]a foreign country may be determined to deny adequate and effective protection of intellectual property rights, notwithstanding the fact that the foreign country may be in compliance with the specific obligation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) referred to in section 101(d)(15) of the Uruguay Round Agreements Act.' (Section 182(d)(4)). While the ATPA criterion in current law (passed in 1990) predates TRIPS, the ATPDEA amendments to the ATPA do add reference to TRIPS. However, that language--`consistent with or greater than' TRIPS--would be amended to conform to the original formulation provided in Special 301.

Reason for change

This amendment would conform both the ATPA and ATPDEA intellectual property criteria to the criteria already existing in Special 301. When Congress amended the Trade Act of 1974 to implement the WTO Agreement, it amended the Special 301 provisions to ensure that the test for what was determined to be `adequate and effective' protection of intellectual property rights would not, as a bilateral matter, be necessarily satisfied merely by a country meeting its obligations under the TRIPS agreement in the WTO. In introducing this Section 301 amendment as a part of the Uruguay Round Agreements Act, the Administration highlighted the purpose of the change, that it `clarifies that a country may be identified as a priority foreign country [under Special 301] even if it is in compliance with the TRIPs Agreement. The TRIPs Agreement does not cover all aspects of intellectual property protection that may affect U.S. persons seeking to protect or enforce rights abroad. Moreover, the long transition periods in that Agreement may permit a country to continue to deny adequate and effective protection of intellectual property during that transition.' Statement of Administrative Action at 362 contained in House Document 103-316 (1994). What is `adequate and effective' protection must necessarily be a flexible and evolving criterion, changing with new technological innovations in intellectual property-based products and services and with new opportunities to pirate them, as well as with evolving international norms. Since the adoption of the `adequate and effective' language in the ATPA program in 1990, there have been vast changes in technology, particularly, for example, the vast growth of digital technology and the Internet, which were virtually unknown at that time. Congress recognized that the TRIPS agreement, whose provisions were drafted essentially in 1990 (and with the technology in place at that time in mind), must be the floor of what constitutes adequate and effective protection, not the ceiling.

The ATPDEA amendments to the ATPA contain the `consistent with or greater than' TRIPS formulation which not only differs substantively from the Special 301 formulation, but might be read as inconsistent from it in that it could imply that merely complying with TRIPS obligations may be sufficient to secure or maintain the country's status as a beneficiary of the additional ATPDEA benefits. To ensure clarity on this point, the language has been amended to conform to the preferable Special 301 formulation.

III. VOTES OF COMMITTEE

In compliance with section 133 of the Legislative Reorganization Act of 1946, the Committee states that the Miscellaneous Trade and Technical Corrections Act of 2003, as amended, was ordered favorably reported with a quorum present, by voice vote, on February 27, 2003.

IV. CONGRESSIONAL ACTION

On June 18, 2002, Chairman Max Baucus requested public comment on a package of technical corrections, temporary duty suspensions or reductions and other miscellaneous trade proposals introduced during the 107th Congress and referred to the Committee on Finance. The legislation put forth by Chairman Grassley, as amended, includes many of these bills which, based upon the comments submitted to the Committee on Finance by the public, the U.S. Customs Service, the U.S. Department of Commerce, the U.S. International Trade Commission (ITC), the United States Trade Representative and other agencies, the Committee has found to be non-controversial. The Miscellaneous Trade and Technical Corrections Act of 2003, as amended, was ordered favorably reported by the Committee, with a quorum present, by voice vote, on February 27, 2003.

V. BUDGETARY IMPACT

In compliance with sections 308 and 403 of the Congressional Budget Act of 1974, and paragraph 11(a) and (b) of rule XXVI of the Standing Rules of the Senate, and section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), the following letter has been received from the Congressional Budget Office on the budgetary and regulatory impact of the legislation:

mis1.eps

misc5.eps

misc4.eps

misc3.eps

misc2.eps

VI. REGULATORY IMPACT AND OTHER MATTERS

In compliance with paragraph 11(b) of rule XXVI of the Standing Rules of the Senate, the Committee states that the legislation will not significantly regulate any individuals or businesses, will not impact on the personal privacy of individuals, and will result in no significant additional paperwork.

VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In the opinion of the Committee, it is necessary, in order to expedite the business of the Senate, to dispense with the requirements of paragraph 12 of Rule XXVI of the Standing Rules of the Senate (relating to the showing of changes in existing law made by the bill as reported by the Committee).

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	CONTENTS	Page
I.	Background	2
II.	Summary	2
	Title I--Tariff Provisions	2
	Title II--Other Trade Provisions	175
	Title III--Protection of Intellectual Property Rights	180
III.	Votes of the Committee	186
IV.	Congressional Action	186
V.	Budgetary Impact	187
VI.	Regulatory Impact and Other Matters	192
VII.	Changes in Existing Law Made by the Bill as Reported	192