[Federal Register: January 21, 2009 (Volume 74, Number 12)]
[Notices]
[Page 3563-3566]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21ja09-54]
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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
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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
OTEXA_DR2for1@mail.doc.gov, 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]