Public Law 103-182

H.R.3450 As finally approved by the House and Senate (Enrolled)

One Hundred THIRD Congress of the United States of America

**AT THE FIRST SESSION**

Begun and held at the City of Washington on Tuesday, the fifth day of
January, one thousand nine hundred and ninety-three

## An Act

To implement the North American Free Trade Agreement

***Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled.***

### The House Ways & Means Committee Report

103d Congress Rept. 103-361\
HOUSE OF REPRESENTATIVES\
1st Session Part 1

NORTH AMERICAN FREE TRADE AGREEMENT IMPLEMENTATION ACT

\-\-\-\-\-\-\-\-\--\
November 15, 1993.\--Ordered to be printed\
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\[[Jump to MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE
HOUSE](#matters-required-to-be-discussed-under-the-rules-of-the-house)\]

Mr. Rostenkowski, from the Committee on Ways and Means,submitted the
following

R E P O R T

\[To accompany H.R. 3450 which on November 4, 1993, was referred jointly
to the following committees for a period ending not later than November
15, 1993: Ways and Means, Agriculture, Banking, Finance and Urban
Affairs, Energy and Commerce, Foreign Affairs, Government Operations,
the Judiciary, and Public Works and Transportation\]

\[Including cost estimate of the Congressional Budget Office\]

     The Committee on Ways and Means, to whom was referred the bill
(H.R. 3450) to implement the North American Free Trade Agreement, having
considered the same, report favorably thereon without amendment and
recommend that the bill do pass.

#### SUMMARY

     H.R. 3450, the \"North American Free Trade Agreement Implementation
Act,\" approves the North American Free Trade Agreement (NAFTA)
transmitted by the President to the Congress on November 4, 1993. The
draft bill contains in six titles the provisions which are necessary or
appropriate to implement the Agreement in U.S. domestic law.

     Sections 1 and 2 set forth the short title, a table of contents,
and definitions of terms used in the Act.

### Title I.\--Approval of, and General Provisions Relating to, the North American Free Trade Agreement

     Title I contains general provisions concerning approval and entry
into force of the NAFTA and the relationship of the Agreement to U.S.
laws. Congress approves the NAFTA and the Statement of Administrative
Action transmitted by the President on November 4, 1993; conditions are
set forth for entry into force of the Agreement on or after January 1,
1994.

     Title I establishes a Federal-State consultation process concerning
NAFTA obligations affecting State laws. U.S. laws prevail over the
Agreement if there is a conflict; the Agreement prevails over
inconsistent State or local law. No person other than the United States
has a cause of action or defense under the Agreement.

     Changes in U.S. law necessary or appropriate to implement
modifications to the Agreement will be subject to standard legislative
procedures, except for provisions of the Act authorizing implementation
of certain actions by Presidential proclamation are subject to prior
consultation and 60 calendar day Congressional layover requirements.

     Institutional provisions include authorization of a U.S. Section of
the NAFTA Secretariat, requirements relating to selection of dispute
settlement panelists, and a preliminary process for considering possible
future country accession to the NAFTA, subject to Congressional
approval.

### Title II\--Customs Provisions

     Title II implements in U.S. domestic law the customs provisions of
the NAFTA. The President is authorized to proclaim the modifications in
U.S. duties to implement the scheduled phaseout and elimination of all
tariffs required under various provisions of the NAFTA, and to maintain
the general level of concessions. The rules of origin in the NAFTA to
ensure application of preferential tariff treatment only to goods
originating in Mexico or Canada are enacted in the statute.

     Title II implements U.S. obligations under the NAFTA to eliminate
customs merchandise processing fees, restrict duty drawback, and revise
country of origin marking requirements; amends penalties and
recordkeeping requirements to enforce NAFTA rules of origin and other
customs requirements; and requires monitoring of television and picture
tube imports.

### Title III\--Application of Agreement to Sectors and Services

     Title III implements in U.S. domestic law various provisions of the
NAFTA relating to particular economic sectors. Title III includes
procedures and criteria for applying bilateral and global import relief
measures on Canadian or Mexican articles; implements NAFTA obligations
that apply to certain agricultural commodities, intellectual property
right protection, temporary entry of business persons, standards and
sanitary and phytosanitary measures, and corporate average fuel economy;
and authorizes the waiver of discriminatory government purchasing
restrictions on NAFTA-covered procurement.

### Title IV\--Dispute Settlement in Antidumping and Countervailing Duty Cases

     Title IV implements in U.S. domestic law the institutional
provisions of the NAFTA establishing binational panel and extraordinary
challenge committee review of final antidumping and countervailing duty
determinations, in lieu of domestic judicial review, including
procedures and criteria for the selection of panelists appointed by the
United States, and special procedures for the selection of Federal
judges for panels and committees. Objectives for future negotiations
with NAFTA countries on subsidies and special procedures for industries
facing subsidized competition pending development of subsidy rules are
also included.

### Title V\--NAFTA Transitional Adjustment Assistance and Other Provisions

     Title V establishes a NAFTA transitional adjustment assistance
program of comprehensive benefits, including training and income
support, for workers who may be laid off due to increased U.S. imports
from Mexico or Canada or a shift of production to Mexico or Canada, and
authorizes State self-employment assistance programs.

     Other provisions of Title V relate to performance under the NAFTA,
including a comprehensive report by the President on the operation and
economic impact of the Agreement after three years; response to actions
affecting U.S. cultural industries; a report on the impact of the NAFTA
on motor vehicle exports to Mexico; response to discriminatory tax
measures; and authorization of a Center for the Study of Western
Hemisphere Trade.

     Changes in customs user fee levels and amendments to the Internal
Revenue Code offset the budgetary costs of the NAFTA.

     With respect to supplemental agreements to the NAFTA, Title V
authorizes U.S. participation in, and appropriations for, the
Commissions on Labor Cooperation, Environmental Cooperation, and Border
Environment Cooperation. It also includes provisions relating to U.S.
membership in the North American Development Bank.

### Title VI\--Customs Modernization

     Title VI includes numerous provisions to streamline and automate
the commercial operations of the U.S. Customs Service, including
authority to establish the National Customs Automation Program. Title VI
also improves compliance with customs laws, and provides safeguards,
uniformity, and due process rights for importers.

#### BACKGROUND AND PURPOSE

     The North American Free Trade Agreement submitted to the Congress
by the President for approval on November 4, 1993, is the culmination of
an initiative launched over three years ago. In a Joint Statement issued
in Washington on June 11, 1990, President Salinas and President Bush
endorsed the objective of a free trade agreement as the best means for
attaining the agreed objectives of a vigorous economic relationship,
maintaining sustained growth, and expanding trade and investment between
the two countries. The Presidents directed their respective trade
ministers to undertake consultations and to do the preparatory work
needed to initiate negotiations on such an agreement, and to report back
to them as soon as practicable.

     On August 8, 1990, the U.S. Trade Representative, Carla A. Hills,
and the Mexican Secretary for Commerce and Industrial Development, Jaime
Serra Puche, jointly recommended to the Presidents the initiation of
formal negotiations, in accordance with each country\'s domestic laws,
on a comprehensive free trade agreement, following preliminary
consultations with private sector representatives and Members of
Congress.

     In a letter dated August 21, 1990, President Salinas of Mexico
formally proposed to President Bush the initiation of formal
negotiations as soon as possible for a free trade agreement between the
United States and Mexico.

     On September 25, 1990, President Bush notified the Chairman of the
Committee on Ways and Means, pursuant to section 1102(c) of the Omnibus
Trade and Competitiveness Act of 1988, of trade negotiations with
Mexico. The letter also informed the Committee of the expressed desire
by the Government of Canada to participate in the negotiations with a
view to negotiating an agreement or agreements among all three
countries, and of the interest of the three governments to consult on
this possibility.

     On February 5, 1991, President Bush notified the Chairman of the
Committee on Ways and Means that he, President Salinas, and Prime
Minister Mulroney had agreed, on the basis of the trilateral
consultations and consultations with the private sector and Members of
Congress, to seek a three-way free trade area. Although recognized as
not necessarily technically required by section 1102 of the 1988 Act,
the President formally notified the Committee of trade negotiations with
Canada.

     On March 1, 1991, President Bush requested the Congress to extend
the fast track procedures for implementation of multilateral or
bilateral trade agreements for two years ending June 1, 1993, to enable
completion of the GATT Uruguay Round of multilateral trade negotiations
and the proposed North American Free Trade Agreement. A number of
Congressional concerns about free trade with Mexico were conveyed in
letters during March to the President jointly from the Chairmen of the
House Committee on Ways and Means and the Senate Committee on Finance
and from the Majority Leader of the House.

     On May 1, 1991, the President responded with a set of detailed
action plans for addressing these issues, including labor and
environmental concerns, as well as views on the economic impact of the
proposed free trade agreement (WMCP: 102-10). The fast track procedures
were automatically extended for the additional two-year period for trade
agreements entered into before June 1, 1993, when neither House of
Congress passed by May 31, 1991, a resolution disapproving extension.

     On March 8, 1993, the Speaker of the House reconstituted a Trade
Agreement Coordinating Group, originally established in the 102nd
Congress, chaired by the Chairman of the Committee on Ways and Means and
consisting of the chairmen and ranking minority members of committees of
jurisdiction over matters involved in trade negotiations or likely to be
affected by trade agreement implementing legislation, the Majority and
Minority Leaders, and co-chairs of the Democratic Trade Task Force. The
corresponding coordinating group at the staff level, chaired by the
Chief Counsel and Staff Director of the Committee on Ways and Means, was
also continued. This group was the primary coordinating mechanism in the
House for monitoring the progress of the NAFTA negotiations and later
the informal consultation process with the Administration on developing
the draft implementing legislation.

     Under the auspices of the Coordinating Group, frequent briefing
sessions were held at the Member and staff level with Administration
negotiators on all subjects under discussion, beginning in June 1991 and
continuing until the NAFTA and supplemental agreement negotiations were
concluded. Given the broad interest of Members generally in a free trade
area with Mexico, the briefings were open to Members and staff at large,
in addition to those on committees of jurisdiction.

     In addition, the Committee on Ways and Means and other committees
of jurisdiction, as well as various Member caucus groups, held Member
and staff- level meetings with Administration officials, particularly
the USTR, throughout the negotiations on issues of their particular
interest.

     On August 12, 1992, President Bush announced the completion of
negotiations for a comprehensive North American Free Trade Agreement
between Mexico, Canada and the United States. At that time, the
Administration issued various documents, including a negotiated summary
of the Agreement.

     On September 18, 1992, President Bush officially notified the
Speaker of the House and the President of the Senate, in accordance with
the 90-day notice requirement under section 1103(a)(1) of the 1988 Act,
of his intent to enter into a NAFTA with the Governments of Mexico and
Canada. The notice was accompanied by the reports of 38 private sector
advisory committees on the draft Agreement as required by section 135 of
the Trade Act of 1974. The President committed to work closely with the
Congress to develop appropriate implementing legislation. The
Administration also issued a report at that time on the benefits of the
NAFTA and actions taken to fulfill the commitments made by the President
on May 1, 1991 on worker adjustment, labor rights, and environmental
protection.

     On October 7, 1992, President Bush, President Salinas, and Prime
Minister Mulroney met in San Antonio, Texas, to discuss plans for
implementing the NAFTA and affirmed their shared commitment to adopt the
agreement in 1993, to take effect on January 1, 1994. The three trade
ministers who negotiated the agreement\--U.S. Trade Representative Carla
Hills, Secretary Jaime Serra, and Minister Michael Wilson\--initialed
the NAFTA draft legal text.

     On December 17, 1992, the expiration date of the 90-day minimum
notice period, President Bush, President Salinas, and Prime Minister
Mulroney signed the NAFTA in their respective capitals. On that day,
President-elect Clinton reaffirmed his support for the NAFTA but
reiterated his campaign pledge that three supplemental agreements would
be required before proceeding with the implementing legislation. These
three supplemental agreements would cover the environment, workers, and
special safeguards for unexpected surges in imports.

     On August 13, 1993, U.S. Trade Representative Michael Kantor
announced agreement by the three governments on supplemental agreements
to the NAFTA on labor cooperation, on environmental cooperation, and on
import surges. He also announced a basic agreement on a new
institutional structure for funding environmental infrastructure
projects in the U.S.-Mexican border region. The NAFTA side agreements
were signed in a White House ceremony on September 14, 1993.

     Informal staff-level consultations began in February 1993, between
the USTR and committees of jurisdiction, and with House and Senate
legislative counsel on those changes in U.S. statutes or additional
authorities necessary to implement NAFTA obligations. Beginning in June,
the Coordinating Group at the staff level held periodic meetings to
coordinate the development of agreed draft texts between committees of
joint jurisdiction as well as provisions in the jurisdiction of other
committees for inclusion in a consolidated draft bill. House and Senate
legislative counsel drafted the text of the proposed implementing bill,
initially from drafts supplied by the Administration.

     In a letter to the Speaker of the House dated September 28, 1993,
the President emphasized the importance of Congress voting on a NAFTA
implementing bill before adjournment in 1993, to enable the Agreement to
take effect on January 1, 1994, as scheduled. To meet that timetable,
the President proposed the completion of informal consultations between
the Administration and all Congressional committees of jurisdiction on
the joint drafting of an implementing bill by November 1 to permit
introduction at that time.

     On November 2, 1993, the Speaker of the House and the Majority
Leader of the Senate transmitted to the U.S. Trade Representative
proposed implementing legislation for the NAFTA, and proposals for
inclusion in the Statement of Administrative Action as developed through
informal consultations between House and Senate committees of
jurisdiction and the Administration. The legislation noted the few items
on which informal consensus could not be reached between the House and
Senate and for which the Administration would have to make the final
judgment with respect to inclusion in the bill.

     On November 4, 1993, President Clinton sent two letters of
transmittal to the Congress covering: (1) transmittal of the text of the
NAFTA, together with the draft implementing bill, Statement of
Administrative Action; and supporting documents as required under
section 1103(a) of the 1988 Act for Congressional approval (House
Document 103-159, vol. 1 and 2); and (2) transmittal of supplemental
agreements to the NAFTA on labor, the environment, and import surges,
and additional agreements and documents (House Document 103-160). The
supplemental agreements and the other agreements are Executive
agreements that do not require Congressional approval but are part of
the entire NAFTA package to be considered by Congress in deciding
whether to approve the implementing bill.

     As provided under section 151 of the Trade Act of 1974, the
implementing legislation was introduced as H.R. 3450 in the House on
November 4, by Mr. Rostenkowski (as designee of the Majority Leader) for
himself and Mr. Archer (as designee of the Minority Leader), by request,
and jointly referred to eight committees of jurisdiction: Ways and
Means; Agriculture; Banking, Finance, and Urban Affairs; Energy and
Commerce; Foreign Affairs; Government Operations; and Public Works and
Transportation. The bill was introduced in the Senate on November 4 as
S. 1627 and referred to the Committee on Finance.

#### BENEFITS OF THE AGREEMENT

     The North American Free Trade Agreement is the most comprehensive
trade agreement ever negotiated and creates the world\'s largest
integrated market for goods and services. At the same time, the
Agreement does not create any new trade barriers with third countries
and provides a solid framework for the liberalization of trade barriers
throughout the Western Hemisphere. Moreover, it should also provide the
catalyst for negotiations to liberalize trade barriers on a multilateral
basis.

     Canada and Mexico are the United States\' first and third largest
trading partners, and NAFTA will lead to a continued expansion of that
trade. In 1992, bilateral trade between the United States and Canada
amounted to almost \$200 billion while bilateral trade between the
United States and Mexico reached nearly \$76 billion. With NAFTA, the
United States, Canada, and Mexico will create the biggest integrated
market in the world\--a combined economy of \$6.5 trillion and 370
million people. NAFTA is the U.S. opportunity to respond to, and compete
with, burgeoning trade alliances in Europe and Asia. By creating export
opportunities, NAFTA will enable the United States to take advantage of
U.S. economic strengths and remain the world\'s biggest and best
exporter.

     The cornerstone of the Agreement will be the phased-out elimination
of all tariffs on trade between the three countries. With respect to
Canada, all tariffs in our bilateral trade will be eliminated by 1999,
as was agreed in the earlier United States-Canada Free Trade Agreement.
As for Mexico, most tariffs in our bilateral trade will be eliminated by
2004, although a few U.S. tariffs on potentially import-sensitive items
will not be completely eliminated until 2009. Mexican tariffs on U.S.
dutiable exports presently average 10 percent, compared to an average
U.S. tariff of 4 percent on dutiable imports from Mexico.     The NAFTA
also reduces a number of nontariff barriers to trade, liberalizes
restrictions on investment and services, sets forth strong and
comprehensive rules on intellectual property, and extends to the three
countries the international system established under the U.S.-Canada
Free Trade Agreement for review of national determinations on unfair
dumping and subsidy practices. Moreover, NAFTA and its supplemental
agreements will help ensure that economic development takes place in a
way that protects and improves the environment and promotes improved
labor conditions. As described in the statement accompanying the
President\'s submission of the draft implementing bill, the expanded
market access under the agreement should result in substantial benefits
for the U.S. economy.

     A free trade area is an arrangement between two or more countries
in which each removes tariff and other restrictions on trade with the
other parties to the arrangement. Article XXIV of the General Agreement
on Tariffs and Trade (GATT) permits free trade areas or customs unions
as a deviation from the nondiscrimination, most-favored-nation (MFN)
principle of Article I if the agreement meets certain criteria.
GATT-approved free trade areas: (1) must eliminate duties and other
restrictive measures on \"substantially all\" trade between the parties;
and (2) duties and other regulations of commerce maintained by the
parties may not be higher or more restrictive to the trade of third
countries than the parties had in place prior to the agreement.

     The NAFTA is the latest in a series of free trade agreements
entered into by the United States beginning with the U.S.-Israel Free
Trade Agreement in 1984 and followed by the U.S.-Canada Free Trade
Agreement in 1988. The Caribbean Basin Initiative authorized by the
Caribbean Basin Economic Recovery Act (Public Law 98-67) generally
provides one-way duty-free entry into the United States but does not
meet the criteria of a reciprocal free trade area.

#### LEGISLATIVE AUTHORITY

     The North American Free Trade Agreement was negotiated and entered
into under the trade agreement authorities of section 1102 of the
Omnibus Trade and Competitiveness Act of 1988 (Public Law 100-418).
Section 1102 authorizes the President to enter into multilateral or
bilateral trade agreements, before June 1, 1993, (extended until April
15, 1994, only for the GATT Uruguay Round of Multilateral Trade
Negotiations) to reduce or eliminate tariff or nontariff barriers and
other trade-distorting measures. The authorities provide the means to
achieve U.S. negotiating objectives set forth under section 1101 of the
1988 Act.

     The President is authorized under section 1102(a) to implement
trade agreement modifications on U.S. tariffs by proclamation within
specified limits. Agreements regarding nontariff barriers entered into
under section 1102(b) or bilateral agreements entered into under section
1102(c) to eliminate or reduce U.S. duties and nontariff barriers are
subject to consultation requirements with Congressional committees of
jurisdiction under sections 1102 and 1103 of the 1988 Act and
Congressional approval of implementing legislation under special \"fast
track\" procedural rules of the House and Senate under section 151 of
the Trade Act of 1974.

     The negotiation of bilateral trade agreements under \"fast track\"
authority is also conditioned upon additional procedural requirements
being met:

\(1\) The foreign country requests the negotiation of a bilateral
agreement;

\(2\) The President provides at least 60 legislative days advance notice
of negotiations to the House Committee on Ways and Means and the Senate
Committee on Finance and consults with these Committees regarding
negotiation of such an agreement; and

\(3\) Neither of the two Committees disapproves of the negotiation of
such an agreement before the end of that 60-day period.

     Trade agreements negotiated under section 1102 authority cannot
enter into force for the United States and become binding as a matter of
domestic law unless the President meets certain requirements for
consultation with the Congress and implementing legislation approving
the agreement and any changes in U.S. statutes are enacted into law:

\(1\) Before entering into an agreement, the President must consult with
the appropriate committees of jurisdiction over subject matters affected
by the agreement, especially regarding issues of implementation.

\(2\) The President must give the Congress at least 90 days advance
notice of his intention to enter into the agreement.

\(3\) After entering into the agreement, the President must submit a
copy of the agreement to the Congress, together with a draft
implementing bill, a statement of any administrative actions proposed to
implement the agreement, an explanation of how the bill and statement
change or affect existing law, and a statement of reasons the agreement
serves the interests of U.S. commerce and why the bill and proposed
action are required and appropriate.

\(4\) The implementing bill is introduced in both Houses of Congress on
the day it is submitted by the President and referred to the committee
or committees of jurisdiction. Fast track rules give the committees up
to 45 legislative days in which to report the bill; a committee is
discharged automatically from further consideration after that period.
(The Speaker of the House limited referral of H.R. 3450, introduced on
November 4, to November 15, 1993.)

\(5\) Each House votes on the bill within 15 legislative days after
committee consideration. A motion in the House to proceed to
consideration of the implementing bill is highly privileged and not
debatable. Amendments or motions to recommit are not in order, and
debate is limited to not more than 20 hours.

     The purpose of the approval process is to preserve the
constitutional role and fulfill the legislative responsibility of the
Congress with respect to agreements which generally involve substantial
changes in domestic laws. The consultation and notification requirements
provide the opportunity for Congressional views and recommendations with
respect to provisions of the proposed agreement and possible changes in
U.S. law or administrative practice to be fully taken into account and
any implementing problems resolved prior to entry into the agreement and
introduction of the implementing bill. At the same time, the process
ensures the Executive branch and foreign countries of expeditious action
on the final agreement and implementing bill without amendments. This
process was used successfully in approving the GATT Tokyo Round
multilateral trade agreements in the Trade Agreements Act of 1979, the
United States-Israel Free Trade Area Implementation Act of 1985, and the
United States-Canada Free Trade Agreements Implementation Act of 1988.

#### COMMITTEE ACTION

     The Committee on Ways and Means and Subcommittee on Trade held
several series of hearings related to the NAFTA and the supplemental
agreements beginning in 1990. The Subcommittee held background hearings
on United States-Mexico economic relations on June 14 and 28, 1990
(Serial No. 101- 108), immediately following the Joint Statement by
President Bush and President Salinas endorsing the objective of a free
trade agreement. On February 20, 21, and 28, 1991, the Subcommittee held
hearings on the proposed negotiation of a free trade agreement with
Mexico (Serial No. 102-19), in response to the notices to the Committee
from President Bush of proposed negotiations with Mexico and Canada.

     On completion of the NAFTA negotiations, the full Committee began a
series of hearings, with Administration witnesses, on September 9 and
15, 1992, which the Subcommittee continued on September 17 and 22, with
private sector witnesses (Serial No. 102-135). The Subcommittee held
hearings on the three proposed supplemental agreements to the NAFTA on
March 11, 1993 (Serial No. 103-8). The full Committee began a series of
hearings on the provisions and economic implications of the NAFTA and
the three supplemental agreements and their implementation with
Administration witnesses upon the signing of those agreements on
September 14, 1993. These hearings were continued by the Subcommittee
with private sector witnesses on September 15, 21, and 23.

     Extensive testimony was received during these hearings and in
written statements submitted for the printed record from Administration
officials who negotiated the NAFTA and supplemental agreements on behalf
of the United States, Members of Congress, and representatives of the
broad range of private sector interests affected by the Agreement, both
in support and in opposition. Private sector interests included national
business organizations, trade associations representing particular
industry or agricultural interests, labor unions, individual companies,
research institutes and academicians, environmental groups, importers
and exporters, and consumer interests. Many of these concerns were
addressed in the course of the negotiations on the NAFTA and side
agreements or in the implementing bill or Statement of Administrative
Action.

     As background information for these hearings and to assist Members
in evaluating the impact of a NAFTA on the U.S. economy, the Committee
requested three series of investigations by the International Trade
Commission under section 332(g) of the Tariff Act of 1930. The first
study provided a review of trade and investment liberalization measures
undertaken by Mexico and the prospects for future U.S.-Mexican relations
(USITC Publication 2275, April 1990). The Committee on Ways and Means
and the Senate Committee on Finance jointly requested a study by the
Commission of the likely impact of a free trade agreement with Mexico on
the United States (USITC Publication 2353, February 1991). The
Committees jointly requested, on September 22, 1992, an updated study by
the ITC of the potential impact of the NAFTA on the U.S. economy overall
and specific sectors (USITC Publication 2596, January 1993) to provide a
basis for Congressional assessment of the actual Agreement.

     On September 30, 1993, the Subcommittee considered in informal
markup session a draft proposal in conceptual form for NAFTA
implementing legislation, concerning matters within the jurisdiction of
the Committee on Ways and Means. The proposal as amended in Subcommittee
was transmitted informally in spreadsheet form to the full Committee on
October 5, 1993, and made available to the public.

     The full Committee met in informal markup session on October 13,
and completed consideration on October 19, 1993, of the draft
implementing proposal as recommended by the Subcommittee. The Committee
adopted several amendments in conceptual form to the proposal and a
number of recommendations for inclusion in the Statement of
Administrative Action, including an Administration proposal to establish
a transitional adjustment assistance program for NAFTA-impacted workers.

     The draft implementing proposal, as amended, was prepared in
legislative form, together with proposals of other committees of
jurisdiction, in a consolidated House proposed bill as a basis for an
informal conference with Senate committees. The House Ways and Means and
Senate Finance Committees issued a press release on November 9 that
summarized their joint recommendations on the implementing legislation
and accompanying Statement of Administrative Action with respect to
provisions within their jurisdiction.

     On November 9, 1993, the Committee on Ways and Means ordered
reported H.R. 3450, to implement the North American Free Trade
Agreement, submitted by the President to the Congress on November 4, by
a rollcall vote of 25 yeas, 12 noes.

     With respect to the provisions in Title VI, Customs Modernization:

     On January 27, 1993, Mr. Gibbons and Mr. Crane introduced H.R. 700,
the \"Customs Modernization and Informed Compliance Act,\" which was
referred to the Committee on Ways and Means. H.R. 700 as introduced was
the verbatim text of Subtitle C of Title VIII of the conference report
on H.R. 11, the \"Revenue Act of 1992\" (H.Rept. 102-1034).

     On March 29, 1993, the Subcommittee on Trade approved, by voice
vote, H.R. 700 with an en bloc amendment.

     On October 19, 1993, the full Committee on Ways and Means approved
for inclusion in the NAFTA draft implementing bill the text of H.R. 700
as introduced with an en bloc amendment. The amendments included
revisions to the sections on remote location filing, drawback, unclaimed
merchandise, and authority to settle claims. In addition, the amendment
added new sections authorizing administrative duty exemptions, customs
accounting treatment for bonded aviation fuel, cartage, and
reconciliation of suspended antidumping and countervailing duty entries.

### \[Letters between the Chairmen\]

     Included herein is an exchange of letters between the Chairmen of
the Committee on Ways and Means and the Committee on Merchant Marine and
Fisheries concerning provisions of H.R. 700, within the jurisdiction of
the Committee on Merchant Marine and Fisheries:

House of Representatives,

Washington, DC, November 10, 1993. Hon. Gerry E. Studds, Chairman,
Committee on Merchant Marine and Fisheries, House of Representatives,
Washington, DC.     Dear Mr. Chairman: Thank you for your letter of
October 18, waiving sequential referral of those sections of H.R. 700,
the \"Customs Modernization and Informed Compliance Act,\" within the
jurisdiction of the Committee on Merchant Marine and Fisheries.

     As you may know, the text of H.R. 700, with additional amendments,
was included in H.R. 3450, implementing legislation for the North
American Free Trade Agreement (NAFTA), as Title VI. On November 9, the
Committee on Ways and Means ordered H.R. 3450 favorably reported to the
House. At your request, the Committee report will include this exchange
of letters regarding your jurisdictional interest.

     I want to thank you for the close cooperation of your staff in
drafting the provisions relating to the vessel clearance and
documentation laws of the United States. Sincerely yours,

Dan Rostenkowski, Chairman.

Committee on Merchant Marine and Fisheries,

House of Representatives,

Washington, DC, .

     Dear Mr. Chairman: It is my understanding that the Committee on
Ways and Means will today be marking up the text of H.R. 700, the
\"Customs Modernization and Informed Compliance Act,\" as part of its
informal mark up of NAFTA legislation. H.R. 700 legislation includes a
number of provisions amending or repealing laws that fall within the
jurisdiction of the Committee on Merchant Marine and Fisheries including
amendments to the Act to Prevent Pollution from Ships and the vessel
clearance and documentation laws of the United States.

     To assist you and the House leadership in considering this
legislation as expeditiously as possible, and with the understanding
that the Committee on Ways and Means will not make any changes to the
pertinent sections without the concurrence of the Committee on Merchant
Marine and Fisheries, I agree not to ask for a sequential referral of
these provisions. At the same time, H.R. 700 does not amend some
provisions in the Customs laws, which use obsolete terminology and do
not reflect current agency authorities. I am hopeful that our staffs can
work together to develop amendments to the Customs laws to reflect
changes the Committee on Merchant Marine and Fisheries has made over the
last decade to modernize the U.S. maritime laws.

     This agreement is made, of course, without prejudice to the
jurisdictional interests of the Committee on Merchant Marine and
Fisheries over the provisions specified in this letter. I would request,
in addition, that our correspondence on this matter be included in your
Committee report on H.R. 700 and NAFTA legislation.

With kind regards.

Sincerely, Gerry E. Studds, Chairman.

#### SECTION-BY-SECTION ANALYSIS, JUSTIFICATION, AND COMPARISON WITH PRESENT LAW

     H.R. 3450 was referred jointly to eight committees in the House.
The following analysis covers only those provisions of the bill as
ordered reported by the Committee on Ways and Means within its
jurisdiction.

[Back To Top](http://www.cbp.gov/nafta/#top)

### The House Energy & Commerce Committee Report

103d Congress Rept. 103-361

NORTH AMERICAN FREE TRADE AGREEMENT IMPLEMENTATION ACT\
November 15, 1993.\--Ordered to be printed

Mr. Dingell, from the Committee on Energy and Commerce, submitted the
following

\[To accompany H.R. 3450 which on November 4, 1993, was referred jointly
to the following committees for a period ending not later than November
15, 1993: Ways and Means, Agriculture, Banking, Finance and Urban
Affairs, Energy and Commerce, Foreign Affairs, Government Operations,
the Judiciary, and Public Works and Transportation\]

The Committee on Energy and Commerce, to whom was referred the bill
(H.R. 3450) to implement the North American Free Trade Agreement, having
considered the same, report the bill without recommendation.

### Purpose and Summary

On December 18, 1992, former President Bush and the heads of state of
Canada and Mexico signed the North American Free Trade Agreement
(NAFTA), providing for the elimination or reduction in tariffs and other
barriers to trade between the three NAFTA countries. If implemented by
the Governments of the United States, Mexico and Canada, NAFTA would
create the biggest consumer market in the world, with a combined economy
of \$6.5 trillion and 370 million people.

President Clinton stated that he could not support the NAFTA negotiated
by former President Bush without additional side agreements. Upon taking
office, President Clinton, therefore, initiated negotiations with Mexico
and Canada to add provisions to NAFTA that deal with the environment,
worker rights, and import surges.

Negotiations on supplemental agreements covering these three topics were
concluded on August 13, 1993. The supplemental agreements were signed at
Mexico City, Washington, and Ottawa on September 8, 9, 12 and 14, 1993.

On November 4, 1993, President Clinton submitted to the Congress H.R.
3450, a bill to implement the North American Free Trade Agreement. H.R.
3450 would approve only the basic agreement and the accompanying
Statement of Administrative Action. The supplemental agreements on the
environment and on labor, together with side letters having to do with
sugar and other agricultural products, are not approved by the
legislation.

Under the provisions of the bill, the President is authorized to enter
the NAFTA into force with respect to Canada or Mexico, as long as
specific conditions are met, on or after January 1, 1994. The provisions
of NAFTA would take effect over a 15-year period, during which tariffs
and other barriers would be reduced or eliminated.

### CONTENTS 

I.  [Background and need for legislation](#background)

II. [Relationship to Federal and to State law; environmental and
    sanitary and phytosanitary
    measures](#ii.-relationship-to-federal-and-to-state-law-environmental-and-sanitary-and-phytosanitary-measures)

III. [Corporate Average Fuel Economy; Automotive Content
     Level](#iii.-corporate-average-fuel-economy-automotive-content-level)

IV. [North American Development Bank and related
    provisions](#iv.-north-american-development-bank-and-related-provisions)

V.  [Energy and Basic
    Petrochemicals](#v.-energy-and-basic-petrochemicals)

VI. [Telecommunications](#vi.-telecommunications)

VII. [Financial Services](#vii.-financial-services)

> [Committee oversight findings](#committee-oversight-findings)
>
> [Committee cost estimate](#committee-cost-estimate)\
> [Inflationary impact statement](#inflationary-impact-statement)\
> [Agency views](#agency-views)

### Senate Finance Committee Report

Page 1\
Calendar No. 309\
103d Congress Report\
SENATE\
1st Session 103-189

===============================\
**NORTH AMERICAN FREE TRADE AGREEMENT IMPLEMENTATION ACT**
\-\-\-\-\-\-\-\-\--

November 18 (legislative day, November 2), 1993.\--Ordered to be printed
\-\-\-\-\-\-\-\-\--

Mr. Moynihan, from the Committee on Finance and on behalf of Mr. Leahy,
from the Committee on Agriculture, Nutrition, and Forestry; Mr.
Hollings, from the Committee on Commerce, Science, and Transportation;
Mr. Glenn, from the Committee on Governmental Affairs; Mr. Biden, from
the Committee on the Judiciary; and Mr. Pell from the Committee on
Foreign Relations filed the following

J O I N T R E P O R T

\[To accompany S. 1627\]\
The Committees on Finance, Agriculture, Nutrition, and Forestry,
Commerce, Science, and Transportation, Governmental Affairs, the
Judiciary, and Foreign Relations, to which was jointly referred the bill
(S. 1627) to implement the North American Free Trade Agreement, having
considered the same, report thereon.

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--\
**C O N T E N T S**\
\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

I.  [REPORTS AND OTHER MATERIALS OF THE COMMITTEES 1](#reports)

    -   [Part I. Report of the Committee on Finance 1](#part1)

        -   [Regulatory Impact of the Bill 105](#reg_impact)

    -   [Part II. Report of the Committee on Agriculture, Nutrition, and
        Forestry 107](#part2)

    -   [Part III. Report of the Committee on Commerce, Science, and
        Transportation
        117](#part-iii.-report-of-the-committee-on-commerce-science-and-transportation)

    -   [Part IV. Report of the Committee on Governmental Affairs
        121](#part-iv.-report-of-the-committee-on-governmental-affairs)

    -   [Part V. Report of the Committee on the Judiciary
        123](#part-v.-report-of-the-committee-on-the-judiciary)

    -   [Part VI. Report of the Committee on Foreign Relations
        129](#part-vi.-report-of-the-committee-on-foreign-relations)

II. [BUDGETARY IMPACT OF THE BILL
    139](#ii.-budgetary-impact-of-the-bill)

III. [CHANGES IN EXISTING LAW:](#iii.-changes-in-existing-law)

     -   United States-Canada Free-Trade Agreement Implementation Act of
         1988 147

     -   Tariff Act of 1930 151

     -   Section 3 of the Act of June 18, 1934 (Commonly known as the
         Foreign Trade Zones Act) 250

     -   Section 13031 of the Consolidated Omnibus Budget Reconciliation
         Act of 1985 252

     -   Trade Act of 1974 255

     -   Meat Import Act of 1979 263

     -   Section 358e of the Agricultural Adjustment Act of 1938 264

     -   Section 1542 of the Food, Agriculture, Conservation, and Trade
         Act of 1990 265

     -   Section 104 of Title 35, United States Code 266

     -   Section 4 of the Record Rental Amendment of 1985 267

     -   Trademark Act of 1946 267

     -   Title 17, United States Code 268

     -   Section 214 of the Immigration and Nationality Act 269

     -   Trade Agreements Act of 1979 271

     -   Section 302 of the Federal Seed Act 281

     -   Act of August 30, 1890 281

     -   Section 1 of the Act of August 31, 1922 283

     -   Section 17 of the Poultry Products Inspection Act 283

     -   Section 20 of the Federal Meat Inspection Act 284

     -   Section 503 of the Motor Vehicle Information and Cost Savings
         Act 286

     -   Section 401 of the Rural Electrification Act of 1938 287

     -   Title 28, United States Code 287

     -   Internal Revenue Code 291

     -   Section 303 of the Social Security Act 299

     -   Caribbean Basin Economic Recovery Act 300

     -   Revised Statutes of the United States 302

     -   Title 46\--Shipping 304

     -   Harmonized Tariff Schedule of the United States 318

     -   Section 9703 of Title 31, United States Code 320

     -   Act of June 16, 1937 321

     -   Section 965 of Title 18, United States Code 322

     -   Section 9 of the Act to Prevent Pollution From Ships 322

     -   Act of October 3, 1913 323

     -   Act of August 5, 1935 324

     -   Act of November 6, 1966 324

     -   Section 1 of the Act of February 10, 1900 325

     -   Section 2 of the Act of April 29, 1908 325

     -   Section 1 of the Act of July 1, 1916 325

     -   The Act of July 3, 1926 326

     -   Act of May 4, 1934 326

     -   Section 1403 of the Water Resources Development Act of 1986 327

     -   Section 9501 of the Omnibus Budget Reconciliation Act of 1987
         327

     -   Section 123 of the Customs and Trade Act of 1990 327

### The House Energy & Commerce Committee Report

#### I. Background and Need for the Legislation

The NAFTA as negotiated by the United States, Mexico, and Canada
requires changes to the statutory laws of each of the parties. H.R. 3450
sets out the changes required in U.S. statutory laws.

The following is a discussion of provisions of H.R. 3450 that affect
matters within the jurisdiction of the Committee on Energy and Commerce.
This discussion also covers some of the subjects within the jurisdiction
of the Committee for which no statutory provisions were required.I.
Entry Into Force

NAFTA is a broad and comprehensive trade agreement. It provides not only
for tariff reductions, but would require Mexico, and in some cases
Canada, to change its laws and regulations having to do with a broad
range of matters affecting foreign commerce, such as: health and safety
standards; telecommunications; financial services; competition policy;
intellectual property; and investment.

The President determines that Mexico or Canada has implemented the
statutory changes necessary to bring that country into compliance with
its obligations under the Agreement: The President transmits a report to
the Congress certifying that Canada or Mexico has fulfilled its
obligations to implement the agreement; Mexico and/or Canada exchanges
notes with the United States providing for the entry into force of the
environmental and labor side agreements.

The Administration, after thorough consultation with the congress, would
provide notice of withdrawal under the NAFTA, and cease to apply that
Agreement, to Mexico or Canada if either country withdraws from a
supplemental agreement. The preceding would not apply in any instance in
which the withdrawal by another government is consensual in nature\--for
example, where that government and the United States withdraw from a
supplemental agreement in order to enter into a superseding agreement in
the labor or environmental area.

#### II. Relationship to Federal and to State Law; Environmental and Sanitary and Phytosanitary Measures

\(2\) Title XIV of the Public Health Service Act (popularly known as the
(3) the Clean Air Act (42 U.S.C. et seq.); (5) The Toxic Substances
Control Act (15 U.S.C. 2601 et seq.); seq.); (8) The Motor Vehicle
Information and Cost Savings Act (15 U.S.C. 1901 Note /1/ This law is
amended in Title V solely for the purpose of implementing essentially
technical, but important, changes regarding fuel economy. /1/ (10) The
Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.); (12) The Solid Waste
Disposal Act (42 U.S.C. 6901 et seq.); Liability Act of 1980 (42 U.S.C.
9601 et seq.); Law 99-499; 100 Stat. 1613); 1972 (popularly known as the
\"Ocean Dumping Act\") (33 U.S.C. 1411 et (16) The Environmental
Research, Development, and Demonstration (17) The Pollution Prosecution
Act of 1990 (42 U.S.C. 4321 note); and 106 Stat. 1505); the \"Refuse
Act\") (33 U.S.C. 2701 et seq.); (21) The Act to Prevent Pollution from
Ships (33 U.S.C. 1901 et seq.).

The Statement of Administrative Action addresses the fact that such U.S.
laws are not affected by the NAFTA. For example, the Statement
specifically confirms the ability of each NAFTA party to take necessary
actions to ensure food safety, such as through the inspection of food
products. The Statement provides: \"\* \* \* Article 712(2) states
explicitly that each government may establish those levels of protection
for human, animal or plant life or health that the government considers
to be appropriate.\" In particular, the Statement makes it clear that
the \"Delaney Clauses\", which prohibit the addition of food additives,
color additives and animal drugs to foods or feeds if the substance is
found to induce cancer in humans or animals, are completely protected
under the NAFTA.

#### III. Corporate Average Fuel Economy; Automotive Content Level

Section 371 of H.R. 3450 amends section 503(b)(2) of title V of the
Motor Vehicle Information and Cost Savings Act which is the title
establishing the Corporate Average Fuel Economy (CAFE) standards. It
does not provide any changes in title V other than this limited
amendment.

The Free Trade Agreement would eliminate Canada\'s export-based duty
1988 for exports to all other countries. Canada\'s production-based
1996.

an important share of the auto industry; namely, the auto parts is the
failure of the Agreement to reach a 60 percent content level, workers.
As a result, the Administration has made a commitment to entities and
workers. For example, the Administration has stated in the level of
customs personnel at the border to ensure that the new, fully enforced.

an agreement with Canada to raise the North American content 50 percent
to 60 percent, which is what the U.S. position in the has committed to
support the need for a greater percentage. The duty remission program,
which under the Agreement would be allowed to investigation should be
initiated under title III of the Trade Act of joint and cooperative
efforts by this Committee and the Committee on the legislation to
Congress, as well as extensive Committee The Committee notes that
despite these commitments and authority, the North American Content
requirement under the CFTA was not raised to 60 percent.

#### IV. North American Development Bank and Related Provisions

Section 541 provides for the establishment of the North American
Development Bank and stipulates that this institution is exempt from
U.S. securities laws. The exemptions provided under this Section are
virtually identical to other exemptions that have previously been
provided to multilateral lending institutions over the years (e.g., the
Inter-American Development Bank, the International Bank for
Reconstruction and Development, the Asian Development Bank, the African
Development Bank, etc.). From time to time, the Securities and Exchange
Commission (SEC) has issued rules regarding periodic and other reports
to be filed with the Commission by such entities (e.g., SEC
International Series Release No. 297).

#### V. Energy and Basic Petrochemicals 

Self-generation: U.S. firms can, build, own, and operate power plants
plants to supply themselves or other Mexican industrial customers with
independent power plants to supply industrial customers, the Mexican
sell to the Mexican government procurement market, which includes the
directly to end users in Mexico, with PEMEX as a third party to any as
well as build, own, operate, and sell in Mexico.

users in Mexico, with PEMEX as a third party to any agreements.

The following is a brief summary of the major articles in Chapter Six.

SCOPE AND COVERAGE

#### IMPORT AND EXPORT RESTRICTIONS; EXPORT TAXES

This provision binds all NAFTA parties to the GATT provisions on
prohibitions or restrictions on trade in energy and basic petrochemical
goods. The relevant GATT provisions prohibit minimum or maximum
export-price and import-price requirements. Significantly, the relevant
GATT provisions are made part of the NAFTA without the limitations and
exceptions provided in the GATT. This means that only limitations and
exceptions provided in NAFTA are allowed. This provision does allow for
the administering of a system of import and export licensing for energy
or basic petrochemical goods, if it is operated in a manner consistent
with the provisions of the NAFTA.

#### OTHER EXPORT MEASURES

other country; sales;

#### ENERGY REGULATORY MEASURES

#### SECURITY AND MISCELLANEOUS PROVISIONS 

critical defense contract; (3) Implement national policies or
international agreements relating to (4) Respond to direct threats of
disruption in the supply of nuclear RESERVATIONS

#### OIL AND PETROCHEMICALS 

NATURAL GAS

ELECTRICITY

#### OTHER ENERGY PRODUCTS 

#### ENERGY-RELATED GOODS AND SERVICES 

Chapter Ten, the Government Procurement provisions of NAFTA, should be
read together with Chapter Six, because it provides large potential new
markets to U.S. energy equipment and contracting companies. This chapter
will give U.S. energy equipment and service suppliers immediate access
to the Mexican government procurement market, including the state-owned
energy companies, PEMEX and CFE. When the NAFTA enters into force, 50
percent of PEMEX and CFE\'s purchases of goods and services over
\$250,000 and purchases of construction services over \$8 million will
be immediately opened to U.S. firms; nearly all purchases will be opened
within 10 years.

#### TARIFF AND NON-TARIFF BARRIERS

#### VI. Telecommunications

#### VII. Financial Services 

Hearings and Briefings

#### Committee Consideration 

#### Committee Oversight Findings 

#### Committee on Government Operations 

#### Committee Cost Estimate 

Congressional Budget Office Estimate

U.S. Congress, Washington, DC, November 15, 1993.

Chairman, Committee on Energy and Commerce, Robert D. Reischauer,
Director.

#### 1. Bill number:

H.R. 3450.

#### 2. Bill title:

North American Free Trade Agreement Implementation Act.

#### 3. Bill status:

As ordered reported by the House Committee on Energy and Commerce on
November 9, 1993.

#### 4. Bill Purpose:

H.R. 3450 would approve the North American Free Trade Agreement (NAFTA)
entered into on December 17, 1992, with the governments of Canada and
Mexico. It would provide for tariff reductions and other changes in law
related to implementation of the agreement. The bill also would create a
transitional adjustment assistance program for affected workers, require
the use of an electronic fund transfer system for collecting certain
taxes, and increase certain customs user fees. It also would authorize
appropriations for a number of agricultural and other programs.5.
Estimated cost to the Federal Government:

The following tables summarize CBO\'s estimate of the budgetary impact
of H.R. 3450. Table 1 shows the impact of the bill on direct spending
and revenues. Table 2 details the estimated costs that depend on future
appropriation actions.

TABLE 1. CBO ESTIMATES OF CHANGES IN REVENUES AND DIRECT SPENDING

     \[By fiscal year, in millions of dollars\] /1/ This table does not
include any discretionary spending that would be /1/
                                   **Five-year**     **1994     1995     1996     1997     1998**     **total**

CHANGES IN REVENUES (NET)

Reduction in tariff rates     -214     -489     -547     -609     
-672     -2,531 /2/

     On-budget      49      262      272      371     1,207      2,161

     Off-budget      23      116      135      146      701      1,121
17      22      22      23      23      107 -3      -3      -3     
-3      -3      -15

Increases in Customs fees (offsetting receipts)     
-93     -203     -221     -241      0     -758

     assistance program/3/ Trade adjustment assitance (TAA) for training
costs is currently limited by law to a maximum of \$80 million a year.
This estimate assumes that this cap is maintained. If it were raised or
eliminated, CBO estimates that TAA costs resulting from NAFTA would be a
total of \$25 million higher over the 1994- 1998 period than shows
above./3/

      10      25      25      20       25       105/4/ Less than
\$500,000./4/

            7      8      9      9 33 -64      -86      -66      -1     
33     -184 0      54      2      0      0      56 -5      -5     
-5      -5      -5      -25

EFFECT ON DEFICIT     On-budget      -1      0      -1     
0     -493     -495

     Off-budget     -23     -116     -135     -146     -701 -1,121

#### TABLE 2. CBO ESTIMATES OF AUTHORIZATIONS OF APPROPRIATIONS 

          \[By fiscal year, in millions of dollars\]

**                                   Five-                              year**

          **1994     1995     1996     1997     1998     total**

Agriculture programs:

Estimated authorizations      96     22     22     22     22     184

Estimated outlays     18     61     34     37     22     172

North American Development Bank:

Estimated Authorizations     0     0     56     56     56     168

Estimated outlays     0      0     56     56     56     168

Other authorizations:

Estimated authorizations     21     16     11     11     11      70

Estimated outlays     16     18     10     11     11      66

Total authorizations:

Estimated authorizations     17     38     89     89     89     422

Estimated outlays     34     79     100     104     89     406

#### Basis of Estimate:

Tariff Rate Reductions. Under NAFTA, all tariffs on U.S. imports from
Mexico would be eliminated by 2008. Tariffs would be phased out for
individual products at varying rates according to one of six different
timetables ranging from immediate elimination to elimination over 15
years for some goods. Based on the composition of imports from Mexico in
1991, tariffs would be eliminated on about 60 percent of dutiable goods
on January 1, 1994, and tariff revenue would be reduced by about 65
percent in calendar year 1994. By 1998, duties on about 70 percent of
goods that are currently subject to duty would be eliminated, and tariff
revenue would be about 85 percent lower than under current law.

#### Electronic Federal Tax Deposit System. 

The new federal tax deposit system would electronically transfer tax
deposits to the Treasury, eliminating the need for banks to process
paper coupons and checks. The change, which would be phased in gradually
over several years, would allow deposits to be credited to the Treasury
on the day of deposit instead of the day after deposit. Adoption of this
system would not change the amount of taxes paid by taxpayers, but would
shift the receipt by the Treasury of certain tax revenues from the
beginning of one fiscal year to the end of the preceding year. The Joint
Committee on Taxation has estimated that these changes would increase
on-budget receipts by \$2.2 billion and off-budget receipts by \$1.1
billion over the fiscal years 1994 through 1998.

#### Customs Enforcement Initiative.

The bill would allow Customs Service auditors to access IRS income tax
return information. This would allow auditors to use businesses\' tax
information on the valuation of imports and is expected to result in
higher customs duty audit assessments. CBO estimates, net of income and
payroll tax offsets, that the access to the information would result in
increased receipts of \$107 million over fiscal years 1994 through 1998.

#### Customs Modernization.

Title VI of H.R. 3450 would expand the base of goods eligible for
customs duty drawbacks and would allow increased exemptions from duty on
certain personal articles, decreasing customs duties by \$7 million each
year. Title VI also would require payment of interest on merchandise
revaluations after entering an item through U.S. Customs, increasing
receipts by \$4 million each year. CBO estimates, net of income and
payroll tax offsets, these provisions would decrease receipts by \$3
million each year.

#### CHANGES IN DIRECT SPENDING

#### Customs User Fees.

H.R. 3450 would make several changes to user fees charged by the U.S.
Customs Service, which are recorded in the budget as offsetting
receipts. For the fiscal years 1994 through 1997 only, the current \$5
passenger fee would be increased to \$6.50 and the exemption granted to
passengers arriving in the United States from Canada, Mexico, and the
Caribbean would be removed. For fiscal years 1999 through 2003, customs
user fees would be extended at the current \$5 rate. (Under current law,
these fees sunset at the end of fiscal year 1998). CBO estimates that
the \$1.50 passenger fee increase and the removal of the exemption would
result in additional fee collections of \$758 million over the fiscal
years 1994 through 1997.Current Trade Adjustment Assistance (TAA)
Program.

Under current law, the TAA program provides cash assistance and training
to workers who can demonstrate that increased imports contributed
importantly to the loss of their job. If NAFTA were to be approved, CBO
estimates that approximately 4,500 additional workers annually for
fiscal years 1995 through 1998 would become eligible for TAA. The
additional workers would not qualify for TAA immediately because workers
must exhaust their unemployment benefits prior to collecting TAA. The
fiscal year 1994 estimate assumes approximately 1,000 workers would
qualify for TAA, assuming that NAFTA becomes effective January 1, 1994.
Under current law, TAA recipients are required to participate in job
training unless they receive a waiver. Currently, about 60 percent of
the recipients train and 40 percent receive waivers. The average
training cost is approximately \$4,000 per person. Based on an average
cash benefit of \$4,800, CBO estimates the additional TAA cash
assistance would be \$5 million in 1994 and \$20 million each year for
fiscal years 1995 through 1998, and we estimate the additional TAA
training benefits would be \$5 million in 1994 and \$10 million each
year for fiscal years 1995 through 1998, if all newly eligible workers
were to receive their full training benefit.

#### New Trade Adjustment Assistance Benefits. 

The bill would add a new sub- chapter to the TAA program to allow
workers who lose their job because their firm shifts production to
Mexico or Canada to qualify for TAA. In addition, workers would be
required to enter a job training program by their sixteenth week of
unemployment or their sixth week of TAA certification, whichever is
later, to be eligible for benefits. Unlike the current TAA program,
beneficiaries under this sub-part could not receive a waiver from
training and still collect cash assistance. TAA cash and training
benefits under this amendment would be available to those who are
displaced from their jobs between January 1, 1994, and September 30,
1998. CBO estimates that fewer than 1,000 workers annually would qualify
for TAA payments under this provision. The average training benefit
would be \$4,000 per person, and the average cash benefit would be
approximately \$6,000 per person. CBO estimates that total TAA payments
under this new sub-part would be less than \$500,000 in fiscal year
1994, \$7 million in fiscal year 1995, \$8 million in fiscal year 1996,
and \$9 million each of the fiscal years 1997 and 1998.

#### Effects on Agricultural Price Support Programs.

Gradual reductions in tariff and non-tariff barriers on agricultural
products under the North American Free Trade Agreement are expected to
result in increased trade between the United States and Mexico. An
estimated net increase in U.S. exports of commodities currently
supported by agriculture programs would result in higher market prices
and a reduction in government support payments. While lower acreage
reduction program (ARP) requirements (to compensate for increased
demand) would mitigate some of the price increase, the ARP level could
not be reduced in some years.

#### North American Development Bank. 

Section 542 would authorize the President to accept membership in a
North American Development Bank. The bank would be a multilateral bank
with stock held by member states. The bill would authorize the United
States to subscribe to 150,000 shares of capital stock and the
appropriation of \$1,500 million to purchase the stock. It would
appropriate \$56.25 million in 1995 for the first paid-in stock
subscription, and would provide an authorization of appropriations for
the remaining amount without fiscal year limitation.

#### Customs Modernization. 

H.R. 3450 would make several changes in the administrative procedures of
the Customs Service. Customs would be allowed to release unclaimed
merchandise for sale or destruction after six months rather than the
one-year period mandated by current law. CBO estimates that this
provision would decrease storage costs by \$6 million annually. In
addition, the number of entries that could be filed informally would be
increased.

#### SPENDING SUBJECT TO APPROPRIATIONS ACTION 

#### Agriculture.

Sections 321 and 361 of the bill would authorize a number of program
changes that could increase federal outlays in agricultural programs by
an estimated \$172 million over the 1994-1998 period. The majority of
costs would reflect authorizations for assistance to farm workers in
markets adversely affected by increased trade with Mexico (\$20 million
per year) and the construction of a containment facility for
agricultural products from Mexico. Other provisions would require the
Secretary of Agriculture to provide information and reports on various
agriculture markets and to monitor end use certificates.

#### North American Development Bank.

Beyond the amount appropriated for 1994, H.R. 3450 would authorize
additional appropriations of \$168 million for paid-in capital of the
bank.

#### NAFTA Secretariat. 

Title I would authorize the appropriation of up to \$2 million to fund
the United States section of the secretariat established by the
agreement. These funds would be used to pay for the activities of the
secretariat, as well as the commission, several committees and
subcommittees, and various working groups subordinate to the
secretariat. It also would allow the U.S. section to retain and spend
reimbursements from the Mexican or Canadian section. We assume that the
U.S. section of the secretariat would be established within the
International Trade Administration of the Department of Commerce (DOC),
and that the secretariat and the various committees under its
jurisdiction would use the full \$2 million authorized to pay for
personnel and other costs.

#### Commerce Department Fees.

Title III (subtitle E) would require the DOC to make available to the
public certain information relating to sanitary procedures and would
permit the DOC to charge reasonable fees for this information. Such fees
would raise \$1 million to \$2 million annually and would be available
for spending under existing authority.

#### Customs Automation Program.

H.R. 3450 would establish the National Customs Automation Program, an
automated and electronic system for processing information on commercial
imports. We estimate that this program would cost \$3 million in fiscal
year 1994, assuming appropriation of the necessary funds.

#### Tax Collection Expenses.

The bill would authorize the Harbor Maintenance Trust Fund to use, for
the first time, up to \$5 million annually to cover the administrative
costs of collecting the harbor maintenance tax. We estimate that this
would result in costs of \$5 million annually, assuming appropriation of
the necessary funds.

#### Commissions.

Section 532 would authorize an annual appropriation of \$5 million for
1994 and 1995 for the United States contributions to the annual budget
of the Commission for Environmental Cooperation. This commission is
described in article 43 of the North American Agreement on Environmental
Cooperation; its purpose is to address environmental issues affecting
the continent. Section 533 would authorize annual appropriations of \$5
million, starting in 1994, for the Border Environment Cooperation
Commission (BECC) that is established by the Border Environment
Cooperation Agreement. This commission would assist in developing
solutions to environmental problems in the U.S.-Mexico border region.
The BECC would certify environmental construction projects for the North
American Development Bank (established by section 451) and other
financial institutions.

#### International Trade Commission.

Various provisions of the bill would require the International Trade
Commission to monitor certain imports and to investigate and determine
petitions for relief from imports benefiting from the agreement. Based
on information supplied by the commission, CBO estimates that these
duties will require an additional authorization of less than \$1 million
per year.

#### 6. Pay-as-you-go considerations:

Section 252 of the Balanced Budget and Emergency Deficit Control Act of
1985 sets up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. CBO estimates that enactment of H.R.
3450 would affect direct spending and receipts.

>           1994     1995     1996     1997     1998

Change in outlays     -152     -208     -257     -218       62

Change in receipts     -151     -208     -256     -218     555

#### 7. Estimated cost to State and local governments:

None.

#### 8. Estimate comparison:

None.

#### 9. Previous CBO estimate:

On November 4, 1993, CBO prepared an estimate, based on draft language,
of the direct spending and revenue effects of the North American Free
Trade Agreement Implementation Act. That estimate of revenues and direct
spending is identical to the estimate for H.R. 3450.

#### 10. Estimate Prepared By:

Kim Cawley, Mark Grabowicz, Mary Maginniss, Eileen Manfredi, Ian
McCormick, John Webb, and Robert Sunshine, Cory Oltman, Melissa Sampson,
Linda Radey, and Joseph Whitehill.

#### 11. Estimate approved by:

C.G. Nuckols, Assistant Director for Budget Analysis.

## Inflationary Impact Statement

Pursuant to clause 2(l)(4) of rule XI of the Rules of the House of
Representatives, the Committee makes the following statement with regard
to the inflationary impact of the reported bill:

#### Agency Views

U.S. House of Representatives,

Committee on Energy and Commerce,

Washington, DC,

February 20, 1991.

Hon. Carla A. Hills,

### U.S. Trade Representative,

Washington, DC.

     Dear Ambassador Hills:

On February 5, 1991, President Bush announced that the United States
will pursue a trilateral free trade agreement with Mexico and Canada to
establish a North American Free Trade Zone. The goal of this agreement,
as stated by the President, is to \"progressively eliminate obstacles to
the flow of goods and services and to investment, provide for the
protection of intellectual property rights, and establish a fair and
expeditious dispute settlement mechanism.\"

     As you know, in the past I have expressed to you a number of
concerns regarding negotiations for a free trade agreement with Mexico,
which has now been superseded by this new trilateral negotiation. These
concerns still stand. I must also emphasize, as we have discussed
before, that free trade zone negotiations involving Mexico must be
comprehensive, and must address not only the matters stated by the
President in his announcement this week, but also to ensure fairness and
competitiveness in other critical matters such as environmental issues,
labor issues, energy issues, and vehicle theft issues.

     In the recently enacted Clean Air Act Amendments (Section 811),
Congress explicitly recognized the linkage between international
competitiveness of United States manufacturers and less stringent
environmental standards of our trading partners. Pursuant to Section
811, the President is required to develop a \"strategy for addressing
such economic effects through trade consultations and negotiations\" and
submit a report to Congress containing that strategy. These economic
effects, including job loss, are exacerbated by the movement of United
States firms to other countries to avoid environmental regulatory
problems\--a phenomena recently noted by Administrator Reilly of the
Environmental Protection Agency.

     Concerns have been raised not only about less stringent
environmental standards in Mexico and lax enforcement of such standards,
but also about pollution from the many U.S. maquiladora facilities which
may affect public health and the environment on both sides of the
border. I do not discount Mexico\'s expressed desire to pursue
environmentally sound economic development. However, I believe it is
essential, for both U.S. industrial competitiveness and environmental
protection, that environmental issues are included as an integral part
of the free trade negotiations.

     I understand you have suggested the possibility of a separate
bi-national agreement on the environment to address these concerns in
lieu of including environmental matters in the free trade agreement
negotiations. I disagree except where such separate negotiations are
specifically contemplated by existing law. For example, section 815 of
the Clean Air Act amendments also authorizes the EPA, in cooperation
with the Secretary of State, to negotiate with Mexico a separate and
independent program to monitor and improve air quality in regions on
both sides of the border. The Committee, through its oversight
functions, will be following the EPA efforts to use this authority. As
you know, EPA believes that pollution from Mexico adversely affects
visibility at the Grand Canyon National Park.

     As you begin these negotiations, there are some specific questions
as to the impact of a North American Free Trade Zone Agreement (NAFTA)
on U.S. trade with Mexico and Canada and on the U.S. economy that I ask
you to address, as follows.

1\. What analysis, other than the February 1991 report of the
International Trade Commission under section 332 of the Tariff Act of
1930, has the Administration done to measure the volume and types of
U.S. exports to, and trade expansion with, Mexico that it hopes would
increase as a result of establishing an NAFTA? Please provide a copy of
such analysis. Is the increase expected to be significant?

2\. What analysis, other than the report referred to in question number
1, has the Administration done to ascertain the volume and type of
Mexican imports to the U.S. resulting from an NAFTA? Please provide a
copy of such analysis. Which U.S. manufacturing sectors would be hardest
hit by increased import competition resulting from the agreement, and
what would be the employment effect, sector by sector? Please explain
the basis for your reply.

3\. What analysis has the Administration done to measure the volume and
type of U.S. investment in Mexico that would result from an NAFTA?
Please provide it. What impact would that capital outflow have on the
domestic economy?

4\. Does Mexico have comparable environmental laws which provide a level
of environmental protection equivalent to the following U.S. Statutes:
Clean Air Act, Resource Conservation and Recovery Act, Toxic Substances
Control Act, Safe Drinking Water Act and Comprehensive Environmental
Response, Compensation and Liability Act (Superfund)? To what extent are
environmental laws in Mexico being aggressively enforced? Describe the
nature of the penalties authorized and assessed for violation of such
laws? Please explain the basis for your reply to these questions.

5\. Does the Administration plan to discuss debt relief for Mexico in
these negotiations? Does the Administration plan to offer foreign
assistance to Mexico as part of the agreement? To what extent will such
relief and assistance be conditional to ensure protection of the
environment and to avoid adverse impacts on U.S. labor?

6\. One way of assessing the impact of a NAFTA would be to examine
patterns of U.S./Mexico trade and investment over the last ten years.
Has the Administration conducted a study of companies that have
transferred production to Mexico, such as furniture manufacturers
transferring from Southern California to Mexico for labor or
environmental regulation reasons? Has the Administration determined how
many workers, in which industries, have been adversely affected by this
trade and investment relationship? Has the Administration determined how
many U.S. workers have received trade adjustment assistance benefits
because of trade with, or investment in, Mexico? If the answer is yes,
please provide the studies and determinations. If the answer is no,
please explain why not.

7\. Has the Administration examined the impact of Mexico\'s Auto Decrees
(since the 1960\'s) on U.S. auto industry investment employment, and
trade with Mexico? Please explain. What are the requirements of these
decrees and what is their effect on U.S. automakers? Will you seek
modifications of the decrees if they are not beneficial to U.S.
interests? Are any U.S. auto-related companies subject to any private
contracts or agreements related to the Mexican Auto Decrees that have
been negotiated between the Government of Mexico and those companies?

8\. Does the Administration believe that additional auto assembly
capacity in Mexico would come at the expense of existing U.S. production
or production in other countries? On what basis is this assessment made?

9\. Do the workers at auto-related production facilities in Mexico
actually have the real right and opportunity (as opposed to a paper,
\"legal\", right) to form unions and join labor federations of their own
choosing?

10\. Do workers in the maquiladora plants in Mexico have the right to
form unions of their own choosing and to bargain a contract with the
employer? Are workers from affected worksites directly involved in
developing goals and strategies for collective bargaining over their own
terms and conditions of work?

11\. Has the Administration examined changes in labor legislation and
labor policy in Mexico over the past twenty years? If so, has the legal
framework or condition of Mexican workers improved or worsened in that
time? Why? Are Mexico\'s legal and constitutional provisions related to
labor enforced by the Mexican Government?

12\. If common norms of labor laws and practice were adopted as part of
the NAFTA, how would such measures be enforced? Would U.S. parties have
the right to intervene in Mexican procedures, even if the aggrieved
Mexican party failed to act? Would a tri-national panel rule on all
disputes, on only those which directly affected each signatory, or on no
such disputes?

13\. In replying to this question and questions 5 thru 10, please
consider to what extent these labor issues were or were not a concern in
the free trade negotiations with Canada and indicate to what extent
these issues and problems potentially create an uneven playing field for
negotiations that did not exist with Canada.

14\. Energy issues are a major part of the U.S./Canada Free Trade
Agreement. Mexico has repeatedly stated that it will not discuss
questions concerning petroleum in any negotiation and has apparently
asserted that this position is based on provisions of the Mexican
Constitution. Please identify those provisions and explain why they
preclude such discussions. Does the Administration, nevertheless, intend
to insist that energy issues be addressed in an NAFTA? What is the basis
for this decision? What is the impact?

15\. Enclosed is my recent correspondence with the Administration
regarding auto theft issues involving Mexico. Please explain whether the
negotiations will address the issues discussed by the Customs Service
that give rise to the theft problem.

     Additionally, I note that the U.S. and Canada are likely to sign
later this month at a meeting of the Economic Commission for Europe
(ECE) a Convention on Environmental Impact Assessment in a Transboundary
Context. Both countries have previously signed an ECE protocol on
transboundary nitrogen oxide pollution and are participating in ECE
negotiations regarding transboundary volatile organic compounds. Also,
the U.S. and Canada have a draft of a bilateral on transboundary
pollution. I understand that Mexico is not a participant in these
matters, yet these concerns are not unique to the Canadian-U.S. border.
What efforts will be made to urge Mexico to either join the U.S. and
Canada in these international efforts or to include those agreements in
these negotiations? Please explain.

     Finally, please clarify for us the extent to which these
negotiations may, or will not, affect or change the U.S.-Canada Free
Trade Agreement. I presume it will not be changed by these negotiations.
Is that your understanding?

     I am providing a copy of this letter to the Council of Economic
Advisors because I believe they need to be aware of my concerns. I
request that you reply to the above questions by April 10, 1991. If you
cannot respond to all of these questions by this date, please respond to
the extent possible and provide a date certain for the completion of
your response.

     With best wishes.

Sincerely,

John D. Dingell,

Chairman.

     Enclosures.

The United States Trade Representative

Executive Office of the President,

Washington, DC, April 10, 1991.

Hon. John D. Dingell,

Chairman, Energy and Commerce Committee,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Thank you for your letter dated February 20,
1991, concerning the North American Free Trade Agreement (NAFTA). I
greatly appreciate your comments on the proposed agreement.

     Participation in trade agreements such as the proposed NAFTA will
substantially enhance U.S. competitiveness and contribute to the growth
of our economy and employment opportunities. Expanded trade and
investment opportunities are essential to our economic well-being. In
1990, for example, exports rose by over 8 percent and accounted for 88
percent of U.S. GNP growth.

     Furthermore, as President Bush stated in his March 1 letter to you,
the continuation of fast track procedures is essential for our
participation in trade negotiations leading to such market-opening
agreements. Preserving fast track procedures\--and the partnership
between Congress and the Executive Branch that fast track
represents\--will keep on course our joint efforts to liberalize trade
and open markets through trade negotiations.

     Mexico has undertaken impressive liberalization of its trade and
investment regime under the leadership of President Salinas. However,
U.S. goods remain subject to trade barriers that in many cases are
higher than our own, and Mexico remains closed to certain U.S.
investments. A North American Free Trade Agreement would create an
enormous market, encompassing some 360 million consumers and total
output of \$6 trillion. The progressive elimination of barriers to the
flow of goods, services and investment, and strengthened protection of
intellectual property rights would benefit a broad spectrum of
businesses, workers, farmers and consumers. Moreover, a NAFTA would help
cement the extensive historical, familial, cultural and language links
the United States has with both Mexico and Canada.

     As you know, the Administration shares your goal of enhancing
protection of the environment and of improved standards for workers. I
firmly believe that the NAFTA negotiations will help us make progress
not merely in trade but along our broader agenda, including the
environment and labor standards.

     In addition to the comments you provided in your letter, you
included fifteen numbered questions (and two questions that were not
numbered) relating to various trade and non-trade issues that might be
raised in the context of the negotiations. We have prepared responses to
these questions; because of the length of these responses, we have
enclosed them with this letter.

     Again, Mr. Chairman, I appreciate your taking the time to share
your thoughts with me.

Sincerely,

Carla A. Hills.

     Enclosure.

     1. What analysis, other than the February 1991 report of the
International Trade Commission under section 332 of the Tariff Act of
1930, has the Administration done to measure the volume and types of
U.S. exports to, and trade expansion with, Mexico that it hopes would
increase as a result of establishing a NAFTA? Please provide a copy of
such analysis. Is the increase expected to be significant?

     Answer. In the past year two comprehensive studies, in addition to
the ITC study, have been conducted on the effects of an FTA with Mexico.
All three studies conclude that the U.S. economy would benefit\--in
terms of exports, output and employment.

THE CLOPPER ALMON STUDY

     Commissioned by the U.S. Department of Labor, Industrial Effects of
a Free Trade Agreement Between Mexico and the USA is a joint study by
groups at the Universities of Maryland and Guanajuato (Mexico). Dr.
Clopper Almon of the University of Maryland was the project director.

     The study, released in September 1990, uses linked input-output
models for the U.S. and Mexican economies. There are over 70 sectors in
each of the two models. Each model forecasts employment, production,
prices, exports and imports in all sectors for the period 1989 to 2000.
The effects of a U.S./Mexico FTA are expressed as the difference between
a baseline forecast (excluding an FTA) and forecasts of two FTA
scenarios (tariff elimination alone and the elimination of tariffs and
major non-tariff barriers).

     The Clopper Almon study concluded that ten years after the
agreement on tariff and non-tariff barriers went into effect, U.S.
exports to Mexico would be \$6.7 billion higher (at 1977 prices and
purchasing power) than if liberalization did not take place. Expressed
in constant 1990 dollars, this represents a roughly \$10 billion
increase in U.S. exports to Mexico. Real exports to Mexico would be
roughly 28 percent higher in the year 2000 due to an FTA. Export
expansion will be particularly strong in agriculture and many
manufacturing sectors (e.g. motor vehicles, computers, communication
equipment, plastic and metal products, non-electrical machinery, and
electrical industrial apparatus).

MARWICK STUDY

     The U.S. Council of the Mexican-U.S. Business Committee recently
contracted for a study of the effects of a U.S.-Mexican FTA from the
accounting firm of KPMG Peat Marwick (Policy Economics Group). An
executive summary of this study reporting broad conclusions of the
analysis has been released, though the full study is not yet available.

     The Peat Marwick study takes an approach different from that
employed by Clopper Almon. Taking 1988 as a base year, the study
examines how employment, wages, incomes, rates of return, exports and
imports would have been different in 1988 had an FTA been in effect that
year. The effects of the FTA in the Peat Marwick study are, therefore,
the difference between 1988 as it was in fact and 1988 as it might have
looked with an FTA in operation and all the long-term adjustments to
free trade completed.

     The executive summary reports results on the basis of two
scenarios, one not allowing for additional invested capital in Mexico
and one that assumes that \$25 billion of additional capital has been
fully put to work in useful ways in Mexico as a result of an FTA.

     The executive summary of the Peat Marwick study does not provide a
dollar figure for the increase in U.S. exports to Mexico under either of
the two scenarios. It reports the increase on a percentage basis
instead. In 1988, had an FTA been in effect, the study estimates in the
no-additional-capital scenario that U.S. exports to Mexico would have
been 5.4 percent higher. Under the additional capital scenario, U.S.
exports increase somewhat less (actual figure not reported in the
executive summary).

COMMENT

     The U.S. export expansion reported in the Peat Marwick study is
smaller than in the Clopper Almon study. One reason for this is that
Clopper Almon considers changes in U.S. exports over time (to the year
2000) while Peat Marwick just considers the hypothetical change to
exports in a base year.

     Also with reference to the Peat Marwick study, the
balance-of-payments effects of increased capital outflows from the
United States to Mexico should strengthen rather than weaken U.S.
exports to Mexico. The Peat Marwick study, using a \"comparative
static\" framework is not designed to capture such balance-of-payments
effects on U.S. exports in the additional capital scenario.

     There are other ways in which these studies tend to underestimate
the potential for export (and output) expansion arising from a NAFTA.
First, the models capture the possibilities for expanded trade between
product sectors. They do not measure the important opportunities for
trade expansion within various product sectors. Second, these models do
not capture the \"dynamic\" gains from liberalization. These dynamic
increases in output come about as a result of higher levels of savings
and investment associated with the \"static\" output gains of the FTA.
Third, these models also miss the beneficial effects of economies of
scale and increased product innovation and R&D. When these effects are
added, they amplify both static and dynamic components of gains from an
FTA. Fourth, a NAFTA will likely address many more Mexican barriers than
could be modeled in either the Clopper Almon or Peat Marwick study. And
finally, the NAFTA should improve overall economic efficiency in the
Mexican economy by advancing and solidifying market- oriented reforms
and disciplining government distortions and private cartel behavior that
act as brakes on economic growth.

     Besides the ITC, Clopper Almon and Peat Marwick studies, others are
in the works. A listing of such work in progress was reported in the ITC
study to the Congress. In addition, the Department of Commerce is
contracting for a study to be done outside of government on the effects
of a NAFTA on long-term labor demographics in the United States. This
study, which should be completed in July, will focus on key U.S.
manufacturing sectors. We will be pleased to share the results of this
study with you.

     Study designs vary significantly and different studies highlight
different effects of trade liberalization. The studies completed to
date, however, all concur in the view that a NAFTA would significantly
expand U.S. exports. Copies of the executive summary of the Peat Marwick
study; the Clopper Almon study and erratum and summary of the Clopper
Almon study done by the U.S. Department of Labor are enclosed.

     2. What analysis, other than the report referred to in question
number 1, has the Administration done to ascertain the volume and type
of Mexican imports to the U.S. resulting from a NAFTA? Please provide a
copy of such analysis. Which U.S. manufacturing sectors would be hardest
hit by increased import competition resulting from the agreement, and
what would be the employment effect, sector by sector? Please explain
the basis for your reply.

     Export, import and employment effects of a NAFTA are drawn out of
the same economy-wide studies. The same studies referred to in answer to
question number 1 will be reported here.

THE CLOPPER ALMON STUDY

     Clopper Almon reports that, 10 years after liberalization, U.S.
imports from Mexico would be about \$1.8 billion higher (1977 dollars)
than they would be if trade liberalization did not take place. this is
equivalent to about \$3.1 billion in constant 1990 dollars.

     Because the Mexican economy is so small compared to the U.S.
economy (4 percent), and U.S. barriers to the entry of imports from
Mexico currently so low, the employment effects\--even on a sectoral
basis\--are extremely small. For example, the manufacturing sector with
by far the largest increase in imports due to an FTA is apparel. The
Almon study estimates that by the year 2000 an FTA would add \$898
million (1977 dollars) to U.S. apparel imports from Mexico, an amount
equal to slightly more than half of the total increase in U.S. imports
from an FTA. The U.S. job loss effect associated with these additional
textile imports are estimated to be very small. After 10 years, the
study estimates that apparel employment will be reduced by 7,200 jobs, a
job loss which averages 720 a year or less than one-tenth of one percent
of projected average annual U.S. apparel employment over the decade.
This rate is surely far below the normal attrition rate in the industry.
This is the worst case. Data for other manufacturing industries are
shown in the appendix tables of the study.

     It is important to note that the Clopper Almon study finds that an
FTA with Mexico would on net be job creating for the United States and
that the U.S. manufacturing sector will be the principal beneficiary. Of
the product sectors in the model losses in declining sectors reach
24,300 jobs after 10 years while gains in gaining sectors total 87,900.
The net job increase is 63,600. The manufacturing sector, at 48,100 new
jobs at the end of 10 years, accounts for the largest share of the net
employment increase. Agriculture adds 11,700 new jobs due to an FTA.

THE PEAT MARWICK STUDY

     The Peat Marwick study finds that U.S. imports from Mexico would
rise by 4.2 percent in the scenario with no additional capital in Mexico
and by 12.9 percent in the scenario with additional capital.

     The Peat Marwick study did not analyze the overall impact of an FTA
on aggregate employment but instead analyzed sectoral shifts. These
shifts tend to be very small, a result consistent with the findings of
the Clopper Almon study.

     In the scenario with additional capital in Mexico, the U.S.
manufacturing sector with the largest percentage gain in employment
(optical instruments and miscellaneous manufactures) increases
employment by 0.9 percent while the manufacturing with the largest
percentage loss in employment (electronic components) loses 0.8 percent
of employment. A breakdown of employment changes for all sectors is
shown in Table 8 of the executive summary of the Peat Marwick study.

     The Clopper Almon and Peat Marwick studies thus confirm a finding
reported by the ITC that while an FTA should have significant trade
effects, those effects are likely to be too small relative to U.S.
production to have a significant short to medium term effect on U.S.
industry overall or even sector by sector.

     3. What analysis has the Administration done to measure the volume
and type of U.S. investment in Mexico that would result from a NAFTA?
Please provide it. What impact would that capital outflow have on the
domestic economy?

     Answer. The three studies already completed on the impact of an FTA
and, to the best of our knowledge, other economy-wide, econometric
studies in progress are not specifically designed to quantify the impact
of a FTA on foreign investment in Mexico. (The Peat Marwick study
assumes \$25 billion in additional capital in Mexico, 40 percent of
which is assumed to come from foreign investors). The problems of
formally assessing the impact of a NAFTA on foreign investment in Mexico
appear to be ones of both modeling and data availability. We
nevertheless have proceeded with an assessment of the issue which is
on-going and report our current findings below.

     The capacity of Mexico\'s economy to absorb new capital is limited.
The net inflow of capital\--portfolio investment as well as direct
investment\--into Mexico from all countries has risen to roughly \$5
billion a year (after falling to zero during the 1980\'s debt crisis).
This inflow is in part the result of Mexico\'s unilateral liberalization
of trade and investment, which has begun to restore foreign confidence
in the Mexican economy, and to remove barriers to investment. As a
result of these economic reforms, little prevents U.S. or other foreign
firms that choose to invest in Mexico for the purposes of exporting from
Mexico to the United States or elsewhere from doing so now.

     However, economic studies of Mexico\'s economy find that its
capacity to substantially increase foreign borrowing in the medium term
is limited. For example, the James Capel study (copy enclosed), and a
study done for Morgan Stanley (copy enclosed) suggest that under best of
circumstances\--continued economic reform in Mexico and an FTA with the
United States\--foreign investment in Mexico will rise to not much more
than \$9 billion or \$10 billion per year over the next 5 years\--an
increase of \$4-\$5 billion per year over current levels. If the total
were to reach \$9 billion or \$10 billion per year in 5 years\' time,
perhaps only one half of this amount would be direct investment.

     In 1989, the stock of U.S. direct investment in Mexico totaled
\$7.1 billion and new flows of direct investment totaled \$1.6 billion.
In contrast, the stock of all U.S. direct investment abroad totaled
\$373 billion and new flows of direct investment totaled \$31.7 billion.
So, even if U.S. investment in Mexico were to double or triple, it would
still remain small relative to U.S. investment in other countries.

     In short, even under the most extreme of circumstances, an FTA with
Mexico will not cause a large capital outflow from the United States.
First, only some of the projected increases in foreign investment in
Mexico will be from the United States. Second, while the numbers are
large compared to the size of Mexico\'s economy\--3 percent to 4 percent
of Mexican GNP, they are tiny compared to the total amount of annual
U.S. domestic investment, currently running at \$750 billion a year.
Third, much of any additional U.S. investment in Mexico will come from
the increased profits that U.S. firms earn in a strengthened Mexican
economy. In 1989, over 70 percent of new U.S. investment in Mexico came
from the reinvested earnings of U.S. subsidiaries on profits earned in
Mexico.

     Fourth, some of the new investment will be diverted from other
developing countries. The types of investments that can be profitably
undertaken in Mexico are the types which U.S. firms already are making
in other developing countries. Investments in Mexico is much less likely
to substitute for investments for which a highly educated labor force
and highly developed infrastructure are needed. Fifth, increased
efficiency and growth will generate new investment funds. Expanding the
investment pie can increase investment in Mexico without decreasing it
in the United States. And sixth, as noted above, there are few barriers
to prevent investment in Mexico now, so long as the output is intended
for export markets in the United States or elsewhere.

     Moreover, some aspects of a NAFTA may work to decrease the rate of
U.S. investment in Mexico. For example, current Mexican performance
requirements compel some U.S. firms to invest in Mexico to gain access
to the Mexican market. If such requirements were eliminated in a NAFTA,
firms could reduce such investments and service the Mexican market with
increased exports from the United States.

     Finally, given the relative magnitudes involved and the highly
integrated global capital markets in existence today, the effect of an
FTA with Mexico could be expected to have little or no effect on the
total amount of investment taking place in the \$5.2 trillion U.S.
economy.

     The new U.S. investment which does flow to Mexico will benefit the
U.S. as well as the Mexican economy. U.S. investment in Mexico tends to
take place in sectors where the competition from Asia is fiercest,
(e.g., autos, electronics).

     Investment in production sharing in Mexico has the effect of
displacing U.S. imports from Asia, or displacing investment in Asia for
example, in response to a poll conducted by the ITC, a large majority of
900 U.S. companies located in Mexico responded that location in Mexico
helped them to compete against imports into the United States.

     Also, in a free market environment many U.S. firms would prefer to
invest in Mexico rather than in Asia. Proximity, opportunity and
knowledge of economic environment will attract U.S. firms that otherwise
would look elsewhere to rationalize their production.

     Workers and firms in the United States benefit from
\"rationalizing\" production between the two markets. In looking to
co-production arrangements between the United States and Mexico, U.S.
firms would be seeking the same advantages which Japanese firms are
finding in Asia and German firms in Spain to improve competitiveness
against their party suppliers. Home country workers\--be they Japanese,
German or American\--benefit from the gradual shift toward more
productive, better paid and more secure employment which is induced by
such co-production arrangements. The firms, by rationalizing their
production internationally, tend to \"grow the market,\" creating jobs,
and raising incomes and living standards in both their home and host
countries.

     Mexicans are far more likely to source capital goods and components
from the United States. 70 percent of all Mexico\'s imports are now from
the United States, and 74 percent of Mexico\'s imports of capital goods
are from the United States.

     The macroeconomic effects of new capital flows to Mexico will be to
stimulate U.S. exports to Mexico, creating thousands of new jobs in the
United States. Exports of capital provide Mexico with the dollar
purchasing power needed to buy U.S. products.

     In developing countries, like Mexico, that face serious foreign
exchange constraints limiting imports, any additional foreign capital
inflows result in increasing imports of nearly the same amount. Since 70
percent of Mexico\'s imports now come from the United States (an even
greater fraction could come from the United States under a NAFTA),
increased capital inflows into Mexico could result in almost offsetting
increases in U.S. exports to Mexico.

     The United States, with its strong export advantage in capital
equipment and many agricultural products will be well positioned to
supply Mexico\'s development needs. If net capital inflows to Mexico
increased by \$5 billion annually in the next half decade and 70 percent
of the associated increase in Mexico were from U.S. suppliers, an
additional 70,000 export-related jobs would be created in the United
States.

     4. Does Mexico have comparable environmental laws which provide a
level of environmental protection equivalent to the following U.S.
statutes: Clean Air Act; Resource Conservation and Recovery Act; Toxic
Substances Control Act, Safe Drinking Water Act and Comprehensive
Environmental Response, Compensation and Liability Act (Superfund)? To
what extent are environmental laws in Mexico being aggressively
enforced? Describe the nature of the penalties authorized and assessed
for violation of such laws. Please explain the basis for your reply to
these questions.

     Answer. The Environmental Protection Agency has been assessing
Mexico\'s environmental laws and regulations. While its work is ongoing,
at this stage of its review, EPA concludes that Mexico\'s General Law on
Ecological Balance and Environmental Protection (\"General Ecology
Law\") provides a comprehensive legal framework for protecting the
environment and addressing pollution problems. As appears from a review
of the statute, Mexico has adopted many of the same general approaches
to protecting the environment as have been applied in the United States,
such as a program of licensing and permitting individual facilities and
the establishment of emissions limitations. In addition to the law,
subsequent steps taken by Mexico show that programs are being developed
to address air, water and soil pollution, hazardous wastes and
materials, development, and the management of natural resources. EPA
will continue to monitor and assess Mexican laws and regulations.

     The General Ecology Law, which updates earlier environmental
statutes, became effective on March 1, 1988. Structurally, the General
Ecology Law is a broad and comprehensive statute that covers, among
other things, air, water and soil pollution, contamination by hazardous
materials and wastes, conservation of ecosystems and the \"rational
use\" of natural resources. Unlike much of U.S. environmental law, the
General Ecology Law refrains from prescribing how Mexico\'s Department
of Urban Development and Environmental Protection (\"SEDUE\", EPA\'s
Mexican counterpart) should implement it. Rather, it gives SEDUE broad
authority and provides general criteria and policy guidance for
developing the specific protection regimes, relying heavily on SEDUE\'s
discretion to develop the details of Mexico\'s program.

     Like the United States, Mexico has created legal authority to
control development, address air, water and soil pollution, and manage
hazardous materials and wastes, pesticides and toxic substances. For
example, both countries require an analysis of the environmental impact
and advance authorization of environmentally significant development
projects. Both require the adoption of ambient air quality standards,
emission limits and technology-based standards for sources of air
pollution. Both regulate air pollution caused by automobiles. Both the
U.S. and Mexico control sources of water pollution through a system of
effluent limitations and water quality standards. Both provide for the
management of hazardous waste and for oversight of pesticides and
potentially risky activities.

     Both countries apportion some responsibilities for environmental
protection between the federal and state and local governments.
Management of pollution- causing activities occurs through a system of
licensing, registrations, and/ or permitting for products or facilities.
The two systems also differ in some respects, and in particular in the
methods used to implement laws and regulations. This difference is not
surprising, given that the United States has a common law tradition and
Mexico a civil law system.

     With respect to enforcement, the Government of Mexico has made it
clear that it wants to have \"clean growth\" and is not prepared to have
Mexico become a pollution haven for North America. It is taking
important steps, including increased funding for enforcement and
increased enforcement activities, to ensure that companies operating in
Mexico comply with relevant environmental laws and regulations. As an
example that Mexico is prepared to make hard choices, last month
President Salinas announced the permanent closure of Mexico\'s largest
oil refinery. This PEMEX refinery, which accounted for 8 percent of
Mexico\'s distillation capacity, was responsible for up to 15 percent of
Mexico City\'s industrial air pollution emissions. The estimated cost of
the shutdown is \$500 million and up to 5000 jobs.

     EPA has just completed a week-long trip to Mexico involving
extensive consultations and information exchange with SEDUE officials
over U.S. and Mexican environmental rules and regulations. I will
provide a supplementary response as soon as we have assimilated this
information.

     5. Does the Administration plan to discuss debt relief for Mexico
in these negotiations? Does the Administration plan to offer foreign
assistance to Mexico as part of the agreement? To what extent will such
relief and assistance be conditional to ensure protection of the
environment and to avoid adverse impacts on U.S. labor?

     Answer. Bilateral official debt issues between the United States
and Mexico will be dealt with through the debt component of the
President\'s Enterprise for the America\'s Initiative, not the free
trade negotiations. If Mexico meets eligibility criteria for debt
reduction under the Initiative (IMF/World Bank programs, significant
investment reforms and a commercial bank debt reduction package), we
would be prepared to sell a portion of Mexico\'s Eximbank and Commodity
Credit Corporation (CCC) obligations to facilitate debt-for-nature,
debt-equity or debt-for-development swaps. Such sales of
non-concessional debt would depend on gaining authority from the
Congress, which we have requested in the proposals transmitted by the
President to the Congress on February 26. Mexico has little outstanding
concessional debt with the United States, so we do not foresee
significant concessional debt reduction under the Initiative.

     The Government of Mexico has not expressed a desire for additional
foreign assistance, nor is it to be a topic for the NAFTA negotiations.

     6. One way of assessing the impact of a NAFTA would be to examine
patterns of U.S.-Mexico trade and investment over the last ten years.
Has the Administration conducted a study of companies that have
transferred production to Mexico, such as furniture manufacturers
transferring from Southern California to Mexico for labor or
environmental regulation reasons? Has the Administration determined how
many U.S. workers have received trade adjustment assistance benefits
because of trade with, or investment in, Mexico? If the answer is yes,
please provide the studies and determinations. If the answer is no,
please explain why not.

     Answer. The following table sets out U.S.-Mexico trade patterns
since 1980:

\[In billions of dollars\]

          U.S.          U.S.

          exports          imports

          to          from          Trade

          Mexico          Mexico          balance

1980          15.1          12.6           2.6

1981          17.8          13.8          4.0

1982          11.7          15.6          -3.8

1983          9.1          16.8          -7.7

1984          12.0          17.3          -6.0

1985          13.6          19.1          -5.5

1986          12.4          17.3          -4.9

1987          14.6          20.3          -5.7

1988          20.6           23.3          -2.6

1989          25.0          27.2          -2.2

1990          28.3          30.2          -1.8

January 1990     2.2          2.4          -0.2

January 1991     2.4           2.5          -0.1

     What the table shows is that following the 1982 debt crisis, U.S.
exports to Mexico diminished sharply, while Mexico\'s exports to the
United States continued to grow, as Mexico\'s exports to the United
States continued to grow, as Mexico sought to earn much-needed foreign
exchange. Since Mexico began to open its economy to imports in 1986,
there has been continued strong growth in U.S. exports to Mexico. The
result has been a two-thirds reduction in our trade deficit with Mexico.
And excluding petroleum, the United States ran a trade surplus with
Mexico of over \$2.5 billion in 1990.

     On investment, the stock of U.S. direct investment in Mexico rose
from \$4.5 billion in 1979 to \$7.1 billion in 1989 (the most recent
year available), an increase of 58 percent. In comparison, the total
stock of U.S. investment overseas doubled during the same period, rising
from \$186.7 billion to \$373.4 billion. As a result, Mexico\'s share of
the total stock of U.S. foreign direct investment fell from 2.4 percent
in 1979 to 1.9 percent in 1989.

     The Administration has not done a study of plants that have
transferred production to Mexico, as specific data to perform such a
study are not collected.

     With respect to trade adjustment assistance, for the reasons
outlined below, the Administration has not determined the extent to
which trade assistance benefits have been provided because of trade or
investment with Mexico.

     The Office of Trade Adjustment Assistance (OTAA), within the
Employment and Training Office, U.S. Department of Labor, is responsible
for implementing the Trade Adjustment Assistance program. One of the key
responsibilities of this office is conducting the required
investigations to certify whether workers are eligible to receive TAA
benefits.

     Under current law (the Trade Act of 1974, as amended) the test that
has to be met for eligibility for TAA is that increased imports must
have contributed importantly to decreased sales and production and to
worker separations in a particular company or subdivision. The origin of
the imports themselves is not relevant to the injury determination.
Accordingly, the Trade Adjustment Assistance Office uses aggregate data
and does not relate eligibility determinations to origin of imports.

     However, with respect to the TAA program as a whole, from the
beginning of the program (April 3, 1975) through March 31, 1991, there
have been 1,748,060 workers certified to apply for TAA benefits. The
four principal industries in which these workers were employed were (in
descending order) automobiles, apparel, steel and footwear. In FY 1991,
\$269 million was appropriated for TAA.

     7. Has the Administration examined the impact of Mexico\'s Auto
Decrees (since the 1960s) on U.S. auto industry investment, employment,
and trade with Mexico? Please explain. What are the requirements of
these decrees and what is their effect on U.S. automakers? Will you seek
modification of the decrees if they are not beneficial to U.S.
interests? Are any U.S. auto- related companies subject to any private
contracts or agreements related to the Mexican Auto Decrees that have
been negotiated between the Governments of Mexico and those companies?

     Answer\--

A. Impact on the U.S. auto industry

     The impact of Mexico\'s auto policy on the U.S. auto industry
investment, employment, and trade has changed with each iteration of the
successive decrees (a total of five decrees since 1962). In general, it
can be said that the first two decrees had little effect on U.S.
employment, as models assembled and produced in Mexico were sold in
Mexico. As the Mexican market expanded over time, the effects on U.S.
investment in Mexico (induced by local content requirements, bans on the
importation of completely assembled engines and requirements that
certain parts be produced in Mexico) were of growing significance. Due
to various economic forces, Mexico\'s automotive imports rose
dramatically and Mexico began to look towards export markets in order to
relieve balance of trade and pressing balance of payments problems.

     Before 1977 Mexico\'s auto exports to the United States were
extremely low. Exports of engines and cars have risen since 1977 but the
engine and assembling plants constructed to fulfill the performance
requirements of the 1977 (and later) auto decrees are highly
capital-intensive facilities. They employ only about 15,000 workers in
total. In addition, in the absence of Mexican auto decrees, some of the
production that takes place in these plants\--most obviously the
assembled sub-compact cars\--would most likely have taken place in the
Far East. Far Eastern production would have used fewer products of U.S.
parts manufactures than are being used in Mexico. In sum, the net effect
of Mexican auto decrees on U.S. employment has so far been small and
possibly positive.

     Beginning with the third decree in 1977, increased incentives were
offered to the five auto assemblers (GM, Ford, Chrysler, VW, and Nissan)
in an attempt to restructure Mexico\'s inefficient industry and to
balance its automotive trade by increasing exports. New content
definitions and requirements necessitated additional investment in
Mexico. The 1983 decree continued this trend. Emphasis was placed on the
export of auto parts, particularly engines. As domestic Mexican sales
increased, vehicle exports increased. In 1989, Mexican export and
domestic vehicle sales were at an all- time high, with Mexican exports
of automotive parts accounting for a higher dollar value than vehicle
exports. At the same time, U.S. exports of automotive parts to Mexico
more than doubled from \$1.8 billion in 1986 to \$4.5 billion in 1990.
This resulted in a reduction in the U.S. parts deficit with Mexico from
\$1.0 billion in 1989 to \$0.003 billion in 1990. The U.S. trade deficit
in finished motor vehicles increased from \$1.2 billion in 1989 to \$2.1
billion in 1990.

     While the first four auto decrees increased Mexican motor vehicle
exports, they had limited impact on balancing automotive trade, and the
Mexican industry was still uncompetitive in certain areas. The 1989
decrees were an attempt to modernize the industry and to allow it to
achieve economies of scale necessary to achieve international
competitiveness. Certain provisions under the old decrees were
liberalized (e.g., reduction in local content requirements, elimination
of mandatory local sourcing of specific parts and renewal of the ability
to import finished vehicles if assemblers have positive trade balances)
but new definitions of the parts industry may have unintentionally made
Mexican parts sourcing more onerous than under previous decrees.

B. Provisions of the 1989 auto decree

     The 1989 decrees contain the following basic provisions:

     Local Content\--Mexican regulations require vehicle and parts
manufacturers in Mexico to meet the following local content requirements
if they wish to produce and sell in the Mexican market:

36 percent for manufacture of cars and light trucks;

40 percent for heavy duty trucks and buses;

30 percent for parts manufacturers.

     These provisions are a liberalization over previous requirements
which were significantly higher and implemented on a per vehicle/per
part basis. Local content is now figured on a company-wide basis but the
fact that parts purchases must now be from companies with at least 60
percent Mexican ownership (who must sell at least 60 percent of their
products to the vehicle assemblers in order to count towards the 36
percent content requirement) may force additional parts investment in
Mexico if the assembler wishes to sell in the Mexican market.

     Trade balancing/performance requirements\--Mexico continues to
maintain trade balancing/performance requirements under the two
automotive decrees issued in December, 1989. For vehicle assemblers to
import new motor vehicles into Mexico, the company must subtract for
each dollar of imported value (of whatever unit of currency used) from
their trade balance at the following rates: Model Year (MY) 1991, \$2.5;
MY 1992 and 1993, \$2.0, and during MY 1994 and thereafter, \$1.75. For
example, for MY 1991, if a vehicle assembler imports a car worth
\$10,000, \$25,000 would have to be subtracted from the assembler\'s
trade balance.

     In order to be able to import new vehicles into Mexico,
manufacturers must export more than they import. Vehicle manufacturers
with positive trade balances may use this \"surplus\" to import new
vehicles. Positive trade balances not used in prior years may be carried
over to the following year starting for the MY 1992 or sold to other
automotive manufacturers wishing its investment in fixed assets
(purchased Mexican machinery, etc., intended for increasing production
capacity) in its trade account balances.

     These provisions are a liberalization over earlier limitations.
Vehicle imports were restricted to border zones. Vehicle manufacturers
may be able to complement their model lines in Mexico with imports from
the United States, depending on their trade balance. Vehicle
manufacturers will also have greater leeway in parts sourcing decisions,
since they no longer must purchase specific parts locally. This could
have a positive effect on U.S. employment by offering new export
opportunities for both U.S.-made vehicles as well as U.S. parts.

     Import restriction for motor vehicle\--Mexico restricts the
importation of both new and used motor vehicles and import licenses are
required. The restriction on imports of new motor vehicles is based on
trade balancing and local content requirements. Under the Auto Decree,
Mexico allows vehicle manufacturers to import new cars equivalent to 15
percent of their local sales for MY1991 and MY1992 with an increase to
20 percent of MY1993 and MY1994.

     Heavy duty vehicle manufacturers (buses, truck tractors, heavy
trucks) are allowed to import vehicles of the same class as they produce
in Mexico. However until 1993 for truck tractors and 1994 for other
heavy trucks, the total value of imported vehicles cannot exceed the
value of local content used in a company\'s total Mexican production
each year. Restrictions on buses ended January 1, 1991 and restrictions
will be totally eliminated by 1994 for truck tractors and heavy trucks.

     Used car imports are restricted to certain areas along the border
(border zones). These imports are intended to minimize illegal
importations.

     The import liberalizations in the 1989 auto decrees should have a
positive effect on U.S. vehicle assemblers and parts producers because
imports of new finished vehicles previously were prohibited. However,
due to the constraints on new vehicle imports mentioned under the trade
balancing section, the magnitude of the effect is difficult to quantify.
There is pent-up demand for U.S. models in Mexico and increased exports
of U.S. models are likely if further liberalization occurs.

     Investment restrictions\--Mexico\'s investment restrictions are
part of the 1973 Foreign Investment Law but are reinforced in the
automotive decrees. Foreign investment in the auto parts sector has been
limited by Mexico to 49 percent except under a 20 year investment trust
provision where 100 percent ownership is allowed. Although
foreign-equity shares up to 49 percent are allowed in the parts sector,
purchases from companies with foreign-equity above 40 percent apparently
do not count towards the 36 percent local content requirement. Purchases
from these companies do count towards trade balancing requirements. One
hundred percent foreign ownership of parts operations is allowed in the
maquila zones.

     Foreign investment restrictions, including those contained in the
automotive decrees, have effectively forced U.S. parts producers to
enter into minority ownership agreements with Mexican companies if they
wish to produce in Mexico. The effect is loss of management and quality
control as well as diseconomies of scale for some U.S. parts
manufacturers.

     Standards\--The decrees require that manufacturers comply with
existing safety and emission standards in Mexico, These requirements
have no negative effects on U.S. manufacturers.

C. Seeking modifications to automotive decrees

     The administrations committed to seeking the removal of auto decree
provisions that distort trade and investment flows.

D. Private agreements between auto-related companies and the government
of Mexico

     The Administrations not aware of any private contracts or
agreements between any U.S. auto-related companies and the Government of
Mexico.

     8. Does the Administration believe that additional auto assembly
capacity in Mexico would come at the expense of existing U.S. production
or production in other countries? On what basis is this assessment made?

     The most likely models to be produced in Mexico are sub-compacts.
The administration does not believe that additional auto assembly
capacity will come at the expense of existing U.S. production because
the United States currently does not wholly produce any sub-compact
models domestically. The United States has not been competitive in the
production of sub-compact cars because of demand conditions and the
resulting lower profit margins made on these models. Consequently, U.S.
companies have chosen to \"buy\" such models from their Asian
competitors. In addition, there currently exists excess capacity for
large model production in the United States. This excess capacity
reflects large capital investment tied up in large/luxury model
production. When these factors are added to costly lay-off clauses in
union contracts, it is unlikely that it would make economic sense to
move existing auto assembly capacity to Mexico.

     The movement of U.S. production capacity also would be limited by
the fact that although labor costs are lower in Mexico, they are a
decreasing component of automotive manufacturing costs and are only one
component in the total cost of production. Overall costs of operating in
Mexico must take account of such factors as higher infrastructure costs
and the relatively lower productivity of Mexican workers.

     It is not possible to determine whether additional Mexican auto
assembly capacity would result as a consequence of a NAFTA without
detailed knowledge of U.S. assemblers\' future investment, production
and marketing plans. These plans could be directly affected by the
outcome of several legislative proposals under consideration in
Congress. The effect of the Administration\'s National Energy Strategy
proposals, current legislative proposals on CAFE, as well as new
environmental and safety regulations under consideration are factors
which companies will need to consider in making future investment
decisions. Once the outcome of these legislative proposals and
implementing regulations is known, the companies will be in a better
position to make these decisions.

     Auto industry analysts have suggested (e.g., James P. Womack, MIT)
that \"Big Three\" production in the Far East might be moved to Mexico
(e.g., Ford Festiva). The incentives to move this production to North
America (most likely to Mexico) include some of the same incentives that
fostered small car production in the Far East. The prospect of including
Mexico in a NAFTA would certainly provide additional incentive for such
a move as well as an added incentive for increased U.S. parts sourcing
to build these models.

     Production location decisions will also be a function of several
variables including currency valuations, interest rates, availability of
capital, gasoline prices, and the ultimate regulatory environment on
both sides of the border.

     Finally, two econometric analyses suggest that a free trade
agreement with Mexico would result in a positive impact in terms of
employment for the U.S. auto industry. Both the Clopper Almon and the
KPMG Peat Marwick analyses indicate that an FTA with Mexico would boost
U.S. employment in the automobile industry by a small amount.

     9. Do workers in auto-related production facilities in Mexico
actually have the real right and opportunity (as opposed to a paper,
\"legal\" right) to form unions and join labor federations of their own
choosing?

     The right to organize and bargain collectively is guaranteed under
Article 123 of the Mexican Federal Constitution and affirmed in Mexican
labor law. These rights apply to workers in all industries, including
auto-related production. There are few, if any, restraints on
unionization. A petition by 20 workers in a plant is necessary to call
for a vote to organize workers and select a union to represent workers
in a plant. At present, almost twice as much of the workforce is
unionized in Mexico as compared to the United States: about 30 percent
of the Mexican workforce is unionized, compared to a U.S. figure of
about 16 percent.

     To the best of our knowledge, these rights exist in the auto sector
in practice as well as in law. Beginning in the 1980s, the auto
industry, along with many other industries in Mexico, has undergone
substantial restructuring. These changes have led to some labor
conflicts between union leadership factions advocating alternative
responses to company demands or government economic policy. The Mexican
government has basically left it up to workers to resolve these
conflicts and make decisions about union representation.

     10. Do workers in the maquiladora plants in Mexico actually have
the right to form unions of their own choosing and to bargain a contract
with their employer? Are workers from affected worksites directly
involved in developing goals and strategies for collective bargaining
over their terms and conditions of work?

     All of Mexico\'s labor laws and regulations, including the
guarantee of the right to organize and bargain collectively noted in an
earlier response, apply equally to all workers in all parts of Mexico,
including the maquiladoras. Workers in maquiladora plants thus have the
right to form unions of their own choosing and to negotiate with their
employers. As one moves from west to east along the northern Mexican
border, the share of maquiladora firms that is organized increases.
Nearly all of the maquiladoras in the northeastern state of Tamaulipas
are organized. Local and regional labor leaders in the state of
Tamaulipas take an active part in and promote the organization of
maquiladora workers.

     We do not have specific information about the extent to which
workers in affected worksites are directly involved in the collective
bargaining process, but they are free to do so.

     11. Has the Administration examined change in labor legislation or
labor policy over the past twenty years? If so, has the legal framework
or condition of Mexican workers improved or worsened over that time?
Why? Are Mexico\'s legal and constitutional provisions related to labor
enforced by the Mexican government?

     Many of the rights of workers flow directly from Title VI of the
Mexican Constitution, entitled \"Labor and Social Security,\" also
referred to as Article 123. For example, Article 123 guarantees workers
the right to form unions and join professional associations of their own
choosing. Workers are protected against anti-union discrimination. Other
provisions specify rights regarding such issues as the length of the
work day, maternity leave, minimum wages, overtime pay, strikes, child
labor, and forced labor. The applicable provisions of the Constitution
function as a series of statutes that authorize the government to take
many actions on behalf of workers.

     In 1931, the Federal Congress enacted Mexico\'s first comprehensive
Federal Labor Code and established the Federal Labor Court to resolve
labor disputes. Today, labor relations in Mexico are governed by the
Federal Labor Law (Ley Federal del Trabajo) of May 1, 1970, and its
subsequent amendments. This Act is comprehensive and regulates labor
contracts, minimum wages, hours of work and legal rest days, paid
vacations, employment of women and minors, labor unions, collective
bargaining, strikes, labor courts, occupational risks, apprenticeship,
profit sharing, dismissal compensation, and conditions of work in
specified fields.

     In 1978 the Mexican Government promulgated a revision of the
federal labor law, citing Mexico\'s adherence to various international
labor treaties (Mexico has now signed 79 International Labor
Organization conventions) and the obsolescence of previous statutes due
to new technologies. This legislation contained a number of improvements
related to occupational safety and health, regarding, e.g., inspection
of machinery, and handling, transportation and storage of materials.
Employers must provide workers with all proper personal safety and
health equipment.

     At the same time that the Government of Mexico revised the Federal
Labor Law, it enacted the General Regulations for Occupational Health
and Safety, an updated version of previous statutes. This comprehensive
set of regulations covers virtually all aspects of occupational health
and safety for industries, including standards for buildings and
worksites; fire prevention; the operation and maintenance of industrial
equipment; the handling, transportation and warehousing of flammable,
combustible, explosive, corrosive irritative or toxic substances noise;
labeling of radioactive materials; workplace temperature, ventilation
and lighting; personal safety equipment for head, ears, face, eyes, body
and limbs; respiratory protection; workplace hygiene; the establishment
of health and safety committees in each workplace; the establishment of
a national consultative commission on health and safety; and
administrative procedures for the enforcement of labor regulations.

     Labor laws are enforced by States as well as by Federal
Authorities. However, under the Mexican constitution, the Federal
government has jurisdiction over federally-operated enterprises and
industry-wide bargaining in the following industrial sectors: textiles,
electricity distribution, motion pictures, rubber, sugar, minerals and
mining, hydrocarbons, railway, petrochemicals, cement, and steel.

     Mexican labor law is administered by the Secretariat of Labor and
Social Welfare (Secretario del Trabajo y Prevision Social). Enforcement
is supplemented by tripartite commissions, including representatives of
government, business, and labor. The Secretariat sets and enforces
provisions relating to industrial health and safety, employment of women
and minors, and minimum wages. In addition, offices of the Federal Board
of Conciliation and Arbitration operate in each of the 31 Mexican
states. The government can, and has imposed fines or closed down plants
for violations of health and safety standards (most cases are resolved
through negotiation).

     12. If common norms of labor laws and practices were adopted as
part of a NAFTA, how would such measures be enforced? Would U.S. parties
have the right to intervene in Mexican procedures, even if the aggrieved
Mexican party failed to act? Would a tri-national panel rule on all
disputes, on only those which directly affected each signatory, or on no
such disputes?

     We recognize the need to deal with labor practice issues in the
context of U.S.-Mexican relations, but have not made any decisions on
how this should be done. Mexico has agreed to include labor issues in
the agenda for the U.S.- Mexico Binational Commission (BNC). At our
request, Mexico has agreed to begin a dialogue on labor issues between
the U.S. Department of Labor and the Mexican Ministry of Labor.

     We do not expect that a NAFTA will include common norms on labor
laws. One reason is that on a legal, statutory basis, Mexico\'s labor
standards are comparable to\--and, in a few cases, exceed\--those in the
United States. For example, as noted in the answers to previous
questions, Article 123 of the Mexican Constitution guarantees workers
and employees the right to form unions and professional associations of
their own choosing. Workers are protected against anti-union
discrimination and about 30 percent of the workforce is organized.
Mexican occupational safety and health laws are also quite extensive,
covering virtually all aspects of occupational safety and health for
industry.

     Another problem is that Mexico would view an attempt to adopt
common labor norms as a violation of its national sovereignty,
particularly if these norms allowed U.S. officials to intervene in
Mexican procedures, or inspect Mexican manufacturing facilities. It
should be recalled, that in the negotiation of the U.S.-Canada Free
Trade Agreement, the United States strenuously opposed Canada\'s
proposal to establish a joint commission to make determinations in
subsidy-countervailing duty cases.

     While drafting specific common standards may not be possible, other
options are being considered. One possibility is to seek the inclusion
in the NAFTA of a principle to the effect that all three governments
should promote improvements in labor standards. It is also possible that
through our dialogue With Mexico on labor practices we may be able to
develop ways to help Mexico improve enforcement of its labor laws.

     13. In replying to this question and questions 5-12, please
consider to what extent these labor issues were or were not a concern in
the free trade negotiations with Canada and indicate to what extent
these issues and problems potentially create an uneven playing field for
negotiations that did not exist with Canada.

     Labor standards issues were not addressed in the free trade area
negotiations with Canada. However, there were some labor concerns
relating to employment impact, which were addressed by allowing up to
ten years for phasing-in concessions, depending on the import
sensitivity of the product, and including a safeguard mechanism to deal
with import surges.

     Differences in labor law and practice between the United States and
Mexico may create some issues that did not exist in the case of the
U.S.-Canada FTA. As noted in the response to question 12, Mexican labor
law is comprehensive and, on a legal, statutory basis, Mexico\'s labor
laws compare favorably with those in the U.S. Mexico, for example, has
very detailed occupational safety and health regulations. Mexico also
has procedures for enforcing its standards, including joint commissions
on which labor is represented.

     As also noted in the answer to question 12, Mexico has agreed to
begin a dialogue on labor issues between the U.S. Department of Labor
and the Mexican Ministry of Labor. We hope that this dialogue will serve
to address areas of concern between the United States and Mexico,
particularly in the areas of adequacy and enforcement of health and
safety standards and worker rights.

     14. Energy issues are a major part of the U.S./Canada Free Trade
Agreement. Mexico has repeatedly stated that it will not discuss
questions concerning petroleum in any negotiation and has apparently
asserted that this position is based on provisions of the Mexican
Constitution. Please identify those provisions and explain why they
preclude such discussions. Does the Administration, nevertheless, intend
to insist that energy issues be addressed in a NAFTA? What is the basis
for this decision? What is the impact?

     Answer. Several provisions of the Mexican Political Constitution of
1917, as amended,Note /1/ Quotes are from an English Language version
published in Doing Business in Mexico (Matthew Bender), Statutory
Volume, Appendix E2, the Mexican Constitution (English Text) (1990).
Current amendments are recorded in *Constitucion Politica Mexicana con
Reformas y Adiciones al Dia, Tomo Primero, Apendices*, Ed. M. Andrade
(looseleaf) (Ediciones Andrade 1969). /1/ expressly pertain to
petroleum. Article 27 addresses state ownership of oil and gas
resources. Article 27, Paragraph 4, vests direct ownership of
\"petroleum and all solid, liquid, and gaseous hydrocarbons\" in the
Nation of Mexico. Paragraph 4 of Article 27 reads in part:

To the nation belongs the ownership of the continental shelf and of the
submarine bases of the island; of all the minerals or substances in
veins, layers, masses or beds that constitute deposits whose nature may
be distinct from the components of the land, such as \* \* \* petroleum
and all solid, liquid and gaseous hydrocarbons. \* \* \*

     Article 27, Paragraph 6, provides that the Mexican Government\'s
ownership interest referred to in Paragraph 4 of Article 27 are
\"inalienable and imprescriptible.\" Paragraph 6 states that private
activity is permitted with regard to these ownership interests if the
Government grants a concession. But a 1939 amendment specifically
prohibits all concessions and contracts with regard to oil and gas.
Paragraph 6 of Article 27, as amended, reads, in part, as follows:

In those cases to which the two preceding paragraphs refer, ownership by
the Nation is inalienable and imprescriptible, and the exploitation,
use, or enjoyment of the resources concerned, by private persons or by
companies organized according to Mexican laws, may not be undertaken
except through concessions granted by the Federal Executive, in
accordance with rules and conditions established by law, \* \* \* In the
case of petroleum, and solid, liquid, or gaseous hydrocarbons \* \* \*
no concessions or contracts shall be granted nor may those that have
been granted continue, and the nation shall carry out the exploitation
of these products, in accordance with the provisions indicated in the
respective regulatory law.

     Finally, Articles 25 and 28 reserve certain \"strategic areas\" to
the State. Paragraph 4 of Article 25, added in 1983, says that:

The public sector shall, in an exclusive manner, be in charge of
strategic areas defined in section IV of article 28, of the
Constitution; the Federal Government always maintaining the ownership
and control over the institutions it establishes in such cases.

     Article 28, Paragraph 4, exempts state enterprises in \"strategic
areas\" from prohibitions on \"monopolies.\" Article 28, Paragraph 4,
added in 1983, provides that:

The functions of the state which it manages exclusively in strategic
areas shall not constitute monopolies, these include: \* \* \* Petroleum
and other hydrocarbons. \* \* \*

     However, notwithstanding these constitutional provisions which
preclude private ownership of petroleum reserves by both domestics and
foreigners, we do not understand the Mexican Government to have refused
to \"discuss questions concerning petroleum,\" nor is there any apparent
reason why these constitutional provisions should \"preclude such
discussions\" of energy issues, which of course are far broader than
ownership of petroleum reserves. We consider that all questions bearing
on our mutual commerce are open to discussion by Governments.

     Article XXIV of the General Agreement on Tariffs and Trade (GATT),
under which free-trade areas are permitted, defines a free-trade area,
in paragraph 8(b), as a group two or more customs territories in which
all duties and, with certain exceptions, other restrictive regulations
of commerce, are eliminated on \"substantially all the trade between the
constituent territories in products originating in such territories.\"
Clearly, energy trade is an important component of our bilateral trade
and it will need to be addressed in a manner consistent with this
definition.

     15. Enclosed is my recent correspondence with the Administration
regarding auto theft issues involving Mexico. Please explain whether the
negotiations will address the issues discussed by the Customs service
that give rise to the theft problem.\"

     In the negotiations toward a free trade agreement, the
Administration intends to address the leading causes of auto theft.
Restrictions on auto and truck imports, bans on imports of used autos,
high Mexican import duties on U.S.-made cars, and high prices for cars
manufactured in Mexico have created strong incentives for smuggling
stolen vehicles into Mexico. Because Mexico\'s market continues to be
very protected, Mexican manufacturers are able to charge higher prices
for the cars they produce. The great differential in prices between the
U.S. car market and the Mexican car market is a significant factor in
creating demand for stolen cars in the U.S. Under the terms of a free
trade agreement, we will seek to eliminate quantitative limits on
automotive imports, import tariffs, performance requirements, and
prohibitions on the import of models not made in Mexico. As trade
barriers are dismantled, legally imported and domestically manufactured
cars should become more affordable for Mexican consumers. In addition, a
wider variety of models will become available on the Mexican market. The
impact of a free trade agreement will thus go a long way toward curbing
the theft of vehicles in the United States.

     Because auto theft does not arise solely because of trade
restrictions, the Administration is continuing other efforts to resolve
the problem. The U.S.- Mexico Convention on the Recovery and Return of
Stolen or Embezzled Vehicles and Aircraft has led to the recovery of
hundreds of vehicles since it entered into force in 1983. The American
Embassy and Consulates monitor Mexico\'s compliance with the Convention
and report that Mexico is making an effort to abide by its terms. For
example highway police in Guadelajara frequently stop Mexican citizens
driving U.S. registered motor vehicles and query the Consulate as to
whether the vehicle has been reported stolen. As Assistant Commissioner
Hensley noted to you, U.S. law enforcement agencies along the border
also maintain informal contacts with their Mexican counterparts as part
of their efforts to retrieve stolen vehicles. Finally, the U.S. Customs
Service has conducted special operations to intercept stolen vehicles at
the border.

     Additionally, I note that the U.S. and Canada are likely to sign
later this month at a meeting of the Economic Commission for Europe
(ECE) a Convention on Environmental Impact Assessment in a Transboundary
Context. Both countries have previously signed an ECE protocol on
transboundary nitrogen oxide pollution and are participating in ECE
negotiations regarding transboundary volatile organic compounds. Also,
the U.S. and Canada have a draft of a bilateral on transboundary
pollution. I understand that Mexico is not a participant in these
matters, yet these concerns are not unique to the Canadian-U.S. border.
What efforts will be made to urge Mexico to either join the U.S. and
Canada in these international efforts or to include those agreements in
these negotiations? Please explain.

     Answer. As you note, the agreements and negotiations with Canada to
which you refer, including the nitrogen oxide protocol and the
transboundary volatile organic compounds negotiations, have occurred in
the context of the Economic Commission for Europe (ECE). Canada, or
course, is a member of the ECE. Since Mexico is not a member of the ECE,
our relationship with Mexico with respect to environmental matters is
not governed by ECE principles. However, the 1987 agreement of
cooperation with Mexico on transboundary air pollution and its five
annexes do signal our commitment to addressing transboundary pollution,
as do our efforts in the International Boundaries and Water Commission.

\-\-\-\-\-\-\-\--

House of Representatives,

Committee on Energy and Commerce,

Washington, DC, April 4, 1991.

Hon. Lynn Martin,

### Secretary, Department of Labor,

Washington, DC.

     Dear Secretary Martin: In the March 23, 1991 issue of the National
Journal, an article written by Bruce Stokes asserted that the Department
of Commerce had done an unpublished study of the projected job losses
that would result from a free trade agreement with Mexico. The analysis,
which the article states has now been referred to the Labor
Department\'s Bureau of International Affairs, allegedly concluded that
a free trade agreement would result in a 40 percent loss of jobs in some
key industries. A copy of the article is enclosed.

     As you can well imagine, any such documents or departmental
analysis would be of critical interest to Congress in assessing whether
a free trade agreement with Mexico is in the interests of the United
States. There has been growing concern that we have inadequate
information on which to decide this important issue. At the same time,
there is an uneasiness about numerous rumors of studies done by the
Administration which predict serious adverse consequences for the U.S.
economy if there is an agreement with Mexico\--and that these studies
have not been published or otherwise shared with Congress.

     I therefore request that you determine whether the Department of
Labor has done or has in its possession any study or analysis such as
described in the National Journal article, and that you provide copies
to me.

     Please provide me with a response to this letter no later than
April 12, 1991.

Sincerely,

John D. Dingell, Chairman.

     Enclosure.

### *Jobs and the Mexico Deal (By Bruce Stokes)*

     An unreleased Commerce Department study projects job losses of more
than 40 per cent in some key industries if the United States signs a
free-trade agreement with Mexico, according to Bush Administration
officials.

     The analysis of more than three dozen industries found that the
most severely hurt would be manufacturers of automobile parts, steel,
shoes and textiles. Some sectors would be unaffected, and a few would
gain employment.

     The White House argues that the real income of unskilled U.S.
workers would rise if there were a free-trade pact with Mexico. But
organized labor has long contended that such an agreement would
encourage U.S.-based firms to relocate south of the Rio Grande, throwing
tens of thousands of Americans out of work.

     The report, if it ever sees the light of day, could fuel labor\'s
efforts, now picking up steam on Capitol Hill, to place constraints on
the Administration\'s negotiating authority with Mexico. The two
governments hope to begin bargaining this summer and to wrap up a trade
deal next year.

     The Commerce analysis now rests with the Labor Department\'s Bureau
of International Labor Affairs, which is preparing an assessment of how
the potential jobs losses under a free-trade-pact might break down
between unionized and nonunionized workers.

     The impact \"probably is disproportionately\" heavy for unionized
workers, an Administration official admitted. But the White House wants
a clearer picture to more fully assess the potential political fallout
from a Mexico deal. Some Labor Department economists are resisting such
analysis, saying the data cannot be used to predict such outcomes with
any certainty.

     \"From a traditional analysis, those are surprisingly large changes
in employment opportunities,\" said C. Michael Aho, the former director
of foreign economic research at Labor who\'s now with the Council on
Foreign Relations. \"The more important effect of employment
opportunities might come over time as firms change their production
patterns in response to trade liberalization. And that could mean larger
job losses in some sectors and more-dramatic job gains in others.\"

\-\-\-\-\-\-\-\-\--

Department of Labor,

Secretary of Labor,

Washington, DC, April 12, 1991.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Thank you for your letter of April 4, 1991,
regarding the National Journal article by Bruce Stokes.

     In that article, Mr. Stokes asserts that the U.S. Department of
Commerce had done an unpublished study on projected job loss in the
United States that would result from a North America Free Trade
Agreement. He also asserts that the Labor Department had received this
data, which projected a 40% job loss in some industries, and was
studying the data to determine the disparate impact of potential job
loss on union and non-union workers.

     I have asked the Deputy Secretary of Labor and the Deputy Under
Secretary for International Affairs, who coordinate all research related
to international trade issues, to conduct a thorough investigation of
this matter. They have informed me that the Bureau of International
Labor Affairs is in the initial phases of contracting with private
sector consultants to study aspects of a possible free trade
agreement\--but none of these correspond to the research described in
Mr. Stokes\' article. These studies would examine the experience of the
European Community in integrating lesser developed countries into their
free trade partnership, and study several sectors of the U.S. economy in
terms of potential jobs created by export growth related to a free trade
agreement. This is the only authorized research the Department of Labor
is undertaking which relates to the employment impact of a free trade
agreement.

     My staff believes the source of the Bruce Stokes article might have
been a spread sheet that a member of the International Labor Affairs
Bureau was preparing on his own. I am told this spread sheet listed
union membership in the United States since 1983 by industry and
occupation, and apparently there was some attempt to cross reference
this data with information contained in a U.S. Chamber of Commerce study
showing how various industries in the United States might be affected by
a free trade agreement. This cross referencing was not completed because
the two sets of data could not be correlated. (A copy of this
information is enclosed.) For your information, the U.S. Chamber of
Commerce study showed a potential .40%\--four-tenths of one percent\--
average job loss in some industries which my staff believes might have
been misinterpreted by the source of the National Journal article to
mean a 40% job loss. As you know, the size of the Mexican economy is not
sufficient to produce a job loss of that magnitude in the United States.

     To summarize, the Department of Labor is not conducting research to
show the impact of a North American Free Trade agreement on union versus
non-union jobs. In addition, we know of no U.S. Commerce Department
study showing job loss in the United States resulting from a free trade
agreement, and the only document we could find that may relate to the
research described in the Stokes article is a U.S. Chamber of Commerce
study showing a potential .40%\-- four-tenths of one percent\--average
job loss in some industries. That study, prepared by the consulting firm
of Peat Marwick, is entitled \"Analysis of Economic Effects of a Free
Trade Area Between the US and Mexico.\" It has been made public and is
available from the U.S. Chamber of Commerce.

     I hope this information meets your concerns and puts to rest the
uneasiness and rumors which have been circulating on this matter. The
North American Free Trade Agreement is indeed an important initiative,
and I hope we can work together to resolve any differences we have
concerning this crucial agreement. I would like to make available to you
the Deputy Secretary of Labor, Roderick DeArment, to talk with you about
this\--or any other matter\-- concerning the North American Free Trade
Agreement. I recently sent Rod and a team of Labor Department officials
to Mexico to look at issues raised by those concerned about working
conditions in that country. I think you will find their insights and
findings valuable to your deliberations.

     Please do not hesitate to call me if I can be of any further
assistance.

Sincerely,

Lynn Martin.

\-\-\-\-\-\-\-\-\--

### Secretary of Commerce,

Washington, DC, May 3, 1991.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Thank you for your letter requesting any
Department of Commerce study as described in the National Journal
concerning a free trade agreement (FTA) with Mexico

     The report from the National Journal is erroneous. After a careful
review of the Department\'s files, we have been unable to locate any
such document. To our knowledge, the Department has undertaken no study
which examines the potential job loss of a U.S.-Mexican FTA. The
Department\'s only jobs analysis related to the free trade agreement has
been directed at the job creation related to export sales. Enclosed is a
copy of our publication, North American Free Trade Agreement: Generating
Jobs for Americans. There are also studies by the Universities of
Maryland and Texas; Peat Marwick; Dallas Federal Reserve; and the
Department of Labor\--all of which show job gains for U.S. workers. Also
enclosed is a copy of the letter to Lloyd Bentsen, Dan Rostenkowski and
Richard Gephardt from the President. Please note the enclosed copy of a
letter to John Sullivan, Publisher of the National Journal from the
Under Secretary for International Trade, J. Michael Farren regarding the
study.

     We are commissioning a private study of the effect of a North
American FTA on long-term labor demographics in the United States. This
initial study, expected to be completed in July, will focus on key U.S.
manufacturing sectors. When the results of this independent analysis
become available this summer, we will be pleased to share them with you.

     I would welcome the opportunity to discuss this matter with you
further, please contact me or have your staff contact Roger W. Wallace,
Deputy Under Secretary for International Trade.

Sincerely,

Robert A. Mosbacher.

\-\-\-\-\-\-\-\-\--

Department of Health and Human Services,

### Food and Drug Administration,

Rockville, MD, October 21, 1991.

Hon. Cardiss Collins,

Chairman, Subcommittee on Commerce, Consumer Protection, and
Competitiveness,

Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Ms. Collins: This is in response to your letter of September
17, 1991, in which you asked several questions about the volume of fruit
and vegetable imports from Mexico and the Food and Drug
Administration\'s (FDA\'s) pesticide inspection program for those
products.

     The following responds to your question in order:

     1. (a) What pesticides, if any, are banned in the U.S. but
permitted for use on fruits and vegetables in Mexico?

     We should first explain that information on the use of U.S. banned
pesticide chemicals in foreign countries is not directly available to
the Federal Government. The laws that control pesticide usage in the
United States do not extend to foreign countries. Therefore, FDA can
only ascertain if U.S. banned pesticides are being used in agriculture
in Mexico or other foreign countries by obtaining this information
voluntarily from the government of the country, by purchasing the
information from private commercial sources, or by finding residues at
levels suggesting use of banned pesticides in imported fruits,
vegetables, and other foodstuffs.

     The Pesticide Monitoring Improvements Act (PMIA) of 1988 requires
FDA to seek from foreign countries information on pesticides used on
foods exported to the U.S. FDA has received PMIA requested information
voluntarily from the Mexican Government. Because FDA\'s legal authority
under the Federal Food, Drug, and Cosmetic (FDC) Act is concerned with
whether there is an Environmental Protection Agency (EPA) established
U.S. tolerance for pesticide residues in imported food, our review of
this information is focusing on residues of pesticides that may be used
in Mexico on foods exported to the U.S. and that may not be covered by
U.S. tolerances. Based on our preliminary review of this information, as
well as information from other FDA sources, it appears that 19 pesticide
chemicals approved for use in Mexico have no U.S. tolerances for any
food commodity. This means that these pesticides are also not registered
for food use in the U.S. This does not mean, however, that all, or even
some of, these 19 pesticide chemicals have had their registered uses
cancelled in the U.S. by the EPA. Because of the subcommittee\'s
inquiry, however, we have requested EPA\'s assistance in reviewing this
preliminary list of chemicals to determine which ones (if any) have been
cancelled (i.e., banned) in the U.S. The result of this determination
will be forwarded to you as soon as it becomes available.

     Finally, there are 59 other Mexican approved chemicals that have
U.S. tolerances for a variety of food commodities. According to
information available to FDA, however, these chemicals might also be
used in Mexico on foods for which there are presently no U.S. tolerances
for these particular chemicals.

     (b) If there are such pesticides, what procedures at the border
will be used to ensure that fruits and vegetables contaminated with
these substances do not enter the U.S.?

     The FDC Act authorizes FDA to refuse entry of shipments into the
U.S. of food found to contain pesticide residues in excess of U.S.
tolerances or for which there are no U.S. tolerances. FDA has an
extensive regulatory monitoring program in place for sampling imported
food at ports of entry to assure compliance with this provision of the
law (see enclosed reprint for detailed information on the FDA program).
Because Mexico exports a relatively large volume of fresh fruits and
vegetables to the U.S. each year, the FDA program gives much more
attention to Mexican imports than foods imported from other countries.
In fact, FDA typically samples three to five times more shipments of
Mexican produce than the next closest sampled foreign country.

     In fiscal year 1990, FDA examined 19,146 samples of domestically
produced and imported foods for possible residues of 268 different
pesticide chemicals. More than half of these pesticides can be detected
by the analytical methodology most frequently applied to imported
Mexican produce. This method is capable of detecting the presence of
residues of many of the pesticide chemicals previously cancelled (i.e.,
banned) by EPA. For example, all chlorinated pesticides that were
cancelled by EPA because of potential public health or environmental
concerns can be detected by the FDA methodology. EPA has also revoked
the tolerances for these pesticides. In instances where banned
pesticides are persistent in the environment and may continue to
contaminate food, EPA has recommended that FDA adopt action levels for
expected unavoidable residues. Residues in excess of action levels may
be indicative of intentional use and may subject the food to enforcement
action. For a number of years, however, the Agency has not encountered
shipments of imported Mexican fruits and vegetables with actionable
levels of these or other U.S. banned pesticides. It is important to add
that, in any given year, the kind of violation most frequently
encountered by FDA involves pesticide residues in food not having a U.S.
tolerance, but for which U.S. tolerances exist for residues of the same
pesticide in other foods.

     2. How many tons of fruits and vegetables grown in Mexico have
entered into the U.S. in each of the last five years?

     According to data published by the USDA (as obtained from the U.S.
Customs Service), the following volumes of fresh and processed fruits
and vegetables from Mexico were imported into the U.S. over the last
five years:

Year:                         Tons
^/1/\ One\ metric\ ton\ is\ 220\ pounds./1^/

1987\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....2.0
million

1988\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....1.9
million

1989\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....2.1
million

1990\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....2.2
million

1991 (projection only)\...\...\...\...\...\...\...\.....2.0 million

     What percentage of all fruits and vegetables grown in Mexico (and
exported to the United States) are tested by U.S. officials to determine
compliance with U.S. pesticide, health and safety standards?

     Based on information FDA has obtained from the U.S. Customs
Service, there are about 190,000 formal entries of food commodities from
Mexico to the U.S. each year. Most of these entries are comprised of
fresh or processed fruits and vegetables. In the last several years, FDA
has averaged sampling about 3,500 shipments per year for pesticide
residue analyses. Therefore,based on available data, FDA checks between
one and two percent of food import entries from Mexico for pesticide
residues.

     4. (a) In each of the last five years, what percentage of fruits
and vegetables that have been tested at the \[Mexican\] border were
found to be in non-compliance with U.S. standards governing pesticide
usage on fruits and vegetables?

     Violation rates for Mexican commodities imported into the U.S. in
the years 1987 through 1991 sampled on a surveillance basis are given
below:

Year:                                   Percent

1987\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
\.... 3.7

1988\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
\.... 4.7

1989\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
\.... 3.5

1990\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
\.... 4.7

1991 (data received through 9/27/91)\...\...\...\...\..... 2.5

     (b) Of the Mexican fruits and vegetables found not to be in
compliance with our standards, what percentage were identified as
containing pesticides that have been banned in the U.S?

     As we explained in our response to question (1a), FDA\'s regulatory
concern is whether there are U.S. tolerances established for the
pesticide residues found in imported Mexican produce. The fact that a
pesticide has been banned in the U.S. is not directly relevant under the
FDC Act. FDA enforcement action is also not possible until after EPA has
revoked the tolerances for the banned pesticide. Generally, there is an
intentional delay by EPA in revoking such tolerances in order to allow
for purging of the marketplace of foods treated with banned pesticide
when its use was still legal. We can state with certainty, however, that
for at least the past five years, FDA has not found shipments of fruits
and vegetables imported from Mexico to contain residues from the
intentional use of the U.S. banned chlorinated hydrocarbon pesticides
such as DDT and BHC. When we receive from EPA the information requested
under question (1a), we will also review our data files to ascertain
whether violative residues of other banned pesticides have been found.
This information will also be given to you.

     5. How many full time employees are currently involved in
conducting inspections at the border of fruits and vegetables entering
our country from Mexico?

     Mexican fruits and vegetables enter the United States primarily
through border ports in FDA\'s Los Angeles and Dallas Districts. There
are currently four inspectors located at Dallas ports of entry and nine
at Los Angeles ports. These inspectors cover all types of products
(food, drugs, devices, etc.,) for entry from Mexico. Samples collected
by these inspectors are transported to our laboratories in Los Angeles
and Dallas for analysis for pesticide residues.

     6. In your view, how, if at all, should inspections of Mexican
fruits and vegetables by U.S. officials be altered under a free trade
agreement with Mexico?

     At the present time, the North American Free Trade Agreement
discussions are just beginning and the basic components of such an
agreement are not known. Still, FDA has for some time had a Memorandum
of Understanding (MOU) with the Mexican government that pertains to the
control of pesticide residues in food. FDA and Mexican officials have
been working together to understand each other\'s pesticide use and
residue control systems, and how these systems may be utilized better to
protect the public health, while diminishing disruptions to trade. These
efforts are ongoing. We would be happy to provide more detailed
information on the implementation of this MOU, if requested.

     I would also like to point out that in the \"Response of the
Administration to Issues Raise in Connection with the Negotiation of a
North American Free Trade Agreement,\" provided to Congress on May 1,
1991, it was emphasized that the United States would not agree to weaken
environmental and health laws or regulations, and would not agree to
weaken existing pesticide or health and safety standards. FDA is
integrally involved in the negotiations, which are proceeding in
accordance with these principles.

     We hope this is responsive to your questions. We will provide
additional information to you as it becomes available. If we can be of
further assistance, please let us know.

Sincerely yours,

Kay Holcombe,

Acting Associate Commissioner for Legislative Affairs.

     Enclosure.

### IMPORTS AND FDA

     During any given week, the United States may import coffee from
Colombia, fruit from Mexico, shrimp from India, egg noodles from Korea,
perfume from France, vitamin supplements from Denmark, x-ray machines
from Germany, cosmetics from Taiwan, and drugs from Hong Kong.

     With the exception of meat and poultry, which are regulated by the
U.S. Department of Agriculture, all food, drugs, cosmetics, medical
devices, and products that emit radiation are subject to examination by
FDA when they arrive in the United States.

     By law, FDA-regulated products must meet the same standards as
domestic goods. Imported foods must be pure, wholesome, safe to eat, and
produced under sanitary conditions; drugs and devices must be safe and
effective; cosmetics must be safe and made from approved ingredients;
and all labeling and packaging must be informative and truthful.

     The number of imports subject to FDA regulation has increased
steadily during the past 20 years\--and continues to increase at a rate
of 2 percent to 5 percent a year. In 1971, 500,000 shipments of
FDA\--regulated products were imported. Currently, more than 1.5 million
shipments arrive annually. Approximately 86 percent are food. The rest
are drugs and cosmetics (6 percent); medical devices and products that
emit radiation, such as televisions, microwave ovens, and x-ray
equipment (7 percent); and veterinary medicines (0.5 percent).

     Not only has the number of imports to the United States increased
over the past 20 years, but the nature of the products has changed.
Fifteen years ago, many of the food imports were bulk raw materials
which were later processed into consumer products. Most of these raw
materials were inspected by FDA on the docks and again during
inspections at domestic processing plants. More and more of today\'s
imports, however, arrive ready-to-use and are marketed directly to
consumers.

     An increasing number of today\'s imports are being shipped in
smaller quantities in multi-product containers. Whereas in the mid-70s
on any given day an FDA inspector might inspect one of two bulk
shipments, today\'s inspectors might inspect 5, 10 or 15 smaller,
individual shipments. This has made rapid sampling and surveillance more
difficult..

### INCREASED SURVEILLANCE

     To meet the growing volume of imports, FDA has doubled its import
operations over the past decade\--by increasing the number of staff
assigned to imports and expanding the amount of surveillance activity.
Since 1979, FDA\'s import operations staff has increased from 218 person
years to 330 person years\--an increase of more than 51 percent. This
boost in strength was accomplished\--despite an overall reduction in
agency resources\--by shifting staff from lower-priority domestic
activities.

     To maximize its resources, FDA:

Increased training of its inspectors.

Began targeting certain problem products\--such as hard cheese,
chocolate candy, and preserved fruits\--for sampling.

Initiated automatic detentions when a single sample of a product
revealed the product to be a health hazard.

Increased follow-up of products that were refused entry to the country
to insure they were exported or destroyed as required.

     As a result of these and other measures, over the past six years
wharf exams increased 114 percent, samples collected increased 84
percent, and detentions increased 73 percent.

     Through its district offices and resident posts, FDA is directly or
indirectly involved in surveillance at each of the approximately 500
U.S. Customs Service points of entry in the country, including major
airports. At the many remote crossings along the Canadian and Mexican
borders. FDA relies on the Customs Service for assistance in detaining
suspicious products.

     On a normal workday, about 200 to 300 FDA, inspectors, laboratory
analysts, and compliance officers handle imports. In a crisis, such as
the Chilean grape scare in 1989, up to 800 field staff may be involved.
Each of FDA\'s 22 district offices, with the exception of Newark, NJ.,
have import operations. Newark is combined with the Port of New York for
import coverage.

     Every food (other than meat and poultry), drug, or other
FDA-regulated entry is screened in some way by the agency. Although it
is physically impossible to personally inspect each of the 1.5 million
shipments a year. FDA does review records for every entry into the
country. Based on this review, a product may be immediately released for
distribution, physically examined, or sampled and analyzed in a
laboratory. Ten percent of the entry records reviewed are marked for
further coverage.

### INSPECTIONS

     Out on the docks, FDA inspectors look for signs of filth, spoilage,
contamination, or mislabeling. For instance, in a shipment of canned
green beans, they check to see if the manufacturer is registered with
FDA; look at the labels to make sure they are printed in English and
conform with other FDA requirements about weight declaration, contents,
etc.; and spot-check for swollen, leaking or rusty cans, wet cases, or
swarms of fruit flies around cases, which may indicate damaged cans. In
a shipment of coffee, inspectors look for damaged containers, moldy
beans, and insects. When examining fresh produce, they check for
spoilage and insects and sample for illegal residues of one or more of
the 256 most widely used pesticides. When checking seafood, most of
which arrives frozen, they look for signs of parasites and for evidence
of thawing and decomposition.

     If a problem is found or suspected, the product is not released,
and a sample may be collected for analysis. Products with a history of
violations or those that are known or suspected health hazards are
targeted in advance for sampling or detention. Approximately 3 percent
of all shipments reviewed are physically sampled. Weekly import alerts
and detention lists are used to determine which entries in particular
should receive close FDA attention.

     In 1989, FDA detained 25,740 entries\--an increase of 54 percent
over 1985. As in previous years, the vast majority of products detained
were foods. Of those, 15 percent were fruits, 23 percent were
vetegables, 18 percent were seafood, 6 percent were spices, and 3
percent were grains. The other 35 percent included a wide range of
items, such as dairy products, beverages, desserts, soups, and salads.

     When a product appears to violate FDA laws or regulations, the
importer is given an opportunity to bring the article into compliance
through reconditioning or relabeling. For example, a shipment of rice
found to contain insects could be fumigated and processed by the
importer (using FDA- approved methods) to eliminate the insects. Food
containing sulfites (preservatives to which some people are allergic)
but not identified as such on the label could be relabeled to include
that information. An import that can\'t be reconditioned or relabeled
must be exported or destroyed by the importer.

     Perishable products\--such as fresh fruit, vegetables and
seafood\--that could spoil on the docks are given priority handling.
Samples are collected and examined by district laboratories, usually
within 24 to 36 hours. If a product is violative and the importer has
distributed it, any distributed product must be recalled.

### AUTOMATIC DETENTION

     Imports that consistently violate FDA standards or are known or
suspected health hazards are automatically detained. For example, the
diet supplement L-tryptophan is being automatically detained because it
has been linked to ecsinophilia-myalgia syndrome, a blood disorder.
Other imports being automatically detained include: swordfish from all
countries because it repeatedly has been found to contain high levels of
mercury; canned mushrooms from the People\'s Republic of China because
they have caused several outbreaks of staphylococcal food poisoning; the
abortion drug RU486 from France because its use has not been approved in
the United States; and, most recently, European wines that were found to
contain the fungicide procymidone, which is approved for use on grapes
in Europe but not in the United States. As of October 1990, 106 products
were on FDA\'s automatic detention list.

     Once a product is placed on automatic detention, importation can
resume only after the shipper or importer has produced evidence showing
the product consistently meets all FDA standards.

     Drugs entering the country for sale must be registered products
from an approved supplier and must be listed with FDA. In addition, they
must meet U.S. requirements for purity and strength. When drugs enter a
port, they are randomly checked and sampled by FDA. On the wharf,
inspectors check labels and look for signs of possible contamination,
such as cracked vials and broken bottles. As with other imports,
potential problem drugs are targeted in advance for sampling and
detention.

### DRUGS FOR PERSONAL USE

     Noncommercial drugs and other products not available domestically
and not approved by FDA may at the discretion of FDA, be released for
personal use. This \"personal use\" policy has existed within FDA
informally and with varying interpretations for many years. However,
under growing pressure from people with AIDS, cancer, and other serious
diseases who want access to drugs approved in other countries but not
available in the United States, FDA in 1988 reviewed its policy and
issued formal guidance.Under this guidance. FDA uses its discretion to
allow the importation of certain drugs if they meet certain criteria:

The drug must have no known health risk.

It must be for personal use only (generally not more than a three-month
supply).

It must not be promoted commercially to people living in the United
States.

     Dextran sulfate, which was promoted for treating AIDS, is an
example of a drug FDA has allowed under its \"personal use\" discretion
to be imported by individuals in the United States.

### IMPORT ALERTS

     To facilitate its surveillance of imports. FDA issues import alerts
to its district offices. These alerts contain the names and descriptions
of products that have repeatedly been found to violate FDA laws or
regulations. The import alert signals FDA inspectors to pay special
attention to a particular product when it arrives in port and, in
certain cases, to automatically detain it. FDA currently has 237 import
alerts on products and importers.

     To further expedite surveillance FDA has entered into agreements
with foreign governments. Through memorandums of understanding (MOUs),
these governments agree to insure that their countries\' products are
manufactured under sanitary conditions, meet U.S. standards for quality,
and are tested and sampled in a specific way before leaving the country.
For example, FDA has nine MOUs with countries that export seafood to the
United States. These MOUs help insure that the seafood is processed,
packaged and shipped property.

     FDA is currently in the process of negotiating other cooperative
agreements with major food exporters in 37 countries to obtain
information on pesticide use in those countries.

     Under certain conditions, FDA also inspects foreign plants to
ensure that manufacturing practices meet U.S. requirements. Foreign
inspections may also result after products have been detained and the
manufacturer wants advice on how to produce goods that meet FDA
requirements.

     The number of imports to the United States is expected to continue
to grow. To meet the increasing demands for surveillance and to
streamline its operations, FDA is working to automate its import
operations. As a first step, in 1991 the agency will initiate a pilot
project in the Seattle district linking FDA\'s import operations there
to the Customs Service\'s nationwide computerized information system.
The agency is also developing a computerized internal import support and
information system that will track all FDA import activities.

     These steps will further insure that food, drugs, and other FDA
regulated products brought into this country for use by American
consumers meet the same high standards as domestic items.

### 9-73-00 Purpose

     To provide the districts with guidance of the uniform handling of
import shipments of those perishable foods including fresh fish and
seafood and fresh produce, which have a shelf life of seven days or
less, that have been sampled by FDA.

     This chapter does not apply to frozen foods or other foods with a
shelf life longer than seven days, or to specific programs or
assignments containing different instructions. This chapter does not
apply to foods covered by automatic detention provisions.

### 9-73-00 Background

     The 1986 GAO report \"Pesticides Better Sampling and Enforcement
Needed on Imported Food,\" criticized FDA for allowing imported
perishable foods containing illegal levels of pesticides into domestic
commerce and not vigorously pursuing bond forfeiture against the
importer of record in all cases where the illegal products could not be
recovered.

     Experience shows importers can temporarily hold perishable
shipments without spoilage and that many analyses can be completed
within 24 hours of sample collections. While some sample analyses may
not be expected to be completed within 24 hours, a 24 to 32 hour delay
in final distribution of the shipment increases the likelihood that a
lot will be recovered when redelivery is requested.

     Under the Federal Food, Drug, & Cosmetic Act (FFD&C Act), importers
bear the primary responsibility for assuring the compliance of products
they distribute to consumers. To exercise their responsibility, they
may, among other things, inspect foreign manufacturers or growers, enter
into agreements with the foreign exporters, and make arrangements to
have products privately tested or examined prior to distribution. Any
product distributed, whether or not it is held temporarily, remains
under bond and is subject to a claim for liquidated damages.

### 9-73-20 Objectives

     To minimize the distribution and consumption of adulterated
perishable foods and fresh fish and seafood and to minimize product
deterioration and spoilage.

### 9-73-30 Approach

     The following procedures and designed in recognition of FDA\'s
authority under section 801 of the FFD&C Act and 21 CFR 1.90, to require
that sampled imported food be held pending results of sample analysis,
and to acknowledge the importers objective of distributing nonviolative
fresh products to consumers in as expedient a manner as possible.

     Section 1.90 of FDA\'s import regulations (21 CFR 1.90) provides
that when an import shipment, including a shipment of perishable food,
fresh fish or seafood, or fresh produce, is sample by FDA, it may not be
distributed until FDA releases it. This RPM section related to the
exercise of FDA\'s enforcement discretion in deciding when to pursue
liquidated damages against importers who distribute perishable food
prior to its release by FDA.

     A district should recommend the maximum liquidated damages if an
importer fails to hold until released by FDA imported perishable foods
there are suspect. A shipment is considered suspect if current
information or past experience indicates that the product may be
violative. Conversely a shipment is considered nonsuspect if there is no
current information or past experience to indicate that the product may
be violative. Where samples of nonsuspect shipments are found to be
violative the district should consider subsequent shipments by the same
shipper as suspect.

     The district should consider recommending automatic detention for
violative shippers or products, where appropriate. See RPM 9-25 for
recommendation criteria.

     The agency may use its enforcement discretion to not recommend a
liquidated damages action against in importer of nonsuspect shipment of
imported perishable foods, including free fish and seafood and free
produce, if those goods:

Have a shelf life of seven days or less (Note: As a general guide,
districts may use Agriculture Handbook Number 66, USDA/ARS to determine
shelf life. Since this handbook reflects ideal storage conditions it may
or may not reflect the conditions found in the individual districts. For
that reason districts may be guided by their own experience in
identifying which products have a shelf life of seven days or less.see
note below)

Were maintained under the control of the importer until at least 5:00
p.m. on the day following sample collection (An importer could retain
such control, after sample collection, at or in transit to a inland
storage facility); and

Are not found to be violative

     With both suspect and nonsuspect shipments, the redelivery bond
remains in place until the release notice (FD-717) is issued. If
distribution of violative merchandise occurs the district may also use
its discretion in deciding whether to recommend to Customs that up to
triple damages be assessed for the portion of the shipment that is not
redelivered.

     Note: When a nonsuspect shipment, controlled for the prescribed
period, is subsequently found violative, districts may recommend
mitigation of damages after the importer demonstrates that a reasonable
effort was made to redeliver the product. Under such circumstances
damages recommended should not be less than the value of the unrecovered
product.

     FDA should attempt to arrive at a decision by 5:00 p.m. on the day
following sample collection as to whether to release such a product. If,
however, FDA has not communicated with the broker and/or importer of a
nonsuspect shipment by this time, the shipment remains subject to
redelivery, recall, seizure, injunction, state embargo, etc.

### 9-73-40 Regulatory procedure

### Nonsuspect samples

     Process the sample and its paperwork in the usual manner. In
addition to the statement in the Notice of Sampling (Form FD-712) which
reads: \"The merchandise must be held intact pending further written
notice from the Food and Drug Administration upon completion of
examination of samples\" add the following:

If analytical procedures will allow it, FDA will attempt to communicate
to you the status of the sample prior to 5:00 p.m. on (insert date of
the day following sample collection) and will regard distribution of
this entry prior to 5:00 p.m. to warrant assessment of liquidated
damages of up to three times the value of the merchandise. This shipment
remains under redelivery bond and all distribution of merchandise prior
to release by FDA is at your risk.

     If complete analysis (original and check) of a nonsuspect sample is
not finished by 5:00 p.m. on the day following collection, but initial
results suggest the shipment is violative, contact the importer and/or
broker at once. The importer must be advised that \"The merchandise must
be held intact pending further written notice from the FDA upon
completion of examination of samples.\" When complete analysis is
furnished by 5:00 p.m. and the sample is violative, notify the importer
and/or broker at once not to allow distribution to consumers. The
importer or broker should be requested to retrieve any product that was
distributed. Detain the shipment and issue Notice of Detention and
Hearing (Form FD-718).

### Suspect samples

     Process the sample and its paperwork in the usual manner. Issue a
Notice of Sampling (Form FD-712), with the standard language that \"The
Merchandise must be held intact pending further written notice from the
FDA upon completion of examination of samples.\" If the sample is
actionable, notify the importer of record and/or broker not to allow
distribution to consumers. The importer or broker should be requested to
retrieve any product that was distributed. Detain the shipment and issue
Notice of Detention and Hearing (Form FD-718).

\-\-\-\-\-\-\-\-\--

Department of Health and Human Services,

### Food and Drug Administration, \[part 2\]

Rockville, MD, December 9, 1991.

Hon. Cardiss Collins,

Chairman, Subcommittee on Commerce Consumer Protection, and
Competitiveness,

Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Ms. Collins: Our response of October 21, 1991, to the
questions raised in your letter of September 17, 1991, about imported
Mexican produce, indicated that we needed certain information from the
Environmental Protection Agency (EPA) to be fully responsive to your
inquiry. This additional information has been received. For your
convenience, we have repeated the questions below with the additional
information we had promised you.

     1. (a) What pesticides, if any, are banned in the U.S. but
permitted for use on fruits and vegetables in Mexico?

     We indicated in our earlier letter that according to information
the Food and Drug Administration (FDA) received from various sources, it
appeared that 19 pesticide chemicals were approved for food uses in
Mexico, but have no U.S. tolerances or were not registered for any food
use in the U.S. The information EPA subsequently provided to us
indicated that none of these 19 pesticide chemicals has been banned or
severely restricted by EPA. EPA also informed us that four of these
pesticides were identified by chemical names different from those used
by Mexico and that these four pesticides do have U.S. tolerances for
their residues in various foods.

     This new information reduces the number of pesticides approved for
us in Mexico and not having U.S. tolerances to 15. These pesticides may
or may not be used on foods that Mexico exports to the U.S. FDA\'s
analytical methods cover seven of the 15 pesticides on EPA\'s updated
list of these chemicals.

     Of the seven pesticides that could have been detected, only
residues of omethoate were found in imported Mexican produce in 1990.
Because there are no U.S. tolerances for residues resulting from the use
of omethoate on any food, these omethoate findings constituted
violations and shipments of these foods were refused entry into U.S.
commerce. FDA also invoked automatic detention to prevent subsequent
shipments of the violative produce from entering the country.

     4(b) Of the Mexican fruits and vegetables found not to be in
compliance with our standards, what percentage were identified as
containing pesticides that have been banned in the U.S.?

     Based on the information we received from EPA, none of the
pesticides have agricultural uses in Mexico have been banned from use in
the U.S.

     Again, we appreciate your interest in this FDA program area, If we
can be of any further assistance, please let us know.

Sincerely yours,

Kay Holcombe,

Acting Associate Commissioner for Legislative Affairs.

\-\-\-\-\-\-\-\-\--

House of Representatives,

Committee on Energy and Commerce,

Washington, DC, March 31, 1992.

Hon. Nicholas F. Brady

### Secretary, Department of the Treasury,

Washington, DC.

     Dear Secretary Brady: Recent press reports (e.g., \"Mexico Wants
Exemption From Banking Laws,\" Washington Post, Wednesday, March 25,
1992) indicate that Mexico, pursuant to negotiations on a North American
free trade agreement (NAFTA), is calling for \"complete exemption\" from
certain Glass-Steagall, Bank Holding Company, and International Banking
Act prohibitions on banking entities and their activities (see
attached). The article states that, while U.S. negotiators maintain that
they are resisting such demands, the February 21 draft containing
Mexico\'s wish list was released on the final day of a negotiating
session at which U.S. negotiators claim major progress occurred.

     We would like to register our strong disapproval of any provision
of NAFTA that exempts any banks or bank affiliates from federal
statutory limitations on securities activities and affiliations with
commerce. Compelling public policy considerations led to the enactment
of the laws from which Mexico proposes to exclude its banks.
Notwithstanding the fact that other countries may have laws at variance
with those on the books in the U.S., no legislative consensus exists in
this country as to whether or in what ways to modify the U.S. laws.

     Indeed, the House of Representatives last year considered
comprehensive banking legislation that would have both changed the
powers of banks and carefully controlled the manner in which those
powers could be exercised. While H.R. 6, the \"Financial Institutions
Safety and Consumer Choice Act of 1991,\" was ultimately defeated,
attempts to strip out the safeguards in Title IV were turned back in
three separate votes. It was clear that the House as a whole supported
granting new powers to banks only if strong firewalls and other
safeguards, along with enhanced regulatory requirements, were also part
of the package. In addition, Administration proposals to allow
commercial enterprises to affiliate with banks were soundly rejected.

     For the administration to permit a group of banks to engage in the
very activities and affiliations that the House repeatedly refused to
authorize would flout the demonstrated will of Congress. Moreover, to do
so on a discriminatory basis would knowingly place U.S. banks at a
competitive disadvantage. Additionally, an exception of this importance
and magnitude would necessarily expand over time. Since numerous other
countries with which the U.S. is or will be conducting trade
negotiations are more permissive than this country in the matter of bank
powers, it would be difficult to limit such exemptions to the NAFTA
context.

     Because congressional ratification will ultimately be required of
any agreement reached within the confines of NAFTA, it is essential both
to this body and to the process as a whole for us to be kept apprised on
a current and ongoing basis of the status of negotiations and of key
developments such as those outlined in the attached article. We would
appreciate your keeping us so informed.

     Thank you for your attention to this matter.

Sincerely,

John D. Dingell,

Chairman.

Edward J. Markey,

Chairman Subcommittee on Telecommunications and

Finance.

     Enclosure.

### Mexico Wants Exemption From Banking Laws

(By Stuart Auerbach)

     Mexico is demanding complete exemption from a wide range of U.S.
banking laws in a proposed free-trade agreement, according to a draft
text that was circulated yesterday by a coalition of organizations
opposed to an accord between the United States, Mexico and Canada.

     At the same time, the draft shows that Mexico is trying to maintain
as much control as possible over its banking, insurance and stock
brokerage industries within the confines of a North American free-trade
agreement (NAFTA).

     According to the draft, which is dated Feb. 21, Mexico wants to
exemptions from federal laws that allow states to restrict interstate
banking, keep banks from selling stocks and insurance and forbid
ownership of banks by brokerages, insurance companies or industrial
corporations.

     Banking has emerged as one of the knottiest sectors in the
negotiations for a free-trade agreement because U.S. domestic laws are
more restrictive than those in either Canada or Mexico.

     The draft text reflects what has happened in the negotiations as of
Feb. 21 and shows that the United States is resisting Mexican demands on
these issues. It illustrates the difficulties in reaching a free-trade
agreement between three countries with widely divergent national
interests.

     President Bush has ordered U.S. negotiators to push for an
agreement this year in hopes of winning a quick congressional
ratification, but White House aides and senior trade negotiators fear
that the complexities of the negotiations may prevent that.

     The release of the draft text undercuts the strategy of Bush
administration negotiators, who along with their Mexican and Canadian
counterparts have been keeping the contents of the talks private because
of political sensitivities in all three countries.

     U.S. lawmakers\' access to the draft text has been restricted,
prompting House Majority Leader Richard A. Gephardt (D-Mo.) to complain
about the secrecy to U.S. Trade Representative Carla A. Hills.

     The draft text was released yesterday by the Ralph Nader
organization Public Citizen under the headline \"Citizens\' Groups
Capture Copy of Secret NAFTA Text.\" The group\'s initial analysis found
the draft wanting in the areas it is most concerned with: the
environment, workers\' rights in Mexico and the export of U.S. jobs to
low wage factories there, agriculture and health and safety.

     Administration trade negotiators, while declining to comment on the
substance of the draft, called it an \"out of date\" text.

     \"It\'s not the text we\'re working on. It\'s a constantly changing
text,\" said Assistant U.S. Trade Representative Kathy Lydon.

     Nonetheless, the date on the draft released by Public Citizen was
the final day of a week long negotiating session in Dallas during which
senior negotiators said major progress was made. Public Citizen said the
draft incorporates the decisions made in Dallas.

     Much of the draft text is in brackets, indicating that no agreement
has been reached on those sections. Frequently, sections are composed of
one bracket after another, detailing each country\'s proposal and
showing the lack of agreement.

     And entire chapters are missing in two of the most contentious
areas\-- energy, where Mexico is firm on protecting its vast oil
resources from foreign investment, and autos, where U.S. union leaders
are fearful of accelerating the opening of production facilities in
Mexico at the expense of U.S. workers.

     Further, the text in another key area, agriculture, is so riddled
with blanks that it is impossible to know which products are to be
protected and which are not.

\-\-\-\-\-\-\-\-\--

Department of the Treasury,

Washington, DC, May 5, 1992.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Secretary Brady has asked me to respond to your
letter of March 31, regarding the financial service negotiations in the
North American Free Trade Agreement (NAFTA) and the related story in the
Washington Post dated March 25.

     I wish to assure you that the Treasury does not intend to use the
NAFTA as a back door to financial reform in the United States or as a
vehicle to give rights to Mexican (or Canadian) firms that U.S. firms
are denied. We do not view a Free Trade Agreement as the appropriate
vehicle for financial reform. Our negotiators have made it clear to
Mexico that financial reform in the United States will come as a direct
action by the Congress.

     The Washington Post story was based on a draft text of an
agreement. This text is undergoing continuous revision. Perhaps more to
the point, the leaked text represents a Mexican proposal that should in
no way be interpreted as implying U.S. agreement with the Mexican
proposal.

     We have attempted to keep the staffs of key Congressional
Committees, including the House Commerce Committee, informed of the
ongoing status of the negotiations. We remain ready to brief you at your
convenience and have requested meetings with the Energy and Commerce
Committee staff to give them an update.

Sincerely,

Mary C. Sophos,

Assistant Secretary, (Legislative Affairs).

\-\-\-\-\-\-\-\-\--

### Office of the U.S. Trade Representative,

Washington, DC, August 14, 1992.

Hon. John D. Dingell,

House of Representatives, Washington, DC.

     Dear Congressman Dingell: This is to acknowledge receipt of your
letter, dated August 7, 1992, concerning the automotive sector
provisions of the NAFTA.

     We are looking into this matter, and a full response will be
forthcoming.

Sincerely,

Mary Tinsley,

Assistant U.S. Trade Representative

for Congressional Affairs.

\-\-\-\-\-\-\-\-\--

### U.S. Department of Commerce,

Under Secretary for International Trade,

Washington, DC, August 31, 1992.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: This responds to your letter to Secretary
Franklin regarding a rule of origin for the automotive sector and other
automotive provisions of the North American Free Trade Agreement
(NAFTA).

     Your letter focuses on the details of the automotive rule of origin
under the NAFTA. As John P. Simpson, the Treasury Department\'s Deputy
Assistant Secretary for Regulatory Tariff and Trade Enforcement, was the
U.S. negotiator for this particular issue, we defer to the Department of
Treasury, to which you have also written, for a response to your
detailed questions. Commerce was involved in the overall automotive
negotiations, however, and we are enclosing a brief factsheet which
provides a general overview of the automotive rule. Also enclosed is a
summary of the automotive provisions of the NAFTA for your information.

Sincerely,

Timothy J. Hauser, Acting.

     Enclosures.

### Summary of NAFTA Rules of Origin for Automobiles

### Regional value-content

     To qualify for NAFTA preferential tariff treatment cars and light
trucks, as well as engines and transmissions for these vehicles, must
contain at least 62.5% North American content, calculated on the basis
of net cost. Heavy trucks and most other parts are subject to a 60%
regional value-content requirement. The percentage requirement will be
phased in in two steps, rising from 50% to 56% after four years and to
62.5% after a second four-year period. A similar transition period will
apply to goods subject to the 60% content level (55% after four years,
then rising to 60% after a second four- year period).

### Tracing

     In order to ensure that the regional value-content calculation is
accurate, most auto parts will be \"traced\" through the production
chain. If these parts are imported, assemblers will count the cost of
these parts as non- originating when they calculate the content of the
motor vehicle.

### Averaging

     Motor vehicle manufacturers and parts producers have several
averaging options that enhance their operational flexibility. Assemblers
may average annually their production by model line or class of vehicle
produced in the same plant, or by model line produced in any one
country. Parts producers may average their production according to
specified categories of parts; after- market producers may use their
fiscal year to average, while OEM producers may either use the
assembler\'s fiscal year or a quarterly or monthly average. CAMI may
average its production with that of its joint-venture partner, GM of
Canada, subject to several conditions. CAMI cars shipped to Mexico may
not qualify for tariff preference by being average with GM cars.

### New/refitted plants

     New plants will receive a five-year grace period during which the
regional value-content requirement will be 50%; after that the regional
value-content must rise to 62.5% to qualify for NAFTA preferences. This
grace period applies to a new plant, with new machinery, producing a
motor vehicle of a class, marque, or size and floor pan not currently
produced anywhere in North America. This provides an incentive for new
investment in North America by giving a new producer time to shift from
traditional suppliers to North American sources. Refitted plants (with a
similar condition regarding new production) will be eligible for a
two-year grace period.

### De minimis rule

     The de minimis rule cannot be used to reduce the effectiveness of
the value-content test.

### NAFTA AUTOMOTIVE BENEFITS

     The NAFTA establishes free trade in automotive products in a
decade. A transition period ensures an orderly adjustment for current
manufacturers in Mexico.

     Mexican Auto Decree terminated in ten years, the import/sales ratio
limit immediately.

     Mexican restrictions on U.S. trade and investment phased out,
creating significant U.S. export opportunities for car and parts
manufacturers: local content requirement reduced immediately and made
easier to meet using existing suppliers; companies may reduce their
required local content in event of disruptions in production or sales;
trade balancing requirement reduced dramatically by only requiring 80
cents (declining to 55 cents) of exports for every dollar of imports
(current requirement is \$2 of exports for every \$1 of car imports);
other credits make trade balance requirement easier to meet\--companies
have automatic right to apply \$150 million in previously earned foreign
exchange to their trade balance; all trade balance and local content
requirements terminate in ten years

     No new trade or investment restrictions may be imposed during or
after the transition.

     On U.S. exports to Mexico, light truck and car duties halved
immediately and eliminated over five and ten years; 75% of parts duty
free in five years. Tariffs on car and engine exports to U.S. eliminated
immediately, tariffs on light trucks eliminated in five years.

     Large quota opened for U.S. commercial truck exports, no import
limits after 5 years.

     No restrictions on new U.S. investment in Mexico. U.S. firms can
acquire existing Mexican firms within five years.

     Mexican automotive goods may be considered as domestic (like
Canadian goods are currently) if they meet the rules under CAFE.

     Strong rule of origin at 62.5% for autos and light trucks, engines
and transmissions (60% for trucks and other parts), deep tracing of
parts to produce an accurate accounting of origin, and corporate
averaging by model line.

\-\-\-\-\-\-\-\-\--

House of Representatives,

Committee on Energy and Commerce,

Washington, DC, June 2, 1992.

### Hon. Nicholas F. Brady,

Hon. Barbara H. Franklin, Hon. Carla A. Hills,     Dear Secretaries
Brady and Franklin and Ambassador Hills: Last week representatives of
your agencies kindly provided a briefing for Members and staff regarding
proposals for the automotive sector provisions of the North American
Free Trade Agreement (NAFTA) now in negotiation. Unfortunately, I was
unable to attend the briefing because of Committee conference reports
under consideration on the House Floor. Nevertheless, I understand it
was helpful. The written information provided, however, was skimpy and
marked \"confidential,\" similar to previous documents that we have
received. Despite this, the enclosed article in the May 20, 1992 edition
of the Journal of Commerce regarding the negotiations appears to reveal
(apparently from people involved in those talks) much of the information
that was treated as \"confidential\" during briefings for Members and
staff. It is unclear to me why such confidentiality is required,
particularly if there is no restraint on Administration personnel
talking to the media.

     As I understand the matter from staff reports of the briefing
regarding a new rule of origin and other issues, the Treasury Department
is placing great stock on the concept of \"tracing\" which its spokesman
admits will be burdensome to suppliers and manufacturers. (Indeed, it is
not clear to me how it will work.) At the same time, the Treasury
official hopes to move from the \"direct cost of processing\" to a
so-called \"simpler\" approach that includes administrative overhead in
determining value. The enclosed article comments on that as follows:

Under net cost, U.S. officials have estimated that the local content of
U.S. and Canadian cars would rise 5%, to 7%, through adding costs now
excluded by present U.S. rules.

Canadian officials say the number is more like 1% to 2%, and have
rejected the U.S. demand that the North American local content
requirement be raised to more than 60%, from the 50% now called for in
the 1988 U.S.-Canada Free Trade Agreement.

     The Treasury official at the briefing placed great emphasis on
raising the 50 percent North American content level with Canada and
applying that same level in Mexico. However, he never mentioned an
actual level and he indicated that it would be from 6 to 8 years, or
possibly longer, before we would see a higher level in Canada even
though a 60 percent content level was to have occurred by now under the
U.S.-Canada Free Trade Agreement. (That was the congressional
understanding when the agreement was approved in 1988.)

     Under the Treasury approach in this negotiation, a 60 percent or
higher level may not be in effect for more than 12 years after 1988. It
is my belief that in 1992, 60 percent is far to low. In addition, that
official kept mentioning the need for the United States to accommodate
Canada on the Honda audit and interpretations (which relate to past
entries) and on the Cami matter. These comments, coupled with the above
remarks by Canadian officials, do not provide me with the feeling that
this is a politically sound \"deal\" or good policy for the United
States in general or, in particular, for my constituents.

     I thought that this was primarily a negotiation for an agreement
with Mexico, not Canada. Such a \"gift\" or apparent capitulation to
Canada to get a 55, 60, or even 65 percent content level in the year
2000 or later with a burdensome tracing program causes me to question
whether there are any benefits for the United States. Such a low content
level now of only 50 percent, with a small increase in the distant
future, would also not appear to be beneficial to the United States.

     The negotiations should focus on Mexico. We need to understand the
issues and differences with Mexico and the proposed solutions developed
by both countries. The emphasis on Canada is inappropriate.

     I request that you provide a written summary of all the auto issues
regarding NAFTA, including the Mexican and Canadian proposals, the U.S.
proposals, and a discussion of the differences and problems in reaching
a resolution that is truly in the interest of the U.S. economy,
including the U.S. job market.

     In the case of the rule of origin, I want to learn more about
tracing, including about how it would work and how it would be enforced.
I want to learn what the actual benefits will be for the U.S., including
U.S. industries and jobs, and the administrative benefits for the
Treasury. Is it primarily designed to resolve a perceived or actual
administrative problem for Treasury or will it actually result in a more
effective rule? Please explain. Why and how would it avoid the need for
audits?

     I also want to understand all other changes in the rule of origin,
including a comparison of the benefits, problems, and disadvantages
under the FTA and in the Treasury proposal. Finally, I want to learn
more about the content percentage and its timing. Starting at 60 percent
or less is really not appealing to me.

     As to the Honda matter, that issue is under investigation by the
Subcommittee on Oversight and Investigations. I do not support a
proposal that seeks to placate Canada through some \"deal\" on the Honda
audit and on other unrelated matters, such as one involving Cami, even
though it might be beneficial to one or more U.S. firms. Both relate to
the existing free trade agreement and its implementation and
enforcement. They are not directly relevant to these negotiations for
NAFTA. If the rule of origin is to be changed, I believe it should be
for the future. It should not be retroactive.

     In addition, I continue to be concerned about the adequacy of the
entire agreement from the standpoint of the environment and jobs. No one
in the Administration has talked to us about these issues.

     I request your reply by June 20, 1992.

     Before closing, I want to express my appreciation to your staff for
their efforts and their briefing. They are clearly capable and
knowledgeable. You should be pleased.

     With every good wish.

Sincerely,

John D. Dingell, Chairman.

     Enclosure.

House of Representatives,

Committee on Energy and Commerce,

Washington, DC, August 7, 1992.

### Hon. Nicholas F. Brady,

Hon. Barbara H. Franklin, Hon. Carla A. Hills,

     Dear Secretaries Brady and Franklin and Ambassador Hills: Since
writing to each of you on June 2, 1992 regarding proposals for the
automotive sector provisions of the North American Free Trade Agreement
(NAFTA) now in negotiation, I received the enclosed July 28 letter from
the Assistant Secretary (Legislative Affairs) of the Treasury Department
offering an \"opportunity to arrange a confidential briefing\" at my
convenience about these matters.

     While I appreciate that offer and welcome it, I do not find it
responsive to my inquiry or adequate, particularly because of the
present demands on my time and that of the other Committee Members and
because the offer is made almost two months after the date of my letter.
Most importantly, I do not find such briefings to be adequate. In this
case, I have made a request for a written response after receiving an
oral briefing for Members and staff. Another oral briefing will not
suffice. Indeed, I am troubled that you have delayed providing this
response and are making the offer to brief me so late, particularly in
light of reports from your agencies that an agreement is almost
complete.

     As I understand the matter from staff reports of the briefing
regarding a new rule of origin and other issues, the Treasury Department
is placing great stock on the concept of \"tracing\" which its spokesman
admits will be burdensome to suppliers and manufacturers. (Indeed, it is
not clear to me how it will work.) At the same time, the Treasury
official hopes to move from the \"direct cost of processing\" to a
so-called \"simpler\" approach that includes administrative overhead in
determining value. The enclosed article comments on that as follows:

Under net cost, U.S. officials have estimated that the local content of
U.S. and Canadian cars would rise 5%, to 7%, through adding costs now
excluded by present U.S. rules.

Canadian officials say the number is more like 1% to 2%, and have
rejected the U.S. demand that the North American local content
requirement be raised to more than 60%, from the 50% now called for in
the 1988 U.S.-Canada Free Trade Agreement.

     The Treasury official at the briefing placed great emphasis on
raising the 50 percent North American content level with Canada and
applying that same level in Mexico. However, he never mentioned an
actual level and he indicated that it would be from 6 to 8 years, or
possibly longer, before we would see a higher level in Canada even
though a 60 percent content level was to have occurred by now under the
U.S.-Canada Free Trade Agreement. (That was the congressional
understanding when the agreement was approved in 1988.)

     Under the Treasury approach in this negotiation, 60 percent or
higher level may not be in effect for more than 12 years after 1988. It
is my belief that in 1992, 60 percent is far too low. In addition, that
official kept mentioning the need for the United States to accommodate
Canada on the Honda audit and interpretations (which relate to past
entries) and on the Cami matter. These comments, coupled with the above
remarks by Canadian officials, do not provide me with the feeling that
this is a politically sound \"deal\" or good policy for the United
States in general or, in particular, for my constituents.

     I thought that this was primarily a negotiation for an agreement
with Mexico, not Canada. Such a \"gift\" or apparent capitulation to
Canada to get a 55, 60, or even 65 percent content level in the year
2000 or later with a burdensome tracing program causes me to question
whether there are any benefits for the United States. Such a low content
level now of only 50 percent, with a small increase in the distant
future, would also not appear to be beneficial to the United States.

     The negotiations should focus on Mexico. We need to understand the
issues and differences with Mexico and the proposed solutions developed
by both countries. The emphasis on Canada is inappropriate.

     I request that you provide a written summary of all the auto issues
regarding NAFTA, including the Mexican and Canadian proposals, the U.S.
proposals, and a discussion of the differences and problems in reaching
a resolution that is truly in the interest of the U.S. economy,
including the U.S. job market.

     In the case of the rule of origin, I want to learn more about
tracing, including about how it would work and how it would be enforced.
I want to learn what the actual benefits will be for the U.S., including
U.S. industries and jobs, and the administrative benefits for the
Treasury. Is it primarily designed to resolve a perceived or actual
administrative problem for Treasury or will it actually result in a more
effective rule? Please explain. Why and how would it avoid the need for
audits?

     I also want to understand all other changes in the rule of origin,
including a comparison of the benefits, problems, and disadvantages
under the FTA and in the Treasury proposal. Finally, I want to learn
more about the content percentage and its timing. Starting at 60 percent
or less is really not appealing to me.

     As to the Honda matter, that issue is under investigation by the
Subcommittee on Oversight and Investigations. I do not support a
proposal that seeks to placate Canada through some \"deal\" on the Honda
audit and on other unrelated matters, such as one involving Cami, even
though it might be beneficial to one or more U.S. firms. Both relate to
the existing free trade agreement and its implementation and
enforcement. They are not directly relevant to these negotiations for
NAFTA. If the rule of origin is to be changed, I believe it should be
for the future. It should not be retroactive.

     In addition, I continue to be concerned about the adequacy of the
entire agreement from the standpoint of the environment and jobs. No one
in the administration has talked to us about these issues.

     I request your reply by June 20, 1992.

     Before closing, I want to express my appreciation to your staff for
their efforts and their briefing. They are clearly capable and
knowledgeable. You should be pleased.

     With every good wish.

Sincerely,

John D. Dingell, Chairman.

\-\-\-\-\-\-\-\-\--

House of Representatives,

Committee on Energy and Commerce,

Washington, DC, May 25, 1993.

Hon. Ronald H. Brown,

### Secretary, Department of Commerce, Washington, DC.

     Dear Mr. Secretary: I want to express my appreciation for your
recent briefing for our Committee Members under the auspices of
Subcommittee Chairwoman Cardiss Collins. The frank and open discussion
of the Bush Administration\'s negotiated North America Free Trade
Agreement (NAFTA) and various other trade and non-trade issues was quite
helpful. Your responses to our questions were very useful, particularly
in regard to your assurances that the Administration is intent about
opening up Japanese markets to U.S. exports and your understanding, in
regard to the negotiations for a future so-called \"clean car\", of my
concerns that the Administration assist the auto industry, not push or
force them. I applaud your assertiveness on trade issues and your
speaking for the needs of American business as a way to create and
protect American jobs.

     In the case of NAFTA, I note you recently emphasized support for
the Bush agreement contingent upon obtaining supplemental agreements in
these areas: (1) the possibility of sectoral surges; (2) the
environment; and (3) workers\' rights. As I indicated to you at the
briefing, I have trade related questions as follows:

     1. As you know, in January 1992 the prior Administration obtained a
series of commitments from the Japanese under the \"Global Partnership
Plan of Action.\" In many areas of this plan progress has been slow, in
part because the past Administration was not, in my view, as aggressive
and demanding as it should have been.

     On March 26, 1993 you and U.S. Trade Representative Michael Kantor
wrote to the Japanese Ministry of International Trade and Industry
(MITI) regarding automotive trade. The letter was critical of Japan\'s
failure to meet these 1992 commitments and referred to Japan\'s pledge
to implement the commitments. (In this regard, enclosed is a Journal of
Commerce article indicating that Toyota contends that it has increased
auto parts purchases. However, the article also points out that less
than a third of the increase was exports to Japan.) The April 2, 1993
edition of Inside U.S. Trade reports that the MITI Minister, Mr. Yoskiro
Mori, allegedly said that the commitments expressed in January 1992 did
not constitute a \"pledge\" by the Japanese Government to press the
Japanese automakers to meet the commitments. What is your understanding
of his reply?

     Please also provide an up-to-date report on the status of these
commitments in the format provided to us in the past by your Department.

     The May 20, 1993 edition of the Wall Street Journal reports that
the Administration plans to unveil a \"new strategy in Japan with the
goal of increasing Japanese purchase of foreign goods and services as
well as denting Japan\'s large trade surplus.\" I applaud that and would
like to learn more details about that strategy. However, I am always
skeptical about talks with Japan. They seem to go on endlessly with
progress measured in extremely small increments. I hope you and others
in the Administration will achieve greater results on a faster schedule.

     2. Last year, I corresponded with your Department about barriers to
U.S. products, including vehicles in other countries and the need for
the Commerce Department to work to remove such barriers. According to
the May 10, 1993 edition of Automotive News, South Korea has begun a
campaign under the guise of curbing corruption that has had the effect
of drying up sales of imported vehicles, including vehicles produced by
the \"Big Three.\" I would appreciate your examining the matter and
advising me what can and will be done to encourage South Korea to remove
this and other barriers. Please also provide an up-to-date report on
barriers in other Asian countries to U.S. products.

     3. In the case of autos, when the Canadian Free Trade Agreement
(CFTA) was adopted in 1989, Congress expected both countries to quickly
increase the Rule of Origin percentage from 50 to 60 percent. Canada
refused and the increase never occurred.

     Under NAFTA, the percentage is changed for Canada and Mexico to 62
1/2 percent regional content. However, even that low percentage does not
take effect until 2002, or over 12 years after the CFTA. While the
\"tracing\" requirement could be helpful, the \"net cost\" measure may
be too liberal. Further, the agreement, as noted by labor, apparently
does not address the high level of imports of vehicles and parts from
outside North America and the low level of local content in vehicles
assembled here by non-North American companies.

     The agreement also provides a change in the Corporate Average Fuel
Economy (CAFE) law to allow each company in Mexico to choose, (after the
3rd year of a 10 year phase-out period) to have its Mexican value
counted as \"domestic.\" A company can, however, continue to have its
Mexican production count as \"foreign.\"

     Both of these changes benefit Mexico and/or Canada and foreign
vehicle manufacturers. As I understand it, the U.S. auto industry did
not seek the CAFE change and the industry and labor supported a higher
Rule of Origin percentage. There was no discussion with our Committee
about the CAFE change.

     Please explain the benefit of this low 62 1/2 percentage in light
of statements by many foreign companies, especially those with
transplants in the U.S., that they meet or exceed this percentage on one
or more of their vehicle lines. Why is the percentage so low and
deferred until the next Century?

     If the CAFE law is amended at any time, will those amendments apply
equally to any company that chooses the domestic or foreign
classification or will the agreement have to be revised? What is the
impact on the U.S. industry of the five year phase-out of the 25 percent
truck tariff and the inclusion of Mexican value in the CAFE definition
of \"domestic\"?

     4. Recent testimony by the American Automobile Manufacturers
Association (AAMA) contends that the current Mexico Auto Decree places
serious constraints on auto manufacturers in Mexico and that NAFTA will
eliminate or moderate those constraints, which I applaud. AAMA adds that
NAFTA will permit U.S. producers to rationalize production which will
mean \"new orders for U.S. auto plants, more secure jobs for U.S.
workers, and the opening of a major new export market for U.S.
automotive products.\" The AAMA witness said that to keep \"this
potential in perspective,\" he refers to a \"Conference Board of Canada
which predicts that Mexico will replace Canada within 30 years as the
U.S.\' largest trading partner.\"

     While I certainly favor results that could help the \"Big Three\"
be more competitive because that should be good for U.S. workers, I am
concerned about what will happen in a much shorter time frame than 30
years. I am also concerned that rationalization could cause a loss of
jobs in the U.S.

     To what extent have each of the Big Three and the transplants
provided assurances that U.S. production will not be transferred in this
decade to Mexico or Canada under NAFTA if it will result in a loss of
U.S. automotive jobs? What is the nature of those assurances?
Recognizing that there is excess production capacity in the U.S., could
there be a loss of a significant share of U.S. production of small cars
and light-duty trucks to Mexico? Would that have a significant adverse
effect on U.S. automotive jobs?

     5. The Bush agreement on import surges was designed, as I am told,
to give U.S. producers time to adjust to increased imports by a
competitor. However, when a multinational firm transfers production from
one country to another, there is generally no \"foreign competitor.\" In
such a case, this single firm decides whether to use American, Canadian
or Mexican workers to make the product. I am concerned that NAFTA
increases the ability of such firms to concentrate production in a
single location, which creates competition among existing workers in the
three countries. Does the agreement provide relief to American workers
of such a firm who lose their jobs in a production transfer? What does
it do for Mexican or Canadian workers?

     I understand that the United Auto Workers union proposes that the
import surge negotiations focus on preventing surges of imports that
represent irreversible transfers of production in industries that have
been subject to national industrial policies and programs and in which
production is dominated by firms that have extensive operations in each
of the three NAFTA countries. In these industries, the restructuring and
consolidation of production that will take place will be a function of
the success of the national policies, not market forces, putting
countries lacking national policies at a disadvantage.

     Given the continuation of the Canadian Auto Pact \"safeguards,\"
the Mexican Auto Decree phaseout and Mexico\'s new protection for auto
parts production that takes into account vehicle imports, how and to
what extent will the U.S. in the supplemental negotiations on \"import
surges\" ensure that U.S. production as a share of total North American
production does not decline as a result of NAFTA?

     6. If trade in one direction, U.S. to Mexico, affects jobs in the
U.S., will trade in the opposite direction, Mexico to the U.S., have an
effect on such employment? What is the estimate of the number of
American jobs created by U.S. exports to Mexico? What is the estimate of
the number of jobs lost due to imports from Mexico? To what extent do
U.S. exports to Mexico that are processed in Mexico and shipped back to
the U.S. for sale create American jobs?

     7. I generally support the negotiation of supplemental agreements
on labor and on the environment, although I must reserve final judgment
until I see their details and understand their impact on the U.S. as
well as on Canada and Mexico. I am concerned that in reality, they may
have greater practical impact in this country than in Canada and Mexico
because of our system of monitoring, enforcement, openness, and citizen
suits. Most importantly, I am concerned that those agreements will not
affect, change, or even address the deficiencies of the Bush-negotiated
agreement, including those identified in these questions. Rather, they
seek to establish a broad set of labor and environmental objectives and
statements. They also appear to provide a rather complicated
organizational structure to help achieve and enforce these objectives,
which raises further questions about staff and costs. I remain skeptical
about their adequacy and usefulness in improving and correcting the Bush
agreement. I would like your explanation of the purpose and
effectiveness of these supplemental agreements, in the case of Mexico
and Canada, particularly in regard to the labor and other issues raised
in previous questions.What specific deficiencies in the original text of
the Bush agreement are being addressed and remedied or mitigated by the
two supplemental agreements? Please also keep our Committee informed
about the substance and process of these negotiations.

     I look forward to your early response to these matters. I am
providing a copy of this letter to the U.S. Trade Representative so that
he may contribute to your response as necessary and so that he is aware
of our concerns and interest.

     With every good wish.

Sincerely,

John D. Dingell, Chairman.

### Toyota Officials Defend Statistics on Purchases of U.S. Components 

(By Kevin G. Hall)

     Long Beach, Calif.\--Dismissing as \"total nonsense\" criticism
that Japanese carmakers do not import enough U.S. components, Toyota
Motor Corp. officials countered that their commitment is reflected in
greater overall purchases of parts from U.S. suppliers.

     Toyota used a suppliers\' conference in Long Beach, Calif., earlier
this week to announce a 40% increase in the amount of U.S. parts it
purchased during the Japanese fiscal year that ended March 30, 1993.

     The carmaker announced that purchases grew to \$4.43 billion during
the 12- month period, well above the \$3.14 billion posted in fiscal
1992, but also well below the \$5.28 billion targeted for next year.

     However, of the \$4.43 billion purchase figure, some \$3.3 billion
was local procurement for Toyota auto plants in Georgetown, Ky., and
Fremont, Calif. About \$1.13 billion of the total figure was actually
exports to Japan for manufacturing.

     The distinction is significant because critics in Washington have
said the true mark of Japan\'s willingness to open its markets is the
amount it actually imports rather than procures locally in plants
abroad.

     The same distinction is currently being hotly debated in the
computer industry, with Japan touting its total purchase of U.S.
computer components and the United States arguing the benchmark should
be limited to capital- affiliated companies.

     Groups like the Northeast-Midwest Institute, a research center set
up to assist Congress on regional economic development issues, are
telling President Clinton not to take Japanese auto parts purchases at
face value.

     \"I think it would be fair to say they are listening to this
concern and voicing it on occasion,\" said Eric Hartman, a senior policy
analyst for the group who specializes in international trade issues.

     Iwao Okijima, a Toyota senior managing director in charge of parts
purchasing, appeared annoyed when asked during a news conference if the
growing local procurement masks the much smaller proportion of U.S. auto
part exports and suggests Japan\'s market remains largely closed to U.S.
suppliers.

     \"I think it\'s nonsense,\" said Mr. Okijima, asking why the closed
market question is not put to the United States in dominant sectors like
aerospace and agriculture. \"We don\'t conclude that those areas where
Japanese industries are in total deficit to American businesses in that
sector are closed\" markets.

     Japanese auto parts companies are more successful, he said, because
they have traditionally offered better quality and enjoy the benefit of
market proximity.

     In contrast, critics have long complained Japan\'s \"keiritsu\"
system of affiliated business groups working together for a common goal
shuts out U.S. suppliers. They note the numbers released by Toyota
Monday do not break down how much of the carmaker\'s purchases are from
transplanted Japanese suppliers in the United States.

     \"A crucial piece of information is missing and it does have a
material consequence, too,\" said Mr. Hartman.

     Toyota\'s figures indicated only that about half of the auto parts
purchases are from wholly owned U.S. companies or joint ventures with
one partner being a wholly owned U.S. firm. There are no data breaking
down the dollar value of parts procured from U.S. firms versus
transplants.

     Auto parts account for about 75%\--or \$49 billion\--of the U.S.
trade deficit with Japan, so the issue is expected to come to a head
with a new administration that has shown a proclivity for talking tough
about trade with Japan.

     Japanese automakers agreed to an overall goal of \$19 billion in
purchases in the year ending March 1995, but it is not clear what action
the Clinton trade team will recommend if the industry as a whole falls
short.

     A reluctant Mr. Okijima, when asked of the potential row, said
\"we\'re hopeful rather than fearful.\" Other Toyota officials indicated
they expect some policy move by Mr. Clinton shortly.

     \"I think they\'ll press things early, I think they\'re already
beating the drums, said James R. Olson, Toyota Motor Sales, U.S.A. Inc.
group vice president of external affairs in Torrance, Calif. \"I think
this is an issue they will bring up before the G-7 meeting (Group of
seven industrialized nations) and try to take it to the meeting.\"

\-\-\-\-\-\-\-\-\--

Department of Commerce,

### The Secretary of Commerce,

Washington, DC., July 13, 1993.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Thank you for your letter regarding the North
American Free Trade Agreement (NAFTA) and other trade issues. I share
your view of the usefulness of our meeting and the helpful exchange of
ideas that we enjoyed. Enclosed are detailed answers to your questions.

     You are quite right that I support the NAFTA for all the reasons we
discussed during our meeting, and I hope the President can count on your
support once we have completed the supplemental agreements.

Sincerely,

Ronald H. Brown.

     Enclosures.

     1. The Government of Japan (GOJ) has on a number of occasions
stated that the announcements made in January 1992 regarding purchase of
U.S. auto parts are goals established by the individual Japanese
automakers and not commitments made by the Japanese Government.
Ambassador Kantor and I wrote to Minister Mori to stress the importance
of the companies meeting these goals and the need for the GOJ to
encourage company efforts leading to these results. Since that time,
Department staff members have met with representatives of the three
largest Japanese auto makers who have assured us that they are on track
in meeting their voluntary target purchases.

     The Japan Automobile Manufacturers Association has just issued its
seminannual report of U.S. auto parts purchases. Total purchases for
Japan\'s fiscal year 1992 are reported to have been slightly more than
\$13.5 billion. The figure represents a \$3.1 billion increase from the
1991 total. If this rate of increase is maintained over the next two
years, the Japanese automakers will meet their announced goals. Our
staff is currently updating the statistical tables that we provided to
your office in the past. I will send you a copy of the data packet as
soon as it is completed.

     The Clinton Administration has proposed a framework which will be
used to negotiate the removal of barriers to trade between the United
States and Japan. The Administration shares your interest in real
results and is committed to advance a program to achieve that goal. I
understand that Timothy J. Hauser, Acting Under Secretary for
International Trade; Paul Rosenberg, one of my senior advisors; and
Marjory Searing, Deputy Assistant Secretary for Japan, met with members
of your staff and the Committee to brief them on the status of these
negotiations.

     2. The motor vehicle tariff rate in South Korea was 17 percent in
1992. It is currently 15 percent, and it is scheduled to be reduced to 5
percent by 1995. In addition to the tariff, the Government has an
eight-level cascading tax for automobiles. Consequently, an imported
automobile costs approximately 27 percent more than an comparable
domestic vehicle.

     Historically, the Republic of Korea Government (ROKG) has
discouraged the importation of automobiles and has instituted various
nontariff barriers. The \"anti-corruption campaign\" cited in your
letter is a renewal of a continuing campaign that started in 1990 as the
\"anti-consumption/import\" campaign and proceeded in 1991 as the
\"frugality\" campaign. The new \"anti-corruption\" campaign could well
lead to a new anti-import campaign. We recognize that these campaigns
are thinly veiled efforts by the ROKG to keep imports out of Korea.

     The ROKG has repeatedly assured the U.S. Administration that the
\"anti- import\" campaigns have ended. In Korea, however, just the
threat of a new Government-sponsored \"anti-consumption\" campaign is
enough to frighten potential customers from import showrooms. We
continue to receive reports of informal efforts by the ROKG to
discourage the purchase of imported automobiles and sales of imported
automobiles continue to fall.

     We are working with the Big Three companies and the American
Automobile Manufacturers Association to develop a strategy for a renewed
effort to open the South Korean automobile market. This effort will
build on bilateral Cabinet-level dialogue held with the ROKG on this
issue over the past several years.

     The report you requested concerning barriers in other Asian markets
is attached to this enclosure.

     3. We understand and share your disappointment that the rule of
origin under the U.S.-Canada Free Trade Agreement (CFTA) was never
increased to 60 percent. However, the CFTA as adopted by Congress
contained no definitive obligation for Canada to agree to such an
increase. The U.S. implementing legislation instructed the President to
\"seek to obtain an increase\" which former President Bush did attempt
to do.

     The NAFTA, on the other hand, contains a specific obligation for
all three countries, including Canada, to the 62.5 percent requirement.
I should emphasize that this requirement is subject to audit by the U.S.
Customs Service. As I understand it, the 62.5 percent figure (combined,
of course, with the improvements regarding tracing and the base for
valuation) is a negotiated result. I believe the U.S. negotiators tried
very hard to achieve a 65 percent level. The outcome is the result of
their intensive efforts. While every negotiating partner would prefer to
achieve their initial position, that is rarely the case. The purpose of
the rule of origin is to ensure that the benefits of duty-free trade
under NAFTA accrues to those producers that make a significant
manufacturing commitment to North America. NAFTA ensures that companies
cannot use Canada or Mexico as sites for \"screwdriver\" operations
(simple assembly operations with little or no use of North American
content) with their production aimed at the United States.

     The NAFTA is a trilateral trade agreement and only addresses
non-North American imports in the context of how they are to be treated
in the rule of origin. Clearly, foreign-produced products will not count
towards the regional content requirement for duty-free trade benefits.
However, as the NAFTA is not a customs union, all three countries retain
their sovereign right to determine their external trade policy. Only
trade policy relating to trilateral trade is addressed in the NAFTA.

     The level of local content in vehicles assembled in North American
by non- North American companies is addressed only in the context of the
level of regional content required for duty-free, trilateral trading
privileges. However, if these companies, producing in any of the three
countries, do not wish to take advantage of duty-free trading privileges
under NAFTA, there is nothing to force them to achieve any level of
content.

     Because the NAFTA has not been implemented, assertions by any
company located in the United States that its production meets the rule
of origin are speculative. It may be true that transplant producers are
meeting or exceeding the 62.5 percent on one or more of their vehicle
lines. However, until that claim is audited under the NAFTA
procedures,we will not have a definitive answer. Pressure from the
United States on Japanese transplants to increase their purchases of
North American parts has shown some results, even though they may not be
taking place as quickly as we would like nor be at the level we would
like. The yen/dollar exchange rate has also aided in increased sourcing
of parts in the United States, whether from traditional U.S. suppliers
or from transplant Japanese parts producers. Just because some model
lines meet or exceed the requirement does not mean that 62.5 percent is
an inadequate percentage.

     After 10 years, all Mexican content will count as \"domestic\" for
CAFE purposes. There is no choice involved. The choice is only when to
count Mexican content as \"domestic\" in the 1997 through 2004 period.
During this period, companies producing in Mexico (prior to model year
1992) may make a one-time election to count their Mexican content as
\"domestic\" or keep it as foreign. They may not switch back and forth.
All vehicles which are sold in the United States must currently be
classified as being in either the \"domestic\" or \"foreign\" fleet for
CAFE purposes. This will not change. Vehicles with 75 percent or more
U.S./Canadian/Mexican content will be classified in the \"domestic\"
fleet; vehicles with less than 75 percent U.S./Canadian/Mexican content
will be classified in the \"import\" fleet. It does not matter where
these vehicles are produced; they are classified as being in a fleet
based on the percentage content achieved in each model line.

     We do not believe this change benefits Canada, because Canadian
content has been included in the \"domestic\" fleet definition since
CAFE\'s inception in 1975. If anything, it puts Mexico on equal footing
with Canada by granting Mexican content equal status with Canadian
content. We also do not believe this change benefits foreign vehicle
manufacturers. Except for Mazda, no transplant producers currently has a
\"domestic\" fleet. If a foreign vehicle manufacturer wishes to source
more parts from Mexico, it will now have to count them as \"domestic.\"
As most foreign producers do not want to have a \"domestic\" fleet, the
inclusion of Mexican content as \"domestic\" does not help them. To
date, all imports of passenger cars from Mexico by the Big Three have
been classified in their \"domestic\" fleet.

     Any subsequent changes to CAFE legislation involving the fuel
economy standard will apply to all vehicles sold in the United States
just as it does today, regardless of whether the vehicles are classified
as being in the \"domestic\" or \"foreign\" fleet. The agreement will
not have to be revised unless the United States changes the content
definitions of the two fleets. The text of the Agreement reads,

4\. Nothing in this Appendix shall be construed to require the United
States to make any changes in its fuel economy requirements for
automobiles, or to prevent the United States from making any changes in
its fuel economy requirements for automobiles that are otherwise
consistent with this Appendix.

     My staff informs me that the subject of the CAFE change was
discussed at numerous briefings by U.S. negotiators attended by
representatives of the Energy and Commerce Committee staff.

     4. The Big Three companies and U.S. labor have not been asked to
provide assurances regarding their future options. Given the current
economic realities, it is difficult to comprehend why a company would
significantly expand capacity in North America. I do not foresee a loss
of a significant share of U.S. production of small cars and light-duty
trucks to Mexico as a result of NAFTA. As opposed to the real effect of
the Mexican auto decree which is forcing investment and production in
Mexico, the NAFTA reduces immediately and eliminates those forces.

     5. The safeguard provisions of the NAFTA are designed to prevent
injury or threat of injury to a domestic industry from increased
imports. In essence, U.S. import relief law (section 201) is carried
over into the NAFTA. Except in certain very limited situations involving
the licensing of the U.S. Government-funded or owned inventions. I know
of no provision in U.S. law that would permit the U.S. Government to
control a firm\'s decision where to locate production facilities. While
I appreciate your interest in a United Auto Workers union proposal to
ensure job retention, I firmly believe that adopting the NAFTA is the
best means for assuring that jobs can be retained in the United States.
The current Mexican auto decree, as you know, is forcing U.S. auto
assemblers and parts manufacturers to produce products in Mexico that
they would otherwise prefer to make in the United States. The NAFTA
eliminates these requirements, permitting manufacturers in the United
States to decide where to produce their goods. General Motors, Ford and
Chrysler have all indicated that the NAFTA\'s market opening provisions
will enable them to export significantly greater amounts to Mexico than
they would be able to do otherwise and will enable them to add
employment in the United States that might otherwise go to Mexico. Any
attempt to further manage production decisions in North America, no
matter how well intentioned, will place that additional employment and
exports at risk.

     The Canadian \"safeguards\" have had no practical effect for years,
because production has remained well above the levels agreed to in the
auto pact. Assemblers would have to alter considerably their production
patterns to fall below them. The NAFTA also incorporates the obligation
under the CFTA that production and export-based remission orders
provided to recipients who did not qualify for duty-free access under
the auto pact be eliminated by 1996 and 1998, respectively. The NAFTA
will further diminish what little value the safeguards have left,
because assemblers will be able to import parts, components and vehicles
from the United States and Mexico duty-free without meeting the
safeguard requirements or needing the duty waivers for such imports. (We
understand that over two-thirds of the imports of automotive assemblers
in Canada are from the United States and Mexico.) Last, as noted above,
the increase in the rule of origin, combined with the tracing and other
improvements, will further influence Canadian assemblers to purchase
components from the United States and Mexico to sell in the free trade
area duty-free. The result is to lessen the value of the duty waivers as
an incentive to maintain specific levels of production and in so doing
reduce what little remaining value (mostly optical at this point) the
\"safeguards\" may have.

     6. NAFTA provides the proverbial level playing field that so many
critics of trade agreements profess to want and will result in increased
jobs in the United States and Mexico. We can look back at our trading
relationship with Mexico since 1987 to see how expanded trade can
benefit both economies. In 1987, the United States exported \$14.5
billion to Mexico, had a \$5.9 billion trade deficit, and could
attribute only 309,000 jobs to exports to Mexico. By 1992, our exports
to Mexico had reached \$40.6 billion. We had a \$5.2 billion surplus,
and exports to Mexico supported 700,000 U.S. jobs. Clearly, the United
States is benefiting from exports to Mexico. Yet Mexico was enjoying
significant economic benefits as well. Exports to the United States in
this period expanded from \$20.5 billion in 1987 to \$35.2 billion in
1992, contributing to GNP growth in 1990-1991 of 4 percent. Trade
liberalization resulted in significant economic expansion on both sides
of the border in spite of significant remaining Mexican tariff and
nontariff barriers, including the auto decree. NAFTA will ensure that
this positive trend continues through the further liberalization of
Mexico\'s trade regime.

     It is obviously impossible to estimate the number of jobs \"lost\"
due to imports. Trade is not a win-lose game. Imports can be attributed
to many factors, including the fact that the good is not, or cannot be,
produced in the country. If it cannot be made here, no job could be
\"lost\" through its importation. Every credible economic study on the
effects of the NAFTA on the U.S. economy has concluded that the
agreement will result in a net increase in U.S. jobs. The U.S.
International Trade Commission estimates that NAFTA will result in a
gain in aggregate U.S. employment of one percent within ten years of
implementation.

     Nonetheless, job losses in certain sectors are predicted. These job
losses will be offset by larger job gains in other areas of the economy.
The ITC in its January 1993 \"Potential Impact on the U.S. Economy and
Selected Industries of the North American Free Trade Agreement\"
provides its assessment of potential job dislocations. The study also
notes offsetting employment gains under NAFTA. Overall, NAFTA will
create more jobs in the U.S. economy than will be lost.

     Mexico uses a higher value of U.S. components in production-shared
exports to the United States, 50 percent in 1991, than any other country
except the Dominican Republic. By contrast, Japan uses only 3 percent,
and Germany uses only 2 percent. Production-shared imports from the rest
of the world average only 19 percent U.S. content. Obviously, production
sharing with Mexico and Canada translates directly into U.S. jobs.

     The ITC has studied the maquiladora program four times since 1970.
When it examines the question, it has found that the likely economic
effects of the elimination of production sharing\--which is what the
maquiladora program is\-- would be that the United States would continue
to import most of the products made in the maquiladoras, but they would
likely be of wholly foreign origin, likely from the Far East. It is a
false assumption to expect that Mexican assembly-related jobs would
migrate to the United States if production sharing were eliminated. On
page xxxvii of the 1988 report on \"The Use and Economic Impact of TSUS
Items 806.30 and 807.00,\" the ITC states, \"Therefore, the prospect of
any increased employment in the United States from removal of item
807.00 with respect to imports from Mexico is remote. . . .\"

     Under those circumstances, U.S. and Mexican exporters would lose
out to Far Eastern exporters. There would be fewer U.S. jobs producing
components and fewer Mexican jobs assembling those components into final
products. In a worst case scenario, considering 1990 employment data for
the maquiladora industry, the United States would risk losing the
estimated 135,000 jobs producing components for assembly in Mexico
(\"Jobs Supported by U.S. Merchandise Exports to Mexico,\" U.S.
Department of Commerce, May 1992, page 6.), and Mexico would risk losing
the approximately 447,000 jobs doing the assembly. (Camara Nacional de
Comercio de la Ciudad de Mexico, Mexico 1992, \"Compendio de Datos y
Estadisticas de Mexico,\" page 110.)

     7. From the Administration\'s perspective, the NAFTA text
adequately addresses the trade objectives and concerns of the United
States. Hence, we do not seek to renegotiate the text as written.
However, the NAFTA does not address related concerns generated by
perceived inadequate Mexican enforcement of labor and environmental
laws. The president has indicated that he believes the NAFTA must be
supplemented with good agreements that will ensure the national
enforcement of national laws in the area of labor and the environment.
In both cases, Mexico has strong laws on the books, but enforcement in
the past has been inconsistent. Mexico\'s enforcement record in the
labor and environmental areas has improved markedly under the Salinas
Administration, a trend that NAFTA and the supplemental agreements will
help encourage.

     The stress on national enforcement of national laws respects the
sovereignty of the three nations, while the focus on a pattern of
nonenforcement by governments (not on individual violations) ensures
that the Commission does not harass individual companies or industry
sectors. The Commissions will bring transparency to the enforcement
efforts of all three countries, encouraging better enforcement.

     The Commissions will also work towards the development of more
stringent, trilaterally-agreed labor and environmental standards,
facilitating a steady upward movement of such standards.

     Attachment.

### Import Barriers in Asia

     Burma.\--There are no local content regulations or import
restrictions. Customs duties ranging from 30-300 percent are levied on
imported automobiles.

     China.\--An import license is required, and only ten organizations
are authorized to import automobiles Note /1/ The following companies
are authorized to import automobiles into China: China National
Automotive Import & Export Corp., China National Technology Import &
Export Corp., China International Trust & Investment Corp., Everbright
Enterprise Corp., Jiefang Automotive Industry Corp., Dongfeng Automotive
Industry Corp., China Global Leasing Company, Ltd., China Leasing
Company, Ltd., China Foreign Trade Leasing Company, Ltd., and Oriental
Leasing Company, Ltd. /1/. However, foreign joint ventures can often
bring in cars duty-free and justify imports on the basis of the needs of
the joint venture. Domestic content and export requirements are enforced
for all joint ventures. Foreign exchange restrictions and incentives to
export-oriented investments may also be viewed as indirect export
requirements. Tax relief and other incentives are available to ventures
that export 70 percent or more of their production. Joint ventures
frequently have no alternative to earning whatever foreign exchange they
need to cover imported parts/kits and to repatriate profits. The import
duty is 120 percent for passenger cars and 50 percent for light trucks
(loading capacity of 8 tons or less). Until recently, passenger cars and
light trucks were also subject to an import regulatory tax of 80 and 50
percent, respectively. Since April 1, 1992, the import regulatory tax
has been abolished, but duty rates for certain passenger cars have been
raised. Some of these rates now reach as high as 220 percent.

     GM is cooperating with the Chinese in a number of areas, including
a joint venture operation in Shenyong. Chrysler has a Jeep Eagle
manufacturing operation. Ford is planning to open a R&D center for
future component manufacturing. VW, Peugeot, Suzuki, Daihatsu, Isuzu,
Steyr, and Nissan all have joint venture assembly operations.

     India.\--Foreign investment and technology agreements are now
approved automatically. Industrial licenses are not required for the
manufacture of commercial, public transport and jeep-type vehicles,
automotive components, spare parts, and ancillaries. Additionally, 51
percent foreign equity participation is now permitted in these
industries. Though local content requirements have been abolished for
new investments in these industries, foreign equity must cover the
foreign exchange requirement for imported capital goods, and imported
inputs must be based on foreign exchange earnings. Exports are further
encouraged by basing dividend and profit repatriations on export
earnings.

     Import licenses are issued on a limited basis for commercial
vehicles. Customs and auxiliary duty rates total 100 percent with an
excise tax of 25 percent that is levied on the total of the two duties.
Import licenses are not normally granted for consumer products,
including passenger motor vehicles. Automobile manufacturing still
requires the issuance of an industrial license, and 51 percent foreign
equity participation is not normally available.

     There are 13 motor vehicle manufacturers in India: Ashok Leyland,
D.C.M. Toyota, Allwyn Nissan, Swaraj Mazda, Hindustan Motors, Eicher
Motors, Mahindra & Mahindra, Premier Automobiles, Standard Motors, Tata
Engg. & Loco. Co. (Teleco), Maruti Udyog, Sipani Automobiles, and Bajaj
Tempo. Approvals have been granted to Ford Motor Company for a joint
venture agreement with Maruti Udyog to make aluminum car radiators with
Ford holding a 56 percent equity and to General Motors with Hindustan
Motors to develop automobile components for export, and ultimately to
manufacture a fuel efficient passenger car.

     Malaysia.\--In 1983, a joint venture by Mitsubishi and the Malysian
Government launched the Proton Saga with local content calculated to be
70 percent and plans to increase it to 90-95 percent. Aside from the
Proton Saga national car company, all other vehicle makers are
assemblers working in conjunction with overseas suppliers with a minimum
local content of 20 percent. Malaysia levies tariffs ranging from 140 to
300 percent on imports of assembled automobiles in addition to a 10
percent sales tax, and charges 40 percent duty on imports of CKD kits.
The import of new or used cars into Malaysia is subject to an import
permit called \"AP\" which is issued by the Ministry of International
Trade in Kuala Lumpur on an ad hoc basis.

     No export requirements or quantitative restrictions on car imports
are known to exist. Malaysia has recently streamlined its system of
investor incentives, and a few of them include exemption from corporate
income tax and investment tax allowances. Recent liberalization allows
foreign investors to retain up to 100 percent equity, if the firm either
exports 50 percent of its output or employs 350 Malaysians full-time.

     Nepal.\--An import license is required. Import duties on minibuses
and public carriers are levied at around 154 percent (including 70
percent regular customs duty and 55 percent additional duty and 20
percent sales tax). Import duties on other vehicles are 201 percent
(including 70 percent regular customs duty and 55 percent additional
duty and 20 percent sales tax).

     Pakistan.\--Pakistan\'s Ministry of Industries requires 75 percent
local content for motor vehicles. Motor vehicles can only be imported by
individual Pakistani expatriates, who must pay in foreign currency
earned overseas, or by authorized local motor vehicle assemblers.
Tariffs on trucks, buses, light commercial vehicles, passenger cars, 4x4
vehicles and station wagons range from 5 percent (for CKD vehicles) to
435 percent ad valorem for CBU vehicles. In some cases, imports are also
subject to a 12.5 percent sales tax, 10 percent import surcharge and 5
percent education tax. The tariff rate of duty (ad valorem) on passenger
cars is based on engine size. Cars less than 1000 cc\'s pay a 100
percent duty, while cars more than 1600 cc\'s must pay a 435 percent
duty. Buses and coaches under 69 passengers pay a 20 percent duty, while
buses with capacity for 70 people are duty-free. Station wagons and
4x4\'s pay a 100 percent duty, while trucks and pickups pay a 20 percent
tariff. The Japanese manufacturers (Suzuki, Mazda, Isuzu, and Hino)
control over 85 percent of domestic production and imports. Right hand
drive vehicles dominate the market.

     Private and public companies assemble Bedford, Isuzu, Hino, Suzuki,
Mazda, and Nissan cars.

     Thailand.\--The following products are banned through import
restrictions: buses, 6-wheel type, with 30 seats and over; cabs and body
assembly parts; and used motor vehicles. Passenger cars with an engine
capacity under 2300 cc\'s have a 150 percent ad valorem import duty;
passenger cars with an engine capacity over 2,300 cc\'s have a 100
percent import duty; pickups and vans have a 100 percent ad valorem
import duty; and trucks and buses have a 40 percent ad valorem import
duty. In addition, for passenger cars, there is a tax on profits of 26
percent of the import value; a 40 percent business tax; a municipal tax
of 10 percent on the business tax; and a surcharge of 20 percent on the
import duty for cars with engines 2300 cc\'s and above and 50 percent
for cars with engines smaller than 2300 cc\'s. Trucks, buses, pickups,
jeeps and vans must also pay a 9 percent business tax and a 10 percent
municipal tax. Pickups, jeeps and vans must also pay an additional 20
percent surcharge on the import duty. Import duties on CKD passenger
cars, pickup trucks and vans is 20 percent, while the rate for buses and
large truck chassis is 10 percent.

     Toyota, Nissan, Isuzu, and Ford produce cars, trucks and buses.
Hino produces trucks and buses. Fiat, British Leyland, and Volvo produce
cars and buses. Mitsubishi, Mazda, Daihatsu, Subaru, GM, Volkswagen,
Peugeot, Renault, BMW, Alfa Romeo, Citroen, and Lancia produce cars.

     Australia.\--The tariff rate on automobiles and components is
currently 35 percent. Post 1992 reductions in passenger car tariffs are
currently being reviewed by the Australian Government. Light commercial
and four-wheel drive vehicles have an 18 percent tariff and will be
reduced to 15 percent by the end of 1992. Under the manufacturers\'
content program for automobiles, automobile manufacturers are assessed a
35.0 percent duty on imported components exceeding 15 percent of
automobile content by value. Automobile exporters may, however, earn up
to 15 percent local content plus an additional 5 percent (valued at 50
cents on the dollar) for exports of automobiles. General Motors, Ford,
Toyota, Mitsubishi, Volvo and Nissan produce vehicles in Australia.

     Hong Kong.\--There are no local content requirements, quantitative
restrictions or import duties on motor vehicles. Cars must pass a strict
emissions test. However, the Hong Kong standard is not as stringent as
U.S. emissions regulations. Only right hand drive passenger cars are
allowed. The exception is for buses and some commercial vehicles.

     Japan.\--Japan maintains no local content requirements or
quantitative restrictions. Import duties on motor vehicles have been
waived indefinitely since 1978. Japan currently levies a 4.5 percent
consumption tax on vehicles over 660 cc\'s. Although the tax was
scheduled to be reduced to 3 percent in April 1992, the Japanese
Ministry of Finance has stated that it will probably continue to charge
4.5 percent for at least two years. In addition to the consumption tax,
there is an annual automobile tax which increases by engine size,
ranging from 7,200 to 148,500 yen, and an acquisition tax for
automobiles, 5 percent on automobiles for private use and 3 percent on
mini vehicles and automobiles for business use. U.S. original equipment
parts suppliers have found the unique quality and supply conditions of
Japanese automakers challenging. Close relationships among major
suppliers and auto firms make it difficult for United States firms to
join supplier networks.

     Honda, Daihatsu, Fuji, Hino, Nissan, Suzuki, Mazda, Isuzu,
Mitsubishi, and Toyota have manufacturing operations in Japan.

     New Zealand.\--New and used completely built-up (CBU) vehicles can
be imported into New Zealand without hinderance subject to a tariff
charge, plus a goods and services tax (GST) levied on all goods
purchased in New Zealand. The tariff rate is currently 35 percent on the
ad valorem value, reducing to 30 percent by 1995. GST at 12.5 percent is
applied to the price paid by the purchaser after entry into New Zealand.
CKD vehicle kits enter free of tariff but are subject to requirements to
use local components such as batteries, tires, seat belts, wheels and
interior trim. The tariff on imported used vehicles is currently at 35
percent based on ad valogrem/FOB value, or NZ \$1,300 to \$1,500
depending on engine rating. The higher amount is applied. Left-hand
drive vehicles are not permitted entry for resale, but they may be sold
if converted to right-hand drive. Vehicle standard requirements are
based on common international standards such as ECE, FMVSS and ADR.

     Ford/Mazda, General Motors/Isuzu, Toyota, Nissan, Honda and
Mitsubishi maintain local vehicle assembly plants in New Zealand.

     Philippines.\--There is a 40 percent local content requirement for
passenger cars and a local content requirement for trucks that ranges
from 13.7 to 55 percent. There are also foreign exchange requirements
for CKD kits (50 percent for passenger cars and 25 percent for
commercial vehicles). Importation of CBU vehicles is strongly
discouraged.

     Nissan, Toyota, and Mitsubishi assemble passenger cars.

     Singapore.\--The Government of Singapore has implemented a strict
quota system. As of mid-1990, any prospective car owner must first
obtain a \"certificate of entitlement\" (COE) before purchasing a
vehicle. Only a limited number of COE\'s are granted each month, to the
highest bidders. The COE doesn\'t apply towards the purchase price at
the car. Left hand drive vehicles are not allowed to be registered for
use in Singapore. An import duty of 45 percent is levied on all imported
cars. Registration fees of 150 percent of the market value of the car
and a flat fee of \$568 dollars for a private car and \$1,841 dollars
for a company car are required. There is a road tax of \$0.40 to \$1.00
per (cc) per annum. A surcharge of \$5,682 is imposed on used imported
cars.

     Mercedes, Ford, British Leyland, and Volvo assemble cars. Nissan
assemblies vans.

     South Korea.\--There are no local content requirements or
quantitative restrictions on motor vehicles. The automobile tariff rate
in Korea was 17 percent in 1992 and is scheduled to be reduced to 5
percent by 1995. Currently, the tariff rate for automobiles is 15
percent. In addition to the tariff, the Government has an eight-level
cascading tax for automobiles. Consequently, an imported automobile
costs approximately 27 percent more than a comparable domestic vehicle.
The South Korean Government has historically discouraged the importation
of automobiles and has instituted various nontariff barriers. Over the
last few years, the South Korean Government pursued an \"anti-import\"
campaign in an attempt to discourage the purchase of \"expensive\"
imports, especially automobiles. The Korean Government has repeatedly
assured the U.S. Administration that the \"anti-import\" campaign has
ended. However, we continue to receive reports of informal efforts by
the South Korean Government to discourage the purchase of imported
autos.

     There are five domestic car manufacturers in Korea\--Hyundai Motor
Company of which Mitsubishi has a 15 percent equity share; Daewoo Motor
Company; Kia Motor Company, in which Ford and Mazda have 10 and 15
percent equity shares, respectively; and Asia Motors, which is 43
percent owned by Kia Motors and Ssangyong Motors. Samsung is planning to
manufacture commercial vehicles. Honda has an agreement to assemble a
small number of Honda Acura Legends with Daewoo Motor Company.

     Taiwan.\--Maintains an import ban on most Japanese passenger cars
and light trucks. It also imposes an import quota on Korean passenger
cars. Imports of diesel vehicles, except jeeps, and two stroke engine
cars are also prohibited. Vehicles face effective duties and taxes of
60-100 percent. These include import duties of 30 percent for passenger
cars and 35-42 percent for commercial vehicles; commodity taxes of 25
percent for passenger cars with 2000 cc engine displacement or less, 35
percent for engines of 2001-3600 cc\'s, 60 percent for engines of 3601
cc\'s and larger, and 15 percent for commercial vehicles; 5 percent
value added tax; and 0.5 percent harbor tax. Taiwan customs uses invoice
price as the basis for calculating the duty- paying value.

     General Motors, Ford, Honda, Renault, Toyota, Daihatsu, Mitsubishi,
Subaru, Citroen, and Suzuki produce and/or assemble vehicles in Taiwan.

House of Representatives,

Committee on Energy and Commerce,

Washington, DC, June 15, 1993.

### Hon. Ronald H. Brown,

Washington, DC. Secretary, Department of Transportation,

     Dear Secretaries Brown and Pena: Enclosed is a letter I received
from Mr. Jack C. Thomas of Illinois about the North American Free Trade
Agreement. He raises some interesting issues and questions. Please
respond to them and identify and provisions of the Bush Agreement that
address such issues and questions. Please provide a copy of your reply
to Mr. Thomas.

     With every good wish.

Sincerely,

John D. Dingell, Chairman.

     Enclosure.

Burr Ridge, IL, May 9, 1993.

Representative John Dingell,

House of Representatives,

Washington, DC.

     Dear Representative Dingell: I am writing about the provisions of
the North American Free Trade Agreement (NAFTA) which calls for the
\"Harmonization\" of the safety regulations between the signatory
countries.

     As a former truck driver and a high safety advocate I\'m afraid
that our U.S. truck safety rules, regulations, and laws will be
seriously jeopardized, undermined, and/or eliminated under the
\"Harmonization\" provisions of NAFTA.

     Here\'s just a few examples:

TRUCK WEIGHT LIMITS

     The U.S. has a 80,000 pound truck weight limit, Canada 137,000
pounds, and Mexico 170,000 pounds. We can not afford to maintain our
nations highways and bridges now, so how can we afford to maintain them
with 170,000 pound trucks running across them? How many of our present
structurally deficient bridges will even support them?

TRUCK DRIVER SAFETY REGULATIONS

     The U.S. has a 10 hour driving limit on truck drivers, Canada 13
hours, and Mexico has a unlimited 24 hour per day driving limit. With
truck driver fatigue being the largest single causal factor in truck
accidents. How can we in good faith allow longer driving hours in the
U.S. which will only result in more accidents, injury or death?

MISCELLANEOUS ITEMS

     Congress enacted the Commercial Drivers Licensing (CDL) system in
order to eliminate multiple licenses, insure the standardization of
driving tests, hazardous materials training, equipment knowledge, and a
nationwide driver computer system to track down and eliminate bad
drivers. How can we eliminate unsafe Canadian or Mexican drivers from
U.S. highways when we don\'t even know who they are? How can Mexican
drivers who can\'t read or speak english read maps, traffic signs, and
comply with laws they can\'t read or don\'t even know about?

     Front wheel brakes are required on American trucks but not on
Mexican trucks. At 60 miles per hour how many more feet does it take to
stop a 170,000 pound truck without front wheel brakes than it does to
stop a 80,000 pound truck with front wheel brakes? How many additional
accidents will occur and how many more Americans will be injured maimed,
or killed on those extra feet? How, or will, NHTSA, OSHA, OMC, DOL, and
DOT be able to inspect, audit, and enforce U.S. safety requirements on
Canadian and Mexican companies?

     I\'m not totally opposed to NAFTA because I really don\'t know how
it\'s other provisions effects other industries, but if it can effect
other industries like it can the trucking industry I\'m very concerned
that NAFTA could very well cause a U.S. depression or even a collapse of
our economy.

     NAFTA, or any like agreement, that might be entered into by the
United States with any other country, and/or countries, must always
ensure the raising of the Standard of Living, Wages, Working Conditions,
and Safety and Environmental regulations up to the highest level,
current and future, of those countries who are signatory to said
agreement.

     In no way should NAFTA, or any like agreement, be allowed to become
a tool by which the U.S. Standards of Living, Wages, Working Conditions,
and Safety and Environmental Laws are reduced or lowered to those of the
country with a lower level. This would only exploit the citizens of the
lower country and would only hurt the citizens and economies of the
other countries that are signatory to all parties concerned it must,
without fail, insure the raising of the Standards of Living in all
signatory countries to that of the highest country, so as to level the
trading field and to make it fair so, everybody can gain without anyone
having to lose.

     How can a Mexican worker making \$7.00 a day afford to purchase
their own domestic products and services, let alone those of the U.S. or
Canada?

     During the 1980\'s, after adjusting for inflation, the U.S. workers
real wages fell 8%, and are presently at 1973 levels. If as a result of
NAFTA, or any like agreement, our wages would go any lower, we won\'t be
able to afford to buy products or services either. If and when that
happens, more and more U.S. companies will go out of business, lay-off
their employees, and our economy will either slip or crash right into a
depression or even bankruptcy. As goes the American economy so goes the
world\'s economy.

     If NAFTA, or any like agreement, allows, permits, or even
entertains the concept of reducing and/or lowering of the U.S. Standards
of Living, Wages, Working Conditions, Safety and Environmental Laws,
and/or allows or permits any agency, panel or commission, to overrule or
rewrite our Laws, circumvent our Legal and Judicial system, our
Congress, and our Constitutional Right of Self Government it should
never, I repeat never, be considered let alone be ratified by Congress!

     Congress must be extremely diligent when it comes to protecting our
Constitutional Rights and installing adequate safeguards into NAFTA, or
any like agreement, prior to ratifying it, as they have the potential to
destroy our jobs, our economy, and to wreak havoc and suffering on all
of the American citizens.

Sincerely yours,

Jack C. Thomas.

### Department of Transportation,

The Secretary of Transportation,

August 13, 1993.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Thank you for your letter dated June 15, 1993,
forwarding Mr. Thomas\' very thoughtful letter outlining his concerns
about the North American Free Trade Agreement (NAFTA). He expresses
particular concern about the section of the Agreement that addresses
standards harmonization among the United States, Canada, and Mexico.

     First, let me reassure you that no provision of the NAFTA exempts
Mexican or Canadian commercial vehicles from U.S. or state safety or
environmental standards. Indeed, the Agreement specifically states that
each country retains the right to adopt and enforce standards for the
protection of life, property, and the environment that may be more
stringent than standards in effect in the other countries. The United
States made it clear from the beginning of the NAFTA negotiations that
foreign commercial vehicles will be required to comply with all
applicable safety and environmental standards when they operate in this
country and that those standards will be strickly enforced.

     In negotiating the work plan for attempting to reach compatibility
on safety standards among the three countries (Annex 913.5.a-1), the
overriding U.S. objective was to have a technical evaluation of the
regulatory regimes of each NAFTA country and to encourage adoption of
regulations that yield the highest safety standards. NAFTA does not
require the development of a single set of standards applicable to all
North American motor carrier operations. It was clear, however, to the
U.S. negotiators that the other two-countries shared the guiding
principle of adopting comparable standards with enhanced safety. It must
be emphasized that at no time has any party sought to establish these
standards on the basis of the lowest common denominator.

     The specific concerns outlined in Mr. Thomas\' letter are addressed
below.

TRUCK WEIGHT LIMITS

     Truck size and weight requirements are included in the work plan
for standards harmonization set forth in the NAFTA (Annex 913.5.a-1).
Although the Agreement includes a commitment from the United States,
Mexico, and Canada to work toward compatible technical and safety
standards, it does not require the United States to change its size and
weight limits, or any of its regulations applicable to motor carrier
operations. Indeed, Mexican and Canadian carriers are required to comply
with existing size and weight requirements when operating in the United
States.

     The Department is fully aware that any future changes in our size
and weight standards that might result from this process must be
consistent with U.S. law. Current U.S. requirements governing truck size
and weight are statutory and can only be changed by amending the
relevant statutes. As part of the trilateral discussions on these
standards, the Department will work closely with all potentially
affected parties and with the Congress to assess the technical
feasibility and implications of the various options. The Department does
not intend to use the NAFTA harmonization process as a \"backdoor\"
method of altering current size and weight limits.

HOURS OF SERVICE

     As with the other safety and operating regulations for truck
drivers, Mexican and Canadian drivers are required to comply with the
U.S. hours-of- service requirements when operating in the United States
and to keep a logbook noting driving time and time on and off duty time.
The NAFTA does not change these requirements.

CDL AND INFORMATION EXCHANGE

     Mr. Thomas is also correct that exchanging information on
commercial drivers is critical if we are to assure that unsafe drivers
can be identified and prevented from driving commercial vehicles. The
United States and Mexico are committed to exchanging information on
convictions, suspensions, cancellations, and revocations on a regular
basis. Mexico and Canada provide information to the Department of
Transportation, which then disseminates it to the states. In addition,
we have established a bilateral group that is working toward
implementation of an electronic information exchange process. In April
1993, technical experts from the United States met with technical staff
from Mexico to begin substantive discussions on creation of an
electronic data interchange system. These meetings will continue through
the year.

DRIVER LANGUAGE REQUIREMENTS

     The Department\'s motor carrier safety regulations include a
requirement that commercial drivers be able to read and speak the
English language sufficiently to converse with the general public, to
understand highway traffic signs and signals in the English language, to
respond to official inquiries, and to make entries on reports and
records.

FRONT BRACES

     Mr. Thomas is correct that front brakes are not required on Mexican
vehicles. However, all Mexican commercial motor vehicles manufactured
after January 25, 1980, must be equipped with front brakes in
conformance with the Federal Motor Carrier Safety Regulations if they
are to be operated in the United States.

STANDARDS ENFORCEMENT

     Mexican and Canadian carriers will be subject to U.S. safety
standards and enforcement procedures. U.S. enforcement officials will
conduct the same stringent driver and vehicle inspections on Mexican and
Canadian carriers as are currently conducted on U.S. carriers. Drivers
and carriers who fail to pass the inspections will be subject to the
same penalties placed on U.S. carriers.

     DOT\'s Federal Highway Administration (FHWA) is working with the
states on enforcement issues on an ongoing basis and has undertaken a
\$300,000 study of enforcement practices along the border to assure that
potential problems resulting from the NAFTA are identified and resolved.

     To ensure uniform and consistent enforcement, Mexico has joined the
Commercial Vehicle Safety Alliance (CVSA), an international organization
that includes state and Canadian province motor carrier enforcement
officials. Mexico has agreed to adopt the North American Vehicle
Inspection Standards and conduct uniform, effective roadside inspections
based on FHWA-CVSA standards for use in its own country.

     The U.S. inspection standards, the out-of-service criteria, and
accompanying training materials have been translated into Spanish.
Further, FHWA, through the Transportation Safety Institute, has
developed and conducted a train-the-trainer course in both Spanish and
English for Mexican roadside inspectors.

OVERALL NAFTA IMPACTS

     The Administration shares Mr. Thomas\' concern about the potential
effects of the NAFTA on U.S. labor and on the environment. That is why
the United States, Canada, and Mexico are currently negotiating
supplemental agreements concerning these issues. The NAFTA will not be
submitted to the Congress for ratification until satisfactory side
agreements have been signed.

     I am very excited about the opportunity that we have to build a
transportation system to support the new trade opportunities that will
develop as a result of NAFTA. This Agreement will be of great benefit to
U.S. motor carriers, railroads, and intermodal companies. We believe it
provides equivalent competitive opportunities to companies of both
countries. I look forward to working with you and your colleagues to
assure that this system provides equal access for all carriers, moves
people and cargo as efficiently as possible, and maintains a
consistently high safety standard. Sincerely,

Federico Pena.

Department of Commerce,

### International Trade Administration,

Washington, DC., July 13, 1993.

Hon. John D. Dingell,

Committee on Energy and Commerce,

House of Representatives, Washington, DC.

     Dear Mr. Chairman: Thank you for your letter to Secretary Brown on
behalf of your consistent Mr. Jack C. Thomas regarding the
\"harmonization\" of transportation safety standards under the North
American Free Trade Agreement (NAFTA). The Department of Transportation
(DOT) has the expertise on the specifics of the technical transportation
issues raised in Mr. Thomas\' letter. NAFTA transportation issues have
been handled by the Office of International Transportation and Trade
directed by Arnold Levine. He can be reached at 366-2892. I am sure that
Secretary Pena will provide a full and effective response to your
letter. I will note that nothing in the NAFTA requires the United States
to change any of its laws and regulations applicable to motor carrier
operations. In addition, every reputable study that has looked at the
labor effects of NAFTA has found that it will result in either increased
U.S. jobs or increased U.S. wages, or both.

     Thank you for sharing your constituent\'s opinion. Please feel free
to contact Michelle O\'Neill, Acting Congressional Liaison.

Sincerely,

Ann H. Hughes,

Deputy Assistant Secretary for the Western Hemisphere.

\-\-\-\-\-\-\-\-\--

### U.S. International Trade Commission,

Washington, DC, July 30, 1993.

Hon. Cardiss Collins,

Chairwoman,

Subcommittee on Commerce, Consumer Protection, and Competitiveness,

Committee on Energy and Commerce,

House of Representatives, Washington, DC

     Dear Chairwoman Collins: In my letter to you of July 13, 1993, I
noted that we would need more time to respond to your request of June
30, 1993 for information on U.S. exports to Mexico. The enclosed
information addresses your four questions.

     Since Mexico sharply reduced its tariffs in 1987, Commission staff
estimate that U.S. exports for consumption in Mexico have grown by 224
percent by 1992, to \$30.9 billion. U.S. exports to Mexico\'s maquila
sector rose more slowly during this period, by 93 percent, to \$8.7
billion. Hence, maquila- related exports as a share of total U.S.
exports to Mexico fell from 32 percent in 1987 to 21 percent in 1992, as
shown in table 1 (enclosed).

     The growth in U.S. exports for consumption in Mexico since 1987 has
been widespread among product groups, as shown in table 2 (enclosed).
Consumer goods have been one of the fastest growing categories.
Traditional exports to Mexico, namely industrial materials and capital
goods, have remained the principal exports for consumption there.

     Thank you for the opportunity to share this information about
U.S.-Mexico trade. If you have any questions regarding the enclosed
information, please do not hesitate to call us.

Sincerely,

Don Newquist, Chairman.

     Enclosures.

Response to Chairwoman Cardiss Collins\' Questions About United
States-Mexico Trade (Annually, 1978-92)

     1. How much of total U.S. exports to Mexico went to build and
establish U.S.-owned maquiladora plants in Mexico?

     Officially U.S. statistics are simply not available on U.S. exports
to Mexico of products such as construction materials, manufacturing
machinery, and office equipment that are used to set up and operate
maquilas. Thus, Commission staff does not have a sound basis for
estimating the value (or portion) of U.S. exports to Mexico for such
purposes.

     Data collected by the Government of Mexico on imports by the
maquiladora sector, and published by the Banco de Mexico, combine
imports of components with other goods used by the sector. The Banco de
Mexico data also aggregate imports from the United States which maquila
imports from other countries. The most definitive statement about U.S.
exports for the building and establishment of maquilas comes from the
Office of Technology Assessment: \"\[For most maquila plants,\] the
steel, insulation, piping and furnishings in factory buildings\--along
with the production equipment\--come from \[the United States\].\" Note
/1/ U.S. Congress, Office of Technology Assessment, \"U.S.-Mexico Trade:
Pulling Together or Pulling Apart?,\" ITE-545 (Washington DC: U.S.
Government Printing Office, Oct. 1992), p. 67./1/

     Nevertheless, we would note that while the maquiladora sector in
Mexico exports almost exclusively to the United States, only 46 percent
of the 2,522 maquilas in existence in 1992 were completely or majority
U.S.-owned. Some 48 percent were either completely or majority
Mexican-owned; 2 percent (52 plants) were Japanese-owned.Note /2/ U.S.
General Accounting Office, \"North American Free Trade Agreement:
U.S.-Mexican Trade and Investment Data,\" GAO/GGD-92-131 (Washington,
DC: Sept. 1992), p. 97./2/ A growing portion of U.S. companies using
assembly facilities in Mexico contact out the work to Mexican firms that
provide assembly services.

     2. How much of total U.S. exports to Mexico went to supply
materials and components needed in the assembly and manufacturing
operations of U.S.-owned maquiladora plants in Mexico?

     Maquila-related exports account for a declining share of total U.S.
exports to Mexico, based on Commission staff estimates shown in table 1.
Their share declined from 32 percent in 1987, the year in which Mexico
sharply cut its tariffs, to 21 percent in 1992, when U.S. exports to
Mexico totaled \$39.6 billion. While exports to the maquila sector rose
by 93 percent during 1987- 92, to \$8.7 billion, exports for consumption
in Mexico rose by a much higher 224 percent, to \$30.9 billion
(identified in table 1 as \"estimated net exports for Mexican
consumption\"). Thus, the net bilateral trade balance with Mexico
improved markedly, shifting from a U.S. deficit of \$5.72 billion in
1987 to a U.S. surplus of \$5.67 billion in 1992.Note /3/ These trade
balance figures, which are derived from data in table 1, do not include
the value of U.S. components involved in maquila trade. In 1992, for
example, \"estimated net exports for Mexican consumption\" of \$30,913.0
million minus imports of \$25,242.7 million (\"total imports from
Mexico\" of \$33,934.6 million less the \"total value of U.S.
components\" contained in imports from the maquiladoras of \$8,691.9
million) yields a net trade surplus of \$5,670.3 million./3/

     Official statistics do not distinguish between maquila-related
exports and exports for consumption in Mexico. As a proxy, Commission
staff uses the value of the U.S. components contained in imports from
Mexico under U.S. tariff provisions 9802.00.60 (metal processing) and
9802.00.80 (assembly). These value figures are shown in table 1 as
\"U.S. exports of components.\" The figures include U.S. components used
by all maquila plants, whether owned by U.S., Mexican, or other foreign
firms.

     A few caveats should be noted about the data in table 1.Note /4/
Table 1 was originally prepared by Commission staff for the Office of
the United States Trade Representative (1986-92). Versions of this table
have previously been provided to members of Congress, Congressional
committees, and other government agencies./4/ First, while most imports
from Mexico under the 9802 tariff provisions are from the maquila
sector, some are from non-maquila firms that make goods in Mexico from
U.S. components for both the Mexican and U.S. markets. Second, some
imports from the sector do not enter under these tariff provisions,
especially if the goods enter free of duty. Third, some U.S.-origin
materials used in the maquila sector do not meet U.S. Customs Service
criteria for duty-free entry under heading 9802.00.80. Nevertheless,
Commission staff believes that the duty-free portion of 9802 imports
from Mexico is substantially equivalent to the value of U.S. exports of
components to the maquila sector.

     3. How much of total U.S. exports to Mexico consisted of finished
and other goods intended for sale to Mexican consumers?

and

     4. How much of total U.S. exports to Mexico consisted of materials
and industrial goods purchased by Mexican industry to produce
manufactured products for consumption in Mexico?

     As noted above, U.S. exports for consumption in Mexico have grown
much faster than those to the maquila sector in recent years. Table 2
shows that the growth in these exports for consumption has been
widespread among major products. Consumer goods have been one of the
fastest growing groups, rising from \$272 million in 1987 to almost
\$2.3 billion in 1992, an increase of over 700 percent.

     Traditional U.S. exports to Mexico, namely industrial materials and
capital goods, have remained the principal exports for consumption
there. It is probable that a portion of the goods made in Mexico from
the industrial materials or on the machines (capital goods) exported
from the United States were sold abroad, including in the United States.
Commission staff estimates that roughly 70 percent of U.S. exports of
capital goods purchased by Mexican industry Note /5/ The Mexican
industry also includes United States, Japanese, and other foreign firms
producing in Mexico for the Mexican market. /5/ in 1992 generally
consisted of equipment that does not lend itself to production of
products for export.Note /6/ To answer your question as to how much of
total U.S. exports to Mexico consisted of industrial goods purchased by
Mexican industry to manufacture products for consumption in Mexico,
Commission staff examined data on exports of capital goods to Mexico at
the more detailed 5-digit end- use classification level, instead of at
the broad 1-digit level, in order to identify individual capital goods
that would likely not be used directly in the production of products for
export. Capital goods likely to fall into this category are electric
apparatus and parts; drilling and oilfield equipment; mining and oil
processing equipment; excavating, paving, and construction machinery;
nonfarm tractors and parts; measuring, testing, and control instruments;
materials-handling equipment; photo and other service industry
machinery; agricultural machinery and equipment; computers; computer
accessories and peripherals; semiconductors; telecommunications
equipment; business machinery and equipment; laboratory testing and
control instruments; other scientific, medical, and hospital equipment;
civilian aircraft, and parts and engines; railway transportation
equipment; passenger, cargo, and other vessels; and marine engines and
parts. /6/

     Commission staff used the same methodology to estimate U.S. exports
for consumption in Mexico by major end-use product groups as that
discussed in response to question 2. Hence, the caveats noted above are
applicable here. Staff considers the value of U.S. components exported
to the maquila sector for a given capital good to be equivalent to the
value of U.S. components contained in imports of that capital good from
Mexico under the 9802 provisions. In any instances where exports of the
components for a capital good are classified under provisions for
\"industrial supplies and materials\" rather than under provisions for
the capital good, the effect would be to understate exports for
consumption in Mexico of that capital good.

     The product groups in table 2 are based on categories established
by the U.S. Department of Commerce, Bureau of Economic Analysis, for
publication of export data.

TABLE 1.\--ANALYSIS OF \"MAQUILADORA\" TRADE, 1978-92

\[In millions of dollars\]

Line No. Item 1978 1979 1980

1\. Total imports from Mexico 6,060.9 8,784.9 12,497.7

2\. U.S. imports from \"Maquiladoras\":

3\. Total value 1,540.0 2,065.1 2,341.4

4\. Percent of total imports 25.4 23.5 18.7

5\. U.S. components:

6\. Total value 826.0 1,049.4 1,186.3

7\. Percent of \"Maquiladora\" imports 53.6 50.8 50.7

8\. Percent of total imports 13.6 11.9 9.5

9\. U.S. imports under HTS subheadings:

10\. 9802.00.60 50.0 63.4 65.1

11\. U.S. components 34.9 44.3 44.9

12\. Percent 70.0 69.9 69.0

13\. Foreign value added 15.1 19.1 20.2

14\. 9802.00.80 1,490.0 2,001.7 2,276.3

15\. U.S. components 791.1 1,005.1 1,141.4

16\. Percent 53.1 50.2 50.1

17\. Foreign value added 698.8 996.6 1,349.9

18\. Total exports to Mexico 6,540.2 9,662.5 14,881.4

19\. U.S. exports of components to 826.0 1,049.4 1,186.3

      maquiladora industry /1/ Based on the value of U.S.-made
components contained in U.S. imports from Mexico under Harmonized Tariff
Schedule headings 9802.00.60 (metal processing) and 9802.00.80
(assembly) /1/

20\. Percent of total U.S. exports 12.6 10.9 8.0

21\. Estimated net exports for Mexican 5,714.2 8,613.1 13,695.1

     consumption

Line No. 1981 1982 1983 1984 1985

1\. 13,703.6 15,488.0 16,618.9 17,762.4 18,938.2

2\.

3\. 2,709.4 2,837.5 3,714.1 4,807.8 5,567.0

4\. 19.8 18.3 22.3 27.1 29.4

5\.

6\. 1,437.6 1,454.1 1,906.9 2,554.7 2,955.8

7\. 53.1 51.2 51.3 53.1 53.1

8\. 10.1 9.4 11.5 14.4 15.6

9\.

10\. 53.8 32.7 27.1 32.4 30.3

11\. 38.4 24.3 20.2 24.6 22.2

12\. 71.3 74.3 74.5 75.9 73.3

13\. 15.4 8.4 6.9 7.8 8.1

14\. 2,655.6 2,804.8 3,687.0 4,775.4 5,536.7

15\. 1,399.2 1,429.8 1,886.7 2,530.1 2,933.6

16\. 52.6 51.0 51.2 53.0 53.0

17\. 1,256.4 1,375.0 1,800.3 2,245.3 2,603.1

18\. 17,353.1 11,025.8 8,755.2 11,461.2 13,084.3

19\. 1,437.6 1,454.1 1,906.9 2,554.7 2,955.8

20\. 8.3 13.1 21.8 22.3 22.6

21\. 15,915.5 9,571.7 6,848.3 8,906.5 10,128.5

TABLE 1.\--ANALYSIS OF \"MAQUILADORA\" TRADE, 1978-92\--Continued

\[In millions of dollars\]

Line No. Item 1986 1987 1988

1\. Total imports from Mexico 17,196.4 19,765.8 22,617.2

2\. U.S. imports from \"Maquiladoras\":

3\. Total value 6,456.6 8,688.7 10,784.5

4\. Percent of total imports 37.5 43.9 47.7

5\. U.S. components:

6\. Total value 3,400.8 4,493.4 5,403.7

7\. Percent of \"Maquiladora\" imports 52.7 51.7 50.1

8\. Percent of total imports 19.7 22.7 23.9

9\. U.S. imports under HTS subheadings:

10\. 9802.00.60 89.9 112.3 131.0

11\. U.S. components 69.0 76.2 103.9

12\. Percent 76.7 67.9 79.2

13\. Foreign value added 20.8 36.1 27.1

14\. 9802.00.80 6,366.7 8,576.4 10,653.5

15\. U.S. components 3,331.8 4,417.2 5,299.8

16\. Percent 52.3 51.5 49.7

17\. Foreign value added 3,035.0 4,159.1 5,353.7

18\. Total exports to Mexico 1,924.9 14,045.2 19,853.3

19\. U.S. exports of components to 3,400.8 4,493.4 5,403.7

     maquiladora industry /1/ Based on the value of U.S.-made
componentscontained in U.S. imports from Mexico underHarmonized Tariff
Schedule headings 9802.00.60(metal processing) and 9802.00.80
(assembly)which Commission staff believes is substantiallyequivalent to
the value of U.S. exports of /1/

20\. Percent of total U.S. exports 28.5 32.0 27.2

21\. Estimated net exports for Mexican 8,524.0 9,551.8 14,449.6

      consumption

Line No. 1989 1990 1991 1992

1\. 26,556.6 29,506.0 30,445.1 33,934.6

2\.

3\. 11,968.7 13,024.6 14,334.3 16,502.0

4\. 45.1 44.1 47.1 48.7

5\.

6\. 6,125.7 6,544.8 7,254.8 8,691.9

7\. 51.2 50.2 50.6 52.7

8\. 23.1 22.2 23.8 25.6

9\.

10\. 180.8 188.3 183.5 229.4

11\. 142.7 140.7 137.1 169.5

12\. 78.9 74.7 74.7 73.7

13\. 38.1 47.6 46.4 59.9

14\. 11,787.9 12,836.3 14,150.8 16,272.6

15\. 5,983.0 6,404.1 7,117.6 8,522.4

16\. 50.8 49.9 50.3 52.4

17\. 5,804.9 6,432.2 7,033.1 7,750.2

18\. 24,117.3 27,467.6 32,279.2 39,604.9

19\. 6,125.7 6,544.8 7,254.8 8,691.9

20\. 25.4 23.8 22.5 21.3

21\. 17,991.6 20,922.8 25,024.5 30,913.0

Source: Compiled by U.S. International Trade Commission staff from
official statistics of the U.S. Department of Commerce.

TABLE 2.\--ESTIMATED NET UNITED STATES EXPORTS OF MERCHANDISE FOR
CONSUMPTION IN MEXICO, BY SPECIFIED END USES, 1978-92

\[In millions of dollars\]

Line No. Item 1978 1979 1980

1\. Total 5,714 8,613 13,795

2\. Foods, feeds, and beverages 792 861 2,317

3\. Industrial supplies and materials 1,825 3,033 4,458

4\. Automotive vehicles, parts, and engines 689 994 1,474

5\. Consumer goods (nonfoods), except automotive 240 272 625

6\. Capital goods, except autos:

7\. Generators, transformers, and accessories 255 379 532

8\. Electric apparatus and parts /3/ Included with generators,
transformers, and accessories. (/3/) (/3/) (/3/)

9\. Drilling and oilfield equipment 239 285 285

10\. Mining and oil processing equipment 53 52 94

11\. Excavating, paving, and construction 85 159 218

      machinery

12\. Nonfarm tractors and parts 148 162 183

13\. Industrial engines, pumps 187 363 440

14\. Food and tobacco processing machinery 22 30 54

15\. Machine tools and metal working machinery 92 144 255

16\. Industrial textile, sewing, and shoe 31 58 75

      machinery

17\. Woodworking, glass working machinery 38 72 106

18\. Pulp and paper machinery 45 78 136

19\. Measuring, testing, and control instruments 77 109 109

20\. Materials-handling equipment 68 106 184

21\. Other industrial machinery 214 311 401

22\. Photo and other service industry machinery 35 72 86

23\. Agricultural machinery and equipment 85 212 362

24\. Computers 53 108 167

25\. Computer accessories, peripherals /4/ Included with computers.
(/4/) (/4/) (/4/)

26\. Semiconductors /2/ Data are not available. Press Esc to
Continue!!(/2/) (/2/) (/2/)

27\. Telecommunications equipment /2/ Data are not available. (/2/)
(/2/) (/2/)

28\. Business machinery and equipment 43 72 90

29\. Laboratory testing and control instruments 16 29 31

30\. Other scientific, medical, and hospital 26 37 49

     equipment

31\. Civilian aircraft 70 198 365

32\. Parts for civilian aircraft 18 22 41

33\. Engines for civilian aircraft 9 9 15

34\. Railway transportation equipment 34 103 187

35\. Passenger, cargo, and other commercial 10 4 81

      vessels

36\. Marine engines and parts 12 18 29

37\. Other/5/ Includes military-type goods, miscellaneous exports, and
reexports. /5/ 250 220 310

Line No. 1981 1982 1983 1984 1985

1\. 15,195 9,572 /1/ Data for major product groups do not add up to
total shown; the shortfall equals less than 1 percent of total estimated
net exports that year. ^/1/^ 6,852 8,906 10,129

2\. 2,221 978 1,769 1,721 1,350

3\. 4,690 3,812 2,559 3,267 3,852

4\. 1,982 982 221 482 442

5\. 791 450 295 380 404

6\.

7\. 595 345 /2/ Data are not available. Press Esc to
Continue!!^(/2/)\ (/2/)\ (/2/)^

8\. /3/ Included with generators, transformers, and accessories.
^(/3/)\ (/3/)^ 59 184 120

9\. 308 210 66 80 103

10\. 147 74 11 14 15

11\. 313 96 79 103 117

12\. 213 98 29 55 69

13\. 510 334 263 329 369

14\. 74 66 36 35 42

15\. 443 260 121 154 193

16\. 81 46 28 42 56

17\. 143 135 68 86 114

18\. 158 136 25 39 48

19\. 153 114 41 78 81

20\. 265 142 140 222 284

21\. 504 288 132 199 266

22\. 144 84 65 93 122

23\. 276 132 53 122 234

24\. 179 134 22 38 60

25\. /4/ Included with computers. ^(/4/)\ (/4/)^ 87 170 198

26\. /2/ Data are not available. ^(/2/)\ (/2/)^ 127 224 297

27\. /2/ Data are not available. ^(/2/)\ (/2/)^ 15 106 272

28\. 128 74 46 59 76

29\. 55 38 23 37 46

30\. 70 50 103 164 236

31\. 641 71 145 61 105

32\. 73 31 42 80 108

33\. 47 17 11 27 29

34\. 188 84 78 70 83

35\. 124 95 21 35 8

36\. 20 20 9 13 11

37\. 390 190 122 247 415

See footnotes at end of table.

TABLE 2.\--ESTIMATED NET UNITED STATES EXPORTS OF MERCHANDISE FOR
CONSUMPTION IN MEXICO, BY SPECIFIED END USES, 1978-92\--Continued

\[In millions of dollars\]

Line No. Item 1986 1987

1\. Total /1/ Data for major product groups do not add up to total
shown; the shortfall equals less than 1 percent of total estimated net
exports that year./1/ 8,524 9,552

2\. Food, feeds, and beverages 877 941

3\. Industrial supplies and materials 3,309 4,052

4\. Automotive vehicles, parts, and engines 217 /2/ Data are not
available. (/2/)

5\. Consumer goods (nonfoods), except automotive 188 272

6\. Capital goods, except autos:

7\. Generators, transformers, and accessories /2/ Data are not
available. (/2/) (/2/)

8\. Electric apparatus and parts 68 167

9\. Drilling and oilfield equipment 91 66

10\. Mining and oil processing equipment 14 21

11\. Excavating, paving, and construction machinery 76 85

12\. Nonfarm tractors and parts 40 41

13\. Industrial engines, pumps 389 349

14\. Food and tobacco processing machinery 43 90

15\. Machine tools and metal working machinery 256 255

16\. Industrial textile, sewing, and shoe machinery 61 55

17\. Woodworking, glass working machinery 154 137

18\. Pulp and paper machinery 60 49

19\. Measuring, testing, and control instruments 76 91

20\. Materials-handling equipment 245 302

21\. Other industrial machinery 302 390

22\. Photo and other service industry machinery 111 110

23\. Agricultural machinery and equipment 88 83

24\. Computers 52 37

25\. Computer accessoreis, peripherals 250 287

26\. Semiconductors 391 313

27\. Telecommunications equipment 278 342

28\. Business machinery and equipment 49 63

29\. Laboratory testing and control instruments 43 36

30\. Other scientific, medical, and hospital 239 266

          equipment32. Parts for civilian aircraft 104 97

33\. Engines for civilian aircraft 26 37

34\. Railway transportation equipment 82 58

35\. Passenger, cargo, and other commercial vessels 4 1

36\. Marine engines and parts 9 12

37\. Other/5/ Includes military-type goods, miscellaneous exports, and
reexports. /5/ 374 553

Line No. 1988 1989 1990 1991 1992

1\. /1/ Data for major product groups do not add up to total shown; the
shortfall equals less than 1 percent of total estimated net exports that
year./1/ 14,450 17,992 20,923 25,024 30,913

2\. 1,904 2,333 2,178 2,527 3,265

3\. 5,362 6,692 7,361 8,551 10,373

4\. /2/ Data are not available. (/2/) 949 1,753 2,165 2,828

5\. 790 1,008 1,376 1,662 2,290

6\.

7\. /2/ Data are not available. (/2/) 172 204 246 259

8\. 432 830 801 1,150 1,475

9\. 88 53 72 105 144

10\. 35 26 10 17 56

11\. 111 132 234 350 433

12\. 63 93 137 132 112

13\. 471 397 417 545 610

14\. 154 63 90 98 121

15\. 364 253 253 303 520

16\. 81 87 89 92 96

17\. 157 160 191 197 202

18\. 67 105 160 213 232

19\. 108 286 366 493 605

20\. 444 179 214 257 397

21\. 405 525 563 640 728

22\. 172 119 157 174 231

23\. 135 112 147 167 157

24\. 47 53 95 147 261

25\. 397 345 465 560 525

26\. 434 212 231 247 331

27\. 552 799 910 1,127 1,335

28\. 108 132 155 185 208

29\. 57 58 57 63 72

30\. 350 91 112 182 221

31\. 75 268 272 375 693

32\. 83 57 110 132 173

33\. 33 31 48 48 70

34\. 119 70 152 159 79

35\. 13 3 5 6 12

36\. 18 4 8 11 19

37\. 798 1,290 1,520 1,700 1,780

Note.\--The product groups are based on categories established for data
collection by the U.S. Department of Commerce, Bureau of Economic
Analysis. Data for 1978-82 are not exactly comparable with data for
1983-92 because of different concordances used for each period.

Source: U.S. International Trade Commission staff estimated net exports
to Mexico by deducting from the total reported value of U.S. merchandise
exports to Mexico, the value of U.S. components sent there for
processing or assembly into products for return to the United States.
Because official U.S. statistics do not distinguish between exports to
Mexico for consumption there and exports of components for processing or
assembly and reexport, Commission staff used the value of U.S.
components contained in imports from Mexico entered under U.S. tariff
provisions 9802.00.60 and 9802.00.80 (formerly the 806 and 807
provisions) as a proxy for the exported components.

### United States Environmental Protection Agency,

Washington, DC, August 9, 1993.

Hon. Cardiss Collins,

Chairwoman, Committee on Energy and Commerce, Washington, DC.      Dear
Ms. Chairwoman: I am responding to your letter to Administrator Browner
of June 25, 1993, regarding environmental issues surrounding the
construction of four coal-fired electricity generating units at a site
near Piedras Negras, Mexico (Carbon II). These units are being built
near an existing, coal-fired power plant (Carbon I) and are located
approximately 20 miles south of Eagle Pass, Texas and 140 miles
southeast of Big Bend National Park. Neither Carbon I nor Carbon II have
add-on controls for sulfur dioxide (SO2) emissions.

     Like you, EPA is very concerned that the plant could have a
significant impact on U.S. air quality in adjacent border areas. The
EPA\'s focus to date has been on gathering technical information
regarding the source\'s operating parameters and emissions and, using
standard modeling techniques and other tools, assessing the impact of
the SO2 emissions on Big Bend National Park and other portions of the
United States. In this effort, EPA has worked cooperatively with the
National Park Service and other federal agencies. The EPA has also had
the cooperation of Mission Energy Corporation, the U.S. investor in
Carbon II. The answers below are based on the information EPA has
gathered as well as the modeling conducted to date by EPA and the Park
Service. However, because of the early stage of EPA\'s investigation,
the following answers must be considered preliminary.

     Once EPA\'s evaluation is complete, EPA will be in a position to
seek a resolution of the issues surrounding the project. The EPA is
committed to seeking a solution that eliminates any significant
impairment of visibility at Big Bend National Park and addresses any
other significant transborder impacts from the project. We remain
optimistic that a satisfactory solution can be achieved and we will
continue, with the assistance of the National Park Service, the State
Department and other federal agencies, to pursue the issue aggressively
until that solution is identified and implemented.      Question. If the
Carbon I and Carbon II facilities were located immediately across the
U.S.-Mexico border in Texas, what federal and state environmental laws
would apply to their operation?

     Response to Question 1. Based on the information EPA has in its
possession, EPA has not assessed, and cannot assess, the full range of
federal, state and local environmental laws that would apply if this
project had been constructed in the United States. As discussed, our
focus has been on the air emissions from this coal-fired facility. In
this regard, the limits on a new coal-fired power plant located on the
U.S. side of the border would include a requirement that the source
comply with the new source performance standard (NSPS) applicable to
power plants (Clean Air Act Sec. Sec. 111 and 40 CFR 60.40a et seq.) and
the requirement that the source undergo New Source Review (NSR) pursuant
to the Prevention of Significant Deterioration (PSD) program (Clean Air
Act Secs. 160 et seq.), assuming that the plant is located in a border
area in attainment with the National Ambient Quality Standards (NAAQS).

     The NSPS would require a power plant of the Carbon II design to
comply with the more stringent of the following limits for emissions of
SO2, particulate matter (PM) and nitrogen oxide (NOx ):

SO2\--An emissions rate of 1.2 lbs. of SO2 per million British Thermal
Units (Btu) or a 90% overall reduction in the unit\'s emission rate; or
a 70% overall reduction in the unit\'s SO2 emissions rate so long as the
resulting emissions rate is less than .60 lbs. per million Btu.

PM\--An emissions rate of .03 lbs. of PM per million Btu or a 99%
overall reduction in the unit\'s PM emissions rate.

NOx\--An emissions rate of .50 lbs. of NOx per million Btu or a 65%
overall reduction in the unit\'s NOx emissions rate.

     (See 40 CFR 60.40a et seq.)

     To secure a New Source Review permit, the applicant would need to
install best available control technology (BACT) to the project. CAA
Sec. 165(a)(4). BACT is based on a case-by-case evaluation of the
appropriate technology considering the individual characteristics of the
project, although the level of controls cannot be less stringent than
the relevant NSPS. CAA Sec. 169(3). The initial survey of available
control technology is the responsibility of the applicant subject to the
approval (after notice and comment by the public) of the permitting
authority.

     In addition to agreeing to install the best available control
technology, the applicant would also have to demonstrate through air
quality modeling that the new source would not violate a NAAQS or PSD
\"increment\" or significantly contribute to such a violation. CAA Sec.
165(a)(3). PSD increments are prescribed levels of degradation of air
quality that will be allowed in an area. The PSD increments for Big Bend
National Park and other \"Class I\" areas are very small and allow
little additional degradation of air quality from baseline levels. If
modeling indicated that the project (even with BACT) would violate a
NAAQS or the increments, additional reductions or other measures would
be required before the applicant could construct the facility.

     The PSD evaluation would also include an analysis of whether the
project would result in adverse impacts on visibility or other air
quality related values on nearby national parks and other Class I areas.
CAA Sec. 165(a)(5), (d). Class I areas are designated by section 162(a)
of the Act. If a project is found to result in an adverse impact, it
could not be built unless these impacts are mitigated or a waiver
(available under limited conditions) is granted. These ambient impact
requirements for new or modified sources are specified in 40 CFR
52.21(p). Even if treated as an existing\--rather than a new\--source, a
plant like Carbon II could be subject to the visibility protection
provisions of Clean Air Act section 169A, which requires installation of
the best available retrofit technology at existing sources that may
impair visibility in Class I areas. It is worth noting in this regard
that in order to address visibility problems in the Grand Canyon area,
EPA recently required a large, coal-fired power plant to reduce its SO2
emissions by 90 percent in order to achieve an SO2 emissions rate of .10
lbs per billion Btu. See 56 Fed. Reg. 50,172 (Oct. 3, 1991).

     Question 2: What are the equivalent Mexican standards for the U.S.
federal and state laws identified in question 1? Please identify, in
particular, where there is no equivalent Mexican standard or where the
Mexican standard provides less environmental protection than the
applicable U.S. federal or state standard.

     Response to Question 2. Mexico\'s environmental standards for air
pollution contain both ambient standards and source-specific emissions
limitations. For SO2, the Mexican ambient air quality standard is .13
ppm (340 g/m3), averaged over a 24-hour period. This is slightly
stricter than the U.S. 24- hour NAAQS which is set at .14 ppm (365
g/m3). For nitrogen dioxide (NO2), the Mexican standard is 395 g/m3,
averaged over a one-hour period. The U.S. NO2 NAAQS is 100 g/m3,
averaged annually. (The U.S. has no short-term NO2 standard.) For
particulate matter, Mexico\'s ambient standard is 275 g/m3 for a 24-hour
average (measured as total suspended particulates). The comparable U.S.
NAAQS is 150 g/m3 for a 24-hour average (measured as particulates with
diameters equal to or less than 10 microns). For carbon monoxide,
Mexico\'s ambient standard is 14,950 g/m3 (8-hour average), while the
United States NAAQS is 10,000 g/m3 (8-hour average).

     EPA\'s preliminary research indicates that a Mexican \"technical
norm\" (NTE- CCAT-006/88) provides the key emissions standards
applicable to coal-fired, electricity-generating stations. Pursuant to
that norm, a plant\'s SO2 emissions are limited to 51.3 kilograms of
sulfur per cubic meter of dry coal burned. Because the Mexican emission
standard for SO2 is tied to coal density and heat (Btu) value of the
coal to be burned, conversion to comparable U.S. units is necessary.
Based upon the coal\'s heat value specified by Mission Energy, EPA staff
estimate the applicable Mexican SO2 emissions standard at Carbon II to
be approximately 4.4 lbs. per million Btu. In comparison, as discussed
above, EPA\'s NSPS would require a new source to install controls that
achieve at least a 70 percent reduction and also achieve an emissions
rate of .60 lbs per million Btu, even if the cleanest of coals were used
(0.2 to 0.4 percent sulfur). Coal-fired generating units subject to BACT
in the last few years have typically been required to achieve reductions
of 90 percent or more.

     The same technical norm also provides limits for particulates (3.6
Kg/ m/3/), NO2 (10 Kg/m/3/) and CO (.270 Kg/m/3/). As with SO2, the
Mexican emissions standards for particulates, NO2, and CO are written
somewhat differently than U.S. standards, being based upon kilograms of
pollutant emitted per cubic meter of coal burned. The stringency of this
type of standard is, therefore, heavily dependent on coal density and
heat (Btu) value of the coal to be input into the power station. In
contrast, the U.S. standard directly links pollution emissions (in
pounds) to the heat input of the coal to the power station (in Btu\'s).

     At this time, EPA\'s best estimates for the Mexican standards for
particulate matter emissions and nitrogen oxides emissions for
coal-fired power plants (for the heat value and estimated coal density
of the coal specified by Mission Energy) are approximately the
following:

PM\--.31 lbs. per million Btu.

NOx\--.86 lbs. per million Btu.

     The comparable U.S. PM emission standard is .03 lbs. per million
Btu. This standard is approximately 10 times as stringent as the Mexican
standard. The U.S. NOx emission standard (.5 lbs per million Btu) is
approximately 70% more stringent than the Mexican standard. There is no
specific U.S. CO emissions standard for coal-fired power plants, as the
SO2, PM, and NOx standards are sufficient to indirectly limit CO
emissions so as to prevent ambient CO problems.

     Question 3. Does federal law require that a power generating
facility located outside the United States meet the requirements of the
Celan Air Act in order to transmit power into the U.S. power grid?

     Response to Question 3. At this time, EPA is unaware of any
evidence indicating that the power generated at Carbon I or Carbon II
will in fact be sold to U.S. utilities for use in the U.S. It appears
instead that the power from Carbon II, like that from Carbon I, will be
used to meet power needs solely within Mexico. If EPA learns that power
from the plants is to be imported into the U.S., EPA will at that time
consider what, if any, environmental restrictions the Clean Air Act or
other U.S. environmental statutes may impose on these sources. In
addition, an environmental assessment consistent with NEPA may be
required under such circumstances for any new connecting transmissions
lines involving construction in the United States. This assessment
should include an examination of the environmental impact of the sources
supplying the power to be transmitted over the new lines.

     Question 4. What effect do the air emissions from the Carbon I
plant have on the compliance or noncompliance status of states of the
United States, or geographic sub-areas of such states, under the Clean
Air Act Amendments?      Response to Question 4. The EPA has undertaken
preliminary air quality modeling to assess the impact on the PSD
increments of the SO2 emissions from the Carbon I and Carbon II plants.
This modeling appears to indicate that the Carbon I and Carbon II plants
result in ambient impacts at Big Bend National Park in excess of the
3-hour and 24-hour Class I increments for SO2. The EPA is in the process
of subjecting these results to internal review. While this air quality
modeling followed all EPA guidelines, it was based upon a model known as
ISCST2, which can produce somewhat conservative (i.e., somewhat
overestimated) results when extended beyond 100 kilometers. Mission
Energy has attempted to run a more refined model and has agreed to share
these results with EPA when they are completed.

     Although EPA has not independently verified the analysis, the
National Park Service has reported that its screening modeling indicates
that emissions from the plant will degrade visibility significantly at
Big Bend National Park and may adversely impact visibility at other
southwestern parks.      Question 5. What effect do these air emissions
have on the State Implementation Plans of states of the United States?

     Response to Question 5. In general, if EPA determines that a PSD
increment has been violated, it must call for a revision of the relevant
state implementation plan (SIP) (40 CFR Sec. 51.166(a)(3)) and, in the
meantime, bar any major construction or modification project that would
cause or contribute to the violation. See Clean Air Act Secs. 113(a)(3),
165(a)(3)(A), and 167. However, a state may exclude emissions from
foreign sources in calculating increment consumption. CAA Sec.
163(c)(1)(D). Since Texas\' PSD provisions do not contain this
exclusion, the emissions from Carbon I and II would count in all
increment consumption calculations until such time as Texas adopted and
submitted, and EPA approved, a SIP revision adding the foreign emissions
exclusion. CAA Sec. 163(c)(3). Even with that exclusion, EPA may still
be required to call for a revision of the PSD portion of Texas\' SIP if
the Administrator determined that revisions were necessary to prevent
significant deterioration of air quality. See 40 CFR 51.166(a)(3).
     Question 6. What effect will the expected emissions from both the
Carbon I and Carbon II, when taken together, have on the Clean Air Act
compliance status of states of geographic sub-areas in the United
States?      Response to Question 6. EPA has not attempted to assess the
impacts that the Carbon I and Carbon II emissions might have on
non-attainment airsheds in Texas and elsewhere.

     Question 7. What is the average cost of compliance under the Clean
Air Act for industrial firms and comparable power plants located in
noncompliance areas in the United States?

     Response to Question 7. Compliance costs at power plants vary
widely depending upon whether retrofit controls are necessary, the
operating parameters and output capacity of the units, and the profile
of the coal to be burned. In addition, the nature and severity of the
nonattainment problem for the area can also have a dramatic impact on
the level of emissions reductions necessary for any particular source.
For this reason, it is difficult to provide meaningful average cost
numbers. Still, there is no doubt that the cost of installing a scrubber
on an existing power plant the size of Carbon I or Carbon II\--whether
in the United States or Mexico\--is substantial. EPA would expect a
scrubber project at a plant of this size to cost in excess of \$300
million. This does not include the cost of NOx or other pollutant
controls that may also be required depending on the air quality status
of the area in which the plant is locating.

     Question 8. Was an Environmental Impact Statement, or similar
environmental review, prepared before the operation of Carbon I and
Carbon II? Did any such statement or review meet the requirements of the
National Environmental Policy Act (NEPA), including the requirements of
public transparency and participation?

     Response to Question 8. EPA understands from Mission Energy, the
United States investor in Carbon II, that an environmental assessment
complying with Mexican laws was prepared by CFE, the State-run utility
authority that built Carbon I and is currently constructing Carbon II.
EPA formally requested a copy of this analysis in an April 21, 1993
letter to SEDESOL. However, to this date, EPA has not received a copy of
this document and cannot comment on whether it would be comparable to an
environmental impact assessment prepared in accordance with the
requirements of NEPA. In addition, Mission has furnished a \"draft\"
environmental assessment which it is in the process of revising. Because
it has not been finalized, EPA has not assessed whether the Mission
analysis meets NEPA standards.

     Question 9. If the U.S. proposal for the creation of a North
American Commission on the Environment were fully implemented today,
what authority would that Commission have to require Carbon I and II to
generate power in a manner that meets the requirements of the U.S. Clean
Air Act?      Response to Question 9. Although the United States
objectives in negotiating the environmental side agreement to the NAFTA
may be discussed in general terms, it is impossible to predict at this
time what the provisions of the final side agreement will contain and
what impact it may have on the situation posed by the Carbon I and II
facilities.

     One objective of the negotiations of the environmental side
agreement to NAFTA has been to develop a forum for the discussion of
environmental issues of concern to the NAFTA parties that will serve as
a mechanism for avoiding environmental disputes before they arise or for
conciliation of such disputes before they become acute. In addition to
dispute avoidance and resolution measures, it may also be possible that
the Commission could be used as a forum to work toward the development
of increasingly compatible environmental standards among the three NAFTA
parties. This would be useful when particular problems are due mainly to
significant differences in environmental standards between or among
NAFTA countries.

     Other Materials Requested:

     1. A copy of the memorandum identified is enclosed.

     2. EPA does not have sufficient data to map the overall impacts
from Carbon I and II. If and when this information becomes available,
EPA will provide it to the Subcommittee.

     3. As discussed in the response to Question 3, EPA has not
identified what United States environmental standards, if any, apply to
importation of power generated in Mexico. Since EPA is unaware of any
evidence indicating that the power generated at Carbon II will be
imported, EPA does not intended to pursue the question of
extraterritorial application of the Clean Air Act further at this time.

     I hope the information contained in this letter is helpful. If you
have any questions regarding any of the information presented, please
have your staff contact either Bill Tyndall at EPA Headquarters or Jim
Yarbrough at Region VI in Dallas.

Sincerely yours,

Michael H. Shapiro,

Acting Assistant Administrator for Air and Radiation.

     Enclosure.

\-\-\-\-\-\-\-\-\--

United States Environmental Protection Agency

Dallas, TX.

MEMORANDUM

### Subject: Mexican Electricity Generating Stations Near Big Bend National Park, Texas.From: Alan Hecht, Acting Assistant Administrator for International Activities (A-106); Michael Shapiro, Acting Assistant Administrator for Air and Radiation (ANR-443); Joe D. Winkle, Acting Regional Administrator, Region 6 (6A).To: Carol Browner, Administrator (A-100).

     The purposes of this memorandum are to inform you about a Mexican
power station complex near the U.S.-Mexico border which is currently
being expanded and to outline for you the various environmental
implications for the U.S. Our information at this time is preliminary,
but we felt the matter sufficiently serious to provide you with this
initial information.      During the last four months, Region 6 and OAR
staff have attempted to acquire information from EPA\'s Mexican
counterpart SEDESOL regarding air emissions from a Mexican electricity
generating complex known as the Carboelectrica Power Stations, located
approximately 20 miles south of Eagle Pass, Texas near the town of Rio
Escondido, Coahuila. From media reports and information from other
sources, we have learned the existing station consists of four
coal-burning units of 300 megawatts each. Four additional coal-fired
units of 350 megawatts each are planned, two of which are completed,
with the other two being 35-40% complete. These units are located
approximately 125- 150 miles southeast of Big Bend National Park and
within Mexico\'s 100- kilometer \"border zone\" as outlined in the 1983
La Paz Agreement. They apparently have no air pollution controls for
sulfur dioxide and also fail to meet basic U.S. standards for nitrogen
dioxide and particulate matter. If what we understand from various
sources is true, these power stations could seriously affect the sulfur
dioxide class I increments and visibility at Big Bend National Park and
other Southwest U.S. National Parks, as protected under the U.S. Clean
Air Act.

     The facility is 49% owned by a U.S. company, Mission Energy
Corporation, which in turn is a subsidiary of SCE Corporation, the
holding company for Southern California Edison. Further, the power plant
has been touted in the May 17, 1993, issue of The Wall Street Journal as
a significant breakthrough in privatization of Mexican energy
production. Negative comments on the facility from U.S. environmental
groups were contained in an article in the Mexican publication El
Financiero on May 31, 1993. These articles are attached.

     In discussions with Mission, the company has admitted that the four
new units will not have sulfur dioxide controls but claims that the
source still will not have a significant impact on Big Bend. It also
claims that the facility will meet all Mexican and World Bank standards.
Mission declined at this time to provide EPA with a copy of an
environmental analysis prepared on the project by the company\'s
environmental consultant.

     Our analysis of this situation has identified several concerns, as
noted in the following:

\(1\) Despite Mission\'s assurances, EPA and National Park Service staff
remain concerned that existing and planned units may significantly
impact U.S. National Park areas. Upper management in the National Park
Service are being informed of this situation by their staff.

\(2\) Although Mission indicated that the new Carboelectrica facility
meets all applicable Mexican environmental regulations, neither the
existing facility nor the new units could be permitted anywhere in the
U.S. because of their failure to meet EPA new source performance
standards, let alone the best available control requirements mandated by
the Clean Air Act new source review program. Moreover, at this point we
have no information indicating the facility would be barred by the
Mexican Government from burning even dirtier, higher sulfur coal.

\(3\) EPA is also concerned that the existing facility and the new units
consume the sulfur dioxide air quality increment in the U.S. Thus, this
source as presently configured can preclude industrial growth in the
U.S.

     We will continue our efforts to secure information regarding this
project. We are also, at your discretion, prepared to initiate a variety
of additional actions in an attempt to resolve this problem.

     Attachments.

### Foreign Investors Jumping at Mexico\'s Invitation To Help Boost Power Capacity 

     Nava, Mexico\--Electricity-hungry Mexico has begun to open the door
to foreign investment in power generation, and companies are rushing to
get in.      The first major opening was the \$1.8 billion privatization
of a plant called Carbon Il here, not far from the Texas border in the
Mexican state of Coahuria \"Carbon Il is a landmark deal,\" says John
Vella, an executive with Mission Energy Co., a unit of Los Angeles based
SCEcorp., one of the new co- owners of the coal-fired plant. \"We see
this as a breakthrough in opening up the marketplace.\"

     The 1,400 megawatt project, now half complete, will be owned and
operated by Mission Energy, which has a 49% stake, and Grup Aceraro del
Norte SA, a mining concern that will use about 120 megawatts to power a
steel mill. The rest of the power will be sold to the government utility
under a 30-year contract.

     The Mexican constitution reserves for the state the exploitation of
hydrocarbons and electricity generation, transportation and
distribution. But, in a effort to fund the expansion of Mexico\'s
electricity grid. President Carlos Salinas de Gortari won approval of a
law last December that allows private investment in electrical plants,
on the condition that the electricity be supplied as a private service
to the private sector. The constitution reserves the public service of
electricity production to the state. Under the new law, three new areas
of independent power production, including the Carbon Il operation, are
considered \"private service\" generation.

     The law touched off a burst of activity. Mexico has \$3.3 billion
in privately funded power plants in the works. Faced back home with
nearly \* \* \* electricity growth through the year 2000, U.S. companies
are eager to enter the Mexican market.

     Joe Tondu, who heads Tondu Energy Systems Inc., a Houston firm, has
been hunting for work in Mexico for more than a year. \"Mexico is way,
way under- electrified. Everybody looks across the fence and says,
\'Whose huge possibilities,\"\" he says.

     Mexico has about 27,500 megawatts on its grid, roughly the same as
Ohio. It wants to add 17,000 megawatts by 2000, according to a recent
prospectus by the government run utility.

     In addition to the Carbon Il plant, a consortium is planning a
\$800 million, 700-megawatt plant in Samalzyuca, across the border from
El Paso, Texas. General Electric Co., El Paso Natural Gas Co.,
Houston-based Coastal Corp., ICA SA. which is Mexico\'s largest
construction firm, and San Francisco-based Bachtel Group are members of
the consortium.      Dozens of others, including Enton Corp. of Houston,
San Diego Gas & Electric Co., Southern Cos. of Atlanta, Public Service
Enterprise Group Inc. of Newark, N.J., and Central & South West Corp. of
Dallas are also bidding or waiting to bid on future projects.

     More than 40 firms, for example, have expressed interest in the
next big project on the Yucatan Peninsula.The United States Trade
Representative,

Executive Office of the President,

Washington DC, August 31, 1993.

Hon. Cardiss Collins,

Chairwoman, House of Representatives, Ford House Office Building,
Washington, DC.

     Dear Madam Chairwoman: Please find enclosed responses to the
questions you submitted for the record on the joint hearing of August 3,
1993.      I hope that you find this information helpful, and I urge you
to contact me should you require further clarification of the
Administration\'s position on specific trade-related issues.

     Thank you for your continued interest, I look forward to working
with you in the future.Sincerely,

Michael Kantor.

     Enclosures.

USTR ANSWERS TO QUESTIONS SUBMITTED BY CONGRESSWOMAN COLLINS

     Question 1. Will a method for funding environmental cleanup be
included in the NAFTA implementing legislation, and if so, are the press
reports that it will be a development commission authorized to issue
federal guaranteed bonds correct?

     Answer. As you know, the Clinton Administration is firmly committed
to addressing funding needs to solve the serious pollution problems
along our southern border. On August 13, I announced an agreement in
principle with Mexico to establish a new border environment institution
as well as a separate financing facility. (A copy of that agreement is
attached.)      In coming weeks, U.S. and Mexican authorities will
consult on the details. We do not anticipate that the new institution
would be authorized to issue federal guaranteed bonds.

     Over the coming weeks, we will be consulting with Congress on NAFTA
implementing legislation, including the question of whether the funding
issue will be addressed in that bill.

     Question 2. There has been a lot of discussion about what kind of
sanctions will be permitted to be imposed, if the proposed trinational
commission finds a country is not enforcing its environmental laws. You
have proposed trade sanction, and the Mexicans apparently have suggested
fines that would be paid for by the government involved.

     Is the United States\' position that the side agreement on the
environment must permit trade sanctions to be imposed pursuant to a
determination that a violation has occurred; what resolution do you see
being reached on this issue?

     Answer. On August 13, I announced the conclusion of negotiations on
the agreements on environment, labor and import surges, which President
Clinton called for last October. The dispute settlement provisions of
the agreements on environmental and labor provide for arbitral panels
which could consider whether a party has engaged in a persistent pattern
of failure to effectively enforce its environment law or its labor laws
with respect to health and safety, child labor and minimum wage.

     If a panel makes such a finding the Parties may, within 60 days,
agree on a mutually satisfactory action plan to remedy the
non-enforcement. If there is no agreed action plan, then between 60 and
120 days after the final panel report, the panel may be reconvened to
evaluate an action plan proposed by the Party complained against or to
set out an action plan in its stead. The panel would also make a
determination on the imposition of monetary enforcement assessments on
the Party complained against.

     The panel may be reconvened at any time to determine if an action
plan is being fully implemented. If it is not being fully implemented,
the panel is to impose a monetary enforcement assessment on the Party
complained against.      In the event that a Party complained against
fails to pay a monetary enforcement assessment or continues in its
failure to enforce its environmental or relevant labor law, the Party is
liable to ongoing enforcement actions. In the case of Canada, the
Commission, on the request of a complaining Party, collects the monetary
enforcement assessment and enforces an action plan in summary
proceedings before a Canadian court of competent jurisdiction. In the
case of Mexico and the United States, the complaining Party or Parties
may suspend NAFTA benefits based on the amount of the assessment.

     Question 3. What is your timeframe for submitting implementing
legislation to the Congress for the NAFTA?

     Answer. We have not decided on a specific date for introduction of
implementing legislation. We plan to work with Congress over the coming
weeks so legislation is place for implementation of the agreement from
January 1, 1994.

     Question. 4. When do you expect to get a ruling on the appeal of
Judge Richey\'s decision that you must submit an environmental impact
statement along with the NAFTA implementing legislation, and if that
decision is upheld, would, in your opinion, NAFTA be dead as some have
suggested?      Answer. The Court of Appeals has scheduled the hearing
in the case for August 24. We expect that the court will issue its
opinion shortly thereafter. We have made clear that the district
court\'s opinion is not in the public interest for a number of reasons,
and we expect that we will prevail on appeal. Having concluded the
supplemental agreements on labor, the environment, and import surges
last week, we are continuing our work, in cooperation with the Congress,
on the drafting of the implementing legislation.

     Question. 5. In the dumping and subsidies cases brought by the U.S.
steel industry, the Commerce Department found huge margins of unfair
trade-86% in the case of France, and 92% in the case of Brazil. Yet, the
ITC last week found the American industry suffered \"no injury\" in
about half the cases considered. I would like to add that in the 90
minutes following the announcement of the ITC\'s decision, U.S. steel
stocks lost over \$1 billion in value.

     Clearly, the ITC\'s decision surprised the stock market. How do you
explain the differences in the way the Commerce Department and ITC ruled
in these cases?

     Answer. The Commerce and ITC decision concern entirely different
issues. The Commerce Department has the sole authority to determine
dumping and subsidy margins for AD and CVD cases. This process is
basically mathematical. The ITC on the other hand determines whether the
industry is being materially injured, or threatened with material
injury, or the establishment of a domestic industry is materially
retarded, by reason of subsidized imports or imports priced at less than
fair value. In 32 of the 72 AD and CVD cases investigations brought
covering flat-rolled steel products the ITC found injury. In other
words, harm that was not inconsequential, immaterial, or unimportant.
The ITC issued a report August 9, explaining these votes.      Question
6. If we are not going to take action under our anti-dumping and
countervailing duty laws to offset the unfair margins documented by
Commerce, what can you now do about it, for example in the negotiations
under the Uruguay Round and of the Multi-Lateral Steel Accord?

     Answer. Under the MSA the U.S. proposal would prohibit all
subsidies and reduce tariffs for steel to zero and eliminate non-tariff
barriers. We believe that these provisions would put the global steel
industry on a much more rational economic base and greatly reduce the
likelihood of dumped or subsidized imports entering the U.S. market and
distorting world trade. The next MSA negotiation will take place
September 21-23. We will be pushing to conclude the MSA negotiations in
the same time frame as the UR, by December 15.

     Question 7. In Tokyo at the G-7 meeting, it was announced that on
about half the industry sectors that had been targeted for zero tariffs,
tariffs would go to zero, and for the other sectors like semiconductors,
lumber, paper, and soda ash, negotiations would continue.

     Does this mean, in reality, that the \"zero-for-zero\" tariff
negotiations are over, or is there a real opportunity in your view that
negotiations will result in some of these sectors getting zero tariff
treatment as well?      Answers. Our agreement in Tokyo sets the
foundation for a major package of tariff reductions in industrial
products. A key component of the package responds to the tremendous
effort and export interests of U.S. industries to eliminate tariffs in
eight sectors, and reducing them in many others. For those where we have
not yet achieved success\--paper, wood, scientific equipment,
non-ferrous metals and electronics\--we are by no means at the end of
the negotiation. With respect to soda ash, I would note that it is
currently subject to the chemical harmonization initiative and we will
continue to press for duty elimination on these particular products.

     Question 8. Under the Semiconductor Agreement, don\'t we count as
U.S. sales, semiconductors that American firms made and assembled
overseas, and isn\'t IBM seeking to have chips it makes in Singapore and
sells to its Japan division counted as U.S. sales under the Agreement?

     Answer. Under the Semiconductor Arrangement, the U.S. Government
and the Government of Japan calculate foreign market share in the
Japanese semiconductor market on a quarterly basis. This requires us to
keep track of sales by all foreign (non-Japanese) capital-affiliated
semiconductor companies into the Japanese market.

     In order to determine whether to treat a semiconductor sale as
\"Foreign\" or \"Japanese,\" we look at the capital-affiliation of the
firm that manufactures the semiconductor. In some cases, the
semiconductor is actually assembled outside of the United States by U.S.
firms. However, in most cases, U.S. firms perform the research and
development, design, and/or diffusion work in the United States, which
benefits the U.S. economy.

     Since the 1991 Arrangement has come into effect, we have been
treating IBM as a \"captive\" semiconductor suppler, a company that
internally uses all of the semiconductors it produces, in our market
share calculation. IBM has recently started selling semiconductors to
external customers in Japan. Given this development, we are currently
discussing the issue of how to treat IBM sales under the Arrangement
with the Government of Japan.

     Question 9. If the approach taken in question (R)8 is the approach
taken under the Japan Framework as well, is it not possible that while
U.S. firms may benefit through increased sales to Japan, American
workers may not benefit nearly as much?

     Answer. The products included in the sector specific \"baskets,\"
including supercomputers, computers, telecommunications equipment,
medical devices, satellites, autos and auto parts, have been chosen
carefully as sectors in which U.S. international competitiveness is
high. Therefore, although agreements negotiated as follow on to the
Framework will be on a most favored nation basis, we expect American
firms to be well positioned to benefit from them.

     There is no firm decision yet as to what \"quantitative
indicators\" will be used in the follow on agreements. Several
indicators will probably be used for each product area. These may
include measures showing market share of foreign suppliers in the
Japanese market, as utilized in the Semiconductor Arrangement. In that
event, some assembly may be performed outside of the United States.
However, in any event, the U.S. economy and labor will benefit from
other activities performed in the U.S. such as research and development
and design work.

     Question 10. With respect to the Japan Framework Agreement, it is
my understanding that issues have been lumped into \"baskets\" or
categories, and that for some of these issues agreements are to be
reached by the end of this year, and that for others, agreement is to be
reached by next July.      Is it realistic to think that agreements can
be reached by the end of this year; have face to face negotiations even
begun yet?

     Answer. The time constraint imposed by the Framework is among its
strongest features. Given the momentum provided by the biannual Heads of
State meetings provided for in the Framework, our negotiating schedule
is realistic. Under the Agreement, both sides have pledged utmost
efforts to reach agreements on some areas of Government Procurement, the
insurance sector and the auto sector by the first Heads of Government
meeting in early 1994. Agreements in remaining areas are to be sought by
the second such meeting in July 1994.      We expect that the first wave
to follow on negotiations under the Framework will begin in September.

     Question 11. It is my understanding that insurance, auto parts, and
government procurement are the issues on which agreement is scheduled to
be reached by the end of this year. Insurance is an issue of special
importance to the Subcommittee on Commerce, Consumer Protection and
Competitiveness. Can you tell us whether our understanding is correct,
and what objectives you have for the negotiations on insurance?

     Response. Yes. Under the Joint Statement on the United States-Japan
Framework for a New Economic Partnership, the United States and Japan
will agree on measures regarding significant market access problems in
government procurement, the insurance market, the automotive industries
at the first Heads of Government meeting in 1994 or by January 10, 1994.
Therefore, improved access to the Japanese insurance market for U.S.
firms is a high priority issue for our next consultations with the
Japanese Government.      In our negotiations on insurance we will be
addressing certain sectoral and structural impediments such as
non-transparency and keiretsu or cross shareholding practices, among
other things. We also intend to review closely the reforms proposed by
Japan\'s Ministry of Finance\'s Insurance Council and to ensure that
such reforms are implemented in a manner that is non- prejudicial to
foreign insurers.

     Question 12. The FCC has estimated that approximately half of the
\$4 billion which is paid annually by U.S. telecommunications carriers
to foreign carriers as accounting payments is in the form of an
above-cost subsidy.      Is this subsidy a concern to you, and if so how
do you propose to deal with it?

     Answer. Yes. USTR is considering different avenues of trade
pressure to remedy this imbalance.

     The GATS Telecommunications Annex and the NAFTA Telecom Chapter
refer to cost-oriented pricing as the basis on which charges for use of
the basic telecom network should be determined. This is a necessary
first step in reducing the above-cost subsidy our carriers are currently
paying to foreign telecom companies.

     The objective of the proposed GATS basic telecom negotiations is
access for U.S. carriers to foreign telecom markets. A successful
outcome to these negotiations, by introducing competition into markets
currently closed to U.S. telecom companies, would help to bring current
international rates nearer to cost, and so reduce the above-cost
subsidy.

     Question 13. The current U.S. GATT objectives now include a
proposal to liberalize market access for long distance basic
telecommunications services. In light of the significant openness of
U.S. market and the lack of openness of most foreign markets, do you
believe further opening on the part of the U.S. through regulatory
decisions would give away your negotiating leverage?      Answer.
Through close coordination with the FCC, we will preserve negotiating
leverage that might be lost if regulatory decisions were made in a
vacuum. USTR has a close working relationship with the FCC, and the FCC
participates regularly in telecom trade inter-agency working groups and
in our multilateral and bilateral telecom negotiations. We have formally
submitted comments in the past to the FCC on the trade implications of
specific regulatory decisions and will continue to do so in the future.
     Question 14. Foreign telecommunications switch manufacturers now
account for nearly half the U.S. switch market. Northern Telecom, owned
by Bell Canada Enterprises, is the largest foreign firm selling
telecommunications switches in the United States. AT&T, on the other
hand, has been unable to sell switches in Canada.

     This issue was not addressed in the U.S.-Canada Free Trade
Agreement, and it is not addressed in the NAFTA, either.

     Given the difficulty AT&T and other U.S. switch producers have had
selling products in Canada and in light of the changes now occurring in
the Canadian telecommunications market, would it be appropriate in your
opinion to address this issue in formal discussions with Canada, perhaps
at a working group level?

     When will a decision be made by the Administration as to how to
approach this issue with Canada?

     Answer. As you are aware, we are in the process of concluding an
inter- agency review of this question in response to industry and
Congressional interest. We are consulting with all of the concerned
agencies and have also talked extensively with GAO and your staff. We
expect that the review will be completed this month, at which time we
will give you a full report on our findings.

     Question 15. I have become concerned that U.S. airlines which have
been hit hard financially here at home are also facing new restrictions
on their ability to serve many foreign airports, for example, in France
and Germany.      Is your office participating in discussion or other
efforts to address this problem, if so, what are you doing, and if not,
how is this issue being handled within the Administration?

     Answer. USTR has been participating in preparatory discussions for
bilateral aviation negotiations, which are led by the Departments of
State and Transportation. These issues also were addressed by a
Presidentially- appointed Commission (National Commission To Ensure A
Strong Competitive Airline Industry, created by section 204 of the
Airport and Airway Safety, Capacity, Noise Improvement and Intermodal
Transportation Act of 1992, PL 103-13, April 7, 1993). The Commission\'s
report is scheduled to be forwarded to the President and the Congress on
August 20. USTR assigned two staff members to serve on the professional
staff of the Commission to assist in the work on international issues.
USTR also is participating in the interagency review of the
Commission\'s proposals, led by the National Economic Council.
     Question 16. I would like to have someone in your office provide a
report to the Subcommittee on what is being done to deal with the
problem of restricted access to foreign airports for U.S. airlines.

     Answer. Attached is a brief report on major markets in
international air transportation. In terms of market share, U.S.
carriers are doing well, but their success has led to increased
resistance to liberalized aviation regimes on the part of some of our
trade partners. In some countries, air transportation is affected by
physical space limitations at major airports. The U.S. Government is
dealing aggressively with these problems through a series of ongoing
negotiations, as indicated in the following:

STATUS OF BILATERAL AIR TRANSPORT AGREEMENTS (MAJOR MARKETS) AS OF
AUGUST 9, 1993

     FRANCE.\--U.S. carriers have about 70 percent of the air passenger
market between the two countries. Eight U.S. carriers serve this market.
On May 4, 1992, under terms of the bilateral agreement, France gave
official notice to the U.S., renouncing the agreement, to be effective
in a year. Thus, since May 1993, air transportation services between the
United States and France are continuing without an agreement under a
system of comity and reciprocity. Services of U.S. airlines have not
been reduced, but possibilities of further expansion are questionable at
present.

     GERMANY.\--U.S. carriers have about 60 percent of the passenger
market. The current agreement with Germany is among the most liberal
U.S. aviation agreement in Europe. The U.S. has the right to fly to any
point in Germany. Germany is seeking to renegotiate the agreement and
has threatened to renounce the present agreement if a new agreement or
an acceptable interim agreement is not reached by this fall. Last year,
in an interim agreement, both sides agreed to freeze the volume of each
carrier\'s traffic until the end of October, while negotiating continue.
Talks are scheduled for Bonn, August 31-September 2.

     UNITED KINGDOM.\--U.S. carriers have roughly half the bilateral
passenger market, which is severely restricted under terms of the
agreement with the U.K. Nine passenger airlines fly between the U.S. and
the U.K. serving 22 U.S. gateway cities and four airports in the U.K.
U.S. carriers are seeking greater access to the U.K. market,
particularly through Heathrow Airport. Physical capacity at Heathrow,
however, is limited. The British are seeking increased participation in
the U.S. market through part-ownership of USAir. Negotiations are
continuing.

     JAPAN.\--U.S. carriers have about 64 percent of the revenues in the
passenger/cargo market between the U.S. and Japan, which is the gateway
to the Asian market. Unlike its huge trade deficit in merchandise trade
with Japan, the U.S. has a surplus in air transportation services (\$2.6
billion in 1992). The Japanese are seeking to negotiate a new, more
restrictive agreement. An area of contention is the carriage of Japanese
passengers by U.S. airlines from Tokyo and Osaka to Australia and other
points beyond Japan (fifth freedom rights). Negotiations in Washington
August 3-5 were inconclusive on these issues. Airports in Tokyo and
Osaka are congested. This will be relieved at Osaka when Kansai Airport
is completed (scheduled for 1994).

     Question 17. The European Commission has apparently agreed to a
program of telecommunications services liberalization that would fully
open the European Community marketplace by 1998.

     Do you believe it is acceptable to continue to allow European
service providers into the U.S. between now and 1993?

     Answer. Although it is obviously an internal matter within the EC
and solely their decision, we are disappointed that the EC\'s 1998 date
for the liberalization of telecommunications, on a resale basis only,
does not liberalize as rapidly or as completely as many within and
outside the Community had hoped. We expect to use the multilateral
negotiating process to secure a more timetable.

     In the meantime, European services providers seeking to provide
international services with the United States on a simple resale basis
must apply for licenses and be approved on the basis of equivalent
resale market opportunities as set forth in the applicable FCC
regulations. For common carrier services, provisions of Section 310 of
the Communications Act of 1934 remain in force. That means that under
existing law and regulation, European providers of basic
telecommunications services may not have the opportunity to compete in
our market due to their restricted nature of their own markets.
     Question 18. The 1988 Trade Act mandated negotiations designed to
achieve mutually advantageous market access for telecommunications
equipment. After five years, can you give us an assessment of how
successful we have been in opening markets as a result of that Act?

     Answer. The 1988 Trade Act provided two useful tools to secure
increased market opportunities abroad for U.S. telecommunications firms.
The first, section 1374, provided authority to designate priority
countries with major telecom markets closed to U.S. suppliers and to
initiate trade negotiations with them. The second, section 1377,
provides an annual review mechanism for all telecom trade agreements
resulting from those or other negotiations. In both cases, the statute
provides for appropriate sanctions in the event the markets remain
closed or the agreements are violated.

     With respect to section 1374, USTR in 1989 designated the Republic
of Korea and the European Community (EC) for market-opening trade
negotiations and concluded the negotiations in February 1992, at the end
of the statutory negotiating period. In the case of Korea, the
negotiations yielded a trade agreement (enforceable under section 1377)
that met the statutory negotiating objectives and provided U.S.
suppliers of telecommunications goods and services with significant new
opportunities in the large growing Korean telecommunications market.

     In the case of the EC, although the EC had liberalized considerably
in the area of services and in some aspects of equipment trade during
this period, the review concluded that the statutory negotiating
objectives with respect to government procurement had not been met. At
the same time, USTR concluded an early review of DC telecom procurement
practices under Title VII of the 1988 Trade Act and identified the EC as
a country that discriminates in government procurement. As a result,
USTR imposed sanctions on the EC under title VII. Negotiations continue
for telecommunications equipment as part of the renegotiation of the
GATT Agreement on Government Procurement code, which is being conducted
concurrently with the Uruguay Round negotiations.      With respect to
other markets, the major markets have either concluded trade agreements
with the United States, successfully engaged in constructive
negotiations in the GATT, or been the subject of additional bilateral
negotiations. This is particularly true of Japan, which has agreed to
discuss telecommunications in the context of the Framework Agreement.
     On balance, the provision of the Telecommunications Trade Act in
the 1988 Trade Act have provided useful legal mechanisms to open markets
abroad and led to significant grains for U.S. suppliers of the
telecommunications equipment and services. Nevertheless, much remains to
be done, and many new issues continually arise in such a rapidly moving
industry as telecommunications.

     Question 19. Would you comment on the prospects of the agreement
\[with Germany that would open German public procurement to U.S.
firms\], and, if the fact, U.S. firms might expect some greater market
access to Germany in the near term.

     Answer. As you know, the U.S. on May 28 imposed Title VII sanctions
against nine EC member states for discrimination in the procurement of
telecom equipment. Shortly thereafter, the German Government informed us
that it did not intend to impose against U.S. suppliers the
discriminatory provision required by the EC Utilities Directive. Germany
also stated that it would not impose the countersanctions voted on by
the EC on June 8. We are still working out the detail of a formal
confirmation. In the meantime sanctions remain in place against Germany.

     U.S. firms have recently won significant procurement contracts in
Germany and there is every reason to expect they will continue to
improve their sales in Germany.

     Question 20. In your testimony at the joint hearing, you said that
it was your personal view that regulatory agencies like the FCC and the
SEC should be given wider latitude to consider the trade policies of
foreign countries when deciding cases that come before them.

     But, at least with respect to services, including
telecommunications and financial services, you have already confirmed in
response to a written question I submitted to you that you already have
authority under section 301(c)(2)(A) of the Trade Act of 1974 to
\"restrict, in the manner appropriate, the terms and conditions of \"any
such authorizations\" such as would be granted to a foreign stock firm
seeking authority to sell stock in the United States.

     If, in fact, you believe the FCC and the SEC should be taking trade
policies of foreign countries into consideration, my question, then, is,
in light of your authority under the Trade Act, why have you not
directed those agencies to do so?

     Answer. During my testimony, I stated that, in my personal view, in
an increasingly global economy the decisions of independent regulatory
bodies should not be taken in isolation, but rather that the regulatory
bodies should be aware that their actions may in some cases have trade
implications. This is significantly different from asserting that
regulatory bodies should be \"given wide latitude to consider trade
policies of foreign countries\" in their decisions.

     The formulation of trade policy is and should remain the
responsibility of the Executive Branch of the Federal Government. We, of
course, actively seek the cooperation and advice of those regulatory
bodies in our work. Nevertheless, the elements that such regulators
should take into consideration in their decisions are set by the
Congress through the relevant statutes and implementing regulations and
typically do not include evaluations of the trade policies of other
countries.

     With respect to the reference to the question that you submitted
previously, my answer replied to a question concerning only
telecommunications services and addressed only those issues.
     Question 21. In response to another question I submitted to you,
you said, \"The provisions of section 301(c)(2)(A) apply only to cases
brought under Section 301 and therefore are not available in this
case.\" The \"case\" you referred to is the investigation of
discrimination against telecommunications suppliers in government
procurement under Title VII of the 1988 Trade Act.      I would just
like you to clarify this statement for me, since I know that other
government procurement issues, for example discrimination by the
Japanese Government in procurement of super computers, have been
addressed under section 301 authority.

     My question, therefore, is simply that is it not your decision, as
the U.S. Trade Representative, whether to use section 301 authority or
whether to use Title VII authority to deal with procurement issues, and
isn\'t section 301 authority actually broader and therefore able to
encompass matters considered under Title VII?

     Answer. Title VII of the 1988 Trade Act requires USTR to conduct an
annual review of foreign governments\' procurement practices, to be
completed by April 30. The statute prescribes actions that USTR must
take in the event that the review results in a finding of a persistent
pattern of discrimination. The sanctions available to the U.S.
Government in cases identified under Title VII, set forth in 41 U.S.C.
10b-1, limited to restricting access to U.S. Government procurement.
Therefore, when we identified the European Community under Title VII for
discriminating in the procurement of telecommunications equipment,
denial or restriction of services authorizations was not a retaliatory
option available to us.      Cases concerning discrimination in
procurement practices may be brought under Section 301, in which case
the denial or restriction of a service authorization is an option. The
criteria for a determination is different in Section 301, as is the time
frame and procedures of the investigation. In cases where USTR could
proceed under either Section 301 or Title VII, USTR decides which
statutory scheme will best achieve our objectives in the most
expeditious manner.

     As you noted, we proceeded under Section 301 in responding to
Japanese discrimination in government procurement of supercomputers. In
fact, we are now conducting a review of the supercomputer agreement with
Japan, which resulted from the Section 301 investigation, to determine
whether Japan is complying with the provisions of the agreement.The
United States Trade Representative,

Executive Office of the President,

Washington, DC, September 7, 1993.

Hon. Henry A. Waxman,

Chairman, Subcommittee on Health and the Environment, Committee on
Energy and Commerce, Washington, DC.

     Dear Congressman: Thank you for your letter of June 23, 1993, in
which you raise a number of questions concerning the interpretation and
application of the provisions of the North American Free Trade Agreement
(NAFTA) in connection with several environmental concerns.

     The NAFTA will establish the largest market in the world, create
jobs in America, and enhance the region\'s competitiveness. The NAFTA,
together with the supplemental Agreement on Environmental Cooperation
concluded last week, provides a number of strong steps to promote
environmental protection. The NAFTA itself begins with the Parties\'
commitment to \"promote sustainable development; strengthen the
development and enforcement of environmental laws and regulations\" and
undertake the NAFTA commitments \"in a manner consistent with
environmental protection and conservation.\"

     These commitments are reflected in the provisions of the NAFTA that
follow, including explicit recognition of the rights of governments to
maintain measures to protect human, animal or plant life or health, the
environment and consumers; recognition of the rights to establish the
level of protection governments consider appropriate; a commitment to
work jointly to enhance the level of safety and of protection of human,
animal and plant life and health, the environment and consumers; and
renouncing the relaxing of health, safety or environmental measures to
encourage investment.

     The Agreement on Environmental Cooperation will ensure that
economic growth is consistent with goals of sustainable development. The
Agreement on Environmental Cooperation further promotes environmental
protection, including by ensuring that laws and standards continue to
provide high levels of environmental protection and that those laws are
effectively enforced.      I will respond to each of the specific
questions in your letter in turn.      Question 1. NAFTA requires that
regulatory standards pertaining to food safety be based on \"risk
assessment, as appropriate to the circumstances.\" Article 712, para. 3.
As you are aware, for food additives, color additives and animal drugs,
the Delaney clauses in U.S. law prohibit the addition of any substance
to foods if the substance is an animal carcinogen. 21 U.S.C.
348(c)(3)(A), 376(b)(5)(B) and 512(d)(1)(H). Under the Delaney clauses,
a traditional risk assessment is irrelevant. Public Citizen v. Young,
831 F.2d 1108 (D.C. Cir. 1987). I would like your evaluation of whether
the NAFTA agreement in any way jeopardizes the Delaney clauses in U.S.
law. Specifically, how does the Delaney clauses\' statement that the
theoretical risk to humans is irrelevant square with the requirement in
Article 712, para. 3 that U.S. laws be based on a risk assessment?

     Response. The NAFTA was carefully drafted, with the Delaney clauses
and other provisions of U.S. law firmly in mind, to safeguard the
ability of governments to ensure food safety. To understand how the
NAFTA applies to these and other \"sanitary and phytosanitary measures\"
(covered in Section B of Chapter 7), it is important to distinguish
between two key concepts\--the level of protection that a government
chooses and the measure that the government uses to achieve that level
of protection.

     The NAFTA makes explicit that each government may establish those
levels of protection for human, animal or plant life or health that the
government considers to be appropriate (Article 712(2)). A government\'s
choice of the level of protection of human health need not be based on a
scientific rationale or a \"risk assessment.\" the NAFTA implicitly
recognizes that such choices are based on societal, not scientific,
values.

     The Delaney clauses, in the first instance, establish a level of
protection. They reflect a decision by the Congress that there should be
no risk of cancer to humans from the substances those clauses cover.
That decision is fully protected under the NAFTA.

     The NAFTA does require governments to meet certain elementary
requirements when applying laws and regulations to achieve their chosen
level of protection in order to safeguard against blatant trade
protectionism in the guise of a health regulation. Our trading partners
have repeatedly sought to exclude perfectly safe U.S. products from
their markets by citing false \"health\" pretexts.

     For example, the NAFTA requires that the sanitary or phytosanitary
measure used have a scientific basis and be based on a risk assessment
appropriate to the circumstances.

     It makes sense to require governments to meet these tests since
legitimate health laws and regulations would have a scientific basis and
are the product of a risk assessment. For example, a determination that
a particular food additive poses a health risk is made on scientific
grounds. Similarly, legitimate food additive regulations are based on
\"risk assessments\" of the type required in the NAFTA. The term \"risk
assessment\" is defined in the NAFTA in relevant part as an evaluation
of the potential for adverse effects on human life or health arising
from the presence of an additive, contaminant, toxin or disease-causing
organism in a food, beverage, or feedstuff. Importantly, \"risk
assessment\" as used in the NAFTA is not limited to quantitative risk
assessment, which is a particular type of risk assessment used to
evaluate the potential for carcinogenesis.      The Delaney clauses are
entirely consistent with the NAFTA\'s requirements in this regard. The
determination that a particular substance poses a risk of cancer is a
scientific determination, based on an evaluation of the potential for
carcinogenic effect. Based on scientific principles, the United States
has determined that if a substance induces cancer in animals, it poses
some risk of human carcinogenesis. And since the level of protection
under Delaney requires that there be zero risk of carcinogenesis, we
prohibit the substance.

     The Public Citizen case dealt with the question of whether there
was a de minimis exception under the color additives Delaney clause, not
whether it was appropriate to evaluate whether a particular substance is
an animal carcinogen and thus such substance poses a risk of
carcinogenesis. The court\'s determination that there was no de minimis
exception under the Delaney clauses does not change the fact that all
three Delaney clauses are themselves based on a risk assessment and are
consistent with the NAFTA requirements.

     Question 2: NAFTA declares that each party may adopt food safety
regulation \"only to the extent necessary to achieve its appropriate
level of protection, taking into account technical and economic
feasibility.\" Article 712, para. 5. What provisions in NAFTA would
prevent Canada or Mexico from successfully challenging U.S. laws as
NAFTA inconsistent, including the Delaney clauses and laws relating to
pesticide residues in foods, on the ground that they are more stringent
than \"necessary\" to achieve the appropriate level of protection chosen
by the U.S.?

     Response. Article 712(5) of the NAFTA provides as follows: \"Each
Party shall ensure that any sanitary or phytosanitary measure that it
adopts, maintains or applies is applied only to the extent necessary to
achieve its appropriate level of protection, taking into account
technical and economic feasibility.\" (Emphasis added.)

     This provision addresses how a health law or regulation that is in
place is applied. It does not address the validity of the underlying
health law or regulation itself, or the level of protection afforded by
those laws.      Article 712(5) provides no basis for challenging the
levels of protection that the Congress has established in the Delaney
clauses or laws relating to pesticide residues in food. The fact that
those chosen levels of protection reflect a more conservative approach
than other countries toward the level of protection that we desire in
setting specific standards does not render these laws subject to
question under Article 712(5).

     This provision is meant to ensure that governments do not enforce
or apply their health laws or regulations in a way calculated to provide
a special advantage to domestic producers. For example, this provision
is designed to guard against a country imposing a two year quarantine on
imported cattle (and not coincidentally protecting the domestic
industry) when a 10 day quarantine would be sufficient to guarantee the
cattle are not diseased.      Article 712(5) does not require
governments to avoid taking any action that has trade restrictive
effects. And it recognizes that governments may legitimately take
economic and technical factors into account in the manner that they
apply their health regulations to imported goods. Finally, the provision
is drafted so that a government will always be able to apply its health
measures in a manner that fully achieves the country\'s chosen level of
protection.

     Question 3. I want to ensure that the U.S. has not ceded its
authority to restrict trade in order to promote protection of our global
commons. Please explain whether the language in NAFTA would prevent the
U.S. or other signatories from restricting trade in order to protect an
extraterritorial resource, assuming that such a restriction is applied
in a way that is nondiscriminatory. For example, would NAFTA preclude
the U.S. from prohibiting the sale or import of specific varieties of
seal pelts with the objective of protecting seal populations that are
not listed as endangered under the Convention on International Trade in
Endangered Species? Would nondiscriminatory restrictions on the sale or
import of products producing greenhouse emissions for the purpose of
protecting the global climate be consistent with NAFTA?

     Response. This Administration is committed to taking effective
action to protect global environmental resources, including the global
commons. Far from ceding our authorities in this area in the NAFTA, the
agreement itself and the supplemental Agreement on Environmental
Cooperation affirm the commitment of all three countries to protection
of the environment and the promotion of sustainable development. In a
provision that has no precedent in trade agreements, NAFTA Article 104
expressly provides that the obligations of the NAFTA parties under
international environmental agreements shall prevail over any
inconsistent obligations undertaken in the NAFTA.      The NAFTA does
not change U.S. obligations concerning the use of trade sanctions to
protect a particular resource outside the United States. The NAFTA will
not impair the ability of the United States to impose the kinds of
non-discriminatory trade restrictions cited in your examples. Thus, a
nondiscriminatory prohibition on the sale of all domestically- and
foreign- produced seal pelts in the United States would generally be
consistent with the NAFTA. Similarly, a ban on the sale of all domestic
and foreign-made goods producing greenhouse gas emissions would
generally be consistent with NAFTA requirements.

     As you may know, the broader question of the use of trade measures
to protect resources outside a particular country\'s jurisdiction is
currently under discussion in a number of international fora, including
the Working Group on Environmental Measures and International Trade
under the General Agreement on Tariffs and Trade (GATT), and in the
Organization for Economic Cooperation and Development (OECD).

     This issue arises most clearly in connection with the \"general
exceptions\" to the GATT, a number of which have been included as
general exceptions to the NAFTA as well. The exceptions most directly
applicable to environmental protection are GATT Article XX(b)
(protection of human, animal and plant life or health) and Article XX(g)
(conservation of exhaustible natural resources). Some GATT countries,
and an earlier, unadopted GATT panel report, have asserted that those
exceptions are not available for measures to conserve or protect a
resource outside the jurisdiction of the country taking the measure. The
scope of those articles are the subject of on-going dispute settlement
proceedings before a GATT panel concerning a challenge by the European
Communities and the Netherlands to U.S. import restrictions on tuna in
order to protect dolphins.

     In those GATT dispute settlement proceedings, we have made clear
that Article XX fully guarantees the ability of the Untied States to
take measures to protect resources outside its jurisdiction. The
inclusion of these Article XX provisions in the NAFTA does nothing to
jeopardize the U.S. position on this question.

     Question 4. I also want assurances that NAFTA will not prohibit the
use of trade restrictions as a sanction for the failure to comply with
future international environmental accords not listed in NAFTA Article
104, especially on the issue of global climate protection. Please
explain whether NAFTA would discourage the adoption in any new
multilateral agreement on global climate of provisions imposing trade
sanctions on non-complying nations, analogous to the trade sanction
provisions which have proven so effective in the Montreal Protocol for
Protection of the Stratospheric Ozone Layer.

     Response. The NAFTA is intentionally designed to be flexible enough
to accommodate additional international environmental or conservation
agreements that contain trade obligations. Article 104 of the NAFTA
gives precedence over the NAFTA to the trade obligations contained in a
list of international environmental agreements. That list includes the
Montreal Protocol on Substances that Deplete the Ozone Layer.

     Article 104 explicitly contemplates adding new environmental or
conservation agreements to the list as the NAFTA countries may agree. If
a new multilateral agreement on climate change contains trade
obligations, it could be added to the list in accordance with Article
104.

     Question 5. Section 105 of NAFTA provides that the parties are to
insure \"all necessary measures are taken in order to give effect to
\[its\] provisions \* \* \*, including their observance \* \* \* by
state and provincial governments.\" Does this require the U.S. to
preempt any state and local laws, and does the Administration intend to
include any preemption provisions in its implementing legislation?

     Response. Article 105 is intended to ensure that the federal
government in each of the three NAFTA countries is fully accountable for
any state or provincial measures covered by the agreement. This
provision is drawn virtually verbatim from the United States-Canada
Free-Trade Agreement (CFTA).      Article 105 does not establish or
require federal preemption of state or provincial measures. It does mean
that the federal government will be held accountable if it cannot secure
state or provincial compliance with NAFTA obligations.

     The precise legal relationship between the NAFTA and a country\'s
domestic law is a matter for each participating government to decide.
For example, we understand that Mexico intends to adopt NAFTA into its
domestic law, thus superseding any pre-existing, inconsistent Mexican
federal or state law.      In the United States, this issue will be
addressed in the NAFTA implementing bill. The Administration will be
working with the Congress to develop the NAFTA implementing legislation,
including any provisions necessary or appropriate to implement Article
105.

     It is important to note that where a question arises concerning the
consistency of a state law with U.S. international trade obligations,
the Executive Branch works with the state through cooperation and
consultations. We ensure that our states are fully briefed on any
discussions with other governments concerning state laws and are kept
involved in any dispute settlement proceedings that may be initiated. In
the case of the NAFTA\--as we have done in connection with the CFTA\--we
would expect state representatives to be full participants in any panel
proceedings concerning their laws.      In the one instance where state
measures were successfully challenged before a GATT panel, we have not
had recourse to preemption or lawsuits. Rather, we have worked with the
state involved to see what, if any, solutions to the question can be
found that would fully protect state interests in the matter. We expect
our practice of consultations and cooperation to continue under the
NAFTA.

     We would note that there is no preemption under the NAFTA in
another sense, which is that state and local laws are free to differ
from federal regulations and still be consistent with the NAFTA. In
fact, there is nothing in the NAFTA that refers to federal standards as
any point of reference for state standards. Instead, the same NAFTA
requirements that guard against standards being used to provide a
special advantage to domestic producers are applied to federal standards
and to state standards.

     Thank you for this opportunity to clarify these issues. I look
forward to continuing to work with you in preparing for the
implementation of the NAFTA. Sincerely,

Michael Kantor.

\-\-\-\-\-\-\-\-\--

### The United States Trade Representative,

Executive Office of the President,

Washington, DC. September 29, 1993.

Hon. John D. Dingell,

Chairman, Committee on Energy and Commerce, House of Representatives,
Washington, DC.

     Dear Mr. Chairman: Thank you for your letter of July 29, cosigned
by Chairwoman Collins, containing questions regarding matters of
significance to the Energy and Commerce Committee. I apologize for the
delay in responding, but we wanted to provide complete responses, which
required interagency coordination.

     Please find attached a complete set of answers to your questions.
     I know that my staff has met with committee staff on several
occasions over recent weeks. I hope that this is the start of a fruitful
process for working together on facilitating drafting of NAFTA
implementing legislation.      I look forward to working with you and
the members of the committee in achieving President Clinton\'s goal to
bring NAFTA into effect on January 1.

Sincerely,

Michael Kantor.

### THE NORTH AMERICAN FREE TRADE AGREEMENT PROPOSAL

     1. Paragraph 1 of Article 102 of the proposed North American Free
Trade Agreement (NAFTA) sets forth six objectives of the Agreement. They
differ from those set forth in Article 102 of the Canadian Free Trade
Agreement (CFTA). Paragraph 2, which was not included in the CFTA,
provides that the Parties shall interpret and apply the provisions of
NAFTA in the light of these objectives and in accordance with applicable
rules of international law. The objectives do not include any reference
to workers or the environment. None even remotely focus on these two
important matters. Please explain why workers and the environment were
ignored in the objectives and how and to what extent the Parties will be
able to effectively interpret and apply the agreement to protect and
enhance workers and the environment if even the basic objectives of
NAFTA fail to mention either category.      Answer. The objectives of
NAFTA focus in highly generalized terms on what the NAFTA does, as
opposed to the motivations for the agreements. Those motivations are
laid out in detail in the preamble, including the resolve of all three
countries to benefit workers and the environment through the NAFTA.
     While the objectives of the NAFTA are appropriately stated in terms
of removing trade and investment barriers, the Agreement clearly will
lead to direct economic benefits for U.S. workers and is carefully
drafted to ensure that U.S. worker and environmental standards can be
fully maintained and improved. We see no contradiction between the goal
of increasing economic opportunities for all Americans by removing trade
and investment barriers, which is the purpose of the NAFTA, and the
inclusion of strong provisions in the Agreement ensuring that U.S.
worker and environmental standards are fully protected.

     2. An article in the June 9, 1993 edition of the Journal of
Commerce reports that a company in Walled Lake, Michigan, has closed its
factory which employed as many as 100 workers and supplied
air-conditioning components to General Motors Corporation, and
transferred its operations to Mexico. The company is headquartered in
Florida. It employs about 1,000 workers in various facilities in the
U.S. and 200 workers in Mexico. At the Walled Lake facility workers are
members of the United Auto Workers Local 445. The firm\'s president, Mr.
David Neighbert, in commenting on this closure and transfer, noted that
we \"live in a global economy\" and \"have to be competitive.\" He said
he was moving south to cut costs. This closure and move to Mexico of an
auto parts firm even before NAFTA is adopted is a concern because many
believe such events will be more common after adoption. We request that
you, working with the Secretary of Labor, examine this closure and
explain the factors that enticed this firm to move to Mexico.

     (a) Is it likely that other operations of this firm will also be
moved to Mexico?

     Answer. We have no information on whether S&J Fabricating and
Engineering of Florida plans to move additional facilities to Mexico. We
can say that if the NAFTA is passed there is less incentive in several
respects for an automotive company to move operations from the United
States to Mexico: NAFTA requires Mexico to phase out current Mexican
legal requirements (such as local content and trade-balancing
requirements) that now force our companies to produce in Mexico or
purchase Mexican products in order to sell products in the Mexican
market.

NAFTA requires Mexico to eliminate its tariffs on U.S. and Canadian-
made automotive products, but not those of other countries. That means
American vehicles and parts will be much cheaper in Mexico. Mexico\'s
tariffs on cars are 20%, and on parts average about 12%; our tariffs on
Mexican automotive products, by comparison, are much lower.

NAFTA will require Mexico to eliminate trade-distorting requirements of
its duty drawback and maquiladora programs that provide incentives to
export products from Mexico and restrict sales in Mexico.

     By comparison, current U.S. tariffs on Mexican automobiles and
parts are already very low, and there are no significant U.S. non-tariff
barriers against imports of Mexican automotive products. In that sense,
the playing field is now titled in Mexico\'s favor. By levelling the
playing field, NAFTA makes it more likely for a company to stay in the
United States and export its products to Mexico. Rejecting NAFTA means
leaving in place all these measures that hurt us now.

     There is good reason to believe that we will benefit by levelling
that playing field. For example, in a study released in September 1992,
the Office of Technology Assessment found that, for automobiles to be
sold in the United States, it is \$410 cheaper to assemble an automobile
in the United States than in Mexico, even though hourly compensation of
assembly workers is about eight times higher in the United States than
in Mexico.

     (b) How does the NAFTA address such closures and relocations if its
objective fail to consider workers?

     Answer. The primary reason that the Clinton Administration supports
NAFTA is that it will benefit U.S. workers. There have been some 20
serious studies of NAFTA\'s employment effects. All but one found a
positive impact (and the exception used very questionable assumptions).

     Of course, any job dislocations are unfortunate, whether they be
from trade, defense conversion, or technology changes. That is why the
Administration has worked to develop a Comprehensive Worker Adjustment
Program that will provide workers displaced by trade with Mexico and for
other reasons with a comprehensive package of one-stop employment
services, training, and income maintenance.

     (c) What is the average auto parts manufacturing wage and benefits
in Mexico? What is it projected to be in five years with the adoption of
NAFTA?      Answer. We do not have precise figures on wages and benefits
for the auto parts industry alone, but we believe that wages and
benefits are lower than those of assembly workers in both countries and
roughly comparable to average manufacturing wages.

     It is very difficult to predict Mexican auto parts wages and
benefits into the future because they can be affected by numerous
macroeconomic and microeconomic factors. We expect productivity and
wages in Mexico to continue to rise as they have done since 1987. The
Mexican government\'s commitment to tie increases in the real minimum
wage to productivity increases should contribute to increases in real
wages of Mexican workers.

     (d) How do Mexican wages and benefits compare to U.S. wages and
benefits in this industry?

     Answer. As mentioned in the response to question (c), we do not
have precise figures on wages and benefits for the auto parts industry
alone, but we believe that wages and benefits are lower than lots of
assembly workers in both countries and roughly comparable to average
manufacturing wages.      According to comparative measures of hourly
compensation costs for production workers in manufacturing developed by
the Bureau of Labor Statistics, Mexican average manufacturing
compensation costs in 1992 were \$2.35 per hour, or 15 percent of
comparable U.S. costs of \$16.17 per hour. In general, most estimates
agree that compensation is 6-8 times higher for workers in the United
States than workers in Mexico. At the same time, analyses suggest that
the productivity of U.S. workers may be higher than that of Mexican
workers by approximately the same ratio, thereby eliminating any
advantage derived from lower Mexican wages.

     3. We understand that the President is committed to a strategy of
building a higher-wage/higher-skilled economy in the United States as
the best way to boost the standard of living for American workers. NAFTA
is said to be an important part of that strategy. At the same time, the
Administration explains that as greater economic integration occurs
between the U.S., Canada, and Mexico, some American workers may be
forced to change jobs. Some may also lose their jobs. We understand that
without NAFTA, more than 2 million Americans lose their jobs annually
due to plant closings, workplace restructuring, or production cuts. The
pace of structural economic change and worker dislocation appears to
have accelerated in recent years.      (a) Explain the above strategy
and the role of NAFTA in this strategy. Under such economic integration,
is it more likely that this strategy and NAFTA will cause a loss of jobs
in manufacturing such as reported by the Journal of Commerce, in the
technology and service industries, or in all of them?

     Answer. The President\'s national economic strategy seeks to use
human resource, technology, infrastructure development, and trade
policies to increase the number of high-wage, high-skill jobs in the
United States. NAFTA and other U.S. trade policy initiatives are
important to the President\'s strategy because they will further open
foreign markets to U.S. exports of technology- and skill-intensive goods
and services.

     Since the Mexican market is currently more protected than our own,
we anticipate that the NAFTA will create U.S. jobs, on net, in
manufacturing and, in particular, in the knowledge-intensive,
high-technology, and service industries. The U.S. Department of Commerce
estimates that in 1990, U.S. exports to Mexico supported 538,000 U.S.
jobs, including 260,000 in manufacturing. Since that time, there have
been further dramatic rises in our exports to Mexico. The Office of the
U.S. Trade Representative (USTR) has updated the Commerce Department\'s
estimate of the number of U.S. jobs supported by U.S. exports to Mexico;
USTR estimates that 716,000 U.S. jobs were directly or indirectly
supported by U.S. exports to Mexico in 1992. Also, USTR has calculated
that on average U.S. jobs supported by merchandise exports to Mexico pay
a wage 12 percent higher than the U.S. national average wage.

     (b) To what extent have manufacturing jobs in the U.S. increased or
declined since 1980? What are the causes of the decline?

     Answer. The number of manufacturing jobs in the U.S. economy
declined from slightly over 20 million in 1980 to slightly over 18
million in 1992. The most important reason for this decline is
technological change, which increases productivity. The dramatic growth
of U.S. manufactured goods exports to Mexico has had a positive effect
on U.S. manufacturing employment.      (c) What is the estimate of
increase or decline under NAFTA in this decade?      Answer. It is
difficult to estimate precisely the contribution of NAFTA to gross and
net U.S. job formation by the year 2000. The many economic studies of
the effects of the free trade with Mexico have projected an increase in
U.S. employment and/or an increase in wage compensation as compared to
the status quo. Indeed, it might also be the case that failure to
implement the NAFTA could also bring about the loss of some U.S.
manufacturing jobs as companies that had made investments in the United
States in anticipation of additional exports to Mexico associated with
the Agreement are forced to revise those plans.

     Most recently, a study by the Congressional Budget Office (CBO)
that includes a survey of the economic impact studies conducted by
academics and private sector institutions finds that NAFTA will result
in net employment gains in the United States. The CBO notes that some
workers could lose their jobs, but that the NAFTA would, on net,
increase total employment in the United States, as job gains more than
offset job losses. The CBO and other studies have found that both job
losses and gains are small in relation to the size of the U.S. economy
and workforce.

     (d) Can we as a nation afford to lose more and more manufacturing
jobs, even if there are gains in service and technology industries?
     Answer. If this question is related to NAFTA, the simple answer is
that we and private economists expect more Americans to be employed in
manufacturing in the United States if the NAFTA is approved than if the
NAFTA is rejected.      Independent of NAFTA, however, there is a trend
of declining employment in manufacturing, at least as a share of total
employment, in the United States and in most of our trading partners,
because manufacturing enjoys higher productivity growth than other
sectors. A fundamental problem, and a priority of the President, is to
ensure that manufacturing workers, and the majority of our labor force
that works in the service and other non-manufacturing sectors, are
competing based on innovation and rising productivity and quality, and
not by lowering wages.

     \[No questions 4 or 5 were received\]

     6. We understand from the Secretary of Labor that in this
recession, only 14 percent of the workers who lost their jobs have been
recalled. In prior recessions, this figure was 44 percent. Even when
re-employed, the typical displaced worker faces a decline in real wages
or loss of health care benefits.

     (a) If workers who come from manufacturing lose jobs under NAFTA,
what programs exist to help them find another job at a similar wage and
benefit level or will they likely have to accept a lesser wage and
benefit scale if they can find a job?

     Answer. Currently, there are two Federal programs which help
trade-impacted workers find new employment:

Trade Adjustment Assistance serves approximately 25,000 workers
dislocated because of imports each year, and includes an entitlement to
training, income maintenance, job search and relocation allowances.

The Economic Dislocation and Worker Adjustment Assistance program
provides rapid response to announcements of layoffs, and an array of
retraining and readjustment services, including supportive services and
needs-related payments for over 300,000 workers each year without regard
to the cause of dislocation.

     Very soon, the Administration plans to introduce legislation
creating a comprehensive worker adjustment program that combines the
best features of our adjustment programs. We foresee the new program as
emphasizing early identification of displaced workers, followed by early
readjustment and job- search assistance, proven ways to cut the time of
unemployment and the associated loss in earnings. In addition, the
Administration will also propose a transitional program to cover any
workers dislocated by the impact of NAFTA until such time as the
comprehensive program is fully implemented.      (b) What does that do
for their standard of living?

     Answer. The Administration believes that in recent years programs
to assist dislocated workers have not been as effective as they must be.
Workers have suffered the consequences. The new comprehensive worker
adjustment program is intended to improve the situation.

     Indeed, the most recent survey of displaced workers, conducted in
January 1992, showed that 5.6 million workers with 3 or more years
tenure with their employers lost jobs between January 1987 and January
1992 due to plant or company closings, slack work, or position or shift
abolishment. About 3.6 million, or 65 percent, were reemployed.

     Among the reemployed workers, median earnings on the jobs held in
January 1992 were \$369 per week, 14 percent lower than the earnings on
the jobs from which they were displaced (\$431).

     We intend to improve upon this record with the new comprehensive
dislocated worker program.

     (c) Will NAFTA legislation address these problems? If not, why not?
If yes, please explain how.

     Answer. As discussed in the answer to question (a), the
Administration is committed to introducing a comprehensive worker
adjustment legislative proposal which addresses the needs of all
dislocated workers through timely assistance in finding a suitable job
and support for longer-term training for those who seek to upgrade their
skills as a way to preserve or increase their earnings. Until that
program is enacted by Congress, the Administration will propose a
transitional program to address the needs of workers who might be
dislocated as a result of NAFTA.

     Concerns about the economic future of Americans are well-placed.
Since the 1970s, the real wages of most American workers have
persistently declined. The average real hourly earnings of production
and non-supervisory workers, mainly non-college workers, declined by 10
percent from 1973 to 1992 (and by nearly 9.5 percent from 1979 to 1992).
Real wages have fallen even more dramatically for young, non-college
workers. In fact, the percentage of year- round, full-time workers not
earning enough to support a family of four above the U.S. poverty level
increased from 12.1 percent in 1979 to 18 percent in 1990.

     The job market is also growing more unstable, leaving an increasing
number of Americans to work harder for not only a lower wage but for
lower benefits and less peace of mind. The number of temporary and
part-time workers continues to grow.

     We can and we must address these sources of concern. But retreating
from trade\--and in particular hoping that the defeat of NAFTA will
reverse the tide of global economic evolution\--not only is not the
solution, but will only make our problems worse. Our challenge is to
pursue the President\'s integrated economic strategy of deficit
reduction, investment in our workers, and expanded trade. That is the
only way to reverse the pattern of stagnant or declining earning. NAFTA
will help to do that. I21The Auto Pact with Canada is not part of the
CFTA. However, the CFTA did not terminate it, although it freezes the
list of manufacturers in Canada who may be granted pact or pact-like
status. How does NAFTA affect this freeze under the auto PACT?

     Answer. The NAFTA reaffirms Canada\'s obligations found in the U.S.
Canada Free Trade Agreement Chapter 10 regarding the Auto pact. In other
words, the freeze on Auto Pact membership continues under the NAFTA.

     8. As you know, the Japanese continue to export large numbers of
vehicles to the U.S. Will any additional capacity be provided for
Japanese vehicles in Canada and Mexico for export? Where will those
exports likely go?      Answer. The NAFTA accords no benefits in any
NAFTA country to cars made in Japan. To benefit from NAFTA preferences,
a car will not only have to be assembled in the United States, Canada or
Mexico, but at least fifty percent of its value will have to consist of
North American parts and labor, rising to 62.5 percent North American
content by January 1, 2002. The NAFTA also increases the incentive to
use U.S. parts as compared to parts from Japan or other non-NAFTA
countries, by eliminating the trade distorting provisions of duty
drawback and maquiladora programs.

     The effect of NAFTA, therefore, is to favor cars and parts made in
North America over those made in Japan.

     Independent of NAFTA, the majority of vehicles produced in Mexico
are currently sold in Mexico. Currently, the only Japanese manufacturer
of motor vehicles in Mexico is Nissan which also produces in the United
States. Nissan is therefore unlikely to export to the United States from
Mexico as it would be competing directly with Nissan in the United
States. Nissan Mexico has been exporting minor numbers of an older model
Sentra from Mexico to Canada, and also exports to Central and South
America as well as back to Japan. It does not currently export vehicles
to the United States from Mexico.      No recent announcements have been
made for increased Japanese production capacity in Canada or Mexico.
Honda and Toyota manufacture in Canada and the United States and both
companies ship vehicles and parts between the United States and Canada.
These two companies have basically rationalized their U.S.-Canadian
production. We have no information with respect to Honda\'s and
Toyota\'s plans for the Mexican market, but we would note that under the
NAFTA there are provisions to ensure that new investment does not
receive an advantage over existing companies (chiefly U.S. companies).
Nissan Mexican expansion plans that were announced in 1991 are for
production to be exported to Japan, Central and South America, as noted
above. This will increase demand for U.S. parts exports which are
incorporated in vehicles produced in Mexico and exported outside of
North America. Nissan\'s production facility in Smyrna, Tennessee, was
also recently expanded.

     9. Article 103 provides that the Parties affirm their existing
rights and obligations with respect to each other under the General
Agreement on Tariffs and Trade and other agreements to which such
Parties are a party. In the event of inconsistency, NAFTA shall prevail.
Please identify these other agreements. Do they cover only trilateral
agreements between the three Parties?

     Answer. Article 103 applies to all pre-existing agreements to which
two or all three NAFTA governments are parties, including bilateral,
trilateral, and multilateral agreements. This Article codifies a normal
rule of international law: an agreement later in time agreement will
prevail over a prior agreement to the extent of the inconsistency. It
also repeat Article 104 of the U.S.- Canada Free-Trade Agreement (CFTA).

     That does not mean that NAFTA nullifies prior agreements. It only
means that, unless otherwise specified in the NAFTA, obligations of the
NAFTA cannot be avoided on grounds of some other agreement that was
concluded earlier between the Parties. Incidentally, this rule is very
similar to that concerning U.S. legislation: a law enacted later in time
will prevail over a prior inconsistent law to the extent of the
inconsistency.

     It should be noted, however, that there are several exceptions
specified in the NAFTA in which the parties specifically affirm that a
prior agreement will have precedence over the NAFTA in the event of an
inconsistency. For example:

\(a\) the Convention on International Trade in Endangered Species of
Wild Fauna and Flora;

\(b\) the Montreal Protocol on Substances that Deplete the Ozone Layer;
and

\(c\) the Basel Convention on the Control of Transboundary Movements of
Hazardous Wastes and Their Disposal.

     Similarly, Annex 104.1 lists two bilateral agreements, one with
Canada and the other with Mexico:

\(d\) The Agreement Between the Government of Canada and the Government
of the United States of America Concerning the Transboundary Movement of
Hazardous Waste; and

\(e\) The Agreement Between the United States of America and the United
Mexican States on Cooperation for the Protection and Improvement of the
Environment in the Border Area.

     Article 104 also provides that the parties may agree to add other
agreements to the list of exceptions in Article 104.

     In other parts of the NAFTA, the United States and Canada affirm
that no inconsistency is intended between the NAFTA and the Agreement on
International Energy Program, and the parties have also affirmed the
priority of tax treaties over the NAFTA, to the extent of any
inconsistency.      It should be noted that in virtually every instance,
we do not believe that there is in fact an inconsistency between NAFTA
and these prior agreements. Our concern has been to avoid doubts in
instances where there has been an argument to the contrary, even if that
is not the U.S. Government\'s view.      10. Article 105 has been
criticized because it is perceived as potentially requiring changes in
Federal and State laws in order to give effect to the proposed
Agreement. A similar provision is contained in Article 103 of the CFTA.
This perception was recognized by a U.S. district court in the recent
decisions of Judge Charles R. Richey regarding the application of the
National Environmental Policy Act of 1969. The court noted that NAFTA
could serve as a basis to challenge such laws as the Federal Food, Drug,
and Cosmetic Act and California\'s Proposition 65. Certainly, Article
105, together with paragraph 2 of Article 102, would appear to give
credence to this criticism.

     (a) What is the intent of the Parties? Do you agree with the court
opinion? If not, please explain why not and provide your understanding
of the effect of this Article. Are your views shared by the other
parties?      Answer. The purpose of Article 105 is to make explicit the
Parties\' understanding that their obligation to act in conformity with
the NAFTA extends to state and provincial laws and regulations as well
as to federal measures. The language builds on that of GATT Article XXIV
(12), which has been in place since 1947, and is virtually identical to
CFTA Article 103.      Article 105 does not address the application of
the NAFTA under the domestic law of the three countries. That is a
matter for each country to decide. Rather, Article 105 makes clear what
obligations the three countries have to each other under international
law in respect of state and provincial measures.

     In this regard, Article 105 simply says that no country can avoid
its commitments under the Agreement by claiming that the measure in
question is a matter of state or provincial jurisdiction. We believe
that the NEPA district court misunderstood this key distinction and
concluded that, as a result of Article 105, the NAFTA could directly
overrule state (and federal) environmental and health measures.

     Contrary to the district court\'s opinion, we are not aware of any
U.S. federal or state health, safety, or environmental measures that are
inconsistent with the obligations of the NAFTA, including Article 105,
Nor does Article 105 require state laws and regulations to be similar or
identical to those of the federal government.

     In fact, nothing in the NAFTA automatically preempts state
law\--even where a NAFTA panel determines that a state law may be
inconsistent with the agreement. And the NAFTA implementing legislation
will ensure that there is no \"private right of action\" under the NAFTA
that might mean that states could face lawsuits by companies or
individuals seeking to enforce compliance with the NAFTA.

     If we follow the pattern of the GATT and the CFTA, the federal
government\'s efforts to secure state conformity with the NAFTA are
likely to be entirely cooperative in nature. The Administration
typically works very closely with the states involved in any dispute
settlement proceedings, both before and after my panel consideration, in
a cooperative effort to determine the best course of action. Although
ultimately the federal government, through its Constitutional authority
and implementing legislation, retains the authority to overrule
inconsistent state law through legislation or civil suit, use of this
authority has not been necessary in the nearly half-century history of
the GATT or the five years that the CFTA has been in effect.      (b)
Please explain how the side agreements will change this perception? How
has article 103 of the CFTA been interpreted? Do the parties intend a
different interpretation for NAFTA, particularly in view of paragraph 2
of Article 102 of NAFTA?

     Answer. As noted above, we do not believe that the NAFTA requires
the United States to change its existing health, environmental, or
safety laws or to make state laws and regulations the same as those of
the federal government. The supplemental agreements also do not require
changing our laws and regulations at the state or federal level. The
supplemental agreements are intended, like certain provisions of the
NAFTA, to encourage improved labor and environmental protection in North
America, but any changes in U.S. laws or regulations would have to be
implemented in accordance with domestic law.

     CFTA Article 103 has consistently been interpreted in accordance
with the view expressed in our answer to question 10(a). We would expect
the three NAFTA countries to interpret NAFTA Article 105 in the same
way.      11. When the CFTA was under consideration, the Energy and
Commerce Committee had a number of concerns, particularly regarding the
energy and auto chapters (see H. Rept. 100-816, Part 7, Aug. 5, 1988).
Some of these concerns were addressed in the implementing legislation
and accompanying Statement of Administrative Action. NAFTA appears
silent on its relationship to the CFTA, although we note that Annex
608.2 incorporates Annexes 902.5 and 905.2 of the CFTA and Annex 801.1
incorporates Article 1101 of the CFTA.      (a) What is the effect of
NAFTA on the bilateral CFTA and the United States-Canada Free-Trade
Agreement Implementation Act of 1988?      Answer. The United States and
Canada will suspend the operation of the CFTA upon the entry into force
of NAFTA. The suspension will remain in effect for such time as the two
governments are parties to the NAFTA. Where the CFTA Implementation Act
carries out U.S. obligations under the CFTA that will continue in effect
through the NAFTA, those statutory provisions will either be repealed
and reenacted in the NAFTA implementing legislation or simply remain in
place.

     (b) Are the requirements of the CFTA fully incorporated into NAFTA?
If not, is it the intent of the Parties that the U.S. and Canada would
suspend or repeal the CFTA and its implementing Act? Please explain how
that would be done and under what circumstances the CFTA could be
reinstated. If suspension or repeal occurs, what is the effect on the
matters addressed in the CFTA that are not specifically addressed in
NAFTA or the NAFTA implementing legislation?

     Answer. Most, but not all, provisions of the CFTA have been
incorporated into NAFTA. For example, the tariff schedules between the
United States and Canada have remained the same, but some rules of
origin have been changed, such as the increased North American content
for automobiles. In many cases, the NAFTA simply restates as obligations
for the three governments, in the same or somewhat different words, the
provisions of the CFTA. In other cases, the three governments simply
decided on a new approach to a particular subject area. For example, the
investment protections are stronger and include a wider list of
prohibited performance requirements.      In still other cases, where
the three governments agreed that certain CFTA provisions should
continue to apply solely between the United States and Canada, those
provisions have been incorporated by reference into the NAFTA in
appropriate annexes. In addition to the incorporations by reference of
CFTA provisions into NAFTA that you cited, others include paragraph one
of Appendix 300-A.1 in Annex 300-A (automotive sector); paragraph A of
Appendix 2.1 in Annex 300-B (textiles and apparel); Annex 702.1
(agricultural trade); Annex 1401.4 (financial services); and Annex 2106
(cultural industries).      12. Paragraph 2 of Annex 608.2 specifies
that Canada and the United States intend no inconsistency between
Chapter 6 and the Agreement on International Energy. If there is one,
the International Energy Plan will prevail as between Canada and the
U.S., but not as to Mexico, which is associated with the Organization of
Petroleum Exporting Countries (OPEC). What problems does that present?
For example, can the U.S. divert shipments of Mexican oil, if necessary,
to comply with International Energy Agency allocation requirements? In
responding, please consider an article in the February 26, 1993 edition
of the Journal of Commerce entitled \"Missing Oil Chapter in NAFTA.\"

     Answer. Taking into account the Journal of Commerce article cited
in your question, we do not believe Annex 608.2 will present any new
problems for the implementation of the IEP. Under the International
Energy Agency\'s (IEA) Sharing System, during an emergency the
participating countries would redistribute their available oil supplies
among themselves in accordance with a prescribed formula, under which
some countries would have allocation rights and others would have
allocation obligations. If the U.S. has an IEA allocation obligation
during an emergency, nothing in the NAFTA would prevent participating
U.S. oil companies from diverting shipments of Mexican oil to IEA
countries with an allocation right. Mexico, pursuant to NAFTA Article
603(3), may require as a condition of export of its oil, that the oil be
consumed in the United States. In that event, given the large number of
oil suppliers available to U.S. companies, it is likely participating
U.S. oil companies would be able to divert other foreign oil shipments
to satisfy the U.S. allocation obligation.

     It should be noted that the NAFTA does not pose new obstacles to
implementation of our IEA commitments in this regard. Mexico could pose
a requirement that oil exported to the United States be consumed in this
country even without the NAFTA.

     13. The provisions of Article 603 of NAFTA are very similar to
those in Article 902 of the CFTA, except for paragraphs 5 and 6. Please
explain the need for including these paragraphs and their impact on the
U.S. Please include a discussion of Annex 603.6 and the reasons why the
U.S. agreed to such an exception.

     Answer. Paragraph 5 of Article 603 is included in NAFTA to confirm
each Party\'s right to maintain systems for licensing imports and
exports of energy and basic petrochemical goods so long as such systems
do not constitute barriers to trade in energy and basic and
petrochemical goods among the Parties, in violation of paragraphs 1 and
2 of Article 603. Thus, for example, the U.S. system for licensing
imports and exports of natural gas will be maintained under this
provision. The reference to \"Article 1502 (Monopolies and State
Enterprises)\" in paragraph 5 is intended to make clear that the Parties
may not implement their import/export licensing systems in a
discriminatory or anticompetitive manner. Regarding paragraph 6, Annex
603.6 authorizes Mexico to restrict the issuance of import and export
licenses for the energy and basic petrochemical goods listed in the
Annex to the Mexican Government for the purpose of maintaining the
Mexican Government\'s monopoly in the energy and basic petrochemicals
sectors. The Mexican Government maintains the Mexican Constitution
requires the reservations set out in Annex 603.6. This provision does
not permit Mexico to derogate from the GATT trade obligations
incorporated by paragraph 1 of Article 603 or from any other applicable
trade obligations in the NAFTA. Moreover, to the extent that Mexican
state enterprises or monopolies are responsible for foreign trade in
energy and basic petrochemical goods, they are subject to the
obligations and disciplines in Article 1502, Monopolies and State
Enterprises.      14. The energy provisions of the CFTA raise questions
about whether these provisions apply to Mexico in the context of NAFTA.
If these do not apply to Mexico, will the CFTA provisions be maintained?
If they do apply, do we need specific legislative language on the
following:

\(a\) Article 903, which prohibits tax, duty or charge on energy that is
not charged domestically.

\(b\) Article 905, which prohibits discriminating regulatory treatment
by FERC and its Canadian equivalent.

\(c\) Article 906, which allows oil and gas production incentives.

     Answer. The fundamental energy trade provisions in Articles 902 and
903 of the U.S.-Canada Free Trade Agreement (CFTA) are carried forward
into Articles 603 and 604, respectively, of the NAFTA. They apply to
Mexico. The provisions of CFTA Article 904 (which limit the
circumstances under which a CFTA Party may restrict exports in
accordance with the GATT when conserving resources to address a domestic
shortage or protect a domestic price control program) and 907 (which
narrows the GATT national security exceptions for energy) have been
carried forward into NAFTA Articles 605 and 607, respectively. These
Articles apply as between the U.S. and Canada but not Mexico. No
statutory changes were required to implement Articles 903, 905, and 906
of the CFTA, and no statutory changes will be required to implement the
parallel NAFTA Articles 604, 606, and 608(1), because existing U.S. laws
are not in conflict with these provisions.

     15. The CFTA contains two statutory provisions on energy. The
Alaskan oil swap exception allows 50,000 barrels per day to be swapped
for Canadian oil. In addition, the Atomic Energy Act is amended to allow
Canadian uranium to be considered domestic.

     (a) Do either of these provisions require legislation in NAFTA?
     (b) Should these provisions apply to Mexico?

     (c) What is their legal status without legislation?

     Answer. The fundamental energy trade provisions in Articles 902 and
903 of the U.S.-Canada Free Trade Agreement (CFTA) are carried forward
into Articles 603 and 604, respectively, of the NAFTA. They apply to
Mexico. The provisions of CFTA Article 904 (which limit the
circumstances under which a CFTA Party may restrict exports in
accordance with the GATT when conserving resources to address a domestic
shortage or protect a domestic price control program) and 907 (which
narrows the GATT national security exceptions for energy) have been
carried forward into NAFTA Articles 605 and 607, respectively. These
Articles apply as between the U.S. and Canada but not Mexico. No
statutory changes were required to implement Articles 903, 905, and 906
of the CFTA, and no statutory changes will be required to implement the
parallel NAFTA Articles 605, 606, and 608(1).

     These U.S. obligations, addressing specific U.S.-Canada issues, are
continued in effect under the NAFTA. They already have been implemented
by the United States-Canada Free-Trade Agreement Implementation Act of
1988. No additional statutory changes would be required for us to meet
our obligations or enforce our rights under these provisions.

     16. Chapter Nine of the CFTA\'s Statement of Administrative Action
states that energy regulatory bodies must treat the other country\'s
energy goods as no less favorable than the most favorable treatment
accorded by such province, state, or federal governments. Does this
principle apply to Mexico?      Answer. Yes. Articles 301, 603(1), and
606 apply the \"national treatment\" principle to Mexico.

     17. Practices forbidden under national treatment include
discriminatory internal taxes, or a domestic rule imposing an internal
quantitative requirement that a specified portion of energy needs to be
supplied from domestic sources. Does this principle apply to Mexico?

     Answer. Yes, as indicated in the answer to Question 16, the
principle of national treatment applies to Mexico.

     18. Annex 905.2 (4) of CFTA specifically limits the application of
any energy \"surplus\" test to exports. While Annex 608.2 of NAFTA
specifically excludes Annex 905.2 from applying to Mexico, would not
\"national treatment\" result in this provision applying to Mexico?

     Answer. Mexico\'s export measure must be administered in a manner
consistent with the trade principles of the NAFTA (and specifically with
Articles 603 and 604 of Chapter Six), just as CFTA Article 905.2
stipulates that Canada\'s \"surplus\" test for exports had to be
administered in a manner consistent with the trade principles of the
CFTA.

     19. Annex 905.2 (2) of CFTA requires Bonneville Power to modify its
intertie access policy to treat Canada \"no less favorable than the most
favorable treatment afforded to utilities outside the Pacific
Northwest.\" Annex 905.2 (3) of CFTA states that no other changes are
required. Does NAFTA\'s treatment of Bonneville as a government
purchasing agent change this?      Answer. No. The government
procurement provisions of Chapter 10 of the NAFTA apply to certain
purchases by the Bonneville Power Administration, as indicated in Annex
1002.1a-2 and Article 1001. Specifically, BPA would be required to
accord national treatment to Mexican goods and Mexican suppliers of
goods and services with respect to certain procurement contracts, and
BPA would be required to comply with the procurement procedures set
forth in Chapter 10 with respect to certain contracts. The obligation to
accord national treatment to Mexican goods and Mexican suppliers of
goods and services applies to the BPA only with respect to purchases for
its own use. The government procurement obligations do not alter the
validity of the statement in CFTA Annex 905.2(3) that \"No other policy
of \[the BPA\] or law authorizing such policy need be changed insofar as
such law or policy concerns energy sales, transmission of energy and
related business arrangements between the Bonneville Power
Administration and British Columbia Hydro.\" This annex is specifically
incorporated into the NAFTA in Annex 608.2.

     20. The Public Utility Holding Company Act (PUHCA) regulates the
purchase and financial transactions of electric utilities.

     (a) How would Mexican or Canadian companies purchase of a U.S.
utility or a U.S. utility\'s investment in Canada or Mexico be affected
by NAFTA?      Answer. NAFTA Chapter 11, \"Investment,\" generally
obligates the NAFTA parties to provide nondiscriminatory treatment to
investors of the three nations and their investments with respect to
establishment, acquisition, expansion, management, conduct, operation,
and sale or other disposition of investments. The chapter also places
restrictions on the ability of the countries to impose \"performance
requirements\" on investments and to expropriate investments. The
protection of this chapter would apply to any investment in a U.S.
utility by Mexican or Canadian companies and to a U.S. utility\'s
investment in Canada or Mexico.

     The Securities and Exchange Commission (SEC) is responsible for
administering the Public Utility Holding Company Act. Thus, the question
of how PUHCA may, in light of NAFTA, affect a Mexican or Canadian
company\'s purchase of a U.S. utility, or a U.S. utility\'s investment
in Canada or Mexico, is best addressed by the SEC.

     (b) Would there be any change in the application of PUHCA? If so,
are statutory changes needed?

     Answer. The Securities and Exchange Commission (SEC) is responsible
for administration of PUHCA. Thus, these questions are best addressed by
the SEC.      21. Will any changes in the application of any U.S. energy
laws, other than the fuel economy provisions of law, be needed to comply
with NAFTA (e.g., regulations, rulemakings, orders, judgment, etc.)?

     Answer. NAFTA Chapter Six requires no change in statute and no
administrative action to implement its provisions. With respect to NAFTA
Chapter Seventeen, Intellectual Property, the Department would be
required to amend its regulations (10 CFR 780) on compulsory licensing
under the Atomic Energy Act to comply with the requirements in Section
10(a-1) of Article 1709.

     22. Are there any procurement laws, regulations, orders or rules in
energy statutes which need to be changed in order to satisfy Article
1003?      Answer. There are no procurement laws, regulations, orders or
rules in energy statutes that need to be changed. Price preferences
resulting from the Buy America Act of 1933 will have to be waived for
covered procurement by the Department of Energy, its power marketing
administrations, and the Tennessee Valley Authority (TVA). Additionally,
a minor change will have to be made to TVA\'s authorizing legislation to
ensure that TVA\'s procurement activities will be conducted in a manner
consistent with the NAFTA. This should not require any significant
changes in TVA\'s current procedures. Finally, the Rural Electrification
Act will have to be amended to waive existing Buy America price
preferences for procurement of Canadian and Mexican origin.      23.
Would Chapter 10 pertaining to government procurement prohibit,
restrict, or subject to challenge legislative or executive order
provisions that allow federal agencies to provide price preference
materials for certain minimum percentages of recycled content or that
required federal agencies to procure materials or commodities with
certain minimum percentages of recycled content?

     Answer. As long as such measures are legitimate environmental
restrictions that do not have as their objective discrimination against
materials of Canadian or Mexican origin, they should not be violations
of the NAFTA and subjected to challenge.

     24. What is the scope of and rationale for the changes in current
compulsory licensing provisions under Article 1709 (10).

     Answer. These projections include items such as payment of adequate
remuneration, that takes into account the economic value of the license,
the availability of judicial review of decisions to grant a license and
the amount of remuneration paid, authority to terminate the compulsory
license, and limits on the scope of the license, i.e., a compulsory
license must be predominately for the supply of the domestic market,
i.e., not for export purposes. Paragraph 7 of this Article also ensures
that a compulsory license will not be granted because of failure to
\"work\" the patent in a particular NAFTA party.

     Two U.S. laws provide for grant of a compulsory license: (1)
Section 308 of the Clean Air Amendments of 1970 (42 U.S.C. Sec. 7608)
and (2) various provisions of the Atomic Energy Act of 1954, as amended,
(42 U.S.C. Secs. 2183, et. seq.). The Environmental Protection Agency
(EPA) has never issued regulations implementing the Clean Air Act
compulsory license and the Department of Energy has not granted any
compulsory licenses pursuant to the Atomic Energy Act. We understand,
however, that amendments to the Atomic Energy Act providing authority
for a compulsory license on technology relating to uranium enrichment
could foreseeably result in applications for compulsory licenses.

     To implement Article 1709(10), we recommend that EPA issue
regulations meeting the requirements of this NAFTA paragraph. DOE would
be required to amend provisions found at 10 CFR, Part 780.

     These provisions have been key objectives in our negotiations with
other countries that have used compulsory licensing provisions freely in
a manner that has severely undermined the value of U.S. intellectual
property rights.      25. In supporting inventive activity through the
Department of Energy, the Department exercises some limitations on the
exercise of resulting patents. Does Article 1703(1) affect or modify
these limitations?

     Answer. Article 1703(1), in relevant part, requires NAFTA parties
to provide national treatment with regard to protection and enforcement
of intellectual property rights. Article 1703(1) does not affect or
require modification of DOE practices relating to exercise of resulting
patents.      26. Article 712, paragraph 3, relating to sanitary and
phytosanitary measures, requires each party to ensure that measures it
adopts, maintains, or applies are based on scientific principles, taking
into account relevant factors including, where appropriate, different
geographic conditions. This raises a number of questions about
environmental measures which are not scientifically based but are
adopted at the state or federal level to further other societal goals.
For example, in the solid waste area minimum content or take back
requirements are imposed to encourage recycling and to stimulate markets
for recycled materials.

     (a) Would such measures generally be subject to challenge under the
terms of NAFTA?

     Answer. Environmental regulations in the solid waste area such as
minimum content and take back requirements are not sanitary and
phytosanitary measures as defined in Article 724 of Chapter 7. The NAFTA
requirement in Article 712(3) for a scientific basis therefore does not
apply to these recycling laws.

     (b) Does this Article in conjunction with Article 105 which states
that all parties \"shall ensure that all necessary measures are taken in
order to give effect to the provisions of this Agreement . . . by state
and local governments subject state recycling laws imposing minimum
content or take back requirements to challenge?

     Answer. As noted in the answer to part (a) above, state recycling
laws are not sanitary or phytosanitary measures and are not subject to
Article 712.      (c) Specifically, could a legislative provision which
requires U.S. newspapers to use newsprint with a minimum percentage of
recycled content be challenged under Article 712 or any other provision
of NAFTA on the basis that it is not \"based on scientific principles\"?

     Answer. As noted above, a requirement to use newsprint with a
minimum percentage of recycled content is not a \"sanitary or
phytosanitary measure,\" so Article 712 does not apply. No other
provision of NAFTA requires such a measure to be based on scientific
principles. More broadly, we do not believe that environmental measures
that do not discriminate based on national origin of the product could
be successfully challenged under any of the NAFTA provisions.

     27. Paragraph 5 of Section 712 provides that each party must ensure
that any sanitary or phytosanitary measure that it adopts, maintains, or
applies is applied only to the extent necessary to achieve the
appropriate level of protection \"taking into account technical and
economic feasibility.\" Some U.S. standards, under, for example, the
Clean Air Act, are solely health- based. What is the effect of this last
phrase on these standards. If the phrase is not applied, is a challenge
likely to be successful?      Answer. Environmental standards such as
Clean Air Act standards are not \"sanitary and phytosanitary measures\"
as that term is defined in the NAFTA, and are thus not governed by
Article 712(5). Even for those measures that are covered by Article
712(5), the quoted language about technical and economic feasibility
provides governments some flexibility in meeting the obligations in that
article, to provide administrative flexibility so that governments can
assure compliance with standards under real world constraints. The
quoted language does not obligate governments to take technical and
economic feasibility into account in establishing sanitary and
phytosanitary measures. Rather, this language permits governments to
take technical and economic feasibility into account in carrying out
their NAFTA obligation with respect to how their sanitary and
phytosanitary measures are applied.      28. What steps have been taken
to ensure that existing or future U.S. standards will remain in effect
relative to pesticide use on crops intended for food use and to
pesticide/chemical residues on fresh imported produce or canned or
otherwise processed food?

     Answer. The NAFTA does not change our standards on pesticide use or
pesticide and other chemical residue or contaminant standards for fresh
or procresed foods, and we are not changing any such standards in
implementing the NAFTA. The NAFTA provisions safeguard the ability of
the United States to ensure food safety. In short, existing U.S. food
safety standards will continue be applied to imported as well as
domestically-produced foods. This means that the U.S. will continue to
prohibit any food shipments determined not to meet pesticide residue or
other food safety requirements.      29. Does the NAFTA ensure that
application of U.S. Food and Drug Administration standards for safety,
purity, and appropriate labelling of foods will not be interfered with,
called into question, or deemed to be a barrier to trade or a violation
of the agreement?

     Answer. The NAFTA safeguards the ability of the United States to
ensure food safety and quality. The Food and Drug Administration (FDA),
which participated in the negotiation of the NAFTA, has reviewed the FDA
standards for safety, purity, and appropriate labelling of foods and has
determined that these standards are consistent with the terms of the
agreement. This is why no changes in these standards are needed or
proposed to implement the NAFTA, and why we believe that our measure
could not be successfully challenged in any NAFTA dispute settlement
proceeding.

     (a) What is the impact relative to the safety, effectiveness, and
appropriate labelling of human and animal drugs and medical devices?
     Answer. The NAFTA has no effect on U.S. laws and regulations in
these areas. Any products coming into the U.S. must continue to meet all
FDA standards and requirements.

     (b) What is the impact relative to safety and appropriate labelling
of dietary supplements imported in to the U.S.

     Answser. The NAFTA does not change or affect U.S. laws and
regulations with respect to such products, and imported products must
continue to meet those standards and requirements.

     30. If the U.S. food safety standards were challenged by Mexico or
Canada under the dispute settlement provision of NAFTA, would the U.S.
have to prove that its standard is necessary to achieve an
\"appropriate\" level of protection; that the standard is based on a
risk assessment; and that the standard will be maintained only as long
as there is a scientific basis for it.?

     Answer. Article 723(6) makes explicit that the party challenging a
U.S. food safety measure would have the burden of showing that the
measure is inconsistent with the NAFTA. Whether any particular level of
protection is \"appropriate\" is a social and political judgement that
the agreement reserves for the government applying the measure (see
Articles 712(2) and 724). As provided in Article 712, a sanitary or
phytosanitary measure is to be based on a risk assessment \"as
appropriate to the circumstances,\" and is not to be maintained where
there is no longer a scientific basis for it. U.S. food safety standards
are already based on risk assessments and have a scientific basis. These
NAFTA requrements help assure that measures applied by the other parties
will not unfairly exclude U.S. food exports.

     (a) Would the Delaney Clause (Public Law 85-929, 21 U.S.C. 341, et
seq.), which was enacted by Congress and not based on specific
scientific evidence, meet the NAFTA criteria described above?

     Answer. Yes. The NAFTA was carefully drafted, with the Delaney
clause and other provisions of U.S. law firmly in mind, to safeguard the
ability of governments to ensure food safety. As noted above, the choice
of the \"appropriate\" level of protection is a social value call: how
much protection do we want as a society from a particular risk. The
choice of the level of protection is not required to be based on a risk
assessment. The Delaney clause, in the first instance, establish a level
of protection that Congress has deemed appropriate. They express our
society\'s determination that we will accept no risk of cancer from the
presence of the regulated substances.      The NAFTA disciplines in
Article 712(3) do apply to any measure adopted to give effect to the
Delaney clauses. The Delaney clauses are entirely consistent with the
NAFTA\'s requirements in this regard. The determination that a
particular substance poses a risk of cancer is a scientific
determination, based on an evaluation of the potential for carcinogenic
effect. Based on scientific principles, the United States has determined
that if a substance induces cancer in animals, it poses some risk of
human carcinogenesis. And since the level of protection under Delaney
requires that there be zero risk of carcinogenesis, we prohibit the
substance.      (b) Has the Administration reviewed all U.S. food safety
standards to determine their consistency with NAFTA, and if so, what
U.S. food safety standards, in the opinion of the Administration, may
not meet the NAFTA criteria described above?

     Answer. Yes, the relevant federal agencies, including the
Department of Agriculture, the Food and Drug Administration and the
Environmental Protection Agency, have reviewed all U.S. food safety
standards. In their judgment, all current standards are consistent with
the NAFTA. Accordingly, no changes to U.S. food safety standards are
needed or proposed to implement the NAFTA.

     31. Paragraph 1 of Article 714 requires that without reducing the
level of protection, the Parties, to the greatest extent practicable and
in accordance with section B of chapter 7, pursue equivalence of their
respective sanitary and phytosanitary measures.

     (a) Please explain this provision and indicate how it will be
implemented, taking into consideration paragraphs 2, 3, and 4.

     Answer. In addressing sanitary and phytosanitary concerns,
countries may adopt somewhat different systems or requirements to with
respect to a particular risk situation. Article 714(1) establishes a
cooperative approach to making those systems or requirements equivalent,
where practicable and without reducing the level of protection of human,
animal or plant life or health. We anticipate that this work will
generally be done through the Committee on Sanitary and Phytosanitary
Measures established under the NAFTA and technical working groups or
subcommittees under that committee. Any recommendations of those groups
could only be implemented in the United States through the normal
domestic legal processes\--either through legislation or rulemaking
consistent with U.S. law.

     Article 714(2) deals with particular cases. Under that article, an
importing party will treat a sanitary or phytosanitary measure of an
exporting NAFTA party as equivalent as long as the exporting party\'s
measure achieves the importing party\'s appropriate level of protection,
and the exporting party has provided, in cooperation with the importing
party, the necessary scientific evidence or other information in
accordance with mutually agreed risk assessment methodologies.

     Article 714(3) specifies that the exporting party must take
reasonable measures to facilitate access in its territory for the
importing party to conduct inspections, tests, or other procedures to
evaluate properly the equivalency of the two regulatory systems.

     Article 714(4) urges each country, when developing its own sanitary
or phytosanitary measures, to consider the existing or proposed measure
of the other parties.

     (b) How will the term \"equivalence\" be interpreted?

     Answer. Under the terms of Article 714(2)(a), a measure is
equivalent only where \"the exporting Party\'s measure achieves the
importing Party\'s appropriate level of protection.\"

     (c) How will this affect imports of products, including food, to
the U.S.?      Answer. Products can be imported to the U.S. only if the
agency with the relevant jurisdiction makes a determination, in
accordance with normal agency procedures and requirements, that the
exporting country\'s regulatory program provides a level of protection
that is at least as high as the level of protection required under U.S.
law.

     (d) What procedures must be established in the U.S. to implement
paragraphs 2 and 3 of this article?

     Answer. Any procedures that are required for the affected agencies
to implement this article will be included in the implementing
legislation and statement of administrative action.

     32. Have any recent GATT panel decisions interpreted the term
\"necessary to protect human, animal or plant life or health\" as
requiring such measures to be \"least GATT\" or \"least trade\"
restrictive. If so, please provide any such decisions. Since Chapter
21\'s environmental exceptions appear to incorporate GATT jurisprudence,
could the above-referenced standard result in state recycling provisions
or programs being found NAFTA inconsistent?      Answer. The report of
the GATT Panel on Thailand\--Restrictions on Importation of and Internal
Taxes on Cigarettes, adopted on November 7, 1990 (BISD 37S/200)
concluded that Thailand\'s import restrictions \"could be considered to
be \'necessary\' in terms of Article XX(b) \[necessary to protect human,
animal, or plant life or health\] only if there were no alternative
measure consistent with the General Agreement, or less inconsistent with
it, which Thailand could reasonably be expected to employ to achieve its
health policy objectives.\"

     The unadopted report of the Panel on United States\--Import
Restrictions on Tuna and Tuna Products from Mexico (contained in GATT
document DS21/R, September 3, 1991) adopted the Thai cigarette
rationale, stating that \"this paragraph of Article XX was intended to
allow contracting parties to impose trade restrictive measures
inconsistent with the General Agreement to pursue overriding public
policy goals to the extent that such inconsistencies were unavoidable.\"

     Article XX(b) is a general exception to GATT obligations, and as
incorporated into the NAFTA under Article 2101, it is an exception to
NAFTA obligations. With respect to state recycling provisions or
programs, this GATT jurisprudence would be relevant only if the measures
are designed to protect human, animal or plant life or health, and only
if the party complaining about the measure first established that the
measure was somehow otherwise inconsistent with the NAFTA.

     33. Article 712 also requires sanitary or phytosanitary measures to
be \"based on a risk assessment, as appropriate to the circumstances.\"
     (a) Does Article 712 contemplate an international or North American
\"risk assessment\" standard? If so, to what extent does it differ from
risk assessment techniques use by the EPA and other U.S. agencies?
     Answer. No, Article 712 does not contemplate an international or
North American \"risk assessment\" standard. Article 715(1) calls upon
the parties simply to \"take into account,\" in conducting their own
risk assessment, relevant techniques and methodologies developed by
North American or international standardizing organizations. Under
NAFTA, federal and state agencies in the U.S. may continue to apply, and
to modify from time to time as they choose, risk assessment techniques
and methods for each regulatory circumstance.

     (b) Please define the meaning of the phrase \"risk assessment\" as
used in NAFTA.

     Answer. \"Risk assessment\" is defined in Article 724 as follows:

\"Risk assessment means an evaluation of:

\(a\) The potential for the introduction, establishment or spread of a
pest or disease and associated biological and economic consequences; or

\(b\) The potential for adverse effects on human or animal life or
health arising from the presence of an additive, contaminant, toxin, or
disease-causing organism in a food, beverage or feedstuff.\"      (c)
Please provide any clarification as to the circumstances where the
Parties believe it is appropriate or those where it is inappropriate to
use risk assessment.

     Answer. It is appropriate to do a risk assessment for all sanitary
and phytosanitary measures (Article 712(3)(c)).

     34. Please explain how and to what extent Article 715 will apply to
or change risk assessments now conducted by the Environmental Protection
Agency (EPA) or other agencies? Will it require risk assessments at the
EPA and other agencies where they are not now conducted?

     Answer. Although Article 715 applies to risk assessments now
conducted by the EPA, the FDA, and the USDA in carrying out their
respective responsibilities in the sanitary and phytosanitary area,
those agencies already conduct risk assessments consistent with the
NAFTA. The NAFTA will not require that additional risk assessments be
conducted.

     35. Do the provisions of Article 715 (2) and (3) apply to the
establishment of environmental standards necessary to protect human
health and the environment?

     Answer. Article 715(2), which requires certain economic factors to
be taken into account where relevant in establishing the appropriate
level of protection and in conducting risk assessments, does not apply
to human health measures. It applies only to the establishment of
measures with respect to the establishment or spread of animal or plant
pest or disease.      Article 715(3) applies to the establishment of the
appropriate level of protection with respect to any sanitary or
phytosanitary measure. It encourages countries to take into account the
objective of minimizing negative trade effects, and calls upon them to
avoid arbitrary or unjustifiable distinctions in those levels of
protection where such distinctions result in arbitrary or unjustifiable
discrimination against a good or another party or constitute a disguised
restriction on trade between the parties.

     36. Please explain the application of Article 718 to regulations
issued by the EPA or other agencies, such as the rules required under
section 112 of the Clean Air Act. When would the 60-day notice
requirement apply\--at the time of proposal or promulgation? Does
Article 718.1(d) give the comments of the Parties greater significance
and importance in rulemaking?      Answer. First, it should be noted
that Article 718 does not apply to such EPA rulemaking as the toxic air
pollutant provisions of section 112 of the Clean Air Act since those
regulations would not be sanitary or phytosanitary measures.

     The 60-day notice period applies to the minimum period before final
adoption of the rule. Thus, notice of the proposed rule pursuant to
standard agency practice under the Administrative Procedure Act will
satisfy this requirement.

     Article 718(1)(d), by its own terms, expressly states that the
opportunity for written comment and, on request, for discussion of and
response to comments, shall be afforded \"without discrimination.\"
Thus, Article 718.1(d) does not give the comments of the Parties greater
significance and importance in rulemaking than the comments of other
interested persons.      37. As provided in Article 1801 of the CFTA,
the CFTA Commission is composed of the Canadian and U.S. cabinet
officials primarily responsible for international trade. Will the
membership of the Commission established in Article 2001 be similarly
provided or will others, like the Secretary of Labor, be members? If
not, why not?

     Answer. The three governments intend the membership of the
Commission established by Article 2001 to be very similar to that of the
CFTA. It will comprise one cabinet-level official from each Party, which
in most cases will be the official primarily responsible for
international trade, i.e., the U.S. Trade Representative and his
Canadian and Mexican counterparts. However, for any given matter it will
be up to each government to select the appropriate cabinet officer its
wishes as its representative.

     38. The CFTA provides that the Commission operate by consensus.
Article 2001 of NAFTA provides that the parties may agree to operate by
other than consensus. We would like to know the circumstances when that
would be appropriate and useful to the U.S.

     Answer. This provision was included in order to give the three
governments the flexibility to depart from the general consensus rule if
they choose to do so. It is most likely to be used, if at all, in
connection with Commission procedural rules or in purely bilateral
matters in which the third Party expresses a preference not to
participate.

     39. Unlike the CFTA, Article 2001 provides that the Commission,
which meets at least once annually, shall supervise the work of all of
the committees and working groups established by NAFTA. There are a
number of them. Please explain why the Commission was given this duty
and how it will conduct such supervision.

     Answer. NAFTA creates a large number of working groups and
committees. The three governments recognized that there was a need for a
central coordination and oversight role. The negotiators also determined
that, in view of its overall responsibilities for the implementation of
the NAFTA, the Commission was the most appropriate body for this role.
Although not expressly provided for in the CFTA, the CFTA Commission
serves a similar function.      The Commission will carry out its
supervisory function by periodically reviewing either oral or written
reports from the various bodies and, where appropriate, by discussing
matter referred to it by such bodies. In some cases, the NAFTA
establishes a direct reporting requirement. For example, the Committee
on Standards-Related Measures is required, under Article 913(3)(b), to
report annually to the Commission. In other cases, the Commission is
likely to request periodic status reports.

     40. On the issue of referral of matters from judicial or
administrative proceedings, Article 2020 of NAFTA differs somewhat from
Article 1808 of the CFTA. Please explain these differences. Do you agree
that the views of the Commission are not binding on U.S. courts in the
case of NAFTA, just as they are not in the case of the CFTA?

     Answer. No material change is intended. The difference in language
between the two agreements largely reflects the trilateral, rather than
bilateral, nature of the NAFTA.

     Article 2020 is simply intended to provide a process for the
submission of views by the Parties concerning the interpretation of the
NAFTA in accordance with the rules of the pertinent court or
administrative body. As is the case under the CFTA, the views of the
three governments (whether acting individually or as the \"Commission\")
are not binding on U.S. courts.      41. Unlike the CFTA, the NAFTA
requires that the Commission establish a Secretariat. Please explain the
need and role of the Secretariat. Where will it be located? What will be
the cost to the U.S. of the Commission, the Secretariat, the committees,
working groups, scientific review boards, and other panels? How will
these be staffed? What has been the annual costs of the CFTA under
Article 18?

     Answer. The CFTA establishes a Secretariat to facilitate the
operation of binational panels that review the application of domestic
dumping and countervailing duty laws in the two countries. The
Secretariat has also been used to provide administrative support for
CFTA Chapter 18 dispute settlement panels as well, in accordance with
the CFTA implementing act.      Given our experience under the CFTA, the
negotiators believed that it was important to recognize the role that
the Secretariat has played in connection with dispute settlement panels
and to permit it to provide administrative support to the Commission and
to committees and groups if the three governments decide that it is
appropriate in any particular case.      As is the case under the CFTA,
each country will establish a Section of the Secretariat, with
appropriate staffing. In the United States, the Section has been a unit
of the Department of Commerce and has been located in Washington. That
office would assume the functions of the NAFTA Secretariat Section here.
     The projected cost of the U.S. Section, including administrative
support for both Chapter 19 and 20 panels, is \$1,107,000 for FY94 and
\$1,250,000 for FY95.

     We do not expect the U.S. Section to incur any significant
increased costs in connection with the provision of administrative
support to the NAFTA Commission or committees and working groups. For
the most part, we would anticipate that such support will be provided
directly by the relevant U.S. departments and agencies without a need
for further budget resources.      The annual costs of the operation of
the U.S. Section under the CFTA, including dispute settlement activities
under both Chapters 18 and 19 were \$460,800 for FY92 and are projected
to be \$788,000 for FY93.      42. Please identify and explain the
principle difference between the CFTA and NAFTA regarding dispute
settlement and the reasons for the differences. We point out that the
NAFTA provisions seem overly detailed, complicated, and costly. For
example, in the case of the CFTA, there is provision for a roster of
persons who are willing to serve as panelists in the case of arbitration
and panelists are chosen from the roster. In the case of NAFTA, the
panelists are appointed by consensus for a term of three years. Why is
there a need for such appointments prior to any dispute?

     Answer. NAFTA Chapter 20 is largely similar to the dispute
settlement provisions in CFTA Chapter 18. Differences largely reflect
the trilateral nature of the NAFTA and experience gained over the five
years that the CFTA has been in effect. The NAFTA provisions are more
detailed in some respects, but are not more burdensome or costly to
apply.

     Key differences include: (1) the selection procedure for roster and
panel members (Articles 2009 and 2011); (2) the provision in NAFTA
Article 2015 for the use of scientific review boards; (3) refinements in
the relationship between GATT dispute settlement and dispute settlement
under the free-trade agreement; (4) the application of dispute
settlement procedures to financial services matters; (5) a procedure for
Parties to challenge retaliatory measures on the basis that they are
excessive; and (6) providing for third party rights in disputes.

     NAFTA Article 2009 is very much like CFTA Article 1807(1). both
articles provide for the establishment of a roster of individuals from
which a government may\--but is not required to\--select panelists. The
three year term set under the NAFTA applies to the roster members only,
not to panelists.      43. Section 102(b)(1) of the legislation
implementing the CFTA which was approved by the Energy and Commerce
Committee states that \"The provisions of the Agreement prevail
over\--(A) any conflicting state law; \* \* \* to the extent of the
conflict.\" Section 102(b)(4)(B) then defines the term \"state law\" to
include \"any state law regulating or taxing the business of
insurance.\"

     (a) Does the Administration anticipate including similar language
concerning the preemption of state insurance laws in the implementing
legislation for the North American Free Trade Agreement?

     Answer. Language similar to that in the CFTA Act may be included in
the NAFTA implementing legislation, but states will not be compelled to
change existing laws as a result of this provision. Insurance measures
were specifically mentioned in the CFTA Act because of the requirements
of section 2 of the McCarran-Furguson Act. If the NAFTA implementing
bill includes a provision similar to CFTA Article 102(b), there would be
a need for an explicit reference to insurance laws. As of this time,
however, bill language in this area remains under consideration.

     In any case, the NAFTA allows states to continue any existing
insurance regulations that may be inconsistent with NAFTA rules by
taking a reservation within one year after NAFTA enters into force. The
NAFTA will not limit the ability of states to regulate for reasons such
as consumer protection, provided discrimination based on nationality is
avoided. In addition, NAFTA does not preempt the ability of states to
impose prudential measures.      44. Will NAFTA, or the implementing
legislation, in any way affect the current authority of the Consumer
Product Safety Commission (CPSC) to establish and enforce consumer
product safety standards for the protection of American consumers?

     Answer. No.

     (a) What standards will control where U.S. standards are
inconsistent with those of Canada or Mexico?

     Answer. U.S. standards.

     Will NAFTA, or the implementing legislation, in any way affect any
other CPSC authority?

     Answer. No.

     45. On June 4, 1993, the business community that supports NAFTA
wrote to you about the side agreements currently under negotiation,
expressing several concerns. Please respond to each of these concerns.

     Answer. The business community letter to Ambassador Kantor dated
June 4, 1993 expressed certain concerns about the supplemental
agreements on environment and labor, based on draft texts that had been
published in Inside U.S. Trade on May 21st. At the time, negotiations
with Mexico and Canada on the supplemental agreements were still in a
relatively early stage. We believe that the final product is a good deal
for the United States and that it takes account of the business
community\'s concerns.

     In negotiating the supplemental agreements, the Administration
sought to maintain a delicate balance. As Ambassador Kantor noted in his
testimony before Congress last Spring, we were committed to forgoing
supplemental agreements with \"teeth\"; we wanted to make sure that if
our trading partners engaged in a persistent pattern of failure to
enforce their environmental or labor laws, the supplemental agreements
would provide a mechanism for attacking that failure. At the same time,
the fundamental premise of the supplemental agreements is national
enforcement of national laws, not supranational enforcement nor one
country\'s enforcement of its laws within another country\'s borders.
The dispute settlement provisions provide a mechanism for dealing with
cases when national enforcement breaks down. We were always guided by
our understanding that the United States would have to live with
anything that we asked Canada and Mexico to accept. Consequently, we had
no intention of fashioning supplemental agreements that intruded
unacceptably on the U.S. sovereignty by inappropriate reliance on
supranational authority.

     With respect to the particular concerns expressed in the letter:
     A. Accountability of the Secretariat to the Council. The
environmental supplemental agreement includes a number of provisions to
ensure that the Secretariat is appropriately accountable to the Council.
For example, the Council chooses the Executive Director of the
Secretariat (Art. 11, par. 1), sets the standards for the staff of the
Secretariat (Art. 11, par. 2), and may decide, by a two-thirds vote, to
reject any appointment that do not meet the general standards. (Art.11,
par. 3.) The Council approves the annual program and budget of the
Secretariat. (Art. 10, par. 1(e).) The Secretariat may prepare reports
on environmental matters beyond the scope of its annual program, but it
must notify the Council when it is doing so, and the Council has the
right to object to such reports, by a two-thirds vote. (Art. 13, par.
1.)

     If the Secretariat receives a submission from a person or a non-
governmental organization (NGO) indicating that one of the countries has
failed to enforce its environmental laws, the Secretariat can develop a
factual record, if it decides the matter warrants it, but the
Secretariat must notify the Council of its intention to do so, and can
go forward only after the Council approves by a two-thirds vote. (Art.
15, par. 1.) The Secretariat does not have the power to subpoena a
private company. If a government believes that a request for information
from the Secretariat is excessive or otherwise unduly burdensome, it may
notify the Council, and the Secretariat shall revise the scope of its
request to comply with any limitations set by the Council by a
two-thirds vote. (Art. 21, par. 2.)      B. Secretariat preemption of
governments\' enforcement authority. A number of steps were taken to
allay the concern that the Commissions could become new, politically
unaccountable bureaucracies with the potential to preempt local, state
and national enforcement authority. The Commission\'s role in
enforcement is limited to determining whether a government has engaged
in a pattern of nonenforcement; it is not empowered to act upon a
company\'s individual instances of noncompliance.

     The enforcement prerogatives of federal, state and local
governments are further protected by safeguards built into the
agreement. For example, in cases where the Secretariat receives a
submission for a person or an NGO concerning an alleged failure to
enforce environmental laws, the Secretariat is required to consider
whether private remedies available under the party\'s law have been
pursued. (Art. 14, par. 2(c).) Moreover, the party charged with
non-enforcement shall advise the Secretariat whether the matter is the
subject of a pending judicial or administrative proceeding, \"in which
case the Secretariat shall proceed no further.\" (Art. 14, par. 3.) A
party is not required to make available information the disclosure of
which would impede its own environmental enforcement. (Art. 39, par.
1(a).) The provisions listed in (A) above also help strike the proper
balance between the activities of the Commission and the enforcement
activities of the three sovereign nations.

     C. Confrontational approach. The procedures ultimately agreed upon
for the Commission do not reflect the \"institutional bias toward
confrontation\" which the business community perceived in previous draft
texts. The June 4 letter noted with particular concern the proposal that
Secretariat reports would be made public at the same time they went to
the Council. In the supplemental agreement negotiated, however, reports
prepared by the Secretariat will not be made final until after the
parties have had a chance to comment on the accuracy of the draft
factual record. (Art. 15, par. 5.) Moreover, the Council may decide not
to make a final factual record publicly available (though we would
expect most records to be made public). (Art. 15, par.7.)      D.
Recognition of labor principles. The labor supplemental agreement sets
forth important labor principles (Annex 1), which the parties commit to
\"promote, to the maximum extent possible.\" (Art. 1(a).) Unlike the
earlier text, the final text does not use the term \"internationally
recognized\" labor principles, because the United States has not
ratified certain of the International Labor Organization (ILO)
conventions which provide the basis for such international recognition.
Nonetheless, the eleven principles listed are endorsed by all three
countries, and have wide support around the world. Moreover, the
supplemental agreement commits each of the three parties \"to ensure
that its labor laws and regulations provide for high labor standards . .
and \[to\] continue to strive to improve those standards . . .\"
(art.2.)      E. Trade sanctions. The business community noted its
opposition to the use of trade sanctions for the non-enforcement of
environmental or labor laws. The agreements encourage effective
enforcement by the parties primarily through cooperation and exposure of
enforcement problems. Only if these problems remain unremedied do the
agreements authorize sanctions.      In the context of dispute
settlement, the supplemental agreements use monetary assessments, rather
than trade sanctions, as the sanction of first resort in case of a panel
decision that a party has engaged in a persistent pattern of failure to
effectively enforce its laws and has failed to remedy the problem. Such
a panel finding, if not followed up with an acceptable settlement
between the parties, would result in the imposition of a monetary
enforcement assessment, as well as the obligation to remedy the non-
enforcement by implementing an acceptable action plan. If a panel
subsequently concluded that a party had failed in its obligation to pay
the monetary enforcement assessment, or to implement the action plan,
the aggrieved party would be permitted to withdraw NAFTA benefits (i.e.
impose trade sanctions) at a level equal, on an annual basis, to the
monetary enforcement assessment. (There would be resort to trade
sanctions if Mexico or the U.S. were the offending parties; if Canada
was the offending party, recourse would be to Canadian courts to enforce
the order.)

     The Administration believes that countries should not, with
impunity, be able to engage in a persistent pattern of failure to
enforce their environmental or labor laws. We believe that monetary
enforcement assessments will be an effective penalty, both as a
deterrent and because of the reluctance of any government to be seen
failing to pay such penalties in highly-publicized cases. But we
insisted on having \"backup\" sanctions to ensure that any monetary
enforcement assessment would be paid, and that the action plan to remedy
the non-enforcement would be carried out.

U.S. House of Representatives,

Committee on Energy and Commerce,

Washington, DC, October 13, 1993.

### Hon. Carol M. Browner,

Washington, DC. U.S. Trade Representative, Washington, DC.

     Dear Administrator Browner and Ambassador Kantor: The Committee
appreciates your testimony on September 29, 1993 concerning the North
American Free Trade Agreement (NAFTA) and the Supplemental Agreement on
Environmental Cooperation. Your testimony was helpful. As I indicated, I
have several additional questions to which I would appreciate your
response by October 29, 1993.

     Our Committee continues to be ready to work with the Administration
to prepare the legislation this month in order to help meet the
President\'s November 1 timetable; however, a draft of the Statement of
Administrative Action has not been provided to us and that could delay
our efforts. Any assistance on this matter would be appreciated.

     With every good wish.

Sincerely,

John D. Dingell, Chairman.

     Enclosure.

QUESTIONS FOR THE ENVIRONMENTAL PROTECTION AGENCY AND THE U.S. TRADE
REPRESENTATIVE CONCERNING NAFTA ENVIRONMENTAL MATTERS

     1. At the briefing, I pointed out that the environmental side
agreement states in Article 1(d) that it supports \"the environmental
goals and objectives of the NAFTA.\" I pointed out that the \"objectives
of NAFTA are set forth in Article 102 and they do not mention the
environment. In the case of Chapter 7, the scope is agriculture and
sanitary and phytosanitary measures. The latter term, as noted by the
USTR in its September 29 letter, covers only certain environmental
measures. The USTR said that: \"Environmental standards such as the
Clean Air Act standards are not sanitary and phytosanitary measures as
that term is defined in the NAFTA.\" As far as I can tell, the words
\"environment\" or \"environmental\" do not appear in NAFTA, except in
Article 104 in regards to other agreements with trade obligations. Thus,
I reiterate that it appears that the above quote in Article 1(d) of the
side agreement is merely hortatory and that the side agreement, while
helpful is independent of the NAFTA.

     In short, NAFTA fails to recognize the need to protect, conserve
and promote the environment in its implementation. The side agreement
does not change that fact. If you disagree, please explain the basis for
that disagreement. What is Mexico\'s and Canada\'s objection to, at a
minimum, revising Article 102 of NAFTA to correct this perceived
omission?      2. Do any of the provisions of either side agreement
require implementing legislation? Please explain. Are the side
agreements trade agreements under U.S. trade law and are they to be
referenced or incorporated in the implementing legislation of each
Party? (I assume that the U.S. would not unilaterally include them in
such legislation.) In this regard, are they agreements under the Fast
Track law? Are the side agreements considered agreements under Article
103 or 104?

     3. At the briefing, I believe the USTR gave support to the view
that if a Party gives notice under Article 50 of withdrawal from the
side agreement, the U.S. should exercise its withdrawal under Article
2205 of NAFTA. Mr. Kantor indicated that the implementation legislation
might be drafted to make this clear. I would like to understand how and
to what extent you propose to provide such a directive to the Executive
Branch in such legislation. Also, if a Party, such as Canada, gave such
notice, would the U.S. terminate NAFTA only in the case of Canada and
reinstate the Canadian Free Trade Agreement or would the termination
apply to both Mexico and Canada? What are the possible implications of
such termination for U.S. businesses under the NAFTA?      4. At the
briefing you said that the EPA recently began a new analysis of
Mexico\'s environmental law and standards to see if, for example, they
are, in fact, comparable to the Clean Air Act, the Federal Water
Pollution Act, the Safe Drinking Water Act, the Superfund Act, the solid
Waste Disposal Act, the Toxic Substances Act, the Pesticide Act, the
Food and Drug Act, the Federal Hazardous Substances Act, the Endangered
Species Act, and fish and wildlife laws, and that EPA expects to have
that analysis completed in October.      However, I understand that
Mexico is continuing to develop these standards and that many have not
been translated. Also, I understand that EPA has found the submissions
by Mexico are not always complete. Some standards are considered
comparable apparently on the basis of EPA assumptions that are not yet
verified as accurate through discussions with officials from Mexico.
Further, EPA staff have stated that Mexico\'s standards will not likely
be adequately developed for full analysis for some time to come. Do you
disagree with these comments? Please also provide a copy of the complete
and detailed analysis that exists as of October 29 and indicate therein
what assumptions EPA has made and whether they have been verified with
Mexico.      5. Have you made a similar analysis of Canada\'s laws and
standards? If so, please provide the results. In the case of Canada,
Annex 41 of the side agreement provides that on date of signature or on
exchange of notifications under Article 47, \"Canada shall set out in a
declaration a list of any provinces for which Canada is to be bound in
respect to matters within their jurisdiction.\" It also states that
Canada can modify that declaration. Has Canada provided that declaration
as yet? Does this mean that Canada could decide not to list any
provinces or some, but not all? If so, what is the benefit of the side
agreement if one or more of the provinces, such as the western
provinces, are not bound, particularly since much of Canada\'s
environmental law is dependent on the provinces concurring.

     6. The following questions address the comparability of Mexico\'s
hazardous waste laws with our Resource Conservation and Recovery Act
(RCRA): (a) Does Mexico require pretreatment of hazardous waste before
disposal similar to U.S. land ban requirements adopted in the 1984
amendment?

\(b\) Does Mexico have anything comparable to the RCRA \"corrective
action\" program to insure cleanup of operating facilities which have a
treatment, storage or disposal permit?

\(c\) Does Mexico have comparable closure or financial responsibility
requirements for hazardous waste treatment, storage or disposal
facilities?

\(d\) Does Mexico set comparable standards for tanks, incinerators or
surface impoundments?

\(e\) Does Mexico have a program to remedy environmental problems from
leaking underground storage tanks as the U.S. does in Subtitle I of
RCRA?

\(f\) Does Mexican law require hazardous waste treatment, storage, or
disposal facilities to obtain permits specifying conditions to protect
public health and the environment?

\(g\) Finally, does Mexico have comparable \"Subtitle D\" minimum
federal criteria (location, design, groundwater monitoring, corrective
action, closure and post-closure care) for municipal solid waste
landfills, such as the U.S. rules which were promulgated on October 9,
1991?

     7. In a February 1992 report, the General Accounting Office stated
that \"Mexico has not yet been able to identify all hazardous waste
generators and not all generators are providing manifests for their
hazardous waste shipments.\" I understand that Mexico does have similar
requirements to manifest and track shipments of hazardous waste but that
based on currently available information, the authorities believe that
only 30% of the hazardous waste generated is being accounted for. Is
that accurate?

     8. Does Mexico have a Superfund program or any program required
cleanup of old sites or sites previously contaminated? Does Mexico have
comparable Community Right-To-Know reporting requirements on its
industry similar to those imposed by Title III of SARA in 1986 and the
Pollution Prevention Act of 1990?

     9. The United States and Mexico currently have a bilateral
agreement regarding waste shipments. Is there a reason why this
agreement is not in Annex 104.1 where the related agreement with Canada
is listed? Also, how would NAFTA effect the current ban on shipments of
hazardous waste to Mexico for the purpose of disposal?

     10. What factors would be used under a NAFTA dispute settlement
proceeding to distinguish a legitimate environmental measure from an
illegitimate trade barrier, and how does this differ substantively or
procedurally from the current analysis under the GATT?

     11. Does Mexico have comparable criminal sanctions for
environmental violations, both as to the scope and type of activities
covered and as to the severity of the fines and length of possible
imprisonment? (For example, under RCRA any person who creates a knowing
endangerment from the transport, treatment, storage, disposal or export
of hazardous waste is subject to a \$250,000 fine and imprisonment for
not more than 15 years.)

     12. A number of bills are pending before this Committee (H.R. 963,
H.R. 1076, H.R. 2848) would provide states or local communities with the
authority to restrict shipments of municipal solid waste generated
outside the state, which would include waste from Canada or Mexico, from
entering landfills within the state. Does such a provision contravene
the Canadian Free Trade Agreement or NAFTA, or is it subject to
challenge under either treaty?      13. For the purposes of
standards-related measures in Chapter 9, would the definition of
\"standard\" or \"technical regulation\" encompass regulations
containing standard and criteria for environmental marketing claims or
provisions specifying plastic recycling codes? What obligation would be
imposed by Article 905 on a federal agency such as the Federal Trade
Commission or the Environmental Protection Agency to use or adopt
relevant international standards?

     14. (a) In the case of the Carbon II plant near Predras Negras,
Mexico, I understand that the emission rate under the Mexican rules is
about 1.9 million Btu\'s. EPA said that if the plant was located in the
U.S. it would be subject to a new source performance standard, the
requirement of new source review pursuant to the Prevention of
Significant Deterioration regulation, and the requirement of best
available control technology. Am I correct in my understanding that
Mexico has no comparable requirement for Carbon II under its technical
norm for sulfur dioxide (SO2), particulate, and nitrogen oxides (NOx)
emissions?

     (b) In an August 2 letter to this Committee, the Treasury
Department said that Southern California Edison\'s subsidiary, Mission
Energy, approached the World Bank\'s International Finance Corporation
(IFC) regarding possible financial support for Carbon II. Treasury said
that Mission Energy must submit a comprehensive environmental assessment
and that the project will have to comply with all World Bank pollution
guidelines. Please explain whether the assessment is the same as would
be required in the U.S. under the National Environmental Policy Act of
1969 and provide us with the status. Also, what are the Bank\'s
guidelines? How do they compare with our laws? Treasury said that a
meeting was to be held in August by the Bank with Mission and the staff
of the EPA, as well as other Federal agencies. What was the result and
who attended?

     15. Please describe the current status of the Mexican investigation
and enforcement systems with respect to environmental violations,
including the judicial and penalty systems, and indicate its
effectiveness and problems. Is there a problem of a lack of trained
people and inadequate technical and other support? Is there a problem of
corruption?

     16. Articles 3 and 10 of the Environmental Side Agreement state
that each Party shall ensure that its laws and regulations provide for
\"high levels of environmental protection\" and that the Parties shall
strive to continue to improve those laws and regulations. What is the
baseline for Mexico, Canada, and the U.S. upon which one will be able to
measure such improvement? What is contemplated by the word \"improve\"
in the case of each Party\'s laws and standards?

     17. The Side Agreement provides for a Commission for Environmental
Cooperation governed by a Council. It directs the Council to cooperate
with the NAFTA Free Trade Commission. Will there now be two independent
Commissions and Secretariats and related councils, etc.? Does the NAFTA
Commission have any powers over the side agreement commission? What is
the NAFTA Commission\'s role in environmental and related matters?
     18. (a) Article 14 appears to establish a process governing
submissions by any non-governmental organization or person asserting
that a Party is failing to effectively enforce its environmental law.
Even if the Secretariat considers that the submission warrants
developing a factual record, it cannot do so unless the Council, by a
two-thirds vote, instructs it to do so. Is it true that without such an
instruction, the process ends? If the Secretariat gets such an
instruction and prepares the record, please explain why it cannot be
made public except by a two-thirds vote. Assuming there is an
affirmative vote to make the factual record public, what happens then?
Must the affected Party take any action? Please explain.

     (b) Under Article 14, a Party has 30 days to advise the Secretariat
\"whether the matter \[under submission\] is the subject of a pending
judicial or administrative proceeding, in which case the Secretariat
shall proceed no further . . . .\" For purposes of Article 14(3),
\"judicial or administrative proceeding\" means \"a domestic judicial,
quasi-judicial or administrative action pursued by a Party in a timely
fashion and in accordance with its law.\" Such actions are defined as
\"mediation; arbitration; the process of issuing a license, permit, or
authorization; seeking an assurance of voluntary compliance or a
compliance agreement; seeking sanctions or remedies in an administrative
or judicial forum; and the process of issuing an administrative order.\"
Does the reference to mediation and arbitration include non-binding
mediation or non-binding arbitration? What criteria will be used to
define or interpret the phrase \"in a timely fashion\"?      19. What is
the expected annual cost of this side agreement to the U.S.? Will that
cost be budgeted through the State Department or the EPA budget? What
will be the role of the EPA? Will the EPA be required to assign any of
its own full-time equivalents to the Commission? If so, please indicate
the number of FTE\'s that will be dedicated to implementing the
environmental side agreement.

     20. What other letters or agreements on wheat, agriculture
generally, cross-border pollution, or other matters are being discussed
with Canada or Mexico or both? What is their status? What is their
effect on the NAFTA?

     As of the date of the filing of this report, no answer had been
received to the letter of October 13, 1993 to Administrator Carol M.
Browner and Ambassador Mickey Kantor.The United States Trade
Representative,

Executive Office of the President,

Washington, DC, October 26, 1993.

Hon. Henry A. Waxman,

Chairman, Subcommittee on Health and the Environment,

Washington, DC.

     Dear Henry: Thank you for your letter of September 16, 1993
summarizing your concerns regarding environmental aspects of the North
American Free Trade Agreement (NAFTA). That letter raised concerns
regarding: process standards, international agreements, border air
pollution, food safety, and preemption.

     Let me note at the outset that the case for the NAFTA comes down to
two compelling points: the NAFTA will increase economic growth and jobs
in the United States, and the NAFTA will help us resolve problems that
trouble Americans in our current relationship with Mexico. Prominent
among those problems are issues related to environmental protection and
our citizens\' health and safety that I know are of particular interest
to you.      The combination of the provisions of the NAFTA and the
NAFTA side agreement on the environment (the North American Agreement on
Environmental Cooperation) constitute truly path-breaking advances in
the area of trade and the environment. The NAFTA and the side agreements
of the NAFTA show heightened sensitivity to safeguarding our rights to
protect the environment, health and safety. They also contain provisions
aimed at seeing that the benefits of increased trade and economic growth
are accompanied by measures to improve standards and enforcement of laws
affording these protections.      Let me address each of your specific
concerns in turn.PROCESS STANDARDS

     In your letter, you state that U.S. laws that restrict market
access to products that are produced in a way that harms the environment
or human health would not be \"standards-related measures\" or
\"technical regulations\" under Chapter Nine of the NAFTA and could
therefore be found to be inconsistent with the NAFTA.

     As an initial matter, it is incorrect to state that Chapter Nine of
the NAFTA (Standards-Related Measures) prohibits measures that are not
\"standards related measures\" or \"technical regulations.\" Chapter
Nine provides for a series of disciplines on standards-related measures,
as defined in that chapter, and applies only to \"standards-related
measures of a Party, other than those covered by Section B of Chapter
Seven \[of the NAFTA\] (Sanitary and Phytosanitary Measures), that may,
directly or indirectly, affect trade in goods or services between the
Parties, and to measures of the Parties relating to such measures.\"
(Article 901)

     If a measure is not a standards-related measure, then Chapter Nine
does not apply to it. (A technical regulation is one type of a
standards-related measure, as defined in Article 915.) Any measure of
the type described in your letter would need to be analyzed on a case by
case basis.      We disagree that such measures would generally be
inconsistent with the NAFTA. For example, as you know, the question of
U.S. embargoes under the Marine Mammal Protection Act of 1972 (MMPA) on
imports of yellowfin tuna in order to protect and conserve dolphin is
currently the subject of a dispute settlement proceeding under the
General Agreement on Tariffs and Trade (GATT). In that proceeding, the
United States has maintained that the U.S. embargoes are consistent with
the GATT by virtue of GATT Articles XX(g), (b) and, in the case of the
intermediary nation embargoes under the MMPA, Article XX(d) as well.

     Those GATT articles are incorporated into the NAFTA through Article
2101 and would be available if U.S. measures were challenged under the
NAFTA.      From our perspective, consideration of the issue of
\"processes and production methods\" or PPMs is a high priority element
of the workplan for the Council under the North American Agreement on
Environmental Cooperation. This involves the very complex, and often
sensitive, questions of how to address any environmental effects of
products due to the processes or production methods associated with
them. Questions like: how was the product harvested?, how was it
processed?, what effects will its consumption have on say, the
environment?

     These questions are of a global nature, not limited just to North
America. Therefore, while the Administration is committed to taking them
up with our North American neighbors in the context of the NAFTA and the
supplemental agreement on environmental cooperation, we are also seeking
a broader dialogue. Indeed, preparatory discussions are already under
way in the Organization for Economic Cooperation and Development (OECD)
to development a sound analysis of PPMs. We are actively involved in
those discussions.      Another important step from our perspective will
be to engage the GATT, beginning with a post-Uruguay Round workprogram
on the environment, which we hope will be launched at the conclusion of
the Uruguay Round. This work would of necessity have to include a
thorough examination of the adequacy of the GATT\'s, substantive rules
as they relate to PPMs. Broadly, our objective is to ensure that
countries are able to effectively address environmental objectives while
not providing a means for arbitrary limits on trade. Easier said than
done. This project will take time\--but we will take it on in good
faith, multilaterally and in the North American context.

### INTERNATIONAL AGREEMENTS

     You expressed concern that the list of agreements in Article 104
and its Annex is not sufficiently inclusive. The agreements listed in
Article 104 and its Annex had been identified as the agreements where
there was particular concern that the relationship to the NAFTA should
be made explicit. We did not list a number of other international
environmental agreements. The NAFTA, in Article 2101, incorporates the
general exceptions to the General Agreement on Tariffs and Trade (GATT).
These exceptions generally provide for environmental measures to protect
human, animal or plant life or health as well as for measures relating
to the conservation of living and non-living exhaustible natural
resources. This could include measures to implement international
environmental agreements.

     We recognize that trade measures under international environmental
agreements can play an important role in the implementation of those
agreements. For example, the trade obligations of the Convention on
International Trade in Endangered species of Wild Fauna and Flora
(CITES) have been vital to ensuring the preservation of endangered
species. Article 104 affirms the importance of these measures.

     For greater clarity, I have recently received agreement from the
governments of Canada and Mexico that we will modify Annex 104.1 of the
NAFTA to include the following additional agreements:

\(a\) The Convention Between the United States of America and the United
Mexican States for the Protection of Migratory Birds and Game Mammals,
done at Mexico, February 7, 1936; and

\(b\) The Convention on the Protection of Migratory Birds, done at
Washington, August 16, 1916.

     We are currently studying which additional agreements it may be
appropriate to include on the list, and I look forward to continuing to
work with you on this issue.

### BORDER AIR POLLUTION

     Your letter expressed concern that major new pollution sources are
being constructed on the Mexican side of the U.S.-Mexico border without
air pollution controls, and cited as the most troubling example the
Carbon II power plant now under construction in Piedras Negras.

     The Carbon II power plant will use state-of-the-art electrostatic
precipitators to control particulate pollution. Since the sulfur content
of the coal to be used by the plant is very low (one percent or less),
no controls are currently planned for SO2 emissions from the plant. As
was true in the U.S. until recently, no such controls are required by
Mexican standards in this circumstance.

     With respect to visibility in Big Bend National Park, we understand
that technical studies are being undertaken to better estimate the
magnitude of the effect from SO2 emissions from the plant. Consultations
involving the Department of State, the Department of the Interior, the
Environmental Protection Agency, and the Mexican government are
continuing on this issue.      We also understand that the local air
quality effects of emissions from the plant are not a significant issue.
U.S. as well as Mexican health and welfare-based ambient air quality
standards for sulfur dioxide will be met.      The way the Carbon II
situation is being managed through cooperative work between our two
governments shows how the closer ties between the United States and
Mexico fostered by the NAFTA and the Supplemental Agreements greatly
improve our ability to work out issues that may arise between us as
neighbors. The Mexican government has given us assurances that they will
work with us to reach a resolution of the issue. Indeed, officials of
the Departments of State and the Interior and of the Environmental
Protection Agency met with Mexican officials at least twice in the past
few weeks on this topic and will meet with them again next week.

     Mexico began building the Carbon I and II power plants\--the only
coal-fired power plants in Mexico\--several years ago to meet its
growing needs for electricity. The power is strictly for domestic use in
Mexico. The project will continue, with or without NAFTA. What NAFTA and
the Supplemental Agreements provide is closer ties among the North
American countries and an environmental commission that will give us a
better way to deal with such situations as they arise\--or even before
they arise\--in the future.      More to the point, the North American
Agreement on Environmental Cooperation contains explicit commitments to
work together toward higher environmental standards. This will help
reduce existing differences between U.S. and Mexican standards by
bringing their standards up, not by lowering ours.

### FOOD SAFETY

     Your letter also sought assurances with respect to additional
questions on the interpretation of the sanitary and phytosanitary
provisions of the NAFTA not raised in our earlier correspondence on this
issue. You sought an assurance that Articles 712(3)(a) and (b) and
715(3)(b) do not require that a NAFTA country base its level of
protection for food safety on a risk assessment. As we stated in
response to a similar question with respect to Article 712(3)(c), each
NAFTA country is free to establish its appropriate level of protection
for food safety, including a level that does not rely on a risk
assessment.

     Article 715(3)(b) obligates each NAFTA party, in establishing its
appropriate level of protection, to avoid arbitrary or unjustifiable
distinctions in its appropriate levels of protection in different
circumstances, where such distinctions result in arbitrary or
unjustifiable discrimination against a good of another party or
constitute a disguised restriction on trade between the parties. As
noted in my September 7 response to your earlier letter, the NAFTA was
carefully drafted, with the Delaney clauses and other provisions of U.S.
law firmly in mind, to safeguard the ability of governments to ensure
food safety.

     The Delaney clauses, in the first instance, establish a level of
protection. They reflect a decision by the Congress that there should be
no risk of cancer to humans from the substances those clauses cover. As
I also noted in my letter of September 7, 1993, that decision is fully
protected under the NAFTA.

     We do not view the level of protection established by the Delaney
clauses as arbitrary or unjustifiable distinctions in U.S. appropriate
levels of protection in different circumstances, nor do the Delaney
clauses result in arbitrary or unjustifiable discrimination against a
good of another party or constitute a disguised restriction on trade
between the parties. The measures applied under the Delaney clauses
apply equally to goods whatever their origin.

     With respect to Article 712(5), measures that are adopted,
maintained or applied are to be applied are to be applied only to the
extent necessary to achieve the government\'s appropriate level of
protection. However, each government retains the right to establish the
level of protection that it considers appropriate. Your letter proposed
several examples, including an example in which an agency, in applying
an administrative order or regulation that it has adopted or maintains,
decided to require batch-by-batch testing of infant formula rather than
periodic testing. In that example, the question under Article 712(5)
would be whether, taking into account technical and economic
feasibility, applying batch-by-batch testing was applying a measure
beyond the extent necessary to achieve the agency\'s appropriate level
of protection, and would periodic testing achieve that level of
protection. A similar analysis would apply to the other examples cited
in your letter.      The discipline provided by Article 712(5) is
reasonable and is not burdensome. Since the government established the
level of protection it considered appropriate in the first place, it
would be surprising for the government to seek then to apply a measure
to achieve a level of protection beyond the level that government
considered to be appropriate.      Your letter also requested that we
provide statements from Canada and Mexico, in a form that would bind
future signatories of the NAFTA, that they agree with the interpretation
we have provided of the NAFTA provisions applicable to measures to
ensure food safety. The best assurance of the meaning and application of
these provisions is the text of the NAFTA itself, which has already been
agreed to by the governments of Mexico and Canada and which would bind
future signatories of the NAFTA. My letter of September 7, 1993 was
based on the plain language of the NAFTA. We also intend to make sure
that the Statement of Administrative Action reflects the explanation of
the NAFTA provisions I provided earlier. As you know, the Statement of
Administrative Action is the single, contemporaneous compilation of the
Administration\'s statments of what is in the NAFTA (its terms, how it
will work, what it means for the United States) and is approved by the
Congress.      I will consider your request for statements from Canada
and Mexico. However, assurances of the type requested raise some
potential difficulties\-- they would actually be additional
international agreements, requiring that we enter into negotiations with
the governments of Mexico and Canada. These negotiations could invite
those governments to re-visit the NAFTA provisions. We have received
numerous other requests for further agreements with the governments of
Mexico and Canada on various provisions of the NAFTA, and I assume those
governments have also received similar requests.

### PREEMPTION

     Your letter expressed your desire for an opportunity to review the
language of the draft NAFTA implementing bill to ensure it does not
unnecessarily interfere with state and local laws. I share your concern
that the implementing bill not unnecessarily interfere with state and
local laws. As you may know, we are currently engaged in a process of
extensive consultations and review with the Congress of draft
implementing legislative language. I look forward to working with you as
we move forward in that process.

     Thank you for this opportunity to address your concerns. The NAFTA
and the side agreements contain both provisions to ensure that trade
liberalization does not come at the expense of environmental protection
and provisions to help improve environmental protection.

Sincerely,

Michael Kantor.

\-\-\-\-\-\-\-\-\--

Department of Health and Human Services

### Public Health Service, Food and Drug Administration,

Rockville, MD, November 8, 1993.

Hon. Cardiss Collins,

Chairwoman, Committee on Energy and Commerce, House of

Representatives, Washington, DC.

     Dear Madam Chairwoman: This is in response to your request at the
November 4, 1993, hearing on the North American Free Trade Agreement
(NAFTA) before your Subcommittee for the current number of pesticides
with Mexican residue limits but without U.S. tolerances.

     As indicated at this hearing by the Food and Drug Administration
(FDA) witness, Mr. Gary Dykstra, we believe there are presently very few
pesticides that have residue limits in Mexico but do not have U.S.
tolerances. While testifying, Mr. Dykstra referred to the Government of
Mexico\'s most recent manual of allowed pesticides uses. As Mr. Dykstra
stated, FDA just received this manual, but our preliminary review
indicates that this number has significantly diminished in the last 2
years.

     Unfortunately without a detailed review of the manual, we are
unable in the brief time available, to provide you with a specific
number. For this reason although it is not current, we are referring you
to Appendix II of the June 1992, General Accounting Office (GAO) report
entitled \"Comparison of U.S. and Mexican Pesticide Standards and
Enforcement.\" This appendix provides a list of 17 pesticide chemicals
that GAO determined had Mexican residue limits but no U.S. tolerances. A
copy of this list of pesticides is enclosed. It should be noted that GAO
indicated in its report that 11 of these pesticides have Mexican residue
limits for commodities other than food or for produce not imported into
the U.S. and therefore, have no significant impact on U.S.- Mexico
Trade.

     At the hearing, you also requested that we identify the pesticides
from this list for which FDA has analytical detection procedures. The
Agency has methods for detecting nearly all of these pesticides and
routinely checks for betacyflutrin, carbendazim, isazophos, omethoate,
phoxim, pirimicarb, and triazophs.

     If we can be of any other assistance, please let us know.

Sincerely,

Carol R. Scheman,

Deputy Commissioner for External Affairs and Acting Associate
Commissioner for Legislative Affairs.

     Enclosure.

     The 17 pesticides with Mexican but no U.S. tolerances. Azocyclotin,
Betacyfluthrin, Bitertanol, Carbendazim, Clethodim, Copper
8-Quinolinolate, Edifenphos, Haloxfop-methyl, Isazophos, Omethoate,
Phoxim, Pirimicarb, Propamocarb hydrochloride, Tebucanazole, Triazophos,
Triflumuron, and Vamidothion.

Department of Health and Human Services,

### Public Health Service, Food and Drug Administration,

Rockville, MD, November 8, 1993.

Hon. Carlos J. Moorhead,

Ex Officio Member, Committee on Energy and Commerce,

     Dear Mr. Moorhead: This letter responds to questions you provided
at the November 4, 1993 hearing on the North American Free Trade
Agreement (NAFTA) before the Subcommittee on Commerce, Consumer
Protection, and Competitiveness, House Committee on Energy and Commerce.

     I would like to preface my responses by assuring you that FDA is
satisfied that the NAFTA in no way compromises our agency\'s ability to
fulfill its mission to protect the public health from products that may
be unsafe, ineffective, of poor quality, or improperly labeled.

     As Mr. Gary Dykstra testified, FDA was integrally involved in the
negotiations on the texts for Sanitary and Phytosanitary Measures and
Standards-Related Measures/Technical Barriers to Trade. In fact, Mr.
Walter Batts, who also testified before the Subcommittee, co-chaired
with an EPA representative the Subgroup on Health and Environment of the
NAFTA negotiations. We believe, as does the United States Trade
Representative, that NAFTA is consistent with the laws and regulations
implemented by FDA. Under NAFTA, FDA would continue its import program
for Mexican products as it has in the past. Also, several enhancements
to that program, which Mr. Dykstra outlined, are being developed which
will improve the efficiency and effectiveness of our import program.

     We have enclosed our responses, which were prepared by FDA\'s
International Affairs Staff, to your specific questions. I hope these
answers are responsive to your questions. Please let me know if you need
any further information.

Sincerely,

Carol R. Scheman,

Deputy Commissioner for External Affairs and Acting Associate
Commissioner for Legislative Affairs.

     ANSWERS TO CONGRESSMAN MOORHEAD\'S QUESTIONS FROM NOVEMBER 4, 1993,
NAFTA HEARING BEFORE THE SUBCOMMITTEE ON COMMERCE, CONSUMER PROTECTION,
AND COMPETITIVENESS, COMMITTEE ON ENERGY AND COMMERCE

     1. Critics of the NAFTA have argued that the agreements on food
safety would require the U.S. to put aside food standards like the
federal \"Delaney anti-cancer clause\" and California\'s \"Proposition
65\" carcinogen labeling law because they could be viewed as trade
barriers by our NAFTA trading partners. Do you agree with this
assessment?

     No. We do not agree with that assessment. The NAFTA was carefully
drafted, with the Delaney clauses and other provisions of the U.S. law
firmly in mind, to safeguard the ability of governments to ensure food
safety. As noted above, the choice of the \"appropriate\" level of
protection is a social value call: how much protection do we want as a
society from a particular risk? The choice of the level of protection is
not required to be based on a risk assessment. The Delaney clauses, in
the first instance, establish a level of protection that Congress has
deemed appropriate. They express our society\'s determination that we
will accept no risk of cancer from the presence of the regulated
substances.

     The NAFTA disciplines in Article 712(3) do apply to any measure
adopted to give effect to the Delaney clauses. The Delaney clauses are
entirely consistent with the NAFTA\'s requirements in this regard. The
determination that a particular substance poses a risk of cancer is a
scientific determination, based on an evaluation of the potential for
carcinogenic effect. Based on scientific principles, the United States
has determined that if a substance induces cancer in animals, it poses
some risk of human carcinogenesis. Because the level of protection under
the Delaney clauses require that there be zero risk of carcinogenesis,
FDA prohibits the substance.

     2. Opponents of both NAFTA and GATT Uruguay Round have argued that
the harmonization of food safety standards proposed in both documents
would force the U.S. to lower its safety standards. Is this true?

     No. We do not believe this is true of either NAFTA or the GATT
Uruguay Round. However, since GATT negotiations are ongoing, we will
confine our specific response to NAFTA. In addressing sanitary and
phytosanitary concerns, countries may adopt somewhat different systems
or requirements with respect to a particular risk situation. Article
714(1) of the Sanitary and Phytosanitary Measures text of NAFTA
establishes a cooperative approach to making those systems or
requirements equivalent, where practicable and without reducing the
level of protection of human, animal or plant life or health. We
anticipate that this work will generally be done through the Committee
on Sanitary and Phytosanitary Measures established under the NAFTA and
technical working groups or subcommittees under that committee. Any
recommendations of those groups could only be implemented in the United
States through the normal domestic legal processes\--either through
legislation or rulemaking consistent with U.S. law.

     3. Under the NAFTA, the standard for sanitary and phytosanitary
measures is that they must have a \"scientific basis.\" Critics claim
that this standard will lead to a situation where NAFTA countries will
engage in \"dueling science\" where one country will try to prove
another country\'s scientific findings false to eliminate their food
safety standards. Do you believe that this is a real hazard?

     We do not believe the NAFTA provision in Article 712(3)(b), which
uses the term \"scientific basis,\" will present problems. \"Scientific
basis\" is defined as \"a reason based on data or information derived
using scientific methods.\" The question is not whether the measure was
based on the \"best\" science or the \"preponderance\" of scientific
evidence or whether there is conflicting science.The only question is
whether the government maintaining the measure has a scientific basis
for it. The NAFTA Sanitary and Phytosanitary Measures text is based on a
recognition that there is seldom, if ever, scientific certainty and
consequently, any scientific determination may require a judgment among
differing scientific opinions. The NAFTA preserves the ability of
governments to continue to make those judgments.

     4. Will NAFTA permit tainted food to enter U.S. supermarkets?
     No. FDA has reviewed its standards for safety, purity, and
appropriate labelling of foods and has determined that these standards
are consistent with the terms of the NAFTA. This is why no changes in
these standards are needed or proposed to implement the NAFTA, and why
we believe that our measures could not be successfully challenged in any
NAFTA dispute settlement proceeding. FDA would like to emphasize that
under NAFTA all products it regulates would continue to be required to
meet all applicable U.S. laws and regulations, and FDA would continue to
perform its compliance and enforcement activities.

     5. There have been a number of criticisms leveled at the text of
the food safety measures contained in the Dunkel Draft of the Uruguay
Round, including a general lack of specificity of real standards. Is the
NAFTA food safety provisions essentially the same as the one contained
in the Dunkel Draft?      Prior to the NAFTA negotiations, a text on
sanitary and phytosanitary measures had been proposed in the context of
the Uruguay Round of multilateral trade negotiations under the auspices
of the GATT. The Uruguay Round proposed text (referred to as the Dunkel
Text) had been the subject of multilateral negotiation, with over 100
countries participating, although final agreement in the Uruguay Round
had not been reached when the NAFTA was concluded. The NAFTA provisions
on sanitary and phytosanitary measures drew from this available text, as
well as from other GATT texts and the U.S.- Canada Free Trade Agreement.

     Because the NAFTA negotiations involved only three countries rather
than over 100, the three NAFTA parties were able to tailor the NAFTA
provisions to their particular needs. While the NAFTA provisions are
essentially the same as those in the Dunkel Text, the NAFTA text does
contain explicit language that consideration of international standards
must not reduce the level of protection of human, animal or plant life
or health. Also, the NAFTA is explicit that a country asserting that a
sanitary or phytosanitary measure of another country is inconsistent
with the text\'s provisions shall have the burden of establishing the
inconsistency. Further, NAFTA is clear that the importing country makes
the determination, where it has a scientific basis, whether the
exporting country\'s sanitary or phytosanitary measure achieves the
importing country\'s appropriate level of protection.

     6. Would international guidelines for food safety measures become
the ceiling for what the U.S. could impose on imported food products?
     Recognizing that sanitary and phytosanitary measures of the three
NAFTA countries are often different, Article 713 provides for the use of
relevant international standards, without reducing the level of
protection of human, animal or plant life or health, as a basis for each
NAFTA government\'s own sanitary and phytosanitary measures. The
objective in using international standards is to make the NAFTA
parties\' measures equivalent or, where appropriate, identical, in order
to facilitate trade. At the same time, the NAFTA explicitly affirms the
right of each government to have a sanitary or phytosanitary measure
more stringent than the relevant international standard, as long as the
sanitary or phytosanitary measure is consistent with the other
provisions of the Sanitary and Phytosanitary Measures text.      The
NAFTA provisions on sanitary and phytosanitary measures were
specifically negotiated to be clear that there would be no \"downward
harmonization\" of such measures. While governments are required to use
international standards as \"a basis\" (but by no means necessarily the
only basis) for their sanitary and phytosanitary measures, Article
713(1) explicitly states that this is to be done \"without reducing the
level of protection of human, animal or plant life or health.\"
(emphasis added) Article 713(3) also explicitly provides that nothing in
this requirement \"shall be construed to prevent a Party from adopting,
maintaining or applying, in accordance with the other provisions of the
Section \[concerning, for example, not arbitrarily discriminating
between its goods and like goods of another Party,\] a sanitary or
phytosanitary measure that is more stringent than the relevant
international standard, guideline or recommendation.\"      7. Under the
NAFTA, would there be any disincentives to increasing in U.S. food
safety standards?

     FDA does not believe there are any disincentives to strengthening
U.S. food safety standards under NAFTA. In fact the agreement, Article
722(2)(a), provides that the committee on Sanitary and Phytosanitary
Measures, \"should facilitate the enhancement of food safety. \* \* \*\"
Further, the environmental side agreement provides that \"each party
shall ensure its laws and regulations provide for high levels of
environmental protection and shall strive to continue to improve those
laws and regulations.\" The NAFTA makes it clear that each country may
adopt, maintain or apply any sanitary or phytosanitary measure necessary
for the protection of human, animal or plant life or health, including a
measure more stringent than an international standard. Also, the NAFTA
is clear that each country has the right to establish its own
appropriate levels of protection of human, animal or plant life or
health. We feel that these provisions are adequate to allow FDA to set
health and safety standards at the level the agency deems appropriate to
meet our public health responsibilities.

\-\-\-\-\-\-\-\-\--

### Environmental Protection Agency

Office of International Activities,

Washington, DC.

Hon. Carlos J. Moorhead,

Ranking Member, Committee on Energy and Commerce,

Washington, DC.

     Dear Representative Moorhead: It was a pleasure to appear before
the Subcommittee on Commerce, Consumer Protection, and Competitiveness
last Thursday November 4, 1993. I am pleased to provide answers to the
important questions you have posed.

     As I testified, the NAFTA and its Environmental Agreement provide
unprecedented procedures and resources which will improve environmental
and health conditions on the U.S.-Mexican border, provide opportunities
to influence future trade agreements, and provide opportunities for U.S.
cooperation with a new generation of Mexican leadership which has staked
much on the NAFTA. Our passage of the NAFTA will not only cement a new
trade relationship, but will mean cleaner, healthier living conditions
for many thousands of people living on the border.

     Question 1. It is my understanding that environmental problems with
Mexico have been ongoing and predated the NAFTA negotiations. To what
extent does approval of the NAFTA provide a new opportunity to work out
preexisting environmental problems with Mexico?

     Answer 1. You are correct that there is nothing new about the
environmental problems that have been raised during the NAFTA debate.
NAFTA did not cause these problems. But the NAFTA and President\'s NAFTA
package provide a new opportunity to come to grips with these problems.
Without NAFTA, the status quo remains. And the status quo is clearly
unacceptable.

     NAFTA and its supplemental agreement on environmental cooperation
provide a host of new mechanisms for resolving existing environmental
problems The supplemental agreement creates a Commission on
Environmental Cooperation for free-ranging discussion among the NAFTA
countries\' top environmental officials of the problems facing the North
American environment. The commission will have an independent
secretariat to receive comments directly form the public concerning
problems of enforcement of environmental laws.      The NAFTA and the
supplemental agreement provide open and transparent mechanisms for
countries to consult on changes in national standards and regulations
related to environmental protection. Without the NAFTA, this avenue to
influence Mexican policy-making will be lost.

     Regarding dispute settlement, the NAFTA improves on current GATT
procedures, to which Canada or Mexico would otherwise have recourse, by
establishing explicitly that the trade provisions of certain
international environmental agreements take precedence over the NAFTA.
The NAFTA provides for establishment of a board of experts to advise
dispute settlement panels concerning matters related to health or
environmental issues.      Finally, the current policy impetus, in the
United States and Mexico, to address the funding needs of the border
could be lost.

     Question 2. What would be the implication for future negotiations
over environmental problems with Mexico if the NAFTA were rejected by
Congress?      Answer 2. A number of existing mechanisms will remain in
place, including the 1983 U.S.-Mexico Border Agreement (La Paz
Agreement) and the 1992 U.S.- Border Plan. If Congress rejects the NAFTA
implementing legislation, though we would expect to see no change in the
dedication of the Government of Mexico and SEDESOL (the Mexican health
and environmental agency) in particular to address environmental
problems, it is impossible to predict the effect on our active program
of cooperation. We expect NAFTA to increase wealth in both Mexico and
the United States. Empirical studies show that wealthier countries are
better able to marshall resources to invest in pollution control and
that prosperity encourages people to place greater value on a cleaner
environment.

     Question 2. There have been concerns that U.S. polluters would flee
across the border to escape U.S. clean air and other environmental
requirements. Are there tools in existing law that would either prevent
that activity, or make such a move more onerous?

     Answer 3. Many factors influence a company\'s decision on where to
locate its manufacturing facilities. Pollution abatement costs represent
a generally small share of total production costs for U.S. industries,
and Mexico in recent years has introduced stringent environmental
protection laws and significantly increased its enforcement efforts. So
most companies would be ill-advised to flee across the border with the
intent to pollute freely.      Moreover, NAFTA and its supplemental
agreement on environmental cooperation do contain mechanisms to address
potential \"pollution have\" problems. NAFTA\'s investment chapter
contains a provision recognizing that \"it is inappropriate to encourage
investment by relaxing domestic health, safety or environmental
measures. Accordingly, a Party should not waive or otherwise derogate
from, or offer to waive or derogate from, such measures as an
encouragement for the establishment, acquisition, expansion or retention
in its territory of an investment of an investor.\" If one Party feels
another has offered such an encouragement, it may request consultations
on the matter, with a view to avoiding such encouragement.

     Mexican domestic law has powerful tools in place to provide an
effective deterrent against noncompliance with its existing regulations.
For example, the ability to shut down a plant on the spot until
compliance is achieved provides SEDESOL with strong negotiating leverage
and a potent deterrent against noncompliance. SEDESOL has demonstrated
its resolve to use those authorities by mobilizing a professional
inspectorate, which conducted more than 16,000 inspections, including
more than 2400 in the border area, and shutting down more than 1400
plants in little more than a year. Approval of NAFTA and the side
agreement will ensure, through bilateral and trilateral cooperation and
the threat of sanctions for failure of effective enforcement, that
Mexico continues on the path of increasingly aggressive utilization of
these authorities.

     Question 4. What safeguards exist to prevent the Border Environment
Cooperation Commission and the North American Development Bank from
becoming a massive financial liability for these projects?

     Answer 4. The border environment Cooperation Commission and the
NADBank were designed to maximize private sector contributions and to
minimize government subsidies to address border environmental
infrastructure.      The Administration\'s border infrastructure finance
package has three required federal funding components:(1) The U.S. share
of BECC administration costs is likely to be in the range of \$5 million
per year. Mexico is expected to contribute an equal amount. This is a
very small price to pay to provide critical assistance to border
communities is designing, constructing and financing environmental
infrastructure projects. The BECC will dramatically improve the
prospects for private sector investment by leveraging federal money with
private sector capital.

\(2\) The U.S. share of NADBank paid-in capital is \$56 million per year
for four years, with Mexico contributing an equal amount. Thus, for a
total federal appropriation of only \$225 million (referred to as
\"paid-in capital\"), the NADBank will be able to provide between \$2
and \$3 billion in loans and guarantees for projects. Although Congress
will be required to authorize the entire \$1,275 billion in callable
capital, it is unlikely that appropriations beyond the \$225 million
will be required. Successful examples of this type of financing
arrangement include the World Bank and Inter-American Development Bank.
There has never been a call on either of these institutions or any other
multi-lateral development bank.

Several people have unfairly compared the federal risks of the NADBank
to that of the Savings and Loan industry. However, federally liability
for the NADBank is considerably different than it is for the savings and
loan industry. In contrast to the savings and loan situation, all
NADBank loans and guarantees will be approved by the NADBank board of
directors (the bank will be governed by a six member board with an equal
number of representatives from each country) based on a careful
financial analysis of each project. This makes even a partial
\"bail-out\" highly unlikely.

\(3\) The President\'s Fiscal Year 1994 budget includes about \$100
million annually over the next five years for grants to support projects
on both sides of the border. These estimates represent a continuation of
existing EPA wastewater treatment programs. However, instead of the
current situation in which the federal government provides grants to
cover virtually the entire U.S. share of construction and operation
costs for binational treatment projects, this new mechanism will allow
for significantly more private sector participation. This will reduce
the total amount of federal funds required to meet the environmental
infrastructure needs in the border.

     This concludes our responses to your four questions. Please let me
know if can be of further assistance to you.

Sincerely yours,

Alan D. Hecht,

Acting Assistant Administrator.

MEDICAL PROFESSIONALS

     Question. NAFTA will allow Mexican doctors, dentists and other
medical professionals to practice in the United States without meeting
the same requirements that U.S. medical professionals must meet. How can
you allow this?

     Answer. The NAFTA does not let Mexican or Canadian medical
professionals circumvent licensing and certification procedures in the
United States. The procedures currently in use in the United States to
test, evaluate and certify professional competency will continue. Any
one who wants to practice medicine or dentistry in the United States
must be licensed by the appropriate regulatory bodies.

     However, NAFTA does obligate each Party, at both the federal and
state government level, to eliminate any citizenship or permanent
residency requirement that a party maintains for licensing or
certification of professionals.

     The NAFTA provides each country the opportunity to demonstrate that
its licensing and certification requirements should be recognized by
another NAFTA partner. It also encourages\--only encourages\--all three
countries to work towards recognizing each others\' licenses and
certifications. In some areas of the professional services sector, we
are already engaged in this exercise. For example, there are several
Canadian medical schools that are accredited by professional bodies in
the United States. However, the NAFTA does not require the U.S.
government or state governments to accord recognition to education,
experience, licenses or certifications obtained in Canada or Mexico.

     Question. Way do NAFTA\'s temporary entry provisions let Mexican
doctors and dentists into the United States to practice based on a
Mexican certification or license?

     Answer. Temporary entry and providing a service\--medical or
otherwise\--are two different and distinct issues covered in the NAFTA.
The services chapter of the agreement contain the provisions on
providing a service, including the obligations of the United States
concerning licensing and certification procedures. In short, the
procedures currently in use in the United States to test, evaluate and
certify professional competency will continue. Any one who wants to
practice medicine or dentistry in the United States must be licensed by
the appropriate regulatory bodies. In addition, there are provisions in
the NAFTA relating to temporary entry which allow eligible individuals
to enter the United States, Canada or Mexico under certain conditions,
but do not convey a right to perform or provide a service.

     In Chapter 16, NAFTA provides specific rights for temporary entry
of business persons\--citizens of the United States, Canada, and
Mexico\--who engage in trade in goods, the provision of services and the
conduct of investment activities. In regard to professional services
providers, the specific entry rights are given to certain categories of
professionals who meet minimum educational requirements or possess
alternative credentials, and who seek to engage in business activities
at a professional level in the country they wish to enter.

     The categories are set out in a new schedule that tracks the one
currently in effect between the United States and Canada. There is an
annual numerical limit for temporary admission of Mexican professionals.
In essence, we have waived the pre-entry \"test\" to determine whether a
national is available for the position as a requirement for entry into
the United States for these professionals. These provisions, however, do
not substitute for valid licenses to practice medicine, engineering,
accounting or other licensed professionals which are recognized by the
appropriate regulatory bodies in the United States.

\-\-\-\-\-\-\-\-\--

### Environmental Protection Agency,

Office of Congressional and Legislative Affairs,

Washington, DC, November 15, 1993.

Hon. Cardiss Collins,

Chairman, Committee on Energy and Commerce,

     Dear Madam Chairman: Attached are the responses to follow-up
questions which you submitted after your subcommittee\'s September 23
and November 4, 1993 hearings. The first two questions were submitted by
letter after the September 23 hearing. The remaining questions were
submitted by staff members after the November 4 hearing. All of the
questions concern environmental issues in the North American Free Trade
Agreement.

     Please let me know if we can be of further assistance.Sincerely
yours,

Thomas C. Roberts,

Director, Legislative Analysis Division.

     Question 1. EPA has responsibility for the cleanup of hazardous
waste sites. How does the Administration plan to pay for hazardous waste
cleanup in the border area; will Superfund revenues, planned for use
elsewhere in the Southwest U.S., or in other areas of the U.S., be used
to pay for the cleanup of hazardous waste sites in the border area; and
will any Superfund or any other U.S. funds be used to pay for cleanup on
the Mexican side of the border?

     Answer. Superfund moneys will be used for hazardous waste cleanup
on the U.S. side of the border at sites on the National Priorities List.
Therefore, use of Superfund for border cleanup would not be at the
expense of other NPL sites not in the border area. Other Superfund
moneys may be used for emergency cleanups on the U.S. side of the
border. An additional source of funding for cleanup on the U.S. side is
through state \"superfund\" programs and liability schemes. In addition,
the liability and cost recovery scheme of the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA)
stimulates private hazardous waste cleanup efforts of sites, including
those not on the National Priorities List, for example, when in the
context of real estate sales or financial transactions. Finally, under
the Resource Conservation and Recovery Act (RCRA), facilities with
hazardous waste treatment, storage and disposal units are required to
conduct corrective action to address releases of hazardous waste
constituents. The RCRA corrective action program is implemented through
permit mechanisms or through oversight of facilities which have interim
status or have failed to seek a permit when required. We believe that
these programs, in combination, will be adequate for cleaning up past
hazardous waste contamination on the U.S. side of the border.

     Superfund will not be used for cleanup of hazardous waste sites in
Mexico, where no threat of release to the U.S. environment exists. It
may be appropriate in some circumstances to use CERCLA authorities when
hazardous waste which was generated in the United States and illegally
exported to Mexico is returned to the U.S., and it is necessary to
provide for safe transport, handling and disposal of the waste while in
the U.S. Our preference would be to use CERCLA\'s liability provisions
to require the exporter to take direct responsibility for proper
disposal of the waste after it is returned. When the illegal exporter is
not immediately cooperative, however, return of the waste by Mexico
could present a potential emergency situation creating a threat of
release to the U.S. environment if such waste is not properly dealt with
after its arrival in the U.S. In such situations, it may be necessary to
use Superfund moneys to effectuate transport and disposal of the waste
in the U.S., and seek restitution through CERCLA cost recovery civil
authorities or as part of a plea bargain or sentence in a criminal
enforcement case.

     We would also not rule out the possible use of CERCLA authorities
to accomplish cleanup of contamination originating from Mexico where
there is a demonstrable release or threatened release to the U.S.
environment, within the limits of the statute\'s subject matter
jurisdiction. Such exercise of CERCLA authority would depend upon a
judicious assessment of the circumstances if such a case should arise.
CERCLA authorities would not, however, be used to facilitate the
repatriation of wastes generated by maquiladoras (see Question 3).

     Question 2. What funds has Mexico committed towards hazardous waste
cleanup on the Mexican side of the border; and does Mexico have a
program for hazardous waste cleanup? If so, please describe it in
detail, including a description of cleanup activities undertaken under
the authority of the program.

     Answer: While Mexico does not currently have anything equivalent to
the U.S. Superfund program, it can impose liability on responsible
parties under the General Ecology Law, which prohibits the unauthorized
disposal of hazardous waste. We know of a few discrete examples where
Mexico has in fact used the leverage of its legal authorities to obtain
cleanup:      In the Mexico and Aceite y Lubricantes cases, two
recycling operations near Mexicali mismanaged spent hazardous waste
solvents generated by maquiladoras. Mexico used its criminal authorities
to arrest the operator of the sites, releasing him on a \$1 million bond
which secured his cooperation in clean-up. Mexico also obtained
contribution to the cleanup costs from several of the maquiladoras which
generated the wastes which were found improperly disposed at the
maquiladora facility. Although some of the wastes found at the facility
may have been illegal exports from U.S. sources, Mexico was able to
obtain sufficient cooperation from the Mexican parties responsible for
the contamination so that it was not necessary to invoke provisions of
the La Paz agreement requiring repatriation to the U.S. of drums which
may have been illegal exports from the U.S.

     In the Alco-Pacifico matter, a lead slag smelter near Tijuana was
badly mismanaged, resulting in contamination. Mexico shut the facility
down and confiscated the property. Although the owner and operator of
the facility, and its U.S. parent corporation, were insolvent, the
facility\'s main U.S. supplier of battery slug, a byproduct shipped to
Alco-Pacifico for reclamation, had violated California state hazardous
waste regulations in shipping its product to Mexico. Mexico, the U.S.,
and California shared information on the matter, leading to a criminal
prosecution by California. The resulting plea bargain provided Mexico
with a \$2 million contribution toward the costs of cleaning up the
site. Mexico is providing additional funds from its general revenues to
assure proper cleanup, which EPA estimates will cost \$5-7 million.

     Finally, in a matter still under development, hazardous wastes
illegally exported from the United States were discovered at a site in
Guerrero Negro, Baja California, some 200 miles south of the border.
Mexico is using its criminal authorities to obtain the cooperation of
the site operator in remediating the site and repatriating the waste
back to the United States. In the U.S., an indictment was issued against
the generator and exporter, and the case is pending trial. EPA and
SEDESOL are actively cooperating in their respective investigations.

     In terms of providing a source of funding for cleanup, although
Mexico currently has nothing equivalent to the U.S. Superfund, it has a
fledgling voluntary program. Through contributions being solicited from
industry, SEDESOL hopes to build a fund that will help to provide for
the cleanup of abandoned hazardous waste sites. To date, approximately
20 enterprises have either contributed or expressed a willingness to
contribute to this fund. SEDESOL\'s rule will be to: 1) identify sites;
2) select remedial action; and 3) provide oversight. Industry will be
responsible for hiring the contractor and undertaking actual cleanup
operations. Mexico realizes that its voluntary program will probably be
inadequate to meet cleanup needs in the long run, and is exploring other
options, examining the U.S. Superfund program, as well as programs and
legal mechanisms in other countries, including the European Community.

     While we do not know precisely what funds Mexico has committed from
its own budget toward border hazardous waste cleanup, we do know that
they anticipate receipt of a \$1.9 billion loan from the World Bank, a
substantial portion of which will go to support hazardous waste cleanup
and enforcement activities in the border area.

     In addition to the specific cases discussed above, binational
cooperation is enhancing Mexico\'s capacity to find and clean up
hazardous waste sites in other ways. For example, EPA provided a course
to SEDESOL\'s inspectors in interpreting aerial photography to identify
abandoned hazardous waste disposal sites and other illegal operations.
Moreover, SEDESOL\'s capacity to conduct hazardous waste cleanups will
increase as it builds its domestic capacity for treatment and disposal
of hazardous wastes, including remediation wastes as well as newly
generated wastes. In February, 1993, SEDESOL officials indicated they
were reviewing 26 license applications for hazardous waste recycling,
incineration, and land disposal facilities nationwide; many of which
were from U.S.-based environmental service companies. By opening the
Mexican market, NAFTA will expand the opportunities for U.S. exports of
waste management technology and services, to assist Mexico in its
efforts to clean up improperly disposed hazardous wastes and manage
newly generated wastes in an environmentally sound manner. In addition,
although its initial priority will be wastewater treatment, the border
infrastructure financing mechanism recently negotiated with Mexico will
provide an additional source of funds for Mexico to build treatment and
disposal facilities for industrial and municipal wastes.

     Question 3. Under Annex III of the La Paz Agreement taken with
Article 55 of Mexico\'s General Ecology Law, there has been since 1988 a
binding legal obligation on the United States and U.S. companies
operating in Mexico to return all hazardous wastes created through the
maquiladora industry to the United States. Is there any U.S. federal
regulation implementing this binding international legal obligation, and
if so, can you give me the citation? Also, please tell me what
percentage of the return of such wastes can the EPA actually document.

     Answer. It is not correct that the U.S. has a binding legal
obligation to ensure the \"return\" of hazardous wastes generated by
U.S.-owned maquiladoras in Mexico. The requirement to export
maquiladora-generated hazardous waste to the country of origin of the
raw materials derives solely from Mexican law, and is imposed upon
maquiladora operations directly by the Mexican government within its
sole, exclusive sovereign jurisdiction. Annex III to the La Paz
agreement does not extend this obligation to the United States. Rather,
it obligates the U.S. to \"readmit\" such waste when in fact it is
returned \"in accordance with applicable national policies, laws, and
regulations.\" This only means that the U.S. will not refuse entry to
such waste, provided it is accompanied with a proper U.S. Uniform
Hazardous Waste Manifest which destines the waste to a facility
authorized to accept that particular waste- stream. As such, this
provision of Annex III is a country-to-country obligation only, it does
not purport to our require the change of domestic U.S. law. Because it
does not impose on the U.S. an obligation to ensure that maquiladoras
comply with the Mexican domestic requirement to export such waste, it
require no adjustment of the rights and obligations of private persons
such that codification by regulation would be required.      Although
Annex III does not require the U.S. to ensure the return of maquiladora
waste, the La Paz agreement does commit the U.S. and Mexico to provide
cooperative assistance; annex III specifically lists cooperation
designed to assist the other country in enforcing their respective
environmental laws applicable to the transboundary movement of hazardous
waste. Because failure to return maquiladora wastes to the U.S. probably
means illegal and unsafe disposal in Mexico, cooperative assistance in
this area has helped Mexico in building its overall enforcement capacity
with respect to maquiladora plants. We have worked together to develop a
binational database to track hazardous waste shipments. This tool is not
yet perfect; both the U.S. and Mexico need to improve their tools for
collecting data, to be sure that we have captured all shipments of
maquiladora wastes on both sides of the border. Until this occurs, we
cannot say what percentage of all maquiladora shipments we are capturing
in the data-base.      We do know, however, that although not perfect,
our collection of hazardous waste manifests from Customs and state
sources has been relatively consistent for the last few years, to enable
us to discern a clear trend: the total volume and number of shipments of
maquiladora hazardous wastes imported to the U.S., and the number of
U.S. waste facilities notifying that they anticipate receiving new waste
streams from Mexican sources, have been steadily increasing through
1992, evidencing a marked increase in compliance by maquiladora
operations with Mexico\'s laws governing the proper disposition of
hazardous wastes.

     The data, however, only reflects shipments through 1992 at this
point. From August 1992 through September, 1993, SEDESOL\'s new Attorney
General for Environmental Protection launched an aggressive new
inspection program. More than 16,000 inspections were conducted
nationwide, including more than 2,400 in the border area\--i.e., enough
to visit every maquiladora which generates hazardous wastes at least
twice. Hundreds of facility shutdowns resulted, and thousands of other
facilities received fines and were slated for follow-up visits when
minor violations were discovered. Midway through this period, in
February of 1993, SEDESOL estimated that 65% of maquiladoras that
generate hazardous wastes and accounted for them by complying with
monthly recordkeeping requirements, and 40% of the total complied with
the requirement to return them to the country of origin of the raw
materials. This figure was up from a 30% estimated compliance rate a
year earlier. Since the majority of the inspections in the border area
were conducted since the first of the year, we anticipate that this
increased enforcement presence, combined with industry\'s awareness that
the U.S. and Mexico are coordinating the tracking of hazardous waste
shipments, has increased further since SEDESOL\'s February estimate.

     The attached report from the Hazardous Waste Tracking System
provides further information on the quantities of waste shipments
captured by the database.

     Question 4. Why did Region VI Waste Management Division Director
Allyn Davis decline to provide the Texas Center for Policy Studies with
Mexico\'s data on waste shipments from the binational Hazardous Waste
Tracking System?      Answer. As Dr. Davis stated in this response
letter, the La Paz agreement provides that information obtained by one
country from the other under the Agreement shall only be provided to
third parties by mutual agreement of the Parties. Mexico has expressly
advised us that it considers waste export authorization data to be
confidential information, and requested that we maintain the
confidentiality. Regardless of whether disclosure of analogous U.S.
information would be required under our laws, to do otherwise than to
respect Mexico\'s wishes would violate our international obligations. We
may want to share information with Mexico someday that we consider
confidential, for example, to facilitate cooperative enforcement
efforts, and we would expect reciprocity in preserving such
confidentiality.

     NAFTA and the side agreements, however, encourages greater public
participation, and exposure of information about a country\'s
environmental program to public scrutiny. The Commission for
Environmental Cooperation, therefore, would provide a perfect forum for
groups like the Texas Center for Policy studies to encourage Mexico to
enhance the transparency of its environmental program by making this
kind of information available, and we would support such efforts. Mexico
has made strides to open its system to greater public participation, for
example, by creating within the Office of the Attorney General for
Environmental Protection a discrete unit specifically charged with
receiving and investigating public complaints about polluters. One of
the goals of the North American Agreement on Environmental Cooperation,
and its Commission, is to encourage participation.      Question. In
your statement, you talk about Carbon I and II, the two Mexican
coal-fired power plants on the border. I asked EPA at our last hearing,
and I would like to ask you now, has Mexico provided EPA copies of the
environmental assessment that SEDESOL, Mexico\'s environmental agency,
performed on these plants? I know EPA requested this information seven
months ago.

     Answer. No. We did receive some information from SEDESOL regarding
emissions rates and operating parameters of Carbon I but we never
received the official environmental assessment. However, we have
received environmental impact information from Mission\'s environmental
contractors.      Do you believe the side agreement is critical to
successful operation of the NAFTA?

     The Administration considers the Environment Agreement critical to
the working of the NAFTA. Section 102(b)(2) of the bill provides
authority for the President to bring the NAFTA into force for the United
States at such time as the supplemental agreement on environmental
cooperation, which the three governments signed on September 14, 1993,
go into effect. The President has also specifically committed in the
Statement of Administrative Action that if Canada or Mexico were to
withdraw from a supplemental agreement on a non-consensual basis the
Administration will, after thorough consultation with Congress, cease to
apply the NAFTA to that country. The U.S. might not withdraw in an
instance in which withdrawal by another government is consensual in
nature\--for example, where Canada and the U.S. withdraw from a
supplemental agreement in order to enter into a superseding agreement on
environment.

     What reason does the Administration have for not wanting to
guarantee statutorily that Mexico or Canada, or future U.S. presidents
continue to abide by the requirements of the side agreements in order to
enjoy the benefits of the basic NAFTA?

     Flexibility is built into the process because there may be
instances in which we would want to continue to apply NAFTA benefits and
rules if one country withdraws from the Agreement\--for example, if
Canada were to withdraw from the Environmental Agreement we might want
to continue our relationship with Mexico under the NAFTA. It is also
important to recognize that because of the involvement of the
environmental community and of EPA, FDA and others, the NAFTA itself
contains a number of provisions that help promote environmental
protection.

     If under a future President, one country were to threaten to
terminate a supplemental agreement, we would expect that the
Administration would take this as a very serious threat to that
country\'s NAFTA benefits. In such a case, Congress also has sufficient
authority to ensure that the United States could no longer apply NAFTA
benefits as well.

     The Administration clearly considers environmental protection to be
as important as any other element of the NAFTA. It should be noted that
the basic NAFTA agreement was negotiated in the previous administration.
While the Clinton Administration considered its content to be sound in
the areas that it covers, it spent eight months in negotiations on a
pathbreaking Environment Agreement specifically to elevate the level of
environmental protection to a status commensurate with President
Clinton\'s general commitment to environmental protection goals. The
Clinton Administration feels very strongly that NAFTA is overwhelmingly
positive for the environment, and that it is symbolic of the new
importance of environmental protection as it relates to trade. NAFTA and
the Environment Agreement elevate environmental protection goals to a
level far above those of any previous trade agreement, and provide
important precedents for future trade negotiations. This is in part due
to the efforts of EPA, the Food and Drug Administration, the National
Oceanic and Atmospheric Administration, and the numerous environmental
groups which are actively supporting NAFTA. If NAFTA is rejected, the
U.S. will not have the opportunity to see the substantial environmental
benefits that it and the Environmental Agreement provide.      Aren\'t
we going to be reluctant to push controversial environmental matters
into dispute settlement, because we know that if we push too hard,
Mexico could withdraw from the environmental agreement altogether, and
that would be embarrassing to us?

     The side agreement depend largely on cooperation of the parties, as
is normally the case in international agreements. This will not,
however, preclude the U.S. from pushing controversial matters in dispute
settlement, because it is highly unlikely that Mexico would withdraw
from the Environment Agreement, for several reasons. First, withdrawing
from the Environment Agreement would severely jeopardize Mexico\'s
rights under the NAFTA. Secondly, we would not be embarrassed if Mexico
withdrew from the Agreement\-- Mexico would. Because the dispute
settlement procedure addresses persistent patterns of a country\'s
failure to effectively enforce its domestic environmental laws,
withdrawal from the Agreement would be tantamount to an admission that
Mexico does not take its own domestic environmental responsibilities
seriously. This is particularly unlikely under the current Mexican
leadership. Under the Salinas government, Mexico has become a leader
among developing countries in promoting environmental protection as a
priority objective for the international community. Third, the dispute
resolution process is structured in such a way that it would not be
Mexico\'s word versus that of the U.S.; it would be Mexico\'s word
versus that of the U.S., Canada, and\--in cases initiated through the
public complaint mechanism\--that of the trinational Secretariat.

## Changes in Existing Law Made by the Bill, As Reported 

     In compliance with clause 3 of rule XIII of the Rules of the House
of Representatives, changes in existing law made by the bill, as
reported, are shown in part 1 the report, filed by the Committee on Ways
and Means.

**I.** []{#reports .anchor}**REPORTS AND OTHER MATERIALS OF THE
COMMITTEES**

**PRELIMINARY STATEMENT**

This joint report compiles the reports and other materials of the
several Committees to which S. 1627, the bill to approve and implement
the North American Free Trade Agreement (NAFTA), was jointly referred.

[]{#part1 .anchor}**PART I. REPORT OF THE COMMITTEE ON FINANCE**

The Committee on Finance, to which was referred the bill to approve and
implement the NAFTA, having considered the same, reports favorably
thereon and recommends that the bill do pass.\
**Summary of Congressional Consideration of the NAFTA\
**\
The various steps involved in Congressional consideration of the NAFTA,
pursuant to procedures established in the Omnibus Trade and
Competitiveness Act of 1988 and the Trade Act of 1974, are summarized
below.\
\
**A. \"Fast Track\" Authority In General\
**\
The requirements for Congressional consideration of the NAFTA under
expedited procedures (known as \"fast track\") are set forth in sections
1102 and 1103 of the Omnibus Trade and Competitiveness Act of 1988 and
section 151 of the Trade Act of 1974.\
\
Section 1102 of the Omnibus Trade and Competitiveness Act of 1988
authorized the President, prior to June 1, 1993, to enter into trade
agreements with foreign countries providing for the elimination or
reduction of tariffs and non-tariff barriers. (The Omnibus Trade and
Competitiveness Act of 1988 provided fast track procedures through June
1, 1991, with the possibility that the fast track implementation process
could be extended to trade agreements entered into prior to June 1, 1993
if the President so requested and neither House of Congress disapproved
of such extension before June 1, 1991.)\
\
On March 1, 1991, President Bush notified the Congress that he was
requesting an extension of fast track procedures until June 1, 1993 in
order to complete the Uruguay Round of Multilateral Trade Negotiations
and to initiate and complete the NAFTA negotiations with Mexico and
Canada. In mid-March, the Chairmen of the Senate Committee on Finance
and the House Committee on Ways and Means, and the House Majority
Leader, wrote to President Bush conveying a number of concerns about
free trade with Mexico, particularly with respect to environmental and
labor issues (addressing both concerns about lax Mexican enforcement and
the need for an adequate U.S. program to assist workers adversely
affected by an agreement).\
On May 1, 1991, the President responded to those letters with a set of
\"action plans\" intended to address the environmental and labor
concerns, as well as a statement of the Administration\'s views on the
economic impact of the proposed agreement. On May 23, 1991, the House of
Representatives, by a vote of 231-to-192, failed to disapprove the
extension requested by President Bush. On May 24, 1991, the Senate, by a
vote of 59-to-36, also failed to disapprove the extension request.\
\
**B. Notification Prior to Negotiations\
**\
Under section 1102(c) of the Omnibus Trade and Competitiveness Act of
1988, regarding bilateral trade agreements, the President must notify
the Committees on Finance and Ways and Means concerning trade
negotiations at least 60 days (including only days in which the
particular House of Congress is in session) before he notifies the
Congress of his intention to enter into any such trade agreement. Either
Committee has the authority, under section 1103(c), to disapprove the
negotiations during that 60-day period, the effect of which is to
eliminate the application of \"fast track\" procedures to legislation to
implement the agreement.\
\
President Bush notified the two Committees on September 25, 1990 of his
intention to begin negotiations with Mexico. (This followed a Joint
Statement issued on June 11, 1990 by Presidents Bush and Salinas
endorsing the objective of a free trade agreement; joint recommendations
on August 8, 1990 to the Presidents from Ambassador Hills and Mexican
Secretary of Commerce and Industrial Development Serra Puche concerning
the initiation of trade negotiations; and a letter dated August 21, 1990
from President Salinas to President Bush formally proposing the
initiation of free trade negotiations.) On February 5, 1991, President
Bush notified the Committees that Canada (with which the United States
had entered into a free trade agreement on January 2, 1988 that was
subsequently approved by the Congress), also would participate in the
negotiations. Neither Committee exercised its authority under section
1103(c) to disapprove the negotiations.\
\
**C. Notification of Intent to Enter Into An Agreement\
**\
Under section 1103(a) of the Omnibus Trade and Competitiveness Act of
1988, the President also is required to notify the Congress of his
intent to enter into a trade agreement at least 90 calendar days before
doing so. At the same time, the advisory committees on trade
negotiations, established under the Trade Act of 1974, must submit
reports on the agreement. During the period between notification and
entering into the agreement, the President is required to consult with
the appropriate Committees of jurisdiction concerning subject matter
affected by the agreement.\
\
The United States commenced the NAFTA negotiations with the Governments
of Mexico and Canada in June 1991. The three Governments announced on
August 12, 1992 that they had reached an agreement, and the
Administration issued a negotiated summary of the agreement. President
Bush notified the Congress on September 18, 1992 of his intent to enter
into the NAFTA and submitted the required advisory committee reports, in
accordance with the 90-day notice requirement. On October 7, 1992,
Presidents Bush and Salinas and Canadian Prime Minister Mulroney met in
San Antonio, Texas to discuss plans for implementing the NAFTA, and the
three countries\' trade ministers initialed the draft legal text of the
NAFTA. On December 17, 1992, ninety days after President Bush had
provided the required notice, the United States, Mexico, and Canada
entered into the NAFTA.\
\
Subsequently, the Clinton Administration negotiated supplemental
agreements to the NAFTA on environmental cooperation and labor
cooperation, as well as an understanding concerning emergency action
under Chapter 8 of the NAFTA (special safeguards for unexpected import
surges). The three Governments announced on August 13, 1993 that they
had completed those negotiations. The supplemental agreements establish
procedures for evaluating the adequacy of the three countries\'
enforcement of their environmental and labor laws. The agreements were
signed on September 14, 1993. The United States and Mexico also
subsequently negotiated a bilateral agreement for funding environmental
infrastructure projects in the U.S.-Mexican border region.\
\
**D. Development of the Implementing Legislation\
**\
In practice under the \"fast track,\" Congress and the Administration
have worked together to produce the legislation to implement trade
agreements. The drafting occurs in informal meetings of the Committees
with jurisdiction over laws that must be amended to implement the
agreement, and then in House-Senate conference meetings. The objective
is to produce one bill to be transmitted by the House and Senate
Leadership to the President as the recommended legislation to implement
the trade agreement. The drafting is done in close consultation with the
Administration in an effort to ensure that the legislation faithfully
implements the agreement and that the Administration\'s subsequent
formal submission is, to the greatest degree possible, consistent with
the legislation recommended by the Congress.\
\
In meetings in October 1993, the Committee on Finance considered and
made recommendations for the implementing bill. Subsequent to those
meetings, the Committees on Finance and Ways and Means resolved
differences in the recommendations of the two Committees. Other
Committees of the Senate and House also considered provisions of the
implementing legislation within their respective jurisdictions. On
November 2, 1993, the Majority Leader of the Senate and the Speaker of
the House transmitted proposed implementing legislation, containing the
recommendations of the various Committees of jurisdiction, to the U.S.
Trade Representative (USTR).\
\
**E. Formal Submission of the Agreement and Legislation\
**\
When the President formally submits a trade agreement to the Congress
under section 1103, he must include in that submission the final text of
the agreement, together with implementing legislation, a Statement of
Administrative Action (describing regulatory and other changes that are
necessary or appropriate to implement the agreement), and other
supporting information. The implementing bill itself must contain
provisions formally approving the agreement and the Statement of
Administrative Action and proposing amendments to current law or new
authority necessary or appropriate to implement the agreement. The
implementing legislation is introduced in both Houses of Congress on the
day it is submitted by the President and is referred to Committees with
jurisdiction over its provisions.\
\
President Clinton transmitted the final text of the NAFTA, along with
implementing legislation, a Statement of Administrative Action, and
other supporting information, as required by section 1103(a) of the
Omnibus Trade and Competitiveness Act of 1988, to the Congress on
November 4, 1993. The legislation was introduced the same day in both
the House and the Senate. (The supplemental agreements, along with the
agreement with Mexico on border funding and other materials, were
transmitted separately to the Congress by the President on November 4.)
The implementing bill reported here, which approves the NAFTA and the
Statement of Administrative Action and contains a number of additional
provisions necessary or appropriate to implement the NAFTA into U.S.
law, was referred to six Senate Committees of jurisdiction.\
\
**F. Committee and Floor Consideration\
**\
Where all of the preceding requirements have been satisfied,
implementing revenue bills, such as the NAFTA bill, are subject under
the \"fast track\" procedures of section 151 of the Trade Act of 1974 to
the following schedule of Congressional consideration:\
\
(1) House Committees have up to 45 days in which to report the bill; any
Committee which does not do so in that period will be automatically
discharged from further consideration.\
\
(2) A vote on final passage by the House must occur on or before the
15th day after the Committees report or are discharged.\
\
(3) Senate Committees must act within 15 days of receiving the
implementing revenue bill from the House or within 45 days of Senate
introduction of the implementing bill, whichever is longer, or they will
be discharged automatically.\
\
(4) The full Senate then must vote within 15 days.\
\
Thus, Congress has a maximum of 90 days in which to complete action on
the bill, although that time period can be shortened. (The 90-day period
excludes the days either House is not in session because of an
adjournment of more than three days to a day certain or an adjournment
sine die, and any Saturday or Sunday when either House is not in
session.)\
\
Once the implementing bill has been formally submitted by the President
and introduced, no amendments to the bill are in order in either House
of Congress.\
Floor debate in each House is limited to no more than 20 hours.\
\
The Committee on Finance ordered S. 1627 favorably reported on November
18, 1993.\
\
**COMMITTEE ON FINANCE ACTIONS\
\
**From February 1991 through September 1993, the Committee on Finance
held 15 hearings on the NAFTA. Five of the hearings were held in 1993.
In those hearings, the Committee heard testimony from Ambassadors Hills
and Kantor, other officials of the Executive Branch, representatives of
U.S. business, labor, agriculture, and environmental organizations, and
academics concerning the NAFTA and the supplemental agreements on
environmental cooperation and labor cooperation. In addition, the
Committee held numerous executive sessions with Ambassadors Hills and
Kantor, in which the Committee was briefed extensively on specific
provisions of the NAFTA and the supplemental agreements on environmental
cooperation and labor cooperation.

\[\* \* \*\]

As a final matter, the Committee notes that there have been complaints
from brokers that they do not get a fair and impartial hearing at the
Headquarters level in broker penalty and liquidated damages claims. It
is the Committee\'s intent that the Customs Service will continue its
study of the procedures relating to these claims, especially with regard
to the issue of the sufficiency of due process.

\[\* \* \*\]

**OVERVIEW OF THE NAFTA\
**\
A free trade agreement such as the NAFTA is an arrangement between two
or more countries in which each removes tariff and other restrictions on
trade between those countries. Article XXIV of the General Agreement on
Tariffs and Trade (GATT) permits free trade areas as a deviation from
the principle of non-discrimination (most-favored-nation (MFN)
treatment) in Article I of the GATT if the agreement meets certain
criteria. Most significantly: (1) the free trade area must eliminate
duties and other restrictive measures on \"substantially all\" trade
between the parties; and (2) duties and other regulations of commerce
maintained by the parties may not be higher or more restrictive to the
trade of third countries than they were prior to the agreement.\
\
The NAFTA is the third free trade agreement to which the United States
is a party, following the agreements concluded with Israel in 1985 and
with Canada in 1988. (The relationship of the NAFTA to the U.S.-Canada
Agreement is explained in the description of section 107 of this bill.)\
\
The NAFTA is organized as follows: Part One includes the general
objectives, including the NAFTA\'s relationship to other agreements, and
definitions. Part Two, containing the Agreement\'s major trade
liberalizing provisions, covers Chapters 3 through 8. These include
provisions on the elimination of tariffs; drawback and other customs
programs; rules of origin for determining whether goods have sufficient
North American content to qualify for preferential treatment under the
NAFTA; trade in automotive goods and in textiles; energy and
petrochemicals; agriculture (including sanitary and phytosanitary
measures); and emergency actions (bilateral and global safeguards).\
\
Part Three concerns standards-related measures (technical barriers to
trade).\
Part Four covers government procurement rules and procedures. Part Five
establishes the rules governing investment, cross-border trade in
services, telecommunications, financial services, competition policy,
and the temporary entry of business persons. Part Six sets out the rules
for protection of intellectual property rights. Part Seven establishes
the procedures for review and dispute settlement in antidumping and
countervailing duty matters, as well as the general institutional
arrangements and dispute settlement procedures. Finally, Part Eight
includes both the exceptions from NAFTA coverage and provisions on the
entry into force and related matters.\
\
In addition to the 22 chapters of text, the NAFTA includes the tariff
schedules of each of the three parties, and annexes setting out the
specific rules of origin and the reservations and exceptions taken by
each country with respect to the commitments on investment, cross-border
trade in services, and financial services.\
\
Not all provisions of the NAFTA are reflected in the implementing
legislation.\
In fact, most of the obligations do not require any U.S. action to
effect implementation, because U.S. law and practice already are
consistent with the terms of the NAFTA. Other obligations can be
implemented through administrative action, as set forth in the Statement
of Administrative Action submitted to the Congress with the NAFTA and
implementing bill on November 4. Finally, many provisions of the NAFTA,
in areas such as energy, investment, and financial services, only
necessitate changes in the laws and regulations of Mexico.\
\
**Description of the Bill**\
**Vote of the Committee in Reporting the Bill\
\
**In compliance with section 133 of the Legislative Reorganization Act
of 1946, the Committee on Finance states that the bill was ordered
favorably reported by a vote of 16 to 4.\
[]{#reg_impact .anchor}**Regulatory Impact of the Bill\
\
**In compliance with paragraph 11(b) of the Standing Rules of the
Senate, the Committee states that the bill 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.

[]{#part2 .anchor}**II. REPORT OF THE COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY**

**\
**The Committee on Agriculture, Nutrition, and Forestry to which was
referred the bill S. 1627, having considered the same, reports favorably
thereon and recommends that the bill do pass.\
\
**Brief Explanation\
\
**The implementing bill makes necessary or appropriate changes in law to
implement the North American Free Trade Agreement. The major provisions
of the bill considered by the Committee on Agriculture, Nutrition, and
Forestry are briefly described below.\
\
The bill amends section 22 of the Agricultural Adjustment Act to
authorize the President, pursuant to Article 309 and Annex 703.2 of the
Agreement, to exempt any \"qualifying good\" from Mexico from import
restrictions imposed under section 22.\
\
The United States will convert its import quotas under section 22 of the
Agricultural Adjustment Act to tariff rate quotas for imports from
Mexico of dairy products, cotton, sugar-containing products and
peanuts.\
\
The bill directs the President to take such action as may be necessary
to ensure that imports of goods subject to the tariff rate quotas
established by the Agreement do not disrupt the orderly marketing of
commodities in the United States.\
\
The bill includes measures to ensure compliance with existing provisions
concerning reentry of exported additional peanuts. In addition, the
sense of Congress is expressed that the United States should request
consultations with Mexico if imports of peanuts exceed the in-quota
quantity of Mexican peanuts established under the Agreement.\
\
The bill requires the Secretary of Agriculture to collect and compile
certain information for fresh fruits and vegetables, processed citrus
products, and cut flowers, and to designate an office to maintain and
disseminate this information.\
\
The bill establishes an end-use certificate requirement for wheat and
barley imported by the United States from countries with similar
requirements.\
The purpose of the U.S. end-use certificate requirement is to ensure
that foreign agricultural commodities do not benefit from U.S. export
programs.\
\
The bill authorizes a fellowship program for individuals from other
NAFTA countries to study agriculture in the United States, and for
individuals in the United States to study agriculture in other NAFTA
countries.\
\
The bill authorizes the Secretary of Agriculture, subject to
appropriation, to make available up to \$20 million per year in grants
to tax-exempt entities with experience in providing services to
low-income migrant or seasonal farm workers, if NAFTA is determined to
have caused such workers to lose income.\
\
The bill requires the Secretary of agriculture to submit a biennial
report on the effects of NAFTA on U.S. agricultural producers and rural
communities, with the first report due March 1, 1997.\
\
The bill amends Title IV of the Trade Agreements Act of 1979 to add a
new subtitle concerning standards and measures under the Agreement.
Chapter 1 of the new subtitle contains provisions to implement Section B
of NAFTA Chapter 7.\
\
The bill provides a conforming change to amend the Federal Seed Act to
remove the staining requirement for alfalfa and clover seed imported
from Mexico.\
\
The bill removes a blanket prohibition on the importation of animals
which are diseased, infected with any disease, or which have been
exposed to infection within 60 days prior to their exportation to the
United States. The provision does not require the Secretary of
Agriculture to permit the importation of such animals, but it permits
the Secretary to specify those circumstances in which such animals may
be imported.\
\
The bill authorizes the Secretary of Agriculture to promulgate
regulations to permit the Secretary to waive certain regulations
regarding shipments of ruminants and swine between the United States and
Canada or Mexico.\
\
The bill authorizes the Secretary of Agriculture to permit the
importation of livestock and meat from regions of countries that are,
and are likely to remain, free of foot-and-mouth disease and rinderpest.
A similar provision allows the Secretary to permit the importation of
honeybees or honeybee semen from regions of Canada and Mexico that are
free of diseases, harmful parasites, and undesirable honeybee species or
subspecies.\
\
The bill amends the Poultry Products Inspection Act to implement NAFTA
Article 714(2) on equivalence. The provision permits imports of poultry
and poultry products from Canada or Mexico if they are processed in
facilities and under conditions that meet standards equivalent to U.S.
standards.\
\
Likewise, the bill amends the Federal Meat Inspection Act to implement
NAFTA Article 714(2) on equivalence. The provisions permit the
importation from Canada or Mexico of meat, carcasses, and meat products
upon certification that plants in Canada or Mexico have complied with
requirements equivalent to the applicable U.S. requirements.\
\
The bill requires that peanut butter and peanut paste be processed from
peanuts meeting the standards of Marketing Agreement No. 146, except
that imported peanut butter and peanut paste may, alternatively, comply
with sanitary measures that provide at least the same level of sanitary
protection.\
\
The bill authorizes the Secretary of Agriculture, subject to
appropriation, to make a grant to construct the \"Southwest Regional
Animal Health Biocontainment Facility\" to conduct research in animal
health and certain other biocontainment matters.\
\
The bill mandates an annual report by the Secretary of Agriculture on
the impact of NAFTA with respect to the inspection of imported meat
poultry, other foods, animals and plants.\
\
**Purpose and Need\
\
**S. 1627 approves and implements the North American Free Trade
Agreement negotiated by the United States with Mexico and Canada.\
\
The implementing bill makes certain changes in United States law that
are necessary or appropriate to implement the Agreement. This report
discusses section 321(b) through (i), section 351, and section 361 of
the implementing bill.\
\
Most changes in United States law and regulation implementing the
Agreement will apply only with respect to Mexico and Canada. United
States law and practice with respect to other countries, their
nationals, and firms will generally be left undisturbed.\
\
Many provisions of the Agreement will not require any change in United
States law or administrative procedure. Where United States law affords
discretion to comply with the Agreement, the implementing agency will
exercise its discretion in a manner consistent with the Agreement. In
addition, some provisions of the Agreement impose obligations only on
Mexico or Canada.\
\
**Committee Consideration\
\
**The Committee held a hearing on September 21, 1993, to discuss the
implications of the proposed North American Free Trade Agreement.\
\
Witnesses at the hearing included: Mickey Kantor, United States Trade
Representative; Mike Espy, Secretary, United States Department of
Agriculture; Bob Foster, Vice Chairman of the Board of Directors,
Agrimark, Inc.; Leland Swenson, President, National Farmers Union; Mike
Bauerle, Immediate Past Chairman, Nebraska Corn Development,
Utilization, and Marketing Board; Dean Kleckner, President, American
Farm Bureau Federation; Martha Roberts, Deputy Commissioner for Food
Safety, Florida Department of Agriculture and Consumer Services; and
Roger Stuber, President, National Cattlemen\'s Association.\
\
The Committee met on November 18, 1993, and favorably reported section
321(b) through (i), section 351, and section 361 of the implementing
legislation, S. 1627, by voice vote. Senators Heflin, Feingold, and
Conrad asked to be recorded as voting no.\
\
**Roll Call Votes\
**\
In accordance with paragraphs 7(b) of Rule XXVI of the Standing Rules of
the Senate, it is announced that no roll call votes were taken with
respect to Committee action on S. 1627.

### PART III. REPORT OF THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

At its executive session on Thursday, November 18, 1993, the Committee
on Commerce, Science, and Transportation considered the portions of S.
1627, legislation to implement the North American Free Trade Agreement
(NAFTA), within the jurisdiction of the Committee, and ordered them
reported without recommendation.\
\
**Summary of Provisions Within the Jurisdiction of the Commerce
Committee\
\
**The provisions of the bill considered by the Committee are briefly
described below.

### PART IV. REPORT OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS

On November 18, 1993, the Committee on Governmental Affairs voted
unanimously to report out, without recommendation, Section 381, Subtitle
G of Title III of S. 1627\--legislation to implement the North American
Free Trade Agreement (NAFTA).

### PART V. REPORT OF THE COMMITTEE ON THE JUDICIARY

Summary of Subtitle C\--Intellectual Property Provisions

### PART VI. REPORT OF THE COMMITTEE ON FOREIGN RELATIONS

Introduction\
\
On November 4, 1993, S. 1627\--the North American Free Trade Agreement
Implementation Act was introduced by Senator Mitchell, for himself and
Senator Dole (by request). S. 1627 was jointly referred to six
committees\-- Finance; Agriculture, Nutrition, and Forestry; Commerce,
Science, and Transportation; Government Affairs; the Judiciary; and
Foreign Relations.\
\
S. 1627 was referred to the Committee on Foreign Relations because of
provisions contained in Subtitle D\--Implementation of NAFTA
Supplemental Agreements. This subtitle provides the necessary authority
for the United States to participate in the North American Agreement on
Labor Cooperation, and the North American Agreement on Environmental
Cooperation, the so called \"Side Agreements\" that were negotiated by
the Clinton Administration to address concerns related to labor and the
environment.\
\
It also contains provisions which will enable the United States to
participate in the Border Environmental Cooperation Commission and the
North American Development Bank\--two organizations established by the
\"November 1993 Agreement Between the United States of America and the
Government of the United Mexican States Concerning the Establishment of
A Border Environmental Cooperation Commission and a North American
Development Bank.\"\
\
**Committee Action\
\
**On October 27, 1993, in anticipation of the referral of S. 1627, The
Committee on Foreign Relations held a hearing on NAFTA, the Supplemental
Agreements and the foreign policy implication of U.S. participation in
NAFTA and related agreements. The following witnesses provided testimony
before the committee: Deputy Secretary of State Clifton Wharton;
Assistant Secretary of Treasury for International Affairs Jeffrey
Shafer; Deputy Trade Representative Rufus Yerxa; William J. Cunningham,
Legislative Representative, AFL-CIO; Stewart Hudson, Legislative
Representative, International Programs Division, National Wildlife
Federation; and Cameron Duncan, Coordinator of Trade and Environmental
Policy, Greenpeace.\
\
On November 4, 1993, S. 1627 was referred to the Committee on Foreign
Relations. On November 18, 1993 the Committee reported S. 1627 favorably
by a vote of 15 to 2; with Senators Pell, Biden, Dodd, Kerry, Simon,
Robb, Mathews, Lugar, Kassebaum, Pressler, Murkowski, Brown, Jeffords,
Coverdell, and Gregg voting aye; and Senators Feingold and Helms voting
no.\
\
**Committee Comments\
\
**The Committee on Foreign Relations focused on two principle areas
during consideration of S. 1627; first, on the specific provisions
contained in Subtitle D of the bill (which fall within the jurisdiction
of the committee); and second, more broadly on the foreign policy
implications of United States\' participation in the NAFTA. The
Committee believes that the Supplemental Agreements are an important and
integral component of the NAFTA agreement. Finally, the Committee
believes that the foreign policy interests for supporting NAFTA are
compelling.\
\
**NAFTA: SUPPLEMENTAL AGREEMENTS ON LABOR AND THE ENVIRONMENT\
\
**The NAFTA Supplemental Agreements on Labor and the Environment were
signed by the President on September 14, 1993. These agreements
encourage Mexico, the United States, and Canada (\"the Parties\") to
address labor and environmental issues in a cooperative and transparent
process, and provide for strong dispute settlement procedures to promote
improved enforcement of national standards. Thus, not only will NAFTA
boost U.S. exports and its position in Latin America, but it will also
ensure that American labor and environmental laws are not degraded, and
that Mexican enforcement of its labor and environmental standards will
improve significantly.\
\
**NORTH AMERICAN AGREEMENT ON LABOR COOPERATION\
\
**The North American Agreement on Labor Cooperation (NAALC) is designed
to promote cooperation between the Parties and to ensure effective
enforcement of labor laws. It creates a new Commission on Labor
Cooperation, headed by a Council consisting of the labor ministers of
each country. The Council is intended to be a forum for cooperation on
issues such as occupational safety, child labor, minimum wages, and
resolution of labor disputes. The Council will be supported by an
independent Secretariat, headed by an Executive Director appointed by
consensus of the Parties for a fixed term.\
\
The Secretariat is charged with investigating and reporting on a range
of labor issues, including labor law enforcement and labor market
conditions. These reports will be publicly available. In addition, based
on the findings of Council consultations, any member of the Council can
request the convening of an independent committee of experts to
investigate evidence of non- enforcement of labor laws. If a Party
believes that another country is exhibiting a persistent pattern of
non-enforcement in the areas of worker safety, child labor, and minimum
wage law, it may invoke dispute resolution procedures, which may result
in the imposition of fines or trade sanctions.\
\
**NORTH AMERICAN AGREEMENT ON ENVIRONMENTAL COOPERATION\
\
**The environmental supplemental agreement\--the North American
Agreement on Environmental Cooperation (NAAEC)\--is designed to provide
incentives for enforcement of national environmental regulations. It
creates a new Commission on Environmental Cooperation, whose Council
will consist of the top environmental officials of the three countries.
A Joint Advisory Committee, consisting of nongovernmental organizations,
will advise the Council. The heart of the Commission will be its
Secretariat, whose Executive Director, while under the direction of the
Council, will enjoy considerable independence.\
\
The objectives of the Commission are to promote cooperation among the
members; improve public access to information on hazardous materials;
consider trans-boundary environmental problems; address public concerns
about NAFTA\'s effects on the environment; and assist the dispute
settlement panels. The Secretariat will produce fact-finding reports in
response to public submissions. The Parties will discuss these reports
within the forum of the Council. If a Party feels that such
consultations have failed to address a pattern of non-enforcement, it
may request the creation of a dispute settlement panel, possibly leading
to the imposition of fines or trade sanctions.\
\
**BORDER ENVIRONMENT COMMISSION AND THE NORTH AMERICAN BANK\
\
**In addition to the labor and environmental commissions established
pursuant to the so call Side Agreements, the Governments of Mexico and
the United States have also agreed on arrangements to assist communities
on both sides of the border in coordinating and carrying out
environmental infrastructure projects. This new agreement furthers the
goals of the North American Free Trade Agreement and the North American
Agreement on Environmental Cooperation.\
\
The agreement provides for the establishment of two institutions:\
\
(1) a North American Development Bank (NADBank), capitalized in equal
shares by the United States and Mexico, that will provide some \$2
billion or more in new financing to supplement existing sources of funds
and foster the expanded participation of private capital; and\
\
(2) a Border Environment Cooperation Commission (BECC) to assist local
communities and other sponsors in developing and implementing
environmental infrastructure projects, and to certify projects for
NADBank financing.\
\
The agreement provides up to 10 per cent of the NADBank capital to be
used for community adjustment and investment programs in support of the
purposes of the NAFTA.\
\
The new agreement represents a significant additional commitment by
Mexico and the United States to implement effective solutions to the
environmental problems in the border region. It embodies the basic
principles for coordinating and financing environmental infrastructure
projects set forth by the two governments during their meeting on
environmental cooperation in August, 1993. The two new institutions will
help marshall resources from all sources, both public and private, to
solve the environmental problems of the border region. The agreement is
contingent on the entry into force of the North American Free Trade
Agreement.\
\
**BORDER ENVIRONMENT COOPERATION COMMISSION\
\
**The Border Environment Cooperation Commission (BECC) will work with
the affected states and local communities and nongovernmental
organizations in developing effective solutions to environmental
problems in the border region.\
\
The BECC will provide technical and financial planning assistance for
environmental infrastructure projects so as to enhance the environment
in the border region for the well-being of the people on both sides of
the border. The BECC will not itself develop or manage projects. Rather,
it will assist, with their concurrence, states and localities and
private investors proposing environmental infrastructure projects in
coordinating environmental infrastructure projects; preparing,
developing, and implementing projects; assessing their technical and
financial feasibility; evaluating their social and economic benefits;
and arranging public and private financing for such projects.\
\
The BECC will certify projects to the NADBank and may do so for other
financial institutions that elect to use the BECC\'s certification. The
BECC may certify any project that meets the technical, environmental,
and financial criteria applied by it. To be eligible for certification,
projects shall be required to observe the environmental laws for the
place where the project is to be located or carried out.\
\
For a project with significant transboundary effects, an environmental
assessment shall be presented and the Board shall determine, in
consultation with affected states and localities, that the project meets
the necessary conditions to achieve a high level of environmental
protection for the affected area.\
\
The BECC has no sovereign power. It can only offer its services to state
and local bodies and assist them in cooperative activities. The BECC and
the International Boundary and Water Commission will cooperate with each
other in planning, developing, and carrying out border sanitation and
other environmental activities.\
\
The BECC will have a binational board of directors and decision-making
procedures structured to ensure that the views of affected states, local
communities, and members of the public will be fully taken into account.
Each country shall have five members on the board of directors.
Individuals selected to serve on the board shall have expertise in
environmental, engineering, economic or financial matters. The board
will be composed of the following members from each country:\
\
\--the senior environmental official of the government (the
Administrator of the Environmental Protection Agency for the United
States and the Secretario de Desarollo Social for Mexico);\
\--the commissioner of the International Boundary and Water Commission;\
\--a representative from a border state;\
\--a representative from a locality in the border region;\
\--a member of the public who resides in the border region.\
\
The BECC will be required to consult with an Advisory Council of 18
members\--nine from each country\--that will include representatives of
state or local governments or community groups from each of the border
states, and members of the public, including nongovernmental
organizations. It will also establish procedures for public
participation, including written notice and an opportunity to comment on
general guidelines and on applications for certification of projects.
The Commission\'s annual report will be made available to the public.\
\
The BECC will be able to mobilize financing for environmental
infrastructure projects from various sources, including the North
American Development Bank; direct government support, such as grants,
loans, and guarantees from federal, state and local governments; or the
private sector. It will seek to mobilize private capital to the maximum
extent possible in order to leverage government financing. Arrangements
for servicing the debt will encourage reliance on fees paid by those
causing pollution and those benefitting from the improved environment.\
\
**NORTH AMERICAN DEVELOPMENT BANK\
\
**The North American Development Bank (NADBank) will be capitalized and
governed by the two countries. Its purpose is to finance projects
certified by the BECC. Based on its capitalization, it is envisaged that
the NADBank will be able to make some \$2 billion or more in loans and
guarantees, with an upper limit of \$3 billion.\
\
The NADBank will use its own capital (contributed equally by the United
States and Mexico), funds raised by it in the financial markets, and
other available resources to finance public and private investment in
environmental infrastructure projects; and encourage and supplement
private investment in environmental infrastructure projects.\
\
The NADBank will be governed by a six-member board, with an equal number
of representatives from each country. The Bank will evaluate the
financial feasibility of projects certified by the BECC and provide
financing as appropriate.\
\
Initial paid-in capital will be \$450 million, with callable capital of
\$2.55 billion.\
\
The United States and Mexico also have agreed that up to 10 per cent of
the resources of the Bank will be made available, on an equal basis, for
community adjustment and investment programs in both countries, which
need not be in the border region. Each government will develop criteria
and procedures for directing these resources through existing government
programs.\
\
The NADBank is intended to supplement existing sources of financing. It
is designed to facilitate, not impair, the ability of governments and
investors to seek financing from other institutions.\
\
**FOREIGN POLICY IMPLICATIONS OF NAFTA\
\
**The Committee gave careful consideration to the foreign policy
implications of NAFTA and concluded that passage of NAFTA is crucial to
U.S. foreign policy interests in Latin American and in the world as a
whole.\
\
The Committee believes that these interests were summarized best by
Deputy Secretary of State Clifton Wharton during his appearance before
the Committee on October 27, 1993. Deputy Secretary Wharton made the
following points:\
\
\--NAFTA puts aside the historical mistrust between the United States
and Mexico, and solidifies a new relationship based on mutual respect
and shared opportunity.\
\--Passage of NAFTA will signal American support for the process of
economic and political reform in neighboring Mexico. Defeat of NAFTA
would deal a serious blow to those in Mexico who support continued
liberalization.\
\--In addition, passage of NAFTA will send a positive signal to those
democratic leaders throughout Latin America and the Caribbean who have
liberalized their economic systems and opened their markets to U.S.
exports.\
\--Although NAFTA is not an exclusionary bloc, improved economic
cooperation in this hemisphere will enhance our negotiating position in
the GATT Uruguay Round talks. This could provide the impetus for a
breakthrough in the stalled negotiations.\
\--Passage of NAFTA will establish the United States as the leader of a
global movement toward economic cooperation and openness. International
respect for the President\'s foreign policy leadership will increase,
making other countries more receptive to U.S. foreign policy
initiatives.\
\
The Committee fully associates itself with these findings and believes
that the Senate as a whole should give them serious consideration during
its deliberations of S. 1627.\
\
**Section-by-Section Analysis\[ of Subtitle D\]\
\
**The following is a section-by-section analysis of Subtitle D\--
Implementation of NAFTA Supplemental Agreements.

\* \* \*

### Senate Finance Committee Report

#### II. BUDGETARY IMPACT OF THE BILL

In compliance with sections 308 and 403 of the Congressional Budget Act
of 1974, and paragraph 11(a) of Rule XXVI of the Standing Rules of the
Senate, the following letter has been received from the Congressional
Budget Office regarding the budgetary impact of the bill:

Congressional Budget Office, U.S. Congress,

Washington, DC, November 18, 1993.

Hon. Daniel Patrick Moynihan, Chairman,\
Committee on Finance, U.S. Senate, Washington, DC.\
\
Dear Mr. Chairman: The Congressional Budget Office has prepared the
enclosed cost estimate for S. 1627, the North American Free Trade
Agreement Implementation Act.\
\
Section 12(c) of the concurrent resolution on the budget requires a
determination of any legislative proposal\'s effect on the deficit for
fiscal years 1999 through 2003. CBO estimates that this bill would not
increase the deficit over this period.\
\
Enactment of S. 1627 would affect direct spending and receipts.
Therefore, pay-as-you-go procedures would apply to the bill.\
\
If you wish further details on this estimate, we will be pleased to
provide them.

Sincerely,

Robert D. Reischauer, Director Enclosure

CONGRESSIONAL BUDGET OFFICE

**Cost Estimate**

November 18, 1993

1\. BILL NUMBER: S. 1627

2\. BILL TITLE: North American Free Trade Agreement Implementation Act

3\. BILL STATUS:

As ordered reported by the Senate Committee on Finance on November 18,
1993.

4\. BILL PURPOSE:

S. 1627 would approve the North American Free Trade Agreement (NAFTA)
entered into on December 17, 1992, with the governments of Canada and
Mexico. It would provide for tariff reductions and other changes in law
related to implementation of the agreement. The bill also would create a
transitional adjustment assistance program for affected workers, require
the use of an electronic fund transfer system for collecting certain
taxes, and increase certain customs user fees. It also would authorize
appropriations for a number of agricultural and other programs.

5\. ESTIMATED COST TO THE FEDERAL GOVERNMENT:

The following tables summarize CBO\'s estimate of the budgetary impact
of S. 1627. Table 1 shows the impact of the bill on direct spending and
revenues. Table 2 details the estimated costs that depend on future
appropriation actions.\
\
**TABLE 1. CBO ESTIMATES OF CHANGES IN REVENUES AND DIRECT SPENDING
ASSOCIATED WITH S. 1627\
**\[By fiscal year, in millions of dollars\] /1/\
/1/ This table does not include any discretionary spending that would
be\
associated with NAFTA.\
\
\
**Five-\
year\
/1/ This table does not include any discretionary spending that would
be\
associated with NAFTA.\
\
[1994 1995 1996 1997 1998 total\
]{.underline}**\
**CHANGES IN REVENUES (NET)\
**\
Reduction in tariff rates -214 -489 -547 -609 -672 -2,531\
Electronic Federal tax deposit system:/2/\
/2/ Estimate provided by the Joint Committee on Taxation.\
\
On-budget 49 262 272 371 1,207 2,161\
Off-budget 23 116 135 146 701 1,121\
Customs enforcement initiative 17 22 22 23 23 107\
Customs modernization provisions -3 -3 -3 -3 -3 -15\
\
**CHANGES IN OUTLAYS\
**Increases in Customs fees (offsetting receipts) -93 -203 -221 -241 0
-758\
Increased spending for current trade adjustment\
assistance program/3/ 10 25 25 20 25 105\
/3/ Trade adjustment assitance (TAA) for training costs is currently
limited by law to a maximum of \$80 million a year. This estimate
assumes that this cap is maintained. If it were raised or eliminated,
CBO estimates that TAA costs resulting from NAFTA would be a total of
\$25 million higher over the 1994- 1998 period than shows above.\
\
New trade adjustment assistance benefits/4/ 7 8 9 9 33\
/4/ Less than \$500,000.\
\
Effects on agricultural price support programs -64 -86 -66 -1 33 -184\
North American Development Bank 0 54 2 0 0 56\
Customs modernization provisions -5 -5 -5 -5 -5 -25\
\
**EFFECT ON DEFICIT\
**Net increase or decrease (-) in deficit:\
On-budget -1 0 -1 0 -493 -495\
Off-budget -23 -116 -135 -146 -701 -1,121\
\
**TABLE 2. CBO ESTIMATES OF AUTHORIZATIONS OF APPROPRIATIONS ASSOCIATED
WITH S. 1627\
\[By fiscal year, in millions of dollars\]\
\
Five-\
year\
[1994 1995 1996 1997 1998 total\
Agriculture programs:\
]{.underline}**Estimated authorizations 96 22 22 22 22 184\
Estimated outlays 18 61 34 37 22 172\
\
**[North American Development Bank:\
]{.underline}**Estimated Authorizations 0 0 56 56 56 168\
Estimated outlays 0 0 56 56 56 168\
\
**[Other authorizations:\
]{.underline}**Estimated authorizations 21 16 11 11 11 70\
Estimated outlays 16 18 10 11 11 66\
\
**[Total authorizations:\
]{.underline}**Estimated authorizations 17 38 89 89 89 422\
Estimated outlays 34 79 100 104 89 406\
\
\
**Basis of Estimate:\
\
[Changes in Revenues\
\
]{.underline}**Tariff Rate Reductions. Under NAFTA, all tariffs on U.S.
imports from Mexico would be eliminated by 2008. Tariffs would be phased
out for individual products at varying rates according to one of six
different timetables ranging from immediate elimination to elimination
over 15 years for some goods. Based on the composition of imports from
Mexico in 1991, tariffs would be eliminated on about 60 percent of
dutiable goods on January 1, 1994, and tariff revenue would be reduced
by about 65 percent in calendar year 1994. By 1998, duties on about 70
percent of goods that are currently subject to duty would be eliminated,
and tariff revenue would be about 85 percent lower than under current
law.\
\
Goods currently afforded duty-free treatment under the Generalized
System of Preferences (GSP) would receive permanent duty-free treatment
under NAFTA. Under current law, the GSP program is scheduled to expire
after September 30, 1994. Therefore, this estimate includes the revenue
loss from extending duty- free treatment to GSP goods imported from
Mexico past the GSP\'s expiration date under current law.\
\
CBO estimates that the provisions of NAFTA that reduce tariff rates
would reduce revenues by \$2.5 billion over 1994 through 1998, net of
income and payroll tax offsets. This estimate is based on Census Bureau
data for 1991 and 1992 on imports from Mexico. This estimate includes
the effects of increased imports from Mexico that would result from the
reduced prices of imported products in the U.S.\--reflecting the lower
tariff rates\--and has been estimated based on the expected substitution
between U.S. products and imports from Mexico. In addition, it is likely
that some of the increase in U.S. imports from Mexico would displace
imports from other countries. In the absence of specific data on the
extent of this substitution effect, CBO assumes that an amount equal to
one-half of the increase in U.S. imports from Mexico would displace
imports from other countries.\
\
Electronic Federal Tax Deposit System. The new federal tax deposit
system would electronically transfer tax deposits to the Treasury,
eliminating the need for banks to process paper coupons and checks. The
change, which would be phased in gradually over several years, would
allow deposits to be credited to the Treasury on the day of deposit
instead of the day after deposit. Adoption of this system would not
change the amount of taxes paid by taxpayers, but would shift the
receipt by the Treasury of certain tax revenues from the beginning of
one fiscal year to the end of the preceding year. The Joint Committee on
Taxation has estimated that these changes would increase on-budget
receipts by \$2.2 billion and off-budget receipts by \$1.1 billion over
the fiscal years 1994 through 1998.\
\
Customs Enforcement Initiative. The bill would allow Customs Service
auditors to access IRS income tax return information. This would allow
auditors to use businesses\' tax information on the valuation of imports
and is expected to result in higher customs duty audit assessments. CBO
estimates, net of income and payroll tax offsets, that the access to the
information would result in increased receipts of \$107 million over
fiscal years 1994 through 1998.\
\
Customs Modernization. Title VI of S. 1627 would expand the base of
goods eligible for customs duty drawbacks and would allow increased
exemptions from duty on certain personal articles, decreasing customs
duties by \$7 million each year. Title VI also would require payment of
interest on merchandise revaluations after entering an item through U.S.
Customs, increasing receipts by \$4 million each year. CBO estimates,
net of income and payroll tax offsets, these provisions would decrease
receipts by \$3 million each year.\
\
**[Changes in Direct Spending\
\
]{.underline}**Customs User Fees. S. 1627 would make several changes to
user fees charged by the U.S. Customs Service, which are recorded in the
budget as offsetting receipts. For the fiscal years 1994 through 1997
only, the current \$5 passenger fee would be increased to \$6.50 and the
exemption granted to passengers arriving in the United States from
Canada, Mexico, and the Caribbean would be removed. For fiscal years
1999 through 2003, customs user fees would be extended at the current
\$5 rate. (Under current law, these fees sunset at the end of fiscal
year 1998.) CBO estimates that the \$1.50 passenger fee increase and the
removal of the exemption would result in additional fee collections of
\$758 million over the fiscal years 1994 through 1997.\
\
Current Trade Adjustment Assistance (TAA) Program. Under current law,
the TAA program provides cash assistance and training to workers who can
demonstrate that increased imports contributed importantly to the loss
of their job. If NAFTA were to be approved, CBO estimates that
approximately 4,500 additional workers annually for fiscal years 1995
through 1998 would become eligible for TAA. The additional workers would
not qualify for TAA immediately because workers must exhaust their
unemployment benefits prior to collecting TAA. The fiscal year 1994
estimate assumes approximately 1,000 workers would qualify for TAA,
assuming that NAFTA becomes effective January 1, 1994. Under current
law, TAA recipients are required to participate in job training unless
they receive a waiver. Currently, about 60 percent of the recipients
train and 40 percent receive waivers. The average training cost is
approximately \$4,000 per person. Based on an average cash benefit of
\$4,800, CBO estimates the additional TAA cash assistance would be \$5
million in 1994 and \$20 million each year for fiscal years 1995 through
1998, and we estimate the additional TAA training benefits would be \$5
million in 1994 and \$10 million each year for fiscal years 1995 through
1998, if all newly eligible workers were to receive their full training
benefit.\
\
Nevertheless, the TAA training program is a capped entitlement. The
training benefits are capped at \$80 million in fiscal years 1994, 1995,
1996, and 1998. In fiscal year 1997, the cap on funding for TAA training
is \$70 million. Because CBO\'s baseline is \$5 million below the cap in
fiscal years 1994, 1995, 1996, 1998 and equal to the cap in fiscal year
1997, the estimated increase in TAA training costs with the existing
caps would be \$5 million each year in fiscal years 1994, 1995, 1996,
1998 and zero in fiscal year 1997.\
\
New Trade Adjustment Assistance Benefits. The bill would add a new sub-
chapter to the TAA program to allow workers who lose their job because
their firm shifts production to Mexico or Canada to qualify for TAA. In
addition, workers would be required to enter a job training program by
their sixteenth week of unemployment or their sixth week of TAA
certification, whichever is later, to be eligible for benefits. Unlike
the current TAA program, beneficiaries under this sub-part could not
receive a waiver from training and still collect cash assistance. TAA
cash and training benefits under this amendment would be available to
those who are displaced from their jobs between January 1, 1994, and
September 30, 1998. CBO estimates that fewer than 1,000 workers annually
would qualify for TAA payments under this provision. The average
training benefit would be \$4,000 per person, and the average cash
benefit would be approximately \$6,000 per person. CBO estimates that
total TAA payments under this new sub-part would be less than \$500,000
in fiscal year 1994, \$7 million in fiscal year 1995, \$8 million in
fiscal year 1996, and \$9 million in each of the fiscal years 1997 and
1998.\
\
Effects on Agricultural Price Support Programs. Gradual reductions in
tariff and non-tariff barriers on agricultural products under the North
American Free Trade Agreement are expected to result in increased trade
between the United States and Mexico. An estimated net increase in U.S.
exports of commodities currently supported by agriculture programs would
result in higher market prices and a reduction in government support
payments. While lower acreage reduction program (ARP) requirements (to
compensate for increased demand) would mitigate some of the price
increase, the ARP level could not be reduced in some years.\
\
The bill also would require end use certificates for imports of wheat
and barley. Such certificates would tend to discourage imports and raise
the price for domestically produced grain, resulting in slightly lower
program payments.\
\
CBO estimates that increased exports and higher prices, combined with
the requirement for end use certificates on imports of wheat and barley,
would reduce federal expenditures on agricultural programs by \$184
million during 1994 through 1998. The majority of these savings would be
derived from higher prices and lower program payments for feed grains.
The dairy sector and other grains would benefit noticeably from
increased exports, leading to a reduction in federal support purchases
and lower program costs.\
\
North American Development Bank. Section 542 would authorize the
President to accept membership in a North American Development Bank. The
bank would be a multilateral bank with stock held by member states. The
bill would authorize the United States to subscribe to 150,000 shares of
capital stock and the appropriation of \$1,500 million to purchase the
stock. It would appropriate \$56.25 million in 1995 for the first
paid-in stock subscription, and would provide an authorization of
appropriations for the remaining amount without fiscal year limitation.\
\
The North American Development Bank would have the same structure as
other regional development banks. Only 15 percent of the bank\'s stock
would be paid-in, or purchased, by the member states. The balance would
be callable capital. Callable capital would secure borrowing by the bank
in private capital markets. The bank would relend the funds. Member
states would make payments on callable capital subscriptions only to the
extent that the bank could not service its debt from earnings on its
investments.\
\
The estimate assumes the U.S. government would subscribe to the capital
stock in four equal annual installments. The first installment would be
funded by the \$56.25 million appropriated for paid-in capital and the
authorization for callable capital subscriptions provided in section
541(a)(3) of this bill. The estimate assumes that the final three
installments of paid-in capital would be provided in appropriations acts
in 1996, 1997, and 1998. The estimate assumes that the appropriation for
paid-in capital would represent outlays in the year provided. The
authorization to subscribe to the callable capital stock is not expected
to result in any appropriations or outlays during the period of the
estimate.\
\
Section 543 authorizes the President to enter into an agreement with the
Bank to receive 10 percent of the paid-in capital actually paid to the
Bank by the United States. The bill would authorize the President to use
these funds, without further appropriation, to make loans or loan
guarantees through existing federal programs to support the community
adjustment and investment program defined in the Cooperation Agreement.
CBO estimates this provision would result in a receipt to the government
from the Bank of \$5.6 million in 1995, and subsequent spending of the
same amount through existing community development loan and loan
guarantee programs.\
\
Customs Modernization. S. 1627 would make several changes in the
administrative procedures of the Customs Service. Customs would be
allowed to release unclaimed merchandise for sale or destruction after
six months rather than the one-year period mandated by current law. CBO
estimates that this provision would decrease storage costs by \$6
million annually. In addition, the number of entries that could be filed
informally would be increased. Informal entries are assessed a lower
customs user fee, and we estimate that this provision would decrease fee
collections by \$1 million annually. The net effect of these changes
would be an outlay reduction of about \$5 million a year.\
\
**[Spending Subject to Appropriations Action\
\
]{.underline}**Agriculture. Sections 321 and 361 of the bill would
authorize a number of program changes that could increase federal
outlays in agricultural programs by an estimated \$172 million over the
1994-1998 period. The majority of costs would reflect authorizations for
assistance to farm workers in markets adversely affected by increased
trade with Mexico (\$20 million per year) and the construction of a
containment facility for agricultural products from Mexico. Other
provisions would require the Secretary of Agriculture to provide
information and reports on various agriculture markets and to monitor
end use certificates.\
\
North American Development Bank. Beyond the amount appropriated for
1994, S. 1627 would authorize additional appropriations of \$168 million
for paid-in capital of the bank.\
\
Section 543 would authorize the President to enter into an agreement
with the Bank to receive 10 percent of the paid-in capital paid to the
Bank by the United States. The bill would authorize the President to use
the 10 percent portion to make loans or loan guarantees through existing
federal programs to support the community adjustment and investment
program defined in the Cooperation Agreement. CBO estimates this
provision would result in a receipt to the government from the Bank of
\$5.6 million annually over the 1996-1998 period, and subsequent
spending of the same amount through existing community development loan
and loan guarantee programs.\
\
NAFTA Secretariat. Title I would authorize the appropriation of up to
\$2 million to fund the United States section of the secretariat
established by the agreement. These funds would be used to pay for the
activities of the secretariat, as well as the commission, several
committees and subcommittees, and various working groups subordinate to
the secretariat. It also would allow the U.S. section to retain and
spend reimbursements from the Mexican or Canadian section. We assume
that the U.S. section of the secretariat would be established within the
International Trade Administration of the Department of Commerce (DOC),
and that the secretariat and the various committees under its
jurisdiction would use the full \$2 million authorized to pay for
personnel and other costs.\
\
Commerce Department Fees. Title III (subtitle E) would require the DOC
to make available to the public certain information relating to sanitary
procedures and would permit the DOC to charge reasonable fees for this
information. Such fees would raise \$1 million to \$2 million annually
and would be available for spending under existing authority.\
\
Customs Automation Program. S. 1627 would establish the National Customs
Automation Program, an automated and electronic system for processing
information on commercial imports. We estimate that this program would
cost \$3 million in fiscal year 1994, assuming appropriation of the
necessary funds.\
\
Tax Collection Expenses. The bill would authorize the Harbor Maintenance
Trust Fund to use, for the first time, up to \$5 million annually to
cover the administrative costs of collecting the harbor maintenance tax.
We estimate that this would result in costs of \$5 million annually,
assuming appropriation of the necessary funds.\
\
Commissions. Section 532 would authorize an annual appropriation of \$5
million for 1994 and 1995 for the United States contributions to the
annual budget of the Commission for Environmental Cooperation. This
commission is described in article 43 of the North American Agreement on
Environmental Cooperation; its purpose is to address environmental
issues affecting the continent. Section 533 would authorize annual
appropriations of \$5 million, starting in 1994, for the Border
Environment Cooperation Commission (BECC) that is established by the
Border Environment Cooperation Agreement. This commission would assist
in developing solutions to environmental problems in the U.S.-Mexico
border region. The BECC would certify environmental construction
projects for the North American Development Bank (established by section
541) and other financial institutions.\
\
International Trade Commission. Various provisions of the bill would
require the International Trade Commission to monitor certain imports
and to investigate and determine petitions for relief from imports
benefiting from the agreement.. Based on information supplied by the
commission, CBO estimates that these duties will require an additional
authorization of less than \$1 million per year.\
\
**6. PAY-AS-YOU-GO CONSIDERATIONS:\
\
**Section 252 of the Balanced Budget and Emergency Deficit Control Act
of 1985 sets up pay-as-you-go procedures for legislation affecting
direct spending or receipts through 1998. CBO estimates that enactment
of S. 1627 would affect direct spending and receipts. Therefore,
pay-as-you-go procedures would apply to the bill. The following table
summarizes CBO\'s estimate of the pay-as-you-go impact of S. 1627. These
figures represent the direct spending estimates in Table 1, excluding
the effects on off-budget revenues.\
\
\[By fiscal year, in millions of dollars\]

1994 1995 1996 1997 1998

Change in outlays -152 -208 -257 -218 62

Change in receipts -151 -208 -256 -218 555

**7. ESTIMATED COST TO STATE AND LOCAL GOVERNMENTS:\
\
**None.\
**8. ESTIMATE COMPARISON:\
**None.\
**9. PREVIOUS CBO ESTIMATE:\
\
**On November 4, 1993, CBO prepared an estimate, based on draft
language, of the direct spending and revenue effects of the North
American Free Trade Agreement Implementation Act. That estimate of
revenues and direct spending is identical to the estimate for S. 1627.\
\
On November 15, 1993, CBO prepared cost estimates for H.R. 3450, an
identical bill ordered reported by the House Committee on Ways and
Means, the House Committee on Banking, Finance and Urban Affairs, and
the House Committee on Energy and Commerce. Those estimates are
identical to this one.\
\
**10. ESTIMATE PREPARED BY:\
\
**Kim Cawley, Mark Grabowicz, Mary Maginniss, Eileen Manfredi, Ian
McCormick, John Webb, and Robert Sunshine (226-2860), Cory Oltman
(226-2820), Melissa Sampson (226-2720), Linda Radey (226-2693) and
Joseph Whitehill (226-2940).\
\
**11. ESTIMATE APPROVED BY:\
\
**C. Nuckols, Assistant Director for Budget Analysis.

Top of Form

Bottom of Form

### Senate Finance Committee Report

#### III. CHANGES IN EXISTING LAW

Pursuant to the requirements of paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by the bill,
S. 1627, as reported, are shown as follows (existing law proposed to be
omitted is ~~enclosed in black brackets~~ \[STRIKEOUT\], new matter is
printed in \[roman\], existing law in which no change is proposed is
shown in roman):

**UNITED STATES-CANADA FREE-TRADE AGREEMENT IMPLEMENTATION ACT OF 1988**

\* \* \* \* \*

**TITLE III\--APPLICATION OF AGREEMENT TO SECTORS AND SERVICES\
\
SEC. 301. AGRICULTURE.\
\
**(a) Special Tariff Provisions for Fresh Fruits and Vegetables.\--\
\
(1) The Secretary of Agriculture (hereafter in this section referred to
as the \"Secretary\") may recommend to the President the imposition of a
temporary duty on any Canadian fresh fruit or vegetable entered into the
United States if the Secretary determines that both of the following
conditions exist at the time that imposition of the duty is
recommended:\
\
(A) For each of 5 consecutive working days the import price of the
Canadian fresh fruit or vegetable is below 90 percent of the
corresponding 5-year average monthly import price for such fruit or
vegetable.\
\
(B) The planted acreage in the United States for the like fresh fruit or
vegetable is no higher than the average planted acreage over the
preceding 5 years, excluding the years with the highest and lowest
acreage. For the purposes of applying this subparagraph, any acreage
increase attributed directly to a reduction in the acreage that was
planted to wine grapes as of October 4, 1987, shall be excluded.\
\
Whenever the Secretary makes a determination that the conditions
referred to in subparagraphs (A) and (B) regarding any Canadian fresh
fruit or vegetable exist, the Secretary shall ~~promptly~~ immediately
submit for publication in the Federal Register notice of the
determination.\
\
(2) No later than 6 days after publication in the Federal Register of
the notice described in paragraph (1), the Secretary shall decide
whether to recommend the imposition of a temporary duty to the
President, and if the Secretary decides to make such a recommendation,
the recommendation shall be forwarded immediately to the President.\
\
~~(2)~~ (3) In determining whether to recommend the imposition of a
temporary duty to the President under paragraph (1), the Secretary shall
consider whether the conditions in subparagraphs (A) and (B) of such
paragraph have led to a distortion in trade between the United States
and Canada of the fresh fruit or vegetable and, if so, whether the
imposition of the duty is appropriate, including consideration of
whether it would significantly correct this distortion.\
\
~~(3)~~ (4) Not later than 7 days after receipt of a recommendation of
the Secretary under paragraph (1), the President, after taking into
account the national economic interests of the United States, shall
determine whether to impose a temporary duty on the Canadian fresh fruit
or vegetable concerned. If the determination is affirmative, the
President shall proclaim the imposition and the rate of the temporary
duty, but such duty shall not apply to the entry of articles that were
in transit to the United States on the first day on which the temporary
duty is in effect.\
\
~~(4)~~ (5) A temporary duty imposed under paragraph ~~(3)~~ (4) shall
cease to apply with respect to articles that are entered on or after the
earlier of\--\
\
(A) the day following the last of 5 consecutive working days with
respect to which the Secretary determines that the point of shipment
price in Canada for the Canadian fruit or vegetable concerned exceeds 90
percent of the corresponding 5-year average monthly import price; or\
\
(B) the 180th day after the date on which the temporary duty first took
effect.\
\
~~(5)~~ (6) No temporary duty may be imposed under this subsection on a
Canadian fresh fruit or vegetable during such time as import relief is
provided with respect to such fresh fruit or vegetable under chapter 1
of title II of the Trade Act of 1974.\
\
~~(6)~~ (7) For purposes of this subsection:\
\
(A) The term \"Canadian fresh fruit or vegetable\" means any article
originating in Canada (as determined in accordance with section 202) and
classified within any of the following headings of the Harmonized
System:\
\
(i) 07.01 (relating to potatoes, fresh or chilled);\
(ii) 07.02 (relating to tomatoes, fresh or chilled);\
(iii) 07.03 (relating to onions, shallots, garlic, leeks and other
alliaceous vegetables, fresh or chilled);\
(iv) 07.04 (relating to cabbages, cauliflowers, kohlrabi, kale and
similar edible brassicas, fresh or chilled);\
(v) 07.05 (relating to lettuce (lactuca sativa) and chicory (cichorium
spp.), fresh or chilled);\
(vi) 07.06 (relating to carrots, salad beets or beetroot, salsify,
celeriac, radishes and similar edible roots (excluding turnips), fresh
or chilled);\
(vii) 07.07 (relating to cucumbers and gherkins, fresh or chilled);\
(viii) 07.08 (relating to leguminous vegetables, shelled or unshelled,
fresh or chilled);\
(ix) 07.09 (relating to other vegetables (excluding truffles), fresh or
chilled);\
(x) 08.06.10 (relating to grapes, fresh);\
(xi) 08.08.20 (relating to pears and quinces, fresh);\
(xii) 08.09 (relating to apricots, cherries, peaches (including
nectarines), plums and sloes, fresh); and\
(xiii) 08.10 (relating to other fruit (excluding cranberries and
blueberries), fresh).\
\
(B) The term \"corresponding 5-year average monthly import price\" for a
particular day means the average import price of a Canadian fresh fruit
or vegetable, for the calendar month in which that day occurs, for that
month in each of the preceding 5 years, excluding the years with the
highest and lowest monthly averages.\
\
(C) The term \"import price\" has the meaning given such term in article
711 of the Agreement.\
\
(D) The rate of a temporary duty imposed under this subsection with
respect to a Canadian fresh fruit or vegetable means a rate that,
including the rate of any other duty in effect for such fruit or
vegetable, does not exceed the lesser of\--\
\
(i) the duty that was in effect for the fresh fruit or vegetable before
January 1, 1989, under column one of the Tariff Schedules of the United
States for the applicable season in which the temporary duty is applied;
or\
\
(ii) the duty in effect for the fresh fruit or vegetable under column
one of such Schedules, or column 1 (General) of the Harmonized System,
at the time the temporary duty is applied. ~~(7)~~ (8)(A) The Secretary
shall, to the extent practicable, administer the provisions of this
subsection to the 8-digit level of classification under the Harmonized
System.\
\
(B) The Secretary may issue such regulations as may be necessary to
implement the provisions of this subsection. ~~(8) For purposes of
assisting the Secretary in carrying out this subsection, the
Commissioner of Customs and the Director of the Bureau of Census shall
cooperate in providing the Secretary with timely information and data
relating to the importation of Canadian fresh fruits and vegetables.\
\
~~(9) For purposes of assisting the Secretary in carrying out this
subsection\--\
\
(A) the Commissioner of Customs and the Director of the Bureau of Census
shall cooperate in providing the Secretary with timely information and
data relating to the importation of Canadian fresh fruits and
vegetables, and

\(B\) importers shall report such information relating to Canadian fresh
fruits and vegetables to the Commissioner of Customs at such time and in
such manner as the Commissioner requires. ~~(9)~~ (10) The authority to
impose temporary duties under this subsection expires on the 20th
anniversary of the date on which the Agreement enters into force.

\* \* \* \* \*

**TITLE IV\--BINATIONAL PANEL DISPUTE SETTLEMENT IN ANTIDUMPING AND
COUNTERVAILING DUTY CASES**

**\* \* \* \* \***

**SEC. 410. TERMINATION OF AGREEMENT.\
\
**(a) In General.\--If\--\
\
(1) no agreement is entered into between the United States and Canada on
a substitute system of rules for antidumping and countervailing duties
before the date that is 7 years after the date on which the Agreement
enters into force, and\
\
(2) the President decides not to exercise the rights of the United
States under article 1906 of the Agreement to terminate the Agreement,
the President shall submit to the Congress a report on such decision
which explains why continued adherence to the Agreement is in the
national economic interest of the United States. In calculating the
7-year period referred to in paragraph (1), any time during which Canada
is a NAFTA country (as defined in section 2(4) of the North American
Free Trade Agreement Implementation Act) shall be disregarded.

\* \* \* \* \*

**TITLE V\--EFFECTIVE DATES AND SEVERABILITY**

**\
1. EFFECTIVE DATES.\
\
**(a) \* \* \*

\* \* \* \* \*

~~(c) Termination of Provisions and Amendments if Agreement
Terminates.\--On the date on which the Agreement ceases to be in force,
the provisions of this Act (other than this subsection and section
410(b)), and the amendments made by this Act, shall cease to have
effect.\
\
~~(c) Termination or Suspension of Agreement.\--\
\
(1) Termination of agreement.\--On the date the Agreement ceases to be
in force, the provisions of this Act (other than this paragraph and
section 410(b)), and the amendments made by this Act, shall cease to
have effect.\
\
(2) Effect of agreement suspension.\--An agreement by the United States
and Canada to suspend the operation of the Agreement shall not be deemed
to cause the Agreement to cease to be in force within the meaning of
paragraph (1).\
\
(3) Suspension resulting from nafta.\--On the date the United States and
Canada agree to suspend the operation of the Agreement by reason of the
entry into force between them of the North American Free Trade
Agreement, the following provisions of this Act are suspended and shall
remain suspended until such time as the suspension of the Agreement may
be terminated:\
\
(A) Sections 204(a) and (b) and 205(a).\
\
(B) Sections 302 and 304(f).

\(C\) Sections 404, 409, and 410(b).

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Tariff Act of 1930**

\* \* \* \* \*

**TITLE III\--SPECIAL PROVISIONS**

**\
**PART I\--MISCELLANEOUS

\* \* \* \* \*

**SEC. 304. MARKING OF IMPORTED ARTICLES AND CONTAINERS.\
\
**(a) \* \* \*

\* \* \* \* \*

\(c\) Marking of Certain Pipe and Fittings.\--\
\
(1) Except as provided in paragraph (2), no exception may be made under
subsection (a)(3) with respect to pipes of iron, steel, or stainless
steel, to pipe fittings of steel, stainless steel, chrome-moly steel, or
cast and malleable iron each of which shall be marked with the English
name of the country of origin by means of die stamping, cast-in-mold
lettering, etching, ~~or engraving~~ engraving, or continuous paint
stenciling.\
\
(2) If, because of the nature of an article, it is technically or
commercially infeasible to mark it by one of the ~~four~~ five methods
specified in paragraph (1), the article may be marked by an equally
permanent method of marking ~~such as paint stenciling~~ or, in the case
of small diameter pipe, tube, and fittings, by tagging the containers or
bundles.

\* \* \* \* \*

\(e\) Marking of Certain Manhole Rings or Frames, Covers, and Assemblies
Thereof.\--No exception may be made under subsection (a)(3) with respect
to manhole rings or frames, covers, and assemblies thereof each of which
shall be marked on the top surface with the English name of the country
or origin by means of die stamping, cast-in-mold lettering, etching,
~~or engraving~~ engraving, or an equally permanent method of marking.

\* \* \* \* \*

\(h\) Treatment of Goods of a NAFTA Country.\--\
\
(1) Application of section.\--In applying this section to an article
that qualifies as a good of a NAFTA country (as defined in section 2(4)
of the North American Free Trade Agreement Implementation Act) under the
regulations issued by the Secretary to implement Annex 311 of the North
American Free Trade Agreement\--\
\
(A) the exemption under subsection (a)(3)(H) shall be applied by
substituting \"reasonably know\" for \"necessarily know\";\
\
(B) the Secretary shall exempt the good from the requirements for
marking under subsection (a) if the good\--\
\
(i) is an original work of art, or\
\
(ii) is provided for under subheading 6904.10, heading 8541, or heading
8542 of the Harmonized Tariff Schedule of the United States; and\
\
(C) subsection (b) does not apply to the usual container of any good
described in subsection (a)(3)(E) or (I) or subparagraph (B)(i) or (ii)
of this paragraph.\
\
(2) Petition rights of nafta exporters and producers regarding marking
determinations.\--\
\
(A) Definitions.\--For purposes of this paragraph:\
\
(i) The term \"adverse marking decision\" means a determination by the
Customs Service which an exporter or producer of merchandise believes to
be contrary to Annex 311 of the North American Free Trade Agreement.\
\
(ii) A person may not be treated as the exporter or producer of
merchandise regarding which an adverse marking decision was made unless
such person\--\
\
(I) if claiming to be the exporter, is located in a NAFTA country and is
required to maintain records in that country regarding exportations to
NAFTA countries; or\
\
(II) if claiming to be the producer, grows, mines, harvests, fishes,
traps, hunts, manufactures, processes, or assembles such merchandise in
a NAFTA country.\
\
(B) Intervention or petition regarding adverse marking decisions.\-- If
the Customs Service makes an adverse marking decision regarding any
merchandise, the Customs Service shall, upon written request by the
exporter or producer of the merchandise, provide to the exporter or
producer a statement of the basis for the decision. If the exporter or
producer believes that the decision is not correct, it may intervene in
any protest proceeding initiated by the importer of the merchandise. If
the importer does not file a protest with regard to the decision, the
exporter or producer may file a petition with the Customs Service
setting forth\--\
\
(i) a description of the merchandise; and\
\
(ii) the basis for its claim that the merchandise should be marked as a
good of a NAFTA country.\
\
(C) Effect of determination regarding decision.\--If, after receipt and
consideration of a petition filed by an exporter or producer under
subparagraph (B), the Customs Service determines that the adverse
marking decision\--\
\
(i) is not correct, the Customs Service shall notify the petitioner of
the determination and all merchandise entered, or withdrawn from
warehouse for consumption, more than 30 days after the date that notice
of the determination under this clause is published in the weekly Custom
Bulletin shall be marked in conformity with the determination; or\
\
(ii) is correct, the Customs Service shall notify the petitioner that
the petition is denied.\
\
(D) Judicial review.\--For purposes of judicial review, the denial of a
petition under subparagraph (C)(ii) shall be treated as if it were a
denial of a petition of an interested party under section 516 regarding
an issue arising under any of the preceding provisions of this section.\
\
~~(h)~~ (i) Penalties.\--Any person who, with intent to conceal the
information given thereby or contained therein, defaces, destroys,
removes, alters, covers, obscures, or obliterates any mark required
under the provisions of this Act shall\--\
\
(1) upon conviction for the first violation of this subsection, be fined
not more than \$100,000, or imprisoned for not more than 1 year, or
both; and\
\
(2) upon conviction for the second or any subsequent violation of this
subsection, be fined not more than \$250,000, or imprisoned for not more
than 1 year, or both.

\* \* \* \* \*

**SEC. 306. CATTLE, SHEEP, SWINE, AND MEATS\--IMPORTATION PROHIBITED IN
CERTAIN CASES\
\
**(a) ~~Rinderpest and Foot-and-Mouth Disease.\--If the Secretary of
Agriculture~~ In General.\--Except as provided in subsection (b), if the
Secretary of Agriculture determines that rinderpest or foot-and-mouth
disease exists in any foreign country, he shall officially notify the
Secretary of the Treasury and give public notice thereof, and
thereafter, and until the Secretary of Agriculture gives notice in a
similar manner that such disease no longer exists in such foreign
country, the importation into the United States of cattle, sheep, or
other ruminants, or swine, or of fresh, chilled, or frozen meat of such
animals, from such foreign country, is prohibited Provided, That wild
ruminants or swine may be imported from any such country upon such
conditions, including post entry conditions, to be prescribed in import
permits or in regulations, as the Secretary may impose for the purpose
of preventing the dissemination of said diseases into or within the
United States: And provided further, That the subsequent distribution,
maintenance, and exhibition of such animals in the United States shall
be limited to zoological parks approved by said Secretary as meeting
such standards as he may by regulation prescribe for the purpose of
preventing the dissemination of said diseases into or within the United
States. The Secretary may at any time seize and dispose of any such
animals which are not handled in accordance with the conditions imposed
by him or which are distributed to or maintained or exhibited at any
place in the United States which is not then an approved zoological
park, in such manner as he deems necessary for said purpose.\
\
~~(b) Notwithstanding subsection (a), the Secretary of Agriculture may
permit, subject to such terms and conditions as the Secretary of
Agriculture determines appropriate, the importation of cattle, sheep, or
other ruminants, or swine (including embryos of such animals) or the
fresh, chilled, or frozen meat of such animals from a region of Canada
notwithstanding the existence of rinderpest or foot-and-mouth disease in
Canada, if\-- (1) the United States and Canada have entered into an
agreement delineating the criteria for recognizing that a geographical
region of either country is free from rinderpest or foot-and-mouth
disease; and (2) the appropriate official of the government of Canada
certifies that the region of Canada from which the animal or meat
originated is free from rinderpest and foot-and-mouth disease.\
\
~~(b) Exception.\--The Secretary of Agriculture may permit, subject to
such terms and conditions as the Secretary determines appropriate, the
importation of cattle, sheep, other ruminants, or swine (including
embryos of the animals), or the fresh, chilled, or frozen meat of the
animals, from a region if the Secretary determines that the region from
which the animal or meat originated is, and is likely to remain, free
from rinderpest and foot-and- mouth disease.

\* \* \* \* \*

**SEC. 311. BONDED MANUFACTURING WAREHOUSES.\
\
**All articles manufactured in whole or in part of imported materials,
or of materials subject to internal-revenue tax, and intended for
exportation without being charged with duty, and without having an
internal-revenue stamp affixed thereto, shall, under such regulations as
the Secretary of the Treasury may prescribe, in order to be so
manufactured and exported, be made and manufactured in bonded warehouses
similar to those known and designated in Treasury Regulations as bonded
warehouses, class six: Provided, That the manufacturer of such articles
shall first give satisfactory bonds for the faithful observance of all
the provisions of law and of such regulations as shall be prescribed by
the Secretary of the Treasury: Provided further, That the manufacture of
distilled spirits from grain, starch, molasses, or sugar, including all
dilutions or mixtures of them or either of them, shall not be permitted
in such manufacturing warehouses.\
\
Whenever goods manufactured in any bonded warehouse established under
the provisions of the preceding paragraph shall be exported directly
therefrom or shall be duly laden for transportation and immediate
exportation under the supervision of the proper officer who shall be
duly designated for that purpose, such goods shall be exempt from duty
and from the requirements relating to revenue stamps.

\* \* \* \* \*

~~No article manufactured in a bonded warehouse, except to the extent
that such article is made from an article that is a drawback eligible
good under section 204(a) of the United States-Canada Free-Trade
Agreement Implementation Act of 1988, may be withdrawn from such
warehouse for exportation to Canada on or after January 1, 1994, or such
later date as may be proclaimed by the President under section
204(b)(2)(B) of such Act of 1988, without payment of a duty on such
imported merchandise in its condition, and at the rate of duty in
effect, at the time of importation.\
\
~~No article manufactured in a bonded warehouse from materials that are
goods subject to NAFTA drawback, as defined in section 203(a) of the
North American Free Trade Agreement Implementation Act, may be withdrawn
from warehouse for exportation to a NAFTA country, as defined in section
2(4) of that Act, without assessment of a duty on the materials in their
condition and quantity, and at their weight, at the time of importation
into the United States. The duty shall be paid before the 61st day after
the date of exportation, except that upon the presentation, before such
61st day, of satisfactory evidence of the amount of any customs duties
paid to the NAFTA country on the article, the customs duty may be waived
or reduced (subject to section 508(b)(2)(B)) in an amount that does not
exceed the lesser of\--\
\
(1) the total amount of customs duties paid or owed on the materials on
importation into the United States, or\
\
(2) the total amount of customs duties paid on the materials to the
NAFTA country. If Canada ceases to be a NAFTA country and the suspension
of the operation of the United States-Canada Free-Trade Agreement
thereafter terminates, no article manufactured in a bonded warehouse,
except to the extent that such article is made from an article that is a
drawback eligible good under section 204(a) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, may be withdrawn from
such warehouse for exportation to Canada during the period such
Agreement is in operation without payment of a duty on such imported
merchandise in its condition, and at the rate of duty in effect, at the
time of importation.\
\
**SEC. 312. BONDED SMELTING AND REFINING WAREHOUSES.\
\
**(a) \* \* \*\
\
(b) The several charges against such bond may be canceled in whole or in
part\--\
\
(1) upon the exportation ~~(other than exportation to Canada on or after
January 1, 1994, or such later date as may be proclaimed by the
President under section 204(b)(2)(B) of the United States-Canada Free-
Trade Agreement Implementation Act of 1988, except to the extent that
the metal-bearing materials were of Canadian origin as determined in
accordance with section 202 of such Act of 1988)~~ from the bonded
warehouses which treated the metal-bearing materials, or from any other
bonded smelting or refining warehouse, of a quantity of the same kind of
metal contained in any product of smelting or refining of metal-bearing
materials equal to the dutiable quantity contained in the imported
metal- bearing materials less wastage provided for in subsection (c)~~,
or~~; except that in the case of a withdrawal for exportation of such a
product to a NAFTA country, as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act, if any of the imported
metal-bearing materials are goods subject to NAFTA drawback, as defined
in section 203(a) of that Act, the duties on the materials shall be
paid, and the charges against the bond canceled, before the 61st day
after the date of exportation; but upon the presentation, before such
61st day, of satisfactory evidence of the amount of any customs duties
paid to the NAFTA country on the product, the duties on the materials
may be waived or reduced (subject to section 508(b)(2)(B)) in an amount
that does not exceed the lesser of\--\
\
(A) the total amount of customs duties owed on the materials on
importation into the United States, or\
\
(B) the total amount of customs duties paid to the NAFTA country on the
product, or

\* \* \* \* \*

\(4\) upon the transfer of the bond charges to a bonded customs
warehouse other than a bonded smelting or refining warehouse by physical
shipment of a quantity of the same kind of metal contained in any
product of smelting or refining equal to the dutiable quantity contained
in the imported metal-bearing materials less wastage provided for in
subsection\
\
(c), and upon withdrawal from such other warehouse for exportation
~~(other than exportation to Canada on or after January 1, 1994, or such
later date as may be proclaimed by the President under section
204(b)(2)(B) of the United States-Canada Free-Trade Agreement
Implementation Act of 1988, except to the extent that the metal-bearing
materials were of Canadian origin as determined in accordance with
section 202 of such Act of 1988)~~ or domestic consumption the
provisions of this section shall apply~~, or~~; except that in the case
of a withdrawal for exportation of such a product to a NAFTA country, as
defined in section 2(4) of the North American Free Trade Agreement
Implementation Act, if any of the imported metal-bearing materials are
goods subject to NAFTA drawback, as defined in section 203(a) of that
Act, the duties on the materials shall be paid, and the charges against
the bond canceled, before the 61st day after the date of exportation;
but upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid to the NAFTA country
on the product, the duties on the materials may be waived or reduced
(subject to section 508(b)(2)(B)) in an amount that does not exceed the
lesser of\--\
\
(A) the total amount of customs duties owed on the materials on
importation into the United States, or

\(B\) the total amount of customs duties paid to the NAFTA country on
the product, or

\* \* \* \* \*

If Canada ceases to be a NAFTA country and the suspension of the
operation of the United States-Canada Free-Trade Agreement thereafter
terminates, no charges against such bond may be canceled in whole or
part upon an exportation to Canada under paragraph (1) or (4) during the
period such Agreement is in operation except to the extent that the
metal-bearing materials were of Canadian origin as determined in
accordance with section 202 of the United States-Canada Free-Trade
Agreement Implementation Act of 1988.

\* \* \* \* \*

\(d\) Upon the exportation ~~(other than exportation to Canada on or
after January 1, 1994, or such later date as may be proclaimed by the
President under section 204(b)(2)(B) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, except to the extent
that the product is a drawback eligible good under section 204(a) of
such Act of 1988)~~; of a product of smelting or refining other than
refined metal the bond shall be credited with a quantity of metal
equivalent to the quantity of metal contained in the product exported
less the proportionate part of the deductions allowed for losses in
determination of the bond charge being cancelled that would not
ordinarily be sustained in production of the specific product exported
as ascertained from time to time by the Secretary of the Treasury;
except that in the case of a withdrawal for exportation to a NAFTA
country, as defined in section 2(4) of the North American Free Trade
Agreement Implementation Act, if any of the imported metal-bearing
materials are goods subject to NAFTA drawback, as defined in section
203(a) of that Act, charges against the bond shall be paid before the
61st day after the date of exportation; but upon the presentation,
before such 61st day, of satisfactory evidence of the amount of any
customs duties paid to the NAFTA country on the product, the bond shall
be credited (subject to section 508(b)(2)(B)) in an amount not to exceed
the lesser of\--\
\
(1) the total amount of customs duties paid or owed on the materials on
importation into the United States, or\
\
(2) the total amount of customs duties paid to the NAFTA country on the
product. If Canada ceases to be a NAFTA country and the suspension of
the operation of the United States-Canada Free-Trade Agreement
thereafter terminates, no bond shall be credited under this subsection
with respect to an exportation of a product to Canada during the period
such Agreement is in operation except to the extent that the product is
a drawback eligible good under section 204(a) of the United
States-Canada Free Trade Agreement Implementation Act of 1988.

\* \* \* \* \*

**SEC. 313. DRAWBACK AND REFUNDS.\
\
**(a) Articles Made From Imported Merchandise.\--Upon the exportation or
destruction under customs supervision of articles manufactured or
produced in the United States with the use of imported merchandise,
provided that those articles have not been used prior to such
exportation or destruction, the full amount of the duties paid upon the
merchandise so used shall be refunded as drawback, less 1 per centum of
such duties, except that such duties shall not be so refunded upon the
exportation or destruction of flour or by- products produced from
~~wheat imported after ninety days after the date of the enactment of
this Act~~ imported wheat. Where two or more products result from the
manipulation of imported merchandise, the drawback shall be distributed
to the several products in accordance with their relative values at the
time of separation.\
(b) Substitution For Drawback Purposes.\--If imported duty-paid
merchandise and ~~duty-free or domestic merchandise~~ any other
merchandise (whether imported or domestic) of the same kind and quality
are used in the manufacture or production of articles within a period
not to exceed three years from the receipt of such imported merchandise
by the manufacturer or producer of such articles, there shall be allowed
upon the exportation, or destruction under customs supervision, of any
such articles, notwithstanding the fact that none of the imported
merchandise may actually have been used in the manufacture or production
of the exported or destroyed articles, an amount of drawback equal to
that which would have been allowable had the merchandise used therein
been imported, but only if those articles have not been used prior to
such exportation or destruction; but the total amount of drawback
allowed upon the exportation or destruction under customs supervision of
such articles, together with the total amount of drawback allowed in
respect of such imported merchandise under any other provision of law,
shall not exceed 99 per centum of the duty paid on such imported
merchandise.\
~~(c) Merchandise not Conforming to Sample or Specifications.\--Upon the
exportation of merchandise not conforming to sample or specifications or
shipped without the consent of the consignee upon which the duties have
been paid and which have been entered or withdrawn for consumption and,
within ninety days after release from customs custody, unless the
Secretary authorizes in writing a longer time, returned to customs
custody for exportation, the full amount of the duties paid upon such
merchandise shall be refunded as drawback, less 1 per centum of such
duties.\
~~(c) Merchandise Not Conforming to Sample or Specifications.\--Upon the
exportation, or destruction under the supervision of the Customs
Service, of merchandise\--\
\
(1) not conforming to sample or specifications, shipped without the
consent of the consignee, or determined to be defective as of the time
of importation;\
\
(2) upon which the duties have been paid;\
\
(3) which has been entered or withdrawn for consumption; and\
\
(4) which, within 3 years after release from the custody of the Customs
Service, has been returned to the custody of the Customs Service for
exportation or destruction under the supervision of the Customs Service;
the full amount of the duties paid upon such merchandise, less 1
percent, shall be refunded as drawback.

\* \* \* \* \*

~~(j) Same Condition Drawback.\--(1) If imported merchandise, on which
was paid any duty, tax, or fee imposed under Federal law because of its
importation\-- (A) is, before the close of the three-year period
beginning on the date of importation\-- (i) exported in the same
condition as when imported, or (ii) destroyed under Customs supervision;
and (B) is not used within the United States before such exportation or
destruction; then upon such exportation or destruction 99 per centum of
the amount of each such duty, tax, and fee so paid shall be refunded as
drawback.\
(2) If there is, with respect to imported merchandise on which was paid
any duty, tax, or fee imposed under Federal law because of its
importation, any other merchandise (whether imported or domestic)
that\-- (A) is fungible with such imported merchandise; (B) is, before
the close of the three-year period beginning on the date of importation
of the imported merchandise, either exported or destroyed under Customs
supervision; (C) before such exportation or destruction\-- (i) is not
used within the United States, and (ii) is in the possession of the
party claiming drawback under this paragraph; and (D) is in the same
condition at the time of exportation or destruction as was the imported
merchandise at the time of its importation; then upon the exportation or
destruction of such other merchandise the amount of each such duty, tax,
and fee paid regarding the imported merchandise shall be refunded as
drawback, but in no case may the total drawback on the imported
merchandise, whether available under this paragraph or any other
provision of law or any combination thereof, exceed 99 percent of that
duty, tax, or fee.\
(3) Packaging material that is imported for use in packaging or
repackaging imported merchandise to which paragraph (1) applies shall be
eligible under the same conditions provided in such paragraph for
refund, as drawback, of 99 per centum of any duty, tax, or fee imposed
under Federal law on the importation of such material.\
(4) The performing of incidental operations (including, but not limited
to, testing, cleaning, repacking, and inspecting) on\-- (A) the imported
merchandise itself in cases to which paragraph (1) applies, or (B) the
merchandise of the same kind and quality in cases to which paragraph (2)
applies, that does not amount to manufacture or production for drawback
purposes under the preceding provisions of this section shall not be
treated as a use of that merchandise for purposes of applying paragraph
(1)(B) or (2)(C).\
\
~~(j) Unused Merchandise Drawback.\--\
\
(1) If imported merchandise, on which was paid any duty, tax, or fee
imposed under Federal law because of its importation\--\
\
(A) is, before the close of the 3-year period beginning on the date of
importation\--\
\
(i) exported, or\
\
(ii) destroyed under customs supervision; and\
\
(B) is not used within the United States before such exportation or
destruction; then upon such exportation or destruction 99 percent of the
amount of each duty, tax, or fee so paid shall be refunded as drawback.
The exporter (or destroyer) has the right to claim drawback under this
paragraph, but may endorse such right to the importer or any
intermediate party.\
\
(2) ~~If~~ Subject to paragraph (4), if /1/ there is, with respect to
imported merchandise on which was paid any duty, tax, or fee imposed
under Federal law because of its importation, any other merchandise
(whether imported or domestic), that\--\
Note /1/ The wording \"Subject to paragraph (4), if\" and paragraph (4)
will take effect on the date the Agreement enters into force with
respect to the United States\
\
\
\
(A) is commercially interchangeable with such imported merchandise;\
\
(B) is, before the close of the 3-year period beginning on the date of
importation of the imported merchandise, either exported or destroyed
under customs supervision; and\
\
(C) before such exportation or destruction\--\
\
(i) is not used within the United States, and\
\
(ii) is in the possession of, including ownership while in bailment, in
leased facilities, in transit to, or in any other manner under the
operational control of, the party claiming drawback under this
paragraph, if that party\--\
\
(I) is the importer of the imported merchandise, or\
\
(II) received from the person who imported and paid any duty due on the
imported merchandise a certificate of delivery transferring to the party
the imported merchandise, commercially interchangeable merchandise, or
any combination of imported and commercially interchangeable merchandise
(and any such transferred merchandise, regardless of its origin, will be
treated as the imported merchandise and any retained merchandise will be
treated as domestic merchandise); then upon the exportation or
destruction of such other merchandise the amount of each such duty, tax,
and fee paid regarding the imported merchandise shall be refunded as
drawback, but in no case may the total drawback on the imported
merchandise, whether available under this paragraph or any other
provision of law or any combination thereof, exceed 99 percent of that
duty, tax, or fee.\
\
(3) The performing of any operation or combination of operations
(including, but not limited to, testing, cleaning, repacking,
inspecting, sorting, refurbishing, freezing, blending, repairing,
reworking, cutting, slitting, adjusting, replacing components,
relabeling, disassembling, and unpacking), not amounting to manufacture
or production for drawback purposes under the preceding provisions of
this section on\--\
\
(A) the imported merchandise itself in cases to which paragraph (1)
applies, or\
\
(B) the commercially interchangeable merchandise in cases to which
paragraph (2) applies, shall not be treated as a use of that merchandise
for purposes of applying paragraph (1)(B) or (2)(C).\
\
(4) Effective upon the entry into force of the North American Free Trade
Agreement, the exportation to a NAFTA country, as defined in section
2(4) of the North American Free Trade Agreement Implementation Act, of
merchandise that is fungible with and substituted for imported
merchandise, other than merchandise described in paragraphs (1) through\
\
(8) of section 203(a) of that Act, shall not constitute an exportation
for purposes of paragraph (2)./2/\
Note /2/ Paragraph (4) will take effect on the date the Agreement enters
into force with respect to the United States.

\* \* \* \* \*

\(l\) Regulations.\--Allowance of the privileges provided for in this
section shall be subject to compliance with such rules and regulations
as the Secretary of the Treasury shall prescribe, which may include, but
need not be limited to, ~~the fixing of a time limit within which
drawback entries or entries for refund under any of the provisions of
this section 309 (b) of this Act shall be filed and completed,~~ the
authority for the electronic submission of drawback entries and the
designation of the person to whom any refund or payment of drawback
shall be made.

\* \* \* \* \*

~~(n) For purposes of subsections (a), (b), (f), (h), and (j)(2), the
shipment on or after January 1, 1994, or such later date as may be
proclaimed by the President under section 204(b)(2)(B) of the United
States-Canada Free- Trade Agreement Implementation Act of 1988, to
Canada on an article, except an article made from or substituted for, as
appropriate, a drawback eligible good under section 204(a) of such Act,
does not constitute an exportation.\
(o) For purposes of subsection (g), vessels built for Canadian account
and ownership, or for the Government of Canada, may not be considered to
be built for any foreign account and ownership, or for the government of
any foreign country, except to the extent that the materials in such
vessels are drawback eligible goods under section 204(a) of the United
States-Canada Free-Trade Agreement Implementation Act of 1988. This
subsection shall apply to vessels delivered to Canadian account or
owner, or to the Government of Canada, on and after January 1, 1994 (or,
if later, the date proclaimed by the President under section
204(b)(2)(B) of the United States-Canada Free- Trade Agreement
Implementation Act of 1988).\
(p) Substitution of Crude Petroleum or Petroleum Derivatives.\-- (1)
Notwithstanding any other provision of this section, in the case of
articles, described in headings 2707 through 2715, 2901 and 2902, or
3901 through 3914 (limited to liquids, pastes, powders, granules, and
flakes) of the Harmonized Tariff Schedule of the United States, that\--
(A) are\-- (i) manufactured or produced under subsection (a) or (b) from
crude petroleum or petroleum derivatives, or (ii) imported duty-paid,
and (B) are stored in common storage with other articles of the same
kind and quality that are otherwise manufactured or produced, drawback
shall be paid on the articles withdrawn for export from such common
storage (regardless of the source or origination of the articles
withdrawn), if the requirements described in paragraph (2) are met. (2)
The requirements of this paragraph are met if\-- (A) inventory records
kept on a calendar month basis (not on a daily or
transaction-by-transaction basis) demonstrate sufficient quantities of
imported duty-paid articles or articles manufactured or produced under
subsection (a) or (b) in the common storage against which such
withdrawal is designated; (B) such inventory records reflect deliveries
to and withdrawals from such common storage that assure that the
drawback paid does not exceed the amount of drawback that would be
payable under this section had all of the articles withdrawn from common
storage been imported duty-paid or manufactured or produced under
subsection (a) or (b); (C) certificates of delivery or certificates of
manufacture and delivery, establishing the drawback eligibility of the
imported duty- paid articles or articles manufactured or produced under
subsection (a) or (b), when required, are filed with the drawback entry;
and (D) the inventory records of the operator of such common storage
are, upon reasonable notice, available to the Customs Service. (3) For
purposes of this subsection\-- (A) The term \"common storage\" includes
all articles of the same kind and quality stored at a single facility
regardless of the number of bins, tanks, or other containers used. (B)
The term \"same kind and quality\" means articles that are commercially
interchangeable or that are referred to under the same eight-digit
classification of the Harmonized Tariff Schedule of the United States.
(C) The term \"single facility\" means all storage units under the
control and recordkeeping of a single operator adjacent to a
manufacturing plant, refinery, warehouse complex, terminal area,
airport, bunkering facility, or similar facility.\
\
~~(n)(1) For purposes of this subsection and subsection (o)\--\
\
(A) the term \"NAFTA Act\" means the North American Free Trade Agreement
Implementation Act;\
\
(B) the terms \"NAFTA country\" and \"good subject to NAFTA drawback\"
have the same respective meanings that are given such terms in sections
2(4) and 203(a) of the NAFTA Act; and\
\
(C) a refund, waiver, or reduction of duty under paragraph (2) of this
subsection or paragraph (1) of subsection (o) is subject to section
508(b)(2)(B).\
\
(2) For purposes of subsections (a), (b), (f), (h), (p), and (q), if an
article that is exported to a NAFTA country is a good subject to NAFTA
drawback, no customs duties on the good may be refunded, waived, or
reduced in an amount that exceeds the lesser of\--\
\
(A) the total amount of customs duties paid or owed on the good on
importation into the United States, or\
\
(B) the total amount of customs duties paid on the good to the NAFTA
country.\
\
(3) If Canada ceases to be a NAFTA country and the suspension of the
operation of the United States-Canada Free-Trade Agreement thereafter
terminates, then for purposes of subsections (a), (b), (f), (h), (j)(2),
and (q), the shipment to Canada during the period such Agreement is in
operation of an article made from or substituted for, as appropriate, a
drawback eligible good under section 204(a) of the United States-Canada
Free-Trade Implementation Act of 1988 does not constitute an
exportation.\
\
(o)(1)For purposes of subsection (g), if\--\
\
(A) a vessel is built for the account and ownership of a resident of a
NAFTA country or the government of a NAFTA country, and\
\
(B) imported materials that are used in the construction and equipment
of the vessel are goods subject to NAFTA drawback, the amount of customs
duties refunded, waived, or reduced on such materials may not exceed the
lesser of the total amount of customs duties paid or owed on the
materials on importation into the United States or the total amount of
customs duties paid on the vessel to the NAFTA country.\
\
(2) If Canada ceases to be a NAFTA country and the suspension of the
operation of the United States-Canada Free-Trade Agreement thereafter
terminates, then for purposes of subsection (g), vessels built for
Canadian account and ownership, or for the Government of Canada, may not
be considered to be built for any foreign account and ownership, or for
the government of any foreign country, except to the extent that the
materials in such vessels are drawback eligible goods under section
204(a) of the United States-Canada Free-Trade Implementation Act of
1988.\
\
(p) Substitution of Finished Petroleum Derivatives.\--\
\
(1) In general.\--Notwithstanding any other provision of this section,
if\--\
\
(A) an article (hereafter referred to in this subsection as the
\"exported article\") of the same kind and quality as a qualified
article is exported;\
\
(B) the requirements set forth in paragraph (2) are met; and\
\
(C) a drawback claim is filed regarding the exported article; the amount
of the duties paid on, or attributable to, such qualified article shall
be refunded as drawback to the drawback claimant.\
\
(2) Requirements.\--The requirements referred to in paragraph (1) are as
follows:\
\
(A) The exporter of the exported article\--\
\
(i) manufactured or produced the qualified article in a quantity equal
to or greater than the quantity of the exported article,\
\
(ii) purchased or exchanged, directly or indirectly, the qualified
article from a manufacturer or producer described in subsection (a) or
(b) in a quantity equal to or greater than the quantity of the exported
article,\
\
(iii) imported the qualified article in a quantity equal to or greater
than the quantity of the exported article, or\
\
(iv) purchased or exchanged, directly or indirectly, an imported
qualified article from an importer in a quantity equal to or greater
than the quantity of the exported article.\
\
(B) In the case of the requirement described in subparagraph\
\
(A)(ii), the manufacturer or producer produced the qualified article in
a quantity equal to or greater than the quantity of the exported
article.\
\
(C) In the case of the requirement of subparagraph (A)(i) or (A)(ii),
the exported article is exported during the period that the qualified
article described in subparagraph (A)(i) or (A)(ii) (whichever is
applicable) is manufactured or produced, or within 180 days after the
close of such period.\
\
(D) In the case of the requirement of subparagraph (A)(i) or (A)(ii),
the specific petroleum refinery or production facility which made the
qualified article concerned is identified.\
\
(E) In the case of the requirement of subparagraph (A)(iii) or (A)(iv),
the exported article is exported within 180 days after the date of entry
of an imported qualified article described in subparagraph (A)(iii) or
(A)(iv) (whichever is applicable).\
\
(F) Except as otherwise specifically provided in this subsection, the
drawback claimant complies with all requirements of this section,
including providing certificates which establish the drawback
eligibility of articles for which drawback is claimed.\
\
(G) The manufacturer, producer, importer, exporter, and drawback
claimant of the qualified article and the exported article maintain all
records required by regulation.\
\
(3) Definition of qualified article, etc.\--For purposes of this
subsection\--\
\
(A) The term \"qualified article\" means an article\--\
\
(i) described in\--\
\
(I) headings 2707, 2708, 2710, 2711, 2712, 2713, 2714, 2715, 2901, and
2902 of the Harmonized Tariff Schedule of the United States, or\
\
(II) headings 3901 through 3914 of such Schedule (as such headings apply
to liquids, pastes, powders, granules, and flakes), and\
\
(ii) which is\--\
\
(I) manufactured or produced as described in subsection (a) or (b) from
crude petroleum or a petroleum derivative, or\
\
(II) imported duty-paid.\
\
(B) An exported article is of the same kind and quality as the qualified
article for which it is substituted under this subsection if it is a
product that is commercially interchangeable with or referred to under
the same eight-digit classification of the Harmonized Tariff Schedule of
the United States as the qualified article.\
\
(C) The term \"drawback claimant\" means the exporter of the exported
article or the refiner, producer, or importer of such article. Any
person eligible to file a drawback claim under this subparagraph may
designate another person to file such claim.\
\
(4) Limitation on drawback.\--The amount of drawback payable under this
subsection shall not exceed the amount of drawback that would be
attributable to the article\--\
\
(A) manufactured or produced under subsection (a) or (b) by the
manufacturer or producer described in clause (i) or (ii) of paragraph
(2)(A), or\
\
(B) imported under clause (iii) or (iv) of paragraph (2)(A).\
\
(q) Packaging Material.\--Packaging material, when used on or for
articles or merchandise exported or destroyed under subsection (a), (b),
(c), or (j), shall be eligible under such subsection for refund, as
drawback, of 99 percent of any duty, tax, or fee imposed under Federal
law on the importation of such material.\
\
(r) Filing Drawback Claims.\--\
\
(1) A drawback entry and all documents necessary to complete a drawback
claim, including those issued by the Customs Service, shall be filed or
applied for, as applicable, within 3 years after the date of exportation
or destruction of the articles on which drawback is claimed, except that
any landing certificate required by regulation shall be filed within the
time limit prescribed in such regulation. Claims not completed within
the 3-year period shall be considered abandoned. No extension will be
granted unless it is established that the Customs Service was
responsible for the untimely filing.\
\
(2) A drawback entry for refund filed pursuant to any subsection of this
section shall be deemed filed pursuant to any other subsection of this
section should it be determined that drawback is not allowable under the
entry as originally filed but is allowable under such other subsection.\
\
(s) Designation of Merchandise by Successor.\--\
\
(1) For purposes of subsection (b), a drawback successor may designate
imported merchandise used by the predecessor before the date of
succession as the basis for drawback on articles manufactured by the
drawback successor after the date of succession.\
\
(2) For purposes of subsection (j)(2), a drawback successor may
designate\--\
\
(A) imported merchandise which the predecessor, before the date of
succession, imported; or\
\
(B) imported merchandise, commercially interchangeable merchandise, or
any combination of imported and commercially interchangeable merchandise
for which the successor received, before the date of succession, from
the person who imported and paid any duty due on the imported
merchandise a certificate of delivery transferring to the successor such
merchandise; as the basis for drawback on merchandise possessed by the
drawback successor after the date of succession.\
\
(3) For purposes of this subsection, the term \"drawback successor\"
means an entity to which another entity (in this subsection referred to
as the \"predecessor\") has transferred by written agreement, merger, or
corporate resolution\--\
\
(A) all or substantially all of the rights, privileges, immunities,
powers, duties, and liabilities of the predecessor; or\
\
(B) the assets and other business interests of a division, plant, or
other business unit of such predecessor, but only if in such transfer
the value of the transferred realty, personalty, and intangibles (other
than drawback rights, inchoate or otherwise) exceeds the value of all
transferred drawback rights, inchoate or otherwise.\
\
(4) No drawback shall be paid under this subsection until either the
predecessor or the drawback successor (who shall also certify that it
has the predecessor\'s records) certifies that\--\
\
(A) the transferred merchandise was not and will not be claimed by the
predecessor, and\
\
(B) the predecessor did not and will not issue any certificate to any
other person that would enable that person to claim drawback.\
\
(t) Drawback Certificates.\--Any person who issues a certificate which
would enable another person to claim drawback shall be subject to the
recordkeeping provisions of this chapter, with the retention period
beginning on the date that such certificate is issued.\
\
(u) Eligibility of Entered or Withdrawn Merchandise.\--Imported
merchandise that has not been regularly entered or withdrawn for
consumption shall not satisfy any requirement for use, exportation, or
destruction under this section.\
\
(v) Multiple Drawback Claims.\--Merchandise that is exported or
destroyed to satisfy any claim for drawback shall not be the basis of
any other claim for drawback; except that appropriate credit and
deductions for claims covering components or ingredients of such
merchandise shall be made in computing drawback payments.\
\
**SEC. 315. EFFECTIVE DATES OF RATES OF DUTY.\
\
**(a) Except as otherwise specially provided for, the rate or rates of
duty imposed by or pursuant to this Act or any other law on any article
entered for consumption or withdrawn from warehouse for consumption
shall be the rate or rates in effect when the documents comprising the
entry for consumption or withdrawal from warehouse for consumption and
any estimated or liquidated duties then required to be paid have been
deposited with the ~~appropriate customs officer in the form and manner
prescribed by regulations of the Secretary of the Treasury,~~ Customs
Service by written, electronic or such other means as the Secretary by
regulation shall prescribe, except that\
\
(1) \* \* \*

\* \* \* \* \*

\(b\) Any article which has been entered for consumption but which,
before release from ~~customs custody~~ custody of the Customs Service,
is removed from the port or other place of intended release because of
inaccessibility, overcarriage, strike, act of God, or unforeseen
contingency, shall be subject to duty at the rate or rates in effect
when the entry for consumption and any required duties were deposited in
accordance with subsection (a) of this section, but only if the article
is returned to such port or place within ninety days after the date of
removal and the identity of the article as that covered by the entry is
established in accordance with regulations prescribed by the Secretary
of the Treasury.\
\
(c) Insofar as duties are based upon the quantity of any merchandise,
such duties shall, except as provided in ~~paragraph 813~~ chapter 98 of
the Harmonized Tariff Schedule of the United States and section 562 of
this Act (relating respectively to certain beverages and to manipulating
warehouses), be levied and collected upon the quantity of such
merchandise at the time of its importation.

\* \* \* \* \*

**SEC. 321. ADMINISTRATIVE EXEMPTIONS.\
\
**(a) The Secretary of the Treasury, in order to avoid expense and
inconvenience to the Government disproportionate to the amount of
revenue that would otherwise be collected, is hereby authorized, under
such regulations as he shall prescribe, to\--\
\
(1) disregard a difference ~~of less than \$10~~ of an amount specified
by the Secretary by regulation, but not less than \$20, between the
total estimated duties, fees, and taxes deposited, or the total duties
fees, and taxes tentatively assessed, with respect to any entry of
merchandise and the total amount of duties, fees, and taxes actually
accruing thereon; ~~and\
\
~~(2) admit articles free of duty and of any tax imposed on or by reason
of importation, but the aggregate fair retail value in the country of
shipment of articles imported by one person on one day and exempted from
the payment of duty ~~shall not exceed\--~~ shall not exceed an amount
specified by the Secretary by regulation, but not less than\--\
\
(A) ~~\$50~~ \$100 in the case of articles sent as bona fide gifts from
persons in foreign countries to persons in the United States\
\
(~~\$100~~ \$200, in the case of articles sent as bona fide gifts from
persons in the Virgin Islands, Guam, and America Samoa), or\
\
(B) ~~\$25~~ \$200 in the case of articles accompanying, and for the
personal or household use of, persons arriving in the United States who
are not entitled to any exemption from duty under subheading 9804.00.30
or 9804.00.70 of this Act, or\
\
(C) ~~\$5~~ \$200 in any other case~~.~~; and\
\
(3) waive the collection of duties, fees, and taxes due on entered
merchandise when such duties, fees, or taxes are less than \$20 or such
greater amount as may be specified by the Secretary by regulation. The
privilege of this subdivision (2) shall not be granted in any case in
which merchandise covered by a single order or contract is forwarded in
separate lots to secure the benefit of this subdivision (2).\
\
(b) The Secretary of the Treasury is authorized by regulations ~~to
diminish any dollar amount specified in subsection (a) and~~ to
prescribe exceptions to any exemption provided for in ~~such
subsection~~ subsection (a) whenever he finds that such action is
consistent with the purpose of ~~such subsection~~ subsection (a) or is
necessary for any reason to protect the revenue or to prevent unlawful
importations.\
\* \* \* \* \*\
\
**TITLE IV\--ADMINISTRATIVE PROVISIONS\
\
**~~PART I\--DEFINITIONS~~ PART I\--DEFINITIONS AND NATIONAL CUSTOMS
AUTOMATION PROGRAM\
\
Subpart A\--Definitions\
\
**SEC. 401. MISCELLANEOUS.\
\
**When used in this title or in Part I of Title III\--\
\
(a) \* \* \*

\* \* \* \* \*

~~(k) Hovering Vessel.\--(1) The term \"hovering vessel\" means any
vessel which is found or kept off the coast of the United States within
or without the customs waters, if, from the history, conduct, character,
or location of the vessel, it is reasonable to believe that such vessel
is being used or may be used to introduce or promote or facilitate the
introduction or attempted introduction of merchandise into the United
States in violation of the laws respecting the revenue.\
\
For the purposes of sections 432, 433, 434, 448, 585, and 586 of this
Act, any vessel which has visited any hovering vessel shall be deemed to
arrive or have arrived, as the case may be, from a foreign port or
place.\
\
(2) For the purposes of sections 432, 433, 434, 448, 585, and 586, any
vessel which\-- (A) has visited any hovering vessel; (B) has received
merchandise while in the customs waters beyond the territorial sea; or
(C) has received merchandise while on the high seas; shall be deemed to
arrive or have arrived, as the case may be, from a foreign port or
place.\
\
~~(k) The term \"hovering vessel\" means\--\
\
(1) any vessel which is found or kept off the coast of the United States
within or without the customs waters, if, from the history, conduct,
character, or location of the vessel, it is reasonable to believe that
such vessel is being used or may be used to introduce or promote or
facilitate the introduction or attempted introduction of merchandise
into the United States in violation of the laws of the United States;
and\
\
(2) any vessel which has visited a vessel described in paragraph (1).

\* \* \* \* \*

\(n\) The term \"electronic transmission\" means the transfer of data or
information through an authorized electronic data interchange system
consisting of, but not limited to, computer modems and computer
networks.\
\
(o) The term \"electronic entry\" means the electronic transmission of
the Customs Service of\--\
\
(1) entry information required for the entry of merchandise, and\
\
(2) entry summary information required for the classification and
appraisement of the merchandise, the verification of statistical
information, and the determination of compliance with applicable law.\
\
(p) The term \"electronic data interchange system\" means any
established mechanism approved by the Commissioner of Customs through
which information can be transferred electronically.\
\
(q) The term \"National Customs Automation Program\" means the program
established under section 411.\
\
(r) The term \"import activity summary statement\" refers to data or
information transmitted electronically to the Customs Service, in
accordance with such regulations as the Secretary prescribes, at the end
of a specified period of time which enables the Customs Service to
assess properly the duties, taxes and fees on merchandise imported
during that period, collect accurate statistics and determine whether
any other applicable requirement of law (other than a requirement
relating to release from customs custody) is met.\
\
(s) The term \"reconciliation\" means an electronic process, initiated
at the request of an importer, under which the elements of an entry,
other than those elements related to the admissibility of the
merchandise, that are undetermined at the time of entry summary are
provided to the Customs Service at a later time. A reconciliation is
treated as an entry for purposes of liquidation, reliquidation, and
protest.

\* \* \* \* \*

Subpart B\--National Customs Automation Program\
\
**SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.\
\
**(a) Establishment.\--The Secretary shall establish the National
Customs Automation Program (hereinafter in this subpart referred to as
the \"Program\") which shall be an automated and electronic system for
processing commercial importations and shall include the following
existing and planned components:\
\
(1) Existing components:\
\
(A) The electronic entry of merchandise.\
\
(B) The electronic entry summary of required information.\
\
(C) The electronic transmission of invoice information.\
\
(D) The electronic transmission of manifest information.\
\
(E) Electronic payments of duties, fees, and taxes.\
\
(F) The electronic status of liquidation and reliquidation.\
\
(G) The electronic selection of high risk entries for examination (cargo
selectivity and entry summary selectivity).\
\
(2) Planned components:\
\
(A) The electronic filing and status of protests.\
\
(B) The electronic filing (including remote filing under section 414) of
entry information with the Customs Service at any location.\
\
(C) The electronic filing of import activity summary statements and
reconciliation.\
\
(D) The electronic filing of bonds.\
\
(E) The electronic penalty process.\
\
(F) The electronic filing of drawback claims, records, or entries.\
\
(G) Any other component initiated by the Customs Service to carry out
the goals of this subpart.\
\
(b) Participation in Program.\--The Secretary shall by regulation
prescribe the eligibility criteria for participation in the Program.
Participation in the Program is voluntary.\
\
**SEC. 412. PROGRAM GOALS.\
\
**The goals of the Program are to ensure that all regulations and
rulings that are administered or enforced by the Customs Service are
administered and enforced in a manner that\--\
\
(1) is uniform and consistent;\
\
(2) is as minimally intrusive upon the normal flow of business activity
as practicable; and\
\
(3) improves compliance.\
\
**SEC. 413. IMPLEMENTATION AND EVALUATION OF PROGRAM.\
\
**(a) Overall Program Plan.\--\
\
(1) In general.\--Before the 180th day after the date of the enactment
of this Act, the Secretary shall develop and transmit to the Committees
an overall plan for the Program. The overall Program plan shall set
forth\--\
\
(A) a general description of the ultimate configuration of the Program;\
\
(B) a description of each of the existing components of the Program
listed in section 411(a)(1); and\
\
(C) estimates regarding the stages on which planned components of the
Program listed in section 411(a)(2) will be brought on-line.\
\
(2) Additional information.\--In addition to the information required
under paragraph (1), the overall Program plan shall include a statement
regarding\--\
\
(A) the extent to which the existing components of the Program currently
meet, and the planned components will meet, the Program goals set forth
in section 412; and\
\
(B) the effects that the existing components are currently having, and
the effects that the planned components will likely have, on\--\
\
(i) importers, brokers, and other users of the Program, and\
\
(ii) Customs Service occupations, operations, processes, and systems.\
\
(b) Implementation Plan, Testing, and Evaluation.\--\
\
(1) Implementation plan.\--For each of the planned components of the
Program listed in section 411(a)(2), the Secretary shall\--\
\
(A) develop an implementation plan;\
\
(B) test the component in order to assess its viability;\
\
(C) evaluate the component in order to assess its contribution toward
achieving the program goals; and\
\
(D) transmit to the Committees the implementation plan, the testing
results, and an evaluation report. In developing an implementation plan
under subparagraph (A) and evaluating components under subparagraph (C),
the Secretary shall publish a request for comments in the Customs
Bulletin and shall consult with the trade community, including
importers, brokers, shippers, and other affected parties.\
\
(2) Implementation.\--\
\
(A) The Secretary may implement on a permanent basis any Program
component referred to in paragraph (1) on or after the date which is 30
days after paragraph (1)(D) is complied with.\
\
(B) For purposes of subparagraph (A), the 30 days shall be computed by
excluding\--\
\
(i) the days either House is not in session because of an adjournment of
more than 3 days to a day certain or an adjournment of the Congress sine
die, and\
\
(ii) any Saturday and Sunday, not excluded under clause (i), when either
House is not in session.\
\
(3) Evaluation and report.\--The Secretary shall\--\
\
(A) develop a user satisfaction survey of parties participating in the
Program;\
\
(B) evaluate the results of the user satisfaction survey on a biennial
basis (fiscal years) and transmit a report to the Committees on the
evaluation by no later than the 90th day after the close of each 2d
fiscal year;\
\
(C) with respect to the existing Program component listed in section
411(a)(1)(G) transmit to the Committees\--\
\
(i) a written evaluation of such component before the 180th day after
the date of the enactment of this section and before the implementation
of the planned Program components listed in section 411(a)(2) (B) and
(C), and\
\
(ii) a report on such component for each of the 3 full fiscal years
occurring after the date of the enactment of this section, which report
shall be transmitted not later than the 90th day after the close of each
such year; and\
\
(D) not later than the 90th day after the close of fiscal year 1994, and
annually thereafter through fiscal year 2000, transmit to the Committees
a written evaluation with respect to the implementation and effect on
users of each of the planned Program components listed in section
411(a)(2). In carrying out the provisions of this paragraph, the
Secretary shall publish requests for comments in the Customs Bulletin
and shall consult with the trade community, including importers,
brokers, shippers, and other affected parties.\
\
(c) Committees.\--For purposes of this section, the term \"Committees\"
means the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate.\
\
SEC. 414. REMOTE LOCATION FILING.\
\
(a) Core Entry Information.\--\
\
(1) In general.\--A Program participant may file electronically an entry
of merchandise with the Customs Service from a location other than the
district designated in the entry for examination (hereafter in this
section referred to as a \"remote location\") if\--\
\
(A) the Customs Service is satisfied that the participant has the
capabilities referred to in paragraph (2)(A) regarding such method of
filing; and\
\
(B) the participant elects to file from the remote location.\
\
(2) Requirements.\--\
\
(A) In general.\--In order to qualify for filing from a remote location,
a Program participant must have the capability to provide, on an
entry-by-entry basis, for the following:\
\
(i) The electronic entry of merchandise.\
\
(ii) The electronic entry summary of required information.\
\
(iii) The electronic transmission of invoice information (when required
by the Customs Service).\
\
(iv) The electronic payment of duties, fees, and taxes.\
\
(v) Such other electronic capabilities within the existing or planned
components of the Program as the Secretary shall by regulation require.\
\
(B) Restriction on exemption from requirements.\--The Customs Service
may not permit any exemption or waiver from the requirements established
by this section for participation in remote entry filing.\
\
(3) Conditions on filing under this section.\--The Secretary may
prohibit a Program participant from participating in remote location
filing, and may remove a Program participant from participation in
remote location filing, if the participant\--\
\
(i) fails to meet all the compliance requirements and operational
standards of remote location filing; or\
\
(ii) fails to adhere to all applicable laws and regulations.\
\
(4) Alternative filing.\--Any Program participant that is eligible to
file entry information electronically from a remote location but chooses
not to do so in the case of any entry must file any paper documentation
for the entry at the designated location referred to in subsection (d).\
\
(b) Additional Entry Information.\--\
\
(1) In general.\--A Program participant that is eligible under
subsection (a) to file entry information from a remote location may, if
the Customs Service is satisfied that the participant meets the
requirements under paragraph (2), also electronically file from the
remote location additional information that is required by the Customs
Service to be presented before the acceptance of entry summary
information and at the time of acceptance of entry summary information.\
\
(2) Requirements.\--The Secretary shall publish, and periodically
update, a list of those capabilities within the existing and planned
components of the Program that a Program participant must have for
purposes of this subsection.\
\
(3) Filing of additional information.\--\
\
(A) If information electronically acceptable.\--A Program participant
that is eligible under paragraph (1) to file additional information from
a remote location shall electronically file all such information that
the Customs Service can accept electronically.\
\
(B) Alternative filing.\--If the Customs Service cannot accept
additional information electronically, the Program participant shall
file the paper documentation with respect to the information at the
appropriate filing location.\
\
(C) Appropriate location.\--For purposes of subparagraph (B), the
\"appropriate location\" is\--\
\
(i) before January 1, 1999, a designated location; and\
\
(ii) after December 31, 1998\--\
\
(I) if the paper documentation is required for release, a designated
location; or\
\
(II) if the paper documentation is not required for release, a remote
location designated by the Customs Service or a designated location.\
\
(D) Other.\--A Program participant that is eligible under paragraph\
\
(1) to file additional information electronically from a remote location
but chooses not to do so must file the paper documentation with respect
to the information at a designated location.\
\
(c) Post-Entry Summary Information.\--A Program participant that is
eligible to file electronically entry information under subsection (a)
and additional information under subsection (b) from a remote location
may file at any remote location designated by the Customs Service any
information required by the Customs Service after entry summary.\
\
(d) Definitions.\--As used in this section:\
\
(1) The term \"designated location\" means a customs office located in
the customs district designated by the entry filer for purposes of
customs examination of the merchandise.\
\
(2) The term \"Program participant\" means, with respect to an entry of
merchandise, any party entitled to make the entry under section
484(a)(2)(B).\
\
PART II\--REPORT, ENTRY, AND UNLOADING OF VESSELS AND VEHICLES

**SEC. 431. MANIFEST\--REQUIREMENT, FORM, AND CONTENTS.**

**\
**~~(a) The master of every vessel arriving in the United States and
required to make entry shall have on board his vessel a manifest in a
form to be prescribed by the Secretary of the Treasury and signed by
such master under oath as to the truth of the statements therein
contained. Such manifest shall contain: First. The names of the ports or
places at which the merchandise was taken on board and the ports of
entry of the United States for which the same is destined, particularly
describing the merchandise destined to each such port: Provided, That
the master of any vessel laden exclusively with coal, sugar, salt,
nitrates, hides, dyewoods, wool, or other merchandise in bulk consigned
to one owner and arriving at a port for orders, may destine such cargo
\"for orders,\" and within fifteen days thereafter, but before the
unlading of any part of the cargo such manifest may be amended by the
master by designating the port or ports of discharge of such cargo, and
in the event of failure to amend the manifest within the time permitted
such cargo must be discharged at the port at which the vessel arrived
and entered. Second. The name, description, and build of the vessel, the
true measure or tonnage thereof, the port to which such vessel belongs,
and the name of the master of such vessel. Third. A detailed account of
all merchandise on board such vessel, with the marks and numbers of each
package, and the number and description of the packages according to
their usual name or denomination, such as barrel, keg, hogshead, case,
or bag; and the names of the shippers of such merchandise. Fourth. The
names of the persons to whom such packages are respectively consigned in
accordance with the bills of lading issued therefor, except that when
such merchandise is consigned to order the manifest shall so state.
Fifth. The names of the several passengers aboard the vessel, stating
whether cabin or steerage passengers, with their baggage, specifying the
number and description of the pieces of baggage belonging to each, and a
list of all baggage not accompanied by passengers. Sixth. An account of
the sea stores and ship\'s stores on board of the vessel.\
(b) Whenever a manifest of articles or persons on board an aircraft is
required for customs purposes to be signed, or produced or delivered to
a customs officer, the manifest may be signed, produced, or delivered by
the pilot or person in charge of the aircraft, or by any other
authorized agent of the owner or operator of the aircraft, subject to
such regulations as the Secretary of the Treasury may prescribe. If any
irregularity of omission or commission occurs in any way in respect of
any such manifest, the owner or operator of the aircraft shall be liable
for any fine or penalty prescribed by law in respect of such
irregularity.\
~~(a) In General.\--Every vessel required to make entry under section
434 or obtain clearance under section 4197 of the Revised Statutes of
the United States (46 U.S.C. App. 91) shall have a manifest that
complies with the requirements prescribed under subsection (d).\
(b) Production of Manifest.\--Any manifest required by the Customs
Service shall be signed, produced, delivered or electronically
transmitted by the master or person in charge of the vessel, aircraft,
or vehicle, or by any other authorized agent of the owner or operator of
the vessel, aircraft, or vehicle in accordance with the requirements
prescribed under subsection (d). A manifest may be supplemented by bill
of lading data supplied by the issuer of such bill. If any irregularity
of omission or commission occurs in any way in respect to any manifest
or bill of lading data, the owner or operator of the vessel, aircraft or
vehicle, or any party responsible for such irregularity, shall be liable
for any fine or penalty prescribed by law with respect to such
irregularity. The Customs Service may take appropriate action against
any of the parties.

\* \* \* \* \*

\(d\) Regulations.\--\
\
(1) In general.\--The Secretary shall by regulation\--\
\
(A) specify the form for, and the information and data that must be
contained in, the manifest required by subsection (a);\
\
(B) allow, at the option of the individual producing the manifest and
subject to paragraph (2), letters and documents shipments to be
accounted for by summary manifesting procedures;\
\
(C) prescribe the manner of production for, and the delivery or
electronic transmittal of the manifest required by subsection (a); and\
\
(D) prescribe the manner for supplementing manifests will bill of lading
data under subsection (b).\
\
(2) Letters and documents shipments.\--For purposes of paragraph
(1)(B)\--\
\
(A) the Customs Service may require with respect to letters and
documents shipments\--\
\
(i) that they be segregated by country of origin, and\
\
(ii) additional examination procedures that are not necessary for
individually manifested shipments;\
\
(B) standard letter envelopes and standard document packs shall be
segregated from larger document shipments for purposes of customs
inspections; and\
\
(C) the term \"letters and documents\" means\--\
\
(i) data described in General Headnote 4(c) of the Harmonized Tariff
Schedule of the United States,\
\
(ii) securities and similar evidences of value described in heading 4907
of such Schedule, but not monetary instruments defined pursuant to
chapter 53 of title 31, United States Code, and\
\
(iii) personal correspondence, whether on paper, cards, photographs,
tapes, or other media.\
\
**SEC. 432. MANIFEST TO SPECIFY SEA AND SHIP\'S STORES.\
\
**~~The manifest of any vessel arriving from a foreign port or place
shall separately specify the articles to be retained on board of such
vessel as sea stores, ship\'s stores, or bunker coal, or bunker oil, and
if any other or greater quantity of sea stores, ship\'s stores, bunker
coal, or bunker oil is found on board of any such vessel than is
specified in the manifest, of if any such articles, whether shown on the
manifest or not, are landed without a permit therefor issued by the
appropriate customs officer, all such articles omitted from the manifest
or landed without a permit shall be subject to forfeiture, and the
master shall be liable to a penalty equal to the value of the articles.\
\
~~**SEC. 433. REPORT OF ARRIVAL OF VESSELS, VEHICLES, AND AIRCRAFT.\
\
**(a) Vessel Arrival.\--(1) Immediately upon the arrival at any port or
place within the United States or the Virgin Islands of\--\
\
(A) any vessel from a foreign port or place;\
\
(B) any foreign vessel from a domestic port; ~~or\
\
~~(C) any vessel of the United States carrying bonded merchandise, or
foreign merchandise for which entry has not been made; or\
\
(D) any vessel which has visited a hovering vessel or received
merchandise while outside the territorial sea; the master of the vessel
shall report the arrival at the nearest customs facility or such other
place as the Secretary may prescribe by regulations.

\* \* \* \* \*

\(d\) Presentation of Documentation.\--The master, person in charge of a
vehicle, or aircraft pilot shall ~~present to customs officers such~~
present, or transmit pursuant to an electronic data interchange system,
to the Customs Service such information, data, documents, papers, or
manifests as the Secretary may by regulation prescribe.\
\
~~(e) Prohibition on Departures and Discharge.\--Unless otherwise
authorized by law, a vessel, aircraft, or vehicle may, after arriving in
the United States or the Virgin Islands\-- (1) depart from the port,
place, or airport of arrival; or (2) discharge any passenger or
merchandise (including baggage); only in accordance with regulations
prescribed by the Secretary.\
\
~~(e) Prohibition on Departures and Discharge.\--Unless otherwise
authorized by law, a vessel, aircraft or vehicle after arriving in the
United States or Virgin Islands may, but only in accordance with
regulations prescribed by the Secretary\--\
\
(1) depart from the port, place, or airport of arrival; or\
\
(2) discharge any passenger or merchandise (including baggage).\
\
**SEC. 434. ENTRY OF AMERICAN VESSELS.\
\
**~~Except as otherwise provided by law, and under such regulations as
the Secretary of Commerce may prescribe, the master of a vessel of the
United States arriving in the United States from a foreign port or place
shall, within forty-eight hours after its arrival within the limits of
any customs collection district, make formal entry of the vessel at the
customhouse by producing and depositing with the appropriate customs
officer the vessel\'s crew list, its register, or document in lieu
thereof, the clearance and bills of health issued to the vessel at the
foreign port or ports from which it arrived, together with the original
and one copy of the manifest, and shall make oath that the ownership of
the vessel is as indicated in the register, or document in lieu thereof,
and that the manifest was made out in accordance with section 431 of
this Act.~~\
\
**SEC. 434. ENTRY; VESSELS.\
\
**(a) Formal Entry.\--Within 24 hours (or such other period of time as
may be provided under subsection (c)(2)) after the arrival at any port
or place in the United States of\--\
\
(1) any vessel from a foreign port or place;\
\
(2) any foreign vessel from a domestic port;\
\
(3) any vessel of the United States having on board bonded merchandise
or foreign merchandise for which entry has not been made; or\
\
(4) any vessel which has visited a hovering vessel or has delivered or
received merchandise while outside the territorial sea; the master of
the vessel shall, unless otherwise provided by law, make formal entry at
the nearest customs facility or such other place as the Secretary may
prescribe by regulation.\
\
(b) Preliminary Entry.\--The Secretary may by regulation permit the
master to make preliminary entry of the vessel with the Customs Service
in lieu of formal entry or before formal entry is made. In permitting
preliminary entry, the Customs Service shall board a sufficient number
of vessels to ensure compliance with the laws it enforces.\
\
(c) Regulations.\--The Secretary may by regulation\--\
\
(1) prescribe the manner and format in which entry under subsection (a)
or subsection (b), or both, must be made, and such regulations may
provide that such any entry may be made electronically pursuant to an
electronic data interchange system;\
\
(2) provide that\--\
\
(A) formal entry must be made within a greater or lesser time than 24
hours after arrival, but in no case more than 48 hours after arrival,
and\
\
(B) formal entry may be made before arrival; and\
\
(3) authorize the Customs Service to permit entry or preliminary entry
of any vessel to be made at a place other than a designated port of
entry, under such conditions as may be prescribed.\
\
**SEC. 435\--ENTRY OF FOREIGN VESSELS.\
\
**~~The master of any foreign vessel arriving within the limits of any
customs collection district shall, within forty-eight hours thereafter,
make entry at the customhouse in the same manner as is required for the
entry of a vessel of the United States, except that a list of the crew
need not be delivered, and that instead of depositing the register or
document in lieu thereof such master may produce a certificate by the
consul of the nation to which such vessel belongs that said documents
have been deposited with him: Provided, That such exception shall not
apply to the vessels of foreign nations in whose ports American consular
officers are not permitted to have the custody and possession of the
register and other papers of vessels entering the ports of such
nations.\
\
~~**SEC. 436. PENALTIES FOR VIOLATIONS OF THE ARRIVAL, REPORTING, ~~AND
ENTRY~~ ENTRY, AND CLEARANCE REQUIREMENTS.\
\
**(a) Unlawful Acts.\--It is unlawful\--\
\
(1) to fail to comply with section ~~433~~ 431, 433, or 434 of this Act
or section 4197 of the Revised Statutes of the United States (46 U.S.C.
App. 91); ~~(2) to present any forged, altered, or false document,
paper, or manifest to a customs officer under section 433(d) without
revealing the facts;\
\
~~(2) to present or transmit, electronically or otherwise, any forged,
altered, or false document, paper, information, data or manifest to the
Customs Service under section 431(e), 433(d), or 434 of this Act or
section 4197 of the Revised Statutes of the United States (46 U.S.C.
App. 91) without revealing the facts; or ~~(3) to fail to make entry as
required by section 434, 435, or 644 of this Act or section 1109 of the
Federal Aviation Act (49 U.S.C. App. 1509); or\
\
~~(3) to fail to make entry or to obtain clearance as required by
section 434 or 644 of this Act, section 4197 of the Revised Statutes of
the United States (46 U.S.C. App. 91), or section 1109 of the Federal
Aviation Act of 1958 (49 U.S.C. App. 1509); or

\* \* \* \* \*

**SEC. 437. DOCUMENTS RETURNED AT CLEARANCE.\
\
**~~The register, or document in lieu thereof, deposited in accordance
with section 434 or 435 of this Act shall be returned to the master or
owner of the vessel upon its clearance.\
\
~~**SEC. 438. UNLAWFUL RETURN OF FOREIGN VESSEL\'S PAPERS.\
\
**It shall not be lawful for any foreign consul to deliver to the master
of any foreign vessel the register, or document in lieu thereof,
deposited with him in accordance with the provisions of section ~~435~~
434 of this Act, or regulations issued thereunder, until such master
shall produce to him a clearance in due form from ~~the appropriate
customs officer of the port where such vessel has been entered.~~ the
Customs Service in the port in which such vessel has entered. Any consul
offending against the provisions of this section shall be liable to a
fine of not more than \$5,000.\
\
~~**SEC. 439. DELIVERY OF MANIFEST.\
\
**Immediately upon arrival and before entering his vessel, the master of
a vessel from a foreign port or place required to make entry shall mail
or deliver to such employee as the Secretary of the Treasury shall
designate, a copy of the manifest, and shall on entering his vessel make
affidavit that a true and correct copy was so mailed or delivered, and
he shall also mail or deliver to such employee designated by the
Secretary a true and correct copy of any correction of such manifest
filed on entry of his vessel. Any master who fails so to mail or deliver
such copy of the manifest or correction thereof shall be liable to a
penalty of not more than \$500.\
\
~~**SEC. 440. CORRECTION OF MANIFEST.\
\
**~~If there is any merchandise or baggage on board such vessel which is
not included in or which does not agree with the manifest, the master of
the vessel shall make a post entry thereof, and mail or deliver a copy
to such employee as the Secretary of the Treasury shall designate and
for failure so to do shall be liable to a penalty of \$500.\
\
~~**SEC. 441. ~~VESSELS NOT REQUIRED TO ENTER.~~ EXCEPTIONS TO VESSSEL
ENTRY AND CLEARANCE REQUIREMENTS.\
\
**~~The following vessels shall not be required to make entry at the
customhouse:~~ The following vessels shall not be required to make entry
under section 434 or to obtain clearance under section 4197 of the
Revised Statutes of the United States (46 U.S.C. App. 91):\
\
(1) \* \* \*

\* \* \* \* \*

~~(3) Vessels carrying passengers on excursion from the United States
Virgin Islands to the British Virgin Islands and returning, and licensed
yachts or undocumented American pleasure vessels not engaged in trade:
Provided, That such vessels do not in any way violate the customs or
navigation laws of the United States and have not visited any hovering
vessel: Provided further, That the master of any such vessel which has
on board any article required by law to be entered shall be required to
report such article to the appropriate customs officer within
twenty-four hours after arrival.\
\
~~(3) Any vessel carrying passengers on excursion from the United States
Virgin Islands to the British Virgin Islands and returning, if\--\
\
(A) the vessel does not in any way violate the customs or navigation
laws of the United States;\
\
(B) the vessel has not visited any hovering vessel; and\
\
(C) the master of the vessel, if there is on board any article required
by law to be entered, reports the article to the Customs Service
immediately upon arrival.\
\
(4) Any United States documented vessel with recreational endorsement or
any undocumented United States pleasure vessel not engaged in trade,
if\--\
\
(A) the vessel complies with the reporting requirements of section 433,
and with the customs and navigation laws of the United States;\
\
(B) the vessel has not visited any hovering vessel; and\
\
(C) the master of, and any other person on board, the vessel, if the
master or such person has on board any article required by law to be
entered or declared, reports such article to the Customs Service
immediately upon arrival;\
\
~~(4)~~ (5) Vessels arriving in distress or for the purpose of taking on
bunker coal, bunker oil, sea stores, or ship\'s stores and which shall
depart within twenty-four hours after arrival without having landed or
taken on board any passengers, or any merchandise other than bunker
coal, bunker oil, sea stores, or ship\'s stores: Provided, That the
master, owner or agent of such vessel shall report under oath to the
appropriate customs officer the hour and date of arrival and departure
and the quantity of bunker coal, bunker oil, sea stores, or ship\'s
stores taken on board; and\
\
~~(5)~~ (6) Tugs ~~enrolled and licensed to engage in the foreign and
coasting trade in the northern, northeastern, and northwestern
frontiers~~ documented under chapter 121 of title 46, United States
Code, with a Great Lakes endorsement when towing vessels which are
required by law to enter and clear.

\* \* \* \* \*

**SEC. 443. CARGO FOR DIFFERENT PORTS\--MANIFEST AND PERMIT.\
\
**~~Merchandise arriving in any vessel for delivery in different
districts or ports of entry shall be described in the manifest in the
order of the districts or ports at or in which the same is to be
unladen. Before any vessel arriving in the United States with any such
merchandise shall depart from the port of first arrival, the master
shall obtain from the appropriate customs officer a permit therefor with
a certified copy of the vessel\'s manifest showing the quantities and
particulars of the merchandise entered at such port of entry and of that
remaining on board.\
\
~~**SEC. 444. ARRIVAL AT ANOTHER PORT.\
\
**~~Within twenty-four hours after the arrival of such vessel at another
port of entry, the master shall report the arrival of his vessel to the
appropriate customs officer at such port and shall produce the permit
issued by the appropriate customs officer at the port of first arrival,
together with the certified copy of his manifest.\
\
~~**SEC. 445. PENALTIES FOR FAILURE TO HAVE PERMIT AND CERTIFIED
MANIFEST.\
\
**~~If the master of any such vessel shall proceed to another port or
district without having obtained a permit therefor and a certified copy
of his manifest, or if he shall fail to produce such permit and
certified copy of his manifest to the appropriate customs officer at the
port of destination, or if he shall proceed to any port not specified in
the permit, he shall be liable to a penalty, for each offense, of not
more than \$500.~~

\* \* \* \* \*

**SEC. 447. PLACE OF ENTRY AND UNLADING.\
\
**It shall be unlawful to make entry of any vessel or to unlade the
cargo or any part thereof of any vessel elsewhere than at a port of
entry: Provided, That upon good cause therefor being shown, the
Secretary of Commerce may permit entry of any vessel to be made at a
place other than port of entry designated by him, under such conditions
as he shall prescribe: And provided further, That any vessel laden with
merchandise in bulk may proceed after entry of such vessel laden with
merchandise in bulk may proceed after entry of such vessel to any place
designated by the Secretary of the Treasury for the purpose of unlading
such cargo, under the supervision of customs officers if ~~the
appropriate customs officer shall consider~~ the Customs Service
considers the same necessary, and in such case the compensation and
expenses of such officers shall be reimbursed to the Government by the
party in interest.\
\
**SEC. 448. UNLADING.\
\
**(a) Permits and Preliminary Entries.\--Except as provided in section
441 of this Act (relating to vessels not required to enter or clear), no
merchandise, passengers, or baggage shall be unladen from any vessel
~~or vehicle arriving from a foreign port or place~~ required to make
entry under section 434, or vehicle required to report arrival under
section 433, until entry of such vessel or report of the arrival of such
vehicle has been made and a permit for the unlading of the same issued
or transmitted pursuant to an electronic data interchange system by
~~the appropriate customs officer~~ the Customs Service~~: Provided,
That the master may make a preliminary entry of a vessel by making oath
or affirmation to the truth of the statements contained in the vessel\'s
manifest and delivering the manifest to the customs officer who boards
such vessel, but the making of such preliminary entry shall excuse the
master from making formal entry of his vessel at the customhouse, as
provided by this Act~~. After the entry~~, preliminary or otherwise,~~
of any vessel or report of the arrival of any vehicle, ~~such customs
officer~~ the Customs Service may issue a permit, electronically
pursuant to an authorized electronic data interchange system or
otherwise, to the master of the vessel, or to the person in charge of
the vehicle, to unlade merchandise or baggage, but except a provided in
subdivision (b) of this section merchandise or baggage so unladen shall
be retained at the place of unlading until entry therefor is made and a
permit for its delivery granted, and the owners of the vessel or vehicle
from which any imported merchandise is unladen prior to entry of such
merchandise shall be liable for the payment of the duties accruing on
any part thereof that may be removed from the place of unlading without
a permit therefore having been issued. ~~Any merchandise or baggage so
unladen from any vessel or vehicle for which entry is not made within
forty-eight hours exclusive of Sunday and holidays from the time of the
entry of the vessel or report of the vehicle, unless a longer time is
granted by such customs officer, the Customs Service, as provided in
section 384, shall be sent to a bonded warehouse or the public stores
and held as unclaimed at the risk and expense of the consignee in the
case of merchandise and of the owner in the case of baggage, until entry
thereof is made.~~ The owner or master of any vessel or vehicle, or
agent thereof, shall notify the Customs Service of any merchandise or
baggage so unladen for which entry is not made within the time
prescribed by law or regulation. The Secretary shall by regulation
prescribe administrative penalties not to exceed \$1,000 for each bill
of lading for which notice is not given. Any such administrative penalty
shall be subject to mitigation and remittance under section 618. Such
unentered merchandise or baggage shall be the responsibility of the
master or person in charge of the importing vessel or vehicle, or agent
thereof, until it is removed from the carrier\'s control in accordance
with section 490.

\* \* \* \* \*

**SEC 449. UNLADING AT PORT OF ENTRY.\
\
**Except as provided in sections 442 and 447 of this act (relating to
residue cargo and to bulk cargo, respectively), merchandise and baggage
imported in such vessel by sea shall be unladen at the port of entry to
which such vessel is destined, unless (1) such vessel is compelled by
any cause to put into another port of entry, and the ~~appropriate
customs officer of such port issues a permit for the unlading of such
merchandise or baggage,~~ Customs Service issues a permit for the
unlading of such merchandise or baggage at such port, or (2) the
Secretary of the Treasury, because of an emergency existing at the port
of destination, authorizes such vessel to proceed to another port of
entry. Merchandise and baggage so unladen may be entered in the same
manner as other imported merchandise or baggage and may be trented as
unclaimed merchandise or baggage and stored at the expense and risk of
the owner thereof, or may be reladen without entry upon the vessel from
which it was unladen for transportation to its destination.

\* \* \* \* \*

~~**SEC. 465. SAME\--SUPPLIES.\
\
**The master of any vessel of the United States documented to engage in
the foreign and coasting trade on the northern, north-eastern, and
northwestern frontiers shall, upon arrival from a foreign contiguous
territory, file with the manifest of such vessel a detailed list of all
supplies or other merchandise purchased in such foreign country for use
or sale on such vessel, and also a statement of the cost of all repairs
to and all equipment taken on board such vessel. The conductor or person
in charge of any railway car arriving from a contiguous country shall
file with the manifest of such car a detailed list of all supplies or
other merchandise purchased in such foreign country for use in the
United States. If any such supplies, merchandise, repairs, or equipment
shall not be reported, the master, conductor, or other person having
charge of such vessel or vehicle shall be liable to a fine of not less
than \$100 and not more than \$500, or to imprisonment for not more than
two years, or both.~~

\* \* \* \* \*

PART III\--ASCERTAINMENT, COLLECTION, AND RECOVERY OF DUTIES\
\
**SEC. 481. INVOICE\--CONTENTS.\
\
**(a) In General.\--~~All invoices of merchandise to be imported into
the United States shall set forth\--~~ All invoices of merchandise to be
imported into the United States and any electronic equivalent thereof
considered acceptable by the Secretary in regulations prescribed under
this action shall set forth, in written, electronic, or such other form
as the Secretary shall prescribe, the following:\
\
(1) \* \* \*

\* \* \* \* \*

~~(3) A detailed description of the merchandise, including the name by
which each item is known, the grade or quality, and the marks, numbers,
or symbols under which sold by the seller or manufacturer to the trade
in the country of exportation, together with the marks and numbers of
the packages in which the merchandise is packed;\
\
~~(3) A detailed description of the merchandise, including the
commercial name by which each item is known, the grade or quality, and
the marks, numbers, or symbols under which sold by the seller or
manufacturer in the country of exportation, together with the marks and
numbers of the packages in which the merchandise is packed;

\* \* \* \* \*

~~(10) Any other facts deemed necessary to a proper appraisement,
examination, and classification of the merchandise that the Secretary of
the Treasury may require.\
\
\
~~(10) Any other fact that the Secretary may by regulation require as
being necessary to a proper appraisement, examination and classification
of the merchandise.

\* \* \* \* \*

~~(c) Purchases in Different Consular Districts.\--When the merchandise
has been purchased in different consular districts for shipment to the
United States and is assembled for shipment and embraced in a single
invoice which is produced for certification under the provisions of
paragraph (2) of subdivision (a) of section 482 of this Act, the invoice
shall have attached thereto the original bills or invoices received by
the shipper, or extracts therefrom, showing the actual prices paid or to
be paid for such merchandise. The consular officer to whom the invoice
is so produced for certification may require that any such original bill
or invoice be certified by the consular officer for the district in
which the merchandise was purchased.\
\
~~(c) Importer Provision of Information.\--Any information required to
be set forth on an invoice may alternatively be provided by any of the
parties qualifying as an \"importer of record\" under section
484(a)(2)(B) by such means, in such form or manner, and within such time
as the Secretary shall by regulation prescribe.\
\
(d) Exceptions by Regulations.\--The Secretary of the Treasury may by
regulations provide for such exceptions from the requirements of this
section as he deems advisable and may allow for the submission or
electronic transmission of partial invoices, electronic equivalents of
invoices, bills, or other documents or parts thereof, required under
this section.\
\
~~**SEC. 482. CERTIFIED INVOICE.\
\
**(a) Certification in General.\--Every invoice required pursuant to
section 484(b) of this Act to be certified shall, at or before the time
of the shipment of the merchandise, or as soon thereafter as the
conditions will permit, be produced for certification to the consular
officer of the United States\-- (1) For the consular district in which
the merchandise was manufactured, or purchased, or from which it was to
be delivered pursuant to contract; (2) For the consular district in
which the merchandise is assembled and repacked for shipment to the
United States, if it has been purchased in different consular
districts.\
(b) Declaration.\--Such invoices shall have indorsed thereon, when so
produced, a verified declaration, in a form prescribed by the Secretary
of the Treasury, stating whether the merchandise is sold or agreed to be
sold, or whether it is shipped otherwise than in pursuance of a purchase
or an agreement to purchase, that there is no other invoice differing
from the invoice so produced, and that all the statements contained in
such invoice and in such declaration are true and correct.\
(c) Making and Signing.\--Every certified invoice shall be made out in
triplicate, or, for merchandise intended for immediate transportation
under the provisions of section 552 of this Act, in quadruplicate, if
desired by the shipper, and shall be signed by the seller or shipper, or
the agent of either; but a person who has no interest in the merchandise
except as broker or forwarder shall not be competent to sign any such
invoice. Where any such invoice is signed by an agent, he shall state
thereon the name of his principal.\
(d) Certified Under Existing Law.\--Such invoices shall be certified in
accordance with the provisions of existing law.\
(e) Disposition.\--The original of the invoice and, if made, the
quadruplicate shall be delivered to the exporter, to be forwarded to the
consignee for use in making entry of the merchandise, and the triplicate
shall be promptly transmitted by the consular officer to the appropriate
customs officer at the port of entry named in the invoice. The duplicate
shall be filed in the office of the consular officer by whom the invoice
was certified, to be there kept until no longer needed in conducting the
current business of the consular office, at which time it may be
disposed of as provided by law.\
(f) Certification by Other than American Consul.\--When merchandise is
to be shipped from a place so remote from an American consulate as to
render impracticable certification of the invoice by an American
consular officer, such invoice may be certified by a consular officer of
a nation at the time in amity with the United States, or if there be no
such consular officer available such invoice shall be executed before a
notary public or other officer having authority to administer oaths and
having an official seal: Provided, That invoices for merchandise shipped
to the United States from the Philippine Islands, the Virgin Islands,
American Samoa, the island of Guam, or the Canal Zone may be certified
by the appropriate customs officer. (g) Effective Date.\--This section
shall take effect sixty days after the date of enactment of this Act.\
\
**SEC. 484. ENTRY OF MERCHANDISE.\
\
**(a) Requirement and Time.\--(1) Except as provided in sections 490,
498, 552, 553, and 336(j) of this Act and in subsections (h) and (i) of
this section, one of the parties qualifying as \'importer of record\'
under paragraph (2)(C) of this subsection, either in person or by an
agent authorized by him in writing\-- (A) shall make entry therefor by
filing with the appropriate customs officer such documentation as is
necessary to enable such officer to determine whether the merchandise
may be released from customs custody; and (B) shall file (at the time
required under paragraph (2)(B) of this subsection) with the appropriate
customs officer such other documentation as is necessary to enable such
officer to assess properly the duties on the merchandise, collect
accurate statistics with respect to the merchandise, and determine
whether any other applicable requirement of law (other than a
requirement relating to release from customs custody) is met.\
(2)(A) The documentation required under paragraph (1) of this subsection
with respect to any imported merchandise shall be filed at such place
within the customs-collection district where the merchandise will be
released from customs custody as the Secretary shall by regulation
prescribe.\
(B) The documentation required under paragraph (1)(B) of this subsection
with respect to any imported merchandise shall be filed with the
appropriate customs officer when entry of the merchandise is made or at
such time within the ten-day period (exclusive of Saturdays, Sundays,
and holidays) immediately following the date of entry as the Secretary
shall by regulation prescribe.\
(C) When an entry of merchandise is made under this section, the
required documentation shall be filed either by the owner or purchaser
of the merchandise or, when appropriately designated by the owner,
purchaser, or consignee of the merchandise, a person holding a valid
license under section 641 of this Act. When a consignee declares on
entry that he is the owner or purchaser of merchandise, the appropriate
customs officer may, without liability, accept the declaration. For the
purposes of this title, the importer of record must be one of the
parties who is eligible to file the documentation required by this
section.\
(D) The Secretary, in prescribing regulations to carry out this
subsection, shall establish procedures which insure the accuracy and
timeliness of import statistics, particularly statistics relevant to the
classification and valuation of imports. Corrections of errors in such
statistical data discovered after the release of merchandise shall be
transmitted immediately to the Director of the Bureau of the Census, who
shall make corrections in the statistics maintained by the Bureau. The
Secretary shall also provide, to the maximum extent practicable, for the
protection of the revenue, the facilitation of the commerce of the
United States, and the equal treatment of all importers of record of
imported merchandise.\
(b) Production of Certified Invoice.\--The Secretary of the Treasury
shall provide by regulation for the production of a certified invoice
with respect to such merchandise as he deems advisable and for the terms
and conditions under which such merchandise may be permitted entry under
the provisions of this section without the production of a certified
invoice.\
The Secretary of the Treasury may by regulations provide for such
exceptions from the requirements of this subdivision as he deems
advisable.\
(c) Production or Bill of Lading.\--The importers of record shall
produce the bill of lading at the time of making entry, except that\--
(1) If the appropriate customs officer is satisfied that no bill of
lading has been issued, the shipping receipt or other evidence
satisfactory to such customs officer may be accepted in lieu thereof;
(2) The appropriate customs officer is authorized to permit entry and to
release merchandise from customs custody without the production of the
bill of lading if the person making such entry gives a bond satisfactory
to such customs officer in a sum equal to not less than one and one-half
times the invoice value of the merchandise, to produce such bill of
lading, to relieve such customs officer of all liability, to indemnify
the collector against loss, to defend every action brought upon a claim
for loss or damage, by reason of such release from customs custody or a
failure to produce such bill of lading and to entitle any person injured
by reason of such release from customs custody to sue on such bond in
his own name, without making such customs officer a party thereto. Any
person so injured by such release may sue on such bond to recover any
damages so sustained by him; and (3) The provisions of this subdivision
shall not apply in the case of an entry under subdivision (b) or (i) of
this section (relating to entry on carrier\'s certificate and on
duplicate bill of lading, respectively).\
(d) Signing and Contents.\--Such entry shall be signed by the importer
of record, or his agent, and shall set forth such facts in regard to the
importation as the Secretary of the Treasury may require for the purpose
of assessing duties and to secure a proper examination, inspection,
appraisement, and liquidation, and shall be accompanied by such
invoices, bills of lading, certificates, and documents as are required
by law and regulations promulgated thereunder.\
(e) Statistical Enumeration.\--The Secretary of the Treasury, the
Secretary of Commerce, and the United States International Trade
Commission are authorized and directed to establish from time to time
for statistical purposes an enumeration of articles in such detail as in
their judgment may be necessary, comprehending all merchandise imported
into the United States and exported from the United States, and shall
seek, in conjunction with statistical programs for domestic production
and programs for achieving international harmonization of trade
statistics, to establish the comparability thereof with such enumeration
of articles. All import entries and export declarations shall include or
have attached thereto an accurate statement specifying, in terms of such
detailed enumeration, the kinds and quantities of all merchandise
imported and exported and the value of the total quantity of each kind
of article.\
(f) Packages Included.\--If any of the certificates or documents
necessary to make entry of any part of merchandise arriving on one
vessel or vehicle and consigned to one consignee have not arrived, such
part may be entered subsequently, and notation of the packages or cases
to be omitted from the original entry shall be made thereon. One or more
packages arriving on one vessel or vehicle addressed for delivery to one
person and imported in another package containing packages addressed for
delivery to other persons may be separately entered, under such rules
and regulations as the Secretary of the Treasury may prescribe. All
other merchandise arriving on one vessel or vehicle and consigned to one
consignee shall be included in one entry, unless the Secretary of the
Treasury shall authorize the inclusion of portions of such merchandise
in separate entries under such rules and regulations as he may
prescribe; except that, in the case of articles not subject to a
quantitative or tariff-rate quota, entry for the entire quantity covered
by an entry for immediate transportation made under section 552 of this
Act may be accepted at the port of entry designated by the consignee, or
his agent, in such entry after the arrival of any part of such quantity
at such designated port or at such other place of deposit as may be
authorized in accordance with regulations prescribed by the Secretary of
the Treasury.\
(g) Statement of Cost Production.\--Under such regulations as the
Secretary of the Treasury may prescribe, the appropriate customs officer
may require a verified statement from the manufacturer or producer
sowing the cost of production of the imported merchandise, when
necessary to the appraisement of such merchandise.\
(h) The carrier bringing the merchandise into the port at which entry is
to be made may certify any person to be the owner, purchaser, or
consignee of the merchandise, and that person may be accepted as such by
the appropriate customs officer. A carrier shall not certify a person
pursuant to this subsection unless it has actual knowledge of or reason
to believe in the accuracy of such certification.\
(i) For the purposes of this section, the appropriate customs officer
may accept a duplicate bill of lading signed or certified to be genuine
by the carrier bringing the merchandise to the port at which entry is to
be made.\
(j) Release of Merchandise.\--Merchandise shall be released from customs
custody only to or upon the order of the carrier by whom the merchandise
is brought to the port at which entry is made, except that merchandise
in a bonded warehouse shall be released from customs custody only to or
upon the order of the proprietor of the warehouse. The appropriate
customs officer shall return to the person making entry the bill of
lading (if any is produced) with a notation thereon to the effect that
entry for such merchandise has been made. The customs officer shall not
be liable to any person in respect of the delivery of merchandise
released from cutoms custody in accordance with the provisions of this
section. Where a recovery is had in any suit or proceeding against a
customs officer on account of the release of merchandise from customs
custody, in the performance of his official duty, and the court
certifies that there was probable cause for such release by such customs
officer, or that he acted under the directions of the Secretary of the
Treasury, or other proper officer of the Government, no execution shall
issue against such customs officer, but the amount so recovered shall,
upon final judgment, be paid out of moneys appropriated from the
Treasury for that purpose.\
\
~~**SEC. 484. ENTRY OF MERCHANDISE.\
\
**(a) Requirement and Time.\--\
\
(1) Except as provided in sections 490, 498, 552, 553, and 336(j), one
of the parties qualifying as \"importer of record\" under paragraph
(2)(B), either in person or by an agent authorized by the party in
writing, shall, using reasonable care\--\
\
(A) make entry therefore by filing with the Customs Service\--\
\
(i) such documentation or, pursuant to an electronic data interchange
system, such information as is necessary to enable the Customs Service
to determine whether the merchandise may be released from customs
custody, and\
\
(ii) notification whether an import activity summary statement will be
filed; and\
\
(B) complete the entry by filing with the Customs Service the declared
value, classification and rate of duty applicable to the merchandise,
and such other documentation or, pursuant to an electronic data
interchange system, such other information as is necessary to enable the
Customs Service to\--\
\
(i) properly assess duties on the merchandise,\
\
(ii) collect accurate statistics with respect to the merchandise, and\
\
(iii) determine whether any other applicable requirement of law\
\
(other than a requirement relating to release from customs custody) is
met.\
\
(2)(A) The documentation or information required under paragraph (1)
with respect to any imported merchandise shall be filed or transmitted
in such manner and within such time periods as the Secretary shall by
regulation prescribe. Such regulations shall provide for the filing of
import activity summary statements, covering entries or warehouse
withdrawals made during a calendar month, within such time period as is
prescribed in regulations but not to exceed the 20th day following such
calendar month.\
\
(B) When an entry of merchandise is made under this section, the
required documentation or information shall be filed or electronically
transmitted either by the owner or purchaser of the merchandise or, when
appropriately designated by the owner, purchaser, or consignee of the
merchandise, a person holding a valid license under section 641. When a
consignee declares on entry that he is the owner or purchaser of
merchandise the Customs Service may, without liability, accept the
declaration. For the purposes of this Act, the importer of record must
be one of the parties who is eligible to file the documentation or
information required by this section.\
\
(C) The Secretary, in prescribing regulations to carry out this
subsection, shall establish procedures which insure the accuracy and
timeliness of import statistics, particularly statistics relevant to the
classification and valuation of imports. Corrections of errors in such
statistical data shall be transmitted immediately to the Director of the
Bureau of the Census, who shall make corrections in the statistics
maintained by the Bureau. The Secretary shall also provide, to the
maximum extent practicable, for the protection of the revenue, the
enforcement of laws governing the importation and exportation of
merchandise, the facilitation of the commerce of the United States, and
the equal treatment of all importers of record of imported merchandise.\
(b) Reconciliation.\--\
\
(1) In general.\--A party that electronically transmits an entry summary
or import activity summary statement may at the time of filing such
summary or statement notify the Customs Service of his intention to file
a reconciliation pursuant to such regulations as the Secretary may
prescribe. Such reconciliation must be filed by the importer of record
within such time period as is prescribed by regulation but no later than
15 months following the filing of the entry summary or import activity
summary statement; except that the prescribed time period for
reconciliation issues relating to the assessment of antidumping and
countervailing duties shall require filing no later than 90 days after
the Customs Service advises the importer that a period of review for
antidumping or countervailing duty purposes has been completed. Before
filing a reconciliation, an importer of record shall post bond or other
security pursuant to such regulations as the Secretary may prescribe.\
\
(2) Regulations regarding ad/cv duties.\--The Secretary shall prescribe,
in consultation with the Secretary of Commerce, such regulations as are
necessary to adapt the reconciliation process for use in the collection
of antidumping and countervailing duties.\
(c) Release of Merchandise.\--The Customs Service may permit the entry
and release of merchandise from customs custody in accordance with such
regulations as the Secretary may prescribe. No officer of the Customs
Service shall be liable to any person with respect to the delivery of
merchandise released from customs custody in accordance with such
regulations.\
(d) Signing and Contents.\--Entries shall be signed by the importer of
record, or his agent, unless filed pursuant to an electronic data
interchange system. If electronically filed, each transmission of data
shall be certified by an importer of record or his agent, one of whom
shall be resident in the United States for purposes of receiving service
of process, as being true and correct to the best of his knowledge and
belief, and such transmission shall be binding in the same manner and to
the same extent as a signed document. The entry shall set forth such
facts in regard to the importation as the Secretary may require and
shall be accompanied by such invoices, bills of lading, certificates,
and documents, or their electronically submitted equivalents, as are
required by regulation.\
(e) Production of Invoice.\--The Secretary may provide by regulation for
the production of an invoice, parts thereof, or the electronic
equivalents thereof, in such manner and form, and under such terms and
conditions, as the Secretary considers necessary.\
(f) Statistical Enumeration.\--The Secretary, the Secretary of Commerce,
and the United States International Trade Commission shall establish
from time to time for statistical purposes an enumeration of articles in
such detail as in their judgment may be necessary, comprehending all
merchandise imported into the United States and exported from the United
States, and shall seek, in conjunction with statistical programs for
domestic production and programs for achieving international
harmonization of trade statistics, to establish the comparability
thereof with such enumeration of articles. All import entries and export
declarations shall include or have attached thereto an accurate
statement specifying, in terms of such detailed enumeration, the kinds
and quantities of all merchandise imported and exported and the value of
the total quantity of each kind of article.\
\
(g) Statement of Cost of Production.\--Under such regulations as the
Secretary may prescribe, the Customs Service may require a verified
statement from the manufacturer or producer showing the cost of
producing the imported merchandise, if the Customs Service considers
such verification necessary for the appraisement of such merchandise.\
(h) Admissibility of Data Electronically Transmitted.\--Any entry or
other information transmitted by means of an authorized electronic data
interchange system shall be admissible in any and all administrative and
judicial proceedings as evidence of such entry or information.\
\
**SEC. 485. DECLARATION.\
\
**(a) Requirement\--Form and Contents.\--Every importer of record making
an entry under the provisions of section 484 of this Act shall make and
file or transmit electronically therewith, in a form and manner to be
prescribed by the Secretary of the Treasury, a declaration under oath,
stating\--\
\
(1) \* \* \*

\* \* \* \* \*

\(d\) ~~A~~ An importer of record shall not be liable for any additional
or increased duties if (1) he declares at the time of entry that he is
not the actual owner of the merchandise, (2) he furnishes the name and
address of such owner, and (3) within ninety days from the date of entry
he produces a declaration of such owner conditioned that he will pay all
additional and increased duties, under such regulations as the Secretary
of the Treasury may prescribe. Such owner shall possess all the rights
of ~~a~~ an importer of record.

\* \* \* \* \*

\(g\) Exported Merchandise Returned as Undeliverable.\--With respect to
any importation of merchandise to which General Headnote 4(e) of the
Harmonized Tariff Schedule of the United States applies, any person who
gained any benefit from, or met any obligation to, the United States as
a result of the prior exportation of such merchandise shall, in
accordance with regulations prescribed by the Secretary, within a
reasonable time inform the Customs Service of the return of the
merchandise.\
\
\* \* \* \* \*\
\
**SEC. 490. GENERAL ORDERS.\
\
**~~(a) Incomplete Entry.\--Whenever entry of any imported merchandise
is not made within the time provided by law or the regulations
prescribed by the Secretary of the Treasury, or whenever entry of such
merchandise is incomplete because of failure to pay the estimated
duties, or whenever, in the opinion of the appropriate customs officer,
entry of such merchandise can not be made for want of proper documents
or other cause, or whenever the appropriate customs officer believes
that any merchandise is not correctly and legally invoiced, he shall
take the merchandise into his custody and send it to a bonded warehouse
or public store, to be held at the risk and expense of the consignee
until entry is made or completed and the proper documents are produced,
or a bond given for their production.~~\
\
(a) Incomplete Entry.\--\
\
(1) Whenever\--\
\
(A) the entry of any imported merchandise is not made within the time
provided by law or by regulation prescribed by the Secretary;\
\
(B) the entry of imported merchandise is incomplete because of failure
to pay the estimated duties, fees, or interest;\
\
(C) in the opinion of the Customs Service, the entry of imported
merchandise cannot be made for want of proper documents or other cause;
or\
\
(D) the Customs Service believes that any merchandise is not correctly
and legally invoiced; the carrier (unless subject to subsection (c))
shall notify the bonded warehouse of such unentered merchandise.\
\
(2) After notification under paragraph (1), the bonded warehouse shall
arrange for the transportation and storage of the merchandise at the
risk and expense of the consignee. The merchandise shall remain in the
bonded warehouse until\--\
\
(A) entry is made or completed and the proper documents are produced;\
\
(B) the information and data necessary for entry are transmitted to the
Customs Service pursuant to an authorized electronic data interchange
system; or\
\
(C) a bond is given for the production of documents or the transmittal
of data.\
\
(b) ~~At Request of Consignee.\--~~ Request for Possession by
Customs.\--At the request of the consignee of any merchandise, or of the
owner or master of the vessel or the person in charge of the vehicle in
which the same is imported, any merchandise may be taken possession of
by the ~~appropriate customs officer~~ Customs Service after the
expiration of one day after the entry of the vessel or report of the
vehicle and may be unladen and held at the risk and expense of the
consignee until entry thereof is made.\
(c) Government Merchandise.\--Any imported merchandise that\--\
\
(1) is described in any of paragraphs (1) through (4) of subsection (a);
and\
\
(2) is consigned to, or owned by, the United States Government; shall be
stored and disposed of in accordance with such rules and procedures as
the Secretary shall by regulation prescribe.\
\
**SEC. 491. UNCLAIMED MERCHANDISE; DISPOSITION OF FORFEITED DISTILLED
SPIRITS, WINES AND MALT LIQUOR\
\
**(a) Any entered or unentered merchandise (except merchandise entered
under section 557 of this Act, but including merchandise entered for
transportation in bond or for exportation) which shall remain in
~~customs custody for one year~~ in a bonded warehouse pursuant to
section 490 for 6 months from the date of importation thereof, without
all estimated duties ~~and storage~~, taxes, fees, interest, storage, or
other charges thereon having been paid, shall be considered unclaimed
and abandoned to the Government and shall be appraised and sold by the
appropriate customs officer at public auction under such regulations as
the Secretary of the Treasury shall prescribe. All gunpowder and other
explosive substances and merchandise liable to depreciation in value by
damage, leakage, or other cause to such extent that the proceeds of sale
thereof may be insufficient to pay the duties, taxes, fees, interest,
storage, and other charges, if permitted to remain in ~~public store or
bonded warehouse for a period of one year~~ pursuant to section 490 in a
bonded warehouse for 6 months, may be sold forthwith, under such
regulations as the Secretary of the Treasury may prescribe. Merchandise
subject to sale hereunder or under section 559 of this Act may be
entered or withdrawn for consumption at any time prior to such sale upon
payment of all duties, taxes, fees, interest, storage, and other
charges, and expenses that may have accrued thereon, but such
merchandise after becoming subject to sale may not be exported prior to
sale without the payment of such duties, taxes, fees, interest, charges,
and expenses nor may it be entered for warehouse. The computation of
duties, taxes, interest, and fees for the purposes of this section and
sections 493 and 559 of this Act shall be at the rate of rates
applicable at the time the merchandise becomes subject to sale.\
(b) Notice of Title Vesting in the United States.\--At the end of the 6-
month period referred to in subsection (a), the Customs Service may, in
lieu of sale of the merchandise, provide notice to all known interested
parties that the title to such merchandise shall be considered to vest
in the United States free and clear of any liens or encumbrances, on the
30th day after the date of the notice unless, before such 30th day\--\
\
(1) the subject merchandise is entered or withdrawn for consumption;
and\
\
(2) payment is made of all duties, taxes, fees, transfer and storage
charges, and other expenses that may have accrued thereon.\
(c) Retention, Transfer, Destruction, or Other Disposition.\--If title
to any merchandise vests in the United States by operation of subsection
(b), such merchandise may be retained by the Customs Service for
official use, transferred to any other Federal agency or to any State or
local agency, destroyed, or otherwise disposed of in accordance with
such regulations as the Secretary shall prescribe. All transfer and
storage charges or expenses accruing on retained or transferred
merchandise shall be paid by the receiving agency.\
(d) Petition.\--Whenever any party, having lost a substantial interest
in merchandise by virtue of title vesting in the United States under
subsection (b), can establish such title or interest to the satisfaction
of the Secretary within 30 days after the day on which title vests in
the United States under subsection (b), or can establish to the
satisfaction of the Secretary that the party did not receive notice
under subsection (b), the Secretary may, upon receipt of a timely and
proper petition and upon finding that the facts and circumstances
warrant, pay such party out of the Treasury of the United States the
amount the Secretary believes the party would have received under
section 493 had the merchandise been sold and a proper claim filed. The
decision of the Secretary with respect to any such petition is final and
conclusive on all parties.\
~~(b)~~ (e) All distilled spirits, wines, and malt liquor forfeited to
the Government summarily or by order of court, under any provision of
law administered by the United States Customs Service, shall be
appraised and disposed of by\--

\(1\) \* \* \*

\* \* \* \* \*

\(3\) sale by ~~appropriate custom officer~~ Customs Service at public
auction under such regulations as the Secretary shall prescribe, except
that before making any such sale the Secretary shall determine that no
Government agency or eleemosynary institution has established a need for
such spirits, wines, and malt liquor under paragraph (1) or (2); or\
\
\* \* \* \* \*\
\
**SEC. 492. DESTRUCTION OF ABANDONED OR FORFEITED MERCHANDISE.\
\
**Except as provided in section 3369 of the Revised Statutes, as amended
(relating to tobacco and snuff), and in section 901 of the Revenue Act
of 1926 (relating to distilled spirits), any merchandise abandoned or
forfeited to the Government under the preceding or any other provision
of the customs laws, which is subject to internal revenue tax and which
the ~~appropriate customs officer~~ Customs Service shall be satisfied
will not sell for a sufficient amount to pay such taxes, shall be
forthwith destroyed, retained for official use, or otherwise disposed of
under regulations to be prescribed by the Secretary of the Treasury,
instead of being sold at auction.\
\
**SEC. 493. PROCEEDS OF SALE.\
\
**The surplus of the proceeds of sales under section 491 of this Act,
after the payment of storage charges, expenses, duties, taxes, and fees,
and the satisfaction of any lien for freight, charges, or contribution
in general average, shall be deposited ~~by the appropriate customs
officer~~ in the Treasury of the United States, if claim therefor shall
not be filed with ~~such customs officer~~ the Customs Service within
ten days from the date of sale, and the sale of such merchandise shall
exonerate the master of any vessel in which the merchandise was imported
from all claims of the owner thereof, who shall, nevertheless, on due
proof of his interest, be entitled to receive from the Treasury the
amount of any surplus of the proceeds of sale.

\* \* \* \* \*

**SEC. 497. PENALTIES FOR FAILURE TO DECLARE.\
\
**(a) In General.\--(1) Any article which\--\
\
(A) is not included in the declaration and entry as made or transmitted;
and\
\* \* \* \* \*\
(2) The amount of the penalty imposed under paragraph (1) with respect
to any article is equal to\-- ~~(A) if the article is a controlled
substance, 1,000 percent of the value of the article; and~~

\(A\) if the article is a controlled substance, either \$500 or an
amount equal to 1,000 percent of the value of the article, whichever
amount is greater; and

\* \* \* \* \*

**SEC. 498. ENTRY UNDER REGULATIONS.\
\
**(a) Authorized for Certain Merchandise.\--The Secretary of the
Treasury is authorized to prescribe rules and regulations for the
declaration and entry of\-- ~~(1) Merchandise, imported in the mails or
otherwise, when the aggregate value of the shipment does not exceed such
amount, not greater than \$1,250, as the Secretary of the Treasury shall
specify in the regulations, and the specified amount may vary for
different classes or kinds of merchandise or different classes of
transactions, except that this paragraph does not apply to articles
valued in excess of \$250 classified in\-- (A) chapters 50 through 63;
(B) chapters 39 through 43, 61 through 65, 67 and 95; and (C)
subchapters III and IV of chapter 99; of the Harmonized Tariff Schedule
of the United States, or to any other article for which formal entry is
required without regard to value;\
\
~~(1) Merchandise, when\--\
\
(A) the aggregate value of the shipment does not exceed an amount
specified by the Secretary by regulation, but not more than \$2,500; or\
\
(B) different commercial facilitation and risk considerations that may
vary for different classes or kinds of merchandise or different classes
of transactions may dictate;\
\
(2) Products of the United States, when the aggregate value of the
shipment does not exceed ~~\$10,000~~ such amounts as the Secretary may
prescribe and the products are imported\--\
\
(A) \* \* \*

\* \* \* \* \*

~~**SEC. 499. EXAMINATION OF MERCHANDISE.\
\
**Imported merchandise, required by law or regulations made in pursuance
thereof to be inspected, examined, or appraised, shall not be delivered
from customs custody, expect under such bond or other security as may be
prescribed by the Secretary of the Treasury to assure compliance with
all applicable laws, regulations, and instructions which the Secretary
of the Treasury or the Customs Service is authorized to enforce; until
it has been inspected, examined, or appraised and is reported by the
appropriate customs officer to have been truly and correctly invoiced
and found to comply with the requirements of the laws of the United
States. Such officer shall designate the packages or quantities covered
by any invoice or entry which are to be opened and examined for the
purpose of appraisement or otherwise and shall order such packages or
quantities to be sent to the public stores or other places for such
purpose. Not less than one package of every invoice and not less than
one package of every ten packages of merchandise, shall be so designated
unless the Secretary of the Treasury, from the character and description
of the merchandise, is of the opinion that the examination of a less
proportion of packages will amply protect the revenue and by special
regulation or instruction, the application of which may be restricted to
one or more individual ports or to one or more importations or one or
more classes of merchandise, permit a less number of packages to be
examined. All such special regulations or instructions shall be
published in the weekly Treasury Decisions within fifteen days after
issuance and before the liquidation of any entries affected thereby.
Such officer may require such additional packages or quantities as he
may deem necessary. If any package contains any article not specified in
the invoice and, in the opinion of the appropriate customs officer, such
article was omitted from the invoice with fraudulent intent on the part
of the seller, shipper, owner, or agent, the contents of the entire
package in which such article is found shall be subject to seizure, but
if no such fraudulent intent is apparent, then the value of said article
shall be added to the entry and the duties thereon paid accordingly. If
a deficiency is found in quantity, weight, or measure in the examination
of any package, report thereof shall be made to the appropriate customs
officers, who shall make allowance therefore in the liquidation of
duties.\
No appraisement made after the effective date of the Customs
Administrative Act of 1938 shall be held invalid on the ground that the
required number of packages or the required quantity of the merchandise
was not designated for examination or, if designated, was not actually
examined, unless the party claiming such invalidity shall establish that
merchandise in the packages or quantities not designated for
examination, or not actually examined, was different from that actually
examined and that the difference was such as to establish the
incorrectness of the appraisement; and then only as to the merchandise
for which the appraisement is shown to be incorrect.\
\
~~**SEC. 499. EXAMINATION OF MERCHANDISE.\
\
**(a) Entry Examination.\--\
\
(1) In general.\--Imported merchandise that is required by law or
regulation to be inspected, examined, or appraised shall not be
delivered from customs custody (except under such bond or other security
as may be prescribed by the Secretary to assure compliance with all
applicable laws, regulations, and instructions which the Secretary or
the Customs Service is authorized to enforce) until the merchandise has
been inspected, appraised, or examined and is reported by the Customs
Service to have been truly and correctly invoiced and found to comply
with the requirements of the laws of the United States.\
\
(2) Examination.\--The Customs Service\--\
\
(A) shall designate the packages or quantities of merchandise covered by
any invoice or entry which are to be opened and examined for the purpose
of appraisement or otherwise;\
\
(B) shall order such packages or quantities to be sent to such place as
is designated by the Secretary by regulation for such purpose;\
\
(C) may require such additional packages or quantities as the Secretary
considers necessary for such purpose; and\
\
(D) shall inspect a sufficient number of shipments, and shall examine a
sufficient number of entries, to ensure compliance with the laws
enforced by the Customs Service.\
\
(3) Unspecified articles.\--If any package contains any article not
specified in the invoice or entry and, in the opinion of the Customs
Service, the article was omitted from the invoice or entry\--\
\
(A) with fraudulent intent on the part of the seller, shipper, owner,
agent, importer of record, or entry filer, the contents of the entire
package in which such article is found shall be subject to seizure; or\
\
(B) without fraudulent intent, the value of the article shall be added
to the entry and the duties, fees, and taxes thereon paid accordingly.\
\
(4) Deficiency.\--If a deficiency is found in quantity, weight, or
measure in the examination of any package, the person finding the
deficiency shall make a report thereof to the Customs Service. The
Customs Service shall make allowance for the deficiency in the
liquidation of duties.\
\
(5) Information required for release.\--If an examination is conducted,
any information required for release shall be provided, either
electronically or in paper form, to the Customs Service at the port of
examination. The absence of such information does not limit the
authority of the Customs Service to conduct an examination.\
\
(b) Testing Laboratories.\--\
\
(1) Accreditation of private testing laboratories.\--The Customs Service
shall establish and implement a procedure, under regulations promulgated
by the Secretary, for accrediting private laboratories within the United
States which may be used to perform tests (that would otherwise be
performed by Customs Service laboratories) to establish the
characteristics, quantities, or composition of imported merchandise.
Such regulations\--\
\
(A) shall establish the conditions required for the laboratories to
receive and maintain accreditation for purposes of this subsection;\
\
(B) shall establish the conditions regarding the suspension and
revocation of accreditation, which may include the imposition of a
monetary penalty not to exceed \$100,000 and such penalty is in addition
to the recovery, from a gauger or laboratory accredited under paragraph
(1), of any loss of revenue that may have occurred, but the Customs
Service\--\
\
(i) may seek to recover lost revenue only in cases where the gauger or
laboratory intentionally falsified the analysis or gauging report in
collusion with the importer; and\
\
(ii) shall neither assess penalties nor seek to recover lost revenue
because of a good faith difference of professional opinion; and\
\
(C) may provide for the imposition of a reasonable charge for
accreditation and periodic reaccreditation. The collection of any charge
for accreditation and reaccreditation under this section is not
prohibited by section 13031(e)(6) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(e)(6)).\
\
(2) Appeal of adverse accreditation decisions.\--A laboratory applying
for accreditation, or that is accredited, under this section may contest
any decision or order of the Customs Service denying, suspending, or
revoking accreditation, or imposing a monetary penalty, by commencing an
action in accordance with chapter 169 of title 28, United States Code,
in the Court of International Trade within 60 days after issuance of the
decision or order.\
\
(3) Testing by accredited laboratories.\--When requested by an importer
of record of merchandise, the Customs Service shall authorize the
release to the importer of a representative sample of the merchandise
for testing, at the expense of the importer, by a laboratory accredited
under paragraph (1). The testing results from a laboratory accredited
under paragraph (1) that are submitted by an importer of record with
respect to merchandise in an entry shall, in the absence of testing
results obtained from a Customs Service laboratory, be accepted by the
Customs Service if the importer of record certifies that the sample
tested was taken from the merchandise in the entry. Nothing in this
subsection shall be construed to limit in any way or preclude the
authority of the Customs Service to test or analyze any sample or
merchandise independently.\
\
(4) Availability of testing procedure, methodologies, and
information.\--Testing procedures and methodologies used by the Customs
Service, and information resulting from any testing conducted by the
Customs Service, shall be made available as follows:\
\
(A) Testing procedures and methodologies shall be made available upon
request to any person unless the procedures or methodologies are\--\
\
(i) proprietary to the holder of a copyright or patent related to such
procedures or methodologies, or\
\
(ii) developed by the Customs Service for enforcement purposes.\
\
(B) Information resulting from testing shall be made available upon
request to the importer of record and any agent thereof unless the
information reveals information which is\--\
\
(i) proprietary to the holder of a copyright or patent; or\
\
(ii) developed by the Customs Service for enforcement purposes.\
\
(5) Miscellaneous provisions.\--For purposes of this subsection\--\
\
(A) any reference to a private laboratory includes a reference to a
private gauger; and\
\
(B) accreditation of private laboratories extends only to the
performance of functions by such laboratories that are within the scope
of those responsibilities for determinations of the elements relating to
admissibility, quantity, composition, or characteristics of imported
merchandise that are vested in, or delegated to, the Customs Service.\
\
(c) Detentions.\--Except in the case of merchandise with respect to
which the determination of admissibility is vested in an agency other
than the Customs Service, the following apply:\
\
(1) In general.\--Within the 5-day period (excluding weekends and
holidays) following the date on which merchandise is presented for
customs examination, the Customs Service shall decide whether to release
or detain the merchandise. Merchandise which is not released within such
5-day period shall be considered to be detained merchandise.\
\
(2) Notice of detention.\--The Customs Service shall issue a notice to
the importer or other party having an interest in detained merchandise
no later than 5 days, excluding weekends and holidays, after the
decision to detain the merchandise is made. The notice shall advise the
importer or other interested party of\--\
\
(A) the initiation of the detention;\
\
(B) the specific reason for the detention;\
\
(C) the anticipated length of the detention;\
\
(D) the nature of the tests or inquiries to be conducted; and\
\
(E) the nature of any information which, if supplied to the Customs
Service, may accelerate the disposition of the detention.\
\
(3) Testing results.\--Upon request by the importer or other party
having an interest in detained merchandise, the Customs Service shall
provide the party with copies of the results of any testing conducted by
the Customs Service on the merchandise and a description of the testing
procedures and methodologies (unless such procedures or methodologies
are proprietary to the holder of a copyright or patent or were developed
by the Customs Service for enforcement purposes). The results and test
description shall be in sufficient detail to permit the duplication and
analysis of the testing and the results.\
\
(4) Seizure and forfeiture.\--If otherwise provided by law, detained
merchandise may be seized and forfeited.\
\
(5) Effect of failure to make determination.\--\
\
(A) The failure by the Customs Service to make a final determination
with respect to the admissibility of detained merchandise within 30 days
after the merchandise has been presented for customs examination, or
such longer period if specifically authorized by law, shall be treated
as a decision of the Customs Service to exclude the merchandise for
purposes of section 514(a)(4).\
\
(B) For purposes of section 1581 of title 28, United States Code, a
protest against the decision to exclude the merchandise which has not
been allowed or denied in whole or in part before the 30th day after the
day on which the protest was filed shall be treated as having been
denied on such 30th day.\
\
(C) Notwithstanding section 2639 of title 28, United States Code, once
an action respecting a detention is commenced, unless the Customs
Service establishes by a preponderance of the evidence that an
admissibility decision has not been reached for good cause, the court
shall grant the appropriate relief which may include, but is not limited
to, an order to cancel the detention and release the merchandise.\
\
**SEC. 500. APPRAISEMENT, CLASSIFICATION, AND LIQUIDATION PROCEDURES.\
\
**~~The appropriate customs officer~~ The Customs Service shall, under
rules and regulations prescribed by the Secretary\--\
\
(a) ~~appraise~~ fix the final appraisement of merchandise by
ascertaining or estimating the value thereof, under section 402, by all
reasonable ways and means in his power, any statement of cost or costs
of production in any invoice, affidavit, declaration, other document to
the contrary notwithstanding;\
\
(b) ~~ascertain the~~ fix the final classification and rate of duty
applicable to such merchandise;\
\
(c) fix the final amount of duty to be paid on such merchandise and
determine any increased or additional duties, taxes, and fees due or any
excess of duties, taxes, and fees deposited; ~~(d) liquidate the entry
of such merchandise; and (e) give notice of such liquidation to the
importer, his consignee, or agent in such form and manner as the
Secretary shall prescribe in such regulations.\
\
~~(d) liquidate the entry and reconciliation, if any, of such
merchandise; and\
\
(e) give or transmit, pursuant to an electronic data interchange system,
notice of such liquidation to the importer, his consignee, or agent in
such form and manner as the Secretary shall by regulation prescribe.\
\
**SEC. 501. ~~VOLUNTARY RELIQUIDATIONS~~ VOLUNTARY RELIQUIDATIONS BY THE
CUSTOMS SERVICE.\
\
**A liquidation made in accordance with section 500 or any reliquidation
thereof made in accordance with this section may be reliquidated in any
respect by ~~the appropriate customs officer on his own initiative~~ the
Customs Service, notwithstanding the filing of a protest, within ninety
days from the date on which notice of the original liquidation is given
or transmitted to the importer, his consignee or agent. Notice of such
reliquidation shall be given or transmitted in the manner prescribed
with respect to original liquidations under section 500(e).\
\
**SEC. 502. REGULATIONS FOR APPRAISEMENT AND CLASSIFICATION.\
\
**(a) Powers of Secretary of the Treasury.\--The Secretary of the
Treasury shall establish and promulgate such rules and regulations not
inconsistent with the law (including regulations establishing procedures
for the issuance of binding rulings prior to the entry of the
merchandise concerned), and may disseminate such information as may be
necessary to secure a just, impartial, and uniform appraisement of
imported merchandise and the classification and assessment of duties
thereon at the various ports of entry~~, and~~. The Secretary may direct
any customs officer to go from one port of entry to another for the
purpose of appraising or classifying or assisting in appraising or
classifying merchandise imported at ~~such port~~ any port, and may
direct any customs officer at any port to review entries of merchandise
filed at any other port.\
~~(b) Reversal of Secretary\'s Rulings.\--No ruling or decision once
made by the Secretary of the Treasury, giving construction to any law
imposing customs duties, shall be reversed or modified adversely to the
United States, by the same or a succeeding Secretary, except in
concurrence with an opinion of the Attorney General recommending the
same, a final decision of the United States Court of International
Trade, or a final decision of a binational panel pursuant to article
1904 of the North American Free Trade Agreement or the United
States-Canada Free-Trade Agreement.\
(c)~~ (b) /3/ Duties of Customs Officers.\--It shall be the duty of all
officers of the customs to execute and carry into effect all
instructions of the Secretary of the Treasury relative to the execution
of the revenue laws; and in case any difficulty arises as to the true
construction or meaning of any part of the revenue laws, the decision of
the Secretary shall be binding upon all officers of the customs.\
Note /3/ The deletion of (b) and the change of (c) to (b) takes effect
on the date the Agreement enters into force with respect to the United
States.

\* \* \* \* \*

**SEC. 504. LIMITATION ON LIQUIDATION.\
\
**(a) Liquidation.\--~~Except as provided in subsection (b),~~ Unless an
entry is extended under subsection (b) or suspended as required by
statute or court order, an entry of merchandise not liquidated within
one year from:\
\
(1) the date of entry of such merchandise;\
\
(2) the date of the final withdrawal of all such merchandise covered by
a warehouse entry; ~~or\
\
~~(3) the date of withdrawal from warehouse of such merchandise for
consumption where, pursuant to regulations issued under section 505(a)
of this Act, duties may be deposited after the filing of an entry or
withdrawal from warehouse; or\
\
(4) if a reconciliation is filed, or should have been filed, the date of
the filing under section 484 or the date the reconciliation should have
been filed; shall be deemed liquidated at the rate of duty, value,
quantity, and amount of duties asserted at the time of entry by the
importer of record. Notwithstanding section 500(e) of this Act, notice
of liquidation need not be given of an entry deemed liquidated.\
~~(b) Extension.\--The Secretary may extend the period in which to
liquidate an entry by giving notice of such extension to the importer of
record in such form and manner as the Secretary shall prescribe in
regulations, if\-- (1) information needed for the proper appraisement or
classification of the merchandise is not available to the appropriate
customs officer; (2) liquidation is suspended as required by statute or
court order; or (3) the importer of record requests such extension and
shows good cause therefor.\
(c) Notice of Suspension.\--If the liquidation of any entry is
suspended, the Secretary shall, by regulation, require that notice of
such suspension be provided to the importer of record concerned and to
any authorized agent and surety of such importer of record.\
(d) Limitation.\--Any entry of merchandise not liquidated at the
expiration of four years from the applicable date specified in
subsection (a) of this section, shall be deemed liquidated at the rate
of duty, value, quantity, and amount of duty asserted at the time of
entry by the importer of record unless liquidation continues to be
suspended as required by statute or court order. When such a suspension
of liquidation is removed, the entry shall be liquidated within 90 days
therefrom.\
~~(b) Extension.\--The Secretary may extend the period in which to
liquidate an entry if\--\
\
(1) the information needed for the proper appraisement or classification
of the merchandise, or for insuring compliance with applicable law, is
not available to the Customs Service; or\
\
(2) the importer of record requests such extension and shows good cause
therefor. The Secretary shall give notice of an extension under this
subsection to the importer of record and the surety of such importer of
record. Notice shall be in such form and manner (which may include
electronic transmittal) as the Secretary shall by regulation prescribe.
Any entry the liquidation of which is extended under this subsection
shall be treated as having been liquidated at the rate of duty, value,
quantity, and amount of duty asserted at the time of entry by the
importer of record at the expiration of 4 years from the applicable date
specified in subsection (a).\
(c) Notice of Suspension.\--If the liquidation of any entry is
suspended, the Secretary shall by regulation require that notice of the
suspension be provided, in such manner as the Secretary considers
appropriate, to the importer of record and to any authorized agent and
surety of such importer of record.\
(d) Removal of Suspension.\--When a suspension required by statute or
court order is removed, the Customs Service shall liquidate the entry
within 6 months after receiving notice of the removal from the
Department of Commerce, other agency, or a court with jurisdiction over
the entry. Any entry not liquidated by the Customs Service within 6
months after receiving such notice shall be treated as having been
liquidated at the rate of duty, value, quantity, and amount of duty
asserted at the time of entry by the importer of record. ~~SEC. 505.
PAYMENT OF DUTIES.\
(a) Deposit of Estimated Duties.\--Unless merchandise is entered for
warehouse or transportation, or under bond, the importer of record shall
deposit with the appropriate customs officer at the time of making
entry, or at such later time as the Secretary may prescribe by
regulation (but not to exceed thirty days after the date of entry), the
amount of duties estimated by such customs officer to be payable
thereon.\
(b) Collection or Refund.\--The appropriate customs officer shall
collect any increased or additional duties due or refund any excess of
duties deposited as determined on a liquidation or reliquidation.\
(c) Duties determined to be due upon liquidation or reliquidation shall
be due 15 days after the date of that liquidation or reliquidation, and
unless payment of the duties is received by the appropriate customs
officer within 30 days after that date, shall be considered delinquent
and bear interest from the 15th day after the date of liquidation or
reliquidation at a rate determined by the Secretary of the Treasury.\
\
~~**SEC. 505. PAYMENT OF DUTIES AND FEES.\
\
**(a) Deposit of Estimated Duties, Fees, and Interest.\--Unless
merchandise is entered for warehouse or transportation, or under bond,
the importer of record shall deposit with the Customs Service at the
time of making entry, or at such later time as the Secretary may
prescribe by regulation, the amount of duties and fees estimated to be
payable thereon. Such regulations may provide that estimated duties and
fees shall be deposited before or at the time an import activity summary
statement is filed. If an import activity summary statement is filed,
the estimated duties and fees shall be deposited together with interest,
at a rate determined by the Secretary, accruing from the first date of
the month the statement is required to be filed until the date such
statement is actually filed.\
(b) Collection or Refund of Duties, Fees, and Interest Due Upon
Liquidation or Reliquidation.\--The Customs Service shall collect any
increased or additional duties and fees due, together with interest
thereon, or refund any excess moneys deposited, together with interest
thereon, as determined on a liquidation or reliquidation. Duties, fees,
and interest determined to be due upon liquidation or reliquidation are
due 30 days after issuance of the bill for such payment. Refunds of
excess moneys deposited, together with interest thereon, shall be paid
within 30 days of liquidation or reliquidation.\
(c) Interest.\--Interest assessed due to an underpayment of duties,
fees, or interest shall accrue, at a rate determined by the Secretary,
from the date the importer of record is required to deposit estimated
duties, fees, and interest to the date of liquidation or reliquidation
of the applicable entry or reconciliation. Interest on excess moneys
deposited shall accrue, at a rate determined by the Secretary, from the
date the importer of record deposits estimated duties, fees, and
interest to the date of liquidation or reliquidation of the applicable
entry or reconciliation.\
(d) Delinquency.\--If duties, fees, and interest determined to be due or
refunded are not paid in full within the 30-day period specified in
subsection (b), any unpaid balance shall be considered delinquent and
bear interest by 30-day periods, at a rate determined by the Secretary,
from the date of liquidation or reliquidation until the full balance is
paid. No interest shall accrue during the 30-day period in which payment
is actually made.\
\
**SEC. 506. ALLOWANCE FOR ABANDONMENT AND DAMAGE.\
\
**Allowance shall be made in the estimation and liquidation of duties
under regulations prescribed by the Secretary of the Treasury in the
following cases:\
\
(1) Abandonment within thirty days.\--Where the importer abandons to the
United States, within thirty days after entry in the case of merchandise
~~not sent to the appraiser\'s stores for~~ released without an
examination, or within thirty days after the release ~~of the
examination packages or quantities of merchandise~~ in the case of
merchandise sent to ~~the appraiser\'s stores~~ the Customs Service for
examination, any imported merchandise representing 5 per centum or more
of the total value of all the merchandise of the same class or kind
entered in the invoice or entry in which the item appears, and delivers,
within the applicable thirty-day period, the portion so abandoned to
such place as the collector directs unless ~~the appropriate customs
officer~~ the Customs Service is satisfied that the merchandise is so
far destroyed as to be nondeliverable;

\(2\) Perishable merchandise, condemned.\--Where fruit or other
perishable merchandise has been condemned at the port of entry, within
ten days after landing, by the health officers or other legally
constituted authorities, and the consignee, within five days after such
condemnation, files, electronically or otherwise, with ~~such customs
officer~~ the Customs Service ~~written~~ notice thereof, an invoiced
description and the location thereof, and the name of the vessel or
vehicle in which imported.

\* \* \* \* \*

**SEC. 508. RECORDKEEPING.\
\
**~~(a) Requirements.\--Any owner, importer, consignee, or agent thereof
who imports, or who knowingly causes to be imported, any merchandise
into the customs territory of the United States shall make, keep, and
render for examination and inspection such records (including
statements, declarations, and other documents) which\-- (1) pertain to
any such importation, or to the information contained in the documents
required by this Act in connection with the entry of merchandise; and
(2) are normally kept in the ordinary course of business.\
(b) Any person who exports, or who knowingly causes to be exported, any
merchandise to Canada shall make, keep, and render for examination and
inspection such records (including certifications of origin or copies
thereof) which pertain to such exportations.\
(c) Period of Time.\--The records required by subsections (a) and (b) of
this section shall be kept for such periods of time, not to exceed 5
years from the date of entry, as the Secretary shall prescribe.\
~~(a) Requirements.\--Any\--\
\
(1) owner, importer, consignee, importer of record, entry filer, or
other party who\--\
\
(A) imports merchandise into the customs territory of the United States,
files a drawback claim, or transports or stores merchandise carried or
held under bond, or\
\
(B) knowingly causes the importation or transportation or storage of
merchandise carried or held under bond into or from the customs
territory of the United States;\
\
(2) agent of any party described in paragraph (1); or\
\
(3) person whose activities require the filing of a declaration or
entry, or both; shall make, keep, and render for examination and
inspection records (which for purposes of this section include, but are
not limited to, statements, declarations, documents and electronically
generated or machine readable data) which\--\
\
(A) pertain to any such activity, or to the information contained in the
records required by this Act in connection with any such activity; and\
\
(B) are normally kept in the ordinary course of business.\
(b) Exportations to Free Trade Countries.\--\
\
(1) Definitions.\--As used in this subsection\--\
\
(A) The term \"associated records\" means, in regard to an exported good
under paragraph (2), records associated with\--\
\
(i) the purchase of, cost of, value of, and payment for, the good;\
\
(ii) the purchase of, cost of, value of, and payment for, all material,
including indirect materials, used in the production of the good; and\
\
(iii) the production of the good. For purposes of this subparagraph, the
terms \"indirect material,\" \"material,\" \"preferential tariff
treatment,\" \"used,\" and \"value\" have the respective meanings given
them in articles 415 and 514 of the North American Free Trade
Agreement.\
\
(B) The term \"NAFTA Certificate of Origin\" means the certification,
established under article 501 of the North American Free Trade
Agreement, that a good qualifies as an originating good under such
Agreement.\
\
(2) Exports to nafta countries.\--\
\
(A) In general.\--Any person who completes and signs a NAFTA Certificate
of Origin for a good for which preferential treatment under the North
American Free Trade Agreement is claimed shall make, keep, and render
for examination and inspection all records relating to the origin of the
good (including the Certificate or copies thereof) and the associated
records.\
\
(B) Claims for certain waivers, reductions, or refunds of duties or for
credit against bonds.\--\
\
(i) In general.\--Any person that claims with respect to an article\--\
\
(I) a waiver or reduction of duty under the last paragraph of section
311, section 312(b)(1) or (4), section 562(2), or the last proviso to
section 3(a) of the Foreign Trade Zones Act;\
\
(II) a credit against a bond under section 312(d); or\
\
(III) a refund, waiver, or reduction of duty under section 313(n)(2) or
(o)(1); must disclose to the Customs Service the information described
in clause (ii).\
\
(ii) Information required.\--Within 30 days after making a claim
described in clause (i) with respect to an article, the person making
the claim must disclose to the Customs Service whether that person has
prepared, or has knowledge that another person has prepared, a NAFTA
Certificate of Origin for the article. If after such 30-day period the
person making the claim either\--\
\
(I) prepares a NAFTA Certificate of Origin for the article; or\
\
(II) learns of the existence of such a Certificate for the article; that
person, within 30 days after the occurrence described in subclause (I)
or (II), must disclose the occurrence to the Customs Service.\
\
(iii) Action on claim.\--If the Customs Service determines that a NAFTA
Certificate of Origin has been prepared with respect to an article for
which a claim described in clause (i) is made, the Customs Service may
make such adjustments regarding the previous customs treatment of the
article as may be warranted under the claim.\
\
(3) Exports under the canadian agreement.\--Any person who exports, or
who knowingly causes to be exported, any merchandise to Canada during
such time as the United States-Canada Free-Trade Agreement is in force
with respect to, and the United States applies that Agreement to, Canada
shall make, keep, and render for examination and inspection such records
(including certifications of origin or copies thereof) which pertain to
the exportations.\
\
~~(c)Period of Time.\--The records required by subsections (a) and (b)
shall be kept for such period of time, not to exceed 5 years from the
date of entry or exportation, as appropriate, as the Secretary shall
prescribe; except that records for any drawback claim shall be kept
until the 3rd anniversary of the date of payment of the claim.\
~~(c) Period of Time.\--The records required by subsections (a) and (b)
shall be kept for such periods of time as the Secretary shall prescribe;
except that\--\
\
(1) no period of time for the retention of the records required under
subsection (a) or (b)(3) may exceed 5 years from the date of entry or
exportation, as appropriate;\
\
(2) the period of time for the retention of the records required under
subsection (b)(2) shall be at least 5 years from the date of signature
of the NAFTA Certificate of Origin; and\
\
(3) records for any drawback claim shall be kept until the 3rd
anniversary of the date of payment of the claim./4/\
Note /4/ This version of section (c) takes effect on the date the
Agreement enters into force with respect to the United States.

\* \* \* \* \*

~~(e) Any person who fails to retain records required by subsection (b)
or the regulations issued to implement that subsection shall be liable
to a civil penalty not to exceed \$10,000.\
\
~~(e) Subsection (b) Penalties.\--\
\
(1) Relating to nafta exports.\--Any person who fails to retain records
required by paragraph (2) of subsection (b) or the regulations issued to
implement that paragraph shall be liable for\--\
\
(A) a civil penalty not to exceed \$10,000; or\
\
(B) the general recordkeeping penalty that applies under the customs
laws; whichever penalty is higher.\
\
(2) Relating to canadian agreement exports.\--Any person who fails to
retain the records required by paragraph (3) of subsection (b) or the
regulations issued to implement that paragraph shall be liable for a
civil penalty not to exceed \$10,000.\
\
**SEC. 509. EXAMINATION OF BOOKS AND WITNESSES.\
\
**(a) Authority.\--In any investigation or inquiry conducted for the
purpose of ascertaining the correctness of any entry, for determining
the liability of any person for duty, fees ~~and taxes~~, fees and taxes
due or duties, fees ~~and taxes~~, fees and taxes which may be due the
United States, for determining liability for fines and penalties, or for
insuring compliance with the laws of the United States administered by
the United States Customs Service, the Secretary (but no delegate of the
Secretary below the rank of district director or special agent in
charge) may\-- ~~(1) examine, or cause to be examined, upon reasonable
notice, any record, statement, declaration or other document, described
in the notice with reasonable specificity, which may be relevant to such
investigation or inquiry; (2) summon, upon reasonable notice\-- (A) the
person who imported, or knowingly caused to be imported, merchandise
into the customs territory of the United States, (B) any officer,
employee, or agent of such person, (C) any person having possession,
custody, or care of records relating to such importation, or\
\
~~(1) examine, or cause to be examined, upon reasonable notice, any
record (which for purposes of this section, includes, but is not limited
to, any statement, declaration, document, or electronically generated or
machine readable data) described in the notice with reasonable
specificity, which may be relevant to such investigation or inquiry,
except that\--\
\
(A) if such record is required by law or regulation for the entry of the
merchandise (whether or not the Customs Service required its
presentation at the time of entry) it shall be provided to the Customs
Service within a reasonable time after demand for its production is
made, taking into consideration the number, type, and age of the item
demanded; and\
\
(B) if a person of whom demand is made under subparagraph (A) fails to
comply with the demand, the person may be subject to penalty under
subsection (g);\
\
(2) summon, upon reasonable notice\--\
\
(A) the person who\--\
\
(i) imported, or knowingly caused to be imported, merchandise into the
customs territory of the United States, ~~(ii) exported merchandise, or
knowingly caused merchandise to be exported, to Canada,\
\
~~(ii) exported merchandise, or knowingly caused merchandise to be
exported, to a NAFTA country (as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act) or to Canada during
such time as the United States Canada Free-Trade Agreement is in force
with respect to, and the United States applies that Agreement to,
Canada,/5/\
Note /5/ This version of subsection (ii) takes effect on the date the
Agreement enters into force with respect to the United States.\
\
\
(iii) transported or stored merchandise that was or is carried or held
under customs bond, or knowingly caused such transportation or storage,
or\
\
(iv) filed a declaration, entry, or drawback claim with the Customs
Service;\
\
(B) any officer, employee, or agent of any person described in
subparagraph (A);\
\
(C) any person having possession, custody or care of records relating to
the importation or other activity described in subparagraph (A); or\
\
(D) any other person he may deem proper~~,~~; to appear before the
appropriate customs officer at the time and place within the customs
territory of the United States specified in the summons (except that no
witness may be required to appear at any place more than one hundred
miles distant from the place where he was served with the summons), to
produce records, as defined in subsection\
\
(c)(I)(A), and to give such testimony, under oath, as may be relevant to
such investigation or inquiry; and\
\
(b) Regulatory Audit Procedures.\--\
\
(1) In conducting a regulatory audit under this section (which does not
include a quantity verification for a customs bonded warehouse or
general purpose foreign trade zone), the Customs Service auditor shall
provide the person being audited, in advance of the audit, with a
reasonable estimate of the time to be required for the audit. If in the
course of an audit it becomes apparent that additional time will be
required, the Customs Service auditor shall immediately provide a
further estimate of such additional time.\
\
(2) Before commencing an audit, the Customs Service auditor shall inform
the party to be audited of his right to an entry conference at which
time the purpose will be explained and an estimated termination date
set. Upon completion of on-site audit activities, the Customs Service
auditor shall schedule a closing conference to explain the preliminary
results of the audit.\
\
(3) Except as provided in paragraph (5), if the estimated or actual
termination date for an audit passes without the Customs Service auditor
providing a closing conference to explain the results of the audit, the
person being audited may petition in writing for such a conference to
the appropriate regional commissioner, who, upon receipt of such a
request, shall provide for such a conference to be held within 15 days
after the date of receipt.\
\
(4) Except as provided in paragraph (5), the Customs Service auditor
shall complete the formal written audit report within 90 days following
the closing conference unless the appropriate regional commissioner
provides written notice to the person being audited of the reason for
any delay and the anticipated completion date. After application of any
exemption contained in section 552 of title 5, United States Code, a
copy of the formal written audit report shall be sent to the person
audited no later than 30 days following completion of the report.\
\
(5) Paragraphs (3) and (4) shall not apply after the Customs Service
commences a formal investigation with respect to the issue involved.\
\
~~(b)~~ (c) Service of Summons.\--A summons issued pursuant to this
section may be served by any person designated in the summons to serve
it. Service upon a natural person may be made by personal delivery of
the summons to him. Service may be made upon a domestic or foreign
corporation or upon a partnership or other unincorporated association
which is subject to suit under a common name, by delivering the summons
to an officer, or managing or general agent, or to any other agent
authorized by appointment or by law to receive service of process. The
certificate of service signed by the person serving the summons is prima
facie evidence of the facts it states on the hearing of an application
for the enforcement of the summons. When the summons requires the
production of records, such records shall be described in the summons
with reasonable specificity.\
\
~~(c)~~ (d) Special Procedures for Third-Party Summonses.\--(1) For
purposes of this subsection\--

\(A\) The term \"records\" includes ~~statements, declarations, or
documents~~ those\--

\* \* \* \* \*

\(C\) The term \"third-party recordkeeper\" means\--\
\
(i) any customhouse broker, unless such customhouse is the importer of
record on an entry;

\* \* \* \* \*

\(2\) If\--\
\
(A) any summons is served on any person who is a third-party
recordkeeper; and\
\
(B) the summons requires the production of, or the giving of testimony
relating to, any portion of records made or kept of the ~~import~~
transactions described in section 508 of any person (other than the
person summoned) who is identified in the description of the records
contained in such summons; then notice of such summons shall be given to
any persons so identified within a reasonable time before the day fixed
in the summons as the day upon which such records are to be examined or
testimony given. Such notice shall be accompanied by a copy of the
summons which has been served and shall contain directions for staying
compliance with the summons under paragraph (5)(B) of this subsection.

\* \* \* \* \*

\(4\) Paragraph (2) of this subsection shall not apply to any
summons\--\
\
(A) served on the person with respect to whose liability for duties,
fees, or taxes the summons is issued, or any officer or employee of such
person; or\
\
(B) to determine whether or not records of the ~~import~~ transactions
described in section 508 of an identified person have been made or kept.

\* \* \* \* \*

\(e\) List of Records and Information.\--The Customs Service shall
identify and publish a list of the records or entry information that is
required to be maintained and produced under subsection (a)(1)(A).\
\
(f) Recordkeeping Compliance Program.\--\
\
(1) In general.\--After consultation with the importing community, the
Customs Service shall by regulation establish a recordkeeping compliance
program which the parties listed in section 508(a) may participate in
after being certified by the Customs Service under paragraph (2).
Participation in the recordkeeping compliance program by recordkeepers
is voluntary.\
\
(2) Certification.\--A recordkeeper may be certified as a participant in
the recordkeeping compliance program after meeting the general
recordkeeping requirements established under the program or after
negotiating an alternative program suited to the needs of the
recordkeeper and the Customs Service. Certification requirements shall
take into account the size and nature of the importing business and the
volume of imports. In order to be certified, the recordkeeper must be
able to demonstrate that it\--\
\
(A) understands the legal requirements for recordkeeping, including the
nature of the records required to be maintained and produced and the
time periods involved;\
\
(B) has in place procedures to explain the recordkeeping requirements to
those employees who are involved in the preparation, maintenance, and
production of required records;\
\
(C) has in place procedures regarding the preparation and maintenance of
required records, and the production of such records to the Customs
Service;\
\
(D) has designated a dependable individual or individuals to be
responsible for recordkeeping compliance under the program and whose
duties include maintaining familiarity with the recordkeeping
requirements of the Customs Service;\
\
(E) has a record maintenance procedure approved by the Customs Service
for original records, or, if approved by the Customs Service, for
alternative records or recordkeeping formats other than the original
records; and\
\
(F) has procedures for notifying the Customs Service of occurrences of
variances to, and violations of, the requirements of the recordkeeping
compliance program or the negotiated alternative programs, and for
taking corrective action when notified by the Customs Service of
violations or problems regarding such program.\
\
(g) Penalties.\--\
\
(1) Definition.\--For purposes of this subsection, the term
\"information\" means any record, statement, declaration, document, or
electronically stored or transmitted information or data referred to in
subsection (a)(1)(A).\
\
(2) Effects of failure to comply with demand.\--Except as provided in
paragraph (4), if a person fails to comply with a lawful demand for
information under subsection (a)(1)(A) the following provisions apply:\
\
(A) If the failure to comply is a result of the willful failure of the
person to maintain, store, or retrieve the demanded information, such
person shall be subject to a penalty, for each release of merchandise,
not to exceed \$100,000, or an amount equal to 75 percent of the
appraised value of the merchandise, whichever amount is less.\
\
(B) If the failure to comply is a result of the negligence of the person
in maintaining, storing, or retrieving the demanded information, such
person shall be subject to a penalty, for each release of merchandise,
not to exceed \$10,000, or an amount equal to 40 percent of the
appraised value of the merchandise, whichever amount is less.\
\
(C) In addition to any penalty imposed under subparagraph (A) or\
\
(B) regarding demanded information, if such information related to the
eligibility of merchandise for a column 1 special rate of duty under
title I, the entry of such merchandise\--\
\
(i) if unliquidated, shall be liquidated at the applicable column 1
general rate of duty; or\
\
(ii) if liquidated within the 2-year period preceding the date of the
demand, shall be reliquidated, notwithstanding the time limitation in
section 514 or 520, at the applicable column 1 general rate of duty;
except that any liquidation or reliquidation under clause (i) or\
\
(ii) shall be at the applicable column 2 rate of duty if the Customs
Service demonstrates that the merchandise should be dutiable at such
rate.\
\
(3) Avoidance of penalty.\--No penalty may be assessed under this
subsection if the person can show\--\
\
(A) that the loss of the demanded information was the result of an act
of God or other natural casualty or disaster beyond the fault of such
person or an agent of the person;\
\
(B) on the basis of other evidence satisfactory to the Customs Service,
that the demand was substantially complied with; or\
\
(C) the information demanded was presented to and retained by the
Customs Service at the time of entry or submitted in response to an
earlier demand.\
\
(4) Penalties not exclusive.\--Any penalty imposed under this subsection
shall be in addition to any other penalty provided by law except for\--\
\
(A) a penalty imposed under section 592 for a material omission of the
demanded information, or\
\
(B) disciplinary action taken under section 641.\
\
(5) Remission or mitigation.\--A penalty imposed under this section may
be remitted or mitigated under section 618.\
\
(6) Customs summons.\--Nothing in this subsection shall limit or
preclude the Customs Service from issuing, or seeking the enforcement
of, a customs summons.\
\
(7) Alternatives to penalties.\--\
\
(A) In general.\--When a recordkeeper who\--\
\
(i) has been certified as a participant in the recordkeeping compliance
program under subsection (f); and\
\
(ii) is generally in compliance with the appropriate procedures and
requirements of the program; does not produce a demanded record or
information for a specific release or provide the information by
acceptable alternative means, the Customs Service, in the absence of
willfulness or repeated violations, shall issue a written notice of the
violation to the recordkeeper in lieu of a monetary penalty. Repeated
violations by the recordkeeper may result in the issuance of penalties
and removal of certification under the program until corrective action,
satisfactory to the Customs Service, is taken.\
\
(B) Contents of notice.\--A notice of violation issued under
subparagraph (A) shall\--\
\
(i) state that the recordkeeper has violated the recordkeeping
requirements;\
\
(ii) indicate the record of information which was demanded; and\
\
(iii) warn the recordkeeper that future failures to produce demanded
records or information may result in the imposition of monetary
penalties.\
\
(C) Response to notice.\--Within a reasonable time after receiving
written notice under subparagraph (A), the recordkeeper shall notify the
Customs Service of the steps it has taken to prevent a recurrence of the
violation.\
\
(D) Regulations.\--The Secretary shall promulgate regulations to
implement this paragraph. Such regulations may specify the time periods
for compliance with a demand for information and provide guidelines
which define repeated violations for purposes of this paragraph. Any
penalty issued for a recordkeeping violation shall take into account the
degree of compliance compared to the total number of importations, the
nature of the demanded records and the recordkeeper\'s cooperation.\
\
**SEC. 510. JUDICIAL ENFORCEMENT.\
\
**(a) Order of Court.\--If any person summoned under section 509 of this
Act does not comply with the summons, the district court of the United
States for any district in which such person is found or resides or is
doing business, upon application and after notice to any such person and
hearing, shall have jurisdiction to issue an order requiring such person
to comply with the summons. Failure to obey such order of the court may
be punished by such court as a contempt thereof and such court may
assess a monetary penalty.

\* \* \* \* \*

~~**SEC. 513. CUSTOMS OFFICER\'S IMMUNITY.\
\
**No customs officer shall be in any way liable to any owner, importer,
consignee, or agent or any other person for or on account of any rulings
or decisions as to the appraisement or the classification of any
imported merchandise or the duties charged thereon, or the collection of
any dues, charges, or duties on or on account of said merchandise, or
any other matter or thing as to which said owner, importer, consignee,
or agent might under this Act be entitled to protest or appeal from the
decision of such officer.\
\
~~**SEC. 513. CUSTOMS OFFICER\'S IMMUNITY.\
\
**No customs officer shall be liable in any way to any person for or on
account of\--\
\
(1) any ruling or decision regarding the appraisement or the
classification of any imported merchandise or regarding the duties,
fees, and taxes charged thereon,\
\
(2) the collection of any dues, charges, duties, fees, and taxes on or
on account of any imported merchandise, or\
\
(3) any other matter of thing as to which any person might under this
Act be entitled to protest or appeal from the decision of such officer.\
\
**SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS SERVICE.\
\
**(a) Finality of Decisions.\--Except as provided in subsection (b) of
this section, section 501 (relating to voluntary reliquidations),
section 516 (relating to petitions by domestic interested parties),
section 520 (relating to refunds and errors), and section 521 (relating
to reliquidations on account of fraud) of this Act, decisions of the
~~appropriate customs officer,~~ Customs Service, including the legality
of all orders and findings entering into the same, as to\--\
\
(1) \* \* \*

\* \* \* \* \*

\(5\) the liquidation or reliquidation of an entry, or reconciliation as
to the issues contained therein, or any modification thereof;\
\
(6) the refusal to pay a claim for drawback; ~~and~~ or\
\
(7) the refusal to reliquidate an entry under section 520(c) of this
act~~,~~; shall be final and conclusive upon all persons (including the
United States and any officer thereof) unless a protest is filed in
accordance with this section, or unless a civil action contesting the
denial of a protest, in whole or in part, is commenced in the United
States Court of International Trade in accordance with chapter 169 of
title 28 of the United States Code within the time prescribed by section
2636 of that title. When a judgment or order of the United States Court
of International Trade has become final, the papers transmitted shall be
returned, together with a copy of the judgment or order to the
~~appropriate customs officer, who~~ Customs Service, which shall take
action accordingly.\
(b) With respect to determinations made under section 303 of this Act of
title VII of this Act which are reviewable under section 516A of this
title, determinations of the ~~appropriate customs officer~~ Customs
Service are final and conclusive upon all persons (including the United
States and any officer thereof) unless a civil action contesting a
determination listed in section 516A of this title is commenced in the
United States Court of International Trade, or review by a binational
panel of a determination to which section 516A(g)(2) applies is
commenced pursuant to section 516A(g) and article 1904 of the North
American Free Trade Agreement or the United States- Canada Free-Trade
Agreement.\
(c) Protests.\--\
\
(1) In general.\--~~A protest of a decisions under subsection (a) shall
be filed in writing with the appropriate customs officer designated in
regulations prescribed by the Secretary, setting forth distinctly and
specifically each decision described in subsection (a) as to which
protest is made; each category of merchandise affected by each such
decision as to which protest is made; and the nature of each objection
and reasons therefor.~~ A protest of a decision made under subsection
(a) shall be filed in writing, or transmitted electronically pursuant to
an electronic data interchange system, in accordance with regulations
prescribed by the Secretary. A protest must set forth distinctly and
specifically\--\
\
(A) each decision described in subsection (a) as to which protest is
made;\
\
(B) each category of merchandise affected by each decision set forth
under paragraph (1);\
\
(C) the nature of each objection and the reasons therefor; and\
\
(D) any other matter required by the Secretary by regulation. Only one
protest may be filed for each entry of merchandise, except that where
the entry covers merchandise of different categories, a separate protest
may be filed for each category. In addition, separate protests may be
filed for each category. In addition, separate protests filed by
different authorized persons with respect to any one category of
merchandise, or with respect to a determination of origin under section
202 of the North American Free Trade Agreement Implementation Act, that
is the subject of a protest are deemed to be part of a single protest. A
protest may be amended, under regulations prescribed by the Secretary,
to set forth objections as to a decision or decisions described in
subsection (a) which were not the subject of the original protest, in
the form and manner prescribed for a protest, any time prior to the
expiration of the time in which such protest could have been filed under
this section. New grounds in support of objections raised by a valid
protest or amendment thereto may be presented for consideration in
connection with the review of such protest pursuant to section 515 of
this Act at any time prior to the disposition of the protest in
accordance with that section.\
\
(2) Except as provided in sections 485(d) and 557(b) of this Act,
protests may be filed with respect to merchandise which is the subject
of a decision specified in subsection (a) of this section by\--\
\
(A) the importers or consignees shown on the entry papers, or their
sureties;\
\
(B) any person paying any charge or exaction;\
\
(C) any person seeking entry or delivery;\
\
(D) any person filing a claim for drawback; ~~or\
\
~~(E) with respect to a determination of origin under section 202 of the
North American Free Trade Agreement Implementation Act, any exporter or
producer of the merchandise subject to that determination, if the
exporter or producer completed and signed a NAFTA Certificate of Origin
covering the merchandise; or ~~(E)~~ (F) any authorized agent of any of
the persons described in ~~clauses (A) through (D)~~ clauses (A) through
(E). ~~(2)~~ (3) Time for filing.\--A protest of a decision, order, or
finding described in subsection (a) shall be filed with ~~such customs
officer~~ the Customs Service within ninety days after but not
before\--\
\
(A) notice of liquidation or reliquidation, or\
\
(B) in circumstances where subparagraph (A) is inapplicable, the date of
the decision as to which protest is made.\
(d) Limitation on Protest of Reliquidation.\--The reliquidation of an
entry shall not open such entry so that a protest may be filed against
the decision of the ~~customs officer~~ Customs Service upon any
question not involved in such reliquidation. A protest by a surety which
has an unsatisfied legal claim under its bond may be filed within 90
days from the date of mailing of notice of demand for payment against
its bond. If another party has not filed a timely protest, the surety\'s
protest shall certify that it is not being filed collusively to extend
another authorized person\'s time to protest as specified in this
subsection.\
(e) Advance Notice of Certain Determinations.\--Except as provided in
subsection (f), an exporter or producer referred to in subsection
(c)(2)(E) shall be provided notice in advance of an adverse
determination of origin under section 202 of the North American Free
Trade Agreement Implementation Act. The Secretary may, by regulations,
prescribe the time period in which such advance notice shall be issued
and authorize the Customs Service to provide in the notice the entry
number and any other entry information considered necessary to allow the
exporter or producer to exercise the rights provided by this section.\
\
(f) Denial of Preferential Treatment.\--If the Customs Service finds
indications of a pattern of conduct by an exporter or producer of false
or unsupported representations that goods qualify under the rules of
origin set out in section 202 of the North American Free Trade Agreement
Implementation Act\--\
\
(1) the Customs Service, in accordance with regulations issued by the
Secretary, may deny preferential tariff treatment to entries of
identical goods exported or produced by that person; and\
\
(2) the advance notice requirement in subsection (e) shall not apply to
that person; until the person establishes to the satisfaction of the
Customs Service that its representations are in conformity with section
202.\
\
**SEC. 515. REVIEW OF PROTESTS.\
\
**(a) \* \* \*\
\
\* \* \* \* \*\
\
(c) If a protesting party believes that an application for further
review was erroneously or improperly denied or was denied without
authority for such action, it may file with the Commissioner of Customs
a written request that the denial of the application for further review
be set aside. Such request must be filed within 60 days after the date
of the notice of the denial. The Commissioner of Customs may review such
request and, based solely on the information before the Customs Service
at the time the application for further review was denied, may set aside
the denial of the application for further review and void the denial of
protest, if appropriate. If the Commissioner of Customs fails to act
within 60 days after the date of the request, the request shall be
considered denied. All denials of protests are effective from the date
of original denial for purposes of section 2636 of title 28, United
States Code. If an action is commenced in the Court of International
Trade that arises out of a protest or an application for further review,
all administrative action pertaining to such protest or application
shall terminate and any administrative action taken subsequent to the
commencement of the action is null and void.\
(d) If a protest is timely and properly filed, but is denied contrary to
proper instructions, the Customs Service may on its own initiative, or
pursuant to a written request by the protesting party filed with the
appropriate district director within 90 days after the date of the
protest denial, void the denial of the protest.\
\* \* \* \* \*\
\
**SEC. 516A. JUDICIAL REVIEW IN COUNTERVAILING DUTY AND ANTI-DUMPING
DUTY PROCEEDINGS.\
\
**(a) Review of Determination.\--\
\
(1) \* \* \*

\* \* \* \* \*

~~(5) Time limits in cases involving canadian merchandise.\--
Notwithstanding any other provision of this subsection, in the case of a
determination to which the provisions of subsection (g) apply, an action
under this subsection may not be commenced, and the time limits for
commencing an action under this subsection shall not begin to run, until
the 31st day after\-- (A) the date of publication in the Federal
Register of notice of any determination described in paragraph (1)(B) or
any determination described in clause (i), (ii), or (iii) of paragraph
(2)(B), (B) the date on which the Government of Canada receives notice
of a determination described in clause (vi) of paragraph (2)(B), or (C)
the date as of which\-- (i) a binational panel has dismissed the
binational panel review for lack of jurisdiction, and (ii) any
interested party seeking review under paragraph (1), (2), or (3) has
provided timely notice under subsection (g)(3)(B), except that if a
request for an extraordinary challenge committee has been made with
respect to the decision to dismiss, the date under this subparagraph
shall not be earlier than the date on which such committee determines
that such panel acted properly when it dismissed for lack of
jurisdiction.\
\
~~(5) Time limits in cases involving merchandise from free trade area
countries.\--Notwithstanding any other provision of this subsection, in
the case of a determination to which the provisions of subsection (g)
apply, an action under this subsection may not be commenced, and the
time limits for commencing an action under this subsection shall not
begin to run, until the day specified in whichever of the following
subparagraphs applies:\
\
(A) For a determination described in paragraph (1)(B) or clause\
\
(i), (ii) or (iii) of paragraph (2)(B), the 31st day after the date on
which notice of the determination is published in the Federal Register.\
\
(B) For a determination described in clause (vi) of paragraph\
\
(2)(B), the 31st day after the date on which the government of the
relevant FTA country receives notice of the determination.\
\
(C) For a determination with respect to which binational panel review
has commenced in accordance with subsection (g)(8), the day after the
date as of which\--\
\
(i) the binational panel has dismissed binational panel review of the
determination for lack of jurisdiction, and\
\
(ii) any interested party seeking review of the determination under
paragraph (1), (2), or (3) of this subsection has provided timely notice
under subsection (g)(3)(B). If such an interested party files a summons
and complaint under this subsection after dismissal by the binational
panel, and if a request for an extraordinary challenge committee is made
with respect to the decision by the binational panel to dismiss\--\
\
(I) judicial review under this subsection shall be stayed during
consideration by the committee of the request, and\
\
(II) the United States Court of International Trade shall dismiss the
action if the committee vacates or remands the binational panel decision
to dismiss.\
\
(D) For a determination for which review by the United States Court of
International Trade is provided for\--\
\
(i) under subsection (g)(12)(B), the day after the date of publication
in the Federal Register of notice that article 1904 of the NAFTA has
been suspended, or\
\
(ii) under subsection (g)(12)(D), the day after the date that notice of
settlement is published in the Federal Register.\
\
(b) Standards of Review.\--\
\
(1) \* \* \*

\* \* \* \* \*

\(3\) Effect of decisions by nafta or united states-canada. binational
panels.\--In making a decision in any action brought under subsection
(a), a court of the United States is not bound by, but may take into
consideration, a final decision of a binational panel or extraordinary
challenge committee convened pursuant to article 1904 of the NAFTA or of
the Agreement.

\* \* \* \* \*

\(f\) Definitions.\--For purposes of this section\--\
\
(1) \* \* \*

\* \* \* \* \*

~~(6) United states secretary.\--The term \"United States Secretary\"
means the secretary provided for in paragraph 4 of article 1909 of the
Agreement. (7) Canadian secretary.\--The term \"Canada Secretary\" means
the secretary provided for in paragraph 5 of article 1909 of the
Agreement.\
\
~~(6) United states secretary.\--The term \"United States Secretary\"
means\--\
\
(A) the secretary for the United States Section referred to in article
1908 of the NAFTA, and\
\
(B) the secretary of the United States Section provided for in article
1909 of the Agreement.\
\
(7) Relevant fta secretary.\--The term \"relevant FTA Secretary\" means
the Secretary\--\
\
(A) referred to in article 1908 of the NAFTA, or\
\
(B) provided for in paragraph 5 of article 1909 of the Agreement, of the
relevant FTA country.\
\
(8) NAFTA.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
\
(9) Relevant fta country.\--The term \"relevant FTA country\" means the
free trade area country to which an antidumping or countervailing duty
proceeding pertains.\
\
(10) Free trade area country.\--The term \"free trade area country\"
means the following:\
\
(A) Canada for such time as the NAFTA is in force with respect to, and
the United States applies the NAFTA to, Canada.\
\
(B) Mexico for such time as the NAFTA is in force with respect to, and
the United States applies the NAFTA to, Mexico.\
\
(C) Canada for such time as\--\
\
(i) it is not a free trade area country under subparagraph (A); and\
\
(ii) the Agreement is in force with respect to, and the United States
applies the Agreement to, Canada.\
\
(g) Review of Countervailing Duty and Antidumping Duty Determinations
Involving ~~Canadian Merchandise~~ Free Trade Area Country
Merchandise.\--\
\
(1) Definition of determination.\--For purposes of this subsection, the
term \"determination\" means a determination described in\--\
\
(A) paragraph (1)(B) of subsection (a), or\
\
(B) clause (i), (ii), (iii), or (vi) or paragraph (2)(B) of subsection
(a), if made in connection with a proceeding regarding a class or kind
of ~~Canadian merchandise~~ free trade area country merchandise, as
determined by the administering authority.\
\
(2) Exclusive review of determination by binational panels.\--If
binational panel review of a determination is requested pursuant to
article 1904 of the NAFTA or of the Agreement, then, except as provided
in paragraphs (3) and (4)\--\
\
(A) the determination is not reviewable under subsection (a), and\
\
(B) no court of the United States has power or jurisdiction to review
the determination on any question of law or fact by an action in the
nature of mandamus or otherwise.\
\
(3) Exception to exclusive binational panel review.\--\
\
(A) In general.\--A determination is reviewable under subsection (a) if
the determination sought to be reviewed is\--\
\
(i) a determination as to which neither the United States ~~nor Canada~~
nor the relevant FTA country requested review by a binational panel
pursuant to article 1904 of the NAFTA or of the Agreement.\
\
(ii) a revised determination issued as a direct result of judicial
review, commenced pursuant to subsection (a), if neither the United
States ~~nor Canada~~ nor the relevant FTA country requested review of
the original determination,\
\
(iii) a determination issued as a direct result of judicial review that
was commenced pursuant to subsection (a) prior to the entry into force
of the NAFTA or of the Agreement, ~~or\
\
~~(iv) a determination which a binational panel has determined ~~under
the paragraph (2)(A)~~ is not reviewable by the binational panel~~.~~,\
\
(v) a determination as to which binational panel review has terminated
pursuant to paragraph 12 of article 1905 of the NAFTA, or\
\
(vi) a determination as to which extraordinary challenge committee
review has terminated pursuant to paragraph 12 of article 1905 of the
NAFTA.\
\
(B) Special rule.\--~~A determination described in subparagraph (A)(i)
or (iv) is reviewable under subsection (a) only if the party seeking to
commence review has provided timely notice of its intent to commence
such review to the United States Secretary, the Canadian Secretary, all
interested parties who were parties to the proceeding in connection with
which the matter arises, and the administering authority or the
Commission, as appropriate. Such notice is provided timely if the notice
is delivered by no later than the date that is 20 days after the date
described in subparagraph (A) or (B) of subsection (a)(5) that is
applicable to such determination.~~ A determination described in
subparagraph (A)(i) or (iv) is reviewable under subsection (a) only if
the party seeking to commence review has provided timely notice of its
intent to commence such review to\--\
\
(i) the United States Secretary and the relevant FTA Secretary;\
\
(ii) all interested parties who were parties to the proceeding in
connection with which the matter arises; and\
\
(iii) the administering authority or the Commission, as appropriate.
Such notice is timely provided if the notice is delivered no later than
the date that is 20 days after the date described in subparagraph (A) or
(B) of subsection (a)(5) that is applicable to such determination,
except that, if the time for requesting binational panel review is
suspended under paragraph (8)(A)(ii) of this subsection, any unexpired
time for providing notice of intent to commence judicial review shall,
during the pendency of any such suspension, also be suspended. Such
notice shall contain such information, and be in such form, manner, and
style, as the administering authority, in consultation with the
Commission, shall prescribe by regulations.\
\
(4) Exception to exclusive binational panel review for constitutional
issues.\--\
\
(A) Constitutionality of binational panel review system.\--An action for
declaratory judgment or injunctive relief, or both, regarding a
determination on the grounds that any provision of, or amendment made
by, the North American Free Trade Agreement Implementation Act
implementing the binational dispute settlement system under chapter 19
of the NAFTA, or the United States-Canada Free-Trade Implementation
Agreement Act of 1988 implementing the binational panel dispute
settlement system under chapter 19 of the Agreement, violates the
Constitution may be brought only in the United States Court of Appeals
for the District of Columbia Circuit, which shall have jurisdiction of
such action. ~~Any action brought under this subparagraph shall be heard
and determined by a 3-judge court in accordance with section 2284 of
title 28, United States code.~~

\* \* \* \* \*

\(5\) Liquidation of entries.\--\
\
(A) Application.\--In the case of a determination for which binational
panel review is requested pursuant to article 1904 of the NAFTA or of
the Agreement, the rules provided in this paragraph shall apply,
notwithstanding the provisions of subsection (c).\
\
(B) General rule.\--In the case of a determination for which binational
panel review is requested pursuant to article 1904 of the NAFTA or of
the Agreement, entries of merchandise covered by such determination
shall be liquidated in accordance with the determination of the
administering authority or the Commission, if they are entered, or
withdrawn from warehouse, for consumption on or before the date of
publication in the Federal Register by the administering authority of
notice of a final decision of a binational panel, or of an extraordinary
challenge committee, not in harmony with that determination. Such notice
of a decision shall be published within 10 days of the date of the
issuance of the panel or committee decision.\
\
(C) Suspension of liquidation.\--\
\
(i) In general.\--Notwithstanding the provisions of subparagraph\
\
(B), in the case of a determination described in clause (iii) or\
\
(vi) of subsection (a)(2)(B) for which binational panel review is
requested pursuant to article 1904 of the NAFTA or of the Agreement, the
administering authority, upon request of an interested party who was a
party to the proceeding in connection with which the matter arises and
who is a participant in the binational panel review, shall order the
continued suspension of liquidation of those entries of merchandise
covered by the determination that are involved in the review pending the
final disposition of the review.\
\
(ii) Notice.\--At the same time as the interested party makes its
request to the administering authority under clause (i), that party
shall serve a copy of its request on the United States Secretary~~, the
Canadian Secretary,~~, the relevant FTA Secretary, and all interested
parties who were parties to the proceeding in connection with which the
matter arises.\
\
(iii) Application of suspension.\--If the interested party requesting
continued suspension of liquidation under clause (i) is a foreign
manufacturer, producer, or exporter, or a United States importer, the
continued suspension of liquidation shall apply only to entries of
merchandise manufactured, produced, exported, or imported by that
particular manufacturer, producer, exporter, or importer. If the
interested party requesting the continued suspension of liquidation
under clause (i) is an interested party described in subparagraph (C),
(D), (E) or (F) of section 771(9), the continued suspension of
liquidation shall apply only to entries which could be affected by a
decision of the binational panel convened under chapter 19 of the NAFTA
or of the Agreement.

\* \* \* \* \*

\(6\) Injunctive relief.\--Except for cases under paragraph (4)(B), in
the case of a determination for which binational panel review is
requested pursuant to article 1904 of the NAFTA or of the Agreement, the
provisions of subsection (c)(2) shall not apply.\
\
(7) Implementation of international obligations under article 1904 of
the nafta or the agreement.\--\
\
(A) ~~In general.\--~~ Action upon remand.\--If a determination is
referred to a binational panel or extraordinary challenge committee
under the NAFTA or the Agreement and the panel or committee makes a
decision remanding the determination to the administering authority or
the Commission, the administering authority or the Commission shall,
within the period specified by the panel or committee, take action not
inconsistent with the decision of the panel or committee. Any action
taken by the administering authority or the Commission under this
paragraph shall not be subject to judicial review, and no court of the
United States shall have power or jurisdiction to review such action on
any question of law or fact by an action in the nature of mandamus or
otherwise.

\* \* \* \* \*

\(8\) Requests for binational panel review.\--\
\
(A) Interested party requests for binational panel review.\--\
\
(i) General rule.\--An interested party who was a party to the
proceeding in which a determination is made may request binational panel
review of such determination by filing a request with the United States
Secretary by no later than the date that is 30 days after the date
described in subparagraph (A) or (B) of subsection (a)(5) that is
applicable to such determination. Receipt of such request by the United
States Secretary shall be deemed to be a request for binational panel
review within the meaning of article 1904(4) of the NAFTA or of the
Agreement. Such request shall contain such information and be in such
form, manner, and style as the administering authority, in consultation
with the Commission, shall prescribe by regulations.\
\
(ii) Suspension of time to request binational panel review under the
nafta.\--Notwithstanding clause (i), the time for requesting binational
panel review shall be suspended during the pendency of any stay of
binational panel review that is issued pursuant to paragraph 11(a) of
article 1905 of the NAFTA.\
\
(B) Service of request for binational panel review.\--\
\
(i) \* \* \*\
\
(ii) Service by united states secretary.\--If an interested party to the
proceeding requests binational panel review of a determination by filing
a request with the ~~Canadian Secretary,~~ relevant FTA Secretary, the
United States Secretary shall serve a copy of the request by mail on any
other interested party who was a party to the proceeding in connection
with which the matter arises, and on the administering authority or the
Commission, as appropriate.\
\
(C) Limitation on request for binational panel review.\--Absent a
request by an interested party under subparagraph (A), the United States
may not request binational panel review ~~under article 1904 of the
Agreement of a determination.~~ of a determination under article 1904 of
the NAFTA or the Agreement.\
\
(9) Representation in panel proceedings.\--In the case of binational
panel proceedings convened under chapter 19 of the NAFTA or of the
Agreement, the administering authority and the Commission shall be
represented by attorneys who are employees of the administering
authority or the Commission, respectively. Interested parties who were
parties to the proceeding in connection with which the matter arises
shall have the right to appear and be represented by counsel before the
binational panel.\
\
(10) Notification of class or kind rulings.\--In the case of a
determination which is described in paragraph (2)(B)(vi) of subsection\
\
(a) and which is subject to the provisions of paragraph (2), the
administering authority, upon request, shall inform any interested
person of the date on which the ~~Government of Canada received notice
of the determination under article 1904(4) of the Agreement.~~
Government of the relevant FTA country received notice of the
determination under paragraph 4 of article 1904 of the NAFTA or the
Agreement.\
\
(11) Suspension and termination of suspension of article 1904 of the
nafta.\--\
\
(A) Suspension of article 1904.\--If a special committee established
under article 1905 of the NAFTA issues an affirmative finding, the Trade
Representative may, in accordance with paragraph 8(a) or 9, as
appropriate, of article 1905 of the NAFTA, suspend the operation of
article 1904 of the NAFTA.\
\
(B) Termination of suspension of article 1904.\--If a special committee
is reconvened and makes an affirmative determination described in
paragraph 10(b) of article 1905 of the NAFTA, any suspension of the
operation of article 1904 of the NAFTA shall terminate.\
\
(12) Judicial review upon termination of binational panel or committee
review under the nafta.\--\
\
(A) Notice of suspension or termination of suspension of article
1904.\--\
\
(i) Upon notification by the Trade Representative or the Government of a
country described in subsection (f)(10)(A) or (B) that the operation of
article 1904 of the NAFTA has been suspended in accordance with
paragraph 8(a) or 9 of article 1905 of the NAFTA, the United States
Secretary shall publish in the Federal Register a notice of suspension
of article 1904 of the NAFTA.\
\
(ii) Upon notification by the Trade Representative or the Government of
a country described in subsection (f)(10)(A) or (B) that the suspension
of the operation of article 1904 of the NAFTA is terminated in
accordance with paragraph 10 of article 1905 of the NAFTA, the United
States Secretary shall publish in the Federal Register a notice of
termination of suspension of article 1904 of the NAFTA.\
\
(B) Transfer of final determinations for judicial review upon suspension
of article 1904.\--If the operation of article 1904 of the NAFTA is
suspended in accordance with paragraph 8(a) or 9 of article 1905 of the
NAFTA\--\
\
(i) upon the request of an authorized person described in subparagraph
(C), any final determination that is the subject of a binational panel
review or an extraordinary challenge committee review shall be
transferred to the United States Court of International Trade (in
accordance with rules issued by the Court) for review under subsection
(a); or\
\
(ii) in a case in which\--\
\
(I) a binational panel review was completed fewer than 30 days before
the suspension, and\
\
(II) extraordinary challenge committee review has not been requested,
upon the request of an authorized person described in subparagraph (C)
which is made within 60 days after the completion of the binational
panel review, the final determination that was the subject of the
binational panel review shall be transferred to the United States Court
of International Trade (in accordance with rules issued by the Court)
for review under subsection (a).\
\
(C) Persons authorized to request transfer of final determinations for
judicial review.\--A request that a final determination be transferred
to the Court of International Trade under subparagraph\
\
(B) may be made by\--\
\
(i) if the United States made an allegation under paragraph 1 of article
1905 of the NAFTA and the operation of article 1904 of the NAFTA was
suspended pursuant to paragraph 8(a) of article 1905 of the NAFTA\--\
\
(I) the government of the relevant country described in subsection
(f)(10)(A) or (B),\
\
(II) an interested party that was a party to the panel or committee
review, or\
\
(III) an interested party that was a party to the proceeding in
connection with which panel review was requested, but only if the time
period for filing notices of appearance in the panel review has not
expired, or\
\
(ii) if a country described in subsection (f)(10)(A) or (B) made an
allegation under paragraph 1 of article 1905 of the NAFTA and the
operation of article 1904 of the NAFTA was suspended pursuant to
paragraph 9 of article 1905 of the NAFTA\--\
\
(I) the government of that country,\
\
(II) an interested party that is a person of that country and that was a
party to the panel or committee review, or\
\
(III) an interested party that is a person of that country and that was
a party to the proceeding in connection with which panel review was
requested, but only if the time period for filing notices of appearance
in the panel review has not expired.\
\
(D)(i) Transfer for judicial review upon settlement.\--If the Trade
Representative achieves a settlement with the government of a country
described in subsection (f)(10)(A) or (B) pursuant to paragraph 7 of
article 1905 of the NAFTA, and referral for judicial review is among the
terms of such settlement, any final determination that is the subject of
a binational panel review or an extraordinary challenge committee review
shall, upon a request described in clause (ii), be transferred to the
United States Court of International Trade (in accordance with rules
issued by the Court) for review under subsection (a).\
\
(ii) A request referred to in clause (i) is a request made by\--\
\
(I) the country referred to in clause (i),\
\
(II) an interested party that was a party to the panel or committee
review, or\
\
(III) an interested party that was a party to the proceeding in
connection with which panel review was requested, but only if the time
for filing notices of appearance in the panel review has not expired.

\* \* \* \* \*

**SEC. 520. REFUNDS AND ERRORS.\
\
**(a) The Secretary of the Treasury is hereby authorized to refund
duties or other receipts in the following cases:\
\
(1) Excess deposits.\--Whenever it is ascertained on liquidation or
reliquidation of an entry or reconciliation that more money has been
deposited or paid as duties than was required by law to be so deposited
or paid;

\* \* \* \* \*

\(4\) Prior to liquidation.\--Prior to the liquidation of an entry or
reconciliation, whenever it is ascertained that excess duties, fees,
charges, or exactions have been deposited or paid by reason of clerical
error.

\* \* \* \* \*

\(c\) Notwithstanding a valid protest was not filed, the ~~appropriate
customs officer~~ Customs Service may, in accordance with regulations
prescribed by the Secretary, reliquidate an entry or reconciliation to
correct\--\
\
(1) a clerical error, mistake of fact, or other inadvertence, whether or
not resulting from or contained in electronic transmission, not
amounting to an error in the construction of a law, adverse to the
importer and manifest from the record or established by documentary
evidence, in any entry, liquidation, or other customs transaction, when
the error, mistake, or inadvertence is brought to the attention of the
~~appropriate customs officer~~ Customs Service within one year after
the date of liquidation or exaction; or\
\
(2) any assessment of duty on household or personal effects in respect
of which an application for refund has been filed, with such employee as
the Secretary of the Treasury shall designate, within one year after the
date of entry.\
~~(d) If a determination is made to reliquidate an entry as a result of
a protest filed under section 514 of this Act or an application for
relief made under subsection (c)(1) of this section, or if reliquidation
is ordered by an appropriate court, interest shall be allowed on any
amount paid as increased or additional duties under section 505(c) of
this Act at the annual rate established pursuant to that section and
determined as of the 15th day after the date of liquidation or
reliquidation. The interest shall be calculated from the date of payment
to the date of (1) the refund, or (2) the filing of a summons under
section 2632 of title 28, United States Code, whichever occurs first.\
~~(d) Notwithstanding the fact that a valid protest was not filed, the
Customs Service may, in accordance with regulations prescribed by the
Secretary, reliquidate an entry to refund any excess duties paid on a
good qualifying under the rules of origin set out in section 202 of the
North American Free Trade Agreement Implementation Act for which no
claim for preferential tariff treatment was made at the time of
importation if the importer, within 1 year after the date of
importation, files, in accordance with those regulations, a claim that
includes\--\
\
(1) a written declaration that the good qualified under those rules at
the time of importation;\
\
(2) copies of all applicable NAFTA Certificates of Origin (as defined in
section 508(b)(1)); and\
\
(3) such other documentation relating to the importation of the goods as
the Customs Service may require.\
\
**~~SEC. 521. RELIQUIDATION ON ACCOUNT OF FRAUD~~.\
\
**~~If the appropriate customs officer finds probable cause to believe
there is fraud in the case, he may reliquidate an entry within two years
(exclusive of the time during which a protest is pending) after the date
of liquidation or last reliquidation.~~

\* \* \* \* \*

**SEC. 526. MERCHANDISE BEARING AMERICAN TRADE-MARK.\
\
**(a) \* \* \*

\* \* \* \* \*

\(e\) Any such merchandise bearing a counterfeit mark (within the
meaning of section 45 of the Act of July 5, 1946 (commonly referred to
as the Lanham Act, 60 Stat. 427; 15 U.S.C. 1127)) imported into the
United States in violation of the provisions of section 42 of the Act of
July 5, 1946 (60 Stat. 440; 15 U.S.C. 1124), shall be seized and, in the
absence of the written consent of the trademark owner, forfeited for
violations of the customs laws. Upon seizure of such merchandise, the
Secretary shall notify the owner of the trademark, and shall, after
forfeiture, obliterate the trademark where feasible and dispose of the
goods seized\--\
\
(1) \* \* \*

\* \* \* \* \*

\(3\) more than ~~1 year~~ 90 days after the date of forfeiture, by sale
by ~~appropriate customs officers~~ the Customs Service at public
auction under such regulations as the Secretary prescribes, except that
before making any such sale the Secretary shall determine that no
Federal, State, or local government agency or eleemosynary institution
has established a need for such merchandise under paragraph (1) or (2),
or

\* \* \* \* \*

**SEC. 529. COLLECTION OF FEES ON BEHALF OF OTHER AGENCIES.\
\
**The Customs Service shall be reimbursed from the fees collected for
the cost and expense, administrative and otherwise, incurred in
collecting any fees on behalf of any government agency for any reason.

\* \* \* \* \*

Part IV\--Transportation in Bond and Warehousing of Merchandise

\* \* \* \* \*

**SEC. 553A. RECORDKEEPING FOR MERCHANDISE TRANSPORTED BY PIPELINE.\
\
**Merchandise in Customs custody that is transported by pipeline may be
accounted for on a quantitative basis, based on the bill of lading, or
equivalent document of receipt, issued by the pipeline carrier. Unless
the Customs Service has reasonable cause to suspect fraud, the Customs
Service may accept the bill of lading, or equivalent document of
receipt, issued by the pipeline carrier to the shipper and accepted by
the consignee to maintain identity. The shipper, pipeline operator, and
consignee shall be subject to the recordkeeping requirements of sections
508 and 509.\
\* \* \* \* \*\
\
**SEC. 557. ENTRY FOR WAREHOUSE\--WAREHOUSE PERIOD\--DRAWBACK.\
\
**(a)(1) Any merchandise subject to duty, with the exception of
perishable articles and explosive substances other than firecrackers,
may be entered for warehousing and be deposited in a bonded warehouse at
the expense and risk of the owner purchaser, importer, or consignee.
Such merchandise may be withdrawn, at any time within 5-years from the
date of importation, for consumption upon payment of the duties and
charges accruing thereon at the rate of duty imposed by law upon such
merchandise at the date of withdrawal; or may be withdrawn for
exportation or for transportation and exportation to a foreign country,
or for shipment or for transportation and shipment to the Virgin
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef,
Johnston Island, or the island of Guam, without the payment of duties
thereon, or for transportation and rewarehousing at another port or
elsewhere, or for transfer to another bonded warehouse at the same
port~~: Provided, That the total period of time for which such
merchandise may remain in bonded warehouse shall not exceed 5 years from
the date of importation.~~; except that\--\
\
(A) the total period of time for which such merchandise may remain in
bonded warehouse shall not exceed 5 years from the date of importation;
and\
\
(B) turbine fuel may be withdrawn for use under section 309 without the
payment of duty if an amount equal to the quantity of fuel withdrawn is
shown to be used within 30 days after the day of withdrawal, but duties\
\
(together with interest payable from the date of the withdrawal at the
rate of interest established under section 6621 of title 26, United
States Code) shall be deposited by the 40th day after the day of
withdrawal on fuel that was withdrawn in excess of the quantity shown to
have been so used during such 30-day period.\
\
(2) Merchandise upon which the duties have been paid and which shall
have remained continuously in bonded warehouse or otherwise in the
custody and under the control of customs officers, may be entered or
withdrawn at any time within 5 years after the date of importation for
exportation or for transportation and exportation to a foreign country,
or for shipment or for transportation and shipment to the Virgin
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef,
Johnston Island, or the island of Guam, under such regulations as the
Secretary of the Treasury shall prescribe, and upon such entry or
withdrawal, and exportation or shipment, the duties thereon shall be
refunded.

\* \* \* \* \*

**SEC. 562. MANIPULATION IN WAREHOUSE.\
\
**Unless by special authority of the Secretary of the Treasury, no
merchandise shall be withdrawn from bonded warehouse in less quantity
than an entire bale, cask, box, or other package; or, if in bulk, in the
entire quantity imported or in a quantity not less than one ton weight.
All merchandise so withdrawn shall be withdrawn in the original packages
in which imported unless, upon the application of the importer, it
appears to the appropriate customs officer that it is necessary to the
safety or preservation of the merchandise to repack or transfer the
same; except that upon permission therefor being granted by the
Secretary of the Treasury, and under customs supervision, at the expense
of the proprietor, merchandise may be cleaned, sorted, repacked, or
otherwise changed in condition, but not manufactured, in bonded
warehouses established for that purpose and be withdrawn therefrom
~~without payment of duties~~\-- ~~(1) for exportation to Canada, but on
or after January 1, 1994, or such later date as may be proclaimed by the
President under section 204(b)(2)(B) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, such exemption from the
payment of duties applies only in the case of the exportation to Canada
of merchandise that\-- (A) is only cleaned, sorted, or repacked in a
bonded warehouse, or (B) is a drawback eligible good under section
204(a) of such Act of 1988; (2) for exportation to any foreign country
except Canada; and (3) for shipment to the Virgin Islands, American
Samoa, Wake Island, Midway Island, Kingman Reef, Johnston Island or the
island of Guam.\
\
~~(1) without payment of duties for exportation to a NAFTA country, as
defined in section 2(4) of the North American Free Trade Agreement
Implementation Act, if the merchandise is of a kind described in any of
paragraphs (1) through (8) of section 203(a) of that Act;\
\
(2) for exportation to a NAFTA country if the merchandise consists of
goods subject to NAFTA drawback, as defined in section 203(a) of that
Act, except that\--\
\
(A) the merchandise may not be withdrawn from warehouse without
assessment of a duty on the merchandise in its condition and quantity,
and at its weight, at the time of withdrawal from the warehouse with
such additions to or deductions from the final appraised value as may be
necessary by reason of change in condition, and\
\
(B) duty shall be paid on the merchandise before the 61st day after the
date of exportation, but upon the presentation, before such 61st day, of
satisfactory evidence of the amount of any customs duties paid to the
NAFTA country on the merchandise, the customs duty may be waived or
reduced (subject to section 508(b)(2)(B)) in an amount that does not
exceed the lesser of\--\
\
(i) the total amount of customs duties paid or owed on the merchandise
on importation into the United States, or\
\
(ii) the total amount of customs duties paid on the merchandise to the
NAFTA country;\
\
(3) without payment of duties for exportation to any foreign country
other than to a NAFTA country or to Canada when exports to that country
are subject to paragraph (4);\
\
(4) without payment of duties for exportation to Canada (if that country
ceases to be a NAFTA country and the suspension of the operation of the
United States-Canada Free-Trade Agreement thereafter terminates), but
the exemption from the payment of duties under this paragraph applies
only in the case of an exportation during the period such Agreement is
in operation of merchandise that\--\
\
(A) is only cleaned, sorted, or repacked in a bonded warehouse, or\
\
(B) is a drawback eligible good under section 204(a) of the United
States-Canada Free-Trade Agreement Implementation Act of 1988; and\
\
(5) without payment of duties for shipment to the Virgin Islands,
American Samoa, Wake Island, Midway Island, Kingman Reef, Johnston
Island or the island of Guam. merchandise may be withdrawn from bonded
warehouse for consumption, or for exportation to Canada if the duty
exemption under paragraph ~~(1)~~ (4) of the preceding sentence does not
apply, upon the payment of duties accruing thereon, in its condition and
quantity, and at its weight, at the time of withdrawal from warehouse,
with such additions to or deductions from the final appraised value as
may be necessary by reason of change in condition. The basis for the
assessment of duties on such merchandise so withdrawn for consumption
shall be the adjusted final appraised value, and if the rate of duty is
based upon or regulated in any manner by the value of the merchandise,
such rate shall be based upon or regulated by such adjusted final
appraised value. The scouring or carbonizing of wool shall not be
considered a process of manufacture within the provisions of this
section. Under such regulations as the Secretary of the Treasury shall
prescribe, imported merchandise which has been entered and which has
remained in continuous customs custody may be manipulated in accordance
with the provisions of this section under customs supervision and at the
risk and expense of the consignee, but elsewhere than in a bonded
warehouse, in cases where neither the protection of the revenue nor the
proper conduct of customs business requires that such manipulation be
done in a bonded warehouse.

\* \* \* \* \*

**SEC. 565. CARTAGE.\
\
**~~The cartage of merchandise entered for warehouse shall be done by
cartmen to be appointed and licensed by the appropriate customs officer
and who shall give a bond, in a penal sum to be fixed by such customs
officer, for the protection of the Government against any loss of, or
damage to, such merchandise while being so carted.~~ The cartage of
merchandise entered for warehouse shall be done by\--\
\
(1) cartmen appointed and licensed by the Customs Services; or\
\
(2) carriers designated under section 551 to carry bonded merchandise;
who shall give bond, in a penal sum to be fixed by the Customs Service,
for the protection of the Government against any loss of, or damage to,
the merchandise while being so carted. The cartage of merchandise
designated for examination at the appraiser\'s stores and of merchandise
taken into custody by the customs officer as unclaimed shall be
performed by such persons as may be designated, under contract or
otherwise, by the Secretary of the Treasury, and under such regulations
for the protection of the owners thereof and of the revenue as the
Secretary of the Treasury shall prescribe.

\* \* \* \* \*

Part V\--Enforcement Provisions

\* \* \* \* \*

~~**SEC. 583. CERTIFICATION OF MANIFEST.\
\
**The master of every vessel and the person in charge of every vehicle
bound to a port or place in the United States shall deliver to the
officer of the customs or Coast Guard who shall first demand it of him,
the original and one copy of the manifest of such vessel or vehicle, and
such officer shall certify on the original manifest to the inspection
thereof and return the same to the master of other person in charge.\
\
~~**SEC. 584. FALSITY OR LACK OF MANIFEST\--PENALTIES.\
\
**(a) General Rule.\--(1) Any master of any vessel and any person in
charge of any vehicle bound to the United States who does not produce
the manifest to the ~~officer demanding the same~~ officer (whether of
the Customs Service or the Coast Guard) demanding the same shall be
liable to a penalty of \$1,000, and if any merchandise, including sea
stores, is found on board of or after having been unladen from such
vessel or vehicle which is not included or described in said manifest or
does not agree therewith, the master of such vessel or the person in
charge of such vehicle or the owner of such vessel or vehicle or any
person directly or indirectly responsible for any discrepancy between
the merchandise and said manifest\" immediately after \"or the owner of
such vessel or vehicle shall be liable to a penalty equal to the lesser
of \$10,000 or the domestic value of the merchandise so found or
unladen, and any such merchandise belonging or consigned to the master
or other officer or to any of the crew of such vessel, or the owner or
person in charge of such vehicle, shall be subject to forfeiture, and if
any merchandise described in such manifest is not found on board the
vessel or vehicle the master or other person in charge or the owner of
such vessel or vehicle or any person directly or indirectly responsible
for any discrepancy between the merchandise and said manifest\"
immediately after \"or the owner of such vessel or vehicle shall be
subject to a penalty of \$1,000: Provided, That if the ~~appropriate
customs officer~~ Customs Service shall be satisfied that the manifest
was lost or mislaid without intentional fraud, or was defaced by
accident, or is incorrect by reason or clerical error or other mistake
and that no part of the merchandise not found on board was unshipped or
discharged except as specified in the report of the master, said
penalties shall not be incurred. For purposes of this subsection, the
term \"clerical error\" means a nonnegligent, inadvertent, or
typographical mistake in the preparation; assembly, or submission
(electronically or otherwise) of the manifest.\
(2) If any of such merchandise so found consists of heroin, morphine, or
cocaine, isonipecaine, or opiate, the master of such vessel or person in
charge of such vehicle or the owner of such vessel or vehicle or any
person directly or indirectly responsible for heroin, morphine, cocaine;
isonipecaine, or opiate being in such merchandise shall be liable to a
penalty of \$1,000 for each ounce thereof so found. If any of such
merchandise so found consists of smoking opium, opium prepared for
smoking, or marihuana, the master of such vessel or person in charge of
such vehicle or the owner of such vessel or vehicle or any person
directly or indirectly responsible for smoking opium, opium prepared for
smoking, or marihuana being in such merchandise shall be liable to a
penalty of \$500 for each ounce thereof so found. If any of such
merchandise so found consists of crude opium, the master of such vessel
or person in charge of such vehicle or the owner of such vessel or
vehicle or any person directly or indirectly responsible for crude opium
being in such merchandise shall be liable to a penalty of \$200 for each
ounce thereof so found. Such penalties shall, notwithstanding the
proviso in section 594 of this Act (relating to the immunity of vessels
or vehicles used as common carriers), constitute a lien upon such vessel
which may be enforced by a libel in rem; except that the master or owner
of a vessel used by any person as a common carrier in the transaction of
business as such common carrier shall not be liable to such penalties
and the vessel shall not be held subject to the lien, if it appears to
the satisfaction of the court that neither the master nor any of the
officers (including licensed and unlicensed officers and petty officers)
nor the owner of the vessel knew, and could not, by the exercise of the
highest degree of care and diligence, have known, that such narcotic
drugs were on board. Clearance of any such vessel may be withheld until
such penalties are paid or until a bond, satisfactory to the
~~appropriate customs officer~~ Customs Service, is given for the
payment thereof. The provisions of this paragraph shall not prevent the
forfeiture of any such vessel or vehicle under any other provision of
law. As used in this paragraph, the terms \"opiate\" and \"marihuana\"
shall have the same meaning given those terms by sections 102(17) and
102(15), respectively, of the Controlled Substances Act.\
(3) If any of such merchandise (sea stores excepted), the importation of
which into the United States is prohibited, or which consists of any
spirits, wines, or other alcoholic liquors for the importation of which
into the United States a certificate is required under section 7 of the
Anti-Smuggling Act and the required certificate be not shown, be so
found upon any vessel not exceeding five hundred net tons, the vessel
shall, in addition to any other penalties herein or by law provided, be
seized and forfeited, and, if any manifested merchandise (sea stores
excepted) consisting of any such spirits, wines, or other alcoholic
liquors be found upon any such vessel and the required certificate be
not shown, the master of the vessel shall be liable to the penalty
herein provided in the case of merchandise not duly manifested:
Provided, That if the ~~appropriate customs officer~~ Customs Service
shall be satisfied that the certificate required for the importation of
any spirits, wines, or other alcoholic liquors was issued and was lost
or mislaid without intentional fraud, or was defaced by accident, or is
incorrect by reason of clerical error or other mistake, said penalties
shall not be incurred.\
(b) Procedures.\--(1) If ~~the appropriate customs officer~~ the Customs
Service has reasonable cause to believe that there has been a violation
of subsection (a)(1) and determines that further proceedings are
warranted, ~~he~~ the Customs Service shall issue or electronically
transmit to the person concerned a ~~written~~ notice of ~~his
intention~~ intent to issue or electronically transmit a claim for a
monetary penalty. Such notice shall\--\
\
(A)\* \* \*

\* \* \* \* \*

\(F\) inform such person that he will have a reasonable opportunity to
make representations, both oral and written, as to why such penalty
claim should not be issued. No notice is required under this subsection
for any violation of subsection (a)(1) for which the proposed penalty is
\$1,000 or less.\
(2) After considering representations, if any, made by the person
concerned pursuant to the notice issued under paragraph (1), ~~the
appropriate customs officer~~ the Customs Service shall determine
whether any violations of subsection (a)(1), as alleged in the notice,
has occurred. If ~~such officer~~ the Customs Service determines that
there was no violation, ~~he~~ the Customs Service shall promptly issue
or electronically transmit a ~~written~~ statement of the determination
to the person to whom the notice was sent. If ~~such officer~~ the
Customs Service determines that there was a violation, ~~he~~ the
Customs Service shall issue or electronically transmit a ~~written~~
penalty claim to such person. The ~~written~~ penalty claim shall
specify all changes in the information provided under subparagraphs (A)
through (E) of paragraph (1).\
\
~~**SEC. 585. DEPARTURE BEFORE REPORT OR ENTRY.\
\
**If any vessel or vehicle from a foreign port or place arrives within
the limits of any collection district and departs or attempts to depart,
except from stress of weather or other necessity, without making a
report or entry under the provisions of this Act, or if any merchandise
is unladen therefrom before such report or entry, the master of such
vessel shall be liable to a penalty of \$5,000, and the person in charge
of such vehicle shall be liable to a penalty of \$500, and any such
vessel or vehicle shall be forfeited, and any officer of the customs may
cause such vessel or vehicle to be arrested and brought back to the most
convenient port of the United States.\
\
~~**SEC. 586. UNLAWFUL UNLADING OR TRANSSHIPMENT\
\
**(a) The master of any vessel from a foreign port or place, or of a
hovering vessel which has received or delivered merchandise while
outside the territorial sea, who allows any merchandise (including sea
stores) to be unladen from such vessel at any time after its arrival
within the customs waters and before such vessel has come to the proper
place for the discharge of such merchandise, and before he has received
a permit to unlade, shall be liable to a penalty equal to twice the
value of the merchandise but not less than \$10,000, and such vessel and
its cargo and the merchandise so unladen shall be seized and forfeited.\
(b) The master of any vessel from a foreign port or place, or of a
hovering vessel which has received or delivered merchandise while
outside the territorial sea, who allows any merchandise (including sea
stores), the importation of which into the United States is prohibited,
or which consists of any spirits, wines, or other alcoholic liquors, to
be unladen from his vessel at any place upon the high seas adjacent to
the customs waters of the United States to be transshipped to or placed
in or received on any vessel of any description, with knowledge, or
under circumstances indicating the purpose to render it possible, that
such merchandise, or any part thereof, may be introduced, or attempted
to be introduced, into the United States in violation of law, shall be
liable to a penalty equal to twice the value of the merchandise by not
less than \$10,000, and the vessel from which the merchandise is so
unladen, and its cargo and such merchandise, shall be seized and
forfeited.\
(c) The master of any vessel from a foreign port or place, or of a
hovering vessel which has received or delivered merchandise while
outside the territorial sea, who allows any merchandise (including sea
stores) destined to the United States, the importation of which into the
United States is prohibited, or which consists, of any spirits, wines,
or other alcoholic liquors, to be unlade without permit to unlade, at
any place upon the high seas adjacent to the customs water of the United
States, to be transshipped to or placed in or received on any vessel of
the United States or any other vessel which is owned by any person a
citizen of, or domiciled in, the United States, or any corporation
incorporated in the United States, shall be liable to a penalty equal to
twice the value of the merchandise but not less than \$10,000, and the
vessel from which the merchandise is so unladen, and its cargo and such
merchandise, shall be seized and forfeited.

\* \* \* \* \*

\(f\) Whenever any part of the cargo or stores of a vessel has been
unladen or transshipped because of accident, stress of weather, or other
necessity, the master of such vessel and the master of any vessel to
which such cargo or stores has been transshipped shall, as soon as
possible thereafter, notify ~~the appropriate customs officer of the~~
the Customs Service at the district within which such unlading or
transshipment has occurred, or ~~the appropriate customs officer within
the~~ the Customs Service at the district at which such vessel shall
first arrive thereafter, and shall furnish proof that such unlading or
transshipment was made necessary by accident, stress of weather, or
other unavoidable cause, and if ~~the appropriate customs officer is~~
the Customs Service is satisfied that the unlading or transshipment was
in fact due to accident, stress of weather, or other necessity, the
penalties described in this section shall not be incurred.

\* \* \* \* \*

**SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE.\
\
**(a) Prohibition.\--\
\
(1) General rule.\--Without regard to whether the United States is or
may be deprived of all or a portion of any lawful duty thereby, no
person, by fraud, gross negligence, or negligence\--\
\
(A) may enter, introduce, or attempt to enter or introduce any
merchandise into the commerce of the United States by means of\--\
\
(i) any document or electronically transmitted data or information,
written or oral statement, or act which is material and false, or\
\
(ii) any omission which is material, or\
\
(B) may aid or abet any other person to violate subparagraph (A).\
\
(2) Exception.\--Clerical errors or mistakes of fact are not violations
of paragraph (1) unless they are part of a pattern of negligent conduct.
The mere nonintentional repetition by an electronic system of an initial
clerical error does not constitute a pattern of negligent conduct.\
\
(b) Procedures.\--\
\
(1) Pre-penalty notice.\--\
\
(A) In general.\--If the ~~appropriate customs officer~~ Customs Service
has reasonable cause to believe that there has been a violation of
subsection (a) and determines that further proceedings are warranted,
~~he~~ it shall issue to the person concerned a written notice of
~~his~~ its intention to issue a claim for a monetary penalty. Such
notice shall\--\
\
(i) describe the merchandise;\
\
(ii) set forth the details of entry or introduction, the attempted entry
or introduction, or the aiding or procuring of the entry or
introduction;

\* \* \* \* \*

\(2\) Penalty claim.\--After considering representations, if any, made
by the person concerned pursuant to the notice issued under paragraph
(1), the ~~appropriate customs officer~~ Customs Service shall determine
whether any violation of subsection (a), as alleged in the notice, has
occurred. If ~~such officer~~ the Customs Service determines that there
was no violation, ~~he~~ it shall promptly issue a written statement of
the determination to the person to whom the notice was sent. If ~~such
officer~~ the Customs Service determines that there was a violation,
~~he~~ it shall issue a written penalty claim to such person. The
written penalty claim shall specify all changes in the information
provided under clauses (i) through (vi) of paragraph (1)(A). Such person
shall have a reasonable opportunity under section 618 of this Act to
make representations, both oral and written, seeking remission or
mitigation of the monetary penalty. At the conclusion of any proceeding
under such section 618, the ~~appropriate customs officer~~ Customs
Service shall provide to the person concerned a written statement which
sets forth the final determination and the findings of fact and
conclusions of law on which such determination is based.\
\
(c) Maximum Penalties.\--\
\
(1) \* \* \*

\* \* \* \* \*

\(4\) Prior disclosure.\--If the person concerned discloses the
circumstances of a violation of subsection (a) before, or without
knowledge of, the commencement of a formal investigation of such
violation, with respect to such violation, merchandise shall not be
seized and any monetary penalty to be assessed under subsection (c)
shall not exceed\--\
\
(A) if the violation resulted from fraud\--\
\
(i) an amount equal to 100 percent of the lawful duties of which the
United States is or may be deprived, so long as such person tenders the
unpaid amount of the lawful duties at the ~~time of disclosure or within
thirty days, or such longer period as the appropriate customs officer
may provide, after notice by the appropriate customs officer of his~~
time of disclosure, or within 30 days (or such longer period as the
Customs Service may provide) after notice by the Customs Service of its
calculation of such unpaid amount, or\
\
(ii) if such violation did not affect the assessment of duties, 10
percent of the dutiable value; or\
\
(B) if such violation resulted from negligence or gross negligence, the
interest (computed from the date of liquidation at the prevailing rate
of interest applied under section 6621 of the Internal Revenue Code of
1954) on the amount of lawful duties of which the United States is or
may be deprived so long as such person tenders the unpaid amount of the
lawful duties at the ~~time of disclosure or within 30 days, or such
longer period as the appropriate customs officer may provide, after
notice by the appropriate customs officer of his~~ time of disclosure,
or within 30 days (or such longer period as the Customs Service may
provide) after notice by the Customs Service of its calculation of such
unpaid amount. The person asserting lack of knowledge of the
commencement of a formal investigation has the burden of proof in
establishing such lack of knowledge. For purposes of this section, a
formal investigation of a violation is considered to be commenced with
regard to the disclosing party and the disclosed information on the date
recorded in writing by the Customs Service as the date on which facts
and circumstances were discovered or information was received which
caused the Customs Service to believe that a possibility of a violation
of subsection (a) existed.\
\
(5) Prior disclosure regarding nafta claims.\--An importer shall not be
subject to penalties under subsection (a) for making an incorrect claim
for preferential tariff treatment under section 202 of the North
American Free Trade Agreement Implementation Act if the importer\--\
\
(A) has reason to believe that the NAFTA Certificate of Origin (as
defined in section 508(b)(1)) on which the claim was based contains
incorrect information; and\
\
(B) in accordance with regulations issued by the Secretary, voluntarily
and promptly makes a corrected declaration and pays any duties owing.\
\
~~(5)~~ (6) Seizure.\--If the Secretary has reasonable cause to believe
that a person has violated the provisions of subsection (a) and that
such person is insolvent or beyond the jurisdiction of the United States
or that seizure is otherwise essential to protect the revenue of the
United States or to prevent the introduction of prohibited or restricted
merchandise into the customs territory of the United States, then such
merchandise may be seized and, upon assessment of a monetary penalty,
forfeited unless the monetary penalty is paid within the time specified
by law. Within a reasonable time after any such seizure is made, the
Secretary shall issue to the person concerned a written statement
containing the reasons for the seizure. After seizure of merchandise
under this subsection, the Secretary may, in the case of restricted
merchandise, and shall, in the case of any other merchandise (other than
prohibited merchandise), return such merchandise upon the deposit of
security not to exceed the maximum monetary penalty which may be
assessed under subsection (c).

\* \* \* \* \*

\(d\) Deprivation of Lawful Duties, Taxes or Fees.\--Notwithstanding
section 514 of this Act, if the United States has been deprived of
lawful duties, taxes, or fees as a result of a violation of subsection
(a), ~~the appropriate customs officer~~ the Customs Service shall
require that such lawful duties, taxes or fees be restored, whether or
not a monetary penalty is assessed.

\* \* \* \* \*

\(f\) False Certifications Regarding Exports To NAFTA Countries.\--\
\
(1) In general.\--Subject to paragraph (3), it is unlawful for any
person to certify falsely, by fraud, gross negligence, or negligence, in
a NAFTA Certificate of Origin (as defined in section 508(b)(1)) that a
good to be exported to a NAFTA country (as defined in section 2(4) of
the North American Free Trade Agreement Implementation Act) qualifies
under the rules of origin set out in section 202 of that Act.\
\
(2) Applicable provisions.\--The procedures and penalties of this
section that apply to a violation of subsection (a) also apply to a
violation of paragraph (1), except that\--\
\
(A) subsection (d) does not apply, and\
\
(B) subsection (c)(5) applies only if the person voluntarily and
promptly provides, to all persons to whom the person provided the NAFTA
Certificate of Origin, written notice of the falsity of the
Certificate.\
\
(3) Exception.\--A person may not be considered to have violated
paragraph (1) if\--\
\
(A) the information was correct at the time it was provided in a NAFTA
Certificate of Origin but was later rendered incorrect due to a change
in circumstances; and\
\
(B) the person voluntarily and promptly provides written notice of the
change to all persons to whom the person provided the Certificate of
Origin.\
\
**SEC. 593A. PENALTIES FOR FALSE DRAWBACK CLAIMS.\
\
**(A) Prohibition.\--\
\
(1) General rule.\--No person, by fraud, or negligence\--\
\
(A) may seek, induce or affect, or attempt to seek, induce, or affect,
the payment or credit to that person or others of any drawback claim by
means of\--\
\
(i) any document, written or oral statement, or electronically
transmitted data or information, or act which is material and false, or\
\
(ii) any omission which is material; or\
\
(B) may aid or abet any other person to violate subparagraph (A).\
\
(2) Exception.\--Clerical errors or mistakes of fact are not violations
of paragraph (1) unless they are part of a pattern of negligent conduct.
The mere noninternational repetition by an electronic system of an
initial clerical error does not constitute a pattern of negligent
conduct.\
\
(b) Procedures.\--\
\
(1) Prepenalty notice.\--\
\
(A) In general.\--If the Customs Service has reasonable cause to believe
that there has been a violation of subsection (a) and determines that
further proceedings are warranted, the Customs Service shall issue to
the person concerned a written notice of intent to issue a claim for a
monetary penalty. Such notice shall\--\
\
(i) identify the drawback claim;\
\
(ii) set forth the details relating to the seeking, inducing, or
affecting, or the attempted seeking, inducing, or affecting, or the
aiding or procuring of, the drawback claim;\
\
(iii) specify all laws and regulations allegedly violated;\
\
(iv) disclose all the material facts which establish the alleged
violation;\
\
(v) state whether the alleged violation occurred as a result of fraud or
negligence;\
\
(vi) state the estimated actual or potential loss of revenue due to the
drawback claim, and, taking into account all circumstances, the amount
of the proposed monetary penalty; and\
\
(vii) inform such person that he shall have a reasonable opportunity to
make representations, both oral and written, as to why a claim for a
monetary penalty should not be issued in the amount stated.\
\
(B) Exceptions.\--The Customs Service may not issue a prepenalty notice
if the amount of the penalty in the penalty claim issued under paragraph
(2) is \$1,000 or less. In such cases, the Customs Service may proceed
directly with a penalty claim.\
\
(C) Prior approval.\--No prepenalty notice in which the alleged
violation occurred as a result of fraud shall be issued without the
prior approval of Customs Headquarters.\
\
(2) Penalty claim.\--After considering representations, if any, made by
the person concerned pursuant to the notice issued under paragraph (1),
the Customs Service shall determine whether any violation of subsection\
\
(a), as alleged in the notice, has occurred. If the Customs Service
determines that there was no violation, the Customs Service shall
promptly issue a written statement of the determination to the person to
whom the notice was sent. If the Customs Service determines that there
was a violation, Customs shall issue a written penalty claim to such
person. The written penalty claim shall specify all changes in the
information provided under clauses (i) through (vii) of paragraph
(1)(A). Such person shall have a reasonable opportunity under section
618 to make representations, both oral and written, seeking remission or
mitigation of the monetary penalty. At the conclusion of any proceeding
under section 618, the Customs Service shall provide to the person
concerned a written statement which sets forth the final determination,
and the findings of fact and conclusions of law on which such
determination is based.\
\
(c) Maximum Penalties.\--\
\
(1) Fraud.\--A fraudulent violation of subsection (a) of this section is
punishable by a civil penalty in an amount not to exceed 3 times the
actual or potential loss of revenue.\
\
(2) Negligence.\--\
\
(A) In general.\--A negligent violation of subsection (a) is punishable
by a civil penalty in an amount not to exceed 20 percent of the actual
or potential loss of revenue for the 1st violation.\
\
(B) Repetitive violations.\--If the Customs Service determines that a
repeat negligent violation occurs relating to the same issue, the
penalty amount for the 2d violation shall be in an amount not to exceed
50 percent of the total actual or potential loss of revenue. The penalty
amount for each succeeding repetitive negligent violation shall be in an
amount not to exceed the actual or potential loss of revenue. If the
same party commits a nonrepetitive violation, that violation shall be
subject to a penalty not to exceed 20 percent of the actual or potential
loss of revenue.\
\
(3) Prior disclosure.\--\
\
(A) In general.\--Subject to subparagraph (B), if the person concerned
discloses the circumstances of a violation of subsection\
\
(a) before, or without knowledge of the commencement of, a formal
investigation of such violation, the monetary penalty assessed under
this subsection may not exceed\--\
\
(i) if the violation resulted from fraud, an amount equal to the actual
or potential revenue of which the United States is or may be deprived as
a result of overpayment of the claim; or\
\
(ii) if the violation resulted from negligence, an amount equal to the
interest computed on the basis of the prevailing rate of interest
applied under section 6621 of the Internal Revenue Code of 1986 on the
amount of actual revenue of which the United States is or may be
deprived during the period that\--\
\
(I) begins on the date of the overpayment of the claim; and\
\
(II) ends on the date on which the person concerned tenders the amount
of the overpayment.\
\
(B) Condition affecting penalty limitations.\--The limitations in
subparagraph (A) on the amount of the monetary penalty to be assessed
under subsection (c) apply only if the person concerned tenders the
amount of the overpayment made on the claim at the time of disclosure,
or within 30 days (or such longer period as the Customs Service may
provide), after notice by the Customs Service of its calculation of the
amount of the overpayment.\
\
(C) Burden of proof.\--The person asserting lack of knowledge of the
commencement of a formal investigation has the burden of proof in
establishing such lack of knowledge.\
\
(4) Commencement of investigation.\--For purposes of this section, a
formal investigation of a violation is considered to be commenced with
regard to the disclosing party and the disclosed information on the date
recorded in writing by the Customs Service as the date on which facts
and circumstances were discovered or information was received which
caused the Customs Service to believe that a possibility of a violation
of subsection (a) existed.\
\
(5) Exclusivity.\--Penalty claims under this section shall be the
exclusive civil remedy for any drawback related violation of subsection\
\
(a).\
\
(d) Deprivation of Lawful Revenue.\--Notwithstanding section 514, if the
United States has been deprived of lawful duties and taxes resulting
from a violation of subsection (a), the Customs Service shall require
that such duties and taxes be restored whether or not a monetary penalty
is assessed.\
(e) Drawback Compliance Program.\--\
\
(1) In general.\--After consultation with the drawback trade community,
the Customs Service shall establish a drawback compliance program in
which claimants and other parties in interest may participate after
being certified by the Customs Service under paragraph (2).
Participation in the drawback compliance program is voluntary.\
\
(2) Certification.\--A party may be certified as a participant in the
drawback compliance program after meeting the general requirements
established under the program or after negotiating an alternative
program suited to the needs of the party and the Customs Service.
Certification requirements shall take into account the size and nature
of the party\'s drawback program and the volume of claims. In order to
be certified, the participant must be able to demonstrate that it\--\
\
(A) understands the legal requirements for filing claims, including the
nature of the records required to be maintained and produced and the
time periods involved;\
\
(B) has in place procedures to explain the Customs Service requirements
to those employees that are involved in the preparation of claims, and
the maintenance and production of required records;\
\
(C) has in place procedures regarding the preparation of claims and
maintenance of required records, and the production of such records to
the Customs Service;\
\
(D) has designated a dependable individual or individuals to be
responsible for compliance under the program and whose duties include
maintaining familiarity with the drawback requirements of Customs
Service;\
\
(E) has a record maintenance procedure approved by the Customs Service
for original records, or, if approved by the Customs Service, for
alternate records or recordkeeping formats other than the original
records; and\
\
(F) has procedures for notifying the Customs Service of variances to,
and violations of, the requirements of the drawback compliance program
or any negotiated alternative programs, and for taking corrective action
when notified by the Customs Service for violations or problems
regarding such program.\
(f) Alternatives to Penalties.\--\
\
(1) In general.\--When a party that\--\
\
(A) has been certified as a participant in the drawback compliance
program under subsection (e); and\
\
(B) is generally in compliance with the appropriate procedures and
requirements of the program; commits a violation of subsection (a), the
Customs Service, shall, in the absence of fraud or repeated violations,
and in lieu of a monetary penalty, issue a written notice of the
violation to the party. Repeated violations by a party may result in the
issuance of penalties and removal of certification under the program
until corrective action, satisfactory to the Customs Service, is taken.\
\
(2) Contents of notice.\--A notice of violation issued under paragraph\
\
(1) shall\--\
\
(A) state that the party has violated subsection (a);\
\
(B) explain the nature of the violation; and\
\
(C) warn the party that future violations of subsection (a) may result
in the imposition of monetary penalties.\
\
(3) Response to notice.\--Within a reasonable time after receiving
written notice under paragraph (1), the party shall notify the Customs
Service of the steps it has taken to prevent a recurrence of the
violation.\
(g) Repetitive Violations.\--\
\
(1) A party who has been issued a written notice under subsection\
\
(f)(1) and subsequently commits a repeat negligent violation involving
the same issue is subject to the following monetary penalties:\
\
(A) 2d violation.\--An amount not to exceed 20 percent of the loss of
revenue.\
\
(B) 3d violation.\--An amount not to exceed 50 percent of the loss of
revenue.\
\
(C) 4th and subsequent violations.\--An amount not to exceed 100 percent
of the loss of revenue.\
\
(2) If a party that has been certified as a participant in the drawback
compliance program under subsection (e) commits an alleged violation
which was not repetitive, the party shall be issued a \"warning
letter\", and, for any subsequent violation, shall be subject to the
same maximum penalty amounts stated in paragraph (1).\
(h) Regulation.\--The Secretary shall promulgate regulations and
guidelines to implement this section. Such regulations shall specify
that for purposes of subsection (g), a repeat negligent violation
involving the same issue shall be treated as a repetitive violation for
a maximum period of 3 years.\
(i) Court of International Trade Proceedings.\--Notwithstanding any
other provision of law, in any proceeding commenced by the United States
in the Court of International Trade for the recovery of any monetary
penalty claimed under this section\--\
\
(1) all issues, including the amount of the penalty, shall be tried de
novo;\
\
(2) if the monetary penalty is based on fraud, the United States shall
have the burden of proof to establish the alleged violation by clear and
convincing evidence; and\
\
(3) if the monetary penalty is based on negligence, the United States
shall have the burden of proof to establish the act or omission
constituting the violation, and the alleged violator shall have the
burden of providing evidence that the act or omission did not occur as a
result of negligence.

\* \* \* \* \*

**SEC. 596. AIDING UNLAWFUL IMPORTATION.\
\
**\* \* \* \* \*\
(a) \* \* \*\
~~(c) Any merchandise that is introduced or attempted to be introduced
into the United States contrary to law (other than in violation of
section 592) may be seized and forfeited.\
~~(c) Merchandise which is introduced or attempted to be introduced into
the United States contrary to law shall be treated as follows:\
\
(1) The merchandise shall be seized and forfeited if it\--\
\
(A) is stolen, smuggled, or clandestinely imported or introduced;\
\
(B) is a controlled substance, as defined in the Controlled Substances
Act (21 U.S.C. 801 et seq.), and is not imported in accordance with
applicable law; or\
\
(C) is a contraband article, as defined in section 1 of the Act of
August 9, 1939 (49 U.S.C. App. 781).\
\
(2) The merchandise may be seized and forfeited if\--\
\
(A) its importation or entry is subject to any restriction or
prohibition which is imposed by law relating to health, safety, or
conservation and the merchandise is not in compliance with the
applicable rule, regulation, or statute;\
\
(B) its importation or entry requires a license, permit or other
authorization of an agency of the United States Government and the
merchandise is not accompanied by such license, permit, or
authorization;\
\
(C) it is merchandise or packaging in which copyright, trademark, or
trade name protection violations are involved (including, but not
limited to, violations of section 42, 43, or 45 of the Act of July 5,
1946 (15 U.S.C. 1124, 1125, or 1127), section 506 or 509 of title 17,
United States Code, or section 2318 or 2320 of title 18, United States
Code);\
\
(D) it is trade dress merchandise involved in the violation of a court
order citing section 43 of such Act of July 5, 1946 (15 U.S.C. 1125);\
\
(E) it is merchandise which is marked intentionally in violation of
section 304; or\
\
(F) it is merchandise for which the importer has received written
notices that previous importations of identical merchandise from the
same supplier were found to have been marked in violation of section
304.\
\
(3) If the importation or entry of the merchandise is subject to
quantitative restrictions requiring a visa, permit, license, or other
similar document, or stamp from the United States Government or from a
foreign government or issuing authority pursuant to a bilateral or
multilateral agreement, the merchandise shall be subject to detention in
accordance with section 499 unless the appropriate visa, license,
permit, or similar document or stamp is presented to the Customs
Service; but if the visa, permit, license, or similar document or stamp
which is presented in connection with the importation or entry of the
merchandise is counterfeit, the merchandise may be seized and
forfeited.\
\
(4) If the merchandise is imported or introduced contrary to a provision
of law which governs the classification of value of merchandise and
there are no issues as to the admissibility of the merchandise into the
United States, it shall not be seized except in accordance with section
592.\
\
(5) In any case where the seizure and forfeiture of merchandise are
required or authorized by this section, the Secretary may\--\
\
(A) remit the forfeiture under section 618, or\
\
(B) permit the exportation of the merchandise, unless its release would
adversely affect health, safety, or conservation or be in contravention
of a bilateral or multilateral agreement or treaty.\
\
\* \* \* \* \*\
\
**SEC. 612. SEIZURE; SUMMARY SALE.\
\
**(a) Whenever it appears to ~~the appropriate customs officer~~ the
Customs Service that any vessel, vehicle, aircraft, merchandise, or
baggage seized under the customs laws is liable to perish or to waste or
to be greatly reduced in value by keeping, or that the expense of
keeping the same is disproportionate to the value thereof, and such
vessel, vehicle, aircraft, merchandise, or baggage is subject to section
607, and such vessel, vehicle, aircraft, merchandise, or baggage has not
been delivered under bond, ~~such officer~~ the Customs Service shall
proceed forthwith to advistise and sell the same at auction under
regulations to be prescribed by the Secretary of the Treasury. If such
vessel, vehicle, aircraft, merchandise, or baggage is not subject to
section 607, ~~such officer~~ the Customs Service shall forthwith
transmit ~~the appraiser\'s return and his~~ its report of the seizure
to the United States attorney, who shall petition the court to order an
immediate sale of such vessel, vehicle, aircraft, merchandise, or
baggage, and if the ends of justice require it the court shall order
such immediate sale, the proceeds thereof to be deposited with the court
to await the final determination of the condemnation proceedings.
Whether such sale be made by ~~the customs officer~~ the Customs Service
or by order of the court, the proceeds thereof shall be held subject to
claims of parties in interest to the same extent as the vessel, vehicle,
aircraft, merchandise, or baggage so sold would have been subject to
such claim.\
~~(b) If the expense of keeping the vessel, vehicle, aircraft,
merchandise, or baggage is disproportionate to the value thereof, and
such value is less than \$1,000, such officer may proceed forthwith to
order destruction or other appropriate disposition of such property,
under regulations prescribed by the Secretary of the Treasury.\
~~(b) If the Customs Service determines that the expense of keeping the
vessel, vehicle, aircraft, merchandise, or baggage is disproportionate
to the value thereof, the Customs Service may promptly order the
destruction or other appropriate disposition of such property under
regulations prescribed by the Secretary. No customs officer shall be
liable for the destruction or other disposition of property made
pursuant to this section.\
\
\* \* \* \* \*\
\
**SEC. 621. LIMITATION OF ACTIONS.\
\
**No suit or action to recover any duty under section 593A(d), or any
pecuniary penalty or forfeiture of property accruing under the customs
laws shall be instituted unless such suit or action is commenced within
five years after the time when the alleged offense was ~~discovered:
Provided, That the time of the absence from the United States of the
person subject to such penalty or forfeiture, or of any concealment or
absence of the property, shall not be reckoned within this period of
limitation.~~ discovered; except that\--\
\
(1) in the case of an alleged violation of section 592 or 593A, no suit
or action (including a suit or action for restoration of lawful duties
under subsection (d) of such sections) may be instituted unless
commenced within 5 years after the date of the alleged violation or, if
such violation arises out of fraud, within 5 years after the date of
discovery of fraud, and\
\
(2) the time of the absence from the United States of the person subject
to the penalty or forfeiture, or of any concealment or absence of the
property, shall not be reckoned within the 5-year period of limitation.

\* \* \* \* \*

**SEC. 623. BONDS AND OTHER SECURITY.\
\
**(a) \* \* \*\
\
(b) Whenever a bond is required or authorized by a law, regulation, or
instruction which the Secretary of the Treasury or the Customs Service
is authorized to enforce, the Secretary of the Treasury may\--\
\
(1) Except as otherwise specifically provided by law, prescribe the
conditions and form of such bond and the manner in which the bond may be
filed with or, pursuant to an authorized electronic data interchange
system, transmitted to the Customs Service, and fix the amount of
penalty thereof, whether for the payment of liquidated damages or of a
penal sum: Provided, That in the case of an alleged violation of section
592 of this Act arising out of gross negligence or negligence, such suit
or action shall not be instituted more than five years after the date
the alleged violation was committed: Provided further, That when a
consolidated bond authorized by paragraph 4 of this subsection is taken,
the Secretary of the Treasury may fix the penalty of such bond without
regard to any other provision of law, regulation, or instruction.\
\* \* \* \* \*\
(d) No condition in any bond taken to assure compliance with any law,
regulation, or instruction which the Secretary of the Treasury or the
Customs Service is authorized to enforce shall be held invalid on the
ground that such condition is not specified in the law, regulation, or
instruction authorizing or requiring the taking of such bond. Any bond
transmitted to the Customs Service pursuant to an authorized electronic
data interchange system shall have the same force and effect and be
binding upon the parties thereto as if such bond were manually executed,
signed, and filed.

\* \* \* \* \*

**SEC. 625. PUBLICATION OF DECISIONS.\
\
**~~Within 120 days after issuing any precedential decision (including
any ruling letter, internal advice memorandum, or protest review
decision) under this Act with respect to any customs transaction, the
Secretary shall have such decision published in the Customs Bulletin or
shall otherwise make such decision available for public inspection.\
\
~~**SEC. 625. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC INFORMATION.\
\
**(a) Publication.\--Within 90 days after the date of issuance of any
interpretive ruling (including any ruling letter, or internal advice
memorandum) or protest review decision under this chapter with respect
to any customs transaction, the Secretary shall have such ruling or
decision published in the Customs Bulletin or shall otherwise make such
ruling or decision available for public inspection.\
(b) Appeals.\--A person may appeal an adverse interpretive ruling and
any interpretation of any regulation prescribed to implement such ruling
to a higher level of authority within the Customs Service for de novo
review. Upon a reasonable showing of business necessity, any such appeal
shall be considered and decided no later than 60 days following the date
on which the appeal is filed. The Secretary shall issue regulations to
implement this subsection.\
(c) Modification and Revocation.\--A proposed interpretive ruling or
decision which would\--\
\
(1) modify (other than to correct a clerical error) or revoke a prior
interpretive ruling or decision which has been in effect for at least 60
days; or\
\
(2) have the effect of modifying the treatment previously accorded by
the Customs Service to substantially identical transactions; shall be
published in the Customs Bulletin. The Secretary shall give interested
parties an opportunity to submit, during not less than the 30-day period
after the date of such publication, comments on the correctness of the
proposed ruling or decision. After consideration of any comments
received, the Secretary shall publish a final ruling or decision in the
Customs Bulletin within 30 days after the closing of the comment period.
The final ruling or decision shall become effective 60 days after the
date of its publication.\
\
(d) Publication of Customs Decisions That Limit Court Decisions.\--A
decision that proposes to limit the application of a court decision
shall be published in the Customs Bulletin together with notice of
opportunity for public comment thereon prior to a final decision.\
(e) Public Information.\--The Secretary may make available in writing or
through electronic media, in an efficient, comprehensive and timely
manner, all information, including directives, memoranda, electronic
messages and telexes which contain instructions, requirements, methods
or advice necessary for importers and exporters to comply with the
Customs laws and regulations. All information which may be made
available pursuant to this subsection shall be subject to any exemption
from disclosure provided by section 552 of title 5, United States Code.

\* \* \* \* \*

**SEC. 628. EXCHANGE OF INFORMATION.\
\
**(a) \* \* \*\
\* \* \* \* \*\
(c) The Secretary may authorize customs officers to exchange information
with any government agency of a NAFTA country, as defined in section
2(4) of the North American Free Trade Agreement Implementation Act, if
the Secretary\--\
\
(1) reasonably believes the exchange of information is necessary to
implement chapter 3, 4, or 5 of the North American Free Trade Agreement,
and\
\
(2) obtains assurances from such country that the information will be
held in confidence and used only for governmental purposes.

\* \* \* \* \*

**SEC. 630. AUTHORITY TO SETTLE CLAIMS.\
\
**(a) In General.\--With respect to a claim that cannot be settled under
chapter 171 of title 28, United States Code, the Secretary may settle,
for not more than \$50,000 in any one case, a claim for damage to, or
loss of, privately owned property caused by an investigative or law
enforcement officer (as defined in section 2680(h) of title 28, United
States Code) who is employed by the Customs Service and acting within
the scope of his or her employment.\
(b) Limitations.\--The Secretary may not pay a claim under subsection
(a) that\--\
\
(1) concerns commercial property;\
\
(2) is presented to the Secretary more than 1 year after it occurs; or\
\
(3) is presented by an officer or employee of the United States
Government and arose within the scope of employment.\
\
(c) Final Settlement.\--A claim may be paid under this section only if
the claimant accepts the amount of settlement in complete satisfaction
of the claim.\
\
**SEC. 631. USE OF PRIVATE COLLECTION AGENCIES.\
\
**(a) In General.\--Notwithstanding any other provision of law, the
Secretary, under such terms and conditions as the Secretary considers
appropriate, shall enter into contracts and incur obligations with one
or more persons for collection services to recover indebtedness arising
under the customs laws and owed the United States Government, but only
after the Customs Service has exhausted all administrative efforts,
including all claims against applicable surety bonds, to collect the
indebtedness.\
(b) Contract Requirements.\--Any contract entered into under subsection
(a) shall provide that\--\
\
(1) the Secretary retains the authority to resolve a dispute, compromise
a claim, end collection action, and refer a matter to the Attorney
General to bring a civil action; and\
\
(2) the person is subject to\--\
\
(A) section 552a of title 5, United States Code, to the extent provided
in subsection (m) as such section; and\
\
(B) laws and regulations of the United States Government and State
governments related to debt collection practices.\
\
Part VI\--Miscellaneous Provisions\
\
**SEC. 641. CUSTOMS BROKERS.\
\
**(a) Definitions.\--As used in this section:

\(1\) The term \"customs broker\" means any person granted a customs
broker\'s license by the Secretary under subsection (b).

\(2\) The term \"customs business\" means those activities involving
transaction with the Customs Service concerning the entry and
admissibility of merchandise, its classification and valuation, the
payment of duties, taxes, or other charges assessed or collected by the
Customs Service upon merchandise by reason of its importation, or the
refund, rebate, or drawback thereof. It also includes the preparation of
documents or forms in any format and the electronic transmission of
documents, invoices, bills, or parts thereof, intended to be filed with
the Customs Service in furtherance of such activities, whether or not
signed or filed by the preparer, or activities relating to such
preparation, but does not include the mere electronic transmission of
data received for transmission to Customs.

\* \* \* \* \*

\(c\) Customs Broker\'s Permits.\-- ~~(1) In general.\--Each person
granted a customs broker\'s license under subsection (b) shall\-- (A) be
issued a permit, in accordance with regulations prescribed under this
section, for each customs district in which that person conducts customs
business; and (B) except as provided in paragraph (2), regularly employ
in each customs district for which a permit is so issued at least one
individual who is licensed under subsection (b)(2) to exercise
responsible supervision and control over the customs business conducted
by that person in that district.\
\
~~(1) In general.\--Each person granted a customs broker\'s license
under subsection (b) shall be issued, in accordance with such
regulations as the Secretary shall prescribe, either or both of the
following:\
\
(A) A national permit for the conduct of such customs business as the
Secretary prescribes by regulation.\
\
(B) A permit for each customs district in which that person conducts
customs business and, except as provided in paragraph (2), regularly
employs at least 1 individual who is licensed under subsection (b)(2) to
exercise responsible supervision and control over the customs business
conducted by that person in that district.

\* \* \* \* \*

\(4\) Appointment of subagents.\--Notwithstanding subsection (c)(1),
upon the implementation by the Secretary under section 413(b)(2) of the
component of the National Customs Automation Program referred to in
section 411(a)(2)(B), a licensed broker may appoint another licensed
broker holding a permit in a customs district to act on its behalf as
its subagent in that district if such activity relates to the filing of
information that is permitted by law or regulation to be filed
electronically. A licensed broker appointing a subagent pursuant to this
paragraph shall remain liable for any and all obligations arising under
bond and any and all duties, taxes, and fees, as well as any other
liabilities imposed by law, and shall be precluded from delegating to a
subagent such liability.\
\
(d) Disciplinary Proceedings.\--\
\
(1) \* \* \*\
\
(2) Procedures.\--\
\
(A) \* \* \*\
\
(B) Revocation or suspension.\--~~The appropriate customs officers~~ The
Customs Service may, for good and sufficient reason, serve notice in
writing upon any customs broker to show cause why a license or permit
issued under this section should not be revoked or suspended. The notice
shall be in the form of a statement specifically setting forth the
grounds of the complaint, and shall allow the customs broker 30 days to
respond. If no response is filed, or ~~the appropriate customs officer~~
the Customs Service determines that the revocation or suspension is
still warranted, ~~he~~ it shall notify the customs broker in writing of
a hearing to be held within ~~15~~ 30 days, or at a later date if the
broker requests an extension and shows good cause therefor, before an
administrative law judge appointed pursuant to section 3105 of title 5,
United States Code, who shall serve as the hearing officer. If the
customs broker waives the hearing, or the broker or his designated
representative fails to appear at the appointed time and place, the
hearing officer shall make findings and recommendations based on the
record submitted by the parties. At the hearing, the customs broker may
be represented by counsel, and all proceedings, including the proof of
the charges and the response thereto shall be presented with testimony
taken under oath and the right of cross-examination accorded to both
parties. A transcript of the hearing shall be made and a copy will be
provided to ~~the appropriate customs officer and the customs broker;
they~~ the Customs Service and the customs broker; which shall
thereafter be provided reasonable opportunity to file a post-hearing
brief. Following the conclusion of the hearing, the hearing officer
shall transmit promptly the record of the hearing along with ~~his~~ the
findings of fact and recommendations to the Secretary for decision. The
Secretary will issue a written decision, based solely on the record,
setting forth his findings of fact and the reasons ~~for his decision~~
for the decision. Such decision may provide for the sanction contained
in the notice to show cause or any lesser sanction authorized by this
subsection, including a monetary penalty not to exceed \$30,000, then
was contained in the notice to show cause.

\* \* \* \* \*

\(f\) Regulations by the Secretary.\--The Secretary may prescribe such
rules and regulations relating to the customs business of customs
brokers as the Secretary considers necessary to protect importers and
the revenue of the United States, and to carry out the provisions of
this section, including rules and regulations governing the licensing of
or issuance of permits to customs brokers, the keeping of books,
accounts, and records by customs brokers, and documents and
correspondence, and the furnishing by customs brokers of any other
information relating to their customs business to any duly accredited
officer or employee of the ~~United States Customs Service.~~ Customs
Service. The Secretary may not prohibit customs brokers from limiting
their liability to other persons in the conduct of customs business. For
purposes of this subsection or any other provision of this Act
pertaining to recordkeeping, all data required to be retained by a
customs broker may be kept on microfilm, optical disc, magnetic tapes,
disks or drums, video files or any other electrically generated medium.
Pursuant to such regulations as the Secretary shall prescribe, the
conversion of data to such storage medium may be accomplished at any
time subsequent to the relevant customs transaction and the data may be
retained in a centralized basis according to such broker\'s business
system.

\* \* \* \* \*

**TITLE VII\--COUNTERVAILING AND ANTIDUMPING DUTIES**

\* \* \* \* \*

Subtitle D\--General Provisions\
\
**SEC. 771. DEFINITIONS; SPECIAL RULES.\
\
**For purposes of this title\--\
\
(1) \* \* \*

\* \* \* \* \*

~~(18)~~ (21) United states-canada agreement.\--The term \"United
States- Canada Agreement\" means the United States-Canada Free-Trade
Agreement.\
\
(22) NAFTA.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
\
(23) Entry.\--The term \"entry\" includes, in appropriate circumstances
as determined by the administering authority, a reconciliation entry
created under a reconciliation process, defined in section 401(s), that
is initiated by an importer. The liability of an importer under an
antidumping or countervailing duty proceeding for entries of merchandise
subject to the proceeding will attach to the corresponding
reconciliation entry or entries. Suspension of liquidation of the
reconciliation entry or entries, for the purpose of enforcing this
title, is equivalent to the suspension of liquidation of the
corresponding individual entries; but the suspension of liquidation of
the reconciliation entry or entries for such purpose does not preclude
liquidation for any other purpose.

\* \* \* \* \*

**SEC. 777. ACCESS TO INFORMATION.\
\
**(a) \* \* \*\
\* \* \* \* \*\
(f) Disclosure of Proprietary Information Under Protective Orders Issued
Pursuant to the North American Free Trade Agreement or the United
States- Canada Agreement.\--\
\
(1) Issuance of protective orders.\--\
\
(A) In general.\--If binational panel review of a determination under
this title is requested pursuant to article 1904 of the NAFTA or the
United States-Canada Agreement, or an extraordinary challenge committee
is convened under Annex 1904.13 of the NAFTA or the United States-Canada
Agreement, the administering authority or the Commission, as
appropriate, may make available to authorized persons, under a
protective order described in paragraph (2), a copy of all proprietary
material in the administrative record made during the proceeding in
question. If the administrating authority or the Commission claims a
privilege as to a document or portion of a document in the
administrative record of the proceeding in question and a binational
panel or extraordinary challenge committee finds that in camera
inspection or limited disclosure of that document or portion thereof is
required by United States law, the administering authority or the
Commission, as appropriate, may restrict access to such document or
portion thereof to the authorized persons identified by the panel or
committee as requiring access and may require such persons to obtain
access under a protective order described in paragraph (2).\
\
(B) Authorized persons.\--For purposes of this subsection, the term
\"authorized persons\" means\--\
\
(i) \* \* \*

\* \* \* \* \*

\(iii\) any officer or employee of the United States Government
designated by the administering authority or the Commission, as
appropriate, to whom disclosure is necessary in order to make
recommendations to the Trade Representative regarding the convening of
extraordinary challenge committees under chapter 19 of the NAFTA or the
Agreement, and\
\
(iv) any officer or employee of the ~~Government of Canada designated by
an authorized agency of Canada~~ Government of a free trade area country
(as defined in section 516A(f)(10)) designated by an authorized agency
of such country to whom disclosure is necessary in order to make
decisions regarding the convening of extraordinary challenge committees
under chapter 19 of the NAFTA or the Agreement.

\* \* \* \* \*

\(2\) Contents of protective order.\--Each protective order issued under
this subsection shall be in such form and contain such requirements as
the administering authority or the Commission may determine by
regulation to be appropriate. The administering authority and the
Commission shall ensure that regulations issued pursuant to this
paragraph shall be designed to provide an opportunity for participation
in the binational panel proceeding, including any extraordinary
challenge, equivalent to that available for judicial review of
determinations by the administering authority or the Commission that are
not subject to review by a binational panel.\
\
(3) Prohibited acts.\--It is unlawful for any person to violate, to
induce the violation of, or knowingly to receive information the receipt
of which constitutes a violation of, any provision of a protective order
issued under this subsection or to violate, to induce the violation of,
or knowingly to receive information the receipt of which constitutes a
violation of, any provision of an undertaking entered into with an
authorized ~~agency of Canada~~ agency of a free trade area country (as
defined in section 516A(f)(10)) to protect proprietary material during
binational panel or extraordinary challenge committee review pursuant to
article 1904 of the NAFTA or the United States-Canada Agreement.\
\
(4) Sanctions for violation of protective orders.\--Any person, except a
judge appointed to a binational panel or an extraordinary challenge
committee under section 402(b) of the North American Free Trade
Agreement Implementation Act, who is found by the administering
authority or the Commission, as appropriate, after notice and an
opportunity for a hearing in accordance with section 554 of title 5,
United States Code, to have committed an act prohibited by paragraph (3)
shall be liable to the United States for a civil penalty and shall be
subject to such other administrative sanctions, including, but not
limited to, debarment from practice before the administering authority
or the Commission, as the administering authority or the Commission
determines to be appropriate. The amount of the civil penalty shall not
exceed \$100,000 for each violation. Each day of a continuing violation
shall constitute a separate violation. The amount of such civil penalty
and other sanctions shall be assessed by the administering authority or
the Commission by written notice, except that assessment shall be made
by the administering authority for violation, or inducement of a
violation or receipt of information with reason to know that such
information was disclosed in violation, of an undertaking entered into
by any person with an authorized ~~agency of Canada~~ agency of a free
trade area country (as defined in section 516A(f)(10)).

\-\-\-\-\-\-\-\-\--

**Section 3 of the Act of June 18, 1934 (Commonly Known as the Foreign
Trade Zones Act)**

**\
**AN ACT To provide for the establishment, operation, and maintenance of
foreign-trade zones in ports of entry of the United States, to expedite
and encourage foreign commerce, and for other purposes

\* \* \* \* \*

Sec. 3. (a) Foreign and domestic merchandise of every description,
except such as is prohibited by law, may, without being subject to the
customs laws of the United States, except as otherwise provided in this
Act, be brought into a zone and may be stored, sold, exhibited, broken
up, repacked, assembled, distributed, sorted, graded, cleaned, mixed
with foreign or domestic merchandise, or otherwise manipulated, or be
manufactured except as otherwise provided in this Act, and be exported,
destroyed, or sent into customs territory of the United States
therefrom, in the original package or otherwise; but when foreign
merchandise is so sent from a zone into customs territory of the United
States it shall be subject to the laws and regulations of the United
States affecting imported merchandise: Provided, That whenever the
privilege shall be requested and there has been no manipulation or
manufacture effecting a change in tariff classification, the appropriate
customs officer shall take under supervision any lot or part of a lot of
foreign merchandise in a zone, cause it to be appraised and taxes
determined and duties liquidated thereon. Merchandise so taken under
supervision may be stored, manipulated, or manufactured under the
supervision and regulations prescribed by the Secretary of the Treasury,
and whether mixed or manufactured with domestic merchandise or not may,
under regulations prescribed by the Secretary of the Treasury, be
exported or destroyed, or may be sent into customs territory upon the
payment of such liquidated duties and determined taxes thereon. If
merchandise so taken under supervision has been manipulated or
manufactured, such duties and taxes shall be payable on the quantity of
such foreign merchandise used in the manipulation or manufacture of the
entered article. Allowance shall be made for recoverable and
irrecoverable waste; and if recoverable waste is sent into customs
territory, it shall be dutiable and taxable in its condition and
quantity and at its weight at the time of entry. Where two or more
products result from the manipulation or manufacture of merchandise in a
zone the liquidated duties and determined taxes shall be distributed to
the several products in accordance with their relative value at the time
of separation with due allowance for waste as provided for above:
Provided further, That subject to such regulations respecting identity
and the safeguarding of the revenue as the Secretary of the Treasury may
deem necessary, articles, the growth, product, or manufacture of the
United States, on which all internal-revenue taxes have been paid, if
subject thereto, and articles previously imported on which duty and/or
tax has been paid, or which have been admitted free of duty and tax, may
be taken into a zone from the customs territory of the United States,
placed under the supervision of the appropriate customs officer, and
whether or not they have been combined with or made part, while in such
zone, of other articles, may be brought back thereto free of quotas,
duty, or tax: Provided further, That if in the opinion of the Secretary
of the Treasury their identity has been lost, such articles not entitled
to free entry by reason of noncompliance with the requirements made
hereunder by the Secretary of the Treasury shall be treated when they
reenter customs territory of the United States as foreign merchandise
under the provisions of the tariff and internal-revenue laws in force at
that time: Provided further, That under the rules and regulations of the
controlling Federal agencies, articles which have been taken into a zone
from customs territory for the sole purpose of exportation, destruction
(except destruction of distilled spirits, wines, and fermented malt
liquors), or storage shall be considered to be exported for the purpose
of\--\
\
(1) the draw-back, warehousing, and bonding, or any other provisions of
the Tariff Act of 1930, as amended, and the regulations thereunder; and\
\
(2) the statutes and bonds exacted for the payment of drawback, refund,
or exemption from liability for internal-revenue taxes and for the
purposes of the internal-revenue laws generally and the regulations
thereunder. Such a transfer may also be considered an exportation for
the purposes of other Federal laws insofar as Federal agencies charged
with the enforcement of those laws deem it advisable. Such articles may
not be returned to customs territory for domestic consumption except
where the Foreign-Trade Zones Board deems such return to be in the
public interest, in which event the articles shall be subject to the
provisions of paragraph 1615 (f) of the Tariff Act of 1930, as amended:
Provided further, That no operation involving any foreign or domestic
merchandise brought into a zone which operation would be subject to any
provision or provisions of section 1807, chapter 15, chapter 16, chapter
17, chapter 21, chapter 23, chapter 24, chapter 25, chapter 26, or
chapter 32 of the Internal Revenue Code if performed in customs
territory, or involving the manufacture of any article provided for in
paragraph 367 or paragraph 368 of the Tariff Act of 1930, shall be
permitted in a zone except those operations (other than rectification of
distilled spirits and wines, or the manufacture or production of
alcoholic products unfit for beverage purposes) which were permissible
under this Act prior to July 1, 1949: Provided further, That articles
produced or manufactured in a zone and exported therefrom shall on
subsequent importation into the customs territory of the United States
be subject to the import laws applicable to like articles manufactured
in a foreign country, except that articles produced or manufactured in a
zone exclusively with the use of domestic merchandise, the identity of
which has been maintained in accordance with the second proviso of this
section, may, on such importation, be entered as American goods
returned: Provided further, That no merchandise that consists of goods
subject to NAFTA drawback, as defined in section 203(a) of the North
American Free Trade Agreement Implementation Act, that is manufactured
or otherwise changed in condition shall be exported to a NAFTA country,
as defined in section 2(4) of that Act, without an assessment of a duty
on the merchandise in its condition and quantity, and at its weight, at
the time of its exportation (or if the privilege in the first proviso to
this subsection was requested, an assessment of a duty on the
merchandise in its condition and quantity, and at its weight, at the
time of its admission into the zone) and the payment of the assessed
duty before the 61st day after the date of exportation of the article,
except that upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid or owed to the NAFTA
country on the article, the customs duty may be waived or reduced
(subject to section 508(b)(2)(B) of the Tariff Act of 1930) in an amount
that does not exceed the lesser of (1) the total amount of cutoms duties
paid or owed on the merchandise on importation into the United States,
or (2) the total amount of customs duties paid on the article to the
NAFTA country: Provided further, That, if Canada ceases to be a NAFTA
country and the suspension of the operation of the United States-Canada
Free-Trade Agreement thereafter terminates, with the exception of
drawback eligible goods under section 204(a) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, No article manufactured
or otherwise changed in condition (except a change by cleaning, testing
or repacking) shall be exported to Canada ~~on or after January 1, 1994,
or such later date as may be proclaimed by the President under section
204(b)(2)(B) of such Act of 1988,~~ during the period such Agreement is
in operation without the payment of a duty that shall be payable on the
article in its condition and quantity, and at its weight, at the time of
its exportation to Canada unless the privilege in the first proviso to
this subsection was requested.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 13031 of the Consolidated Omnibus Budget Reconciliation Act of
1985**

**\
**SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.\
(a) Schedule of Fees.\--In addition to any other fee authorized by law,
the Secretary of the Treasury shall charge and collect the following
fees for the provision of customs services in connection with the
following:\
\
(1) \* \* \*

\* \* \* \* \*

~~(5) For the arrival of each passenger aboard a commercial vessel or
commercial aircraft from a place outside the United States (other than a
place referred to in subsection (b)(1)(A)), \$5.\
\
~~(5)(A) For fiscal years 1994, 1995, 1996, and 1997, for the arrival of
each passenger aboard a commercial vessel or commercial aircraft from
outside the customs territory of the United States, \$6.50.\
\
(B) For fiscal year 1998 and each fiscal year thereafter, for the
arrival of each passenger aboard a commercial vessel or commercial
aircraft from a place outside the United States (other than a place
referred to in subsection (b)(1)(A) of this section), \$5.\
(b) Limitation on Fees.\--(1) No fee may be charged under subsection (a)
for customs services provided in connection with\--\
\
(A) the arrival of any passenger whose journey\--\
\
(i) \* \* \*

\* \* \* \* \*

Subparagraph (A) shall not apply to fiscal years 1994, 1995, 1996, and
1997.

\* \* \* \* \*

~~(10) The fee charged under subsection (a) (9) or (10) of this section
with respect to goods of Canadian origin (as determined under section
202 of the United States-Canada Free-Trade Agreement Implementation Act
of 1988) shall be in accordance with article 403 of the United
States-Canada Free-Trade Agreement. Any service for which an exemption
from such fee is provided by reason of this paragraph may not be funded
with money contained in the Customs User Fee Account.\
\
~~(10)(A) The fee charged under subsection (a) (9) or (10) with respect
to goods of Canadian origin (as determined under section 202 of the
United States-Canada Free-Trade Agreement) when the United States-Canada
Free-Trade Agreement is in force shall be in accordance with section 403
of that Agreement.\
\
(B) For goods qualifying under the rules of origin set out in section
202 of the North American Free Trade Agreement Implementation Act, the
fee under subsection (a) (9) or (10)\--\
\
(i) may not be charged with respect to goods that qualify to be marked
as goods of Canada pursuant to Annex 311 of the North American Free
Trade Agreement, for such time as Canada is a NAFTA country, as defined
in section 2(4) of such Implementation Act; and\
\
(ii) may not be increased after December 31, 1993, and may not be
charged after June 29, 1999, with respect to goods that qualify to be
marked as goods of Mexico pursuant to such Annex 311, for such time as
Mexico is a NAFTA country. Any service for which an exemption from such
fee is provided by reason of this paragraph may not be funded with money
contained in the Customs User Fee Account.\
\
(f) Disposition of Fees.\--There is established in the general fund of
the Treasury a separate account which shall be known as the \"Customs
User Fee Account\". Notwithstanding section 524 of the Tariff Act of
1930 (19 U.S.C. 1524), there shall be deposited as offsetting receipts
into the Customs User Fee Account all fees collected under subsection
(a) ~~except that portion of such fees that is required under paragraph
(3) for the direct reimbursement of appropriations~~ except\--\
\
(A) the portion of such fees that is required under paragraph (3) for
the direct reimbursement of appropriations, and\
\
(B) the portion of such fees that is determined by the Secretary to be
excess fees under paragraph (5).

\* \* \* \* \*

(3)(A) The Secretary of the Treasury, in accordance with section 524 of
the Tariff Act of 1930 and subject to subparagraph (B), shall directly
reimburse, from the fees collected under subsection (a) ~~(other than
subsection (a) (9) or (10)~~ other than the fees under subsection (a)
(9) and (10) and the excess fees determined by the Secretary under
paragraph\
\
(5)), each appropriation for the amount paid out of that appropriation
for the costs incurred by the Secretary\--\
\
(i) \* \* \*

\* \* \* \* \*

\(4\) At the close of fiscal year 1988 and each even-numbered fiscal
year occurring thereafter, the Secretary of the Treasury shall submit a
report to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate regarding how
the fees imposed ~~under subsection (a)~~ under subsection (a) (other
than the excess fees determined by the Secretary under paragraph (5))
should be adjusted in order that the balance of the Customs User Fee
Account approximates a zero balance. Before making recommendations
regarding any such adjustments, the Secretary of the Treasury shall
provide adequate opportunity for public comment. The recommendations
shall, as precisely as possible, propose fees which reflect the actual
costs to the United States Government for the commercial services
provided by the United States Customs Service.\
\
(5) At the close of each of fiscal years 1994, 1995, 1996, and 1997, the
Secretary of the Treasury shall determine the amount of the fees
collected under paragraph (5)(A) of subsection (a) for that fiscal year
that exceeds the amount of such fees that would have been collected for
such fiscal year if the fees that were in effect on the day before the
effective date of this paragraph applied to such fiscal year. The amount
of the excess fees determined under the preceding sentence shall be
deposited in the Customs User Fee Account and shall be available for
reimbursement of inspectional costs (including passenger processing
costs) not otherwise reimbursed under this section, and shall be
available only to the extent provided in appropriations Acts.\
(g) Regulations and Enforcement.\--(1) ~~In addition to the regulations
required under paragraph (2), the~~The Secretary of the Treasury may
prescribe such rules and regulations as may be necessary to carry out
the provisions of this section. Regulations issued by the Secretary of
the Treasury under this subsection with respect to the collection of the
fees charged under subsection (a)(5) and the remittance of such fees to
the Treasury of the United States shall be consistent with the
regulations issued by the Secretary of the Treasury for the collection
and remittance of the taxes imposed by subchapter C of chapter 33 of the
Internal Revenue Code of 1954, but only to the extent the regulations
issued with respect to such taxes do not conflict with the provisions of
this section. ~~(2) The Secretary of the Treasury shall prescribe
regulations governing the work shifts of customs personnel at airports.
Such regulations shall provide, among such other factors considered
appropriate by the Secretary, that\-- (A) the work shifts will be
adjusted, as necessary, to meet cyclical and seasonal demands and to
minimize the use of overtime; (B) the work shifts will not be
arbitrarily reduced or compressed; and (C) consultation with the
Advisory Committee on Commercial Operations of the United States Customs
Service (established under section 9501(c) of the Omnibus Budget
Reconciliation Act of 1987) will be carried out before adjustments are
made in the work shifts.~~ ~~(3)~~ (2) Except to the extent otherwise
provided in regulations, all administrative and enforcement provisions
of customs laws and regulations, other than those laws and regulations
relating to drawback, shall apply with respect to any fee prescribed
under subsection (a) of this section, and with respect to persons liable
therefor, as if such fee is a customs duty. For purposes of the
preceding sentence, any penalty expressed in terms of a relationship to
the amount of the duty shall be treated as not less than the amount
which bears a similar relationship to the amount of the fee assessed.
For purposes of determining the jurisdiction of any court of the United
States or any agency of the United States, any fee prescribed under
subsection (a) of this section shall be treated as if such fee is a
customs duty.

\* \* \* \* \*

\(j\) Effective Dates.\--(1) \* \* \*

\* \* \* \* \*

\(3\) Fees may not be charged under subsection (a) after ~~September 30,
1998.~~ September 30, 2003.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Trade Act of 1974**

\* \* \* \* \*

**TABLE OF CONTENTS\
\
**TITLE I\--NEGOTIATING AND OTHER AUTHORITY

\* \* \* \* \*

TITLE II\--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION\
\
Chapter 1\--Positive Adjustment by Industries Injured by Imports\
\
\* \* \* \* \*\
\
Chapter 2\--Adjustment Assistance for Workers\
\
Subchapter A\--Petitions and Determinations

\* \* \* \* \*

Subchapter C\--General Provisions\
Sec. 239. Agreements with States.\
Sec. 240 Administration absent State agreement.\
Sec. 241. Payments to States.

\* \* \* \* \*

Sec. 249. Subpena power.\
Sec. 249A. Nonduplication of assistance.\
\
Subchapter D\--NAFTA Transitional Adjustment Assistance Program\
Sec. 250. Establishment of transitional program.

\* \* \* \* \*

**TITLE I\--NEGOTIATING AND OTHER AUTHORITY**

\* \* \* \* \*

**CHAPTER 8\--IDENTIFICATION OF MARKET BARRIERS AND CERTAIN UNFAIR TRADE
ACTIONS**

\* \* \* \* \*

**[SEC. 182. IDENTIFICATION OF COUNTRIES THAT DENY ADEQUATE PROTECTION,
OR MARKET ACCESS, FOR INTELLECTUAL PROPERTY RIGHTS.\
\
]{.underline}**(a) \* \* \*\
\* \* \* \* \*\
(f) Special Rule for Actions Affecting United States Cultural
Industries.\--\
\
(1) In general.\--By no later than the date that is 30 days after the
date on which the annual report is submitted to Congressional committees
under section 181(b), the Trade Representative shall identify any act,
policy, or practice of Canada which\--\
\
(A) affects cultural industries,\
\
(B) is adopted or expanded after December 17, 1992, and\
\
(C) is actionable under article 2106 of the North American Free Trade
Agreement.\
\
(2) Special rules for identifications.\--For purposes of section
302(b)(2)(A), an act, policy, or practice identified under this
subsection shall be treated as an act, policy, or practice that is the
basis for identification of a country under subsection (a)(2), unless
the United States has already taken action pursuant to article 2106 of
the North American Free Trade Agreement in response to such act, policy,
or practice. In deciding whether to identify an act, policy, or practice
under paragraph (1), the Trade Representative shall\--\
\
(A) consult with and take into account the views of representatives of
the relevant domestic industries, appropriate committees established
pursuant to section 135, and appropriate officers of the Federal
Government, and\
\
(B) take into account the information from such sources as may be
available to the Trade Representative and such information as may be
submitted to the Trade Representative by interested persons, including
information contained in reports submitted under section 181(b).\
\
(3) Cultural industries.\--For purposes of this subsection, the term
\"cultural industries\" means persons engaged in any of the following
activities:\
\
(A) The publication, distribution, or sale of books, magazines,
periodicals, or newspapers in print or machine readable form but not
including the sole activity of printing or typesetting any of the
foregoing.\
\
(B) The production, distribution, sale, or exhibition of film or video
recordings.\
\
(C) The production, distribution, sale, or exhibition of audio or video
music recordings.\
\
(D) The publication, distribution, or sale of music in print or machine
readable form.\
\
(E) Radio communications in which the transmissions are intended for
direct reception by the general public, and all radio, television, and
cable broadcasting undertakings and all satellite programming and
broadcast network services.\
**TITLE II\--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION\
\
CHAPTER 1\--POSITIVE ADJUSTMENT BY INDUSTRIES INJURED BY IMPORTS**

\* \* \* \* \*

**[SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY
COMMISSION.\
\
]{.underline}**(a) Petitions and Adjustment Plans.\--\
\
(1) \* \* \*

\* \* \* \* \*

\(8\) The procedures concerning the release of confidential business
information set forth in section 332(g) of the Tariff Act of 1930 shall
apply with respect to information received by the Commission in the
course of investigations conducted under this chapter and part 1 of
title III of the North American Free Trade Agreement Implementation Act.

\* \* \* \* \*

\(d\) Provisional Relief.\--\
\
(1)(A) An entity representing a domestic industry that produces a
perishable agricultural product or citrus product that is like or
directly competitive with an imported perishable agricultural product or
citrus product may file a request with the Trade Representative for the
monitoring of imports of that product under subparagraph (B). Within 21
days after receiving the request, the Trade Representative shall
determine if\--\
\
(i) the imported product is a perishable agricultural product or citrus
product; and\
\
(ii) there is a reasonable indication that such product is being
imported into the United States in such increased quantities as to be,
or likely to be, a substantial cause of serious injury, or the threat
thereof, to such domestic industry.

\* \* \* \* \*

\(C\) If a petition filed under subsection (a)\--\
\
(i) alleges injury from imports of a perishable agricultural product or
citrus product that has been, on the date the allegation is included in
the petition, subject to monitoring by the Commission under paragraph
(2) for not less than 90 days; and\
\
(ii) requests that provisional relief be provided under this subsection
with respect to such imports; the Commission shall, not later than the
21st day after the day on which the request was filed, make a
determination, on the basis of available information, whether increased
imports (either actual or relative to domestic production) of the
perishable agricultural product or citrus product are a substantial
cause of serious injury, or the threat thereof, to the domestic industry
producing a like or directly competitive perishable product or citrus
product, and whether either\--\
\
(I) the serious injury is likely to be difficult to repair by reason of
perishability of the like or directly competitive agricultural product;
or\
\
(II) the serious injury cannot be timely prevented through investigation
under subsection (b) and action under section 203.

\* \* \* \* \*

\(5\) For purposes of this subsection:\
\
(A) The term \"citrus product\" means any processed oranges or
grapefruit, or any orange or grapefruit juice, including concentrate.
~~(A)~~ (B) A perishable agricultural product is any agricultural
article, including livestock, regarding which the Trade Representative
considers action under this section to be appropriate after taking into
account\--\
\
(i) whether the article has\--

\* \* \* \* \*

~~(B)~~ (C) The term \"provisional relief\" means\--\
\
(i) any increase in, or imposition of, any duty;

\* \* \* \* \*

**CHAPTER 2\--ADJUSTMENT ASSISTANCE FOR WORKERS\
\
**Subchapter A\--Petitions and Determinations\
\
**[SEC. 221. PETITIONS.\
\
]{.underline}**(a) A petition for a certification of eligibility to
apply for adjustment assistance under this ~~chapter~~ subchapter may be
filed with the Secretary of Labor (hereinafter in this chapter referred
to as the \"Secretary\") by a group of workers (including workers in any
agricultural firm or subdivision of an agricultural firm) or by their
certified or recognized union or other duly authorized representative.
Upon receipt of the petition, the Secretary shall promptly publish
notice in the Federal Register that he has received the petition and
initiated an investigation.\
\
\* \* \* \* \*\
\
**[SEC. 222. GROUP ELIGIBILITY REQUIREMENTS.\
\
]{.underline}**(a) The Secretary shall certify a group of workers
(including workers in any agricultural firm or subdivision of an
agricultural firm) as eligible to apply for adjustment assistance under
this ~~chapter~~ subchapter if he determines\--\
\
(1) \* \* \*

\* \* \* \* \*

**[SEC. 223. DETERMINATIONS BY SECRETARY OF LABOR.\
\
]{.underline}**(a) As soon as possible after the date on which a
petition is filed under section 221, but in any event not later than 60
days after that date, the Secretary shall determine whether the
petitioning group meets the requirements of section 222 and shall issue
a certification of eligibility to apply for assistance under this
~~chapter~~ subchapter covering workers in any group which meets such
requirements. Each certification shall specify the date on which the
total or partial separation began or threatened to begin.

\* \* \* \* \*

**[SEC. 225. BENEFIT INFORMATION TO WORKERS.\
\
]{.underline}**(a) \* \* \*\
\
(b)(1) The Secretary shall provide written notice through the mail of
the benefits available under this chapter to each worker whom the
Secretary has reason to believe is covered by a certification made under
subchapter A or subchapter D of this chapter\--\
\
(A) at the time such certification is made, if the worker was partially
or totally separated from the adversely affected employment before such
certification, or\
\
(B) at the time of the total or partial separation of the worker from
the adversely affected employment, if subparagraph (A) does not apply.\
\
(2) The Secretary shall publish notice of the benefits available under
this chapter to workers covered by each certification made under
subchapter A or subchapter D in newspapers of general circulation in the
areas in which such workers reside.

\* \* \* \* \*

Subchapter C\--General Provisions

\* \* \* \* \*

**[SEC. 245. AUTHORIZATION OF APPROPRIATIONS.\
\
]{.underline}**~~There~~ (a) In General.\--There are authorized to be
appropriated to the Department of Labor, for each of the fiscal years
1993, 1994, 1995, 1996, 1997, and 1998, such sums as may be necessary to
carry out the purposes of this chapter, other than subchapter D.\
\
(b) Subchapter D.\--There are authorized to be appropriated to the
Department of Labor, for each of fiscal years 1994, 1995, 1996, 1997,
and 1998, such sums as may be necessary to carry out the purposes of
subchapter D of this chapter.

\* \* \* \* \*

**[SEC. 249A. NONDUPLICATION OF ASSISTANCE.\
\
]{.underline}**No worker may receive assistance relating to a separation
pursuant to certifications under both subchapters A and D of this
chapter. Subchapter D\--NAFTA Transitional Adjustment Assistance
Program\
\
**[SEC. 250. ESTABLISHMENT OF TRANSITIONAL PROGRAM.\
\
]{.underline}**(a) Group Eligibility Requirements.\--\
\
(1) Criteria.\--A group of workers (including workers in any
agricultural firm or subdivision of an agricultural firm) shall be
certified as eligible to apply for adjustment assistance under this
subchapter pursuant to a petition filed under subsection (b) if the
Secretary determines that a significant number or proportion of the
workers in such workers\' firm or an appropriate subdivision of the firm
have become totally or partially separated, or are threatened to become
totally or partially separated, and either\--\
\
(A) that\--\
\
(i) the sales or production, or both, of such firm or subdivision have
decreased absolutely,\
\
(ii) imports from Mexico or Canada of articles like or directly
competitive with articles produced by such firm or subdivision have
increased, and\
\
(iii) the increase in imports under clause (ii) contributed importantly
to such workers\' separation or threat of separation and to the decline
in the sales or production of such firm or subdivision; or\
\
(B) that there has been a shift in production by such workers\' firm or
subdivision to Mexico or Canada of articles like or directly competitive
with articles which are produced by the firm or subdivision.\
\
(2) Definition of contributed importantly.\--The term \"contributed
importantly\", as used in paragraph (1)(A)(iii), means a cause which is
important but not necessarily more important than any other cause.\
\
(3) Regulations.\--The Secretary shall issue regulations relating to the
application of the criteria described in paragraph (1) in making
preliminary findings under subsection (b) and determinations under
subsection (c).\
\
(b) Preliminary Findings and Basic Assistance.\--\
\
(1) Filing of petitions.\--A petition for certification of eligibility
to apply for adjustment assistance under this subchapter may be filed by
a group of workers (including workers in any agricultural firm or
subdivision of an agricultural firm) or by their certified or recognized
union or other duly authorized representative with the Governor of the
State in which such workers\' firm or subdivision thereof is located.\
\
(2) Findings and assistance.\--Upon receipt of a petition under
paragraph (1), the Governor shall\--\
\
(A) notify the Secretary that the Governor has received the petition;\
\
(B) within 10 days after receiving the petition\--\
\
(i) make a preliminary finding as to whether the petition meets the
criteria described in subsection (a)(1) (and for purposes of this clause
the criteria described under subparagraph (A)(iii) of such subsection
shall be disregarded), and\
\
(ii) transmit the petition, together with a statement of the finding
under clause (i) and reasons therefor, to the Secretary for action under
subsection (c); and\
\
(C) if the preliminary finding under subparagraph (B)(i) is affirmative,
ensure that rapid response and basic readjustment services authorized
under other Federal law are made available to the workers.\
\
(c) Review of Petitions by Secretary; Certifications.\--\
\
(1) In general.\--The Secretary, within 30 days after receiving a
petition under subsection (b), shall determine whether the petition
meets the criteria described in subsection (a)(1). Upon a determination
that the petition meets such criteria, the Secretary shall issue to
workers covered by the petition a certification of eligibility to apply
for assistance described in subsection (d).\
\
(2) Denial of certification.\--Upon denial of certification with respect
to a petition under paragraph (1), the Secretary shall review the
petition in accordance with the requirements of subchapter A to
determine if the workers may be certified under such subchapter.\
(d) Comprehensive Assistance.\--Workers covered by certification issued
by the Secretary under subsection (c) shall be provided, in the same
manner and to the same extent as workers covered under a certification
under subchapter A, the following:\
\
(1) Employment services described in section 235.\
\
(2) Training described in section 236, except that notwithstanding the
provisions of section 236(a)(2)(A), the total amount of payments for
training under this subchapter for any fiscal year shall not exceed
\$30,000,000.\
\
(3) Trade readjustment allowances described in sections 231 through 234,
except that\--\
\
(A) the provisions of sections 231(a)(5)(C) and 231(c), authorizing the
payment of trade readjustment allowances upon a finding that it is not
feasible or appropriate to approve a training program for a worker,
shall not be applicable to payment of such allowances under this
subchapter; and\
\
(B) notwithstanding the provisions of section 233(b), in order for a
worker to qualify for trade readjustment allowances under this
subchapter, the worker shall be enrolled in a training program approved
by the Secretary under section 236(a) by the later of\--\
\
(i) the last day of the 16th week of such worker\'s initial unemployment
compensation benefit period, or\
\
(ii) the last day of the 6th week after the week in which the Secretary
issues a certification covering such worker. In cases of extenuating
circumstances relating to enrollment in a training program, the
Secretary may extend the time for enrollment for a period not to exceed
30 days .\
\
(4) Job search allowances described in section 237.

\(5\) Relocation allowances described in section 238.

\(e\) Administration.\--The provisions of subchapter C shall apply to
the administration of the program under this subchapter in the same
manner and to the same extent as such provisions apply to the
administration of the program under subchapters A and B, except that the
agreement between the Secretary and the States described in section 239
shall specify the procedures that will be used to carry out the
certification process under subsection (c) and the procedures for
providing relevant data by the Secretary to assist the States in making
preliminary findings under subsection (b).

\* \* \* \* \*

**CHAPTER 5\--MISCELLANEOUS PROVISIONS**

\* \* \* \* \*

**[SEC. 284. JUDICIAL REVIEW.\
\
]{.underline}**(a) A worker, group of workers, certified or recognized
union, or authorized representative of such worker or group aggrieved by
a final determination of the Secretary of Labor under section 223 or
section 250(c) of this title, a firm or its representative or any other
interested domestic party aggrieved by a final determination of the
Secretary of Commerce under section 251 of this title, or a community or
any other interested domestic party aggrieved by a final determination
of the Secretary of Commerce under section 271 of this title may, within
sixty days after notice of such determination, commence a civil action
in the United States Court of International Trade for review of such
determination. The clerk of such court shall send a copy of the summons
and the complaint in such action to the Secretary of Labor or the
Secretary of Commerce, as the case may be. Upon receiving a copy of such
summons and complaint, such Secretary shall promptly certify and file in
such court the record on which he based such determination.

\* \* \* \* \*

**[SEC. 285. TERMINATION.\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(c\) ~~No~~ (1) Except as provided in paragraph (2), no assistance,
vouchers, allowances, or other payments may be provided under chapter 2,
and no technical assistance may be provided under chapter 3, after
September 30, 1998.\
(2)(A) Except as provided in subparagraph (B), no assistance, vouchers,
allowances, or other payments may be provided under subchapter D of
chapter 2 after the day that is the earlier of\--\
\
(i) September 30, 1998, or\
\
(ii) the date on which legislation, establishing a program providing
dislocated workers with comprehensive assistance substantially similar
to the assistance provided by such subchapter D, becomes effective.\
(B) Notwithstanding subparagraph (A), if, on or before the day described
in subparagraph (A), a worker\--\
\
(i) is certified as eligible to apply for assistance, under subchapter D
of chapter 2; and\
\
(ii) is otherwise eligible to receive assistance in accordance with
section 250, such worker shall continue to be eligible to receive such
assistance for any week for which the worker meets the eligibility
requirements of such section.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Meat Import Act of 1979**

**Sec. 2. (a) This section may be cited as the \"Meat Import Act of
1979\".**

**\
**(b) For purposes of this section\--\
\
(1) The term \"entered\" means entered, or withdrawn from warehouse, for
consumption in the customs territory of the United States.\
\
(2) The term \"meat articles\" means the articles provided for in the
Tariff Schedules of the United States (19 U.S.C. 1202) under\--\
\
(A) item 106.10 (relating to fresh, chilled, or frozen cattle meat);\
\
(B) items 106.22 and 106.25 (relating to fresh, chilled, or frozen meat
of goats and sheep (except lambs)); and\
\
(C) items 107.55 and 107.62 (relating to prepared and preserved beef and
veal (except sausage)), if the articles are prepared, whether fresh,
chilled, or frozen, but not otherwise preserved. ~~Such term does not
include any article described in subparagraph (A), (B), or (C)
originating in Canada (as determined in accordance with section 202 of
the United States-Canada Free-Trade Agreement Implementation Act of
1988).\
\
~~(3) The term \"meat articles\" does not include any article described
in paragraph (2) that\--\
\
(A) originates in a NAFTA country (as determined in accordance with
section 202 of the NAFTA Act), or\
\
(B) originates in Canada (as determined in accordance with section 202
of the United States-Canada Free-Trade Agreement Implementation Act of
1988) during such time as the United States-Canada Free-Trade Agreement
is in force with respect to, and the United States applies such
Agreement to, Canada. \[(3)\] (4) The term \'Secretary\' means the
Secretary of Agriculture.\
\
(5) The term \"NAFTA Act\" means the North American Free Trade Agreement
Implementation Act.\
\
(6) The term \"NAFTA country\" has the meaning given such term in
section 2(4) of the NAFTA Act.

\* \* \* \* \*

(f)(1) If the aggregate quantity estimated before any calendar quarter
by the Secretary under subsection (e)(2) is 110 percent or more of the
aggregate quantity estimated by him under subsection (e)(1), and if
there is no limitation in effect under this section for such calendar
year with respect to meat articles, the President shall by proclamation
limit the total quantity of meat articles which may be entered during
such calendar year to the aggregate quantity estimated for such calendar
year by the Secretary under subsection (e)(1); except that no limitation
imposed under this paragraph for any calendar year may be less than (A)
1,193,000,000 pounds if no import limitation on Canadian products is in
effect under subsection (1), or (B) 1,250,000,000 pounds if an import
limitation on Canadian products is in effect under subsection (1). The
President shall include in the articles subject to any limit proclaimed
under this paragraph any article of meat provided for in item 107.61 of
the Tariff Schedules of the United States (relating to high-quality beef
specially processed into fancy cuts~~.~~ , except that the President may
exclude any such article originating in a NAFTA country (as determined
in accordance with section 202 of the NAFTA Act) or, if paragraph (3)(B)
applies, any such article originating in Canada as determined in
accordance with such paragraph (3)(B).\
\* \* \* \* \*\
(i) The Secretary shall allocate the total quantity proclaimed under
subsection (f)(1) and any increase in such quantity provided for under
subsection (g) among supplying countries other than Canada and Mexico on
the basis of the shares of the United States market for meat articles
such countries other than Canada and Mexico supplied during a
representative period. Notwithstanding the preceding sentence, due
account may be given to special factors which have affected or may
affect the trade in meat articles or cattle. The Secretary shall certify
such allocations to the Secretary of the Treasury.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 358e of the Agricultural Adjustment Act of 1938**

**SEC. 358e. MARKETING PENALTIES AND DISPOSITION OF ADDITIONAL PEANUTS
FOR 1991 THROUGH 1997 CROPS OF PEANUTS.\
\
\
**(a) \* \* \*

\* \* \* \* \*

\(d\) Handling and Disposal of Additional Peanuts.\--\
\
(1) \* \* \*

\* \* \* \* \*

~~(6) Reentry of exported peanuts.\--If any additional peanuts exported
by a handler are reentered into the United States in commercial
quantities as determined by the Secretary, the importer thereof shall be
subject to a penalty at a rate equal to 140 percent of the loan level
for quota peanuts on the quantity of peanuts reentered.\
\
~~(6) Reentry of exported peanuts.\--\
\
(A) Penalty.\--If any additional peanuts exported by a handler are
reentered into the United States in commercial quantities as determined
by the Secretary, the importer of the peanuts shall be subject to a
penalty at a rate equal to 140 percent of the loan level for quota
peanuts on the quantity of peanuts reentered.\
\
(B) Records.\--Each person, firm, or handler who imports peanuts into
the United States shall maintain such records and documents as are
required by the Secretary to ensure compliance with this subsection.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 1542 of the Food, Agriculture, Conservation, and Trade Act of
1990**

**SEC. 1542. PROMOTION OF AGRICULTURAL EXPORTS TO EMERGING DEMOCRACIES.\
\
**(a) \* \* \*\
\* \* \* \* \*\
(d) E (Kika) de la Garza Agricultural Fellowship Program.\--The
Secretary of Agriculture (hereafter in this section referred to as the
\"Secretary\") shall establish a program, to be known as the \"E (Kika)
de la Garza Agricultural Fellowship Program\", to develop agricultural
markets in emerging democracies and to promote cooperation and exchange
of information between agricultural institutions and agribusinesses in
the United States and the Soviet Union, as follows:\
\
(1) \* \* \*

\* \* \* \* \*

\(3\) Agricultural fellowships for nafta countries.\--\
\
(A) In general.\--The Secretary shall grant fellowships to individuals
from countries that are parties to the North American Free Trade
Agreement (referred to in this paragraph as \"NAFTA\") to study
agriculture in the United States, and to individuals in the United
States to study agriculture in other NAFTA countries.\
\
(B) Purpose.\--The purpose of fellowships granted under this paragraph
is\--\
\
(i) to allow the recipients to expand their knowledge and understanding
of agricultural systems and practices in other NAFTA countries;\
\
(ii) to facilitate the improvement of agricultural systems in NAFTA
countries; and\
\
(iii) to establish and expand agricultural trade linkages between the
United States and other NAFTA countries.\
\
(C) Eligible recipients.\--The Secretary may provide fellowships under
this paragraph to agricultural producers and consultants, government
officials, and other individuals from the private and public sectors.\
\
(D) Acceptance of gifts.\--The Secretary may accept money, funds,
property, and services of every kind of gift, devise, bequest, grant, or
otherwise, and may in any manner, dispose of all of the holdings and use
the receipts generated from the disposition to carry out this paragraph.
Receipts under this paragraph shall remain available until expended.\
\
(E) Authorization of appropriation.\--There are authorized to be
appropriated such sums as are necessary to carry out this paragraph.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 104 of Title 35, United States Code**

~~Sec. 104. Invention made abroad\
\
In proceedings in the Patent and Trademark Office and in the courts, an
applicant for a patent, or a patentee, may not establish a date of
invention by reference to knowledge or use thereof, or other activity
with respect thereto, in a foreign country, except as provided in
sections 119 and 365 of this title. Where an invention was made by a
person, civil or military, while domiciled in the United States and
serving in a foreign country in connection with operations by or on
behalf of the United States, he shall be entitled to the same rights of
priority with respect to such invention as if the same had been made in
the United States.~~ Sec. 104. Invention made abroad\
(a) In General.\--In proceedings in the Patent and Trademark Office, in
the courts, and before any other competent authority, an applicant for a
patent, or a patentee, may not establish a date of invention by
reference to knowledge or use thereof, or other activity with respect
thereto, in a foreign country other than a NAFTA country, except as
provided in sections 119 and 365 of this title. Where an invention was
made by a person, civil or military, while domiciled in the United
States or a NAFTA country and serving in any other country in connection
with operations by or on behalf of the United States or a NAFTA country,
the person shall be entitled to the same rights of priority in the
United States with respect to such invention as if such invention had
been made in the United States or a NAFTA country. To the extent that
any information in a NAFTA country concerning knowledge, use, or other
activity relevant to proving or disproving a date of invention has not
been made available for use in a proceeding in the Office, a court, or
any other competent authority to the same extent as such information
could be made available in the United States, the Commissioner, court,
or such other authority shall draw appropriate inferences, or take other
action permitted by statute, rule, or regulation, in favor of the party
that requested the information in the proceeding.\
(b) Definition.\--As used in this section, the term \"NAFTA country\"
has the meaning given that term in section 2(4) of the North American
Free Trade Agreement Implementation Act.

\-\-\-\-\-\-\-\-\--

**Section 4 of the Record Rental Amendment of 1985**

**EFFECTIVE DATE\
\
**Sec. 4. (a) \* \* \*

\* \* \* \* \*

~~(c) The amendments made by this Act shall not apply to rentals,
leasings, lendings (or acts or practices in the nature of rentals,
leasings, or lendings) occurring after the date which is 13 years after
the date of the enactment of this Act.~~

\-\-\-\-\-\-\-\-\--

**Trademark Act of 1946**

\* \* \* \* \*

**TITLE I\--THE PRINCIPAL REGISTER**

\* \* \* \* \*

**MARKS REGISTRABLE ON THE PRINCIPAL REGISTER\
\
**Sec. 2. No trade-mark by which the goods of the applicant may be
distinguished from the goods of others shall be refused registration on
the principal register on account of its nature unless it\--\
\
(a) \* \* \*

\* \* \* \* \*

~~(e) Consists of a mark which, (1) when used on or in connection with
the goods of the applicant is merely descriptive or deceptively
misdescriptive of them, or (2) when used on or in connection with the
goods of the applicant is primarily geographically descriptive or
deceptively misdescriptive of them, except as indications of regional
origin may be registrable under section 4 hereof, or (3) is primarily
merely a surname.\
~~(e) Consists of a mark which (1) when used on or in connection with
the goods of the applicant is merely descriptive or deceptively
misdescriptive of them, (2) when used on or in connection with the goods
of the applicant is primarily geographically descriptive of them, except
as indications of regional origin may be registrable under section 4,
(3) when used on or in connection with the goods of the applicant is
primarily geographically deceptively misdescriptive of them, or (4) is
primarily merely a surname.\
(f) Except as expressly excluded in paragraphs (a), (b), (c), ~~and
(d)~~ (d), and (e)(3) of this section, nothing herein shall prevent the
registration of a mark used by the applicant which has become
distinctive of the applicant\'s goods in commerce. The Commissioner may
accept as prima facie evidence that the mark has become distinctive, as
used on or in connection with the applicant\'s goods in commerce, proof
of substantially exclusive and continuous use thereof as a mark by the
applicant in commerce for the five years before the date on which the
claim of distinctiveness is made. Nothing in this section shall prevent
the registration of a mark which, when used on or in connection with the
goods of the applicant, is primarily geographically deceptively
misdescriptive of them, and which became distinctive of the applicant\'s
goods in commerce before the date of the enactment of the North American
Free Trade Agreement Implementation Act.

\* \* \* \* \*

**TITLE II\--THE SUPPLEMENTAL REGISTER\
\
**Sec. 23. (a) In addition to the principal register, the Commissioner
shall keep a continuation of the register provided in paragraph (b) of
section 1 of the Act of March 19, 1920, entitled \"An Act to give effect
to certain provisions of the convention for the protection of
trade-marks and commercial names, made and signed in the city of Buenos
Aires, in the Argentine Republic, August 20, 1910, and for other
purposes\", to be called the supplemental register. All marks capable of
distinguishing applicant\'s goods or services and not registrable on the
principal register herein provided, except those declared to be
unregistrable under subsections (a), (b), (c), ~~and (d)~~ (d), and
(e)(3) of section 2 of this Act, which are in lawful use in commerce by
the owner thereof, on or in connection with any goods or services may be
registered on the supplemental register upon the payment of the
prescribed fee and compliance with the provisions of subsections (a) and
(e) of section 1 so far as they are applicable. Nothing in this section
shall prevent the registration on the supplemental register of a mark,
capable of distinguishing the applicant\'s goods or services and not
registrable on the principal register under this Act, that is declared
to be unregistrable under section 2(e)(3), if such mark has been in
lawful use in commerce by the owner thereof, on or in connection with
any goods or services, since before the date of the enactment of the
North American Free Trade Agreement Implementation Act.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Title 17, United States Code**

\* \* \* \* \*

Chapter 1\--Subject Matter and Scope of Copyright\
Sec. 101. Definitions.\
102. Subject matter of copyright: In general.\
103. Subject matter of copyright: Compilations and derivative works.\
104. Subject matter of copyright: National origin.\
104A. Copyright in certain motion pictures.

\* \* \* \* \*

**Sec. 104A. Copyright in certain motion pictures\
\
**(a) Restoration of Copyright.\--Subject to subsections (b) and (c)\--\
\
(1) any motion picture that is first fixed or published in the territory
of a NAFTA country as defined in section 2(4) of the North American Free
Trade Agreement Implementation Act to which Annex 1705.7 of the North
American Free Trade Agreement applies, and\
\
(2) any work included in such motion picture that is first fixed in or
published with such motion picture. that entered the public domain in
the United States because it was first published on or after January 1,
1978, and before March 1, 1989, without the notice required by section
401, 402, or 403 of this title, the absence of which has not been
excused by the operation of section 405 of this title, as such sections
were in effect during that period, shall have copyright protection under
this title for the remainder of the term of copyright protection to
which it would have been entitled in the United States had it been
published with such notice.\
\
(b) Effective Date of Protection.\--The protection provided under
subsection (a) shall become effective, with respect to any motion
picture or work included in such motion picture meeting the criteria of
that subsection, 1 year after the date on which the North American Free
Trade Agreement enters into force with respect to, and the United States
applies the Agreement to, the country in whose territory the motion
picture was first fixed or published if, before the end of that 1-year
period, the copyright owner in the motion picture or work files with the
Copyright Office a statement of intent to have copyright protection
restored under subsection (a). The Copyright Office shall publish in the
Federal Register promptly after that effective date a list of motion
pictures, and works included in such motion pictures, for which
protection is provided under subsection (a).\
\
(c) Use of Previously Owned Copies.\--A national or domiciliary of the
United States who, before the date of the enactment of the North
American Free Trade Agreement Implementation Act, made or acquired
copies of a motion picture, or other work included in such motion
picture, that is subject to protection under subsection (a), may sell or
distribute such copies or continue to perform publicly such motion
picture and other work without liability for such sale, distribution, or
performance, for a period of 1 year after the date on which the list of
motion pictures, and works included in such motion pictures, that are
subject to protection under subsection (a) is published in the Federal
Register under subsection (b).

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 214 of the Immigration and Nationality Act**

**ADMISSION OF NONIMMIGRANTS\
Sec. 214.\
**(a) \* \* \*

\* \* \* \* \*

(e)(1) Notwithstanding any other provision of this Act, an alien who is
a citizen of Canada and seeks to enter the United States under and
pursuant to the provisions of Annex 1502.1 (United States of America),
Part C\-- Professionals, of the United States-Canada Free-Trade
Agreement to engage in business activities at a professional level as
provided for therein may be admitted for such purpose under regulations
of the Attorney General promulgated after consultation with the
Secretaries of State and Labor.\
(2) An alien who is a citizen of Canada or Mexico, and the spouse and
children of any such alien if accompanying or following to join such
alien, who seeks to enter the United States under and pursuant to the
provisions of Section D of Annex 1603 of the North American Free Trade
Agreement (in this subsection referred to as \"NAFTA\") to engage in
business activities at a professional level as provided for in such
Annex, may be admitted for such purpose under regulations of the
Attorney General promulgated after consultation with the Secretaries of
State and Labor. For purposes of this Act, including the issuance of
entry documents and the application of subsection (b), such alien shall
be treated as if seeking classification, or classifiable, as a
nonimmigrant under section 101(a)(15). The admission of an alien who is
a citizen of Mexico shall be subject to paragraphs (3), (4), and (5).
For purposes of this paragraph and paragraphs (3), (4), and (5), the
term \"citizen of Mexico\" means \"citizen\" as defined in Annex 1608 of
NAFTA.\
(3) The Attorney General shall establish an annual numerical limit on
admissions under paragraph (2) of aliens who are citizens of Mexico, as
set forth in Appendix 1603.D.4 of Annex 1603 of the NAFTA. Subject to
paragraph (4), the annual numerical limit\--\
\
(A) beginning with the second year that NAFTA is in force, may be
increased in accordance with the provisions of paragraph 5(a) of Section
D of such Annex, and\
\
(B) shall cease to apply as provided for in paragraph 3 of such
Appendix.\
(4) The annual numerical limit referred to in paragraph (3) may be
increased or shall cease to apply (other than by operation of paragraph
3 of such Appendix) only if\--\
\
(A) the President has obtained advice regarding the proposed action from
the appropriate advisory committees established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155);\
\
(B) the President has submitted a report to the Committee on the
Judiciary of the Senate and the Committee on the Judiciary of the House
of Representatives that sets forth\--\
\
(i) the action proposed to be taken and the reasons therefor, and\
\
(ii) the advice obtained under subparagraph (A);\
\
(C) a period of at least 60 calendar days that begins on the first day
on which the President has met the requirements of subparagraphs (A)
and\
\
(B) with respect to such action has expired; and\
\
(D) the President has consulted with such committees regarding the
proposed action during the period referred to in subparagraph (C).\
\
(5) During the period that the provisions of Appendix 1603.D.4 of Annex
1603 of the NAFTA apply, the entry of an alien who is a citizen of
Mexico under and pursuant to the provisions of Section D of Annex 1603
of NAFTA shall be subject to the attestation requirement of section
212(m), in the case of a registered nurse, or the application
requirement of section 212(n), in the case of all other professions set
out in Appendix 1603.D.1 of Annex 1603 of NAFTA, and the petition
requirement of subsection (c), to the extent and in the manner
prescribed in regulations promulgated by the Secretary of Labor, with
respect to sections 212(m) and 212(n), and the Attorney General, with
respect to subsection (c).

\* \* \* \* \*

\(j\) Notwithstanding any other provision of this Act, an alien who is a
citizen of Canada or Mexico who seeks to enter the United States under
and pursuant to the provisions of Section B, Section C, or Section D of
Annex 1603 of the North American Free Trade Agreement, shall not be
classified as a nonimmigrant under such provisions if there is in
progress a strike or lockout in the course of a labor dispute in the
occupational classification at the place or intended place of
employment, unless such alien establishes, pursuant to regulations
promulgated by the Attorney General, that the alien\'s entry will not
affect adversely the settlement of the strike or lockout or the
employment of any person who is involved in the strike or lockout.
Notice of a determination under this subsection shall be given as may be
required by paragraph 3 of article 1603 of such Agreement. For purposes
of this subsection, the term \"citizen of Mexico\" means \"citizen\" as
defined in Annex 1608 of such Agreement.

\-\-\-\-\-\-\-\-\--

**Trade Agreements Act of 1979**

**SECTION 1. SHORT TITLE; TABLE OF CONTENTS; PURPOSES.\
\
**(a) Short Title.\--This Act may be cited as the \"Trade Agreements Act
of 1979\".\
(b) Table of Contents.\--\
Sec. 1. Short title; table of contents; purposes.\
Sec. 2. Approval of trade agreements.\
Sec. 3. Relationship of trade agreements to United States law.\
\
TITLE I\--COUNTERVAILING AND ANTIDUMPING DUTIES\
\
\* \* \* \* \*\
\
TITLE IV\--TECHNICAL BARRIERS TO TRADE (STANDARDS)\
\
Subtitle A\--Obligations of the United States\
Sec. 401. Certain standards-related activities.\
Sec. 402. Federal standards-related activities.\
Sec. 403. State and private standards-related activities.

\* \* \* \* \*

**TITLE III\--GOVERNMENT PROCUREMENT\
\
SEC. 301. GENERAL AUTHORITY TO MODIFY DISCRIMINATORY PURCHASING
REQUIREMENTS\
\
**(a) Presidential Waiver of Discriminatory Purchasing
Requirements.\--~~The President~~ Subject to subsection (f) of this
section, the President may waive, in whole or in part, with respect to
eligible products of any foreign country or instrumentality designated
under subsection (b), and suppliers of such products, the application of
any law, regulation, procedure, or practice regarding Government
procurement that would, if applied to such products and suppliers,
result in treatment less favorable than that accorded\--\
\
(1) to United States products and suppliers of such products; or\
\
(2) to eligible products of another foreign country or instrumentality
which is a party to the Agreement and suppliers of such products.\
\
(b) Designation of Eligible Countries and Instrumentalities.\--The
President may designate a foreign country or instrumentality for
purposes of subsection (a) only if he determines that such country or
instrumentality\--\
\
(1) is a country or instrumentality which (A) has become a party to the
Agreement or the North American Free Trade Agreement, and (B) will
provide appropriate reciprocal competitive government procurement
opportunities to United States products and suppliers of such products;

\* \* \* \* \*

\(e\) Procurement Procedures by Certain Federal
Agencies.\--Notwithstanding any other provision of law, the President
may direct any agency of the United States listed in Annex 1001.1a-2 of
the North American Free Trade Agreement to procure eligible products in
compliance with the procedural provisions of chapter 10 of such
Agreement.\
(f) Small Business and Minority Preferences.\--The authority of the
President under subsection (a) of this section to waive any law,
regulation, procedure, or practice regarding Government procurement does
not authorize the waiver of any small business or minority preference.\
\
**SEC. 302. AUTHORITY TO ENCOURAGE RECIPROCAL COMPETITIVE PROCUREMENT
PRACTICES.\
\
**(a) Authority To Bar Procurement From Non-Designated Countries.\--With
respect to procurement covered by the Agreement, the President, in order
to encourage additional countries to become parties to the Agreement and
to provide appropriate reciprocal competitive government procurement
opportunities to United States products and suppliers of such
products\--\
\
(1) shall prohibit the procurement, after the date on which any waiver
under section 301(a) first takes effect, of products (A) which are
products of a foreign country or instrumentality which is not designated
pursuant to section 301(b), and (B) which ~~would otherwise be eligible
products~~ are products covered under the Agreement for procurement by
the United States; and

\* \* \* \* \*

**SEC. 308. DEFINITIONS.\
\
**As used in this title\--\
\
(1) \* \* \*\
\* \* \* \* \*\
\
(4) Eligible products.\-- ~~(A) In general.\--The term \"eligible
product\" means, with respect to any foreign country or instrumentality,
a product or service of that country or instrumentality which is covered
under the Agreement for procurement by the United States.\
\
~~(A) In general.\--The term \"eligible product\" means, with respect to
any foreign country or instrumentality that is\--\
\
(i) a party to the Agreement, a product or service of that country or
instrumentality which is covered under the Agreement for procurement by
the United States; or\
\
(ii) a party to the North American Free Trade Agreement, a product or
service of that country or instrumentality which is covered under the
North American Free Trade Agreement for procurement by the United
States.

\* \* \* \* \*

**TITLE IV\--TECHNICAL BARRIERS TO TRADE (STANDARDS)**

\* \* \* \* \*

Subtitle B\--Functions of Federal Agencies\
\
**SEC. 411. FUNCTIONS OF ~~SPECIAL~~ TRADE REPRESENTATIVE.\
\
**(a) In General.The ~~Special~~ Trade Representative shall coordiante
the consideration of international trade policy issues that arise as a
result of, and shall develop international trade policy as it relates
to, the implementation of this title.\
(b) Negotiating Functions.\--The ~~Special~~ Trade Representative has
responsibility for coordinating United States discussions and
negotiations with foreign countries for the purpose of establishing
mutual arrangements with respect to standard-related activities. In
carrying out this responsibility, the ~~Special~~ Trade Representative
shall inform and consult with any Federal agency having expertise in the
matter\
(c) Cross Reference.\--

\* \* \* \* \*

**SEC. 412. ESTABLISHMENT AND OPERATION OF TECHNICAL OFFICES.\
\
**(a) Establishment.\--\
\
(1) For nonagricultural products.\--The Secretary of Commerce shall
establish and maintain within the Department of Commerce a technical
office that shall carry out the functions prescribed under subsection
(b) with respect to nonagricultural products.\
\
(2) For agricultural products.\--The Secretary of Agriculture shall
establish and maintain within the Department of Agriculture a technical
office that shall carry out the functions prescribed under subsection
(b) with respect to agricultural products.\
(b) Functions of Offices.\--The President shall prescribe for each
technical office established under subsection (a) such functions as the
President deems necessary or appropriate to implement this title.\
\
**SEC. 413. REPRESENTATION OF UNITED STATES INTERESTS BEFORE
INTERNATIONAL STANDARDS ORGANIZATIONS.\
\
**(a) Oversight and Consultation.\--The Secretary concerned shall\--\
\
(1) inform, and consult and coordinate with, the ~~Special~~ Trade
Representative with respect to international standards-related
activities identified under paragraph (2);

\* \* \* \* \*

**SEC. 415 CONTRACTS AND GRANTS.\
\
**(a) In General.\--For purposes of carrying out this title, and
otherwise encouraging compliance with the Agreement, the ~~Special~~
Trade Representative and the Secretary concerned may each, with respect
to functions for which responsible under this title, make grants to, or
enter into contracts with, any other Federal agency, any State agency,
or any private person, to assist such agency or person to implement
appropriate programs and activities, including, but not limited to,
programs and activities\--\
\
(1) to increase awareness of proposed and adopted standards-related
activities;\
\
(2) to facilitate international trade through the appropriate
international and domestic standards-related activities;\
\
(3) to provide, if appropriate, and pursuant to section 413, adequate
United States representation in international standards-related
activities; and\
\
(4) to encourage United States exports through increased awareness of
foreign standards-related activities that may affect United States
exports. No contract entered into under this section shall be effective
except to such extent, and in such amount, as is provided in advance in
appropriation Acts.\
(b) Terms and Conditions.\--Any contract entered into, or any grant
made, under subsection (a) shall be subject to such terms and conditions
as the ~~Special~~ Trade Representative or Secretary concerned shall by
regulation prescribe as being necessary or appropriate to protect the
interests of the United States.\
(c) Limitations.\--Financial assistance extended under this section
shall not exceed 75 percent of the total costs (as established by the
~~Special~~ Trade Representative or Secretary concerned, as the case may
be) of the program or activity for which assistance is made available.
The non-Federal share of such costs shall be made in cash or kind,
consistent with the maintenance of the program or activity concerned.\
(d) Audit.\--Each recipient of a grant or contract under this section
shall make available to the ~~Special~~ Trade Representative or
Secretary concerned, as the case may be, and to the Comptroller General
of the United States, for purposes of audit and examination, any book,
document, paper and record that is pertinent to the funds received under
such grant or contract.\
\
**SEC. 416. TECHNICAL ASSISTANCE.\
\
**The ~~Special~~ Trade Representative and the Secretary concerned may
each, with respect to functions for which responsible under this title,
make available, on a reimbursable basis or otherwise, to any other
Federal agency, State agency, or private person such assistance,
including, but not limited to, employees, services, and facilities, as
may be appropriate to assist such agency or person in carrying out
standards-related activities in a manner consistent with this title.\
\
**SEC. 417. CONSULTATIONS WITH REPRESENTATIVES OF DOMESTIC INTERESTS.\
\
**In carrying out the functions for which responsible under this title,
the ~~Special~~ Trade Representative or Secretary concerned shall
solicit technical and policy advice from the committees, established
under section 135 of the Trade Act of 1974 (19 U.S.C. 2155), that
represent the interests concerned, and may solicit advice from
appropriate State agencies and private persons.\
\
Subtitle C\--Administrative and Judicial Proceedings Regarding
Standards- Related Activities\
\
CHAPTER 1\--REPRESENTATIONS ALLEGING UNITED STATES VIOLATIONS OR
OBLIGATIONS\
\
**SEC. 421. RIGHTS OF ACTION UNDER THIS CHAPTER.\
\
**Except as provided under this chapter, the provisions of this subtitle
do not create any right of action under the laws of the United States
with respect to allegations that any standards-related activity engaged
in within the United States violates the obligations of the United
States under the Agreement.\
\
**SEC. 422. REPRESENTATIONS.\
**Any\--\
\
(1) Party to the Agreement; or\
\
(2) foreign country that is not a Party to the Agreement but is found by
the ~~Special~~ Trade Representative to extend rights and privileges to
the United States that are substantially the same as those that would be
so extended if that foreign country were a Party to the Agreement: may
make a representation to the ~~Special~~ Trade Representative alleging
that a standards-related activity engaged in within the United States
violates the obligations of the United States under the Agreement. Any
such representation must be made in accordance with procedures that the
~~Special~~ Trade Representative shall by regulation prescribe and must
provide a reasonable indication that the standards-related activity
concerned is having a significant trade effect. No person other than a
Party to the Agreement or a foreign country described in paragraph (2)
may make such a representation.\
\
**SEC. 423. ACTION AFTER RECEIPT OF REPRESENTATIONS.\
\
**(a) Review.\--Upon receipt of any representation made under section
422, the ~~Special~~ Trade Representative shall review the issues
concerned in consultation with\--\
\
(1) the agency or person alleged to be engaging in violations under the
Agreement;\
\
(2) the member agencies of the interagency trade organization
established under section 242(a) of the Trade Expansion Act of 1962 (19
U.S.C. 1872((A));\
\
(3) other appropriate Federal agencies; and\
\
(4) appropriate representatives referred to in section 417.\
\
(b) Resolution.\--The ~~Special~~ Trade Representative shall undertake
to resolve, on a mutually satisfactory basis, the issues set forth in
the representation through consultation with the parties concerned.\
\
**SEC. 424. PROCEDURE AFTER FINDING BY INTERNATIONAL FORUM.\
\
**(a) In General.\--If an appropriate international forum finds that a
standards-related activity being engaged in within the United States
conflicts with the obligations of the United States under the Agreement,
the interagency trade organization established under section 242(a) of
the Trade Expansion Act of 1962 (19 U.S.C. 1872(a)) shall review the
finding and the matters related thereto with a view to recommending
appropriate action.\
(b) Cross Reference.\--\
For provisions of law regarding remedies available to domestic persons
alleging that standards activities engaged in by Parties to the
Agreement (other than the United States) violate the obligations of the
Agreement, see section 301 of the Trade Act of 1974 (19 U.S.C. 2411).\
\
CHAPTER 2\--OTHER PROCEEDINGS REGARDING CERTAIN STANDARDS-RELATED
ACTIVITIES\
\
**SEC. 441. FINDINGS OF RECIPROCITY REQUIRED IN ADMINISTRATIVE
PROCEEDINGS.\
\
**(a) In General.\--Except as provided under chapter 1, no Federal
agency may consider a complaint or petition against any
standards-related activity regarding an imported product, if that
activity is engaged in with the United States and is covered by the
Agreement, unless the ~~Special~~ Trade Representative finds, and
informs the agency concerned in writing, that\--\
\
(1) the country of origin of the imported product is a Party to the
Agreement or a foreign country described in section 422(2); and\
\
(2) the dispute settlement procedures provided under the Agreement are
not appropriate.\
(b) Exemptions.\--This section does not apply with respect to causes of
action arising under\--\
\
(1) the antitrust laws as defined in subsection (a) of the first section
of the Clayton Act (15 U.S.C. 12(a)); or\
\
(2) statutes administered by the Secretary of Agriculture. This section
does not apply with respect to petitions and proceedings that are
provided for under the practices of any Federal agency for the purpose
of ensuring, in accordance with section 553 of title 5, United States
Code, that interested persons are given an opportunity to participate in
agency rulemaking or to seek the issuance, amendment, or repeal of a
rule.

\* \* \* \* \*

Subtitle D\--Definitions and Miscellaneous Provisions\
\
**SEC. 451. DEFINITIONS.\
\
**As used in this title\--\
\
(1) Agreement.\--The term \"Agreement\" means the Agreement on Technical
Barriers to Trade approved under section 2(a) of this Act.

\* \* \* \* \*

~~(12) Special representative.\--The term \"Special Representative\"
means the Special Representative for Trade Negotiations.\
\
~~(12) Trade representative.\--The term \"Trade Representative\" means
the United States Trade Representative.

\* \* \* \* \*

**SEC. 453. REPORTS TO CONGRESS ON OPERATION OF AGREEMENT.\
\
**As soon as practicable after the close of the 3-year period beginning
on the date on which this title takes effect, and as soon as practicable
after the close of each succeeding 3-year period, the ~~Special~~ Trade
Representative shall prepare and submit to Congress a report containing
an evaluation of the operation of the Agreement, both domestically and
internationally, during the period.\
\
**SEC. 454. EFFECTIVE DATE.\
\
**This title shall take effect on January 1, 1980, of the Agreement
enters into force with respect to the United States by that date.
Subtitle E\--Standards and Measures Under the North American Free Trade
Agreement\
\
CHAPTER 1\--SANITARY AND PHYTOSANITARY MEASURES\
\
**SEC. 461. GENERAL.\
\
**Nothing in this chapter may be construed\--\
\
(1) to prohibit a Federal agency or State agency from engaging in
activity related to sanitary or phytosanitary measures to protect human,
animal, or plant life or health; or\
\
(2) to limit the authority of a Federal agency or State agency to
determine the level of protection of human, animal, or plant life or
health the agency considers appropriate.\
\
**SEC. 462. INQUIRY POINT.\
\
**The standards information center maintained under section 414 shall,
in addition to the functions specified therein, make available to the
public relevant documents, at such reasonable fees as the Secretary of
Commerce may prescribe, and information regarding\--\
\
(1) any sanitary or phytosanitary measure of general application,
including any control or inspection procedure or approval procedure
proposed, adopted, or maintained by a Federal or State agency;\
\
(2) the procedures of a Federal or State agency for risk assessment, and
factors the agency considers in conducting the assessment and in
establishing the levels of protection that the agency considers
appropriate;\
\
(3) the membership and participation of the Federal Government and State
governments in international and regional sanitary and phytosanitary
organizations and systems, and in bilateral and multilateral
arrangements regarding sanitary and phytosanitary measures, and the
provisions of those systems and arrangements; and\
\
(4) the location of notices of the type required under article 719 of
the NAFTA, or where the information contained in such notices can be
obtained.\
\
**SEC. 463. CHAPTER DEFINITIONS.\
\
**Notwithstanding section 451, for purposes of this chapter\--\
\
(1) Animal.\--The term \"animal\" includes fish, bees, and wild fauna.\
\
(2) Approval procedure.\--The term \"approval procedure\" means any
registration, notification, or other mandatory administrative procedure
for\--\
\
(A) approving the use of an additive for a stated purpose or under
stated conditions, or\
\
(B) establishing a tolerance for a stated purpose or under stated
conditions for a contaminant, in a food, beverage, or feedstuff prior to
permitting the use of the additive or the marketing of a food, beverage,
or feedstuff containing the additive or contaminant.\
\
(3) Contaminant.\--The term \"contaminant\" includes pesticide and
veterinary drug residues and extraneous matter.\
\
(4) Control or inspection procedure.\--The term \"control or inspection
procedure\" means any procedure used, directly or indirectly, to
determine that a sanitary or phytosanitary measure is fulfilled,
including sampling, testing, inspection, evaluation, verification,
monitoring, auditing, assurance of conformity, accreditation,
registration, certification, or other procedure involving the physical
examination of a good, of the packaging of a good, or of the equipment
or facilities directly related to production, marketing, or use of a
good, but does not mean an approval procedure.\
\
(5) Plant.\--The term \"plant\" includes wild flora.\
\
(6) Risk assessment.\--The term \"risk assessment\" means an evaluation
of\--\
\
(A) the potential for the introduction, establishment or spread of a
pest or disease and associated biological and economic consequences; or\
\
(B) the potential for adverse effects on human or animal life or health
arising from the presence of an additive, contaminant, toxin or
disease-causing organism in a food, beverage, or feedstuff.\
\
(7) Sanitary or phytosanitary measure.\--\
\
(A) In general.\--The term \"sanitary or phytosanitary measure\" means a
measure to\--\
\
(i) protect animal or plant life or health in the United States from
risks arising from the introduction, establishment, or spread of a pest
or disease;\
\
(ii) protect human or animal life or health in the United States from
risks arising from the presence of an additive, contaminant, toxin, or
disease-causing organism in a food, beverage, or feedstuff;\
\
(iii) protect human life or health in the United States from risks
arising from a disease-causing organism or pest carried by an animal or
plant, or a product thereof; or\
\
(iv) prevent or limit other damage in the United States arising from the
introduction, establishment, or spread of a pest.\
\
(B) Form.\--The form of a sanitary or phytosanitary measure includes\--\
\
(i) end product criteria;\
\
(ii) a product-related processing or production method;\
\
(iii) a testing, inspection, certification, or approval procedure;\
\
(iv) a relevant statistical method;\
\
(v) a sampling procedure;\
\
(vi) a method of risk assessment;\
\
(vii) a packaging and labeling requirement directly related to food
safety; and\
\
(viii) a quarantine treatment, such as a relevant requirement associated
with the transportation of animals or plants or with material necessary
for their survival during transportation.\
\
CHAPTER 2\--STANDARDS-RELATED MEASURES\
\
**SEC. 471. GENERAL.\
\
**(a) No Bar To Engaging in Standards Activity.\--Nothing in this
chapter shall be construed\--\
\
(1) to prohibit a Federal agency from engaging in activity related to
standards-related measures, including any such measure relating to
safety, the protection of human, animal, or plant life or health, the
environment or consumers; or\
\
(2) to limit the authority of a Federal agency to determine the level it
considers appropriate of safety or of protection of human, animal, or
plant life or health, the environment or consumers.\
(b) Exclusion.\--This chapter does not apply to\--\
\
(1) technical specifications prepared by a Federal agency for production
or consumption requirements of the agency; or\
\
(2) sanitary or phytosanitary measures under chapter 1.\
\
**SEC. 472. INQUIRY POINT.\
\
**The standards information center maintained under section 414 shall,
in addition to the functions specified therein, make available to the
public relevant documents, at such reasonable fees as the Secretary of
Commerce may prescribe, and information regarding\--\
\
(1) the membership and participation of the Federal Government, State
governments, and relevant nongovernmental bodies in the United States in
international and regional standardizing bodies and conformity
assessment systems, and in bilateral and multilateral arrangements
regarding standards-related measures, and the provisions of those
systems and arrangements;\
\
(2) the location of notices of the type required under article 909 of
the NAFTA, or where the information contained in such notice can be
obtained; and\
\
(3) the Federal agency procedures for assessment of risk, and factors
the agency considers in conducting the assessment and establishing the
levels of protection that the agency considers appropriate.\
\
**SEC. 473. CHAPTER DEFINITIONS.\
\
**Notwithstanding section 451, for purposes of this chapter\--\
\
(1) Approval procedure.\--The term \"approval procedure\" means any
registration, notification, or other mandatory administrative procedure
for granting permission for a good or service to be produced, marketed,
or used for a stated purpose or under stated conditions.\
\
(2) Conformity assessment procedure.\--The term \"conformity assessment
procedure\" means any procedure used, directly or indirectly, to
determine that a technical regulation or standard is fulfilled,
including sampling, testing, inspection, evaluation, verification,
monitoring, auditing, assurance of conformity, accreditation,
registration, or approval used for such a purpose, but does not mean an
approval procedure.\
\
(3) Objective.\--The term \"objective\" includes\--\
\
(A) safety,\
\
(B) protection of human, animal, or plant life or health, the
environment or consumers, including matters relating to quality and
identifiability of goods or services, and\
\
(C) sustainable development, but does not include the protection of
domestic production.\
\
(4) Service.\--The term \"service\" means a land transportation service
or a telecommunications service.\
\
(5) Standard.\--The term \"standard\" means\--\
\
(A) characteristics for a good or a service,\
\
(B) characteristics, rules, or guidelines for\--\
\
(i) processes or production methods relating to such good, or\
\
(ii) operating methods relating to such service, and\
\
(C) provisions specifying terminology, symbols, packaging, marking, or
labelling for\--\
\
(i) a good or its related process or production methods, or\
\
(ii) a service or its related operating methods, for common and repeated
use, including explanatory and other related provisions set out in a
document approved by a standardizing body, with which compliance is not
mandatory.\
\
(6) Standards-related measure.\--The term \"standards-related measure\"
means a standard, technical regulation, or conformity assessment
procedure.\
\
(7) Technical regulation.\--The term \"technical regulation\" means\--\
\
(A) characteristics or their related processes and production methods
for a good,\
\
(B) characteristics for a service or its related operating methods, or\
\
(C) provisions specifying terminology, symbols, packaging, marking, or
labelling for\--\
\
(i) a good or its related process or production method, or\
\
(ii) a service or its related operating method, set out in a document,
including applicable administrative, explanatory, and other related
provisions, with which compliance is mandatory.\
\
(8) Telecommunications service.\--The term \"telecommunications
service\" means a service provided by means of the transmission and
reception of signals by any electromagnetic means, but does not mean the
cable, broadcast, or other electromagnetic distribution of radio or
television programming to the public generally.\
\
CHAPTER 3\--SUBTITLE DEFINITIONS\
\
**SEC. 481. DEFINITIONS.\
\
**Notwithstanding section 451, for purposes of this subtitle\--\
\
(1) NAFTA.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
\
(2) State.\--The term \"State\" means any of the several States, the
District of Columbia, and the Commonwealth of Puerto Rico.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 302 of the Federal Seed Act**

**\
**Sec. 302. (a) \* \* \*

\* \* \* \* \*

\(e\) The provisions of this title requiring certain seeds to be stained
shall not apply\--\
\
(1) to alfalfa or clover seed originating in Canada or Mexico, or

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Act of August 30, 1890**

**Chapter 839.\--\
**An act providing for an inspection of meats for exportation,
prohibiting the importation of adulterated articles of food or drink,
and authorizing the President to make proclamation in certain cases, and
for other purposes.

\* \* \* \* \*

**Sec. 6.\
**The importation of cattle, sheep, and other ruminants, and swine,
which are diseased or infected with any disease, or which shall have
been exposed to such infection within sixty days next before their
exportation, is prohibited~~: Provided, That the Secretary of
Agriculture, within his discretion and under such regulations as he may
prescribe, is authorized to permit the admission from Mexico into the
State of Texas of cattle which have been infested with or exposed to
ticks upon being freed therefrom, and the admission from the British
Virgin Islands into the Virgin Islands of the United States, for
slaughter only, of cattle which have been infested with or exposed to
ticks upon being freed therefrom.~~ , except that the Secretary of
Agriculture, in accordance with such regulations as the Secretary may
issue, may (1) permit the importation of cattle, sheep, or other
ruminants, and swine, from Canada or Mexico, and (2) permit the
importation from the British Virgin Islands into the Virgin Islands of
the United States, for slaughter only, of cattle that have been infested
with or exposed to ticks on being freed from the ticks. Any person who
knowingly violates any provision of this section or sections 7 through
10 of this Act or any regulation prescribed by the Secretary of
Agriculture under any such section shall be guilty of a misdemeanor and
shall, on conviction, be punished by a fine not exceeding \$5,000 by
imprisonment not exceeding one year, or both. Any person who violates
any such provision or any such regulation may be assessed a civil
penalty by the Secretary of Agriculture not exceeding \$1,000. The
Secretary may issue an order assessing such civil penalty only after
notice and an opportunity for an agency hearing on the record. Such
order shall be treated as a final order reviewable under chapter 158 of
title 28, United States Code. The validity of such order may not be
reviewed in an action to collect such civil penalty.

\* \* \* \* \*

**Sec. 10. Inspection of Animals.\
\
**~~Sec. 10. That the Secretary of Agriculture shall~~\--(a) In
General.\-- Except as provided in subsection (b), the Secretary of
Agriculture shall cause careful inspection to be made by a suitable
officer of all imported animals described in this act, to ascertain
whether such animals are infected with contagious diseases or have been
exposed to infection so as to be dangerous to other animals, which shall
then either be placed in quarantine or dealt with according to the
regulations of the Secretary of Agriculture; and all food, litter,
manure, clothing, utensils, and other appliances that have been so
related to such animals on board ship as to be judged liable to convey
infection shall be dealt with according to the regulations of the
Secretary of Agriculture; and the Secretary of Agriculture may cause
inspection to be made of all animals described in this act intended for
exportation, and provide for the disinfection of all vessels engaged in
the transportation thereof, and of all barges or other vessels used in
the conveyance of such animals intended for export to the ocean steamer
or other vessels, and of all attendants and their clothing, and of all
head-ropes and other appliances used in such exportation, by such orders
and regulations as he may prescribe; and if, upon such inspection, any
such animals shall be adjudged, under the regulations of the Secretary
of Agriculture, to be infected or to have been exposed to infection so
as to be dangerous to other animals, they shall not be allowed to be
placed upon any vessel for exportation; the expense of all the
inspection and disinfection provided for in this section to be borne by
the owners of the vessels on which such animals are exported.\
\
(b) Exception.\--The Secretary of Agriculture, in accordance with such
regulations as the Secretary may issue, may waive any provision of
subsection (a) in the case of shipments between the United States and
Canada or Mexico.

\-\-\-\-\-\-\-\-\--

**Section 1 of the Act of August 31, 1922**

**(Commonly referred to as the Honeybee Act)**

**\
**CHAPTER. 301.\--An Act To regulate foreign commerce in the importation
into the United States of the adult honeybee (Apis mellifica).\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,\
\
(a) In order to prevent the introduction and spread of diseases and
parasites harmful to honeybees, and the introduction of genetically
undesirable germ plasma of honeybees, the importation into the United
States of all honeybees is prohibited, except that honeybees may be
imported into the United States\--\
\
(1) by the United States Department of Agriculture for experimental or
scientific purposes ~~, or~~;\
\
(2) from countries determined by the Secretary of Agriculture\--\
\
(A) to be free of disease or parasites harmful to honeybees, and
undesirable species or subspecies of honeybees; and\
\
(B) to have in operation precautions adequate to prevent the importation
of honeybees from other countries where harmful disease or parasites, or
undesirable species or subspecies, of honeybees exist~~.~~ ; or\
\
(3) from Canada or Mexico, subject to such terms and conditions as the
Secretary of Agriculture determines appropriate, if the Secretary
determines that the region of Canada or Mexico from which the honeybees
originated is, and is likely to remain, free of diseases or parasites
harmful to honeybees, and undesirable species or subspecies of
honeybees.\
\
(b) Honeybee semen may be imported into the United States only from (1)
countries determined by the Secretary of Agriculture to be free of
undesirable species or subspecies of honeybees, and which have in
operation precautions adequate to prevent the importation of such
undesirable honeybees and their semen, or (2) Canada or Mexico, if the
Secretary of Agriculture determines that the region of Canada or Mexico
from which the imports originate is, and is likely to remain, free of
undesirable species or subspecies of honeybees:

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 17 of the Poultry Products Inspection Act**

**IMPORTS\
\
**Sec. 17. (a) \* \* \*

\* \* \* \* \*

(d)(1) Notwithstanding any other provision of law, except as provided in
paragraph (2), all poultry, or parts or products thereof, capable of use
as human food offered for importation into the United States shall\--\
\
(A) be subject to the same inspection, sanitary, quality, species
verification, and residue standards applied to products produced in the
United States; and\
\
(B) have been processed in facilities and under conditions that are the
same as those under which similar products are processed in the United
States.\
\
(2)(A) Notwithstanding any other provision of law, all poultry, or parts
or products of poultry, capable of use as human food offered for
importation into the United States from Canada and Mexico shall\--\
\
(i) comply with paragraph (1); or\
\
(ii)(I) be subject to inspection, sanitary, quality, species
verification, and residue standards that are equivalent to United States
standards; and\
\
(II) have been processed in facilities and under conditions that meet
standards that are equivalent to United States standards.\
\
(B) The Secretary may treat as equivalent to a United States standard a
standard of Canada or Mexico described in subparagraph (A)(ii) if the
exporting country provides the Secretary with scientific evidence or
other information, in accordance with risk assessment methodologies
agreed to by the Secretary and the exporting country, to demonstrate
that the standard of the exporting country achieves the level of
protection that the Secretary considers appropriate.\
\
(C) The Secretary may\--\
\
(i) determine, on a scientific basis, that the standard of the exporting
country does not achieve the level of protection that the Secretary
considers appropriate; and\
\
(ii) provide the basis for the determination in writing to the exporting
country on request.\
\
~~(2)~~ (3) Any such imported poultry article that does not meet such
standards shall not be permitted entry into the United States.\
\
~~(3)~~ (4) The Secretary shall enforce this subsection through\--\
\
(A) random inspections for such species verification and for residues;
and\
\
(B) random sampling and testing of internal organs and fat of carcasses
for residues at the point of slaughter by the exporting country, in
accordance with methods approved by the Secretary.

\-\-\-\-\-\-\-\-\--

**Section 20 of the Federal Meat Inspection Act**

**\
**Sec. 20. (a) \* \* \*

\* \* \* \* \*

\(e\) Not later than March 1 of each year the Secretary shall submit to
the Committee on Agriculture of the House of Representatives and the
Committee on Agriculture and Forestry of the Senate a comprehensive and
detailed written report with respect to the administration of this
section during the immediately preceding calendar year. Such report
shall include, but shall ~~not be limited to\--~~ not be limited to the
following:\
\
(1)(A) Subject to subparagraphs (B) and (C), a certification by the
Secretary that foreign plants in Canada and Mexico that export carcasses
or meat or meat products referred to in subsection (a) have complied
with paragraph (2) or with requirements that are equivalent to United
States requirements with regard to all inspection and building
construction standards, and all other provisions of this Act and
regulations issued under this Act.\
\
(B) Subject to subparagraph (C), the Secretary may treat as equivalent
to a United States requirement a requirement described in subparagraph\
\
(A) if the exporting country provides the Secretary with scientific
evidence or other information, in accordance with risk assessment
methodologies agreed to by the Secretary and the exporting country, to
demonstrate that the requirement or standard of the exporting country
achieves the level of protection that the Secretary considers
appropriate.\
\
(C) The Secretary may\--\
\
(i) determine, on a scientific basis, that a requirement of an exporting
country does not achieve the level of protection that the Secretary
considers appropriate; and\
\
(ii) provide the basis for the determination to the exporting country in
writing on request.\
\
(2) A certification by the Secretary that, except as provided in
paragraph (1), foreign plants that export carcasses or meat or meat
products referred to in subsection (a) have complied with requirements
that are at least equal to all inspection and building construction
standards and all other provisions of this Act and regulations issued
under this Act. ~~(1) a certification by the Secretary that foreign
plants exporting carcasses or meat or meat products referred to in
subsection (a) of this section have complied with requirements at least
equal to all the inspection, building construction standards, and all
other provisions of this Act and regulations issued thereunder;~~ ~~(2)
the~~ (3) The names and locations of plants authorized or permitted to
have imported into the United States therefrom carcasses or meat or meat
products referred to in subsection (a) of this section~~;~~. ~~(3) the~~
(4) The number of inspectors employed by the Department of Agriculture
in the calendar year concerned who were assigned to inspect plants
referred to in paragraph (e)(2) hereof and the frequency with which each
such plant was inspected by such inspectors~~;~~. ~~(4) the~~ (5) The
number of inspectors licensed by each country from which any imports
subject to the provisions of this section were imported who were
assigned, during the calendar year concerned, to inspect such imports
and the facilities in which such imports were handled and the frequency
and effectiveness of such inspections~~;~~. ~~(5) the~~ (6) The total
volume of carcasses or meat or meat products referred to in subsection
(a) of this section which was imported into the United States during the
calendar year concerned from each country, including a separate
itemization of the volume of each major category of such imports from
each country during such year, and a detailed report of rejections of
plants and products because of failure to meet appropriate standards
prescribed by this Act~~; and~~. ~~(6) the~~ (7) The name of each
foreign country that applies standards for the importation of meat
articles from the United States that are described in subsection (h)(2).

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 503 of the Motor Vehicle Information and Cost Savings Act**

**DETERMINATION OF AVERAGE FUEL ECONOMY\
\
**Sec. 503. (a) \* \* \*\
\
(b)(1) \* \* \*\
\
(2) For purposes of this subsection:\
\
(A) \* \* \*

\* \* \* \* \*

\(E\) ~~An~~ Except as provided in subparagraph (G), an automobile shall
be considered domestically manufactured in any model year if at least 75
percent of the cost to the manufacturer of such automobile is
attributable to value added in the United States or Canada, unless the
assembly of such automobile is completed in Canada and such automobile
is not imported into the United States prior to the expiration of 30
days following the end of such model year. The EPA Administrator may
prescribe rules for purposes of carrying out ~~this subparagraph~~ this
subparagraph and subparagraph (G).

\* \* \* \* \*

(G)(i) In accordance with the schedule set out in clause (ii), an
automobile shall be considered domestically manufactured in a model year
if at least 75 percent of the cost to the manufacturer of the automobile
is attributable to value added in the United States, Canada, or Mexico,
unless the assembly of the automobile is completed in Canada or Mexico
and the automobile is not imported into the United States prior to the
expiration of 30 days following the end of that model year.\
\
(ii) Clause (i) shall apply to all automobiles manufactured by a
manufacturer and sold in the United States, wherever assembled, in
accordance with the following schedule:\
\
(I) With respect to a manufacturer that initiated the assembly of
automobiles in Mexico before model year 1992, the manufacturer may
elect, at any time between January 1, 1997, and January 1, 2004, to have
clause (i) apply to all automobiles it manufactures, beginning with the
model year commencing after the date of such election.\
\
(II) With respect to a manufacturer initiating the assembly of
automobiles in Mexico after model year 1991, clause (i) shall apply to
all automobiles it manufactures, beginning with the model year
commencing after January 1, 1994, or the model year commencing after the
date that the manufacturer initiates the assembly of automobiles in
Mexico, whichever is later.\
\
(III) With respect to a manufacturer not described by subclause (I) or
(II) assembling automobiles in the United States or Canada but not in
Mexico, the manufacturer may elect, at any time between January 1, 1997,
and January 1, 2004, to have clause (i) apply to all automobiles it
manufactures, beginning with the model year commencing after the date of
such election, except that if such manufacturer initiates the assembly
of automobiles in Mexico before making such election, this subclause
shall not apply and the manufacturer shall be subject to clause (II).\
\
(IV) With respect to a manufacturer not assembling automobiles in the
United States, Canada, or Mexico, clause (i) shall apply to all
automobiles it manufactures, beginning with the model year commencing
after January 1, 1994.\
\
(V) With respect to a manufacturer authorized to make an election under
subclause (I) or (III) which has not made that election within the
specified period, clause (i) shall apply to all automobiles it
manufactures, beginning with the model year commencing after January 1,
2004.\
\
(iii) The Secretary shall prescribe reasonable procedures for elections
under this subparagraph, and the EPA Administrator may prescribe rules
for purposes of carrying out this subparagraph.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 401 of the Rural Electrification Act of 1938**

Sec. 401. The Act entitled \"An Act to provide for rural
electrification, and for other purposes\", approved May 20, 1936 (49
Stat. 1363), is hereby amended as follows: (a) By inserting in
subsection (a) of section 3 thereof immediately following the date
\"June 30, 1937\" the phrase \"and \$100,000,000 for the fiscal year
ending June 30, 1939\" and (b) by striking out the date \"June 30,
1937\" appearing at the end of subsection (e) of such section 3 and
inserting in lieu thereof the date \"June 30, 1939\".\
\
In making loans pursuant to this title and pursuant to the Rural
Electrification Act of 1936, the Administrator of the Rural
Electrification Administration shall require that, to the extent
practicable and the cost of which is not unreasonable, the borrower
agree to use in connection with the expenditure of such funds only such
unmanufactured articles, materials, and supplies, as have been mined or
produced in the United States, Mexico, or Canada, and only such
manufactured articles, materials, and supplies as have been manufactured
in the United States, Mexico, or Canada substantially all from articles,
materials, or supplies mined, produced, or manufactured, as the case may
be, in the United States, Mexico, or Canada.

\-\-\-\-\-\-\-\-\--

**Title 28, United States Code**

\* \* \* \* \*

**PART IV\--JURISDICTION AND VENUE**

\* \* \* \* \*

**CHAPTER 95\--COURT OF INTERNATIONAL TRADE**

\* \* \* \* \*

Sec. 1581. Civil actions against the United States and agencies and
officers thereof. 1582. Civil actions commenced by the United States.
1583. Counterclaims, cross-claims, and third-party actions. ~~1584.
Civil actions under the United States-Canada Free-Trade Agreement.~~
1584. Civil actions under the North American Free Trade Agreement or the
United States-Canada Free-Trade Agreement.\
\
**[Sec. 1581. Civil actions against the United States and agencies and
officers thereof\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(g\) The Court of International Trade shall have exclusive jurisdiction
of any civil action commenced to review\--\
\
(1) any decision of the Secretary of the Treasury to deny a customs
broker\'s license under section 641(b)(2) or (3) of the Tariff Act of
1930, or to deny a customs broker\'s permit under section 641(c)(1) of
such Act, or to revoke a license or permit under section 641(b)(5) or\
\
(c)(2) of such Act; ~~and\
\
~~(2) any decision of the Secretary of the Treasury to revoke or suspend
a customs broker\'s license or permit, or impose a monetary penalty in
lieu thereof, under section 641(d)(2)(B) of the Tariff Act of 1930~~.~~;
and\
\
(3) any decision or order of the Customs Service to deny, suspend, or
revoke accreditation of a private laboratory under section 499(b) of the
Tariff Act of 1930.

\* \* \* \* \*

\(i\) In addition to the jurisdiction conferred upon the Court of
International Trade by subsections (a)-(h) of this section and subject
to the exception set forth in subsection (j) of this section, the Court
of International Trade shall have exclusive jurisdiction of any civil
action commenced against the United States, its agencies, or its
officers, that arises out of any law of the United States providing
for\--\
\
(1) revenue from imports or tonnage;\
\
(2) tariffs, duties, fees, or other taxes on the importation of
merchandise for reasons other than the raising of revenue;\
\
(3) embargoes or other quantitative restrictions on the importation of
merchandise for reasons other than the protection of the public health
or safety; or\
\
(4) administration and enforcement with respect to the matters referred
to in paragraphs (1)-(3) of this subsection and subsections (a)-\
\
(h) of this section. This subsection shall not confer jurisdiction over
an antidumping or countervailing duty determination which is reviewable
either by the Court of International Trade under section 516A(a) of the
Tariff Act of 1930 or by a binational panel under article 1904 of the
North American Free Trade Agreement or the United States-Canada
Free-Trade Agreement, and section 516A(g) of the Tariff Act of 1930.

\* \* \* \* \*

**[Sec. 1582. Civil actions commenced by the United States\
\
]{.underline}**The Court of International Trade shall have exclusive
jurisdiction of any civil action which arises out of an import
transaction and which is commenced by the United States\--\
\
(1) to recover a civil penalty under section 592, 593A, 641(b)(6),
641(d)(2)(A), 704(i)(2), or 734(i)(2) of the Tariff Act of 1930;

\* \* \* \* \*

**[Sec. 1584. Civil actions under the North American Free Trade
Agreement or the United States-Canada Free-Trade Agreement\
\
]{.underline}**The United States Court of International Trade shall have
exclusive jurisdiction of any civil action which arises under section
~~777(d)~~ 777(f) of the Tariff Act of 1930 and is commenced by the
United States to enforce administrative sanctions levied for violation
of a protective order or an undertaking.

\* \* \* \* \*

**PART VI\--PARTICULAR PROCEEDINGS**

\* \* \* \* \*

**CHAPTER 151\--DECLARATORY JUDGMENTS**

\* \* \* \* \*

**[Sec. 2201. Creation of remedy\
\
]{.underline}**(a) In a case of actual controversy within its
jurisdiction, except with respect to Federal taxes other than actions
brought under action 7428 of the Internal Revenue Code of 1986, a
proceeding under section 505 or 1146 of title 11, or in any civil action
involving an antidumping or countervailing duty proceeding regarding a
class or kind of ~~Canadian merchandise~~ merchandise of a free trade
area country (as defined in section 516(f)(1) of the Tariff Act of
1930), as determined by the administering authority, any court of the
United States, upon the filing of an appropriate pleading, may declare
the rights and other legal relations of any interested party seeking
such declaration, whether or not further relief is or could be sought.
Any such declaration shall have the force and effect of a final judgment
or decree and shall be reviewable as much.

\* \* \* \* \*

**CHAPTER 169\--COURT OF INTERNATIONAL TRADE PROCEDURE**

\* \* \* \* \*

**[Sec. 2631. Persons entitled to commence a civil action\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

(g)(1)\* \* \*

\* \* \* \* \*

\(3\) A civil action to review any decision or order of the Customs
Service to deny, suspend, or revoke accreditation of a private
laboratory under section 499(b) of the Tariff Act of 1930 may be
commenced in the Court of International Trade by the person whose
accreditation was denied, suspended, or revoked.

\* \* \* \* \*

**[Sec. 2635. Filing of official documents\
\
]{.underline}**~~(a)(1) Upon service of the summons on the Secretary of
the Treasury in any civil action contesting the denial of a protest
under section 515 of the Tariff Act of 1930 or the denial of a petition
under section 516 of such Act, the appropriate customs officer shall
forthwith transmit to the clerk of the Court of International Trade, as
prescribed by its rules, and as a part of the official record\-- (A) the
consumption or other entry and the entry summary; (B) the commercial
invoice; (C) the special customs invoice; (D) a copy of the protest or
petition; (E) a copy of the denial, in whole or in part, of the protest
or petition; (F) the importer\'s exhibits; (G) the official and other
representative samples; (H) any official laboratory reports; and (I) a
copy of any board relating to the entry.\
\
(2) If any of the items listed in paragraph (1) of this subsection do
not exist in a particular civil action, an affirmative statement to that
effect shall be transmitted to the clerk of the court.\
\
~~(a) In any action commenced in the Court of International Trade
contesting the denial of a protest under section 515 of the Tariff Act
of 1930 or the denial of a petition under section 516 of such Act, the
Customs Service, as prescribed by the rules of the court, shall file
with the clerk of the court, as part of the official record, any
document, paper, information or data relating to the entry of
merchandise and the administrative determination that is the subject of
the protest or petition.

\* \* \* \* \*

**[Sec. 2636. Time for commencement of action\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(h\) A civil action contesting the denial, suspension, or revocation by
the Customs Service of a private laboratory\'s accreditation under
section 499(b) of the Tariff Act of 1930 is barred unless commenced in
accordance with the rules of the Court of International Trade within 60
days after the date of the decision or order of the Customs Service.\
\
~~(h)~~(i) A civil action of which the Court of International Trade has
jurisdiction under section 1581 of this title, other than an action
specified in subsection (a)-(h) of this section, is barred unless
commenced in accordance with the rules of the court within two years
after the cause of action first accrues.

\* \* \* \* \*

**[Sec. 2640. Scope and standard of review\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(d\) In any civil action commenced to review any order or decision of
the Customs Service under section 499(b) of the Tariff Act of 1930, the
court shall review the action on the basis of the record before the
Customs Service at the time of issuing such decision or order.\
\
~~(d)~~ (e) In any civil action not specified in the section, the Court
of International Trade shall review the matter as provided in section
706 of title 5.

\* \* \* \* \*

**[Sec. 2642. Analysis of imported merchandise\
\
]{.underline}**The Court of International Trade may order an analysis of
imported merchandise and reports thereon by laboratories or agencies of
the United States or laboratories accredited by the Customs Services
under section 499(b) of the Tariff Act of 1930.

\* \* \* \* \*

**CHAPTER 169\--COURT OF INTERNATIONAL TRADE PROCEDURE**

\* \* \* \* \*

Sec. 2643. Relief\
\
(a) \* \* \*

\* \* \* \* \*

(c)(1) \* \* \*

\* \* \* \* \*

\(5\) In any civil action involving an antidumping or countervailing
duty proceeding regarding a class or kind of ~~Canadian merchandise,~~
merchandise of a free trade area country (as defined in section
516A(f)(10) of the Tariff Act of 1930), as determined by the
administering authority, the Court of International Trade may not order
declaratory relief.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**INTERNAL REVENUE CODE**

\* \* \* \* \*

**Subtitle C\--Employment Taxes**

\* \* \* \* \*

**CHAPTER 23\--FEDERAL UNEMPLOYMENT TAX ACT**

\* \* \* \* \*

**[SEC. 3304. APPROVAL OF STATE LAWS.\
\
]{.underline}**(a) Requirements.\--The Secretary of Labor shall approve
any State law submitted to him, within 30 days of such submission, which
he finds provides that\--\
\
(1) \* \* \*

\* \* \* \* \*

\(4\) all money withdrawn from the unemployment fund of the State shall
be used solely in the payment of unemployment compensation, exclusive of
expenses of administration, and for refunds of sums erroneously paid
into such fund and refunds paid in accordance with the provisions of
section 3305 (b); except that\--\
\
(A) \* \* \*

\* \* \* \* \*

\(D\) amounts may be deducted from unemployment benefits and used to
repay overpayments as provided in section 303(g) of the Social Security
Act; ~~and\
\
~~(E) amounts may be withdrawn for the payment of short-time
compensation under a plan approved by the Secretary of Labor; and\
\
(F) amounts may be withdrawn for the payment of allowances under a
self-employment assistance program (as defined in section 3306(t));

\* \* \* \* \*

**[SEC. 3306. DEFINITIONS.\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(f\) Unemployment Fund.\--For purposes of this chapter, the term
\"unemployment fund\" means a special fund, established under a State
law and administered by a State agency, for the payment of compensation.
Any sums standing to the account of the State agency in the Unemployment
Trust Fund established by section 904 of the Social Security Act, as
amended (42 U.S.C. 1104), shall be deemed to be a part of the
unemployment fund of the State, and no sums paid out of the Unemployment
Trust Fund to such State agency shall cease to be a part of the
unemployment fund of the State until expended by such State agency. An
unemployment fund shall be deemed to be maintained during a taxable year
only if throughout such year, or such portion of the year as the
unemployment fund was in existence, no part of the moneys of such fund
was expended for any purpose other than the payment of compensation
(exclusive of expenses of administration) and for refunds of sums
erroneously paid into such fund and refunds paid in accordance with the
provisions of section 3305 (b); except that\--\
\
(1) \* \* \*

\* \* \* \* \*

\(3\) amounts may be deducted from unemployment benefits and used to
repay overpayments as provided in section 303(g) of the Social Security
Act; ~~and\
\
~~(4) amounts may be withdrawn for the payment of short-time
compensation under a plan approved by the Secretary of Labor~~.~~; and\
\
(5) amounts may be withdrawn for the payment of allowances under a
self-employment assistance program (as defined in subsection (t)).

\* \* \* \* \*

\(t\) Self-Employment Assistance Program.\--For the purposes of this
chapter, the term \"self-employment assistance program\" means a program
under which\--\
\
(1) individuals who meet the requirements described in paragraph (3) are
eligible to receive an allowance in lieu of regular unemployment
compensation under the State law for the purpose of assisting such
individuals in establishing a business and becoming self-employed;\
\
(2) the allowance payable to individuals pursuant to paragraph (1) is a
payable in the same amount, at the same interval, on the same terms, and
subject to the same conditions, as regular unemployment compensation
under the State law, except that\--\
\
(A) State requirements relating to availability for work, active search
for work, and refusal to accept work are not applicable to such
individuals;\
\
(B) State requirements relating to disqualifying income are not
applicable to income earned from self-employment by such individuals;
and\
\
(C) such individuals are considered to be unemployed for the purposes of
Federal and State laws applicable to unemployment compensation, as long
as such individuals meet the requirements applicable under this
subsection;\
\
(3) individuals may receive the allowance described in paragraph (1) if
such individuals\--\
\
(A) are eligible to receive regular unemployment compensation under the
State law, or would be eligible to receive such compensation except for
the requirements described in subparagraph (A) or (B) of paragraph (2);\
\
(B) are identified pursuant to a State worker profiling system as
individuals likely to exhaust regular unemployment compensation and\
\
(C) are participating in self-employment assistance activities which\--\
\
(i) include entrepreneurial training, business counseling, and technical
assistance; and\
\
(ii) are approved by the State agency; and\
\
(D) are actively engaged on a full-time basis in activities (which may
include training) relating to the establishment of a business and
becoming self-employed;\
\
(4) the aggregate number of individuals receiving the allowance under
the program does not at any time exceed 5 percent of the number of
individuals receiving regular unemployment compensation under the State
law at such time;\
\
(5) the program does not result in any cost to the Unemployment Trust
Fund (established by section 904(a) of the Social Security Act) in
excess of the cost that would be incurred by such State and charged to
such Fund if the State had not participated in such program; and\
\
(6) the program meets such other requirements as the Secretary of Labor
determines to be appropriate.

\* \* \* \* \*

**Subtitle F\--Procedure and Administration**

\* \* \* \* \*

**CHAPTER 61\--INFORMATION AND RETURNS**

\* \* \* \* \*

[Subchapter B\--Miscellaneous Provisions]{.underline}

\* \* \* \* \*

**[SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN
INFORMATION.\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(l\) Disclosure of Returns and Return Information for Purposes Other
Than Tax Administration.\--\
\
\
(1) \* \* \*

\* \* \* \* \*

\(14\) Disclosure of return information to united states customs
service.\--The Secretary may, upon written request from the Commissioner
of the United States Customs Service, disclose to officers and employees
of the Department of the Treasury such return information with respect
to taxes imposed by chapters 1 and 6 as the Secretary may prescribe by
regulations, solely for the purpose of, and only to the extent necessary
in\--\
\
(A) ascertaining the correctness of any entry in audits as provided for
in section 509 of the Tariff Act of 1930 (19 U.S.C. 1509), or\
\
(B) other actions to recover any loss of revenue, or to collect duties,
taxes, and fees, determined to be due and owing pursuant to such audits.

\* \* \* \* \*

\(p\) Procedure and Recordkeeping.\--\
\
(1) \* \* \*

\* \* \* \* \*

\(3\) Records of inspection and disclosure.\--\
\
(A) System of recordkeeping.\--Except as otherwise provided by this
paragraph, the Secretary shall maintain a permanent system of
standardized records or accountings of all requests for inspection or
disclosure of returns and return information (including the reasons for
and dates of such requests) and of returns and return information
inspected or disclosed under this section. Notwithstanding the
provisions of section 552a(c) of title 5, United States Code, the
Secretary shall not be required to maintain a record or accounting of
requests for inspection or disclosure of returns and return information,
or of returns and return information inspected or disclosed, under the
authority of subsections (c), (e), (h)(1), (3)(A), or (4), (i)(4),
(7)(A)(ii), or (8), (k)(1), (2), or (6), (l)(1), (4)(B), (5), (7), (8),
(9), (10), (11), (12), ~~or (13)~~ (13), or (14), (m), or (n). The
records or accountings required to be maintained under this paragraph
shall be available for examination by the Joint Committee on Taxation or
the Chief of Staff of such joint committee. Such record or accounting
shall also be available for examination by such person or persons as may
be, but only to the extent, authorized to make such examination under
section 552a(c)(3) of title 5, United States Code.

\* \* \* \* \*

\(4\) Safeguards.\--Any Federal agency described in subsection (h)(2),
(h)(6), (i)(1), (2), (3), (5), or (8), (j)(1) or (2), (l)(1), (2), (3),
(5), (10), (11), ~~or (13)~~ (13), or (14), or (o)(1), the General
Accounting Office, or any agency, body, or commission described in
subsection (d), (i)(3)(B)(i), or (8) or (l)(6), (7), (8), (9), or (12)
shall, as a condition for receiving returns or return information\--\
\
(A) establish and maintain, to the satisfaction of the Secretary, a
permanent system of standardized records with respect to any request,
the reason or such request, and the date of such request made by or of
it and any disclosure of return or return information made by or to it;\
\
(B) establish and maintain, to the satisfaction of the Secretary, a
secure area or place in which such returns or return information shall
be stored;\
\
(C) restrict, to the satisfaction of the Secretary, access to the
returns or return information only to persons whose duties or
responsibilities require access and to whom disclosure may be made under
the provisions of this title;\
\
(D) provide such other safeguards which the Secretary determines (and
which he prescribes in regulations) to be necessary or appropriate to
protect the confidentiality of the returns or return information;\
\
(E) furnish a report to the Secretary, at such time and containing such
information as the Secretary may prescribe, which describes the
procedures established and utilized by such agency, body, or commission
or the General Accounting Office for ensuring the confidentiality of
returns and return information required by this paragraph; and\
\
(F) upon completion of use of such returns or return information\--\
\
(i) in the case of an agency, body, or commission described in
subsection (d), (i)(3)(B)(i), or (l)(6), (7), (8), (9), return to the
Secretary such returns or return information (along with any copies made
therefrom) or make such returns or return information undisclosable in
any manner and furnish a written report to the Secretary describing such
manner,\
\
(ii) in the case of an agency described in subsections (h)(2), (h)(6),
(i)(1), (2), (3), (5), or (8), (j)(1) or (2), (l)(1), (2), (3), (5),
(10), (11), (12), ~~or (13)~~ (13), or (14), or (o)(1), or the General
Accounting Office, either\--\
\
(I) return to the Secretary such returns or return information (along
with any copies made therefrom),\
\
(II) otherwise make such returns or return information undisclosable,
or\
\
(III) to the extent not so returned or make undisclosable, ensure that
the conditions of subparagraphs (A), (B), (C), (D), and (E) of this
paragraph continue to be met with respect to such returns or return
information, and\
\
(iii) in the case of the Department of Health and Human Services for
purposes of subsection (m)(6), destroy all such return information upon
completion of its use in providing the notification for which the
information was obtained, so as to make such information undisclosable;
except that the conditions of subparagraphs (A), (B), (C), (D), and (E)
shall cease to apply with respect to any return or return information
if, and to the extent that, such return or return information is
disclosed in the course of any judicial or administrative proceeding and
made a part of the public record thereof. If the Secretary determines
that any such agency, body, or commission or the General Accounting
Office has failed to, or does not, meet the requirements of this
paragraph, he may, after any proceedings for review established under
paragraph (7), take such actions as are necessary to ensure such
requirements are met, including refusing to disclose returns or return
information to such agency body, or commission or the General Accounting
Office until he determines that such requirements have been or will be
met. In the case of any agency which receives any mailing address under
paragraph (2), (4), (6), or (7) of subsection (m) and which discloses
any such mailing address to any agent or which receives any information
under subsection (l)(12)(B) and which discloses any such information to
any agent, this paragraph shall apply to such agency and each such agent
(except that, in the case of an agent, any report to the Secretary or
other action with respect to the Secretary shall be made or taken
through such agency). For purposes of applying this paragraph in any
case to which subsection (m)(6) applies, the term \"return information\"
includes related blood donor records (as defined in section 1141(h)(2)
of the Social Security Act).

\* \* \* \* \*

**CHAPTER 64\--COLLECTION**

\* \* \* \* \*

[Subchapter A\--General Provisions\
\
]{.underline}\* \* \* \* \*\
\
**[SEC. 6302. MODE OR TIME OF COLLECTION.\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(h\) Use of Electronic Fund Transfer System for Collection of Certain
Taxes.\--\
\
(1) Establishment of system.\--\
\
(A) In general.\--The Secretary shall prescribe such regulations as may
be necessary for the development and implementation of an electronic
fund transfer system which is required to be used for the collection of
depository taxes. Such system shall be designed in such manner as may be
necessary to ensure that such taxes are credited to the general account
of the Treasury on the date on which such taxes would otherwise have
been required to be deposited under the Federal tax deposit system.\
\
(B) Exemptions.\--The regulations prescribed under subparagraph (A) may
contain such exemptions as the Secretary may deem appropriate.\
\
(2) Phase-in requirements.\--\
\
(A) In general.\--Except as provided in subparagraph (B), the
regulations referred to in paragraph (1)\--\
\
(i) shall contain appropriate procedures to assure that an orderly
conversion from the Federal tax deposit system to the electronic fund
transfer system is accomplished, and\
\
(ii) may provide for a phase-in of such electronic fund transfer system
by classes of taxpayers based on the aggregate undeposited taxes of such
taxpayers at the close of specified periods and any other factors the
Secretary may deem appropriate.\
\
(B) Phase-in requirements.\--The phase-in of the electronic fund
transfer system shall be designed in such manner as may be necessary to
ensure that\--\
\
(i) during each fiscal year beginning after September 30, 1993, at least
the applicable required percentage of the total depository taxes imposed
by chapters 21, 22, and 24 shall be collected by means of electronic
fund transfer, and\
\
(ii) during each fiscal year beginning after September 30, 1993, at
least the applicable required percentage of the total other depository
taxes shall be collected by means of electronic fund transfer.\
\
(C) Applicable required percentage.\--\
\
(i) In the case of the depository taxes imposed by chapters 21, 22, and
24, the applicable required percentage is\--\
\
(I) 3 percent for fiscal year 1994,\
\
(II) 16.9 percent for fiscal year 1995,\
\
(III) 20.1 percent for fiscal year 1996,\
\
(IV) 58.3 percent for fiscal years 1997 and 1998, and\
\
(V) 94 percent for fiscal year 1999 and all fiscal years thereafter.\
\
(ii) In the case of other depository taxes, the applicable required
percentage is\--\
\
(I) 3 percent for fiscal year 1994,\
\
(II) 20 percent for fiscal year 1995,\
\
(III) 30 percent for fiscal year 1996,\
\
(IV) 60 percent for fiscal years 1997 and 1998, and\
\
(V) 94 percent for fiscal year 1999 and all fiscal years thereafter.\
\
(3) Definitions.\--For purposes of this subsection\--\
\
(A) Depository tax.\--The term \"depository tax\" means any tax if the
Secretary is authorized to require deposits of such tax.\
\
(B) Electronic fund transfer.\--The term \"electronic fund transfer\"
means any transfer of funds, other than a transaction originated by
check, draft, or similar paper instrument, which is initiated through an
electronic terminal, telephonic instrument, or computer or magnetic tape
so as to order, instruct, or authorize a financial institution or other
financial intermediary to debit or credit an account.\
\
(4) Coordination with other electronic fund transfer requirements.\--\
\
(A) Coordination with certain excise taxes.\--In determining whether the
requirements of subparagraph (B) of paragraph (2) are met, taxes
required to be paid by electronic fund transfer under sections 5061(e)
and 5703(b) shall be disregarded.\
\
(B) Additional requirement.\--Under regulations, any tax required to be
paid by electronic fund transfer under section 5061(e) or 5703(b) shall
be paid in such a manner as to ensure that the requirements of the
second sentence of paragraph (1)(A) of this subsection are satisfied.\
\
~~(h)~~ (i) Cross References.\-- For treatment of earned income advance
amounts as payment of withholding and FICA taxes, see section 3507(d).

\* \* \* \* \*

**Subtitle I\--Trust Fund Code**

\* \* \* \* \*

**CHAPTER 98\--TRUST FUND CODE**

\* \* \* \* \*

[Subchapter A\--Establishment of Trust Funds\
\
]{.underline}\* \* \* \* \*\
\
**[SEC. 9505. HARBOR MAINTENANCE TRUST FUND.\
\
]{.underline}**(a) \* \* \*

\* \* \* \* \*

\(c\) Expenditures From Harbor Maintenance Trust Fund.\--Amounts in the
Harbor Maintenance Trust Fund shall be available, as provided by
appropriation Acts, for making expenditures\--\
\
(1) \* \* \*

\* \* \* \* \*

~~(3) for the payment of all expenses of administration incurred\-- (A)
by the Department of The Treasury in administering subchapter A of
chapter 36 (relating to harbor maintenance tax), but not in excess of
\$5,000,000 for any fiscal year, and (B) for periods during which no fee
applies under paragraph (9) or (10) of section 13031(a) of the
Consolidated Omnibus Budget Reconciliation Act of 1985.\
\
~~(3) for the payment of all expenses of administration incurred by the
Department of the Treasury, the Army Corps of Engineers, and the
Department of Commerce related to the administration of subchapter A of
chapter 36 (relating to harbor maintenance tax), but not in excess of
\$5,000,000 for any fiscal year.

\-\-\-\-\-\-\-\-\--

**Section 303 of the Social Security Act**

**PROVISIONS OF STATE LAWS\
\
**Sec. 303. (a) The Secretary of Labor shall make no certification for
payment to any State unless he finds that the law of such State,
approved by the Secretary of Labor under the Federal Unemployment Tax
Act, includes provision for\--\
\
(1) \* \* \*

\* \* \* \* \*

\(5\) Expenditure of all money withdrawn from an unemployment fund of
such State, in the payment of unemployment compensation, exclusive of
expenses of administration, and for refunds of sums erroneously paid
into such fund and refunds paid in accordance with the provisions of
section 3305(b) of the Federal Unemployment Tax Act: Provided, That an
mount equal to the amount of employee payments into the unemployment
fund of a State may be used in the payment of cash benefits to
individuals with respect to their disability, exclusive of expenses of
administration: Provided further, That the amounts specified by section
903(c)(2) may, subject to the conditions prescribed in such section, be
used for expenses incurred by the State for administration of its
unemployment compensation law and public employment offices: Provided
further, That nothing in this paragraph shall be construed to prohibit
deducting an amount from unemployment compensation otherwise payable to
an individual and using the amount so deducted to pay for health
insurance if the individual elected to have such deduction made and such
deduction was made under a program approved by the Secretary of Labor:
Provided further, That amounts may be deducted from unemployment
benefits and used to repay overpayments as provided in subsection (g):
Provided further, That amounts may be withdrawn for the payment of
short-time compensation under a plan approved by the Secretary of Labor
~~; and~~ : Provided further, That amounts may be withdrawn for the
payment of allowances under a self-employment assistance program (as
defined in section 3306(t) of the Internal Revenue Code of 1986); and

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Caribbean Basin Economic Recovery Act**

\* \* \* \* \*

**TITLE II\--CARIBBEAN BASIN INITIATIVE\
SEC. 201. SHORT TITLE.\
\
**This title may be cited as the \"Caribbean Basin Economic Recovery
Act\".\
Subtitle A\--Duty-Free Treatment

\* \* \* \* \*

**SEC. 219. CENTER FOR THE STUDY 0F WESTERN HEMISPHERIC TRADE.\
\
**(a) Establishment.\--The Commissioner of Customs, after consultation
with appropriate officials in the State of Texas, is authorized and
directed to make grants to an institution (or a consortium of such
institutions) to assist such institution in planning, establishing, and
operating a Center for the Study of Western Hemispheric Trade (hereafter
in this section referred to as the \"Center\". The Commissioner of
Customs shall make the first grant not later than December 1, 1994, and
the Center shall be established not later than February 1, 1995.\
\
(b) Scope of the Center.\--The Center shall be a year-round program
operated by an institution located in the State of Texas (or a
consortium of such institutions), the purpose of which is to promote and
study trade between and among Western Hemisphere countries. The Center
shall conduct activities designed to examine\--\
\
(1) the impact of the NAFTA on the economies in, and trade within, the
Western Hemisphere,\
\
(2) the negotiation of any future free trade agreements, including
possible accessions to the NAFTA; and\
\
(3) adjusting tariffs, reducing nontariff barriers, improving relations
among customs officials, and promoting economic relations among
countries in the Western Hemisphere.\
\
(c) Consultation; Selection Criteria.\--The Commissioner of Customs
shall consult with appropriate officials of the State of Texas and
private sector authorities with respect to selecting, planning, and
establishing the Center. In selecting the appropriate institution, the
Commissioner of Customs shall give consideration to\--\
\
(1) the institution\'s ability to carry out the programs and activities
described in this section; and\
\
(2) any resources the institution can provide the Center in addition to
Federal funds provided under this program.\
\
(d) Programs and Activities.\--The Center shall conduct the following
activities:\
\
(1) Provide forums for international discussion and debate for
representatives from countries in the Western Hemisphere regarding
issues which affect trade and other economic relations within the
hemisphere, including the impact of the NAFTA on individual economies
and the desirability and feasibility of possible accessions to the NAFTA
by such countries.\
\
(2) Conduct studies and research projects on subjects which affect
Western Hemisphere trade, including tariffs, customs, regional and
national economics, business development and finance, production and
personnel management, manufacturing, agriculture, engineering,
transportation, immigration, telecommunications, medicine, science,
urban studies, border demographics, social anthropology, and
population.\
\
(3) Publish materials, disseminate information, and conduct seminars and
conferences to support and educate representatives from countries in the
Western Hemisphere who seek to do business with or invest in other
Western Hemisphere countries.\
\
(4) Provide grants, fellowships, endowed chairs, and financial
assistance to outstanding scholars and authorities from Western
Hemisphere countries.\
\
(5) Provide grants, fellowships, and other financial assistance to
qualified graduate students, from Western Hemisphere countries, to study
at the center.\
\
(6) Implement academic exchange programs and other cooperative research
and instructional agreements with the complementary North/South Center
at the University of Miami at Coral Gables.\
\
(e) Definitions.\--For purposes of this section\--\
\
(a) Nafta.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
\
(2) Western hemisphere countries.\--The terms \"Western Hemisphere
countries\", \"countries in the Western Hemisphere\", and \"Western
Hemisphere\" means Canada, the United States, Mexico, countries located
in South America, beneficiary countries (as defined by section 212), the
Commonwealth of Puerto Rico, and the United States Virgin Islands.\
\
(f) Fees for Seminars and Publications.\--Notwithstanding any other
provision of law, a grant made under this section may provide that the
Center may charge a reasonable fee for attendance at seminars and
conferences and for copies of publications, studies, reports, and other
documents the Center publishes. The Center may waive such fees in any
case in which it determines imposing a fee would impose a financial
hardship and the purposes of the Center would be served by granting such
a waiver.\
\
(g) Duration of Grant.\--The Commissioner of Customs is directed to make
grants to any institution or institutions selected as the Center for
fiscal years 1994, 1995, 1996, and 1997.\
\
(h) Report.\--The Commissioner of Customs shall, no later than July 1,
1994, and annually thereafter for years for which grants are made,
submit a written report to the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of Representatives. The
first report shall include\--\
\
(1) a statement identifying the institution or institutions selected as
the Center,\
\
(2) the reasons for selecting the institution or institutions as the
Center, and\
\
(3) the plan of such institution or institutions for operating the
Center. Each subsequent report shall include information with respect to
the operations of the Center, the collaboration of the Center with, and
dissemination of information to, Government policymakers and the
business community with respect to the study of Western Hemispheric
trade by the Center, and the plan and efforts of the Center to continue
operations after grants under this section have expired.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Revised Statutes of the United States**

\* \* \* \* \*

**TITLE XXXIV\--COLLECTION OF DUTIES UPON IMPORTS**

\* \* \* \* \*

**CHAPTER FOUR\--ENTRY OF MERCHANDISE**

\* \* \* \* \*

~~**[Sec. 2792.\
]{.underline}**Vessels used exclusively as ferry-boats carrying
passengers, baggage, and merchandise, shall not be required to enter and
clear, nor shall the masters of such vessels be required to present
manifests, or to pay entrance or clearance fees, or fees for receiving
or certifying manifests, but they shall, upon arrival in the United
States, be required to report such baggage and merchandise to the proper
officer of the customs according to law.\
Any passenger vessel engaged triweekly or oftener in trade between ports
of the United States and foreign ports shall be exempt from entrance and
clearance fees and tonnage taxes while such service triweekly or oftener
is maintained.\
\
~~**[Sec. 2793.\
]{.underline}**~~Enrolled or licensed vessels engaged in the foreign and
coasting trade on the northern, northeastern, and northwestern frontiers
of the United States,~~ Documented vessels with a coastwise, Great Lakes
endorsement, departing from or arriving at a port in one district to or
from a port in another district, and also touching at intermediate
foreign ports, shall not thereby become liable to the payment of entry
and clearance fees or tonnage tax, as if from or to foreign ports~~; but
such vessel shall, notwithstanding, be required to enter and clear;
except that when such vessels are on such voyages on the Great Lakes and
touch at foreign ports for the purpose of taking on bunker fuel only,
they may be exempted from entering and clearing under such rules and
regulations as the Secretary of Commerce may prescribe, notwithstanding
any other provisions of law: Provided, That this exception shall not
apply to such vessels if, while at such foreign port, they land or take
on board any passengers, or any merchandise other than bunker fuel,
receive orders, discharge any seamen by mutual consent, or engage any
seamen to replace those discharged by mutual consent, or transact any
other business save that of taking on bunker fuel~~.

\* \* \* \* \*

**CHAPTER ELEVEN\--PROVISIONS APPLYING TO COMMERCE WITH CONTIGUOUS
COUNTRIES**

\* \* \* \* \*

~~**[Sec. 3111.\
]{.underline}**If any vessel enrolled or licensed to engage in the
foreign and coasting trade on the northern, northeastern, and
northwestern frontiers of the United States shall touch at any port in
the adjacent British provinces, and the master of such vessel shall
purchase any merchandise for the use of the vessel, the master of the
vessel shall report the same, with cost and quantity thereof, to an
officer of the customs at the first port in the United States at which
he shall next arrive, designating them as \"sea- stores\"; and in the
oath to be taken by such master of such vessel, on making such report,
he shall declare that the articles so specified or designated
\"sea-stores\" are truly intended for the use exclusively of the vessel,
and are not intended for sale, transfer, or private use. If any greater
quantity of dutiable articles shall be found on board such vessel than
are specified in such report or entry of such articles, or any part
thereof shall be landed without a permit from an officer of the customs,
such articles, together with the vessel, her apparel, tackle, and
furniture, shall be forfeited.~~

\* \* \* \* \*

~~**[Sec. 3118.\
]{.underline}**The master of any vessel so enrolled or licensed shall,
before departing from a port in one collection-district to a place in
another collection-district, where there is no custom-house, file his
manifest, and obtain a clearance in the same manner, and make oath to
the manifest, which manifest and clearance shall be delivered to the
proper officer of customs at the port at which the vessel next arrives
after leaving the place of destination specified in the clearance.\
\
**[Sec. 3119.\
]{.underline}**Nothing contained in the three preceding sections shall
exempt masters of vessels from reporting, as now required by law, any
merchandise destined for any foreign port. No permit shall be required
for the unloading of cargo brought from an American port.~~

\* \* \* \* \*

~~**[Sec. 3122.\
]{.underline}**The master of any vessel so enrolled or licensed,
destined with a cargo from a place in the United States, at which there
may be no custom-house, to a port where there may be a custom-house,
shall, within twenty-four hours after arrival at the port of
destination, deliver to the proper officer of the customs a manifest,
subscribed by him, setting forth the cargo laden at the place of
departure, or laden or unladen at any intermediate port, or place, to
the truth or which manifest he shall make oath before such officer. If
the vessel, however, have no cargo, the master shall not be required to
deliver such manifest.~~

\* \* \* \* \*

~~**[Sec. 3124.\
]{.underline}**The manifests, certificates of clearance, and oaths,
provided for by the eight preceding sections, shall be in such form, and
prepared, filled up, and executed in such manner as the Secretary of the
Treasury may from time to time prescribe.\
\
**[Sec. 3125.\
]{.underline}**If the master of any enrolled or licensed vessel shall
neglect or fail to comply with any of the provisions or requirements of
the nine preceding sections, such master shall forfeit and pay to the
United States the sum of twenty dollars for each and every failure or
neglect, and for which sum the vessel shall be liable, and may be
summarily proceeded against, by way of libel, in any district court of
the United States.~~

\* \* \* \* \*

**[Sec. 3126.\
]{.underline}**~~Any vessel, on being duly registered in pursuance of
the laws of the United States,~~ Any United States documented vessel
with a registry or coastwise endorsement, or both may engage in trade
between one port in the United States and one or more ports within the
same, with the privilege of touching at one or more foreign ports during
the voyage, and land and take in thereat merchandise, passengers and
their baggage, and letters, and mails. ~~All such vessels shall be
furnished by the appropriate customs officers of the ports at which they
shall take in their cargoes in the United States, with certified
manifests, setting forth the particulars of the cargoes, the marks,
number of packages; by whom shipped, to whom consigned, at what port to
be delivered; designating such merchandise as is entitled to drawback,
or to the privilege of being placed in warehouse; and the masters of all
such vessels shall, on their arrival at any port of the United States
from any foreign port at which such vessel may have touched, as herein
provided, conform to the laws providing for the delivery of manifests of
cargo and passengers taken on board at such foreign port, and all other
laws regulating the report and entry of vessels from foreign ports, and
be subject to all the penalties therein prescribed.\
\
~~**[Sec. 3127.\
]{.underline}**Any foreign merchandise taken in at one port of the
United States to be conveyed ~~in registered vessels~~ a United States
documented vessel with a registry or coastwise endorsement, or both, to
any other port within the same, either under the provisions relating to
warehouses, or under the laws regulating the transportation coastwise of
merchandise entitled to drawback, as well as any merchandise not
entitled to drawback, but on which the import duties chargeable by law
shall have been duly paid, shall not become subject to any import duty
by reason of the vessel in which they may arrive having touched at a
foreign port during the voyage.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Title 46\--Shipping**

\* \* \* \* \*

**TITLE XLVIII\--REGULATION OF COMMERCE AND NAVIGATION\
Chapter One\--Registry and Recording**

\* \* \* \* \*

**[Sec. 4136.\
]{.underline}**~~The Secretary of Commerce may issue a register or
enrollment~~ The Secretary of Transportation may issue a certificate of
documentation with a coastwise endorsement for any vessel wrecked on the
coasts of the United States or her possessions or adjacent waters, when
purchased by a citizen or citizens of the United States and thereupon
repaired in a shipyard in the United States or her possessions, if it
shall be proved to the satisfaction of the ~~Secretary of Commerce~~
Secretary of Transportation, if he deems it necessary , through a board
of three appraisers appointed by him, that the said repairs put upon
such vessels are equal to three times the appraised salved value of the
vessel: Provided, That the expense of the appraisal herein provided for
shall be borne by the owner of the vessel: Provided further, That if any
of the material matters of fact sworn to or represented by the owner, or
at his instance, to obtain the register of any vessel are not true,
there shall be a forfeiture to the United States of the vessel in
respect to which the oath shall have been made, together with tackel,
apparel, and furniture thereof.

\* \* \* \* \*

**Chapter Two\--Clearance and Entry**

\* \* \* \* \*

~~**[Sec. 4197.\
]{.underline}**The master or person having the charge or command of any
vessel bound to a foreign port shall deliver to the collector of the
district from which such vessel is about to depart a manifest of all the
cargo on board the same, and the value thereof, by him subscribed, and
shall swear to the truth thereof; whereupon the collector shall grant a
clearance for such vessel and her cargo, but without specifying the
particulars thereof in the clearance, unless required by the master or
other person having the charge or command of such vessel so to do. In
any vessel bound to a foreign port (other than a licensed yacht or an
undocumented American pleasure vessel not engaged in any trade nor in
any way violating the customs or navigation laws of the United States)
departs from any port or place in the United States without a clearance,
or if the master delivers a false manifest, or does not answer truly the
questions demanded of him, or, having received a clearance adds to the
cargo of such vessel without having mentioned in the report outwards the
intention to do so, or if the departure of the vessel is delayed beyond
the second day after obtaining clearance without reporting the delay to
the collector, the master or other person having the charge or command
of such vessel shall be liable to a penalty of not more than \$1,000 nor
less the \$500, or if the cargo consists in any part of narcotic drugs,
or any spirits, wines, or other alcoholic liquors (sea stores excepted),
a penalty of not more than \$5,000 nor less than \$1,000 for each
offense, and the vessel shall be detained in any port of the United
States until the said penalty is paid or secured: Provided, That in
order that the commerce of the United States may move with expedition
and without undue delay, the Secretary of Commerce is hereby authorized
to make regulations permitting the master of any vessel taking on cargo
for a foreign port or for a port in noncontiguous territory belonging to
the United States to file a manifest as hereinbefore provided, and if
the manifest be not a complete manifest and it so appears upon such
manifest, the collector of customs may grant clearance to the vessel in
case of an incomplete manifest, taking from the owner of the vessel, who
may act in the premises by a duly authorized attorney in fact, a bond
with security approved by the collector of customs in the penal sum of
\$1,000, conditioned that the master or someone for him will file a
completed outward manifest not later than the fourth business day after
the clearance of the vessel. In the event that the said complete outward
manifest be not filed as required by the provisions of this section and
the regulations made by the Secretary of Commerce in pursuance hereof,
then a penalty of \$50 for each day\'s delinquency beyond the allowed
period of four days for filing the completed manifest shall be exacted,
and if the completed manifest be not filed within the three days
following the four-day period, then for each succeeding day of
delinquency a penalty of \$100 shall be exacted. Suit may be instituted
in the name of the United States against the principal and surety on the
bond for the recovery of any penalties that may accrue and be exacted in
accordance with the terms of the bond.\
~~**[SEC. 4197. CLEARANCE; VESSELS.\
\
]{.underline}**(a) When Required; Vessels of the United States.\--Except
as otherwise provided by law, any vessel of the United States shall
obtain clearance from the Customs Service before proceeding from a port
or place in the United States\--\
\
(1) for a foreign port or place;\
\
(2) for another port or place in the United States if the vessel has on
board bonded merchandise or foreign merchandise for which entry has not
been made; or\
\
(3) outside the territorial sea to visit a hovering vessel or to receive
merchandise while outside the territorial sea.\
\
(b) When Required; Other Vessels.\--Except as otherwise provided by law,
any vessel that is not a vessel of the United States shall obtain
clearance from the Customs Service before proceeding from a port or
place in the United States\--\
\
(1) for a foreign port or place;\
\
(2) for another port or place in the United States; or\
\
(3) outside the territorial sea to visit a hovering vessel or to receive
or deliver merchandise while outside the territorial sea.\
\
(c) Regulations.\--The Secretary of the Treasury may by regulation\--\
\
(1) prescribe the manner in which clearance under this section is to
obtained, including the documents, data or information which shall be
submitted or transmitted, pursuant to an authorized data interchange
system, to obtain the clearance;\
\
(2) permit the Customs Service to grant clearance for vessel under this
section before all requirements for clearance are complied with, but
only if the owner or operator of the vessel files a bond in an amount
set by the Secretary of the Treasury conditioned upon the compliance by
the owner or operator with all specified requirements for clearance
within a time period (not exceeding 4 business days) established by the
Secretary of the Treasury; and\
\
(3) authorize the Customs Service to permit clearance of any vessel to
be obtained at a place other than a designated port of entry, under such
conditions as he may prescribe.\
\
~~**[Sec. 4198.\
]{.underline}**The oath to be taken by the master or commander of the
vessel shall be as follows:\
District of\
I, (insert the name), master or commander of the (insert the
denomination and name of the vessel), bound from the port of (insert the
name of the port or place sailing from) to ((insert the name of the port
or place bound to), do solemnly, sincerely, and truly swear (or affirm,
as the case may be) that the manifest of the cargo on board the said
(insert denomination and name of the vessel), now delivered by me to the
collector of this district, and subscribed with my name, contains,
according to the best of my knowledge and belief, a full, just, and true
account of all the goods, wares, and merchandise now actually laden on
board the said vessel, and of the value thereof; and if any other goods,
wares, or merchandise shall be laden or put on board the said (insert
denomination and name of vessel) previous to her sailing from this port,
I will immediately report the same to the said collector. I do also
swear (or affirm) that I verily believe that duties on all the foreign
merchandise therein specified have been paid or secured, according to
law, and that no part thereof is intended to be relanded within the
United States, and that if by distress or other unavoidable accident it
shall become necessary to reland the same, I will forthwith make a just
and true report thereof to the collector of the customs of the district
wherein such distress or accident may happen. So help me God.\
\
~~**[Sec. 4199.\
]{.underline}**~~(a) Copies of bills of lading or equivalent commercial
documents relating to all cargo encompassed by the manifest required
under this chapter shall be attached to such manifest and delivered to
the appropriate officer of the United States Customs Service at the time
such manifest is delivered.\
\
(b) The following information shall be included on such manifest, or on
attached copies of bills of lading or equivalent commercial documents:
(1) Name and address of shipper. (2) Description of the cargo. (3)
Number of packages and gross weight. (4) Name of vessel or carrier. (5)
Port of exit. (6) Port of destination.\
\
(c) Except as provided in subsection (d), the following information
contained on such manifest, or on attached copies of bills of lading or
equivalent commercial documents, shall be available for public
disclosure: (1) Name and address of shipper, unless the shipper has made
a biennial certification claiming confidential treatment pursuant to
procedures adopted by the Secretary of the Treasury. (2) General
character of the cargo. (3) Number of packages and gross weight. (4)
Name of vessel or carrier. (5) Port of exit. (6) Port of destination.
(7) Country of destination.\
\
(d) The information listed in subsection (c) shall not be available for
public disclosure if\-- (1) the Secretary of the Treasury makes an
affirmative finding on a shipment-by-shipment basis that disclosure is
likely to pose a threat of personal injury or property damage; or (2)
the information is exempt under the provisions of section 552(b)(1) of
title 5 of the United States Code.\
\
(e) The Secretary of the Treasury, in order to allow for the timely
dissemination and publication of the information listed in subsection
(c) above, is authorized to establish procedures to provide access to
manifests, or attached bills of lading or equivalent commercial
documents which shall include provisions for adequate protection against
the public disclosure of information not available for public disclosure
from such manifests or attached bills of lading, or equivalent
commercial documents.~~

\* \* \* \* \*

~~**[Sec. 4201.\
]{.underline}**The form of a clearance, to be granted to a ship or
vessel on her departure to a foreign port or place, shall be as follows:
District of \-\-\-\-\--, ss, \-\-\-\-\--\
Port of \-\-\-\-\--:\-\-\-\-\--\
These are to certify all whom it doth concern, that \-\-\-\-\-\-\--,
master or commander of the \-\-\-\-\-\-\--, burden \-\-\-\-\-\-\-- tons,
or thereabouts, mounted with \-\-\-\-\-\-\-- guns, navigated with
\-\-\-\-\-\-\-- men, \-\-\-\-\-\-\-- built, and bound for
\-\-\-\-\-\-\--, having on board \-\-\-\-\-\-\--, hath here entered and
cleared his said vessel according to law. Given under our hands and
seals, at the custom-house of \-\-\-\-\-\-\--, this \-\-\-\-\-\-\-- day
of \-\-\-\-\-\-\--, one thousand \-\-\-\-\-\-\--, and in the
\-\-\-\-\-\-\-- year of the Independence of the United States of
America.~~

\* \* \* \* \*

~~**[Sec. 4207.\
]{.underline}**Whenever any clearance is granted to any vessel of the
United States, duly registered as such, and bound on any foreign voyage,
the collector of the district shall annex thereto, in every case, a copy
of the rates or tariffs of fees which diplomatic and consular officers
are entitled, by the regulations prescribed by the President, to receive
for their services.\
\
**[Sec. 4208.\
]{.underline}**The master or person having charge or command of any
steamboat on Lake Champlain, when going from the United States into the
province of Quebec, may deliver a manifest of the cargo on board, and
take a clearance from the collector of the district through which any
such boat shall last pass, when leaving the United States, without
regard to the place from which any such boat shall have commenced her
voyage, or where her cargo shall have been taken on board.~~

\* \* \* \* \*

~~**[Sec. 4213.\
]{.underline}**It shall be the duty of all masters of vessels for whom
any official services shall be performed by any consular officer,
without the payment of a fee, to require a written statement of such
services from such consular officer, and, after certifying as to whether
such statement is correct, to furnish it to the collector of the
district in which such vessels shall first arrive on their return to the
United States; and if any such master of a vessel shall fail to furnish
such statement, he shall be liable to a fine of not exceeding fifty
dollars, unless such master shall state under oath that no such
statement was furnished him by said consular officer. And it shall be
the duty of every collector to forward to the Secretary of the Treasury
all such statements as shall have been furnished to him, and also a
statement of all certified invoices which shall have come to his office,
giving the dates of the certificates, and the names of the persons for
whom and of the consular officer by whom the same were certified.~~

\* \* \* \* \*

**Chapter Three\--Tonnage Duties**

\* \* \* \* \*

~~**[Sec. 4221.\
]{.underline}**In cases of vessels making regular daily trips between
any port of the United States and any port in the Dominion of Canada,
wholly upon interior waters not navigable to the ocean, no tonnage or
clearance fees shall be charged against such vessel by the officers of
the United States, except upon the first clearing of such vessel in each
year.\
\
~~**[Sec. 4222.\
]{.underline}**~~No consul or consular agent of the United States shall
exact tonnage fees from any vessel of the United States, touching at or
near ports in Canada, on her regular voyage from one port to another
within the United States, unless such consul or consular agent shall
perform some official services, required by law for such vessel, when
she shall thus touch at a Canadian port.\
\
~~\* \* \* \* \*\
\
**TITLE XLIX\--REGULATION OF VESSELS IN FOREIGN COMMERCE**

\* \* \* \* \*

~~**[Sec. 4306.\
]{.underline}**Every vessel of the United States, going to any foreign
country, shall, before she departs from the United States, at the
request of the master, be furnished by the collector for the district
where such vessel may be, with a passport, the form for which shall be
prescribed by the Secretary of State. In order to be entitled to such
passport, the master of every such vessel shall be bound, with
sufficient sureties, to the Treasury of the United States, in the
penalty of two thousand dollars, conditioned that the passport shall not
be applied to the use or protection of any other vessel than the one
described in it; and that, in case of the loss or sale of any vessel
having such passport, the same shall, within three months, be delivered
up to the collector from whom it was received, if the loss or sale take
place within the United States; or within six months, if the same shall
happen at any place nearer than the Cape of Good Hope; and within
eighteen months, if at a more distant place.\
\
~~**[Sec. 4307.\
]{.underline}**~~If any vessel of the United States shall depart
therefrom, and shall be found to any foreign country, other than to some
port in America, without such passport, the master of such vessel shall
be liable to a penalty of two hundred dollars for every such offense.\
\
~~**[Sec. 4308.\
]{.underline}**~~Every unregistered vessel owned by a citizen of the
United States, and sailing with a sea-letter, going to any foreign
country, shall, before she departs from the United States, at the
request of the master, be furnished by the collector of the district
where such vessel may be with a passport, for which the master shall be
subject to the rules and conditions prescribed for vessels of the United
States.~~

\* \* \* \* \*

**TITLE L\--REGULATION OF VESSELS IN DOMESTIC COMMERCE**

\* \* \* \* \*

~~**[Sec. 4332.\
]{.underline}**Every surveyor who certifies a manifest, or grants any
permit, or who receives any certified manifest, or any permit, as is
provided for in this Title, shall make return thereof monthly, or
sooner, if it can conveniently be made, to the collector of the district
where such surveyor resides.~~

\* \* \* \* \*

**[Sec. 4336.\
]{.underline}**Any officer concerned in the collection of the revenue
may at all times inspect the ~~register or enrollment or license of any
vessel~~ certificate of documentation of any documented vessel or any
document in lieu thereof; and if the master or other person in charge or
command of any such vessel shall not exhibit the same, when required by
such officer, unless the vessel is one which by regulation of the
~~Secretary of the Treasury is not required to have its register or
enrollment or license~~ Secretary of Transportation is not required to
have its certificate of documentation or document in lieu thereof on
board, such master or person in charge or command shall be liable to a
penalty of \$100, unless the failure to do so is willful, in which case
he shall be liable to a penalty of \$1,000 and to a fine of not more
than \$1,000 or imprisonment for not more than one year, or both.

\* \* \* \* \*

**[Sec. 4348.\
]{.underline}**~~The seacoasts and navigable rivers of the United States
and Porto Rico shall be divided into five great districts: The first to
include all the collection districts on the seacoasts and navigable
rivers between the northern boundary of the State of Maine and the
southern boundary of the State of Texas; the second to consist of the
island of Porto Rico; the third to include the collection districts on
the seacoasts and navigable rivers between the southern boundary of the
State of California and the northern boundary of the State of
Washington; the fourth to consist of the Territory of Alaska; the fifth
to consist of the Territory of Hawaii.~~

\* \* \* \* \*

~~**[Sec. 4358.\
]{.underline}**The coasting trade between the territory ceded to the
United States by the Emperor of Russia and any other portion of the
United States shall be regulated in accordance with the provisions of
law applicable to such trade between any two great districts.~~

\* \* \* \* \*

~~**[Sec. 4361.\
]{.underline}**Whenever any vessel of the United States, registered
according to law, is employed in going from any one district in the
United States to any other district, such vessel, and the master
thereof, with the goods she may have on board previous to her departure
from the district where she may be, and also upon her arrival in any
other district, shall be subject, except as to the payment of fees, to
the same regulations, provisions, penalties, and forfeitures, and the
like duties are imposed on like officers, as are provided for vessels
licensed for carrying on the coasting-trade. Nothing herein contained
shall be construed to extend to registered vessels of the United States
having on board merchandise of foreign growth or manufacture, brought
into the United States, in such vessel, from a foreign port, and on
which the duties have not been paid according to law.\
\
~~**[Sec. 4362.\
]{.underline}**~~The collector of the district of Philadelphia may grant
permits for the transportation of merchandise of foreign growth or
manufacture across the State of New Jersey to the district of New York,
or across the State of Delaware to any district in the State of Maryland
or Virginia; and the collector of the district of New York may grant
like permits for transportation across the State of New Jersey; and the
collector of any district of Maryland or Virginia may grant like permits
for transportation across the State of Delaware to the district of
Philadelphia. Every such permit shall express the name of the owner, or
person sending the merchandise, and of the person to whom the
merchandise is consigned, with the marks, numbers, and description of
the packages, whether bale, box chest, or otherwise, and the kind of
goods contained therein, and the date when granted; and the owner, or
person sending such goods, shall swear that they were legally imported,
and the duties paid. Where the merchandise, to be so transported, shall
be of less value than eight hundred dollars, the permit shall not be
deemed necessary.\
\
~~**[Sec. 4363.\
]{.underline}**~~The owner or consignee of all merchandise transported
under the provisions of the preceding section and for the transportation
whereof a permit is necessary, shall, within twenty-four hours after the
arrival thereof at the place to which such merchandise was permitted to
be transported, report the same to the collector of the district where
it has arrived, and shall deliver up the permit accompanying the same;
and if the owner or consignee shall neglect or refuse to make due entry
of such merchandise within the time and in the manner directed, all such
merchandise shall be subject to forfeiture; and if the permit granted
shall not be given up within the time limited for making the report, the
person to whom it was granted, neglecting or refusing to deliver it up,
shall be liable to a penalty of fifty dollars for every twenty-four
hours it shall be withheld afterward.\
\
~~**[Sec. 4364.\
]{.underline}**~~Whenever any vessel, licensed for carrying on the
fishery, is intended to touch and trade at any foreign port, it shall be
the duty of the master or owner to obtain permission for that purpose
from the collector of the district where such vessel may be, previous to
her departure, and the master of every such vessel shall deliver like
manifests, and make like entries, both of the vessel and of the
merchandise on board, within the same time, and under the same penalty,
as are by law provided for vessels of the United States arriving from a
foreign port.\
\
~~**[Sec. 4365.\
]{.underline}**~~Whenever a vessel, licensed for carrying on the
fisheries, is found within three leagues of the coast, with merchandise
of foreign growth or manufacture, exceeding the value of five hundred
dollars, without having such permission as is directed by the preceding
section, such vessel, together with the merchandise of foreign growth or
manufacture imported therein, shall be subject to seizure and
forfeiture.\
\
~~**[Sec. 4366.\
]{.underline}**~~The master of every vessel employed in the
transportation of merchandise from district to district, that shall put
into a port other than the one to which she was bound, shall, within
twenty-four hours of his arrival, if there be an officer residing at
such port, and she continue there so long, make report of his arrival to
such officer, with the name of the place he came from, and to which he
is bound, with an account of his lading; and every master who neglects
or refuses so to do shall be liable to a penalty of twenty dollars.\
\
~~**[Sec. 4367.\
]{.underline}**~~The master of every foreign vessel bound from a
district in the United States to any other district within the same,
shall, in all cases previous to her departure from such district,
deliver to the collector of such district duplicate manifests of the
lading on board such vessel, if there be any, or, if there be none, he
shall declare that such is the case; and to the truth of such manifest
or declaration he shall swear, and also obtain a permit from the
collector, authorizing him to proceed to the place of his destination.\
\
~~**[Sec. 4368.\
]{.underline}**~~The master of every foreign vessel, on his arrival
within any district from any other district, shall, in all cases, within
forty-eight hours after his arrival, and previous to the unlading of any
goods from on board such vessel, deliver to the collector of the
district where he may have arrived, a manifest of the goods laden on
board such vessel, if any there be; or if in ballast only, he shall so
declare; he shall swear to the truth of such manifest or declaration,
and shall also swear that such manifest contains an account of all the
merchandise which was on board such vessel at the time, or has been
since her departure for the place from whence she shall be reported last
to have sailed; and he shall also deliver to such collector the permit
which was given him from the collector of the district from whence he
sailed.\
\
~~**[Sec. 4369.\
]{.underline}**~~Every master of any foreign vessel who neglects or
refuses to comply with any of the requirements of the two preceding
sections, shall be liable to a penalty of one hundred dollars. Nothing
therein contained shall, however, be construed as affecting the payment
of tonnage, or any other requirements to which such vessels are subject
by law.~~

\* \* \* \* \*

**TITLE LIII\--MERCHANT SEAMEN**

\* \* \* \* \*

**Chapter Five\--Protection and Relief**

\* \* \* \* \*

~~**[Sec. 4573.\
]{.underline}**Before a clearance is granted to any vessel bound on a
foreign voyage or engaged in the whale-fishery, the master thereof shall
deliver to the collector of the customs a list containing the names,
places of birth and residence, and description of the persons who
compose his ship\'s company; to which list the oath of the captain shall
be annexed, that the list contains the names of his crew, together with
the places of their birth and residence, as far as he can ascertain
them; and the collector shall deliver him a certified copy thereof, for
which the collector shall be entitled to receive the sum of twenty-five
cents.\
\
~~**[Sec. 4574.\
]{.underline}**~~In all cases of private vessels of the United States
sailing from a port in the United States to a foreign port, the list of
the crew shall be examined by the collector for the district from which
the vessel shall clear, and, if approved of by him, shall be certified
accordingly. No person shall be admitted or employed on board of any
such vessel unless his name shall have been entered in the list of the
crew, approved and certified by the collector for the district from
which the vessel shall clear. The collector, before he delivers the list
of the crew, approved and certified, to the master or proper officer of
the vessel to which the same belongs, shall cause the same to be
recorded in a book by him for that purpose to be provided, and the
record shall be open for the inspection of all persons, and a certified
copy thereof shall be admitted in evidence in any court in which any
question may arise under any of the provisions of the Title.\
\
~~**[Sec. 4575.\
]{.underline}**~~The following rules shall be observed with reference to
vessels bound on any foreign voyage:\
First. The duplicate list of the ship\'s company, required to be made
out by the master and delivered to the collector of the customs, under
section forty-five hundred and seventy-three, shall be a fair copy in
one uniform handwriting, without erasure or interlineation.\
Second. It shall be the duty of the owners of every such vessel to
obtain from the collector of the customs of the district from which the
clearance is made, a true and certified copy of the shipping-articles,
containing the names of the crew, which shall be written in a uniform
hand, without erasures of interlineations.\
Third. These documents, which shall be deemed to contain all the
conditions of contract with the crew as to their service, pay, voyage,
and all other things, shall be produced by the master, and laid before
any consul, or other commercial agent of the United States, whenever he
may deem their contents necessary to enable him to discharge the duties
imposed upon him by law toward any mariner applying to him for his aid
or assistance.\
Fourth. All interlineations, erasures, or writing in a hand different
from that in which such duplicates were originally made, shall be deemed
fraudulent alterations, working no change in such papers, unless
satisfactorily explained in a manner consistent with innocent purposes
and the provisions of law which guard the rights of mariners.\
Fifth. If any master of a vessel shall proceed on a foreign voyage
without the documents herein required, or refuse to produce them when
required, or to perform the duties imposed by this section, or shall
violate the provisions thereof, he shall be liable to each and every
individual injured thereby in damages, to be recovered in any court of
the United States in the district where such delinquent may reside or be
found, and in addition thereto be punishable by a fine of one hundred
dollars for each offense.\
Sixth. It shall be the duty of the boarding-officer to report all
violations of this section to the collector of the port where any vessel
may arrive, and the collector shall report the same to the Secretary of
the Treasury and to the United States attorney in his district.\
\
~~**[Sec. 4576.\
]{.underline}**~~The master of every vessel bound on a foreign voyage or
engaged in the whale fishery shall exhibit the certified copy of the
list of the crew to the first boarding officer at the first port in the
United States at which he shall arrive on his return, and also produce
the persons named therein to the boarding officer, whose duty it shall
be to examine the men with such list and to report the same to the
collector; and it shall be the duty of the collector at the port of
arrival, where the same is different from the port from which the vessel
originally sailed, to transmit a copy of the list so reported to him to
the collector of the port from which such vessel originally sailed. For
each failure to produce any person on the certified copy of the list of
the crew the master and owner shall be severally liable to a penalty of
four hundred dollars, to be sued for, prosecuted, and disposed of in
such manner as penalties and forfeitures which may be incurred for
offenses against the laws relating to the collection of duties; but such
penalties shall not be incurred on account of the master not producing
to the first boarding officer any of the persons contained in the list
who may have been discharged in a foreign country with the consent of
the consul, vice-consul, commercial agent, or vice-commercial agent
there residing, certified in writing, under his hand and official seal,
to be produced to the collector with the other persons composing the
crew, nor on account of any such person dying or absconding or being
forcibly impressed into other service of which satisfactory proof shall
also be exhibited to the collector.~~

\* \* \* \* \*

**TITLE LXII.\--NATIONAL BANKS\
\
Chapter One\--Organization and Powers**

\* \* \* \* \*

**[Sec. 5136.\
]{.underline}**Upon duly making and filing articles of association and
an organization certificate, the association shall become, as from the
date of the execution of its organization certificate, a body corporate,
and as such, and in the name designated in the organization certificate,
it shall have power\--\
First. To adopt and use a corporate seal.\
Second. To have succession from the date of the approval of this Act, or
from the date of its organization if organized after such date of
approval until such time as it be dissolved by the act of its
shareholders owning two- thirds of its stock, or until its franchise
becomes forfeited by reason of violation of law, or until terminated by
either a general or a special Act of Congress or until its affairs be
placed in the hands of a receiver and finally wound up by him.\
Third. To make contracts.\
Fourth. To sue and be sued, complain and defend, in any court of law and
equity, as fully as natural persons.\
Fifth. To elect or appoint directors, and by its board of directors to
appoint a president, vice-president, cashier, and other officers, define
their duties, require bonds of them and fix the penalty thereof, dismiss
such officers or any of them at pleasure, and appoint others to fill
their places.\
Sixth. To prescribe, by its board of directors, by-laws not inconsistent
with law, regulating the manner in which its stock shall be transferred,
its directors elected or appointed, its officers appointed, its property
transferred, its general business conducted, and the privileges granted
to it by law exercised and enjoyed.\
Seventh. To exercise by its board of directors or duly authorized
officers or agents, subject to law, all such incidental powers as shall
be necessary to carry on the business of banking; by discounting and
negotiating promissory notes, drafts, bills of exchange, and other
evidences of debt; by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money on personal security; and
by obtaining, issuing, and circulating notes according to the provisions
of this title. The business of dealing in securities and stock by the
association shall be limited to purchasing and selling such securities
and stock without recourse, solely upon the order, and for the account
of, customers, and in no case for its own account, and the association
shall not underwrite any issue of securities or stock: Provided, That
the association may purchase for its own account investment securities
under such limitations and restrictions as the Comptroller of the
Currency may by regulation prescribe. In no event shall the total amount
of the investment securities of any one obligor or maker, held by the
association for its own account, exceed at any time 10 per centum of its
capital stock actually paid in and unimpaired and 10 per centum of its
unimpaired surplus fund, except that this limitation shall not require
any association to dispose of any securities lawfully held by it on the
date of enactment of the Banking Act of 1935. As used in this section
the term \"investment securities\" shall mean marketable obligations
evidencing indebtedness of any person, copartnership, association, or
corporation in the form of bonds, notes and/or debentures commonly known
as investment securities under such further definition of the term
\"investment securities\" as may by regulation be prescribed by the
Comptroller of the Currency. Except as hereinafter provided or otherwise
permitted by law, nothing herein contained shall authorize the purchase
by the association for its own account of any shares of stock of any
corporation. The limitations and restrictions herein contained as to
dealing in, underwriting and purchasing for its own account, investment
securities shall not apply to obligations of the United States, or
general obligations of any State or of any political subdivision
thereof, or obligations of the Washington Metropolitan Area Transit
Authority which are guaranteed by the Secretary of Transportation under
section 9 of the National Capital Transportation Act of 1969, or
obligations issued under authority of the Federal Farm Loan Act, as
amended, or issued by the thirteen banks for cooperatives or any of them
or the Federal Home Loan Banks, or obligations which are insured by the
Secretary of Housing and Urban Development under title XI of the
National Housing Act, or obligations which are insured by the Secretary
of Housing and Urban Development (hereafter in this sentence referred to
as the \"Secretary\" pursuant to section 207 of the National Housing
Act, if the debentures to be issued in payment of such insured
obligations are guaranteed as to principal and interest by the United
States, or obligations, participations, or other instruments of or
issued by the Federal National Mortgage Association or the Government
National Mortgage Association, or mortgages, obligations, or other
securities which are or ever have been sold by the Federal Home Loan
Mortgage Corporation pursuant to section 305 or section 306 of the
Federal Home Loan Mortgage Corporation Act or obligations of the Federal
Financing Bank or obligations of the Environmental Financing Authority
or obligations or other instruments or securities of the Student Loan
Marketing Association, or such obligations of any local public agency
(as defined in section 110 (h) of the Housing Act of 1949) as are
secured by an agreement between the local public agency and the
Secretary in which the local public agency agrees to borrow from said
Secretary and said Secretary agrees to lend to said local public agency,
monies in an aggregate amount which (together with any other monies
irrevocably committed to the payment of interest on such obligations)
will suffice to pay, when due, the interest on and all installments
(including the final installment) of the principal of such obligations,
which monies under the terms of said agreement are required to be used
for such payments, or such obligations of a public housing agency (as
defined in the United States Housing Act of 1937, as amended) as are
secured (1) by an agreement between the public housing agency and the
Secretary in which the public housing agency agrees to borrow from the
Secretary and the Secretary agrees to lend to the public housing agency,
prior to the maturity of such obligations, monies in an amount which
(together with any other monies irrevocably committed to the payment of
interest on such obligations) will suffice to pay the principal of such
obligations with interest to maturity thereon, which monies under the
terms of said agreement are required to be used for the purpose of
paying the principal of and the interest on such obligations at their
maturity, (2) by a pledge of annual contributions under an annual
contributions contract between such public housing agency and the
Secretary if such contract shall contain the covenant by the Secretary
which is authorized by subsection (b) of section 22 of the United States
Housing Act of 1937, as amended, and if the maximum sum and the maximum
period specified in such contract pursuant to said subsection 22(b)
shall not be less than the annual amount and the period for payment
which are requisite to provide for the payment when due of all
installments of principal and interest on such obligations, or (3) by a
pledge or both annual contributions under an annual contributions
contract containing the covenant by the Secretary which is authorized by
section 6(g) of the United States Housing Act of 1937, and a loan under
an agreement between the local public housing agency and the Secretary
in which the public housing agency agrees to borrow from the Secretary,
and the Secretary agrees to lend to the public housing agency, prior to
the maturity of the obligations involved, moneys in an amount which
(together with any other moneys irrevocably committed under the annual
contributions contract to the payment of principal and interest on such
obligations) will suffice to provide for the payment when due of all
installments of principal and interest on such obligations, which moneys
under the terms of the agreement are required to be used for the purpose
of paying the principal and interest on such obligations at their
maturity: Provided, That in carrying on the business commonly known as
the safe-deposit business the association shall not invest in the
capital stock of a corporation organized under the law of any State to
conduct a safe-deposit business in an amount in excess of 15 per centum
of the capital stock of the association actually paid in and unimpaired
and 15 per centum of its unimpaired surplus. The limitations and
restrictions herein contained as to dealing in and underwriting
investment securities shall not apply to obligations issued by the
International Bank for Reconstruction and Development, the European Bank
for Reconstruction and Development, the Inter- American Development
Bank, the North American Development Bank, the Asian Development Bank,
the African Development Bank, the Inter-American Investment Corporation,
or the International Finance Corporation, or obligations issued by any
State or political subdivision or any agency of a State or political
subdivision for housing, university, or dormitory purposes, which are at
the time eligible for purchase by a national bank for its own account,
nor to bonds, notes and other obligations issued by the Tennessee Valley
Authority or by the United States Postal Service: Provided, That no
association shall hold obligations issued by any of said organizations
as a result of underwriting, dealing, or purchasing for its own account
(and for this purpose obligations as to which it is under commitment
shall be deemed to be held by it) in a total amount exceeding at any one
time 10 per centum of its capital stock actually paid in and unimpaired
and 10 per centum of its unimpaired surplus fund. Notwithstanding any
other provision in this paragraph, the association may purchase for its
own account shares of stock issued by a corporation authorized to be
created pursuant to title IX of the Housing and Urban Development Act of
1968, and may make investments in a partnership, limited partnership, or
joint venture formed pursuant to section 907(a) or 907(c) of that Act.
Notwithstanding any other provision of this paragraph, the association
may purchase for its own account shares of stock issued by any State
housing corporation incorporated in the State in which the association
is located and may make investments in loans and commitments for loans
to any such corporation: Provided, That in no event shall the total
amount of such stock held for its own account and such investments in
loans and commitments made by the association exceed at any time 5 per
centum of its capital stock actually paid in and unimpaired plus 5 per
centum of its unimpaired surplus fund. Notwithstanding any other
provision in this paragraph, the association may purchase for its own
account shares of stock issued by a corporation organized solely for the
purpose of making loans to farmers and ranchers for agricultural
purposes, including the breeding, raising, fattening, or marketing of
livestock. However, unless the association owns at least 80 per centum
of the stock of such agricultural credit corporation the amount invested
by the association at any one time in the stock of such corporation
shall not exceed 20 per centum of the unimpaired capital and surplus of
the association: Provided further, That notwithstanding any other
provision of this paragraph, the association may purchase for its own
account shares of stock of a bank insured by the Federal Deposit
Insurance Corporation or a holding company which owns or controls such
an insured bank if the stock of such bank or company is owned
exclusively (except to the extent directors\' qualifying shares are
required by law) by depository institutions and such bank or company and
all subsidiaries thereof are engaged exclusively in providing services
for other depository institutions and their officers, directors, and
employees, but in no event shall the total amount of such stock held by
the association in any bank or holding company exceed at any time 10 per
centum of the associations capital stock and paid in and unimpaired
surplus and in no event shall the purchase of such stock result in an
association\'s acquiring more than 5 per centum of any class of voting
securities of such bank or company. The limitations and restrictions
contained in this paragraph as to an association purchasing for its own
account investment securities shall not apply to securities that (A) are
offered and sold pursuant to section 4(5) of the Securities Act of 1933
(15 U.S.C. 77d(5)); or (B) are mortgage related securities (as that term
is defined in section 3(a)(41) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(41))), subject to such regulations as the Comptroller
of the Currency may prescribe, including regulations prescribing minimum
size of the issue (at the time of initial distribution) or minimum
aggregate sales prices, or both. A national banking association may deal
in, underwrite, and purchase for such association\'s own account
qualified Canadian government obligations to the same extent that such
association may deal in, underwrite, and purchase for such
association\'s own account obligations of the United States or general
obligations of any State or of any political subdivision thereof. For
purposes of this paragraph\--\
\
(1) \* \* \*

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Harmonized Tariff Schedule of the United States**

\* \* \* \* \*

**General notes**

\* \* \* \* \*

4\. Exemptions. For the purposes of general note 1\--\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) records, diagrams and other data with regard to any business,
engineering or exploration operation whether on paper, cards,
photographs, blueprints, tapes or other media, ~~and\
\
~~(d) articles returned from space within the purview of section 484a of
the Tariff Act of 1930, and\
\
(e) articles exported from the United States which are returned within
45 days after such exportation from the United States as undeliverable
and which have not left the custody of the carrier or foreign customs
service, are not goods subject to the provisions of the tariff schedule.
No exportation referred to in subdivision (e) may be treated as
satisfying any requirement for exportation in order to receive a benefit
from, or meet an obligation to, the United States as a result of such
exportation.

\* \* \* \* \*

**SECTION XVII\--VEHICLES, AIRCRAFT, VESSELS AND ASSOCIATED TRANSPORT
EQUIPMENT**

\* \* \* \* \*

**Chapter 86\--Railway or Tramway Locomotives, Rolling Stock and Parts
Thereof; Railway or Tramway Track Fixtures and Fittings and Parts
Thereof; Mechanical (Including Electro-Mechanical) Traffic Signaling
Equipment of all Kinds Notes\
\
**1. \* \* \*

\* \* \* \* \*

4\. Railway locomotives (provided for in headings 8601 and 8602) and
railway freight cars (provided for in heading 8606) on which no duty is
owed are not subject to the entry or release requirements for imported
merchandise set forth in sections 448 and 484 of the Tariff Act of 1930.
The Secretary of the Treasury may by regulation establish appropriate
reporting requirements, including the requirement that a bond be posted
to ensure compliance.

\* \* \* \* \*

**SECTION XXII\--SPECIAL CLASSIFICATION PROVISIONS; TEMPORARY
LEGISLATION; TEMPORARY MODIFICATIONS ESTABLISHED PURSUANT TO TRADE
LEGISLATION; ADDITIONAL IMPORT RESTRICTIONS ESTABLISHED PURSUANT TO
SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED\
Chapter 98\--Special Classification Provisions**

\* \* \* \* \*

**[SUBCHAPTER III\--SUBSTANTIAL CONTAINERS OR HOLDERS\
\
]{.underline}**U.S. Notes\
\
1. \* \* \*

\* \* \* \* \*

4\. Instruments of international traffic, such as containers, lift vans,
rail cars and locomotives, truck cabs and trailers, etc, are exempt from
formal entry procedures but are required to be accounted for when
imported and exported into and out of the United States, respectively,
through the manifesting procedures required for all international
carriers by the United States Customs Service. Fees associated with the
importation of such instruments of international traffic shall be
reported and paid on a periodic basis as required by regulations issued
by the Secretary of the Treasury and in accordance with 1956 Customs
Convention on Containers (20 UST 30; TIAS 6634).

\* \* \* \* \*

**Chapter 99\--Temporary Legislation; Temporary Modifications
Established Pursuant to Trade Legislation; Additional Import
Restrictions Established Pursuant to Section 22 of the Agricultural
Adjustment Act, as Amended**

\* \* \* \* \*

**[SUBCHAPTER V\--TEMPORARY MODIFICATIONS ESTABLISHED PURSUANT TO THE
UNITED STATES-CANADA FREE TRADE AGREEMENT\
\
]{.underline}**U.S. Notes\
\
1. \* \* \*

\* \* \* \* \*

9\. Railway freight cars provided for in subheadings 9905.86.05 and
9905.86.10 are not subject to the entry or release requirements for
imported merchandise set forth in sections 448 and 484 of the Tariff Act
of 1930. The Secretary of the Treasury may by regulation establish
appropriate reporting requirements, including the requirement that a
bond be posted to ensure compliance.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 9703 of Title 31, United States Code**

**Sec. 9703. Department of the Treasury Forfeiture Fund\
\
**(a) In General.\--There is established in the Treasury of the United
States a fund to be known as the \"Department of the Treasury Forfeiture
Fund\" (referred to in this section as the \"Fund\"). The Fund shall be
available to the Secretary, without fiscal year limitation, with respect
to seizures and forfeitures made pursuant to any law (other than section
7301 or 7302 of the Internal Revenue Code of 1986) enforced or
administered by the Department of the Treasury or the United States
Coast Guard for the following law enforcement purposes:\
\
(1) \* \* \*\
\
(2) At the discretion of the Secretary\--\
\
(A) \* \* \*

\* \* \* \* \*

\(E\) the payment of claims against employees of the Customs Service
settled by the Secretary under section 630 of the Tariff Act of 1930;
~~(E)~~ (F) payment for equipment for any vessel, vehicle, or aircraft
available for official use by a State or local law enforcement agency to
enable the vessel, vehicle, or aircraft to assist in law enforcement
functions if the vessel, vehicle, or aircraft will be used in joint law
enforcement operations with a Department of the Treasury law enforcement
organization; ~~(F)~~ (G) payment of overtime salaries, travel, fuel,
training, equipment, and other similar costs of State or local law
enforcement officers that are incurred in joint law enforcement
operations with a Department of the Treasury law enforcement
organization; ~~(G)~~ (H) reimbursement of private persons for expenses
incurred by such persons in cooperating with a Department of the
Treasury law enforcement organization in investigations and undercover
law enforcement operations; ~~(H)~~ (I) payment for training foreign law
enforcement personnel with respect to seizure or forfeiture activities
of the Department of the Treasury; and ~~(I)~~ (J) payment made pursuant
to guidelines promulgated by the Secretary, if such payment is necessary
and directly related to seizure and forfeiture program expenses for\--\
\
(i) the purchase or lease of automatic data processing systems (not less
than a majority of which use will be related to such program);

\* \* \* \* \*

\(e\) Investments.\--Amounts in the Fund, and in any holding accounts
associated with the Fund, which are not currently needed for the
purposes of this section ~~shall~~ may be kept on deposit or invested in
obligations of, or guaranteed by, the United States and all earnings on
such investments ~~shall~~ may be deposited in the Fund.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Act of June 16, 1937**

**\
**~~AN ACT To expedite the dispatch of vessels from certain ports of
call.\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That in order to expedite the
dispatch of vessels carrying passengers operating on regular schedules
and arriving at night or on a Sunday or a holiday at a port in the
United States at which such vessel is required by law to report arrival
and make entry and from which it is required to obtain a clearance, the
appropriate customs officer, if the vessel departs during the same
night, Sunday, or holiday on which it arrives may, under such
regulations as may be prescribed the Secretary of the Treasury, receive
the report of arrival and entry of such vessel from and give clearance
for such vessel to the master or other proper officer thereof on board
such vessel: Provided, That bond, as prescribed in section 451 of the
Tariff Act of 1930, is given to secure reimbursement to the Government
for the compensation of, and expenses incurred by, such customs officers
in performing such services, who shall be entitled to rates of
compensation fixed on the same basis and payable in the same manner and
upon the same terms and conditions as in the case of customs officers
and employees assigned to lading or unlading at night or on Sunday or a
holiday.\
\
~~\-\-\-\-\-\-\-\-\--

**Section 965 of Title 18, United States Code**

**Sec. 965. Verified statements as prerequisite to vessel\'s departure\
\
**(a) During a war in which the United States is a neutral nation, every
master or person having charge or command of any vessel, domestic or
foreign, whether requiring clearance or not, before departure of such
vessel from port shall, in addition to the facts required by ~~sections
91, 92, and 94 of Title 46~~ section 431 of the Tariff Act of 1930 (19
U.S.C. 1431) and section 4197 of the Revised Statutes of the United
States (46 U.S.C. App. 91), to be set out in the masters\' and
shippers\' manifests before clearance will be issued to vessels bound to
foreign ports, deliver to the ~~collector of customs for the district
wherein such vessel is then located~~ Customs Service a statement, duly
verified by oath, that the cargo or any part of the cargo is or is not
to be delivered to other vessels in port or to be transshipped on the
high seas, and, if it is to be so delivered or transshipped, stating the
kind and quantities and the value of the total quantity of each kind of
article so to be delivered or transshipped, and the name of the person,
corporation, vessel, or government to whom the delivery or transshipment
is to be made; and the owners, shippers, or consignors of the cargo of
such vessel shall in the same manner and under the same conditions
deliver to the ~~collector~~ Customs Service like statements under oath
as to the cargo or the parts thereof laden or shipped by them,
respectively.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 9 of the Act To Prevent Pollution From Ships**

**\
**Sec. 9. (a) \* \* \*

\* \* \* \* \*

\(e\) If any ship subject to the MARPOL Protocol or this Act, its owner,
operator, or person in charge is liable for a fine or civil penalty
under this section, or if reasonable cause exists to believe that the
ship, its owner, operator, or person in charge may be subject to a fine
or civil penalty under this section, the Secretary of the Treasury, upon
the request of the Secretary, ~~shall refuse or revoke\-- (1) the
clearance required by section 4197 of the Revised Statutes of the United
States, as amended (46 U.S.C. 91); or (2) a permit to proceed under
section 4367 of the revised Statutes of the United States (46 U.S.C.
313) or section 443 of the Tariff Act 1930, as amended (19 U.S.C. 1443).
Clearance or a permit to proceed may be granted upon the filing of a
bond or other surety satisfactory to the Secretary.~~ shall refuse or
revoke the clearance required by section 4197 of the Revised Statutes of
the United States (46 U.S.C. App. 91). Clearance may be granted upon the
filing of a bond or other surety satisfactory to the Secretary.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Act of October 3, 1913**

**CHAPTER 16.\--An Act To reduce tariff duties and to provide revenue
for the Government, and for other purposes.**

\* \* \* \* \*

**Section IV.\
\
[A. \* \* \* ]{.underline}**

\* \* \* \* \*

**[J. SUBSECTION 1.\
\
]{.underline}**A discriminating duty of 10 per centum ad valorem, in
addition to the duties imposed by law, shall be levied, collected, and
paid on all goods, wares, or merchandise which shall be imported in
vessels not of the United States, or which being the production or
manufacture of any foreign country not contiguous to the United States,
shall come into the United States from such contiguous country; but this
discriminating duty shall not apply to goods, wares, or merchandise
which shall be imported in vessels not of the United States entitled at
the time of such importation by treaty or convention or Act of Congress
to be entered in the ports of the United States on payment of the same
duties as shall then be payable on goods, wares, and merchandise
imported in vessels of the United States, nor to goods, wares, and
merchandise imported in a vessel owned by citizens of the United States,
but not a vessel of the United States, if such vessel, after entering an
American port, shall before leaving the same be ~~registered as a vessel
of the United States,~~ documented under chapter 121 of title 46, United
States Code, nor to such foreign products or manufactures as shall be
imported from such contiguous countries in the usual course of strictly
retail trade.

\* \* \* \* \*

**[J. SUBSECTION 3.\
\
]{.underline}**Section 130 of this title shall not apply to vessels or
goods, wares, or merchandise imported in vessels of a foreign nation
which does not maintain a similar regulation against ~~vessels of the
United States~~ United States documented vessels nor to any vessel owned
by citizens of the United States but not a vessel of the United States
if such vessel after entering an American port shall, before leaving the
same, be ~~registered as a vessel of the United States.~~ documented
under chapter 121 of title 46, United States Code.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Act of August 5, 1935**

**\
**AN ACT To protect the revenue of the United States and provide
measures for the more effective enforcement of the laws respecting the
revenue, to prevent smuggling, to authorize customs-enforcement areas,
and for other purposes.\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,\
\
**TITLE I\
Section 1.\
**(a) \* \* \*\
\
\* \* \* \* \*\
\
**Sec. 4.\
**Subject to appeal to the Secretary of Commerce and under such
regulations as he may prescribe, ~~whenever the collector of customs of
the district in which any vessel is, or is sought to be, registered,
enrolled, licensed, or numbered~~ when the Secretary of Transportation
is shown upon evidence which he deems sufficient that such vessel is
being, or is intended to be, employed to smuggle, transport, or
otherwise assist in the unlawful introduction or importation into the
United States of any merchandise or person, or to smuggle any
merchandise into the territory of any foreign government in violation of
the laws there in force, if under the laws of such foreign government
any penalty or forfeiture is provided for violation of the laws of the
United States respecting the customs revenue, or whenever, from the
design or fitting of any vessel or the nature of any repairs made
thereon, it is apparent to ~~such collector~~ the Secretary of
Transportation that such vessel has been built or adapted for the
purpose of smuggling merchandise, the ~~said collector shall revoke the
registry, enrollment, license, or number of said vessel~~ the Secretary
of Transportation shall revoke any endorsement on the vessel\'s
certificate of documentation or number (when the Secretary is the
authority issuing the number under chapter 123 of title 46, United
States Code) or refuse the same if application be made therefor, as the
case may be. ~~Such collector and all persons~~ The Secretary of
Transportation and all persons acting by or under his direction shall be
indemnified from any penalties or actions for damages for carrying out
the provisions of this section.

\* \* \* \* \*

**[Sec. 201\
]{.underline}**\[Repealed.\]

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Act of November 6, 1966**

AN ACT To require evidence of adequate financial responsibility to pay
judgments for personal injury or death, or to repay fares in the event
of nonperformance of voyages, to establish minimum standards for
passenger vessels and to require disclosure of construction details on
passenger vessels, and for other purposes.

\* \* \* \* \*

**Sec. 2.\
**(a) \* \* \*

\* \* \* \* \*

\(e\) ~~The collector of customs at~~ At the port or place of departure
from the United States of any vessel described in subsection (a) of this
section, the Customs Service shall refuse the clearance required by
section 4197 of the Revised Statutes (46 U.S.C. 91) to any such vessel
which does not have evidence furnished by the Federal Maritime
Commission that the provisions of this section have been complied with.\
\
**Sec. 3.\
**(a) \* \* \*

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 1 of the Act of February 10, 1900**

**CHAPTER 15.\--An Act Relating to Cuban vessels.\
\
**Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled. ~~That vessels owned by
citizens of Cuba and documented as such by officers of the United States
shall hereafter be entitled in ports of the United States to the rights
and privileges of vessels of the most favored nation, and they and their
cargoes shall be subject to no higher charges in ports of the United
States than are imposed on the vessels and cargoes of the most favored
nation in the same trade.~~

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 2 of the Act of April 29, 1908**

**CHAPTER 152.\--An Act To repeal an Act approved April thirtieth,
nineteen hundred and six, entitled \"An Act to regulate shipping in
trade between ports of the United States and ports or places in the
Philippine Archipelago, between ports or places in the Philippine
Archipelago, and for other purposes,\" and for other purposes.\
\
**Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That until Congress shall have
authorized the registry as vessels of the United States of vessels owned
in the Philippine Islands, the government of the Philippine Islands is
hereby authorized to adopt, from time to time, and enforce regulations
governing the transportation of merchandise and passengers between ports
or places in the Philippine Archipelago.\
\
**Sec. 2.\
**~~That on and after the passage of this Act the same tonnage taxes
shall be levied, collected, and paid upon all foreign vessels coming
into the United States from the Philippine Islands which are required by
law to be levied, collected, and paid upon vessels coming into the
United States from foreign countries.~~

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 1 of the Act of July 1, 1916**

**CHAPTER 209.\--An Act Making appropriations for sundry civil expenses
of the Government for the fiscal year ending June thirtieth, nineteen
hundred and seventeen, and for other purposes.\
\
**Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That the following sums are
appropriated, out of any money in the Treasury not otherwise
appropriated, for the fiscal year ending June thirtieth, nineteen
hundred and seventeen, namely:

\* \* \* \* \*

~~That the internal-revenue taxes imposed by the Philippine Legislature
under the law enacted by that body on December twenty-first, nineteen
hundred and fifteen, as amended by the law enacted by that body on
February fourth, nineteen hundred and sixteen, and the tonnage tax on
vessels engaged in foreign trade enacted by that body on February
fourth, nineteen hundred and sixteen, are hereby legalized and ratified,
and the collection of all such taxes heretofore or hereafter is hereby
legalized, ratified, and confirmed as fully to all intents and purposes
as if the same had by prior Act of Congress been specifically authorized
and directed.~~

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**The Act of July 3, 1926**

**CHAPTER 757.\--An Act To create a sixth great district to include all
the collection districts on the Great Lakes, their connecting and
tributary waters, as far east as the Raquette River, New York.\
\
**Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, ~~That there is hereby created,
in addition to the five great districts provided by section 4348 of the
Revised Statutes as amended by the Act of May 12, 1906, a sixth great
district to include all the collection districts on the Great Lakes,
their connecting and tributary waters, as far east as the Raquette
River, New York.\
~~**Sec. 2.\
**~~Enrolled and licensed vessels operating in the great district herein
created shall be subject to all of the requirements of licensed and
enrolled and licensed vessels imposed by sections 4349, 4350, 4351, and
4352 of the Revised Statutes and amendments and laws supplementary
thereto: Provided, That nothing herein shall affect the rights or
privileges reserved to seamen under existing law.\
~~**Sec. 3.\
**Sections 3116 and 3117 of the Revised Statutes are hereby repealed.

\-\-\-\-\-\-\-\-\--

**Act of May 4, 1934**

**AN ACT Authorizing pursers or licensed deck officers of vessels to
perform the duties of the masters of such vessels in relation to
entrance and clearance of same.\
\
**~~Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That whenever, under any
provision or provisions of any statute of the United States, it is made
the duty of the masters of vessels to make entry and clearance of same,
it shall be lawful for such duties to be performed by any licensed deck
officer or purser of such vessel; and when such duties are performed by
a licensed deck officer or purser of such vessel, such acts shall have
the same force and effect as if performed by masters of such vessels:
Provided, That nothing herein contained shall relieve the master of any
penalty or liability provided by any statute relating to the entry or
clearance of vessels.~~

\-\-\-\-\-\-\-\-\--

**Section 1403 of the Water Resources Development Act of 1986**

**SEC. 1403. CREATION OF HARBOR MAINTENANCE TRUST FUND.\
\
**(a) \* \* \*\
\
~~(b) Authorization of Appropriations.\--There are authorized to be
appropriated to the Department of the Treasury (from the fees collected
under paragraphs (9) and (10) of section 13031(a) of the Consolidated
Omnibus Budget Reconciliation Act of 1985) such sums as may be necessary
to pay all expenses of administration incurred by such Department in
administering subchapter A of chapter 36 of the Internal Revenue Code of
1954 for periods to which such fees apply.~~

\* \* \* \* \*

**Section 9501 of the Omnibus Budget Reconciliation Act of 1987**

**SEC. 9501. CUSTOMS USER FEES.\
\
**(a) \* \* \*

\* \* \* \* \*

\(c\) Analysis Regarding the CES Program; Effect on Implementation of
Program.\--\
\
(1) \* \* \*

\* \* \* \* \*

\(3\) The Commissioner of Customs is authorized to obtain from the
operators of centralized cargo examination stations information
regarding the fees paid to them for the provision of services at these
stations.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

**Section 123 of the Customs and Trade Act of 1990**

**SEC. 123. ANNUAL NATIONAL TRADE AND CUSTOMS LAW VIOLATION ESTIMATES
AND ENFORCEMENT STRATEGY.\
\
**(a) \* \* \*\
\
\* \* \* \* \*\
\
(d) Compliance Program.\--The Commissioner of Customs shall\--\
\
(1) devise and implement a methodology for estimating the level of
compliance with the laws administered by the Customs Service; and\
\
(2) include as an additional part of the report required to be submitted
under subsection (a) for each of fiscal years 1994, 1995, and 1996, an
evaluation of the extent to which such compliance was obtained during
the 12-month period preceding the 60th day before each such fiscal
year.\
\
~~(d)~~ (e) Confidentiality.\--The contents of any report submitted to
the Committees under subsection (a) or (c)(2) are confidential and
disclosure of all or part of the contents is restricted to\--\
\
(1) officers and employees of the United States designated by the
Commissioner of Customs;\
\
(2) the chairman of each of the Committees; and\
\
(3) those members of each of the Committees and staff persons of each of
the Committees who are authorized by the Chairman thereof to have access
to the contents.

Top of Form

Bottom of Form

### House Ways & Means Committee

#### MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

**Vote of the Committee in Reporting the Bill**

In compliance with clause 2(l)(2)(B) of rule XI of the Rules of the
House of Representatives, the following statement is made relative to
the vote of the Committee in reporting the bill: H.R. 3450 was ordered
favorably reported by the Committee, by a rollcall vote of 25 ayes, 12
noes on November 9, 1993.

**Oversight Findings**

In compliance with clause 2(l)(3)(A) of rule XI of the Rules of the
House of Representatives relating to oversight findings, the Committee
concludes, on the basis of hearing testimony, numerous studies and
reports on the potential impact of the NAFTA, correspondence from
Members of Congress and the private sector, and from extensive review of
the provisions of the NAFTA, that approval and implementation of the
North American Free Trade Agreement would be in the overall economic
interest of the United States.\
With respect to clause 2(l)(3)(D) of rule XI of the Rules of the House
of Representatives, no oversight findings or recommendations have been
submitted to the Committee by the Committee on Government Operations
with respect to the subject matter contained in the bill.

**Budgetary Authority and Cost Estimates, Including Estimates of the
Congressional Budget Office**

In compliance with clause 2(l)(3)(B) of rule XI of the Rules of the
House of Representatives, the Committee states that there are no tax
expenditures created by the bill.\
In compliance with clause 2(l)(3)(C) of rule XI of the Rules of the
House of Representatives, the Committee agrees with cost estimates
furnished by the Congressional Budget Office on H.R. 3450 and required
to be included herein:

U.S. Congress,

Congressional Budget Office,

Washington, DC, November 15, 1993. Hon. Dan Rostenkowski, Chairman,
Committee on Ways and Means, House of Representatives, Washington, DC.

Dear Mr. Chairman:\
The Congressional Budget Office has prepared the enclosed cost estimate
for H.R. 3450, the North American Free Trade Agreement Implementation
Act.\
Enactment of H.R. 3450 would affect direct spending and receipts.
Therefore, pay-as-you-go procedures would apply to the bill.\
If you wish further details on this estimate, we will be pleaded to
provide them.

Sincerely,

Robert D. Reischauer, Director.

**Congressional Budget Office Cost Estimate**

1\. Bill number: H.R. 3450.\
2. Bill title: North American Free Trade Agreement Implementation Act.\
3. Bill status: As ordered reported by the House Committee on Ways and
Means on November 9, 1993.\
4. Bill purpose: H.R. 3450 would approve the North American Free Trade
Agreement (NAFTA) entered into on December 17, 1992, with the
governments of Canada and Mexico. It would provide for tariff reductions
and other changes in law related to implementation of the agreement. The
bill also would create a transitional adjustment assistance program for
affected workers, require the use of an electronic fund transfer system
for collecting certain taxes, and increase certain customs user fees. It
also would authorize appropriations for a number of agricultural and
other programs.\
5. Estimated cost to the Federal Government: The following tables
summarize CBO\'s estimate of the budgetary impact of H.R. 3450. Table 1
shows the impact of the bill on direct spending and revenues. Table 2
details the estimated costs that depend on future appropriation
actions.\
**TABLE 1.\--CBO ESTIMATES OF CHANGES IN REVENUES AND DIRECT SPENDING
ASSOCIATED WITH H.R. 3450**\
\
\[By fiscal year, in millions of dollars\] /1/\
/1/ This table does not include any discretionary spending that would
be\
associated with NAFTA.\
\
\
Five-\
year\
/1/ This table does not include any discretionary spending that would
be\
associated with NAFTA.\
\
**1994 1995 1996 1997 1998 total**\
\
CHANGES IN REVENUES (NET)\
\
Reduction in tariff rates -214 -489 -547 -609 -672 -2,531\
Electronic Federal tax deposit system:/2/\
/2/ Estimate provided by the Joint Committee on Taxation.\
\
On-budget 49 262 272 371 1,207 2,161\
Off-budget 23 116 135 146 701 1,121\
Customs enforcement initiative 17 22 22 23 23 107\
Customs modernization provisions -3 -3 -3 -3 -3 -15\
\
CHANGES IN OUTLAYS\
Increases in Customs fees (offsetting receipts) -93 -203 -221 -241 0
-758\
Increased spending for current trade adjustment\
assistance program/3/ 10 25 25 20 25 105\
/3/ Trade adjustment assitance (TAA) for training costs is currently
limited by law to a maximum of \$80 million a year. This estimate
assumes that this cap is maintained. If it were raised or eliminated,
CBO estimates that TAA costs resulting from NAFTA would be a total of
\$25 million higher over the 1994- 1998 period than shows above.\
\
New trade adjustment assistance benefits/4/ 7 8 9 9 33\
/4/ Less than \$500,000.\
\
Effects on agricultural price support programs -64 -86 -66 -1 33 -184\
North American Development Bank 0 54 2 0 0 56\
Customs modernization provisions -5 -5 -5 -5 -5 -25\
\
EFFECT ON DEFICIT\
Net increase or decrease (-) in deficit:\
On-budget -1 0 -1 0 -493 -495\
Off-budget -23 -116 -135 -146 -701 -1,121\
\
**TABLE 2.\--CBO ESTIMATES OF AUTHORIZATIONS OF APPROPRIATIONS
ASSOCIATED WITH H.R. 3450**\
\
\[By fiscal year, in millions of dollars\]\
\
**Five-\
year**\
**1994 1995 1996 1997 1998 total**\
Agriculture programs:\
Estimated authorizations 96 22 22 22 22 184\
Estimated outlays 18 61 34 37 22 172\
\
North American Development Bank:\
Estimated Authorizations 0 0 56 56 56 168\
Estimated outlays 0 0 56 56 56 168\
\
Other authorizations:\
Estimated authorizations 21 16 11 11 11 70\
Estimated outlays 16 18 10 11 11 66\
\
Total authorizations:\
Estimated authorizations 17 38 89 89 89 422\
Estimated outlays 34 79 100 104 89 406\
\
**Basis of estimate**\
\
\
**Changes in revenues**\
\
\
Tariff Rate Reductions. Under NAFTA, all tariffs on U.S. imports from
Mexico would be eliminated by 2008. Tariffs would be phased out for
individual products at varying rates according to one of six different
timetables ranging from immediate elimination to elimination over 15
years for some goods. Based on the composition of imports from Mexico in
1991, tariffs would be eliminated about 60 percent of dutiable goods on
January 1, 1994, and tariff revenue would be reduced by about 65 percent
in calendar year 1994. By 1998, duties on about 70 percent of goods that
are currently subject to duty would be eliminated, and tariff revenue
would be about 85 percent lower than under current law.\
Goods currently afforded duty-free treatment under the Generalized
System of Preferences (GSP) would receive permanent duty-free treatment
under NAFTA. Under current law, the GSP program is scheduled to expire
after September 30, 1994. Therefore, this estimate includes the revenue
loss from extending duty- free treatment of GSP goods imported from
Mexico past the GSP\'s expiration date under current law.\
CBO estimates that the provisions of NAFTA that reduce tariff rates
would reduce revenues by \$2.5 billion over 1994 through 1998, net of
income and payroll tax offsets. This estimate is based on Census Bureau
data for 1991 and 1992 on imports from Mexico. This estimate includes
the effects of increased imports from Mexico that would result from the
reduced prices of imported products in the U.S.\--reflecting the lower
tariff rates\--and has been estimated based on the expected substitution
between U.S. products and imports from Mexico. In addition, it is likely
that some of the increase in U.S. imports from Mexico would displace
imports from other countries. In the absence of specific data on the
extent of this substitution effect, CBO assumes that an amount equal to
one-half of the increase in U.S. imports from Mexico would displace
imports from other countries.\
Electronic Federal Tax Deposit System.\--The new federal tax deposit
system would electronically transfer tax deposits to the Treasury,
eliminating the need for banks to process paper coupons and checks. The
change, which would be phased in gradually over several years, would
allow deposits to be credited to the Treasury on the day of deposit
instead of the day after deposit. Adoption of this system would not
change the amount of taxes paid by taxpayers, but would shift the
receipt by the Treasury of certain tax revenues from the beginning of
one fiscal year to the end of the preceding year. The Joint Committee on
Taxation has estimated that these changes would increase on-budget
receipts by \$2.2 billion and off-budget receipts by \$1.1 billion over
the fiscal years 1994 through 1998.\
Customs Enforcement Initiative.\--The bill would allow Customs Service
auditors to access IRS income tax return information. This would allow
auditors to use businesses\' tax information on the valuation of imports
and is expected to result in higher customs duty audit assessments. CBO
estimates, net of income and payroll tax offsets, that the access to the
information would result in increased receipts of \$107 million over
fiscal years 1994 through 1998.\
Customs Modernization.\--Title VI of H.R. 3450 would expand the base of
goods eligible for customs duty drawbacks and would allow increased
exemptions from duty on certain personal articles, decreasing customs
duties by \$7 million each year. Title VI also would require payment of
interest on merchandise revaluations after entering an item through U.S.
Customs, increasing receipts by \$4 million each year. CBO estimates,
net of income and payroll tax offsets, these provisions would decrease
receipts by \$3 million each year.\
\
\
**Changes in direct spending**\
\
\
Customs User Fees.\--H.R. 3450 would make several changes to user fees
charged by the U.S. Customs Service, which are recorded in the budget as
offsetting receipts. For the fiscal years 1994 through 1997 only, the
current \$5 passenger fee would be increased to \$6.50 and the exemption
granted to passengers arriving in the United States from Canada, Mexico,
and the Caribbean would be removed. For fiscal years 1999 through 2003,
customs user fees would be extended at the current \$5 rate. (Under
current law, these fees sunset at the end of fiscal year 1998.) CBO
estimates that the \$1.50 passenger fee increase and the removal of the
exemption would result in addition fee collections of \$758 million over
the fiscal years 1994 through 1997.\
Current Trade Adjustment Assistance (TAA) Program.\--Under current law,
the TAA program provides cash assistance and training to workers who can
demonstrate that increased imports contributed importantly to the loss
of their job. If NAFTA were to be approved, CBO estimates that
approximately 4,500 additional workers annually for fiscal years 1995
through 1998 would become eligible for TAA. The additional workers would
not qualify for TAA immediately because workers must exhaust their
unemployment benefits prior to collecting TAA. The fiscal year 1994
estimate assumes approximately 1,000 workers would qualify for TAA,
assuming that NAFTA becomes effective January 1, 1994. Under current
law, TAA recipients are required to participate in job training unless
they receive a waiver. Currently, about 60 percent of the recipients
train and 40 percent receive waivers. The average training cost is
approximately \$4,000 per person. Based on an average cash benefit of
\$4,800, CBO estimates the additional TAA cash assistance would be \$5
million in 1994 and \$20 million each year for fiscal years 1995 through
1998, and we estimate the additional TAA training benefits would be \$5
million in 1994 and \$10 million each year for fiscal years 1995 through
1998, if all newly eligible workers were to receive their full training
benefit.\
Nevertheless, the TAA training program is a capped entitlement. The
training benefits are capped at \$80 million in fiscal years 1994, 1995,
1996, and 1998. In fiscal year 1997, the cap on funding for TAA training
is \$70 million. Because CBO\'s baseline is \$5 million below the cap in
fiscal years 1994, 1995, 1996, 1998 and equal to the cap in fiscal year
1997, the estimated increase in TAA training costs with the existing
caps would be \$5 million each year in fiscal years 1994, 1995, 1996,
1998 and zero in fiscal year 1997.\
New Trade Adjustment Assistance Benefits.\--The bill would add a new
sub- chapter to the TAA program to allow workers who lose their job
because their firm shifts production to Mexico or Canada to qualify for
TAA. In addition, workers would be required to enter a job training
program by their sixteenth week of unemployment or their sixth week of
TAA certification, whichever is later, to be eligible for benefits.
Unlike the current TAA program, beneficiaries under this sub-part could
not receive a waiver from training and still collect cash assistance TAA
cash and training benefits under this amendment would be available to
those who are displaced from their jobs between January 1, 1994, and
September 30, 1998. CBO estimates that fewer than 1,000 workers annually
would qualify for TAA payments under this provision. The average
training benefit would be \$4,000 per person, and the average cash
benefit would be approximately \$6,000 per person. CBO estimates that
total TAA payments under this new sub-part would be less than \$500,000
in fiscal year 1994, \$7 million in fiscal year 1995, \$8 million in
fiscal year 1996, and \$9 million in each of the fiscal years 1997 and
1998.\
Effects on Agricultural Price Support Programs.\--Gradual reductions in
tariff and non-tariff barriers on agricultural products under the North
American Free Trade Agreement are expected to result in increased trade
between the United States and Mexico. An estimated net increase in U.S.
exports of commodities currently supported by agriculture programs would
result in higher market prices and a reduction in government support
payments. While lower acreage reduction program (ARP) requirements (to
compensate for increased demand) would mitigate some of the price
increase, the ARP level could not be reduced in some years.\
The bill also would require end use certificates for imports of wheat
and barley. Such certificates would tend to discourage imports and raise
the price for domestically produced grain, resulting in slightly lower
program payments.\
CBO estimates that increased exports and higher prices, combined with
the requirement for end use certificates on imports of wheat and barley,
would reduce federal expenditures on agricultural programs by \$184
million during 1994 through 1998. The majority of these savings would be
derived from higher prices and lower program payments for feed grains.
The dairy sector and other grains would benefit noticeably from
increased exports, leading to a reduction in federal support purchases
and lower program costs.\
North American Development Bank.\--Section 542 would authorize the
President to accept membership in a North American Development Bank. The
bank would be a multilateral bank with stock held by members states. The
bill would authorize the United States to subscribe to 150,000 shares of
capital stock and the appropriation of \$1,500 million to purchase the
stock. It would appropriate \$56.25 million in 1995 for the first
paid-in stock subscription, and would provide an authorization of
appropriations for the remaining amount without fiscal year limitation.\
The North American Development Bank would have the same structure as
other regional development banks. Only 15 percent of the bank\'s stock
would be paid-in, or purchased, by the member states. The balance would
be callable capital. Callable capital would secure borrowing by the bank
in private capital markets. The bank would relend the funds. Member
states would make payments on callable capital subscriptions only to the
extent that the bank could not service its debt from earnings on its
investments.\
The estimate assumes the U.S. government would subscribe to the capital
stock in four equal annual installments. The first installment would be
funded by the \$56.25 million appropriated for paid-in capital and the
authorization for callable capital subscriptions provided in section
541(a)(3) of this bill. The estimate assumes that the final three
installments of paid-in capital would be provided in appropriations acts
in 1996, 1997, and 1998. The estimate assumes that the appropriation for
paid-in capital would represent outlays in the year provided. The
authorization to subscribe to the callable capital stock is not expected
to result in any appropriations or outlays during the period of the
estimate.\
Section 543 authorizes the President to enter into an agreement with the
Bank to receive 10 percent of the paid-in capital actually paid to the
Bank by the United States. The bill would authorize the President to use
these funds, without further appropriation, to make loans or loan
guarantees through existing federal programs to support the community
adjustment and investment program defined in the Cooperation Agreement.
CBO estimates this provision would result in a receipt to the government
from the Bank of \$5.6 million in 1995, and subsequent spending of the
same amount through existing community development loan and loan
guarantee programs.\
Customs Modernization.\--H.R. 3450 would make several changes in the
administrative procedures of the Customs Service. Customs would be
allowed to release unclaimed merchandise for sale or destruction after
six months rather than the one-year period mandated by current law. CBO
estimates that this provision would decrease storage costs by \$6
million annually. In addition, the number of entries that could be filed
informally would be increased. Informal entries are assessed a lower
customs user fee, and we estimate that this provision would decrease fee
collections by \$1 million annually. The net effect of these changes
would be an outlay reduction of about \$5 million a year.\
\
**Spending subject to appropriations action**\
\
\
Agriculture.\--Sections 321 and 361 of the bill would authorize a number
of program changes that could increase federal outlays in agricultural
programs by an estimated \$172 million over the 1994-1998 period. The
majority of costs would reflect authorizations for assistance to farm
workers in markets adversely affected by increased trade with Mexico
(\$20 million per year) and the construction of a containment facility
for agricultural products from Mexico. Other provisions would require
the Secretary of Agriculture to provide information and reports on
various agriculture markets and to monitor end use certificates.\
North American Development Bank.\--Beyond the amount appropriated for
1994, H.R. 3450 would authorize additional appropriations of \$168
million for paid- in capital of the bank.\
Section 543 would authorize the President to enter into an agreement
with the Bank to receive 10 percent of the paid-in capital paid to the
Bank by the United States. The bill would authorize the President to use
the 10 percent portion to make loans or loan guarantees through existing
federal programs to support the community adjustment and investment
program defined in the Cooperation Agreement. CBO estimates this
provisions would result in a receipt to the government from the Bank of
\$5.6 million annually over the 1996-1998 period, and subsequent
spending of the same amount through existing community development loan
and loan guarantee programs.\
NAFTA Secretariat.\--Title I would authorize the appropriation of up to
\$2 million to fund the United States section of the secretariat
established by the agreement. These funds would be used to pay for the
activities of the secretariat, as well as the commission, several
committees and subcommittees, and various working groups subordinate to
the secretariat. It also would allow the U.S. section to retain and
spend reimbursements from the Mexican or Canadian section. We assume
that the U.S. section of the secretariat would be established within the
International Trade Administration of the Department of Commerce (DOC),
and that the secretariat and the various committees under its
jurisdiction would use the full \$2 million authorized to pay for
personnel and other costs.\
Commerce Department Fees.\--Title III (subtitle E) would require the DOC
to make available to the public certain information relating to sanitary
procedures and would permit the DOC to charge reasonable fees for this
information. Such fees would raise \$1 million to \$2 million annually
and would be available for spending under existing authority.\
Customs Automation Program.\--H.R. 3450 would establish the National
Customs Automation Program, an automated and electronic system for
processing information on commercial imports. We estimate that this
program would cost \$3 million in fiscal year 1994 assuming
appropriation of the necessary funds.\
Tax Collection Expenses.\--The bill would authorize the Harbor
Maintenance Trust Fund to use, for the first time, up to \$5 million
annually to cover the administrative costs of collecting the harbor
maintenance tax. We estimate that this would result in costs of \$5
million annually, assuming appropriation of the necessary funds.\
Commissions.\--Section 532 would authorize an annual appropriation of
\$5 million for 1994 and 1995 for the United States contributions to the
annual budget of the Commission for Environmental Cooperation. This
commission is described in article 43 of the North American Agreement on
Environmental Cooperation; its purposes is to address environmental
issues affecting the continent. Section 533 would authorize annual
appropriations of \$5 million, starting in 1994, for the Border
Environment Cooperation Commission (BECC) that is established by the
Border Environment Cooperation Agreement. This commission would assist
in developing solutions to environmental problems in the U.S.-Mexico
border region. The BECC would certify environmental construction
projects for the North American Development Bank (established by section
541) and other financial institutions.\
International Trade Commission.\--Various provisions of the bill would
require the International Trade Commission to monitor certain imports
and to investigate and determine petitions for relief for imports
benefiting from the agreement. Based on information supplied by the
commission, CBO estimates that these duties will require an additional
authorization of less than \$1 million per year.\
6. Pay-as-you-go considerations: Section 252 of the Balanced Budget and
Emergency Deficit Control Act of 1985 sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts through 1998. CBO
estimates that enactment of H.R. 3450 would affect direct spending and
receipts. Therefore, pay-as-you-go procedures would apply to the bill.
The following table summarizes CBO\'s estimate of the pay-as-you-go
impact of H.R. 3450. These figures represent the direct spending
estimates in Table 1, excluding the effects on off-budget revenues.

\[By fiscal year, in million of dollars\]

1994 1995 1996 1997 1998

Change in outlays -152 -208 -257 -218 62

Change in receipts -151 -208 -256 -218 555

7\. Estimated cost to State and local governments: None.\
8. Estimate Comparison: None.\
9. Previous CBO estimate\
On November 4, 1993, CBO prepared an estimate, based on draft language,
of the direct spending and revenue effects of the North American Free
Trade Agreement Implementation Act. That estimate of revenues and direct
spending is identical to the estimate for H.R. 3450.\
10. Estimate prepared by: Kim Cawly, Mark Grabowicz, Mary Maginniss,
Eileen Manfredi, Ian McCormick, John Webb, and Robert Sunshine, Cory
Oltman Melissa Sampson, Linda Radey and Joseph Whitehill.\
11. Estimate approved by: C.G. Nuckols, Assistant Director for Budget
Analysis.

**Inflationary Impact**

With respect to clause 2(l)(4) of rule XI of the Rules of the House of
Representatives, the Committee states that H.R. 3450 would not have an
inflationary impact on prices and costs in the operation of the general
economy.

**Changes in Existing Law Made by the Bill, as Reported**

In compliance with clause 3 of rule XIII of the Rules of the House of
Representatives, changes in existing law made by the bill, as reported,
are shown as follows (existing law proposed to be omitted is enclosed in
black\
brackets, new matter is printed in italic, existing law in which no
change is proposed is shown in roman):\
\
**UNITED STATES-CANADA FREE-TRADE AGREEMENT IMPLEMENTATION ACT OF 1988**

\* \* \* \* \*

**TITLE III\--APPLICATION OF AGREEMENT TO SECTORS AND SERVICES**\
\
\
**[SEC. 301. AGRICULTURE.]{.underline}**\
\
\
(a) Special Tariff Provisions for Fresh Fruits and Vegetables.\--\
(1) The Secretary of Agriculture (hereafter in this section referred to
as the \"Secretary\") may recommend to the President the imposition of a
temporary duty on any Canadian fresh fruit or vegetable entered into the
United States if the Secretary determines that both of the following
conditions exist at the time that imposition of the duty is
recommended:\
(A) For each of 5 consecutive working days the import price of the
Canadian fresh fruit or vegetable is below 90 percent of the
corresponding 5-year average monthly import price for such fruit or
vegetable.\
(B) The planted acreage in the United States for the like fresh fruit or
vegetable is no higher than the average planted acreage over the
preceding 5 years, excluding the years with the highest and lowest
acreage. For the purposes of applying this subparagraph, any acreage
increase attributed directly to a reduction in the acreage that was
planted to wine grapes as of October 4, 1987, shall be excluded.
Whenever the Secretary makes a determination that the conditions
referred to in subparagraphs (A) and (B) regarding any Canadian fresh
fruit or vegetable exist, the Secretary shall ~~promptly~~ immediately
submit for publication in the Federal Register notice of the
determination.\
(2) No later than 6 days after publication in the Federal Register of
the notice described in paragraph (1), the Secretary shall decide
whether to recommend the imposition of a temporary duty to the
President, and if the Secretary decides to make such a recommendation,
the recommendation shall be forwarded immediately to the President.\
~~(2)~~ (3) In determining whether to recommend the imposition of a
temporary duty to the President under paragraph (1), the Secretary shall
consider whether the conditions in subparagraphs (A) and (B) of such
paragraph have led to a distortion in trade between the United States
and Canada of the fresh fruit or vegetable and, if so, whether the
imposition of the duty is appropriate, including consideration of
whether it would significantly correct this distortion.\
~~(3)~~ (4) Not later than 7 days after receipt of a recommendation of
the Secretary under paragraph (1), the President, after taking into
account the national economic interests of the United States, shall
determine whether to impose a temporary duty on the Canadian fresh fruit
or vegetable concerned. If the determination is affirmative, the
President shall proclaim the imposition and the rate of the temporary
duty, but such duty shall not apply to the entry of articles that were
in transit to the United States on the first day on which the temporary
duty is in effect.\
~~(4)~~ (5) A temporary duty imposed under paragraph ~~(3)~~ (4) shall
cease to apply with respect to articles that are entered on or after the
earlier of\--\
(A) the day following the last of 5 consecutive working days with
respect to which the Secretary determines that the point of shipment
price in Canada for the Canadian fruit or vegetable concerned exceeds 90
percent of the corresponding 5-year average monthly import price; or\
(B) the 180th day after the date on which the temporary duty first took
effect.\
~~(5)~~ (6) No temporary duty may be imposed under this subsection on a
Canadian fresh fruit or vegetable during such time as import relief is
provided with respect to such fresh fruit or vegetable under chapter 1
of title II of the Trade Act of 1974.\
~~(6)~~ (7) For purposes of this subsection:\
(A) The term \"Canadian fresh fruit or vegetable\" means any article
originating in Canada (as determined in accordance with section 202) and
classified within any of the following headings of the Harmonized
System:\
(i) 07.01 (relating to potatoes, fresh or chilled);\
(ii) 07.02 (relating to tomatoes, fresh or chilled);\
(iii) 07.03 (relating to onions, shallots, garlic, leeks and other
alliaceous vegetables, fresh or chilled);\
(iv) 07.04 (relating to cabbages, cauliflowers, kohlrabi, kale and
similar edible brassicas, fresh or chilled);\
(v) 07.05 (relating to lettuce (lactuca sativa) and chicory\
(cichorium spp.), fresh or chilled);\
(vi) 07.06 (relating to carrots, salad beets or beetroot, salsify,
celeriac, radishes and similar edible roots (excluding turnips), fresh
or chilled);\
(vii) 07.07 (relating to cucumbers and gherkins, fresh or chilled);\
(viii) 07.08 (relating to leguminous vegetables, shelled or unshelled,
fresh or chilled);\
(ix) 07.09 (relating to other vegetables (excluding truffles), fresh or
chilled);\
(x) 08.06.10 (relating to grapes, fresh);\
(xi) 08.08.20 (relating to pears and quinces, fresh);\
(xii) 08.09 (relating to apricots, cherries, peaches (including
nectarines), plums and sloes, fresh); and\
(xiii) 08.10 (relating to other fruit (excluding cranberries and
blueberries), fresh).\
(B) The term \"corresponding 5-year average monthly import price\" for a
particular day means the average import price of a Canadian fresh fruit
or vegetable, for the calendar month in which that day occurs, for that
month in each of the preceding 5 years, excluding the years with the
highest and lowest monthly averages.\
(C) The term \"import price\" has the meaning given such term in article
711 of the Agreement.\
(D) The rate of a temporary duty imposed under this subsection with
respect to a Canadian fresh fruit or vegetable means a rate that,
including the rate of any other duty in effect for such fruit or
vegetable, does not exceed the lesser of\--\
(i) the duty that was in effect for the fresh fruit or vegetable before
January 1, 1989, under column one of the Tariff Schedules of the United
States for the applicable season in which the temporary duty is applied;
or\
(ii) the duty in effect for the fresh fruit or vegetable under column
one of such Schedules, or column 1 (General) of the Harmonized System,
at the time the temporary duty is applied.\
~~(7)~~ (8)(A) The Secretary shall, to the extent practicable,
administer the provisions of this subsection to the 8-digit level of
classification under the Harmonized System.\
(B) The Secretary may issue such regulations as may be necessary to
implement the provisions of this subsection.\
~~(8) For purposes of assisting the Secretary in carrying out this
subsection, the Commissioner of Customs and the Director of the Bureau
of Census shall cooperate in providing the Secretary with timely
information and data relating to the importation of Canadian fresh
fruits and vegetables.~~\
(9) For purposes of assisting the Secretary in carrying out this
subsection\--\
(A) the Commissioner of Customs and the Director of the Bureau of Census
shall cooperate in providing the Secretary with timely information and
data relating to the importation of Canadian fresh fruits and
vegetables, and\
(B) importers shall report such information relating to Canadian fresh
fruits and vegetables to the Commissioner of Customs at such time and in
such manner as the Commissioner requires.\
~~(9)~~ (10) The authority to impose temporary duties under this
subsection expires on the 20th anniversary of the date on which the
Agreement enters into force.

\* \* \* \* \*

**TITLE IV\--BINATIONAL PANEL DISPUTE SETTLEMENT IN ANTIDUMPING AND
COUNTERVAILING DUTY CASES**

\* \* \* \* \*

**[SEC. 410. TERMINATION OF AGREEMENT.]{.underline}**\
\
\
(a) In General.\--If\--\
(1) no agreement is entered into between the United States and Canada on
a substitute system of rules for antidumping and countervailing duties
before the date that is 7 years after the date on which the Agreement
enters into force, and\
(2) the President decides not to exercise the rights of the United
States under article 1906 of the Agreement to terminate the Agreement,
the President shall submit to the Congress a report on such decision
which explains why continued adherence to the Agreement is in the
national economic interest of the United States. In calculating the
7-year period referred to in paragraph (1), any time during which Canada
is a NAFTA country (as defined in section 2(4) of the North American
Free Trade Agreement Implementation Act) shall be disregarded.

\* \* \* \* \*

**TITLE V\--EFFECTIVE DATES AND SEVERABILITY**\
\
\
**[SEC. 501. EFFECTIVE DATES.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

~~(c) Termination of Provisions and Amendments if Agreement
Terminates.\--On the date on which the Agreement ceases to be in force,
the provisions of this Act (other than this subsection and section
410(b)), and the amendments made by this Act, shall cease to have
effect.~~\
(c) Termination or Suspension of Agreement.\--\
(1) Termination of agreement.\--On the date the Agreement ceases to be
in force, the provisions of this Act (other than this paragraph and
section 410(b)), and the amendments made by this Act, shall cease to
have effect.\
(2) Effect of agreement suspension.\--An agreement by the United States
and Canada to suspend the operation of the Agreement shall not be deemed
to cause the Agreement to cease to be in force within the meaning of
paragraph (1).\
(3) Suspension resulting from nafta.\--On the date the United States and
Canada agree to suspend the operation of the Agreement by reason of the
entry into force between them of the North American Free Trade
Agreement, the following provisions of this Act are suspended and shall
remain suspended until such time as the suspension of the Agreement may
be terminated:\
(A) Sections 204(a) and (b) and 205(a).\
(B) Sections 302 and 304(f).\
(C) Sections 404, 409, and 410(b).

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Tariff Act of 1930**

\* \* \* \* \*

**TITLE III\--SPECIAL PROVISIONS**\
\
\
PART I\--MISCELLANEOUS

\* \* \* \* \*

**[SEC. 304. MARKING OF IMPORTED ARTICLES AND
CONTAINERS.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) Marking of Certain Pipe and Fittings.\--(1) Except as provided in
paragraph (2), no exception may be made under subsection (a)(3) with
respect to pipes of iron, steel, or stainless steel, to pipe fittings of
steel, stainless steel, chrome-moly steel, or cast and malleable iron
each of which shall be marked with the English name of the country of
origin by means of die stamping, cast-in-mold lettering, etching, ~~or
engraving~~ engraving, or continuous paint stenciling.\
(2) If, because of the nature of an article, it is technically or
commercially infeasible to mark it by one of the ~~four~~ five methods
specified in paragraph (1), the article may be marked by an equally
permanent method of marking ~~such as paint stenciling~~ or, in the case
of small diameter pipe, tube, and fittings, by tagging the containers or
bundles.

\* \* \* \* \*

\(e\) Marking of Certain Manhole Rings or Frames, Covers, and Assemblies
Thereof.\--No exception may be made under subsection (a)(3) with respect
to manhole rings or frames, covers, and assemblies thereof each of which
shall be marked on the top surface with the English name of the country
or origin by means of die stamping, cast-in-mold lettering, etching,
~~or engraving~~ engraving, or an equally permanent method of marking.

\* \* \* \* \*

\(h\) Treatment of Goods of a NAFTA Country.\--\
(1) Application of section.\--In applying this section to an article
that qualifies as a good of a NAFTA country (as defined in section 2(4)
of the North American Free Trade Agreement Implementation Act) under the
regulations issued by the Secretary to implement Annex 311 of the North
American Free Trade Agreement\--\
(A) the exemption under subsection (a)(3)(H) shall be applied by
substituting \"reasonably know\" for \"necessarily know\";\
(B) the Secretary shall exempt the good from the requirements for
marking under subsection (a) if the good\--\
(i) is an original work of art, or\
(ii) is provided for under subheading 6904.10, heading 8541, or heading
8542 of the Harmonized Tariff Schedule of the United States; and\
(C) subsection (b) does not apply to the usual container of any good
described in subsection (a)(3)(E) or (I) or subparagraph (B)(i) or (ii)
of this paragraph.\
(2) Petition rights of nafta exporters and producers regarding marking
determinations.\--\
(A) Definitions.\--For purposes of this paragraph:\
(i) The term \"adverse marking decision\" means a determination by the
Customs Service which an exporter or producer of merchandise believes to
be contrary to Annex 311 of the North American Free Trade Agreement.\
(ii) A person may not be treated as the exporter or producer of
merchandise regarding which an adverse marking decision was made unless
such person\--\
(I) if claiming to be the exporter, is located in a NAFTA country and is
required to maintain records in that country regarding exportations to
NAFTA countries; or\
(II) if claiming to be the producer, grows, mines, harvests, fishes,
traps, hunts, manufactures, processes, or assembles such merchandise in
a NAFTA country.\
(B) Intervention or petition regarding adverse marking decisions.\-- If
the Customs Service makes an adverse marking decision regarding any
merchandise, the Customs Service shall, upon written request by the
exporter or producer of the merchandise, provide to the exporter or
producer a statement of the basis for the decision. If the exporter or
producer believes that the decision is not correct, it may intervene in
any protest proceeding initiated by the importer of the merchandise. If
the importer does not file a protest with regard to the decision, the
exporter or producer may file a petition with the Customs Service
setting forth\--\
(i) a description of the merchandise; and\
(ii) the basis for its claim that the merchandise should be marked as a
good of a NAFTA country.\
(C) Effect of determination regarding decision.\--If, after receipt and
consideration of a petition filed by an exporter or producer under
subparagraph (B), the Customs Service determines that the adverse
marking decision\--\
(i) is not correct, the Customs Service shall notify the petitioner of
the determination and all merchandise entered, or withdrawn from
warehouse for consumption, more than 30 days after the date that notice
of the determination under this clause is published in the weekly Custom
Bulletin shall be marked in conformity with the determination; or\
(ii) is correct, the Customs Service shall notify the petitioner that
the petition is denied.\
(D) Judicial review.\--For purposes of judicial review, the denial of a
petition under subparagraph (C)(ii) shall be treated as if it were a
denial of a petition of an interested party under section 516 regarding
an issue arising under any of the preceding provisions of this section.\
~~(h)~~ (i) Penalties.\--Any person who, with intent to conceal the
information given thereby or contained therein, defaces, destroys,
removes, alters, covers, obscures, or obliterates any mark required
under the provisions of this Act shall\--\
(1) upon conviction for the first violation of this subsection, be fined
not more than \$100,000, or imprisoned for not more than 1 year, or
both; and\
(2) upon conviction for the second or any subsequent violation of this
subsection, be fined not more than \$250,000, or imprisoned for not more
than 1 year, or both.

\* \* \* \* \*

**[SEC. 306. CATTLE, SHEEP, SWINE, AND MEATS\-- IMPORTATION PROHIBITED
IN CERTAIN CASES.]{.underline}**\
\
\
(a) ~~Rinderpest and Foot-and-Mouth Disease.\--If the Secretary of
Agriculture~~ In General.\--Except as provided in subsection (b), if the
Secretary of Agriculture determines that rinderpest or foot-and-mouth
disease exists in any foreign country, he shall officially notify the
Secretary of the Treasury and give public notice thereof, and
thereafter, and until the Secretary of Agriculture gives notice in a
similar manner that such disease no longer exists in such foreign
country, the importation into the United States of cattle, sheep, or
other ruminants, or swine, or of fresh, chilled, or frozen meat of such
animals, from such foreign country, is prohibited Provided, That wild
ruminants or swine may be imported from any such country upon such
conditions, including post entry conditions, to be prescribed in import
permits or in regulations, as the Secretary may impose for the purpose
of preventing the dissemination of said diseases into or within the
United States: And provided further, That the subsequent distribution,
maintenance, and exhibition of such animals in the United States shall
be limited to zoological parks approved by said Secretary as meeting
such standards as he may by regulation prescribe for the purpose of
preventing the dissemination of said diseases into or within the United
States. The Secretary may at any time seize and dispose of any such
animals which are not handled in accordance with the conditions imposed
by him or which are distributed to or maintained or exhibited at any
place in the United States which is not then an approved zoological
park, in such manner as he deems necessary for said purpose.\
~~(b) Notwithstanding subsection (a), the Secretary of Agriculture may
permit, subject to such terms and conditions as the Secretary of
Agriculture determines appropriate, the importation of cattle, sheep, or
other ruminants, or swine (including embryos of such animals) or the
fresh, chilled, or frozen meat of such animals from a region of Canada
notwithstanding the existence of rinderpest or foot-and-mouth disease in
Canada, if\--~~\
~~(1) the United States and Canada have entered into an agreement
delineating the criteria for recognizing that a geographical region of
either country is free from rinderpest or foot-and-mouth disease; and~~\
~~(2) the appropriate official of the government of Canada certifies
that the region of Canada from which the animal or meat originated is
free from rinderpest and foot-and-mouth disease.~~\
(b) Exception.\--The Secretary of Agriculture may permit, subject to
such terms and conditions as the Secretary determines appropriate, the
importation of cattle, sheep, other ruminants, or swine (including
embryos of the animals), or the fresh, chilled, or frozen meat of the
animals, from a region if the Secretary determines that the region from
which the animal or meat originated is, and is likely to remain, free
from rinderpest and foot-and- mouth disease.

\* \* \* \* \*

**[SEC. 311. BONDED MANUFACTURING WAREHOUSES.]{.underline}**\
\
\
All articles manufactured in whole or in part of imported materials, or
of materials subject to internal-revenue tax, and intended for
exportation without being charged with duty, and without having an
internal-revenue stamp affixed thereto, shall, under such regulations as
the Secretary of the Treasury may prescribe, in order to be so
manufactured and exported, be made and manufactured in bonded warehouses
similar to those known and designated in Treasury Regulations as bonded
warehouses, class six: Provided, That the manufacturer of such articles
shall first give satisfactory bonds for the faithful observance of all
the provisions of law and of such regulations as shall be prescribed by
the Secretary of the Treasury: Provided further, That the manufacture of
distilled spirits from grain, starch, molasses, or sugar, including all
dilutions or mixtures of them or either of them, shall not be permitted
in such manufacturing warehouses.\
Whenever goods manufactured in any bonded warehouse established under
the provisions of the preceding paragraph shall be exported directly
therefrom or shall be duly laden for transportation and immediate
exportation under the supervision of the proper officer who shall be
duly designated for that purpose, such goods shall be exempt from duty
and from the requirements relating to revenue stamps.

\* \* \* \* \*

~~No article manufactured in a bonded warehouse, except to the extent
that such article is made from an article that is a drawback eligible
good under section 204(a) of the United States-Canada Free-Trade
Agreement Implementation Act of 1988, may be withdrawn from such
warehouse for exportation to Canada on or after January 1, 1994, or such
later date as may be proclaimed by the President under section
204(b)(2)(B) of such Act of 1988, without payment of a duty on such
imported merchandise in its condition, and at the rate of duty in
effect, at the time of importation.~~\
No article manufactured in a bonded warehouse from materials that are
goods subject to NAFTA drawback, as defined in section 203(a) of the
North American Free Trade Agreement Implementation Act, may be withdrawn
from warehouse for exportation to a NAFTA country, as defined in section
2(4) of that Act, without assessment of a duty on the materials in their
condition and quantity, and at their weight, at the time of importation
into the United States. The duty shall be paid before the 61st day after
the date of exportation, except that upon the presentation, before such
61st day, of satisfactory evidence of the amount of any customs duties
paid to the NAFTA country on the article, the customs duty may be waived
or reduced (subject to section 508(b)(2)(B)) in an amount that does not
exceed the lesser of\--\
(1) the total amount of customs duties paid or owed on the materials on
importation into the United States, or\
(2) the total amount of customs duties paid on the materials to the
NAFTA country. If Canada ceases to be a NAFTA country and the suspension
of the operation of the United States-Canada Free-Trade Agreement
thereafter terminates, no article manufactured in a bonded warehouse,
except to the extent that such article is made from an article that is a
drawback eligible good under section 204(a) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, may be withdrawn from
such warehouse for exportation to Canada during the period such
Agreement is in operation without payment of a duty on such imported
merchandise in its condition, and at the rate of duty in effect, at the
time of importation.\
\
**[SEC. 312. BONDED SMELTING AND REFINING WAREHOUSES.]{.underline}**\
\
\
(a) \* \* \*\
(b) The several charges against such bond may be canceled in whole or in
part\--\
(1) upon the exportation ~~(other than exportation to Canada on or after
January 1, 1994, or such later date as may be proclaimed by the
President under section 204(b)(2)(B) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, except to the extent
that the metal-bearing materials were of Canadian origin as determined
in accordance with section 202 of such Act of 1988)~~ from the bonded
warehouses which treated the metal-bearing materials, or from any other
bonded smelting or refining warehouse, of a quantity of the same kind of
metal contained in any product of smelting or refining of metal-bearing
materials equal to the dutiable quantity contained in the imported
metal- bearing materials less wastage provided for in subsection (c)~~,
or~~; except that in the case of a withdrawal for exportation of such a
product to a NAFTA country, as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act, if any of the imported
metal-bearing materials are goods subject to NAFTA drawback, as defined
in section 203(a) of that Act, the duties on the materials shall be
paid, and the charges against the bond canceled, before the 61st day
after the date of exportation; but upon the presentation, before such
61st day, of satisfactory evidence of the amount of any customs duties
paid to the NAFTA country on the product, the duties on the materials
may be waived or reduced (subject to section 508(b)(2)(B)) in an amount
that does not exceed the lesser of\--\
(A) the total amount of customs duties owed on the materials on
importation into the United States, or\
(B) the total amount of customs duties paid to the NAFTA country on the
product, or

\* \* \* \* \*

\(4\) upon the transfer of the bond charges to a bonded customs
warehouse other than a bonded smelting or refining warehouse by physical
shipment of a quantity of the same kind of metal contained in any
product of smelting or refining equal to the dutiable quantity contained
in the imported metal-bearing materials less wastage provided for in
subsection\
(c), and upon withdrawal from such other warehouse for exportation
(other than exportation to Canada on or after January 1, 1994, or such
later date as may be proclaimed by the President under section
204(b)(2)(B) of the United States-Canada Free-Trade Agreement
Implementation Act of 1988, except to the extent that the metal-bearing
materials were of Canadian origin as determined in accordance with
section 202 of such Act of 1988) or domestic consumption the provisions
of this section shall apply~~, or~~; except that in the case of a
withdrawal for exportation of such a product to a NAFTA country, as
defined in section 2(4) of the North American Free Trade Agreement
Implementation Act, if any of the imported metal-bearing materials are
goods subject to NAFTA drawback, as defined in section 203(a) of that
Act, the duties on the materials shall be paid, and the charges against
the bond canceled, before the 61st day after the date of exportation;
but upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid to the NAFTA country
on the product, the duties on the materials may be waived or reduced
(subject to section 508(b)(2)(B)) in an amount that does not exceed the
lesser of\--\
(A) the total amount of customs duties owed on the materials on
importation into the United States, or\
(B) the total amount of customs duties paid to the NAFTA country on the
product, or

\* \* \* \* \*

If Canada ceases to be a NAFTA country and the suspension of the
operation of the United States-Canada Free-Trade Agreement thereafter
terminates, no charges against such bond may be canceled in whole or
part upon an exportation to Canada under paragraph (1) or (4) during the
period such Agreement is in operation except to the extent that the
metal-bearing materials were of Canadian origin as determined in
accordance with section 202 of the United States-Canada Free-Trade
Agreement Implementation Act of 1988.

\* \* \* \* \*

\(d\) Upon the exportation ~~(other than exportation to Canada on or
after January 1, 1994, or such later date as may be proclaimed by the
President under section 204(b)(2)(B) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, except to the extent
that the product is a drawback eligible good under section 204(a) of
such Act of 1988)~~; of a product of smelting or refining other than
refined metal the bond shall be credited with a quantity of metal
equivalent to the quantity of metal contained in the product exported
less the proportionate part of the deductions allowed for losses in
determination of the bond charge being cancelled that would not
ordinarily be sustained in production of the specific product exported
as ascertained from time to time by the Secretary of the Treasury;
except that in the case of a withdrawal for exportation to a NAFTA
country, as defined in section 2(4) of the North American Free Trade
Agreement Implementation Act, if any of the imported metal-bearing
materials are goods subject to NAFTA drawback, as defined in section
203(a) of that Act, charges against the bond shall be paid before the
61st day after the date of exportation; but upon the presentation,
before such 61st day, of satisfactory evidence of the amount of any
customs duties paid to the NAFTA country on the product, the bond shall
be credited (subject to section 508(b)(2)(B)) in an amount not to exceed
the lesser of\--\
(1) the total amount of customs duties paid or owed on the materials on
importation into the United States, or\
(2) the total amount of customs duties paid to the NAFTA country on the
product. If Canada ceases to be a NAFTA country and the suspension of
the operation of the United States-Canada Free-Trade Agreement
thereafter terminates, no bond shall be credited under this subsection
with respect to an exportation of a product to Canada during the period
such Agreement is in operation except to the extent that the product is
a drawback eligible good under section 204(a) of the United
States-Canada Free Trade Agreement Implementation Act of 1988.

\* \* \* \* \*

**[SEC. 313. DRAWBACK AND REFUNDS.]{.underline}**\
\
\
(a) Articles Made From Imported Merchandise.\--Upon the exportation or
destruction under customs supervision of articles manufactured or
produced in the United States with the use of imported merchandise,
provided that those articles have not been used prior to such
exportation or destruction, the full amount of the duties paid upon the
merchandise so used shall be refunded as drawback, less 1 per centum of
such duties, except that such duties shall not be so refunded upon the
exportation or destruction of flour or by- products produced from
~~wheat imported after ninety days after the date of the enactment of
this Act~~ imported wheat. Where two or more products result from the
manipulation of imported merchandise, the drawback shall be distributed
to the several products in accordance with their relative values at the
time of separation.\
(b) Substitution For Drawback Purposes.\--If imported duty-paid
merchandise and ~~duty-free or domestic merchandise~~ any other
merchandise (whether imported or domestic) of the same kind and quality
are used in the manufacture or production of articles within a period
not to exceed three years from the receipt of such imported merchandise
by the manufacturer or producer of such articles, there shall be allowed
upon the exportation, or destruction under customs supervision, of any
such articles, notwithstanding the fact that none of the imported
merchandise may actually have been used in the manufacture or production
of the exported or destroyed articles, an amount of drawback equal to
that which would have been allowable had the merchandise used therein
been imported, but only if those articles have not been used prior to
such exportation or destruction; but the total amount of drawback
allowed upon the exportation or destruction under customs supervision of
such articles, together with the total amount of drawback allowed in
respect of such imported merchandise under any other provision of law,
shall not exceed 99 per centum of the duty paid on such imported
merchandise. ~~(c) Merchandise not Conforming to Sample or
Specifications.\--Upon the exportation of merchandise not conforming to
sample or specifications or shipped without the consent of the consignee
upon which the duties have been paid and which have been entered or
withdrawn for consumption and, within ninety days after release from
customs custody, unless the Secretary authorizes in writing a longer
time, returned to customs custody for exportation, the full amount of
the duties paid upon such merchandise shall be refunded as drawback,
less 1 per centum of such duties.~~\
(c) Merchandise Not Conforming to Sample or Specifications.\--Upon the
exportation, or destruction under the supervision of the Customs
Service, of merchandise\--\
(1) not conforming to sample or specifications, shipped without the
consent of the consignee, or determined to be defective as of the time
of importation;\
(2) upon which the duties have been paid;\
(3) which has been entered or withdrawn for consumption; and\
(4) which, within 3 years after release from the custody of the Customs
Service, has been returned to the custody of the Customs Service for
exportation or destruction under the supervision of the Customs Service;
the full amount of the duties paid upon such merchandise, less 1
percent, shall be refunded as drawback.

\* \* \* \* \*

~~(j) Same Condition Drawback.\--(1) If imported merchandise, on which
was paid any duty, tax, or fee imposed under Federal law because of its
importation\--~~\
~~(A) is, before the close of the three-year period beginning on the
date of importation\--~~\
~~(i) exported in the same condition as when imported, or~~\
~~(ii) destroyed under Customs supervision; and~~\
~~(B) is not used within the United States before such exportation or
destruction; then upon such exportation or destruction 99 per centum of
the amount of each such duty, tax, and fee so paid shall be refunded as
drawback.~~\
~~(2) If there is, with respect to imported merchandise on which was
paid any duty, tax, or fee imposed under Federal law because of its
importation, any other merchandise (whether imported or domestic)
that\--~~\
~~(A) is fungible with such imported merchandise;~~\
~~(B) is, before the close of the three-year period beginning on the
date of importation of the imported merchandise, either exported or
destroyed under Customs supervision;~~\
~~(C) before such exportation or destruction\--~~\
~~(i) is not used within the United States, and~~\
~~(ii) is in the possession of the party claiming drawback under\
this paragraph; and~~\
~~(D) is in the same condition at the time of exportation or destruction
as was the imported merchandise at the time of its importation; then
upon the exportation or destruction of such other merchandise the amount
of each such duty, tax, and fee paid regarding the imported merchandise
shall be refunded as drawback, but in no case may the total drawback on
the imported merchandise, whether available under this paragraph or any
other provision of law or any combination thereof, exceed 99 percent of
that duty, tax, or fee.~~\
~~(3) Packaging material that is imported for use in packaging or
repackaging imported merchandise to which paragraph (1) applies shall be
eligible under the same conditions provided in such paragraph for
refund, as drawback, of 99 per centum of any duty, tax, or fee imposed
under Federal law on the importation of such material.~~\
~~(4) The performing of incidental operations (including, but not
limited to, testing, cleaning, repacking, and inspecting) on\--~~\
~~(A) the imported merchandise itself in cases to which paragraph (1)
applies, or~~\
~~(B) the merchandise of the same kind and quality in cases to which
paragraph (2) applies, that does not amount to manufacture or production
for drawback purposes under the preceding provisions of this section
shall not be treated as a use of that merchandise for purposes of
applying paragraph (1)(B) or (2)(C).~~\
(j) Unused Merchandise Drawback.\--\
(1) If imported merchandise, on which was paid any duty, tax, or fee
imposed under Federal law because of its importation\--\
(A) is, before the close of the 3-year period beginning on the date of
importation\--\
(i) exported, or\
(ii) destroyed under customs supervision; and\
(B) is not used within the United States before such exportation or
destruction; then upon such exportation or destruction 99 percent of the
amount of each duty, tax, or fee so paid shall be refunded as drawback.
The exporter (or destroyer) has the right to claim drawback under this
paragraph, but may endorse such right to the importer or any
intermediate party.\
(2) Subject to paragraph (4), if there is, with respect to imported
merchandise on which was paid any duty, tax, or fee imposed under
Federal law because of its importation, any other merchandise (whether
imported or domestic), that\--\
(A) is commercially interchangeable with such imported merchandise;\
(B) is, before the close of the 3-year period beginning on the date of
importation of the imported merchandise, either exported or destroyed
under customs supervision; and\
(C) before such exportation or destruction\--\
(i) is not used within the United States, and\
(ii) is in the possession of, including ownership while in bailment, in
leased facilities, in transit to, or in any other manner under the
operational control of, the party claiming drawback under this
paragraph, if that party\--\
(I) is the importer of the imported merchandise, or\
(II) received from the person who imported and paid any duty due on the
imported merchandise a certificate of delivery transferring to the party
the imported merchandise, commercially interchangeable merchandise, or
any combination of imported and commercially interchangeable merchandise
(and any such transferred merchandise, regardless of its origin, will be
treated as the imported merchandise and any retained merchandise will be
treated as domestic merchandise); then upon the exportation or
destruction of such other merchandise the amount of each such duty, tax,
and fee paid regarding the imported merchandise shall be refunded as
drawback, but in no case may the total drawback on the imported
merchandise, whether available under this paragraph or any other
provision of law or any combination thereof, exceed 99 percent of that
duty, tax, or fee.\
(3) The performing of any operation or combination of operations\
(including, but not limited to, testing, cleaning, repacking,
inspecting, sorting, refurbishing, freezing, blending, repairing,
reworking, cutting, slitting, adjusting, replacing components,
relabeling, disassembling, and unpacking), not amounting to manufacture
or production for drawback purposes under the preceding provisions of
this section on\--\
(A) the imported merchandise itself in cases to which paragraph (1)
applies, or\
(B) the commercially interchangeable merchandise in cases to which
paragraph (2) applies, shall not be treated as a use of that merchandise
for purposes of applying paragraph (1)(B) or (2)(C).\
(4) Effective upon the entry into force of the North American Free Trade
Agreement, the exportation to a NAFTA country, as defined in section
2(4) of the North American Free Trade Agreement Implementation Act, of
merchandise that is fungible with and substituted for imported
merchandise, other than merchandise described in paragraphs (1) through\
(8) of section 203(a) of that Act, shall not constitute an exportation
for purposes of paragraph (2).

\* \* \* \* \*

\(l\) Regulations.\--Allowance of the privileges provided for in this
section shall be subject to compliance with such rules and regulations
as the Secretary of the Treasury shall prescribe, which may include, but
need not be limited to, ~~the fixing of a time limit within which
drawback entries or entries for refund under any of the provisions of
this section 309 (b) of this Act shall be filed and completed,~~ the
authority for the electronic submission of drawback entries and the
designation of the person to whom any refund or payment of drawback
shall be made.

\* \* \* \* \*

~~(n) For purposes of subsections (a), (b), (f), (h), and (j)(2), the
shipment on or after January 1, 1994, or such later date as may be
proclaimed by the President under section 204(b)(2)(B) of the United
States-Canada Free- Trade Agreement Implementation Act of 1988, to
Canada on an article, except an article made from or substituted for, as
appropriate, a drawback eligible good under section 204(a) of such Act,
does not constitute an exportation.~~\
~~(o) For purposes of subsection (g), vessels built for Canadian account
and ownership, or for the Government of Canada, may not be considered to
be built for any foreign account and ownership, or for the government of
any foreign country, except to the extent that the materials in such
vessels are drawback eligible goods under section 204(a) of the United
States-Canada Free-Trade Agreement Implementation Act of 1988. This
subsection shall apply to vessels delivered to Canadian account or
owner, or to the Government of Canada, on and after January 1, 1994 (or,
if later, the date proclaimed by the President under section
204(b)(2)(B) of the United States-Canada Free- Trade Agreement
Implementation Act of 1988).~~\
~~(p) Substitution of Crude Petroleum or Petroleum Derivatives.\--~~\
~~(1) Notwithstanding any other provision of this section, in the case
of articles, described in headings 2707 through 2715, 2901 and 2902, or
3901 through 3914 (limited to liquids, pastes, powders, granules, and
flakes) of the Harmonized Tariff Schedule of the United States,
that\--~~\
~~(A) are\--~~\
~~(i) manufactured or produced under subsection (a) or (b) from crude
petroleum or petroleum derivatives, or~~\
~~(ii) imported duty-paid, and~~\
~~(B) are stored in common storage with other articles of the same kind
and quality that are otherwise manufactured or produced, drawback shall
be paid on the articles withdrawn for export from such common storage
(regardless of the source or origination of the articles withdrawn), if
the requirements described in paragraph (2) are met.~~\
~~(2) The requirements of this paragraph are met if\--~~\
~~(A) inventory records kept on a calendar month basis (not on a daily
or transaction-by-transaction basis) demonstrate sufficient quantities
of imported duty-paid articles or articles manufactured or produced
under subsection (a) or (b) in the common storage against which such
withdrawal is designated;~~\
~~(B) such inventory records reflect deliveries to and withdrawals from
such common storage that assure that the drawback paid does not exceed
the amount of drawback that would be payable under this section had all
of the articles withdrawn from common storage been imported duty-paid or
manufactured or produced under subsection (a) or (b);~~\
~~(C) certificates of delivery or certificates of manufacture and
delivery, establishing the drawback eligibility of the imported duty-
paid articles or articles manufactured or produced under subsection (a)
or (b), when required, are filed with the drawback entry; and~~\
~~(D) the inventory records of the operator of such common storage are,
upon reasonable notice, available to the Customs Service.~~\
~~(3) For purposes of this subsection\--~~\
~~(A) The term \"common storage\" includes all articles of the same~~\
kind and quality stored at a single facility regardless of the number\
of bins, tanks, or other containers used.\
~~(B) The term \"same kind and quality\" means articles that are~~\
commercially interchangeable or that are referred to under the same\
eight-digit classification of the Harmonized Tariff Schedule of the\
United States.\
~~(C) The term \"single facility\" means all storage units under the~~\
control and recordkeeping of a single operator adjacent to a\
manufacturing plant, refinery, warehouse complex, terminal area,\
airport, bunkering facility, or similar facility.\
(n)(1) For purposes of this subsection and subsection (o)\--\
(A) the term \"NAFTA Act\" means the North American Free Trade Agreement
Implementation Act;\
(B) the terms \"NAFTA country\" and \"good subject to NAFTA drawback\"
have the same respective meanings that are given such terms in sections
2(4) and 203(a) of the NAFTA Act; and\
(C) a refund, waiver, or reduction of duty under paragraph (2) of this
subsection or paragraph (1) of subsection (o) is subject to section
508(b)(2)(B).\
(2) For purposes of subsections (a), (b), (f), (h), (p), and (q), if an
article that is exported to a NAFTA country is a good subject to NAFTA
drawback, no customs duties on the good may be refunded, waived, or
reduced in an amount that exceeds the lesser of\--\
(A) the total amount of customs duties paid or owed on the good on
importation into the United States, or\
(B) the total amount of customs duties paid on the good to the NAFTA
country.\
(3) If Canada ceases to be a NAFTA country and the suspension of the
operation of the United States-Canada Free-Trade Agreement thereafter
terminates, then for purposes of subsections (a), (b), (f), (h), (j)(2),
and (q), the shipment to Canada during the period such Agreement is in
operation of an article made from or substituted for, as appropriate, a
drawback eligible good under section 204(a) of the United States-Canada
Free-Trade Implementation Act of 1988 does not constitute an
exportation.\
(o)(1)For purposes of subsection (g), if\--\
(A) a vessel is built for the account and ownership of a resident of a
NAFTA country or the government of a NAFTA country, and\
(B) imported materials that are used in the construction and equipment
of the vessel are goods subject to NAFTA drawback, the amount of customs
duties refunded, waived, or reduced on such materials may not exceed the
lesser of the total amount of customs duties paid or owed on the
materials on importation into the United States or the total amount of
customs duties paid on the vessel to the NAFTA country.\
(2) If Canada ceases to be a NAFTA country and the suspension of the
operation of the United States-Canada Free-Trade Agreement thereafter
terminates, then for purposes of subsection (g), vessels built for
Canadian account and ownership, or for the Government of Canada, may not
be considered to be built for any foreign account and ownership, or for
the government of any foreign country, except to the extent that the
materials in such vessels are drawback eligible goods under section
204(a) of the United States-Canada Free-Trade Implementation Act of
1988.\
(p) Substitution of Finished Petroleum Derivatives.\--\
(1) In general.\--Notwithstanding any other provision of this section,
if\--\
(A) an article (hereafter referred to in this subsection as the\
\"exported article\") of the same kind and quality as a qualified
article is exported;\
(B) the requirements set forth in paragraph (2) are met; and\
(C) a drawback claim is filed regarding the exported article; the amount
of the duties paid on, or attributable to, such qualified article shall
be refunded as drawback to the drawback claimant.\
(2) Requirements.\--The requirements referred to in paragraph (1) are as
follows:\
(A) The exporter of the exported article\--\
(i) manufactured or produced the qualified article in a quantity equal
to or greater than the quantity of the exported article,\
(ii) purchased or exchanged, directly or indirectly, the qualified
article from a manufacturer or producer described in subsection (a) or
(b) in a quantity equal to or greater than the quantity of the exported
article,\
(iii) imported the qualified article in a quantity equal to or greater
than the quantity of the exported article, or\
(iv) purchased or exchanged, directly or indirectly, an imported
qualified article from an importer in a quantity equal to or greater
than the quantity of the exported article.\
(B) In the case of the requirement described in subparagraph\
(A)(ii), the manufacturer or producer produced the qualified article in
a quantity equal to or greater than the quantity of the exported
article.\
(C) In the case of the requirement of subparagraph (A)(i) or\
(A)(ii), the exported article is exported during the period that the
qualified article described in subparagraph (A)(i) or (A)(ii)\
(whichever is applicable) is manufactured or produced, or within 180
days after the close of such period.\
(D) In the case of the requirement of subparagraph (A)(i) or\
(A)(ii), the specific petroleum refinery or production facility which
made the qualified article concerned is identified.\
(E) In the case of the requirement of subparagraph (A)(iii) or\
(A)(iv), the exported article is exported within 180 days after the date
of entry of an imported qualified article described in subparagraph
(A)(iii) or (A)(iv) (whichever is applicable).\
(F) Except as otherwise specifically provided in this subsection, the
drawback claimant complies with all requirements of this section,
including providing certificates which establish the drawback
eligibility of articles for which drawback is claimed.\
(G) The manufacturer, producer, importer, exporter, and drawback
claimant of the qualified article and the exported article maintain all
records required by regulation.\
(3) Definition of qualified article, etc.\--For purposes of this
subsection\--\
(A) The term \"qualified article\" means an article\--\
(i) described in\--\
(I) headings 2707, 2708, 2710, 2711, 2712, 2713, 2714, 2715, 2901, and
2902 of the Harmonized Tariff Schedule of the United States, or\
(II) headings 3901 through 3914 of such Schedule (as such headings apply
to liquids, pastes, powders, granules, and flakes), and\
(ii) which is\--\
(I) manufactured or produced as described in subsection (a) or (b) from
crude petroleum or a petroleum derivative, or\
(II) imported duty-paid.\
(B) An exported article is of the same kind and quality as the qualified
article for which it is substituted under this subsection if it is a
product that is commercially interchangeable with or referred to under
the same eight-digit classification of the Harmonized Tariff Schedule of
the United States as the qualified article.\
(C) The term \"drawback claimant\" means the exporter of the exported
article or the refiner, producer, or importer of such article. Any
person eligible to file a drawback claim under this subparagraph may
designate another person to file such claim.\
(4) Limitation on drawback.\--The amount of drawback payable under this
subsection shall not exceed the amount of drawback that would be
attributable to the article\--\
(A) manufactured or produced under subsection (a) or (b) by the
manufacturer or producer described in clause (i) or (ii) of paragraph\
(2)(A), or\
(B) imported under clause (iii) or (iv) of paragraph (2)(A).\
(q) Packaging Material.\--Packaging material, when used on or for
articles or merchandise exported or destroyed under subsection (a), (b),
(c), or (j), shall be eligible under such subsection for refund, as
drawback, of 99 percent of any duty, tax, or fee imposed under Federal
law on the importation of such material.\
(r) Filing Drawback Claims.\--\
(1) A drawback entry and all documents necessary to complete a drawback
claim, including those issued by the Customs Service, shall be filed or
applied for, as applicable, within 3 years after the date of exportation
or destruction of the articles on which drawback is claimed, except that
any landing certificate required by regulation shall be filed within the
time limit prescribed in such regulation. Claims not completed within
the 3-year period shall be considered abandoned. No extension will be
granted unless it is established that the Customs Service was
responsible for the untimely filing.\
(2) A drawback entry for refund filed pursuant to any subsection of this
section shall be deemed filed pursuant to any other subsection of this
section should it be determined that drawback is not allowable under the
entry as originally filed but is allowable under such other subsection.\
(s) Designation of Merchandise by Successor.\--\
(1) For purposes of subsection (b), a drawback successor may designate
imported merchandise used by the predecessor before the date of
succession as the basis for drawback on articles manufactured by the
drawback successor after the date of succession.\
(2) For purposes of subsection (j)(2), a drawback successor may
designate\--\
(A) imported merchandise which the predecessor, before the date of
succession, imported; or\
(B) imported merchandise, commercially interchangeable merchandise, or
any combination of imported and commercially interchangeable merchandise
for which the successor received, before the date of succession, from
the person who imported and paid any duty due on the imported
merchandise a certificate of delivery transferring to the successor such
merchandise; as the basis for drawback on merchandise possessed by the
drawback successor after the date of succession.\
(3) For purposes of this subsection, the term \"drawback successor\"
means an entity to which another entity (in this subsection referred to
as the \"predecessor\") has transferred by written agreement, merger, or
corporate resolution\--\
(A) all or substantially all of the rights, privileges, immunities,
powers, duties, and liabilities of the predecessor; or\
(B) the assets and other business interests of a division, plant, or
other business unit of such predecessor, but only if in such transfer
the value of the transferred realty, personalty, and intangibles (other
than drawback rights, inchoate or otherwise) exceeds the value of all
transferred drawback rights, inchoate or otherwise.\
(4) No drawback shall be paid under this subsection until either the
predecessor or the drawback successor (who shall also certify that it
has the predecessor\'s records) certifies that\--\
(A) the transferred merchandise was not and will not be claimed by the
predecessor, and\
(B) the predecessor did not and will not issue any certificate to any
other person that would enable that person to claim drawback.\
(t) Drawback Certificates.\--Any person who issues a certificate which
would enable another person to claim drawback shall be subject to the
recordkeeping provisions of this chapter, with the retention period
beginning on the date that such certificate is issued.\
(u) Eligibility of Entered or Withdrawn Merchandise.\--Imported
merchandise that has not been regularly entered or withdrawn for
consumption shall not satisfy any requirement for use, exportation, or
destruction under this section.\
(v) Multiple Drawback Claims.\--Merchandise that is exported or
destroyed to satisfy any claim for drawback shall not be the basis of
any other claim for drawback; except that appropriate credit and
deductions for claims covering components or ingredients of such
merchandise shall be made in computing drawback payments.\
\
**[SEC. 315. EFFECTIVE DATES OF RATES OF DUTY.]{.underline}**\
\
\
(a) Except as otherwise specially provided for, the rate or rates of
duty imposed by or pursuant to this Act or any other law on any article
entered for consumption or withdrawn from warehouse for consumption
shall be the rate or rates in effect when the documents comprising the
entry for consumption or withdrawal from warehouse for consumption and
any estimated or liquidated duties then required to be paid have been
deposited with the ~~appropriate customs officer in the form and manner
prescribed by regulations of the Secretary of the Treasury,~~ Customs
Service by written, electronic or such other means as the Secretary by
regulation shall prescribe, except that\
(1) \* \* \*

\* \* \* \* \*

\(b\) Any article which has been entered for consumption but which,
before release from ~~customs custody~~ custody of the Customs Service,
is removed from the port or other place of intended release because of
inaccessibility, overcarriage, strike, act of God, or unforeseen
contingency, shall be subject to duty at the rate or rates in effect
when the entry for consumption and any required duties were deposited in
accordance with subsection (a) of this section, but only if the article
is returned to such port or place within ninety days after the date of
removal and the identity of the article as that covered by the entry is
established in accordance with regulations prescribed by the Secretary
of the Treasury.\
(c) Insofar as duties are based upon the quantity of any merchandise,
such duties shall, except as provided in ~~paragraph 813~~ chapter 98 of
the Harmonized Tariff Schedule of the United States and section 562 of
this Act (relating respectively to certain beverages and to manipulating
warehouses), be levied and collected upon the quantity of such
merchandise at the time of its importation.

\* \* \* \* \*

**[SEC. 321. ADMINISTRATIVE EXEMPTIONS.]{.underline}**\
\
\
(a) The Secretary of the Treasury, in order to avoid expense and
inconvenience to the Government disproportionate to the amount of
revenue that would otherwise be collected, is hereby authorized, under
such regulations as he shall prescribe, to\--\
(1) disregard a difference ~~of less than \$10~~ of an amount specified
by the Secretary by regulation, but not less than \$20, between the
total estimated duties, fees, and taxes deposited, or the total duties
fees, and taxes tentatively assessed, with respect to any entry of
merchandise and the total amount of duties, fees, and taxes actually
accruing thereon; ~~and~~\
(2) admit articles free of duty and of any tax imposed on or by reason
of importation, but the aggregate fair retail value in the country of
shipment of articles imported by one person on one day and exempted from
the payment of duty ~~shall not exceed\--~~ shall not exceed an amount
specified by the Secretary by regulation, but not less than\--\
(A) ~~\$50~~ \$100 in the case of articles sent as bona fide gifts from
persons in foreign countries to persons in the United States\
(~~\$100~~ \$200, in the case of articles sent as bona fide gifts from
persons in the Virgin Islands, Guam, and America Samoa), or\
(B) ~~\$25~~ \$200 in the case of articles accompanying, and for the
personal or household use of, persons arriving in the United States who
are not entitled to any exemption from duty under subheading 9804.00.30
or 9804.00.70 of this Act, or\
(C) ~~\$5~~ \$200 in any other case~~.~~; and\
(3) waive the collection of duties, fees, and taxes due on entered
merchandise when such duties, fees, or taxes are less than \$20 or such
greater amount as may be specified by the Secretary by regulation. The
privilege of this subdivision (2) shall not be granted in any case in
which merchandise covered by a single order or contract is forwarded in
separate lots to secure the benefit of this subdivision (2).\
(b) The Secretary of the Treasury is authorized by regulations ~~to
diminish any dollar amount specified in subsection (a) and~~ to
prescribe exceptions to any exemption provided for in ~~such
subsection~~ subsection (a) whenever he finds that such action is
consistent with the purpose of ~~such subsection~~ subsection (a) or is
necessary for any reason to protect the revenue or to prevent unlawful
importations.

\* \* \* \* \*

**TITLE IV\--ADMINISTRATIVE PROVISIONS**

~~PART I\--DEFINITIONS~~

PART I\--DEFINITIONS AND NATIONAL CUSTOMS AUTOMATION PROGRAM

Subpart A\--Definitions

**[SEC. 401. MISCELLANEOUS.]{.underline}**\
\
\
When used in this title or in Part I of Title III\--\
(a) \* \* \*

\* \* \* \* \*

\(k\) Hovering Vessel.\--(1) The term \"hovering vessel\" means any
vessel which is found or kept off the coast of the United States within
or without the customs waters, if, from the history, conduct, character,
or location of the vessel, it is reasonable to believe that such vessel
is being used or may be used to introduce or promote or facilitate the
introduction or attempted introduction of merchandise into the United
States in violation of the laws respecting the revenue.\
~~For the purposes of sections 432, 433, 434, 448, 585, and 586 of this
Act, any vessel which has visited any hovering vessel shall be deemed to
arrive or have arrived, as the case may be, from a foreign port or
place.~~\
~~(2) For the purposes of sections 432, 433, 434, 448, 585, and 586, any
vessel which\--~~\
~~(A) has visited any hovering vessel;~~\
~~(B) has received merchandise while in the customs waters beyond the
territorial sea; or~~\
~~(C) has received merchandise while on the high seas; shall be deemed
to arrive or have arrived, as the case may be, from a foreign port or
place.~~\
(k) The term \"hovering vessel\" means\--\
(1) any vessel which is found or kept off the coast of the United States
within or without the customs waters, if, from the history, conduct,
character, or location of the vessel, it is reasonable to believe that
such vessel is being used or may be used to introduce or promote or
facilitate the introduction or attempted introduction of merchandise
into the United States in violation of the laws of the United States;
and\
(2) any vessel which has visited a vessel described in paragraph (1).

\* \* \* \* \*

\(n\) The term \"electronic transmission\" means the transfer of data or
information through an authorized electronic data interchange system
consisting of, but not limited to, computer modems and computer
networks.\
(o) The term \"electronic entry\" means the electronic transmission of
the Customs Service of\--\
(1) entry information required for the entry of merchandise, and\
(2) entry summary information required for the classification and
appraisement of the merchandise, the verification of statistical
information, and the determination of compliance with applicable law.\
(p) The term \"electronic data interchange system\" means any
established mechanism approved by the Commissioner of Customs through
which information can be transferred electronically.\
(q) The term \"National Customs Automation Program\" means the program
established under section 411.\
(r) The term \"import activity summary statement\" refers to data or
information transmitted electronically to the Customs Service, in
accordance with such regulations as the Secretary prescribes, at the end
of a specified period of time which enables the Customs Service to
assess properly the duties, taxes and fees on merchandise imported
during that period, collect accurate statistics and determine whether
any other applicable requirement of law (other than a requirement
relating to release from customs custody) is met.\
(s) The term \"reconciliation\" means an electronic process, initiated
at the request of an importer, under which the elements of an entry,
other than those elements related to the admissibility of the
merchandise, that are undetermined at the time of entry summary are
provided to the Customs Service at a later time. A reconciliation is
treated as an entry for purposes of liquidation, reliquidation, and
protest.

\* \* \* \* \*

Subpart B\--National Customs Automation Program

**[SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.]{.underline}**\
\
\
(a) Establishment.\--The Secretary shall establish the National Customs
Automation Program (hereinafter in this subpart referred to as the
\"Program\") which shall be an automated and electronic system for
processing commercial importations and shall include the following
existing and planned components:\
(1) Existing components:\
(A) The electronic entry of merchandise.\
(B) The electronic entry summary of required information.\
(C) The electronic transmission of invoice information.\
(D) The electronic transmission of manifest information.\
(E) Electronic payments of duties, fees, and taxes.\
(F) The electronic status of liquidation and reliquidation.\
(G) The electronic selection of high risk entries for examination\
(cargo selectivity and entry summary selectivity).\
(2) Planned components:\
(A) The electronic filing and status of protests.\
(B) The electronic filing (including remote filing under section 414) of
entry information with the Customs Service at any location.\
(C) The electronic filing of import activity summary statements and
reconciliation.\
(D) The electronic filing of bonds.\
(E) The electronic penalty process.\
(F) The electronic filing of drawback claims, records, or entries.\
(G) Any other component initiated by the Customs Service to carry out
the goals of this subpart.\
(b) Participation in Program.\--The Secretary shall by regulation
prescribe the eligibility criteria for participation in the Program.
Participation in the Program is voluntary.\
**[SEC. 412. PROGRAM GOALS.]{.underline}**\
\
\
The goals of the Program are to ensure that all regulations and rulings
that are administered or enforced by the Customs Service are
administered and enforced in a manner that\--\
(1) is uniform and consistent;\
(2) is as minimally intrusive upon the normal flow of business activity
as practicable; and\
(3) improves compliance.\
**[SEC. 413. IMPLEMENTATION AND EVALUATION OF PROGRAM.]{.underline}**\
\
\
(a) Overall Program Plan.\--\
(1) In general.\--Before the 180th day after the date of the enactment
of this Act, the Secretary shall develop and transmit to the Committees
an overall plan for the Program. The overall Program plan shall set
forth\--\
(A) a general description of the ultimate configuration of the Program;\
(B) a description of each of the existing components of the Program
listed in section 411(a)(1); and\
(C) estimates regarding the stages on which planned components of the
Program listed in section 411(a)(2) will be brought on-line.\
(2) Additional information.\--In addition to the information required
under paragraph (1), the overall Program plan shall include a statement
regarding\--\
(A) the extent to which the existing components of the Program currently
meet, and the planned components will meet, the Program goals set forth
in section 412; and\
(B) the effects that the existing components are currently having, and
the effects that the planned components will likely have, on\--\
(i) importers, brokers, and other users of the Program, and\
(ii) Customs Service occupations, operations, processes, and systems.\
(b) Implementation Plan, Testing, and Evaluation.\--\
(1) Implementation plan.\--For each of the planned components of the
Program listed in section 411(a)(2), the Secretary shall\--\
(A) develop an implementation plan;\
(B) test the component in order to assess its viability;\
(C) evaluate the component in order to assess its contribution toward
achieving the program goals; and\
(D) transmit to the Committees the implementation plan, the testing
results, and an evaluation report. In developing an implementation plan
under subparagraph (A) and evaluating components under subparagraph (C),
the Secretary shall publish a request for comments in the Customs
Bulletin and shall consult with the trade community, including
importers, brokers, shippers, and other affected parties.\'\
(2) Implementation.\--\
(A) The Secretary may implement on a permanent basis any Program
component referred to in paragraph (1) on or after the date which is 30
days after paragraph (1)(D) is complied with.\
(B) For purposes of subparagraph (A), the 30 days shall be computed by
excluding\--\
(i) the days either House is not in session because of an adjournment of
more than 3 days to a day certain or an adjournment of the Congress sine
die, and\
(ii) any Saturday and Sunday, not excluded under clause (i), when either
House is not in session.\
(3) Evaluation and report.\--The Secretary shall\--\
(A) develop a user satisfaction survey of parties participating in the
Program;\
(B) evaluate the results of the user satisfaction survey on a biennial
basis (fiscal years) and transmit a report to the Committees on the
evaluation by no later than the 90th day after the close of each 2d
fiscal year;\
(C) with respect to the existing Program component listed in section
411(a)(1)(G) transmit to the Committees\--\
(i) a written evaluation of such component before the 180th day after
the date of the enactment of this section and before the implementation
of the planned Program components listed in section 411(a)(2) (B) and
(C), and\
(ii) a report on such component for each of the 3 full fiscal years
occurring after the date of the enactment of this section, which report
shall be transmitted not later than the 90th day after the close of each
such year; and\
(D) not later than the 90th day after the close of fiscal year 1994, and
annually thereafter through fiscal year 2000, transmit to the Committees
a written evaluation with respect to the implementation and effect on
users of each of the planned Program components listed in section
411(a)(2). In carrying out the provisions of this paragraph, the
Secretary shall publish requests for comments in the Customs Bulletin
and shall consult with the trade community, including importers,
brokers, shippers, and other affected parties.\
(c) Committees.\--For purposes of this section, the term \"Committees\"
means the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate.\
**[SEC. 414. REMOTE LOCATION FILING.]{.underline}**\
\
\
(a) Core Entry Information.\--\
(1) In general.\--A Program participant may file electronically an entry
of merchandise with the Customs Service from a location other than the
district designated in the entry for examination (hereafter in this
section referred to as a \"remote location\") if\--\
(A) the Customs Service is satisfied that the participant has the
capabilities referred to in paragraph (2)(A) regarding such method of
filing; and\
(B) the participant elects to file from the remote location.\
(2) Requirements.\--\
(A) In general.\--In order to qualify for filing from a remote location,
a Program participant must have the capability to provide, on an
entry-by-entry basis, for the following:\
(i) The electronic entry of merchandise.\
(ii) The electronic entry summary of required information.\
(iii) The electronic transmission of invoice information (when required
by the Customs Service).\
(iv) The electronic payment of duties, fees, and taxes.\
(v) Such other electronic capabilities within the existing or planned
components of the Program as the Secretary shall by regulation require.\
(B) Restriction on exemption from requirements.\--The Customs Service
may not permit any exemption or waiver from the requirements established
by this section for participation in remote entry filing.\
(3) Conditions on filing under this section.\--The Secretary may
prohibit a Program participant from participating in remote location
filing, and may remove a Program participant from participation in
remote location filing, if the participant\--\
(i) fails to meet all the compliance requirements and operational
standards of remote location filing; or\
(ii) fails to adhere to all applicable laws and regulations.\
(4) Alternative filing.\--Any Program participant that is eligible to
file entry information electronically from a remote location but chooses
not to do so in the case of any entry must file any paper documentation
for the entry at the designated location referred to in subsection (d).\
(b) Additional Entry Information.\--\
(1) In general.\--A Program participant that is eligible under
subsection (a) to file entry information from a remote location may, if
the Customs Service is satisfied that the participant meets the
requirements under paragraph (2), also electronically file from the
remote location additional information that is required by the Customs
Service to be presented before the acceptance of entry summary
information and at the time of acceptance of entry summary information.\
(2) Requirements.\--The Secretary shall publish, and periodically
update, a list of those capabilities within the existing and planned
components of the Program that a Program participant must have for
purposes of this subsection.\
(3) Filing of additional information.\--\
(A) If information electronically acceptable.\--A Program participant
that is eligible under paragraph (1) to file additional information from
a remote location shall electronically file all such information that
the Customs Service can accept electronically.\
(B) Alternative filing.\--If the Customs Service cannot accept
additional information electronically, the Program participant shall
file the paper documentation with respect to the information at the
appropriate filing location.\
(C) Appropriate location.\--For purposes of subparagraph (B), the\
\"appropriate location\" is\--\
(i) before January 1, 1999, a designated location; and\
(ii) after December 31, 1998\--\
(I) if the paper documentation is required for release, a designated
location; or\
(II) if the paper documentation is not required for release, a remote
location designated by the Customs Service or a designated location.\
(D) Other.\--A Program participant that is eligible under paragraph\
(1) to file additional information electronically from a remote location
but chooses not to do so must file the paper documentation with respect
to the information at a designated location.\
(c) Post-Entry Summary Information.\--A Program participant that is
eligible to file electronically entry information under subsection (a)
and additional information under subsection (b) from a remote location
may file at any remote location designated by the Customs Service any
information required by the Customs Service after entry summary.\
(d) Definitions.\--As used in this section:\
(1) The term \"designated location\" means a customs office located in
the customs district designated by the entry filer for purposes of
customs examination of the merchandise.\
(2) The term \"Program participant\" means, with respect to an entry of
merchandise, any party entitled to make the entry under section
484(a)(2)(B).

PART II\--REPORT, ENTRY, AND UNLOADING OF VESSELS AND VEHICLES

**[SEC. 431. MANIFEST\--REQUIREMENT, FORM, AND CONTENTS.]{.underline}**\
\
\
~~(a) The master of every vessel arriving in the United States and
required to make entry shall have on board his vessel a manifest in a
form to be prescribed by the Secretary of the Treasury and signed by
such master under oath as to the truth of the statements therein
contained. Such manifest shall contain:~~\
~~First. The names of the ports or places at which the merchandise was
taken on board and the ports of entry of the United States for which the
same is destined, particularly describing the merchandise destined to
each such port: Provided, That the master of any vessel laden
exclusively with coal, sugar, salt, nitrates, hides, dyewoods, wool, or
other merchandise in bulk consigned to one owner and arriving at a port
for orders, may destine such cargo \"for orders,\" and within fifteen
days thereafter, but before the unlading of any part of the cargo such
manifest may be amended by the master by designating the port or ports
of discharge of such cargo, and in the event of failure to amend the
manifest within the time permitted such cargo must be discharged at the
port at which the vessel arrived and entered.~~\
~~Second. The name, description, and build of the vessel, the true
measure or tonnage thereof, the port to which such vessel belongs, and
the name of the master of such vessel.~~\
~~Third. A detailed account of all merchandise on board such vessel,
with the marks and numbers of each package, and the number and
description of the packages according to their usual name or
denomination, such as barrel, keg, hogshead, case, or bag; and the names
of the shippers of such merchandise.~~\
~~Fourth. The names of the persons to whom such packages are
respectively consigned in accordance with the bills of lading issued
therefor, except that when such merchandise is consigned to order the
manifest shall so state.~~\
~~Fifth. The names of the several passengers aboard the vessel, stating
whether cabin or steerage passengers, with their baggage, specifying the
number and description of the pieces of baggage belonging to each, and a
list of all baggage not accompanied by passengers.~~\
~~Sixth. An account of the sea stores and ship\'s stores on board of the
vessel.~~\
~~(b) Whenever a manifest of articles or persons on board an aircraft is
required for customs purposes to be signed, or produced or delivered to
a customs officer, the manifest may be signed, produced, or delivered by
the pilot or person in charge of the aircraft, or by any other
authorized agent of the owner or operator of the aircraft, subject to
such regulations as the Secretary of the Treasury may prescribe. If any
irregularity of omission or commission occurs in any way in respect of
any such manifest, the owner or operator of the aircraft shall be liable
for any fine or penalty prescribed by law in respect of such
irregularity.~~\
(a) In General.\--Every vessel required to make entry under section 434
or obtain clearance under section 4197 of the Revised Statutes of the
United States (46 U.S.C. App. 91) shall have a manifest that complies
with the requirements prescribed under subsection (d).\
(b) Production of Manifest.\--Any manifest required by the Customs
Service shall be signed, produced, delivered or electronically
transmitted by the master or person in charge of the vessel, aircraft,
or vehicle, or by any other authorized agent of the owner or operator of
the vessel, aircraft, or vehicle in accordance with the requirements
prescribed under subsection (d). A manifest may be supplemented by bill
of lading data supplied by the issuer of such bill. If any irregularity
of omission or commission occurs in any way in respect to any manifest
or bill of lading data, the owner or operator of the vessel, aircraft or
vehicle, or any party responsible for such irregularity, shall be liable
for any fine or penalty prescribed by law with respect to such
irregularity. The Customs Service may take appropriate action against
any of the parties.

\* \* \* \* \*

\(d\) Regulations.\--\
(1) In general.\--The Secretary shall by regulation\--\
(A) specify the form for, and the information and data that must be
contained in, the manifest required by subsection (a);\
(B) allow, at the option of the individual producing the manifest and
subject to paragraph (2), letters and documents shipments to be
accounted for by summary manifesting procedures;\
(C) prescribe the manner of production for, and the delivery or
electronic transmittal of the manifest required by subsection (a); and\
(D) prescribe the manner for supplementing manifests will bill of lading
data under subsection (b).\
(2) Letters and documents shipments.\--For purposes of paragraph\
(1)(B)\--\
(A) the Customs Service may require with respect to letters and
documents shipments\--\
(i) that they be segregated by country of origin, and\
(ii) additional examination procedures that are not necessary for
individually manifested shipments;\
(B) standard letter envelopes and standard document packs shall be
segregated from larger document shipments for purposes of customs
inspections; and\
(C) the term \"letters and documents\" means\--\
(i) data described in General Headnote 4(c) of the Harmonized Tariff
Schedule of the United States,\
(ii) securities and similar evidences of value described in heading 4907
of such Schedule, but not monetary instruments defined pursuant to
chapter 53 of title 31, United States Code, and\
(iii) personal correspondence, whether on paper, cards, photographs,
tapes, or other media.\
\
**~~[SEC. 432. MANIFEST TO SPECIFY SEA AND SHIP\'S
STORES.]{.underline}~~**\
\
\
~~The manifest of any vessel arriving from a foreign port or place shall
separately specify the articles to be retained on board of such vessel
as sea stores, ship\'s stores, or bunker coal, or bunker oil, and if any
other or greater quantity of sea stores, ship\'s stores, bunker coal, or
bunker oil is found on board of any such vessel than is specified in the
manifest, of if any such articles, whether shown on the manifest or not,
are landed without a permit therefor issued by the appropriate customs
officer, all such articles omitted from the manifest or landed without a
permit shall be subject to forfeiture, and the master shall be liable to
a penalty equal to the value of the articles.~~\
\
**[SEC. 433. REPORT OF ARRIVAL OF VESSELS, VEHICLES, AND
AIRCRAFT.]{.underline}**\
\
\
(a) Vessel Arrival.\--(1) Immediately upon the arrival at any port or
place within the United States or the Virgin Islands of\--\
(A) any vessel from a foreign port or place;\
(B) any foreign vessel from a domestic port; ~~or~~\
(C) any vessel of the United States carrying bonded merchandise, or
foreign merchandise for which entry has not been made; or\
(D) any vessel which has visited a hovering vessel or received
merchandise while outside the territorial sea; the master of the vessel
shall report the arrival at the nearest customs facility or such other
place as the Secretary may prescribe by regulations.

\* \* \* \* \*

\(d\) Presentation of Documentation.\--The master, person in charge of a
vehicle, or aircraft pilot shall ~~present to customs officers such~~
present, or transmit pursuant to an electronic data interchange system,
to the Customs Service such information, data, documents, papers, or
manifests as the Secretary may by regulation prescribe.\
~~(e) Prohibition on Departures and Discharge.\--Unless otherwise
authorized by law, a vessel, aircraft, or vehicle may, after arriving in
the United States or the Virgin Islands\--~~\
~~(1) depart from the port, place, or airport of arrival; or~~\
~~(2) discharge any passenger or merchandise (including baggage); only
in accordance with regulations prescribed by the Secretary.~~\
(e) Prohibition on Departures and Discharge.\--Unless otherwise
authorized by law, a vessel, aircraft or vehicle after arriving in the
United States or Virgin Islands may, but only in accordance with
regulations prescribed by the Secretary\--\
(1) depart from the port, place, or airport of arrival; or\
(2) discharge any passenger or merchandise (including baggage).\
\
**~~[SEC. 434. ENTRY OF AMERICAN VESSELS.]{.underline}~~**\
\
\
~~Except as otherwise provided by law, and under such regulations as the
Secretary of Commerce may prescribe, the master of a vessel of the
United States arriving in the United States from a foreign port or place
shall, within forty-eight hours after its arrival within the limits of
any customs collection district, make formal entry of the vessel at the
customhouse by producing and depositing with the appropriate customs
officer the vessel\'s crew list, its register, or document in lieu
thereof, the clearance and bills of health issued to the vessel at the
foreign port or ports from which it arrived, together with the original
and one copy of the manifest, and shall make oath that the ownership of
the vessel is as indicated in the register, or document in lieu thereof,
and that the manifest was made out in accordance with section 431 of
this Act.~~\
**[SEC. 434. ENTRY; VESSELS.]{.underline}**\
\
\
(a) Formal Entry.\--Within 24 hours (or such other period of time as may
be provided under subsection (c)(2)) after the arrival at any port or
place in the United States of\--\
(1) any vessel from a foreign port or place;\
(2) any foreign vessel from a domestic port;\
(3) any vessel of the United States having on board bonded merchandise
or foreign merchandise for which entry has not been made; or\
(4) any vessel which has visited a hovering vessel or has delivered or
received merchandise while outside the territorial sea; the master of
the vessel shall, unless otherwise provided by law, make formal entry at
the nearest customs facility or such other place as the Secretary may
prescribe by regulation.\
(b) Preliminary Entry.\--The Secretary may by regulation permit the
master to make preliminary entry of the vessel with the Customs Service
in lieu of formal entry or before formal entry is made. In permitting
preliminary entry, the Customs Service shall board a sufficient number
of vessels to ensure compliance with the laws it enforces.\
(c) Regulations.\--The Secretary may by regulation\--\
(1) prescribe the manner and format in which entry under subsection (a)
or subsection (b), or both, must be made, and such regulations may
provide that such any entry may be made electronically pursuant to an
electronic data interchange system;\
(2) provide that\--\
(A) formal entry must be made within a greater or lesser time than 24
hours after arrival, but in no case more than 48 hours after arrival,
and\
(B) formal entry may be made before arrival; and\
(3) authorize the Customs Service to permit entry or preliminary entry
of any vessel to be made at a place other than a designated port of
entry, under such conditions as may be prescribed.\
\
**~~[SEC. 435. ENTRY OF FOREIGN VESSELS.]{.underline}~~**\
\
\
~~The master of any foreign vessel arriving within the limits of any
customs collection district shall, within forty-eight hours thereafter,
make entry at the customhouse in the same manner as is required for the
entry of a vessel of the United States, except that a list of the crew
need not be delivered, and that instead of depositing the register or
document in lieu thereof such master may produce a certificate by the
consul of the nation to which such vessel belongs that said documents
have been deposited with him: Provided, That such exception shall not
apply to the vessels of foreign nations in whose ports American consular
officers are not permitted to have the custody and possession of the
register and other papers of vessels entering the ports of such
nations.~~\
\
**[SEC. 436. PENALTIES FOR VIOLATIONS OF THE ARRIVAL, REPORTING, ~~AND
ENTRY~~ ENTRY, AND CLEARANCE REQUIREMENTS.]{.underline}**\
\
\
(a) Unlawful Acts.\--It is unlawful\--\
(1) to fail to comply with section ~~433~~ 431, 433, or 434 of this Act
or section 4197 of the Revised Statutes of the United States (46 U.S.C.
App. 91);\
~~(2) to present any forged, altered, or false document, paper, or
manifest to a customs officer under section 433(d) without revealing the
facts;~~\
(2) to present or transmit, electronically or otherwise, any forged,
altered, or false document, paper, information, data or manifest to the
Customs Service under section 431(e), 433(d), or 434 of this Act or
section 4197 of the Revised Statutes of the United States (46 U.S.C.
App. 91) without revealing the facts; or\
~~(3) to fail to make entry as required by section 434, 435, or 644 of
this Act or section 1109 of the Federal Aviation Act (49 U.S.C. App.
1509); or~~\
(3) to fail to make entry or to obtain clearance as required by section
434 or 644 of this Act, section 4197 of the Revised Statutes of the
United States (46 U.S.C. App. 91), or section 1109 of the Federal
Aviation Act of 1958 (49 U.S.C. App. 1509); or

\* \* \* \* \*

**~~[SEC. 437. DOCUMENTS RETURNED AT CLEARANCE.]{.underline}~~**\
\
\
~~The register, or document in lieu thereof, deposited in accordance
with section 434 or 435 of this Act shall be returned to the master or
owner of the vessel upon its clearance.~~\
\
**[SEC. 438. UNLAWFUL RETURN OF FOREIGN VESSEL\'S
PAPERS.]{.underline}**\
\
\
It shall not be lawful for any foreign consul to deliver to the master
of any foreign vessel the register, or document in lieu thereof,
deposited with him in accordance with the provisions of section ~~435~~
434 of this Act, or regulations issued thereunder, until such master
shall produce to him a clearance in due form from ~~the appropriate
customs officer of the port where such vessel has been entered.~~ the
Customs Service in the port in which such vessel has entered. Any consul
offending against the provisions of this section shall be liable to a
fine of not more than \$5,000.\
\
**~~[SEC. 439. DELIVERY OF MANIFEST.]{.underline}~~**\
\
\
~~Immediately upon arrival and before entering his vessel, the master of
a vessel from a foreign port or place required to make entry shall mail
or deliver to such employee as the Secretary of the Treasury shall
designate, a copy of the manifest, and shall on entering his vessel make
affidavit that a true and correct copy was so mailed or delivered, and
he shall also mail or deliver to such employee designated by the
Secretary a true and correct copy of any correction of such manifest
filed on entry of his vessel. Any master who fails so to mail or deliver
such copy of the manifest or correction thereof shall be liable to a
penalty of not more than \$500.~~\
\
**~~[SEC. 440. CORRECTION OF MANIFEST.]{.underline}~~**\
\
\
~~If there is any merchandise or baggage on board such vessel which is
not included in or which does not agree with the manifest, the master of
the vessel shall make a post entry thereof, and mail or deliver a copy
to such employee as the Secretary of the Treasury shall designate and
for failure so to do shall be liable to a penalty of \$500.~~\
\
**[SEC. 441. ~~VESSELS NOT REQUIRED TO ENTER.~~ EXCEPTIONS TO VESSSEL
ENTRY AND CLEARANCE REQUIREMENTS.]{.underline}**\
\
~~The following vessels shall not be required to make entry at the
customhouse:~~ The following vessels shall not be required to make entry
under section 434 or to obtain clearance under section 4197 of the
Revised Statutes of the United States (46 U.S.C. App. 91):\
(1) \* \* \*

\* \* \* \* \*

~~(3) Vessels carrying passengers on excursion from the United States
Virgin Islands to the British Virgin Islands and returning, and licensed
yachts or undocumented American pleasure vessels not engaged in trade:
Provided, That such vessels do not in any way violate the customs or
navigation laws of the United States and have not visited any hovering
vessel: Provided further, That the master of any such vessel which has
on board any article required by law to be entered shall be required to
report such article to the appropriate customs officer within
twenty-four hours after arrival.~~\
(3) Any vessel carrying passengers on excursion from the United States
Virgin Islands to the British Virgin Islands and returning, if\--\
(A) the vessel does not in any way violate the customs or navigation
laws of the United States;\
(B) the vessel has not visited any hovering vessel; and\
(C) the master of the vessel, if there is on board any article required
by law to be entered, reports the article to the Customs Service
immediately upon arrival.\
(4) Any United States documented vessel with recreational endorsement or
any undocumented United States pleasure vessel not engaged in trade,
if\--\
(A) the vessel complies with the reporting requirements of section 433,
and with the customs and navigation laws of the United States;\
(B) the vessel has not visited any hovering vessel; and\
(C) the master of, and any other person on board, the vessel, if the
master or such person has on board any article required by law to be
entered or declared, reports such article to the Customs Service
immediately upon arrival;\
~~(4)~~ (5) Vessels arriving in distress or for the purpose of taking on
bunker coal, bunker oil, sea stores, or ship\'s stores and which shall
depart within twenty-four hours after arrival without having landed or
taken on board any passengers, or any merchandise other than bunker
coal, bunker oil, sea stores, or ship\'s stores: Provided, That the
master, owner or agent of such vessel shall report under oath to the
appropriate customs officer the hour and date of arrival and departure
and the quantity of bunker coal, bunker oil, sea stores, or ship\'s
stores taken on board; and\
~~(5)~~ (6) Tugs ~~enrolled and licensed to engage in the foreign and
coasting trade in the northern, northeastern, and northwestern
frontiers~~ documented under chapter 121 of title 46, United States
Code, with a Great Lakes endorsement when towing vessels which are
required by law to enter and clear.

\* \* \* \* \*

**~~[SEC. 443. CARGO FOR DIFFERENT PORTS\--MANIFEST AND
PERMIT.]{.underline}~~**\
\
\
~~Merchandise arriving in any vessel for delivery in different districts
or ports of entry shall be described in the manifest in the order of the
districts or ports at or in which the same is to be unladen. Before any
vessel arriving in the United States with any such merchandise shall
depart from the port of first arrival, the master shall obtain from the
appropriate customs officer a permit therefor with a certified copy of
the vessel\'s manifest showing the quantities and particulars of the
merchandise entered at such port of entry and of that remaining on
board.~~\
\
**~~[SEC. 444. ARRIVAL AT ANOTHER PORT.]{.underline}~~**\
\
\
~~Within twenty-four hours after the arrival of such vessel at another
port of entry, the master shall report the arrival of his vessel to the
appropriate customs officer at such port and shall produce the permit
issued by the appropriate customs officer at the port of first arrival,
together with the certified copy of his manifest.~~\
\
**~~[SEC. 445. PENALTIES FOR FAILURE TO HAVE PERMIT AND CERTIFIED
MANIFEST.]{.underline}~~**\
\
\
~~If the master of any such vessel shall proceed to another port or
district without having obtained a permit therefor and a certified copy
of his manifest, or if he shall fail to produce such permit and
certified copy of his manifest to the appropriate customs officer at the
port of destination, or if he shall proceed to any port not specified in
the permit, he shall be liable to a penalty, for each offense, of not
more than \$500.~~

\* \* \* \* \*

**[SEC. 447. PLACE OF ENTRY AND UNLADING.]{.underline}**\
\
\
It shall be unlawful to make entry of any vessel or to unlade the cargo
or any part thereof of any vessel elsewhere than at a port of entry:
Provided, That upon good cause therefor being shown, the Secretary of
Commerce may permit entry of any vessel to be made at a place other than
port of entry designated by him, under such conditions as he shall
prescribe: And provided further, That any vessel laden with merchandise
in bulk may proceed after entry of such vessel laden with merchandise in
bulk may proceed after entry of such vessel to any place designated by
the Secretary of the Treasury for the purpose of unlading such cargo,
under the supervision of customs officers if ~~the appropriate customs
officer shall consider~~ the Customs Service considers the same
necessary, and in such case the compensation and expenses of such
officers shall be reimbursed to the Government by the party in
interest.\
\
**[SEC. 448. UNLADING.]{.underline}**\
\
\
(a) Permits and Preliminary Entries.\--Except as provided in section 441
of this Act (relating to vessels not required to enter or clear), no
merchandise, passengers, or baggage shall be unladen from any vessel
~~or vehicle arriving from a foreign port or place~~ required to make
entry under section 434, or vehicle required to report arrival under
section 433, until entry of such vessel or report of the arrival of such
vehicle has been made and a permit for the unlading of the same issued
or transmitted pursuant to an electronic data interchange system by
~~the appropriate customs officer~~ the Customs Service~~: Provided,
That the master may make a preliminary entry of a vessel by making oath
or affirmation to the truth of the statements contained in the vessel\'s
manifest and delivering the manifest to the customs officer who boards
such vessel, but the making of such preliminary entry shall excuse the
master from making formal entry of his vessel at the customhouse, as
provided by this Act~~. After the entry~~, preliminary or otherwise,~~
of any vessel or report of the arrival of any vehicle, ~~such customs
officer~~ the Customs Service may issue a permit, electronically
pursuant to an authorized electronic data interchange system or
otherwise, to the master of the vessel, or to the person in charge of
the vehicle, to unlade merchandise or baggage, but except a provided in
subdivision (b) of this section merchandise or baggage so unladen shall
be retained at the place of unlading until entry therefor is made and a
permit for its delivery granted, and the owners of the vessel or vehicle
from which any imported merchandise is unladen prior to entry of such
merchandise shall be liable for the payment of the duties accruing on
any part thereof that may be removed from the place of unlading without
a permit therefore having been issued. Any merchandise or baggage so
unladen from any vessel or vehicle for which entry is not made within
forty-eight hours exclusive of Sunday and holidays from the time of the
entry of the vessel or report of the vehicle, unless a longer time is
granted by such customs officer, the Customs Service, as provided in
section 384, shall be sent to a bonded warehouse or the public stores
and held as unclaimed at the risk and expense of the consignee in the
case of merchandise and of the owner in the case of baggage, until entry
thereof is made. The owner or master of any vessel or vehicle, or agent
thereof, shall notify the Customs Service of any merchandise or baggage
so unladen for which entry is not made within the time prescribed by law
or regulation. The Secretary shall by regulation prescribe
administrative penalties not to exceed \$1,000 for each bill of lading
for which notice is not given. Any such administrative penalty shall be
subject to mitigation and remittance under section 618. Such unentered
merchandise or baggage shall be the responsibility of the master or
person in charge of the importing vessel or vehicle, or agent thereof,
until it is removed from the carrier\'s control in accordance with
section 490.

\* \* \* \* \*

**[SEC 449. UNLADING AT PORT OF ENTRY.]{.underline}**\
\
\
Except as provided in sections 442 and 447 of this act (relating to
residue cargo and to bulk cargo, respectively), merchandise and baggage
imported in such vessel by sea shall be unladen at the port of entry to
which such vessel is destined, unless (1) such vessel is compelled by
any cause to put into another port of entry, and the ~~appropriate
customs officer of such port issues a permit for the unlading of such
merchandise or baggage,~~ Customs Service issues a permit for the
unlading of such merchandise or baggage at such port, or (2) the
Secretary of the Treasury, because of an emergency existing at the port
of destination, authorizes such vessel to proceed to another port of
entry. Merchandise and baggage so unladen may be entered in the same
manner as other imported merchandise or baggage and may be trented as
unclaimed merchandise or baggage and stored at the expense and risk of
the owner thereof, or may be reladen without entry upon the vessel from
which it was unladen for transportation to its destination.

\* \* \* \* \*

**~~[SEC. 465. SAME\--SUPPLIES.]{.underline}~~**\
\
\
~~The master of any vessel of the United States documented to engage in
the foreign and coasting trade on the northern, north-eastern, and
northwestern frontiers shall, upon arrival from a foreign contiguous
territory, file with the manifest of such vessel a detailed list of all
supplies or other merchandise purchased in such foreign country for use
or sale on such vessel, and also a statement of the cost of all repairs
to and all equipment taken on board such vessel. The conductor or person
in charge of any railway car arriving from a contiguous country shall
file with the manifest of such car a detailed list of all supplies or
other merchandise purchased in such foreign country for use in the
United States. If any such supplies, merchandise, repairs, or equipment
shall not be reported, the master, conductor, or other person having
charge of such vessel or vehicle shall be liable to a fine of not less
than \$100 and not more than \$500, or to imprisonment for not more than
two years, or both.~~

\* \* \* \* \*

PART III\--ASCERTAINMENT, COLLECTION, AND RECOVERY OF DUTIES

**[SEC. 481. INVOICE\--CONTENTS.]{.underline}**\
\
\
(a) In General.-~~-All invoices of merchandise to be imported into the
United States shall set forth\--~~ All invoices of merchandise to be
imported into the United States and any electronic equivalent thereof
considered acceptable by the Secretary in regulations prescribed under
this action shall set forth, in written, electronic, or such other form
as the Secretary shall prescribe, the following:\
(1) \* \* \*

\* \* \* \* \*

~~(3) A detailed description of the merchandise, including the name by
which each item is known, the grade or quality, and the marks, numbers,
or symbols under which sold by the seller or manufacturer to the trade
in the country of exportation, together with the marks and numbers of
the packages in which the merchandise is packed;~~\
(3) A detailed description of the merchandise, including the commercial
name by which each item is known, the grade or quality, and the marks,
numbers, or symbols under which sold by the seller or manufacturer in
the country of exportation, together with the marks and numbers of the
packages in which the merchandise is packed;

\* \* \* \* \* (10) Any other facts deemed necessary to a proper
appraisement, examination, and classification of the merchandise that
the Secretary of the Treasury may require.

\(10\) Any other fact that the Secretary may by regulation require as
being necessary to a proper appraisement, examination and classification
of the merchandise.

\* \* \* \* \*

~~(c) Purchases in Different Consular Districts.\--When the merchandise
has been purchased in different consular districts for shipment to the
United States and is assembled for shipment and embraced in a single
invoice which is produced for certification under the provisions of
paragraph (2) of subdivision (a) of section 482 of this Act, the invoice
shall have attached thereto the original bills or invoices received by
the shipper, or extracts therefrom, showing the actual prices paid or to
be paid for such merchandise. The consular officer to whom the invoice
is so produced for certification may require that any such original bill
or invoice be certified by the consular officer for the district in
which the merchandise was purchased.~~\
(c) Importer Provision of Information.\--Any information required to be
set forth on an invoice may alternatively be provided by any of the
parties qualifying as an \"importer of record\" under section
484(a)(2)(B) by such means, in such form or manner, and within such time
as the Secretary shall by regulation prescribe.\
(d) Exceptions by Regulations.\--The Secretary of the Treasury may by
regulations provide for such exceptions from the requirements of this
section as he deems advisable and may allow for the submission or
electronic transmission of partial invoices, electronic equivalents of
invoices, bills, or other documents or parts thereof, required under
this section.\
\
**[SEC. 482. CERTIFIED INVOICE.]{.underline}**\
\
\
~~(a) Certification in General.\--Every invoice required pursuant to
section 484(b) of this Act to be certified shall, at or before the time
of the shipment of the merchandise, or as soon thereafter as the
conditions will permit, be produced for certification to the consular
officer of the United States\--~~\
~~(1) For the consular district in which the merchandise was
manufactured, or purchased, or from which it was to be delivered
pursuant to contract;~~\
~~(2) For the consular district in which the merchandise is assembled
and repacked for shipment to the United States, if it has been purchased
in different consular districts.~~\
~~(b) Declaration.\--Such invoices shall have indorsed thereon, when so
produced, a verified declaration, in a form prescribed by the Secretary
of the Treasury, stating whether the merchandise is sold or agreed to be
sold, or whether it is shipped otherwise than in pursuance of a purchase
or an agreement to purchase, that there is no other invoice differing
from the invoice so produced, and that all the statements contained in
such invoice and in such declaration are true and correct.~~\
~~(c) Making and Signing.\--Every certified invoice shall be made out in
triplicate, or, for merchandise intended for immediate transportation
under the provisions of section 552 of this Act, in quadruplicate, if
desired by the shipper, and shall be signed by the seller or shipper, or
the agent of either; but a person who has no interest in the merchandise
except as broker or forwarder shall not be competent to sign any such
invoice. Where any such invoice is signed by an agent, he shall state
thereon the name of his principal.~~\
~~(d) Certified Under Existing Law.\--Such invoices shall be certified
in accordance with the provisions of existing law.~~\
~~(e) Disposition.\--The original of the invoice and, if made, the
quadruplicate shall be delivered to the exporter, to be forwarded to the
consignee for use in making entry of the merchandise, and the triplicate
shall be promptly transmitted by the consular officer to the appropriate
customs officer at the port of entry named in the invoice. The duplicate
shall be filed in the office of the consular officer by whom the invoice
was certified, to be there kept until no longer needed in conducting the
current business of the consular office, at which time it may be
disposed of as provided by law.~~\
~~(f) Certification by Other than American Consul.\--When merchandise is
to be shipped from a place so remote from an American consulate as to
render impracticable certification of the invoice by an American
consular officer, such invoice may be certified by a consular officer of
a nation at the time in amity with the United States, or if there be no
such consular officer available such invoice shall be executed before a
notary public or other officer having authority to administer oaths and
having an official seal: Provided, That invoices for merchandise shipped
to the United States from the Philippine Islands, the Virgin Islands,
American Samoa, the island of Guam, or the Canal Zone may be certified
by the appropriate customs officer.~~\
~~(g) Effective Date.\--This section shall take effect sixty days after
the date of enactment of this Act.~~\
\
**~~[SEC. 484. ENTRY OF MERCHANDISE.]{.underline}~~**\
\
\
~~(a) Requirement and Time.\--(1) Except as provided in sections 490,
498, 552, 553, and 336(j) of this Act and in subsections (h) and (i) of
this section, one of the parties qualifying as \'importer of record\'
under paragraph (2)(C) of this subsection, either in person or by an
agent authorized by him in writing\--~~\
~~(A) shall make entry therefor by filing with the appropriate customs
officer such documentation as is necessary to enable such officer to
determine whether the merchandise may be released from customs custody;
and~~\
~~(B) shall file (at the time required under paragraph (2)(B) of this
subsection) with the appropriate customs officer such other
documentation as is necessary to enable such officer to assess properly
the duties on the merchandise, collect accurate statistics with respect
to the merchandise, and determine whether any other applicable
requirement of law (other than a requirement relating to release from
customs custody) is met.~~\
~~(2)(A) The documentation required under paragraph (1) of this
subsection with respect to any imported merchandise shall be filed at
such place within the customs-collection district where the merchandise
will be released from customs custody as the Secretary shall by
regulation prescribe.~~\
~~(B) The documentation required under paragraph (1)(B) of this
subsection with respect to any imported merchandise shall be filed with
the appropriate customs officer when entry of the merchandise is made or
at such time within the ten-day period (exclusive of Saturdays, Sundays,
and holidays) immediately following the date of entry as the Secretary
shall by regulation prescribe.~~\
~~(C) When an entry of merchandise is made under this section, the
required documentation shall be filed either by the owner or purchaser
of the merchandise or, when appropriately designated by the owner,
purchaser, or consignee of the merchandise, a person holding a valid
license under section 641 of this Act. When a consignee declares on
entry that he is the owner or purchaser of merchandise, the appropriate
customs officer may, without liability, accept the declaration. For the
purposes of this title, the importer of record must be one of the
parties who is eligible to file the documentation required by this
section.~~\
~~(D) The Secretary, in prescribing regulations to carry out this
subsection, shall establish procedures which insure the accuracy and
timeliness of import statistics, particularly statistics relevant to the
classification and valuation of imports. Corrections of errors in such
statistical data discovered after the release of merchandise shall be
transmitted immediately to the Director of the Bureau of the Census, who
shall make corrections in the statistics maintained by the Bureau. The
Secretary shall also provide, to the maximum extent practicable, for the
protection of the revenue, the facilitation of the commerce of the
United States, and the equal treatment of all importers of record of
imported merchandise.~~\
~~(b) Production of Certified Invoice.\--The Secretary of the Treasury
shall provide by regulation for the production of a certified invoice
with respect to such merchandise as he deems advisable and for the terms
and conditions under which such merchandise may be permitted entry under
the provisions of this section without the production of a certified
invoice.~~\
~~The Secretary of the Treasury may by regulations provide for such
exceptions from the requirements of this subdivision as he deems
advisable.~~\
~~(c) Production or Bill of Lading.\--The importers of record shall
produce the bill of lading at the time of making entry, except
that\--~~\
~~(1) If the appropriate customs officer is satisfied that no bill of
lading has been issued, the shipping receipt or other evidence
satisfactory to such customs officer may be accepted in lieu thereof;~~\
~~(2) The appropriate customs officer is authorized to permit entry and
to release merchandise from customs custody without the production of
the bill of lading if the person making such entry gives a bond
satisfactory to such customs officer in a sum equal to not less than one
and one-half times the invoice value of the merchandise, to produce such
bill of lading, to relieve such customs officer of all liability, to
indemnify the collector against loss, to defend every action brought
upon a claim for loss or damage, by reason of such release from customs
custody or a failure to produce such bill of lading and to entitle any
person injured by reason of such release from customs custody to sue on
such bond in his own name, without making such customs officer a party
thereto. Any person so injured by such release may sue on such bond to
recover any damages so sustained by him; and~~\
~~(3) The provisions of this subdivision shall not apply in the case of
an entry under subdivision (b) or (i) of this section (relating to entry
on carrier\'s certificate and on duplicate bill of lading,
respectively).~~\
~~(d) Signing and Contents.\--Such entry shall be signed by the importer
of record, or his agent, and shall set forth such facts in regard to the
importation as the Secretary of the Treasury may require for the purpose
of assessing duties and to secure a proper examination, inspection,
appraisement, and liquidation, and shall be accompanied by such
invoices, bills of lading, certificates, and documents as are required
by law and regulations promulgated thereunder.~~\
~~(e) Statistical Enumeration.\--The Secretary of the Treasury, the
Secretary of Commerce, and the United States International Trade
Commission are authorized and directed to establish from time to time
for statistical purposes an enumeration of articles in such detail as in
their judgment may be necessary, comprehending all merchandise imported
into the United States and exported from the United States, and shall
seek, in conjunction with statistical programs for domestic production
and programs for achieving international harmonization of trade
statistics, to establish the comparability thereof with such enumeration
of articles. All import entries and export declarations shall include or
have attached thereto an accurate statement specifying, in terms of such
detailed enumeration, the kinds and quantities of all merchandise
imported and exported and the value of the total quantity of each kind
of article.~~\
~~(f) Packages Included.\--If any of the certificates or documents
necessary to make entry of any part of merchandise arriving on one
vessel or vehicle and consigned to one consignee have not arrived, such
part may be entered subsequently, and notation of the packages or cases
to be omitted from the original entry shall be made thereon. One or more
packages arriving on one vessel or vehicle addressed for delivery to one
person and imported in another package containing packages addressed for
delivery to other persons may be separately entered, under such rules
and regulations as the Secretary of the Treasury may prescribe. All
other merchandise arriving on one vessel or vehicle and consigned to one
consignee shall be included in one entry, unless the Secretary of the
Treasury shall authorize the inclusion of portions of such merchandise
in separate entries under such rules and regulations as he may
prescribe; except that, in the case of articles not subject to a
quantitative or tariff-rate quota, entry for the entire quantity covered
by an entry for immediate transportation made under section 552 of this
Act may be accepted at the port of entry designated by the consignee, or
his agent, in such entry after the arrival of any part of such quantity
at such designated port or at such other place of deposit as may be
authorized in accordance with regulations prescribed by the Secretary of
the Treasury.~~\
~~(g) Statement of Cost Production.\--Under such regulations as the
Secretary of the Treasury may prescribe, the appropriate customs officer
may require a verified statement from the manufacturer or producer
sowing the cost of production of the imported merchandise, when
necessary to the appraisement of such merchandise.~~\
~~(h) The carrier bringing the merchandise into the port at which entry
is to be made may certify any person to be the owner, purchaser, or
consignee of the merchandise, and that person may be accepted as such by
the appropriate customs officer. A carrier shall not certify a person
pursuant to this subsection unless it has actual knowledge of or reason
to believe in the accuracy of such certification.~~\
~~(i) For the purposes of this section, the appropriate customs officer
may accept a duplicate bill of lading signed or certified to be genuine
by the carrier bringing the merchandise to the port at which entry is to
be made.~~\
~~(j) Release of Merchandise.\--Merchandise shall be released from
customs custody only to or upon the order of the carrier by whom the
merchandise is brought to the port at which entry is made, except that
merchandise in a bonded warehouse shall be released from customs custody
only to or upon the order of the proprietor of the warehouse. The
appropriate customs officer shall return to the person making entry the
bill of lading (if any is produced) with a notation thereon to the
effect that entry for such merchandise has been made. The customs
officer shall not be liable to any person in respect of the delivery of
merchandise released from cutoms custody in accordance with the
provisions of this section. Where a recovery is had in any suit or
proceeding against a customs officer on account of the release of
merchandise from customs custody, in the performance of his official
duty, and the court certifies that there was probable cause for such
release by such customs officer, or that he acted under the directions
of the Secretary of the Treasury, or other proper officer of the
Government, no execution shall issue against such customs officer, but
the amount so recovered shall, upon final judgment, be paid out of
moneys appropriated from the Treasury for that purpose.~~\
**[SEC. 484. ENTRY OF MERCHANDISE.]{.underline}**\
\
\
(a) Requirement and Time.\--\
(1) Except as provided in sections 490, 498, 552, 553, and 336(j), one
of the parties qualifying as \"importer of record\" under paragraph
(2)(B), either in person or by an agent authorized by the party in
writing, shall, using reasonable care\--\
(A) make entry therefore by filing with the Customs Service\--\
(i) such documentation or, pursuant to an electronic data interchange
system, such information as is necessary to enable the Customs Service
to determine whether the merchandise may be released from customs
custody, and\
(ii) notification whether an import activity summary statement will be
filed; and\
(B) complete the entry by filing with the Customs Service the declared
value, classification and rate of duty applicable to the merchandise,
and such other documentation or, pursuant to an electronic data
interchange system, such other information as is necessary to enable the
Customs Service to\--\
(i) properly assess duties on the merchandise,\
(ii) collect accurate statistics with respect to the merchandise, and\
(iii) determine whether any other applicable requirement of law\
(other than a requirement relating to release from customs custody) is
met.\
(2)(A) The documentation or information required under paragraph (1)
with respect to any imported merchandise shall be filed or transmitted
in such manner and within such time periods as the Secretary shall by
regulation prescribe. Such regulations shall provide for the filing of
import activity summary statements, covering entries or warehouse
withdrawals made during a calendar month, within such time period as is
prescribed in regulations but not to exceed the 20th day following such
calendar month.\
(B) When an entry of merchandise is made under this section, the
required documentation or information shall be filed or electronically
transmitted either by the owner or purchaser of the merchandise or, when
appropriately designated by the owner, purchaser, or consignee of the
merchandise, a person holding a valid license under section 641. When a
consignee declares on entry that he is the owner or purchaser of
merchandise the Customs Service may, without liability, accept the
declaration. For the purposes of this Act, the importer of record must
be one of the parties who is eligible to file the documentation or
information required by this section.\
(C) The Secretary, in prescribing regulations to carry out this
subsection, shall establish procedures which insure the accuracy and
timeliness of import statistics, particularly statistics relevant to the
classification and valuation of imports. Corrections of errors in such
statistical data shall be transmitted immediately to the Director of the
Bureau of the Census, who shall make corrections in the statistics
maintained by the Bureau. The Secretary shall also provide, to the
maximum extent practicable, for the protection of the revenue, the
enforcement of laws governing the importation and exportation of
merchandise, the facilitation of the commerce of the United States, and
the equal treatment of all importers of record of imported merchandise.\
(b) Reconciliation.\--\
(1) In general.\--A party that electronically transmits an entry summary
or import activity summary statement may at the time of filing such
summary or statement notify the Customs Service of his intention to file
a reconciliation pursuant to such regulations as the Secretary may
prescribe. Such reconciliation must be filed by the importer of record
within such time period as is prescribed by regulation but no later than
15 months following the filing of the entry summary or import activity
summary statement; except that the prescribed time period for
reconciliation issues relating to the assessment of antidumping and
countervailing duties shall require filing no later than 90 days after
the Customs Service advises the importer that a period of review for
antidumping or countervailing duty purposes has been completed. Before
filing a reconciliation, an importer of record shall post bond or other
security pursuant to such regulations as the Secretary may prescribe.\
(2) Regulations regarding ad/cv duties.\--The Secretary shall prescribe,
in consultation with the Secretary of Commerce, such regulations as are
necessary to adapt the reconciliation process for use in the collection
of antidumping and countervailing duties.\
(c) Release of Merchandise.\--The Customs Service may permit the entry
and release of merchandise from customs custody in accordance with such
regulations as the Secretary may prescribe. No officer of the Customs
Service shall be liable to any person with respect to the delivery of
merchandise released from customs custody in accordance with such
regulations.\
(d) Signing and Contents.\--Entries shall be signed by the importer of
record, or his agent, unless filed pursuant to an electronic data
interchange system. If electronically filed, each transmission of data
shall be certified by an importer of record or his agent, one of whom
shall be resident in the United States for purposes of receiving service
of process, as being true and correct to the best of his knowledge and
belief, and such transmission shall be binding in the same manner and to
the same extent as a signed document. The entry shall set forth such
facts in regard to the importation as the Secretary may require and
shall be accompanied by such invoices, bills of lading, certificates,
and documents, or their electronically submitted equivalents, as are
required by regulation.\
(e) Production of Invoice.\--The Secretary may provide by regulation for
the production of an invoice, parts thereof, or the electronic
equivalents thereof, in such manner and form, and under such terms and
conditions, as the Secretary considers necessary.\
(f) Statistical Enumeration.\--The Secretary, the Secretary of Commerce,
and the United States International Trade Commission shall establish
from time to time for statistical purposes an enumeration of articles in
such detail as in their judgment may be necessary, comprehending all
merchandise imported into the United States and exported from the United
States, and shall seek, in conjunction with statistical programs for
domestic production and programs for achieving international
harmonization of trade statistics, to establish the comparability
thereof with such enumeration of articles. All import entries and export
declarations shall include or have attached thereto an accurate
statement specifying, in terms of such detailed enumeration, the kinds
and quantities of all merchandise imported and exported and the value of
the total quantity of each kind of article.\
(g) Statement of Cost of Production.\--Under such regulations as the
Secretary may prescribe, the Customs Service may require a verified
statement from the manufacturer or producer showing the cost of
producing the imported merchandise, if the Customs Service considers
such verification necessary for the appraisement of such merchandise.\
(h) Admissibility of Data Electronically Transmitted.\--Any entry or
other information transmitted by means of an authorized electronic data
interchange system shall be admissible in any and all administrative and
judicial proceedings as evidence of such entry or information.

\* \* \* \* \*

**[SEC. 485. DECLARATION.]{.underline}**\
\
\
(a) Requirement\--Form and Contents.\--Every importer of record making
an entry under the provisions of section 484 of this Act shall make and
file or transmit electronically therewith, in a form and manner to be
prescribed by the Secretary of the Treasury, a declaration under oath,
stating\--\
(1) \* \* \*

\* \* \* \* \*

\(d\) ~~A~~ An importer of record shall not be liable for any additional
or increased duties if (1) he declares at the time of entry that he is
not the actual owner of the merchandise, (2) he furnishes the name and
address of such owner, and (3) within ninety days from the date of entry
he produces a declaration of such owner conditioned that he will pay all
additional and increased duties, under such regulations as the Secretary
of the Treasury may prescribe. Such owner shall possess all the rights
of ~~a~~ an importer of record.

\* \* \* \* \*

\(g\) Exported Merchandise Returned as Undeliverable.\--With respect to
any importation of merchandise to which General Headnote 4(e) of the
Harmonized Tariff Schedule of the United States applies, any person who
gained any benefit from, or met any obligation to, the United States as
a result of the prior exportation of such merchandise shall, in
accordance with regulations prescribed by the Secretary, within a
reasonable time inform the Customs Service of the return of the
merchandise.

\* \* \* \* \*

SEC. 490. GENERAL ORDERS.\
~~(a) Incomplete Entry.\--Whenever entry of any imported merchandise is
not made within the time provided by law or the regulations prescribed
by the Secretary of the Treasury, or whenever entry of such merchandise
is incomplete because of failure to pay the estimated duties, or
whenever, in the opinion of the appropriate customs officer, entry of
such merchandise can not be made for want of proper documents or other
cause, or whenever the appropriate customs officer believes that any
merchandise is not correctly and legally invoiced, he shall take the
merchandise into his custody and send it to a bonded warehouse or public
store, to be held at the risk and expense of the consignee until entry
is made or completed and the proper documents are produced, or a bond
given for their production.~~\
(a) Incomplete Entry.\--\
(1) Whenever\--\
(A) the entry of any imported merchandise is not made within the time
provided by law or by regulation prescribed by the Secretary;\
(B) the entry of imported merchandise is incomplete because of failure
to pay the estimated duties, fees, or interest;\
(C) in the opinion of the Customs Service, the entry of imported
merchandise cannot be made for want of proper documents or other cause;
or\
(D) the Customs Service believes that any merchandise is not correctly
and legally invoiced; the carrier (unless subject to subsection (c))
shall notify the bonded warehouse of such unentered merchandise.\
(2) After notification under paragraph (1), the bonded warehouse shall
arrange for the transportation and storage of the merchandise at the
risk and expense of the consignee. The merchandise shall remain in the
bonded warehouse until\--\
(A) entry is made or completed and the proper documents are produced;\
(B) the information and data necessary for entry are transmitted to the
Customs Service pursuant to an authorized electronic data interchange
system; or\
(C) a bond is given for the production of documents or the transmittal
of data.\
(b) ~~At Request of Consignee.\--~~ Request for Possession by
Customs.\--At the request of the consignee of any merchandise, or of the
owner or master of the vessel or the person in charge of the vehicle in
which the same is imported, any merchandise may be taken possession of
by the ~~appropriate customs officer~~ Customs Service after the
expiration of one day after the entry of the vessel or report of the
vehicle and may be unladen and held at the risk and expense of the
consignee until entry thereof is made.\
(c) Government Merchandise.\--Any imported merchandise that\--\
(1) is described in any of paragraphs (1) through (4) of subsection\
(a); and\
(2) is consigned to, or owned by, the United States Government; shall be
stored and disposed of in accordance with such rules and procedures as
the Secretary shall by regulation prescribe.\
\
**[SEC. 491. UNCLAIMED MERCHANDISE; DISPOSITION OF FORFEITED DISTILLED
SPIRITS, WINES AND MALT LIQUOR]{.underline}**\
\
\
(a) Any entered or unentered merchandise (except merchandise entered
under section 557 of this Act, but including merchandise entered for
transportation in bond or for exportation) which shall remain in
~~customs custody for one year~~ in a bonded warehouse pursuant to
section 490 for 6 months from the date of importation thereof, without
all estimated duties ~~and storage~~, taxes, fees, interest, storage, or
other charges thereon having been paid, shall be considered unclaimed
and abandoned to the Government and shall be appraised and sold by the
appropriate customs officer at public auction under such regulations as
the Secretary of the Treasury shall prescribe. All gunpowder and other
explosive substances and merchandise liable to depreciation in value by
damage, leakage, or other cause to such extent that the proceeds of sale
thereof may be insufficient to pay the duties, taxes, fees, interest,
storage, and other charges, if permitted to remain in ~~public store or
bonded warehouse for a period of one year~~ pursuant to section 490 in a
bonded warehouse for 6 months, may be sold forthwith, under such
regulations as the Secretary of the Treasury may prescribe. Merchandise
subject to sale hereunder or under section 559 of this Act may be
entered or withdrawn for consumption at any time prior to such sale upon
payment of all duties, taxes, fees, interest, storage, and other
charges, and expenses that may have accrued thereon, but such
merchandise after becoming subject to sale may not be exported prior to
sale without the payment of such duties, taxes, fees, interest, charges,
and expenses nor may it be entered for warehouse. The computation of
duties, taxes, interest, and fees for the purposes of this section and
sections 493 and 559 of this Act shall be at the rate of rates
applicable at the time the merchandise becomes subject to sale.\
(b) Notice of Title Vesting in the United States.\--At the end of the 6-
month period referred to in subsection (a), the Customs Service may, in
lieu of sale of the merchandise, provide notice to all known interested
parties that the title to such merchandise shall be considered to vest
in the United States free and clear of any liens or encumbrances, on the
30th day after the date of the notice unless, before such 30th day\--\
(1) the subject merchandise is entered or withdrawn for consumption;
and\
(2) payment is made of all duties, taxes, fees, transfer and storage
charges, and other expenses that may have accrued thereon.\
(c) Retention, Transfer, Destruction, or Other Disposition.\--If title
to any merchandise vests in the United States by operation of subsection
(b), such merchandise may be retained by the Customs Service for
official use, transferred to any other Federal agency or to any State or
local agency, destroyed, or otherwise disposed of in accordance with
such regulations as the Secretary shall prescribe. All transfer and
storage charges or expenses accruing on retained or transferred
merchandise shall be paid by the receiving agency.\
(d) Petition.\--Whenever any party, having lost a substantial interest
in merchandise by virtue of title vesting in the United States under
subsection (b), can establish such title or interest to the satisfaction
of the Secretary within 30 days after the day on which title vests in
the United States under subsection (b), or can establish to the
satisfaction of the Secretary that the party did not receive notice
under subsection (b), the Secretary may, upon receipt of a timely and
proper petition and upon finding that the facts and circumstances
warrant, pay such party out of the Treasury of the United States the
amount the Secretary believes the party would have received under
section 493 had the merchandise been sold and a proper claim filed. The
decision of the Secretary with respect to any such petition is final and
conclusive on all parties.\
~~(b)~~ (e) All distilled spirits, wines, and malt liquor forfeited to
the Government summarily or by order of court, under any provision of
law administered by the United States Customs Service, shall be
appraised and disposed of by\--\
(1) \* \* \*

\* \* \* \* \*

\(3\) sale by ~~appropriate custom officer~~ Customs Service at public
auction under such regulations as the Secretary shall prescribe, except
that before making any such sale the Secretary shall determine that no
Government agency or eleemosynary institution has established a need for
such spirits, wines, and malt liquor under paragraph (1) or (2); or

\* \* \* \* \*

**[SEC. 492. DESTRUCTION OF ABANDONED OR FORFEITED
MERCHANDISE.]{.underline}**\
\
\
Except as provided in section 3369 of the Revised Statutes, as amended
(relating to tobacco and snuff), and in section 901 of the Revenue Act
of 1926 (relating to distilled spirits), any merchandise abandoned or
forfeited to the Government under the preceding or any other provision
of the customs laws, which is subject to internal revenue tax and which
the ~~appropriate customs officer~~ Customs Service shall be satisfied
will not sell for a sufficient amount to pay such taxes, shall be
forthwith destroyed, retained for official use, or otherwise disposed of
under regulations to be prescribed by the Secretary of the Treasury,
instead of being sold at auction.\
\
**[SEC. 493. PROCEEDS OF SALE.]{.underline}**\
\
\
The surplus of the proceeds of sales under section 491 of this Act,
after the payment of storage charges, expenses, duties, taxes, and fees,
and the satisfaction of any lien for freight, charges, or contribution
in general average, shall be deposited ~~by the appropriate customs
officer~~ in the Treasury of the United States, if claim therefor shall
not be filed with ~~such customs officer~~ the Customs Service within
ten days from the date of sale, and the sale of such merchandise shall
exonerate the master of any vessel in which the merchandise was imported
from all claims of the owner thereof, who shall, nevertheless, on due
proof of his interest, be entitled to receive from the Treasury the
amount of any surplus of the proceeds of sale.

\* \* \* \* \*

**[SEC. 497. PENALTIES FOR FAILURE TO DECLARE.]{.underline}**\
\
\
(a) In General.\--(1) Any article which\--\
(A) is not included in the declaration and entry as made or transmitted;
and

\* \* \* \* \*

\(2\) The amount of the penalty imposed under paragraph (1) with respect
to any article is equal to\--\
~~(A) if the article is a controlled substance, 1,000 percent of the
value of the article; and~~\
(A) if the article is a controlled substance, either \$500 or an amount
equal to 1,000 percent of the value of the article, whichever amount is
greater; and

\* \* \* \* \*

**[SEC. 498. ENTRY UNDER REGULATIONS.]{.underline}**\
\
\
(a) Authorized for Certain Merchandise.\--The Secretary of the Treasury
is authorized to prescribe rules and regulations for the declaration and
entry of\-- (1) Merchandise, imported in the mails or otherwise, when
the aggregate value of the shipment does not exceed such amount, not
greater than \$1,250, as the Secretary of the Treasury shall specify in
the regulations, and the specified amount may vary for different classes
or kinds of merchandise or different classes of transactions, except
that this paragraph does not apply to articles valued in excess of \$250
classified in\--\
~~(A) chapters 50 through 63;~~\
~~(B) chapters 39 through 43, 61 through 65, 67 and 95; and~~\
~~(C) subchapters III and IV of chapter 99; of the Harmonized~~\
Tariff Schedule of the United States, or to any other article for\
which formal entry is required without regard to value;\
(1) Merchandise, when\--\
(A) the aggregate value of the shipment does not exceed an amount
specified by the Secretary by regulation, but not more than \$2,500; or\
(B) different commercial facilitation and risk considerations that may
vary for different classes or kinds of merchandise or different classes
of transactions may dictate;\
(2) Products of the United States, when the aggregate value of the
shipment does not exceed ~~\$10,000~~ such amounts as the Secretary may
prescribe and the products are imported\--\
(A) \* \* \*

\* \* \* \* \*

**~~[SEC. 499. EXAMINATION OF MERCHANDISE.]{.underline}~~**\
\
\
~~Imported merchandise, required by law or regulations made in pursuance
thereof to be inspected, examined, or appraised, shall not be delivered
from customs custody, expect under such bond or other security as may be
prescribed by the Secretary of the Treasury to assure compliance with
all applicable laws, regulations, and instructions which the Secretary
of the Treasury or the Customs Service is authorized to enforce; until
it has been inspected, examined, or appraised and is reported by the
appropriate customs officer to have been truly and correctly invoiced
and found to comply with the requirements of the laws of the United
States. Such officer shall designate the packages or quantities covered
by any invoice or entry which are to be opened and examined for the
purpose of appraisement or otherwise and shall order such packages or
quantities to be sent to the public stores or other places for such
purpose. Not less than one package of every invoice and not less than
one package of every ten packages of merchandise, shall be so designated
unless the Secretary of the Treasury, from the character and description
of the merchandise, is of the opinion that the examination of a less
proportion of packages will amply protect the revenue and by special
regulation or instruction, the application of which may be restricted to
one or more individual ports or to one or more importations or one or
more classes of merchandise, permit a less number of packages to be
examined. All such special regulations or instructions shall be
published in the weekly Treasury Decisions within fifteen days after
issuance and before the liquidation of any entries affected thereby.
Such officer may require such additional packages or quantities as he
may deem necessary. If any package contains any article not specified in
the invoice and, in the opinion of the appropriate customs officer, such
article was omitted from the invoice with fraudulent intent on the part
of the seller, shipper, owner, or agent, the contents of the entire
package in which such article is found shall be subject to seizure, but
if no such fraudulent intent is apparent, then the value of said article
shall be added to the entry and the duties thereon paid accordingly. If
a deficiency is found in quantity, weight, or measure in the examination
of any package, report thereof shall be made to the appropriate customs
officers, who shall make allowance therefore in the liquidation of
duties.~~\
~~No appraisement made after the effective date of the Customs
Administrative Act of 1938 shall be held invalid on the ground that the
required number of packages or the required quantity of the merchandise
was not designated for examination or, if designated, was not actually
examined, unless the party claiming such invalidity shall establish that
merchandise in the packages or quantities not designated for
examination, or not actually examined, was different from that actually
examined and that the difference was such as to establish the
incorrectness of the appraisement; and then only as to the merchandise
for which the appraisement is shown to be incorrect.\
~~\
**[SEC. 499. EXAMINATION OF MERCHANDISE.]{.underline}**\
\
\
(a) Entry Examination.\--\
(1) In general.\--Imported merchandise that is required by law or
regulation to be inspected, examined, or appraised shall not be
delivered from customs custody (except under such bond or other security
as may be prescribed by the Secretary to assure compliance with all
applicable laws, regulations, and instructions which the Secretary or
the Customs Service is authorized to enforce) until the merchandise has
been inspected, appraised, or examined and is reported by the Customs
Service to have been truly and correctly invoiced and found to comply
with the requirements of the laws of the United States.\
(2) Examination.\--The Customs Service\--\
(A) shall designate the packages or quantities of merchandise covered by
any invoice or entry which are to be opened and examined for the purpose
of appraisement or otherwise;\
(B) shall order such packages or quantities to be sent to such place as
is designated by the Secretary by regulation for such purpose;\
(C) may require such additional packages or quantities as the Secretary
considers necessary for such purpose; and\
(D) shall inspect a sufficient number of shipments, and shall examine a
sufficient number of entries, to ensure compliance with the laws
enforced by the Customs Service.\
(3) Unspecified articles.\--If any package contains any article not
specified in the invoice or entry and, in the opinion of the Customs
Service, the article was omitted from the invoice or entry\--\
(A) with fraudulent intent on the part of the seller, shipper, owner,
agent, importer of record, or entry filer, the contents of the entire
package in which such article is found shall be subject to seizure; or\
(B) without fraudulent intent, the value of the article shall be added
to the entry and the duties, fees, and taxes thereon paid accordingly.\
(4) Deficiency.\--If a deficiency is found in quantity, weight, or
measure in the examination of any package, the person finding the
deficiency shall make a report thereof to the Customs Service. The
Customs Service shall make allowance for the deficiency in the
liquidation of duties.\
(5) Information required for release.\--If an examination is conducted,
any information required for release shall be provided, either
electronically or in paper form, to the Customs Service at the port of
examination. The absence of such information does not limit the
authority of the Customs Service to conduct an examination.\
(b) Testing Laboratories.\--\
(1) Accreditation of private testing laboratories.\--The Customs Service
shall establish and implement a procedure, under regulations promulgated
by the Secretary, for accrediting private laboratories within the United
States which may be used to perform tests (that would otherwise be
performed by Customs Service laboratories) to establish the
characteristics, quantities, or composition of imported merchandise.
Such regulations\--\
(A) shall establish the conditions required for the laboratories to
receive and maintain accreditation for purposes of this subsection;\
(B) shall establish the conditions regarding the suspension and
revocation of accreditation, which may include the imposition of a
monetary penalty not to exceed \$100,000 and such penalty is in addition
to the recovery, from a gauger or laboratory accredited under paragraph
(1), of any loss of revenue that may have occurred, but the Customs
Service\--\
(i) may seek to recover lost revenue only in cases where the gauger or
laboratory intentionally falsified the analysis or gauging report in
collusion with the importer; and\
(ii) shall neither assess penalties nor seek to recover lost revenue
because of a good faith difference of professional opinion; and\
(C) may provide for the imposition of a reasonable charge for
accreditation and periodic reaccreditation. The collection of any charge
for accreditation and reaccreditation under this section is not
prohibited by section 13031(e)(6) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(e)(6)).\
(2) Appeal of adverse accreditation decisions.\--A laboratory applying
for accreditation, or that is accredited, under this section may contest
any decision or order of the Customs Service denying, suspending, or
revoking accreditation, or imposing a monetary penalty, by commencing an
action in accordance with chapter 169 of title 28, United States Code,
in the Court of International Trade within 60 days after issuance of the
decision or order.\
(3) Testing by accredited laboratories.\--When requested by an importer
of record of merchandise, the Customs Service shall authorize the
release to the importer of a representative sample of the merchandise
for testing, at the expense of the importer, by a laboratory accredited
under paragraph (1). The testing results from a laboratory accredited
under paragraph (1) that are submitted by an importer of record with
respect to merchandise in an entry shall, in the absence of testing
results obtained from a Customs Service laboratory, be accepted by the
Customs Service if the importer of record certifies that the sample
tested was taken from the merchandise in the entry. Nothing in this
subsection shall be construed to limit in any way or preclude the
authority of the Customs Service to test or analyze any sample or
merchandise independently.\
(4) Availability of testing procedure, methodologies, and
information.\--Testing procedures and methodologies used by the Customs
Service, and information resulting from any testing conducted by the
Customs Service, shall be made available as follows:\
(A) Testing procedures and methodologies shall be made available upon
request to any person unless the procedures or methodologies are\--\
(i) proprietary to the holder of a copyright or patent related to such
procedures or methodologies, or\
(ii) developed by the Customs Service for enforcement purposes.\
(B) Information resulting from testing shall be made available upon
request to the importer of record and any agent thereof unless the
information reveals information which is\--\
(i) proprietary to the holder of a copyright or patent; or\
(ii) developed by the Customs Service for enforcement purposes.\
(5) Miscellaneous provisions.\--For purposes of this subsection\--\
(A) any reference to a private laboratory includes a reference to a
private gauger; and\
(B) accreditation of private laboratories extends only to the
performance of functions by such laboratories that are within the scope
of those responsibilities for determinations of the elements relating to
admissibility, quantity, composition, or characteristics of imported
merchandise that are vested in, or delegated to, the Customs Service.\
(c) Detentions.\--Except in the case of merchandise with respect to
which the determination of admissibility is vested in an agency other
than the Customs Service, the following apply:\
(1) In general.\--Within the 5-day period (excluding weekends and
holidays) following the date on which merchandise is presented for
customs examination, the Customs Service shall decide whether to release
or detain the merchandise. Merchandise which is not released within such
5-day period shall be considered to be detained merchandise.\
(2) Notice of detention.\--The Customs Service shall issue a notice to
the importer or other party having an interest in detained merchandise
no later than 5 days, excluding weekends and holidays, after the
decision to detain the merchandise is made. The notice shall advise the
importer or other interested party of\--\
(A) the initiation of the detention;\
(B) the specific reason for the detention;\
(C) the anticipated length of the detention;\
(D) the nature of the tests or inquiries to be conducted; and\
(E) the nature of any information which, if supplied to the Customs
Service, may accelerate the disposition of the detention.\
(3) Testing results.\--Upon request by the importer or other party
having an interest in detained merchandise, the Customs Service shall
provide the party with copies of the results of any testing conducted by
the Customs Service on the merchandise and a description of the testing
procedures and methodologies (unless such procedures or methodologies
are proprietary to the holder of a copyright or patent or were developed
by the Customs Service for enforcement purposes). The results and test
description shall be in sufficient detail to permit the duplication and
analysis of the testing and the results.\
(4) Seizure and forfeiture.\--If otherwise provided by law, detained
merchandise may be seized and forfeited.\
(5) Effect of failure to make determination.\--\
(A) The failure by the Customs Service to make a final determination
with respect to the admissibility of detained merchandise within 30 days
after the merchandise has been presented for customs examination, or
such longer period if specifically authorized by law, shall be treated
as a decision of the Customs Service to exclude the merchandise for
purposes of section 514(a)(4).\
(B) For purposes of section 1581 of title 28, United States Code, a
protest against the decision to exclude the merchandise which has not
been allowed or denied in whole or in part before the 30th day after the
day on which the protest was filed shall be treated as having been
denied on such 30th day.\
(C) Notwithstanding section 2639 of title 28, United States Code, once
an action respecting a detention is commenced, unless the Customs
Service establishes by a preponderance of the evidence that an
admissibility decision has not been reached for good cause, the court
shall grant the appropriate relief which may include, but is not limited
to, an order to cancel the detention and release the merchandise.\
\
**[SEC. 500. APPRAISEMENT, CLASSIFICATION, AND LIQUIDATION
PROCEDURES.]{.underline}**\
\
\
~~The appropriate customs officer~~ The Customs Service shall, under
rules and regulations prescribed by the Secretary\--\
(a) ~~appraise~~ fix the final appraisement of merchandise by
ascertaining or estimating the value thereof, under section 402, by all
reasonable ways and means in his power, any statement of cost or costs
of production in any invoice, affidavit, declaration, other document to
the contrary notwithstanding;\
(b) ~~ascertain the~~ fix the final classification and rate of duty
applicable to such merchandise;\
(c) fix the final amount of duty to be paid on such merchandise and
determine any increased or additional duties, taxes, and fees due or any
excess of duties, taxes, and fees deposited;\
~~(d) liquidate the entry of such merchandise; and~~\
~~(e) give notice of such liquidation to the importer, his consignee, or
agent in such form and manner as the Secretary shall prescribe in such
regulations.~~\
(d) liquidate the entry and reconciliation, if any, of such merchandise;
and\
(e) give or transmit, pursuant to an electronic data interchange system,
notice of such liquidation to the importer, his consignee, or agent in
such form and manner as the Secretary shall by regulation prescribe.\
\
**[SEC. 501. ~~VOLUNTARY RELIQUIDATIONS~~ VOLUNTARY RELIQUIDATIONS BY
THE CUSTOMS SERVICE.]{.underline}**\
\
\
A liquidation made in accordance with section 500 or any reliquidation
thereof made in accordance with this section may be reliquidated in any
respect by ~~the appropriate customs officer on his own initiative~~ the
Customs Service, notwithstanding the filing of a protest, within ninety
days from the date on which notice of the original liquidation is given
or transmitted to the importer, his consignee or agent. Notice of such
reliquidation shall be given or transmitted in the manner prescribed
with respect to original liquidations under section 500(e).\
\
**[SEC. 502. REGULATIONS FOR APPRAISEMENT AND
CLASSIFICATION.]{.underline}**\
\
\
(a) Powers of Secretary of the Treasury.\--The Secretary of the Treasury
shall establish and promulgate such rules and regulations not
inconsistent with the law (including regulations establishing procedures
for the issuance of binding rulings prior to the entry of the
merchandise concerned), and may disseminate such information as may be
necessary to secure a just, impartial, and uniform appraisement of
imported merchandise and the classification and assessment of duties
thereon at the various ports of entry~~, and~~. The Secretary may direct
any customs officer to go from one port of entry to another for the
purpose of appraising or classifying or assisting in appraising or
classifying merchandise imported at ~~such port~~ any port, and may
direct any customs officer at any port to review entries of merchandise
filed at any other port.\
~~(b) Reversal of Secretary\'s Rulings.\--No ruling or decision once
made by the Secretary of the Treasury, giving construction to any law
imposing customs duties, shall be reversed or modified adversely to the
United States, by the same or a succeeding Secretary, except in
concurrence with an opinion of the Attorney General recommending the
same, a final decision of the United States Court of International
Trade, or a final decision of a binational panel pursuant to article
1904 of the United States-Canada Free-Trade Agreement.~~\
~~(c)~~ (b) Duties of Customs Officers.\--It shall be the duty of all
officers of the customs to execute and carry into effect all
instructions of the Secretary of the Treasury relative to the execution
of the revenue laws; and in case any difficulty arises as to the true
construction or meaning of any part of the revenue laws, the decision of
the Secretary shall be binding upon all officers of the customs.

\* \* \* \* \*

**[SEC. 504. LIMITATION ON LIQUIDATION.]{.underline}**\
\
\
(a) Liquidation.\--~~Except as provided in subsection (b),~~ Unless an
entry is extended under subsection (b) or suspended as required by
statute or court order, an entry of merchandise not liquidated within
one year from:\
(1) the date of entry of such merchandise;\
(2) the date of the final withdrawal of all such merchandise covered by
a warehouse entry; ~~or~~\
(3) the date of withdrawal from warehouse of such merchandise for
consumption where, pursuant to regulations issued under section 505(a)
of this Act, duties may be deposited after the filing of an entry or
withdrawal from warehouse; or\
(4) if a reconciliation is filed, or should have been filed, the date of
the filing under section 484 or the date the reconciliation should have
been filed; shall be deemed liquidated at the rate of duty, value,
quantity, and amount of duties asserted at the time of entry by the
importer of record. Notwithstanding section 500(e) of this Act, notice
of liquidation need not be given of an entry deemed liquidated.\
~~(b) Extension.\--The Secretary may extend the period in which to
liquidate an entry by giving notice of such extension to the importer of
record in such form and manner as the Secretary shall prescribe in
regulations, if\--~~\
~~(1) information needed for the proper appraisement or classification
of the merchandise is not available to the appropriate customs
officer;~~\
~~(2) liquidation is suspended as required by statute or court order;
or~~\
~~(3) the importer of record requests such extension and shows good
cause therefor.~~\
~~(c) Notice of Suspension.\--If the liquidation of any entry is
suspended, the Secretary shall, by regulation, require that notice of
such suspension be provided to the importer of record concerned and to
any authorized agent and surety of such importer of record.~~\
~~(d) Limitation.\--Any entry of merchandise not liquidated at the
expiration of four years from the applicable date specified in
subsection (a) of this section, shall be deemed liquidated at the rate
of duty, value, quantity, and amount of duty asserted at the time of
entry by the importer of record unless liquidation continues to be
suspended as required by statute or court order. When such a suspension
of liquidation is removed, the entry shall be liquidated within 90 days
therefrom.~~\
(b) Extension.\--The Secretary may extend the period in which to
liquidate an entry if\--\
(1) the information needed for the proper appraisement or classification
of the merchandise, or for insuring compliance with applicable law, is
not available to the Customs Service; or\
(2) the importer of record requests such extension and shows good cause
therefor. The Secretary shall give notice of an extension under this
subsection to the importer of record and the surety of such importer of
record. Notice shall be in such form and manner (which may include
electronic transmittal) as the Secretary shall by regulation prescribe.
Any entry the liquidation of which is extended under this subsection
shall be treated as having been liquidated at the rate of duty, value,
quantity, and amount of duty asserted at the time of entry by the
importer of record at the expiration of 4 years from the applicable date
specified in subsection (a).\
(c) Notice of Suspension.\--If the liquidation of any entry is
suspended, the Secretary shall by regulation require that notice of the
suspension be provided, in such manner as the Secretary considers
appropriate, to the importer of record and to any authorized agent and
surety of such importer of record.\
(d) Removal of Suspension.\--When a suspension required by statute or
court order is removed, the Customs Service shall liquidate the entry
within 6 months after receiving notice of the removal from the
Department of Commerce, other agency, or a court with jurisdiction over
the entry. Any entry not liquidated by the Customs Service within 6
months after receiving such notice shall be treated as having been
liquidated at the rate of duty, value, quantity, and amount of duty
asserted at the time of entry by the importer of record.\
\
**~~[SEC. 505. PAYMENT OF DUTIES.]{.underline}~~**\
\
\
~~(a) Deposit of Estimated Duties.\--Unless merchandise is entered for
warehouse or transportation, or under bond, the importer of record shall
deposit with the appropriate customs officer at the time of making
entry, or at such later time as the Secretary may prescribe by
regulation (but not to exceed thirty days after the date of entry), the
amount of duties estimated by such customs officer to be payable
thereon.~~\
~~(b) Collection or Refund.\--The appropriate customs officer shall
collect any increased or additional duties due or refund any excess of
duties deposited as determined on a liquidation or reliquidation.~~\
~~(c) Duties determined to be due upon liquidation or reliquidation
shall be due 15 days after the date of that liquidation or
reliquidation, and unless payment of the duties is received by the
appropriate customs officer within 30 days after that date, shall be
considered delinquent and bear interest from the 15th day after the date
of liquidation or reliquidation at a rate determined by the Secretary of
the Treasury.\
~~\
**[SEC. 505. PAYMENT OF DUTIES AND FEES.]{.underline}**\
\
\
(a) Deposit of Estimated Duties, Fees, and Interest.\--Unless
merchandise is entered for warehouse or transportation, or under bond,
the importer of record shall deposit with the Customs Service at the
time of making entry, or at such later time as the Secretary may
prescribe by regulation, the amount of duties and fees estimated to be
payable thereon. Such regulations may provide that estimated duties and
fees shall be deposited before or at the time an import activity summary
statement is filed. If an import activity summary statement is filed,
the estimated duties and fees shall be deposited together with interest,
at a rate determined by the Secretary, accruing from the first date of
the month the statement is required to be filed until the date such
statement is actually filed.\
(b) Collection or Refund of Duties, Fees, and Interest Due Upon
Liquidation or Reliquidation.\--The Customs Service shall collect any
increased or additional duties and fees due, together with interest
thereon, or refund any excess moneys deposited, together with interest
thereon, as determined on a liquidation or reliquidation. Duties, fees,
and interest determined to be due upon liquidation or reliquidation are
due 30 days after issuance of the bill for such payment. Refunds of
excess moneys deposited, together with interest thereon, shall be paid
within 30 days of liquidation or reliquidation.\
(c) Interest.\--Interest assessed due to an underpayment of duties,
fees, or interest shall accrue, at a rate determined by the Secretary,
from the date the importer of record is required to deposit estimated
duties, fees, and interest to the date of liquidation or reliquidation
of the applicable entry or reconciliation. Interest on excess moneys
deposited shall accrue, at a rate determined by the Secretary, from the
date the importer of record deposits estimated duties, fees, and
interest to the date of liquidation or reliquidation of the applicable
entry or reconciliation.\
(d) Delinquency.\--If duties, fees, and interest determined to be due or
refunded are not paid in full within the 30-day period specified in
subsection (b), any unpaid balance shall be considered delinquent and
bear interest by 30-day periods, at a rate determined by the Secretary,
from the date of liquidation or reliquidation until the full balance is
paid. No interest shall accrue during the 30-day period in which payment
is actually made.\
\
**[SEC. 506. ALLOWANCE FOR ABANDONMENT AND DAMAGE.]{.underline}**\
\
\
Allowance shall be made in the estimation and liquidation of duties
under regulations prescribed by the Secretary of the Treasury in the
following cases:\
(1) Abandonment within thirty days.\--Where the importer abandons to the
United States, within thirty days after entry in the case of merchandise
not sent to the appraiser\'s stores for released without an examination,
or within thirty days after the release ~~of the examination packages or
quantities of merchandise~~ in the case of merchandise sent to ~~the
appraiser\'s stores~~ the Customs Service for examination, any imported
merchandise representing 5 per centum or more of the total value of all
the merchandise of the same class or kind entered in the invoice or
entry in which the item appears, and delivers, within the applicable
thirty-day period, the portion so abandoned to such place as the
collector directs unless ~~the appropriate customs officer~~ the Customs
Service is satisfied that the merchandise is so far destroyed as to be
nondeliverable;\
(2) Perishable merchandise, condemned.\--Where fruit or other perishable
merchandise has been condemned at the port of entry, within ten days
after landing, by the health officers or other legally constituted
authorities, and the consignee, within five days after such
condemnation, files, electronically or otherwise, with ~~such customs
officer~~ the Customs Service ~~written~~ notice thereof, an invoiced
description and the location thereof, and the name of the vessel or
vehicle in which imported.

\* \* \* \* \*

**[SEC. 508. RECORDKEEPING.]{.underline}**\
\
~~(a) Requirements.\--Any owner, importer, consignee, or agent thereof
who imports, or who knowingly causes to be imported, any merchandise
into the customs territory of the United States shall make, keep, and
render for examination and inspection such records (including
statements, declarations, and other documents) which\--~~\
~~(1) pertain to any such importation, or to the information contained
in the documents required by this Act in connection with the entry of
merchandise; and~~\
~~(2) are normally kept in the ordinary course of business.~~\
~~(b) Any person who exports, or who knowingly causes to be exported,
any merchandise to Canada shall make, keep, and render for examination
and inspection such records (including certifications of origin or
copies thereof) which pertain to such exportations.~~\
~~(c) Period of Time.\--The records required by subsections (a) and (b)
of this section shall be kept for such periods of time, not to exceed 5
years from the date of entry, as the Secretary shall prescribe.~~\
(a) Requirements.\--Any\--\
(1) owner, importer, consignee, importer of record, entry filer, or
other party who\--\
(A) imports merchandise into the customs territory of the United States,
files a drawback claim, or transports or stores merchandise carried or
held under bond, or\
(B) knowingly causes the importation or transportation or storage of
merchandise carried or held under bond into or from the customs
territory of the United States;\
(2) agent of any party described in paragraph (1); or\
(3) person whose activities require the filing of a declaration or
entry, or both; shall make, keep, and render for examination and
inspection records (which for purposes of this section include, but are
not limited to, statements, declarations, documents and electronically
generated or machine readable data) which\--\
(A) pertain to any such activity, or to the information contained in the
records required by this Act in connection with any such activity; and\
(B) are normally kept in the ordinary course of business.\
(b) Exportations to Free Trade Countries.\--\
(1) Definitions.\--As used in this subsection\--\
(A) The term \"associated records\" means, in regard to an exported good
under paragraph (2), records associated with\--\
(i) the purchase of, cost of, value of, and payment for, the good;\
(ii) the purchase of, cost of, value of, and payment for, all material,
including indirect materials, used in the production of the good; and\
(iii) the production of the good. For purposes of this subparagraph, the
terms \"indirect material,\"\
\"material,\" \"preferential tariff treatment,\" \"used,\" and \"value\"
have the respective meanings given them in articles 415 and 514 of the
North American Free Trade Agreement.\
(B) The term \"NAFTA Certificate of Origin\" means the certification,
established under article 501 of the North American Free Trade
Agreement, that a good qualifies as an originating good under such
Agreement.\
(2) Exports to nafta countries.\--\
(A) In general.\--Any person who completes and signs a NAFTA Certificate
of Origin for a good for which preferential treatment under the North
American Free Trade Agreement is claimed shall make, keep, and render
for examination and inspection all records relating to the origin of the
good (including the Certificate or copies thereof) and the associated
records.\
(B) Claims for certain waivers, reductions, or refunds of duties or for
credit against bonds.\--\
(i) In general.\--Any person that claims with respect to an article\--\
(I) a waiver or reduction of duty under the last paragraph of section
311, section 312(b)(1) or (4), section 562(2), or the last proviso to
section 3(a) of the Foreign Trade Zones Act;\
(II) a credit against a bond under section 312(d); or\
(III) a refund, waiver, or reduction of duty under section 313(n)(2) or
(o)(1); must disclose to the Customs Service the information described
in clause (ii).\
(ii) Information required.\--Within 30 days after making a claim
described in clause (i) with respect to an article, the person making
the claim must disclose to the Customs Service whether that person has
prepared, or has knowledge that another person has prepared, a NAFTA
Certificate of Origin for the article. If after such 30-day period the
person making the claim either\--\
(I) prepares a NAFTA Certificate of Origin for the article; or\
(II) learns of the existence of such a Certificate for the article; that
person, within 30 days after the occurrence described in subclause (I)
or (II), must disclose the occurrence to the Customs Service.\
(iii) Action on claim.\--If the Customs Service determines that a NAFTA
Certificate of Origin has been prepared with respect to an article for
which a claim described in clause (i) is made, the Customs Service may
make such adjustments regarding the previous customs treatment of the
article as may be warranted under the claim.\
(3) Exports under the canadian agreement.\--Any person who exports, or
who knowingly causes to be exported, any merchandise to Canada during
such time as the United States-Canada Free-Trade Agreement is in force
with respect to, and the United States applies that Agreement to, Canada
shall make, keep, and render for examination and inspection such
records\
(including certifications of origin or copies thereof) which pertain to
the exportations.\
(c) Period of Time.\--The records required by subsections (a) and (b)
shall be kept for such periods of time as the Secretary shall prescribe;
except that\--\
(1) no period of time for the retention of the records required under
subsection (a) or (b)(3) may exceed 5 years from the date of entry or
exportation, as appropriate;\
(2) the period of time for the retention of the records required under
subsection (b)(2) shall be at least 5 years from the date of signature
of the NAFTA Certificate of Origin; and\
(3) records for any drawback claim shall be kept until the 3rd
anniversary of the date of payment of the claim.

\* \* \* \* \*

~~(e)Any person who fails to retain records required by subsection (b)
or the regulations issued to implement that subsection shall be liable
to a civil penalty not to exceed \$10,000.~~\
(e) Subsection (b) Penalties.\--\
(1) Relating to nafta exports.\--Any person who fails to retain records
required by paragraph (2) of subsection (b) or the regulations issued to
implement that paragraph shall be liable for\--\
(A) a civil penalty not to exceed \$10,000; or\
(B) the general recordkeeping penalty that applies under the customs
laws; whichever penalty is higher.\
(2) Relating to canadian agreement exports.\--Any person who fails to
retain the records required by paragraph (3) of subsection (b) or the
regulations issued to implement that paragraph shall be liable for a
civil penalty not to exceed \$10,000.\
\
**[SEC. 509. EXAMINATION OF BOOKS AND WITNESSES.]{.underline}**\
\
\
(a) Authority.\--In any investigation or inquiry conducted for the
purpose of ascertaining the correctness of any entry, for determining
the liability of any person for duty, fees ~~and taxes~~, fees and taxes
due or duties, fees ~~and taxes~~, fees and taxes which may be due the
United States, for determining liability for fines and penalties, or for
insuring compliance with the laws of the United States administered by
the United States Customs Service, the Secretary (but no delegate of the
Secretary below the rank of district director or special agent in
charge) may\-- (1) examine, or cause to be examined, upon reasonable
notice, any record, statement, declaration or other document, described
in the notice with reasonable specificity, which may be relevant to such
investigation or inquiry;\
~~(2) summon, upon reasonable notice\--~~\
~~(A) the person who imported, or knowingly caused to be imported,~~\
merchandise into the customs territory of the United States,\
~~(B) any officer, employee, or agent of such person,~~\
~~(C) any person having possession, custody, or care of records~~\
relating to such importation, or\
(1) examine, or cause to be examined, upon reasonable notice, any record
(which for purposes of this section, includes, but is not limited to,
any statement, declaration, document, or electronically generated or
machine readable data) described in the notice with reasonable
specificity, which may be relevant to such investigation or inquiry,
except that\--\
(A) if such record is required by law or regulation for the entry of the
merchandise (whether or not the Customs Service required its
presentation at the time of entry) it shall be provided to the Customs
Service within a reasonable time after demand for its production is
made, taking into consideration the number, type, and age of the item
demanded; and\
(B) if a person of whom demand is made under subparagraph (A) fails to
comply with the demand, the person may be subject to penalty under
subsection (g);\
(2) summon, upon reasonable notice\--\
(A) the person who\--\
(i) imported, or knowingly caused to be imported, merchandise into the
customs territory of the United States,\
(ii) exported merchandise, or knowingly caused merchandise to be
exported, to a NAFTA country (as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act),\
(iii) transported or stored merchandise that was or is carried or held
under customs bond, or knowingly caused such transportation or storage,
or\
(iv) filed a declaration, entry, or drawback claim with the Customs
Service;\
(B) any officer, employee, or agent of any person described in
subparagraph (A);\
(C) any person having possession, custody or care of records relating to
the importation or other activity described in subparagraph (A); or

\* \* \* \* \*

\(D\) any other person he may deem proper~~,~~; to appear before the
appropriate customs officer at the time and place within the customs
territory of the United States specified in the summons (except that no
witness may be required to appear at any place more than one hundred
miles distant from the place where he was served with the summons), to
produce records, as defined in subsection\
(c)(I)(A), and to give such testimony, under oath, as may be relevant to
such investigation or inquiry; and\
(b) Regulatory Audit Procedures.\--\
(1) In conducting a regulatory audit under this section (which does not
include a quantity verification for a customs bonded warehouse or
general purpose foreign trade zone), the Customs Service auditor shall
provide the person being audited, in advance of the audit, with a
reasonable estimate of the time to be required for the audit. If in the
course of an audit it becomes apparent that additional time will be
required, the Customs Service auditor shall immediately provide a
further estimate of such additional time.\
(2) Before commencing an audit, the Customs Service auditor shall inform
the party to be audited of his right to an entry conference at which
time the purpose will be explained and an estimated termination date
set. Upon completion of on-site audit activities, the Customs Service
auditor shall schedule a closing conference to explain the preliminary
results of the audit.\
(3) Except as provided in paragraph (5), if the estimated or actual
termination date for an audit passes without the Customs Service auditor
providing a closing conference to explain the results of the audit, the
person being audited may petition in writing for such a conference to
the appropriate regional commissioner, who, upon receipt of such a
request, shall provide for such a conference to be held within 15 days
after the date of receipt.\
(4) Except as provided in paragraph (5), the Customs Service auditor
shall complete the formal written audit report within 90 days following
the closing conference unless the appropriate regional commissioner
provides written notice to the person being audited of the reason for
any delay and the anticipated completion date. After application of any
exemption contained in section 552 of title 5, United States Code, a
copy of the formal written audit report shall be sent to the person
audited no later than 30 days following completion of the report.\
(5) Paragraphs (3) and (4) shall not apply after the Customs Service
commences a formal investigation with respect to the issue involved. (b)
(c) Service of Summons.\--A summons issued pursuant to this section may
be served by any person designated in the summons to serve it. Service
upon a natural person may be made by personal delivery of the summons to
him. Service may be made upon a domestic or foreign corporation or upon
a partnership or other unincorporated association which is subject to
suit under a common name, by delivering the summons to an officer, or
managing or general agent, or to any other agent authorized by
appointment or by law to receive service of process. The certificate of
service signed by the person serving the summons is prima facie evidence
of the facts it states on the hearing of an application for the
enforcement of the summons. When the summons requires the production of
records, such records shall be described in the summons with reasonable
specificity.\
~~(c)~~ (d) Special Procedures for Third-Party Summonses.\--(1) For
purposes of this subsection\--\
(A) The term \"records\" includes ~~statements, declarations, or
documents~~ those\--

\* \* \* \* \*

\(C\) The term \"third-party recordkeeper\" means\--\
(i) any customhouse broker, unless such customhouse is the importer of
record on an entry;

\* \* \* \* \*

\(2\) If\--\
(A) any summons is served on any person who is a third-party
recordkeeper; and\
(B) the summons requires the production of, or the giving of testimony
relating to, any portion of records made or kept of the ~~import~~
transactions described in section 508 of any person (other than the
person summoned) who is identified in the description of the records
contained in such summons; then notice of such summons shall be given to
any persons so identified within a reasonable time before the day fixed
in the summons as the day upon which such records are to be examined or
testimony given. Such notice shall be accompanied by a copy of the
summons which has been served and shall contain directions for staying
compliance with the summons under paragraph (5)(B) of this subsection.

\* \* \* \* \*

\(4\) Paragraph (2) of this subsection shall not apply to any
summons\--\
(A) served on the person with respect to whose liability for duties,
fees, or taxes the summons is issued, or any officer or employee of such
person; or\
(B) to determine whether or not records of the ~~import~~ transactions
described in section 508 of an identified person have been made or kept.

\* \* \* \* \*

\(e\) List of Records and Information.\--The Customs Service shall
identify and publish a list of the records or entry information that is
required to be maintained and produced under subsection (a)(1)(A).\
(f) Recordkeeping Compliance Program.\--\
(1) In general.\--After consultation with the importing community, the
Customs Service shall by regulation establish a recordkeeping compliance
program which the parties listed in section 508(a) may participate in
after being certified by the Customs Service under paragraph (2).
Participation in the recordkeeping compliance program by recordkeepers
is voluntary.\
(2) Certification.\--A recordkeeper may be certified as a participant in
the recordkeeping compliance program after meeting the general
recordkeeping requirements established under the program or after
negotiating an alternative program suited to the needs of the
recordkeeper and the Customs Service. Certification requirements shall
take into account the size and nature of the importing business and the
volume of imports. In order to be certified, the recordkeeper must be
able to demonstrate that it\--\
(A) understands the legal requirements for recordkeeping, including the
nature of the records required to be maintained and produced and the
time periods involved;\
(B) has in place procedures to explain the recordkeeping requirements to
those employees who are involved in the preparation, maintenance, and
production of required records;\
(C) has in place procedures regarding the preparation and maintenance of
required records, and the production of such records to the Customs
Service;\
(D) has designated a dependable individual or individuals to be
responsible for recordkeeping compliance under the program and whose
duties include maintaining familiarity with the recordkeeping
requirements of the Customs Service;\
(E) has a record maintenance procedure approved by the Customs Service
for original records, or, if approved by the Customs Service, for
alternative records or recordkeeping formats other than the original
records; and\
(F) has procedures for notifying the Customs Service of occurrences of
variances to, and violations of, the requirements of the recordkeeping
compliance program or the negotiated alternative programs, and for
taking corrective action when notified by the Customs Service of
violations or problems regarding such program.\
(g) Penalties.\--\
(1) Definition.\--For purposes of this subsection, the term
\"information\" means any record, statement, declaration, document, or
electronically stored or transmitted information or data referred to in
subsection (a)(1)(A).\
(2) Effects of failure to comply with demand.\--Except as provided in
paragraph (4), if a person fails to comply with a lawful demand for
information under subsection (a)(1)(A) the following provisions apply:\
(A) If the failure to comply is a result of the willful failure of the
person to maintain, store, or retrieve the demanded information, such
person shall be subject to a penalty, for each release of merchandise,
not to exceed \$100,000, or an amount equal to 75 percent of the
appraised value of the merchandise, whichever amount is less.\
(B) If the failure to comply is a result of the negligence of the person
in maintaining, storing, or retrieving the demanded information, such
person shall be subject to a penalty, for each release of merchandise,
not to exceed \$10,000, or an amount equal to 40 percent of the
appraised value of the merchandise, whichever amount is less.\
(C) In addition to any penalty imposed under subparagraph (A) or\
(B) regarding demanded information, if such information related to the
eligibility of merchandise for a column 1 special rate of duty under
title I, the entry of such merchandise\--\
(i) if unliquidated, shall be liquidated at the applicable column 1
general rate of duty; or\
(ii) if liquidated within the 2-year period preceding the date of the
demand, shall be reliquidated, notwithstanding the time limitation in
section 514 or 520, at the applicable column 1 general rate of duty;
except that any liquidation or reliquidation under clause (i) or\
(ii) shall be at the applicable column 2 rate of duty if the Customs
Service demonstrates that the merchandise should be dutiable at such
rate.\
(3) Avoidance of penalty.\--No penalty may be assessed under this
subsection if the person can show\--\
(A) that the loss of the demanded information was the result of an act
of God or other natural casualty or disaster beyond the fault of such
person or an agent of the person;\
(B) on the basis of other evidence satisfactory to the Customs Service,
that the demand was substantially complied with; or\
(C) the information demanded was presented to and retained by the
Customs Service at the time of entry or submitted in response to an
earlier demand.\
(4) Penalties not exclusive.\--Any penalty imposed under this subsection
shall be in addition to any other penalty provided by law except for\--\
(A) a penalty imposed under section 592 for a material omission of the
demanded information, or\
(B) disciplinary action taken under section 641.\
(5) Remission or mitigation.\--A penalty imposed under this section may
be remitted or mitigated under section 618.\
(6) Customs summons.\--Nothing in this subsection shall limit or
preclude the Customs Service from issuing, or seeking the enforcement
of, a customs summons.\
(7) Alternatives to penalties.\--\
(A) In general.\--When a recordkeeper who\--\
(i) has been certified as a participant in the recordkeeping compliance
program under subsection (f); and\
(ii) is generally in compliance with the appropriate procedures and
requirements of the program; does not produce a demanded record or
information for a specific release or provide the information by
acceptable alternative means, the Customs Service, in the absence of
willfulness or repeated violations, shall issue a written notice of the
violation to the recordkeeper in lieu of a monetary penalty. Repeated
violations by the recordkeeper may result in the issuance of penalties
and removal of certification under the program until corrective action,
satisfactory to the Customs Service, is taken.\
(B) Contents of notice.\--A notice of violation issued under
subparagraph (A) shall\--\
(i) state that the recordkeeper has violated the recordkeeping
requirements;\
(ii) indicate the record of information which was demanded; and\
(iii) warn the recordkeeper that future failures to produce demanded
records or information may result in the imposition of monetary
penalties.\
(C) Response to notice.\--Within a reasonable time after receiving
written notice under subparagraph (A), the recordkeeper shall notify the
Customs Service of the steps it has taken to prevent a recurrence of the
violation.\
(D) Regulations.\--The Secretary shall promulgate regulations to
implement this paragraph. Such regulations may specify the time periods
for compliance with a demand for information and provide guidelines
which define repeated violations for purposes of this paragraph. Any
penalty issued for a recordkeeping violation shall take into account the
degree of compliance compared to the total number of importations, the
nature of the demanded records and the recordkeeper\'s cooperation.\
\
**[SEC. 510. JUDICIAL ENFORCEMENT.]{.underline}**\
\
\
(a) Order of Court.\--If any person summoned under section 509 of this
Act does not comply with the summons, the district court of the United
States for any district in which such person is found or resides or is
doing business, upon application and after notice to any such person and
hearing, shall have jurisdiction to issue an order requiring such person
to comply with the summons. Failure to obey such order of the court may
be punished by such court as a contempt thereof and such court may
assess a monetary penalty.

\* \* \* \* \*

**~~[SEC. 513. CUSTOMS OFFICER\'S IMMUNITY.]{.underline}~~**\
\
\
~~No customs officer shall be in any way liable to any owner, importer,
consignee, or agent or any other person for or on account of any rulings
or decisions as to the appraisement or the classification of any
imported merchandise or the duties charged thereon, or the collection of
any dues, charges, or duties on or on account of said merchandise, or
any other matter or thing as to which said owner, importer, consignee,
or agent might under this Act be entitled to protest or appeal from the
decision of such officer.~~\
**[SEC. 513. CUSTOMS OFFICER\'S IMMUNITY.]{.underline}**\
\
\
No customs officer shall be liable in any way to any person for or on
account of\--\
(1) any ruling or decision regarding the appraisement or the
classification of any imported merchandise or regarding the duties,
fees, and taxes charged thereon,\
(2) the collection of any dues, charges, duties, fees, and taxes on or
on account of any imported merchandise, or\
(3) any other matter of thing as to which any person might under this
Act be entitled to protest or appeal from the decision of such officer.\
\
**[~~SEC. 514. FINALITY OF DECISIONS; PROTESTS.~~ SEC. 514. PROTEST
AGAINST DECISIONS OF THE CUSTOMS SERVICE.]{.underline}**\
\
\
(a) Finality of Decisions.\--Except as provided in subsection (b) of
this section, section 501 (relating to voluntary reliquidations),
section 516 (relating to petitions by domestic interested parties),
section 520 (relating to refunds and errors), and section 521 (relating
to reliquidations on account of fraud) of this Act, decisions of the
~~appropriate customs officer,~~ Customs Service, including the legality
of all orders and findings entering into the same, as to\--\
(1) \* \* \*

\* \* \* \* \*

\(5\) the liquidation or reliquidation of an entry, or reconciliation as
to the issues contained therein, or any modification thereof;\
(6) the refusal to pay a claim for drawback; ~~and~~ or\
(7) the refusal to reliquidate an entry under section 520(c) of this
act~~,~~; shall be final and conclusive upon all persons (including the
United States and any officer thereof) unless a protest is filed in
accordance with this section, or unless a civil action contesting the
denial of a protest, in whole or in part, is commenced in the United
States Court of International Trade in accordance with chapter 169 of
title 28 of the United States Code within the time prescribed by section
2636 of that title. When a judgment or order of the United States Court
of International Trade has become final, the papers transmitted shall be
returned, together with a copy of the judgment or order to the
~~appropriate customs officer, who~~ Customs Service, which shall take
action accordingly.\
(b) With respect to determinations made under section 303 of this Act of
title VII of this Act which are reviewable under section 516A of this
title, determinations of the ~~appropriate customs officer~~ Customs
Service are final and conclusive upon all persons (including the United
States and any officer thereof) unless a civil action contesting a
determination listed in section 516A of this title is commenced in the
United States Court of International Trade, or review by a binational
panel of a determination to which section 516A(g)(2) applies is
commenced pursuant to section 516A(g) and article 1904 of the North
American Free Trade Agreement or the United States- Canada Free-Trade
Agreement.\
(c) Protests.\--\
(1) In general.-~~-A protest of a decisions under subsection (a) shall
be filed in writing with the appropriate customs officer designated in
regulations prescribed by the Secretary, setting forth distinctly and
specifically each decision described in subsection (a) as to which
protest is made; each category of merchandise affected by each such
decision as to which protest is made; and the nature of each objection
and reasons therefor.~~ A protest of a decision made under subsection
(a) shall be filed in writing, or transmitted electronically pursuant to
an electronic data interchange system, in accordance with regulations
prescribed by the Secretary. A protest must set forth distinctly and
specifically\--\
(A) each decision described in subsection (a) as to which protest is
made;\
(B) each category of merchandise affected by each decision set forth
under paragraph (1);\
(C) the nature of each objection and the reasons therefor; and\
(D) any other matter required by the Secretary by regulation. Only one
protest may be filed for each entry of merchandise, except that where
the entry covers merchandise of different categories, a separate protest
may be filed for each category. In addition, separate protests may be
filed for each category. In addition, separate protests filed by
different authorized persons with respect to any one category of
merchandise, or with respect to a determination of origin under section
202 of the North American Free Trade Agreement Implementation Act, that
is the subject of a protest are deemed to be part of a single protest. A
protest may be amended, under regulations prescribed by the Secretary,
to set forth objections as to a decision or decisions described in
subsection (a) which were not the subject of the original protest, in
the form and manner prescribed for a protest, any time prior to the
expiration of the time in which such protest could have been filed under
this section. New grounds in support of objections raised by a valid
protest or amendment thereto may be presented for consideration in
connection with the review of such protest pursuant to section 515 of
this Act at any time prior to the disposition of the protest in
accordance with that section.\
(2) Except as provided in sections 485(d) and 557(b) of this Act,
protests may be filed with respect to merchandise which is the subject
of a decision specified in subsection (a) of this section by\--\
(A) the importers or consignees shown on the entry papers, or their
sureties;\
(B) any person paying any charge or exaction;\
(C) any person seeking entry or delivery;\
(D) any person filing a claim for drawback; ~~or~~\
(E) with respect to a determination of origin under section 202 of the
North American Free Trade Agreement Implementation Act, any exporter or
producer of the merchandise subject to that determination, if the
exporter or producer completed and signed a NAFTA Certificate of Origin
covering the merchandise; or\
~~(E)~~ (F) any authorized agent of any of the persons described in
clauses (A) through (D) clauses (A) through (E). (2) (3) Time for
filing.\--A protest of a decision, order, or finding described in
subsection (a) shall be filed with ~~such customs officer~~ the Customs
Service within ninety days after but not before\--\
(A) notice of liquidation or reliquidation, or\
(B) in circumstances where subparagraph (A) is inapplicable, the date of
the decision as to which protest is made.\
(d) Limitation on Protest of Reliquidation.\--The reliquidation of an
entry shall not open such entry so that a protest may be filed against
the decision of the ~~customs officer~~ Customs Service upon any
question not involved in such reliquidation. A protest by a surety which
has an unsatisfied legal claim under its bond may be filed within 90
days from the date of mailing of notice of demand for payment against
its bond. If another party has not filed a timely protest, the surety\'s
protest shall certify that it is not being filed collusively to extend
another authorized person\'s time to protest as specified in this
subsection.\
(e) Advance Notice of Certain Determinations.\--Except as provided in
subsection (f), an exporter or producer referred to in subsection
(c)(2)(E) shall be provided notice in advance of an adverse
determination of origin under section 202 of the North American Free
Trade Agreement Implementation Act. The Secretary may, by regulations,
prescribe the time period in which such advance notice shall be issued
and authorize the Customs Service to provide in the notice the entry
number and any other entry information considered necessary to allow the
exporter or producer to exercise the rights provided by this section.\
(f) Denial of Preferential Treatment.\--If the Customs Service finds
indications of a pattern of conduct by an exporter or producer of false
or unsupported representations that goods qualify under the rules of
origin set out in section 202 of the North American Free Trade Agreement
Implementation Act\--\
(1) the Customs Service, in accordance with regulations issued by the
Secretary, may deny preferential tariff treatment to entries of
identical goods exported or produced by that person; and\
(2) the advance notice requirement in subsection (e) shall not apply to
that person; until the person establishes to the satisfaction of the
Customs Service that its representations are in conformity with section
202.\
\
**[SEC. 515. REVIEW OF PROTESTS.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) If a protesting party believes that an application for further
review was erroneously or improperly denied or was denied without
authority for such action, it may file with the Commissioner of Customs
a written request that the denial of the application for further review
be set aside. Such request must be filed within 60 days after the date
of the notice of the denial. The Commissioner of Customs may review such
request and, based solely on the information before the Customs Service
at the time the application for further review was denied, may set aside
the denial of the application for further review and void the denial of
protest, if appropriate. If the Commissioner of Customs fails to act
within 60 days after the date of the request, the request shall be
considered denied. All denials of protests are effective from the date
of original denial for purposes of section 2636 of title 28, United
States Code. If an action is commenced in the Court of International
Trade that arises out of a protest or an application for further review,
all administrative action pertaining to such protest or application
shall terminate and any administrative action taken subsequent to the
commencement of the action is null and void.\
(d) If a protest is timely and properly filed, but is denied contrary to
proper instructions, the Customs Service may on its own initiative, or
pursuant to a written request by the protesting party filed with the
appropriate district director within 90 days after the date of the
protest denial, void the denial of the protest.

\* \* \* \* \*

**[SEC. 516A. JUDICIAL REVIEW IN COUNTERVAILING DUTY AND ANTI-DUMPING
DUTY PROCEEDINGS.]{.underline}**\
\
\
(a) Review of Determination.\--\
(1) \* \* \*

\* \* \* \* \* (5) Time limits in cases involving canadian
merchandise.\-- Notwithstanding any other provision of this subsection,
in the case of a determination to which the provisions of subsection (g)
apply, an action under this subsection may not be commenced, and the
time limits for commencing an action under this subsection shall not
begin to run, until the 31st day after\--

~~(A) the date of publication in the Federal Register of notice of~~\
any determination described in paragraph (1)(B) or any determination\
described in clause (i), (ii), or (iii) of paragraph (2)(B),\
~~(B) the date on which the Government of Canada receives notice of~~\
a determination described in clause (vi) of paragraph (2)(B), or\
~~(C) the date as of which\--~~\
~~(i) a binational panel has dismissed the binational panel~~\
review for lack of jurisdiction, and\
~~(ii) any interested party seeking review under paragraph (1),~~\
(2), or (3) has provided timely notice under subsection\
(g)(3)(B), except that if a request for an extraordinary challenge
committee has been made with respect to the decision to dismiss, the
date under this subparagraph shall not be earlier than the date on which
such committee determines that such panel acted properly when it
dismissed for lack of jurisdiction.\
(5) Time limits in cases involving merchandise from free trade area
countries.\--Notwithstanding any other provision of this subsection, in
the case of a determination to which the provisions of subsection (g)
apply, an action under this subsection may not be commenced, and the
time limits for commencing an action under this subsection shall not
begin to run, until the day specified in whichever of the following
subparagraphs applies:\
(A) For a determination described in paragraph (1)(B) or clause\
(i), (ii) or (iii) of paragraph (2)(B), the 31st day after the date on
which notice of the determination is published in the Federal Register.\
(B) For a determination described in clause (vi) of paragraph\
(2)(B), the 31st day after the date on which the government of the
relevant FTA country receives notice of the determination.\
(C) For a determination with respect to which binational panel review
has commenced in accordance with subsection (g)(8), the day after the
date as of which\--\
(i) the binational panel has dismissed binational panel review of the
determination for lack of jurisdiction, and\
(ii) any interested party seeking review of the determination under
paragraph (1), (2), or (3) of this subsection has provided timely notice
under subsection (g)(3)(B). If such an interested party files a summons
and complaint under this subsection after dismissal by the binational
panel, and if a request for an extraordinary challenge committee is made
with respect to the decision by the binational panel to dismiss\--\
(I) judicial review under this subsection shall be stayed during
consideration by the committee of the request, and\
(II) the United States Court of International Trade shall dismiss the
action if the committee vacates or remands the binational panel decision
to dismiss.\
(D) For a determination for which review by the United States Court of
International Trade is provided for\--\
(i) under subsection (g)(12)(B), the day after the date of publication
in the Federal Register of notice that article 1904 of the NAFTA has
been suspended, or\
(ii) under subsection (g)(12)(D), the day after the date that notice of
settlement is published in the Federal Register.\
(b) Standards of Review.\--\
(1) \* \* \*

\* \* \* \* \*

\(3\) Effect of decisions by nafta or united states-canada. binational
panels.\--In making a decision in any action brought under subsection
(a), a court of the United States is not bound by, but may take into
consideration, a final decision of a binational panel or extraordinary
challenge committee convened pursuant to article 1904 of the NAFTA or of
the Agreement.

\* \* \* \* \*

\(f\) Definitions.\--For purposes of this section\--\
(1) \* \* \*

\* \* \* \* \*

\(6\) United states secretary.\--The term \"United States Secretary\"
means the secretary provided for in paragraph 4 of article 1909 of the
Agreement.\
~~(7) Canadian secretary.\--The term \"Canada Secretary\" means the
secretary provided for in paragraph 5 of article 1909 of the
Agreement.~~\
(6) United states secretary.\--The term \"United States Secretary\"
means\--\
(A) the secretary for the United States Section referred to in article
1908 of the NAFTA, and\
(B) the secretary of the United States Section provided for in article
1909 of the Agreement.\
(7) Relevant fta secretary.\--The term \"relevant FTA Secretary\" means
the Secretary\--\
(A) referred to in article 1908 of the NAFTA, or\
(B) provided for in paragraph 5 of article 1909 of the Agreement, of the
relevant FTA country.\
(8) NAFTA.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
(9) Relevant fta country.\--The term \"relevant FTA country\" means the
free trade area country to which an antidumping or countervailing duty
proceeding pertains.\
(10) Free trade area country.\--The term \"free trade area country\"
means the following:\
(A) Canada for such time as the NAFTA is in force with respect to, and
the United States applies the NAFTA to, Canada.\
(B) Mexico for such time as the NAFTA is in force with respect to, and
the United States applies the NAFTA to, Mexico.\
(C) Canada for such time as\--\
(i) it is not a free trade area country under subparagraph (A); and\
(ii) the Agreement is in force with respect to, and the United States
applies the Agreement to, Canada.\
(g) Review of Countervailing Duty and Antidumping Duty Determinations
Involving ~~Canadian Merchandise~~ Free Trade Area Country
Merchandise.\--\
(1) Definition of determination.\--For purposes of this subsection, the
term \"determination\" means a determination described in\--\
(A) paragraph (1)(B) of subsection (a), or\
(B) clause (i), (ii), (iii), or (vi) or paragraph (2)(B) of subsection
(a), if made in connection with a proceeding regarding a class or kind
of Canadian merchandise free trade area country merchandise, as
determined by the administering authority.\
(2) Exclusive review of determination by binational panels.\--If
binational panel review of a determination is requested pursuant to
article 1904 of the NAFTA or of the Agreement, then, except as provided
in paragraphs (3) and (4)\--\
(A) the determination is not reviewable under subsection (a), and\
(B) no court of the United States has power or jurisdiction to review
the determination on any question of law or fact by an action in the
nature of mandamus or otherwise.\
(3) Exception to exclusive binational panel review.\--\
(A) In general.\--A determination is reviewable under subsection (a) if
the determination sought to be reviewed is\--\
(i) a determination as to which neither the United States ~~nor~~\
Canada nor the relevant FTA country requested review by a binational
panel pursuant to article 1904 of the NAFTA or of the Agreement.\
(ii) a revised determination issued as a direct result of judicial
review, commenced pursuant to subsection (a), if neither the United
States ~~nor Canada~~ nor the relevant FTA country requested review of
the original determination,\
(iii) a determination issued as a direct result of judicial review that
was commenced pursuant to subsection (a) prior to the entry into force
of the NAFTA or of the Agreement, ~~or~~\
(iv) a determination which a binational panel has determined ~~under the
paragraph (2)(A)~~ is not reviewable by the binational panel~~.~~,\
(v) a determination as to which binational panel review has terminated
pursuant to paragraph 12 of article 1905 of the NAFTA, or\
(vi) a determination as to which extraordinary challenge committee
review has terminated pursuant to paragraph 12 of article 1905 of the
NAFTA.\
(B) Special rule.\--~~A determination described in subparagraph~~\
(A)(i) or (iv) is reviewable under subsection (a) only if the party\
seeking to commence review has provided timely notice of its intent\
to commence such review to the United States Secretary, the Canadian\
Secretary, all interested parties who were parties to the proceeding\
in connection with which the matter arises, and the administering\
authority or the Commission, as appropriate. Such notice is provided\
timely if the notice is delivered by no later than the date that is\
20 days after the date described in subparagraph (A) or (B) of\
subsection (a)(5) that is applicable to such determination. A
determination described in subparagraph (A)(i) or (iv) is reviewable
under subsection (a) only if the party seeking to commence review has
provided timely notice of its intent to commence such review to\--\
(i) the United States Secretary and the relevant FTA Secretary;\
(ii) all interested parties who were parties to the proceeding in
connection with which the matter arises; and\
(iii) the administering authority or the Commission, as appropriate.
Such notice is timely provided if the notice is delivered no later than
the date that is 20 days after the date described in subparagraph (A) or
(B) of subsection (a)(5) that is applicable to such determination,
except that, if the time for requesting binational panel review is
suspended under paragraph (8)(A)(ii) of this subsection, any unexpired
time for providing notice of intent to commence judicial review shall,
during the pendency of any such suspension, also be suspended. Such
notice shall contain such information, and be in such form, manner, and
style, as the administering authority, in consultation with the
Commission, shall prescribe by regulations.\
(4) Exception to exclusive binational panel review for constitutional
issues.\--\
(A) Constitutionality of binational panel review system.\--An action for
declaratory judgment or injunctive relief, or both, regarding a
determination on the grounds that any provision of, or amendment made
by, the North American Free Trade Agreement Implementation Act
implementing the binational dispute settlement system under chapter 19
of the NAFTA, or the United States-Canada Free-Trade Implementation
Agreement Act of 1988 implementing the binational panel dispute
settlement system under chapter 19 of the Agreement, violates the
Constitution may be brought only in the United States Court of Appeals
for the District of Columbia Circuit, which shall have jurisdiction of
such action. ~~Any action brought under this~~\
subparagraph shall be heard and determined by a 3-judge court in\
accordance with section 2284 of title 28, United States code.

\* \* \* \* \*

\(5\) Liquidation of entries.\--\
(A) Application.\--In the case of a determination for which binational
panel review is requested pursuant to article 1904 of the NAFTA or of
the Agreement, the rules provided in this paragraph shall apply,
notwithstanding the provisions of subsection (c).\
(B) General rule.\--In the case of a determination for which binational
panel review is requested pursuant to article 1904 of the NAFTA or of
the Agreement, entries of merchandise covered by such determination
shall be liquidated in accordance with the determination of the
administering authority or the Commission, if they are entered, or
withdrawn from warehouse, for consumption on or before the date of
publication in the Federal Register by the administering authority of
notice of a final decision of a binational panel, or of an extraordinary
challenge committee, not in harmony with that determination. Such notice
of a decision shall be published within 10 days of the date of the
issuance of the panel or committee decision.\
(C) Suspension of liquidation.\--\
(i) In general.\--Notwithstanding the provisions of subparagraph\
(B), in the case of a determination described in clause (iii) or\
(vi) of subsection (a)(2)(B) for which binational panel review is
requested pursuant to article 1904 of the NAFTA or of the Agreement, the
administering authority, upon request of an interested party who was a
party to the proceeding in connection with which the matter arises and
who is a participant in the binational panel review, shall order the
continued suspension of liquidation of those entries of merchandise
covered by the determination that are involved in the review pending the
final disposition of the review.\
(ii) Notice.\--At the same time as the interested party makes its
request to the administering authority under clause (i), that party
shall serve a copy of its request on the United States Secretary~~, the
Canadian Secretary,~~, the relevant FTA Secretary, and all interested
parties who were parties to the proceeding in connection with which the
matter arises.\
(iii) Application of suspension.\--If the interested party requesting
continued suspension of liquidation under clause (i) is a foreign
manufacturer, producer, or exporter, or a United States importer, the
continued suspension of liquidation shall apply only to entries of
merchandise manufactured, produced, exported, or imported by that
particular manufacturer, producer, exporter, or importer. If the
interested party requesting the continued suspension of liquidation
under clause (i) is an interested party described in subparagraph (C),
(D), (E) or (F) of section 771(9), the continued suspension of
liquidation shall apply only to entries which could be affected by a
decision of the binational panel convened under chapter 19 of the NAFTA
or of the Agreement.

\* \* \* \* \*

\(6\) Injunctive relief.\--Except for cases under paragraph (4)(B), in
the case of a determination for which binational panel review is
requested pursuant to article 1904 of the NAFTA or of the Agreement, the
provisions of subsection (c)(2) shall not apply.\
(7) Implementation of international obligations under article 1904 of
the nafta or the agreement.\--\
(A) ~~In general.\--~~ Action upon remand.\--If a determination is
referred to a binational panel or extraordinary challenge committee
under the NAFTA or the Agreement and the panel or committee makes a
decision remanding the determination to the administering authority or
the Commission, the administering authority or the Commission shall,
within the period specified by the panel or committee, take action not
inconsistent with the decision of the panel or committee. Any action
taken by the administering authority or the Commission under this
paragraph shall not be subject to judicial review, and no court of the
United States shall have power or jurisdiction to review such action on
any question of law or fact by an action in the nature of mandamus or
otherwise.

\* \* \* \* \*

\(8\) Requests for binational panel review.\--\
(A) Interested party requests for binational panel review.\--\
(i) General rule.\--An interested party who was a party to the
proceeding in which a determination is made may request binational panel
review of such determination by filing a request with the United States
Secretary by no later than the date that is 30 days after the date
described in subparagraph (A) or (B) of subsection (a)(5) that is
applicable to such determination. Receipt of such request by the United
States Secretary shall be deemed to be a request for binational panel
review within the meaning of article 1904(4) of the NAFTA or of the
Agreement. Such request shall contain such information and be in such
form, manner, and style as the administering authority, in consultation
with the Commission, shall prescribe by regulations.\
(ii) Suspension of time to request binational panel review under the
nafta.\--Notwithstanding clause (i), the time for requesting binational
panel review shall be suspended during the pendency of any stay of
binational panel review that is issued pursuant to paragraph 11(a) of
article 1905 of the NAFTA.\
(B) Service of request for binational panel review.\--\
(i) \* \* \*\
(ii) Service by united states secretary.\--If an interested party to the
proceeding requests binational panel review of a determination by filing
a request with the ~~Canadian~~\
Secretary, relevant FTA Secretary, the United States Secretary shall
serve a copy of the request by mail on any other interested party who
was a party to the proceeding in connection with which the matter
arises, and on the administering authority or the Commission, as
appropriate.\
(C) Limitation on request for binational panel review.\--Absent a
request by an interested party under subparagraph (A), the United States
may not request binational panel review ~~under article 1904~~\
of the Agreement of a determination. of a determination under article
1904 of the NAFTA or the Agreement.\
(9) Representation in panel proceedings.\--In the case of binational
panel proceedings convened under chapter 19 of the NAFTA or of the
Agreement, the administering authority and the Commission shall be
represented by attorneys who are employees of the administering
authority or the Commission, respectively. Interested parties who were
parties to the proceeding in connection with which the matter arises
shall have the right to appear and be represented by counsel before the
binational panel.\
(10) Notification of class or kind rulings.\--In the case of a
determination which is described in paragraph (2)(B)(vi) of subsection\
(a) and which is subject to the provisions of paragraph (2), the
administering authority, upon request, shall inform any interested
person of the date on which the ~~Government of Canada received notice
of the determination under article 1904(4) of the Agreement.~~
Government of the relevant FTA country received notice of the
determination under paragraph 4 of article 1904 of the NAFTA or the
Agreement.\
(11) Suspension and termination of suspension of article 1904 of the
nafta.\--\
(A) Suspension of article 1904.\--If a special committee established
under article 1905 of the NAFTA issues an affirmative finding, the Trade
Representative may, in accordance with paragraph 8(a) or 9, as
appropriate, of article 1905 of the NAFTA, suspend the operation of
article 1904 of the NAFTA.\
(B) Termination of suspension of article 1904.\--If a special committee
is reconvened and makes an affirmative determination described in
paragraph 10(b) of article 1905 of the NAFTA, any suspension of the
operation of article 1904 of the NAFTA shall terminate.\
(12) Judicial review upon termination of binational panel or committee
review under the nafta.\--\
(A) Notice of suspension or termination of suspension of article
1904.\--\
(i) Upon notification by the Trade Representative or the Government of a
country described in subsection (f)(10)(A) or (B) that the operation of
article 1904 of the NAFTA has been suspended in accordance with
paragraph 8(a) or 9 of article 1905 of the NAFTA, the United States
Secretary shall publish in the Federal Register a notice of suspension
of article 1904 of the NAFTA.\
(ii) Upon notification by the Trade Representative or the Government of
a country described in subsection (f)(10)(A) or (B) that the suspension
of the operation of article 1904 of the NAFTA is terminated in
accordance with paragraph 10 of article 1905 of the NAFTA, the United
States Secretary shall publish in the Federal Register a notice of
termination of suspension of article 1904 of the NAFTA.\
(B) Transfer of final determinations for judicial review upon suspension
of article 1904.\--If the operation of article 1904 of the NAFTA is
suspended in accordance with paragraph 8(a) or 9 of article 1905 of the
NAFTA\--\
(i) upon the request of an authorized person described in subparagraph
(C), any final determination that is the subject of a binational panel
review or an extraordinary challenge committee review shall be
transferred to the United States Court of International Trade (in
accordance with rules issued by the Court) for review under subsection
(a); or\
(ii) in a case in which\--\
(I) a binational panel review was completed fewer than 30 days before
the suspension, and\
(II) extraordinary challenge committee review has not been requested,
upon the request of an authorized person described in subparagraph (C)
which is made within 60 days after the completion of the binational
panel review, the final determination that was the subject of the
binational panel review shall be transferred to the United States Court
of International Trade (in accordance with rules issued by the Court)
for review under subsection (a).\
(C) Persons authorized to request transfer of final determinations for
judicial review.\--A request that a final determination be transferred
to the Court of International Trade under subparagraph\
(B) may be made by\--\
(i) if the United States made an allegation under paragraph 1 of article
1905 of the NAFTA and the operation of article 1904 of the NAFTA was
suspended pursuant to paragraph 8(a) of article 1905 of the NAFTA\--\
(I) the government of the relevant country described in subsection
(f)(10)(A) or (B),\
(II) an interested party that was a party to the panel or committee
review, or\
(III) an interested party that was a party to the proceeding in
connection with which panel review was requested, but only if the time
period for filing notices of appearance in the panel review has not
expired, or\
(ii) if a country described in subsection (f)(10)(A) or (B) made an
allegation under paragraph 1 of article 1905 of the NAFTA and the
operation of article 1904 of the NAFTA was suspended pursuant to
paragraph 9 of article 1905 of the NAFTA\--\
(I) the government of that country,\
(II) an interested party that is a person of that country and that was a
party to the panel or committee review, or\
(III) an interested party that is a person of that country and that was
a party to the proceeding in connection with which panel review was
requested, but only if the time period for filing notices of appearance
in the panel review has not expired.\
(D)(i) Transfer for judicial review upon settlement.\--If the Trade
Representative achieves a settlement with the government of a country
described in subsection (f)(10)(A) or (B) pursuant to paragraph 7 of
article 1905 of the NAFTA, and referral for judicial review is among the
terms of such settlement, any final determination that is the subject of
a binational panel review or an extraordinary challenge committee review
shall, upon a request described in clause (ii), be transferred to the
United States Court of International Trade (in accordance with rules
issued by the Court) for review under subsection (a).\
(ii) A request referred to in clause (i) is a request made by\--\
(I) the country referred to in clause (i),\
(II) an interested party that was a party to the panel or committee
review, or\
(III) an interested party that was a party to the proceeding in
connection with which panel review was requested, but only if the time
for filing notices of appearance in the panel review has not expired.

\* \* \* \* \*

**[SEC. 520. REFUNDS AND ERRORS.]{.underline}**\
\
\
(a) The Secretary of the Treasury is hereby authorized to refund duties
or other receipts in the following cases:\
(1) Excess deposits.\--Whenever it is ascertained on liquidation or
reliquidation of an entry or reconciliation that more money has been
deposited or paid as duties than was required by law to be so deposited
or paid;

\* \* \* \* \*

\(4\) Prior to liquidation.\--Prior to the liquidation of an entry or
reconciliation, whenever it is ascertained that excess duties, fees,
charges, or exactions have been deposited or paid by reason of clerical
error.

\* \* \* \* \*

\(c\) Notwithstanding a valid protest was not filed, the ~~appropriate
customs officer~~ Customs Service may, in accordance with regulations
prescribed by the Secretary, reliquidate an entry or reconciliation to
correct\--\
(1) a clerical error, mistake of fact, or other inadvertence, whether or
not resulting from or contained in electronic transmission, not
amounting to an error in the construction of a law, adverse to the
importer and manifest from the record or established by documentary
evidence, in any entry, liquidation, or other customs transaction, when
the error, mistake, or inadvertence is brought to the attention of the
~~appropriate customs officer~~ Customs Service within one year after
the date of liquidation or exaction; or\
(2) any assessment of duty on household or personal effects in respect
of which an application for refund has been filed, with such employee as
the Secretary of the Treasury shall designate, within one year after the
date of entry.\
~~(d) If a determination is made to reliquidate an entry as a result of
a protest filed under section 514 of this Act or an application for
relief made under subsection (c)(1) of this section, or if reliquidation
is ordered by an appropriate court, interest shall be allowed on any
amount paid as increased or additional duties under section 505(c) of
this Act at the annual rate established pursuant to that section and
determined as of the 15th day after the date of liquidation or
reliquidation. The interest shall be calculated from the date of payment
to the date of (1) the refund, or (2) the filing of a summons under
section 2632 of title 28, United States Code, whichever occurs first.~~\
(d) Notwithstanding the fact that a valid protest was not filed, the
Customs Service may, in accordance with regulations prescribed by the
Secretary, reliquidate an entry to refund any excess duties paid on a
good qualifying under the rules of origin set out in section 202 of the
North American Free Trade Agreement Implementation Act for which no
claim for preferential tariff treatment was made at the time of
importation if the importer, within 1 year after the date of
importation, files, in accordance with those regulations, a claim that
includes\--\
(1) a written declaration that the good qualified under those rules at
the time of importation;\
(2) copies of all applicable NAFTA Certificates of Origin (as defined in
section 508(b)(1)); and\
(3) such other documentation relating to the importation of the goods as
the Customs Service may require.\
\
**~~[SEC. 521. RELIQUIDATION ON ACCOUNT OF FRAUD.]{.underline}~~**\
\
\
~~If the appropriate customs officer finds probable cause to believe
there is fraud in the case, he may reliquidate an entry within two years
(exclusive of the time during which a protest is pending) after the date
of liquidation or last reliquidation.~~

\* \* \* \* \*

**[SEC. 526. MERCHANDISE BEARING AMERICAN TRADE-MARK.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(e\) Any such merchandise bearing a counterfeit mark (within the
meaning of section 45 of the Act of July 5, 1946 (commonly referred to
as the Lanham Act, 60 Stat. 427; 15 U.S.C. 1127)) imported into the
United States in violation of the provisions of section 42 of the Act of
July 5, 1946 (60 Stat. 440; 15 U.S.C. 1124), shall be seized and, in the
absence of the written consent of the trademark owner, forfeited for
violations of the customs laws. Upon seizure of such merchandise, the
Secretary shall notify the owner of the trademark, and shall, after
forfeiture, obliterate the trademark where feasible and dispose of the
goods seized\--\
(1) \* \* \*

\* \* \* \* \*

\(3\) more than ~~1 year~~ 90 days after the date of forfeiture, by sale
by ~~appropriate customs officers~~ the Customs Service at public
auction under such regulations as the Secretary prescribes, except that
before making any such sale the Secretary shall determine that no
Federal, State, or local government agency or eleemosynary institution
has established a need for such merchandise under paragraph (1) or (2),
or

\* \* \* \* \*

**[SEC. 529. COLLECTION OF FEES ON BEHALF OF OTHER
AGENCIES.]{.underline}**\
\
\
The Customs Service shall be reimbursed from the fees collected for the
cost and expense, administrative and otherwise, incurred in collecting
any fees on behalf of any government agency for any reason.

\* \* \* \* \*

Part IV\--Transportation in Bond and Warehousing of Merchandise

\* \* \* \* \*

**[SEC. 553A. RECORDKEEPING FOR MERCHANDISE TRANSPORTED BY
PIPELINE.]{.underline}**\
\
\
Merchandise in Customs custody that is transported by pipeline may be
accounted for on a quantitative basis, based on the bill of lading, or
equivalent document of receipt, issued by the pipeline carrier. Unless
the Customs Service has reasonable cause to suspect fraud, the Customs
Service may accept the bill of lading, or equivalent document of
receipt, issued by the pipeline carrier to the shipper and accepted by
the consignee to maintain identity. The shipper, pipeline operator, and
consignee shall be subject to the recordkeeping requirements of sections
508 and 509.

\* \* \* \* \*

**[SEC. 557. ENTRY FOR WAREHOUSE\--WAREHOUSE
PERIOD\--DRAWBACK.]{.underline}**\
\
\
(a)(1) Any merchandise subject to duty, with the exception of perishable
articles and explosive substances other than firecrackers, may be
entered for warehousing and be deposited in a bonded warehouse at the
expense and risk of the owner purchaser, importer, or consignee. Such
merchandise may be withdrawn, at any time within 5-years from the date
of importation, for consumption upon payment of the duties and charges
accruing thereon at the rate of duty imposed by law upon such
merchandise at the date of withdrawal; or may be withdrawn for
exportation or for transportation and exportation to a foreign country,
or for shipment or for transportation and shipment to the Virgin
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef,
Johnston Island, or the island of Guam, without the payment of duties
thereon, or for transportation and rewarehousing at another port or
elsewhere, or for transfer to another bonded warehouse at the same
port~~: Provided, That the total period of time for which such
merchandise may remain in bonded warehouse shall not exceed 5 years from
the date of importation.~~; except that\--\
(A) the total period of time for which such merchandise may remain in
bonded warehouse shall not exceed 5 years from the date of importation;
and\
(B) turbine fuel may be withdrawn for use under section 309 without the
payment of duty if an amount equal to the quantity of fuel withdrawn is
shown to be used within 30 days after the day of withdrawal, but duties\
(together with interest payable from the date of the withdrawal at the
rate of interest established under section 6621 of title 26, United
States Code) shall be deposited by the 40th day after the day of
withdrawal on fuel that was withdrawn in excess of the quantity shown to
have been so used during such 30-day period.\
(2) Merchandise upon which the duties have been paid and which shall
have remained continuously in bonded warehouse or otherwise in the
custody and under the control of customs officers, may be entered or
withdrawn at any time within 5 years after the date of importation for
exportation or for transportation and exportation to a foreign country,
or for shipment or for transportation and shipment to the Virgin
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef,
Johnston Island, or the island of Guam, under such regulations as the
Secretary of the Treasury shall prescribe, and upon such entry or
withdrawal, and exportation or shipment, the duties thereon shall be
refunded.

\* \* \* \* \*

**[SEC. 562. MANIPULATION IN WAREHOUSE.]{.underline}**\
\
\
Unless by special authority of the Secretary of the Treasury, no
merchandise shall be withdrawn from bonded warehouse in less quantity
than an entire bale, cask, box, or other package; or, if in bulk, in the
entire quantity imported or in a quantity not less than one ton weight.
All merchandise so withdrawn shall be withdrawn in the original packages
in which imported unless, upon the application of the importer, it
appears to the appropriate customs officer that it is necessary to the
safety or preservation of the merchandise to repack or transfer the
same; except that upon permission therefor being granted by the
Secretary of the Treasury, and under customs supervision, at the expense
of the proprietor, merchandise may be cleaned, sorted, repacked, or
otherwise changed in condition, but not manufactured, in bonded
warehouses established for that purpose and be withdrawn therefrom
~~without payment of duties~~\--\
~~(1) for exportation to Canada, but on or after January 1, 1994, or
such later date as may be proclaimed by the President under section
204(b)(2)(B) of the United States-Canada Free-Trade Agreement
Implementation Act of 1988, such exemption from the payment of duties
applies only in the case of the exportation to Canada of merchandise
that\--~~\
~~(A) is only cleaned, sorted, or repacked in a bonded warehouse,~~\
or\
~~(B) is a drawback eligible good under section 204(a) of such Act~~\
of 1988;\
~~(2) for exportation to any foreign country except Canada; and~~\
~~(3) for shipment to the Virgin Islands, American Samoa, Wake Island,
Midway Island, Kingman Reef, Johnston Island or the island of Guam.~~\
(1) without payment of duties for exportation to a NAFTA country, as
defined in section 2(4) of the North American Free Trade Agreement
Implementation Act, if the merchandise is of a kind described in any of
paragraphs (1) through (8) of section 203(a) of that Act;\
(2) for exportation to a NAFTA country if the merchandise consists of
goods subject to NAFTA drawback, as defined in section 203(a) of that
Act, except that\--\
(A) the merchandise may not be withdrawn from warehouse without
assessment of a duty on the merchandise in its condition and quantity,
and at its weight, at the time of withdrawal from the warehouse with
such additions to or deductions from the final appraised value as may be
necessary by reason of change in condition, and\
(B) duty shall be paid on the merchandise before the 61st day after the
date of exportation, but upon the presentation, before such 61st day, of
satisfactory evidence of the amount of any customs duties paid to the
NAFTA country on the merchandise, the customs duty may be waived or
reduced (subject to section 508(b)(2)(B)) in an amount that does not
exceed the lesser of\--\
(i) the total amount of customs duties paid or owed on the merchandise
on importation into the United States, or\
(ii) the total amount of customs duties paid on the merchandise to the
NAFTA country;\
(3) without payment of duties for exportation to any foreign country
other than to a NAFTA country or to Canada when exports to that country
are subject to paragraph (4);\
(4) without payment of duties for exportation to Canada (if that country
ceases to be a NAFTA country and the suspension of the operation of the
United States-Canada Free-Trade Agreement thereafter terminates), but
the exemption from the payment of duties under this paragraph applies
only in the case of an exportation during the period such Agreement is
in operation of merchandise that\--\
(A) is only cleaned, sorted, or repacked in a bonded warehouse, or\
(B) is a drawback eligible good under section 204(a) of the United
States-Canada Free-Trade Agreement Implementation Act of 1988; and\
(5) without payment of duties for shipment to the Virgin Islands,
American Samoa, Wake Island, Midway Island, Kingman Reef, Johnston
Island or the island of Guam. merchandise may be withdrawn from bonded
warehouse for consumption, or for exportation to Canada if the duty
exemption under paragraph ~~(1)~~ (4) of the preceding sentence does not
apply, upon the payment of duties accruing thereon, in its condition and
quantity, and at its weight, at the time of withdrawal from warehouse,
with such additions to or deductions from the final appraised value as
may be necessary by reason of change in condition. The basis for the
assessment of duties on such merchandise so withdrawn for consumption
shall be the adjusted final appraised value, and if the rate of duty is
based upon or regulated in any manner by the value of the merchandise,
such rate shall be based upon or regulated by such adjusted final
appraised value. The scouring or carbonizing of wool shall not be
considered a process of manufacture within the provisions of this
section. Under such regulations as the Secretary of the Treasury shall
prescribe, imported merchandise which has been entered and which has
remained in continuous customs custody may be manipulated in accordance
with the provisions of this section under customs supervision and at the
risk and expense of the consignee, but elsewhere than in a bonded
warehouse, in cases where neither the protection of the revenue nor the
proper conduct of customs business requires that such manipulation be
done in a bonded warehouse.

\* \* \* \* \*

~~The cartage of merchandise entered for warehouse shall be done by
cartmen to be appointed and licensed by the appropriate customs officer
and who shall give a bond, in a penal sum to be fixed by such customs
officer, for the protection of the Government against any loss of, or
damage to, such merchandise while being so carted.~~ The cartage of
merchandise entered for warehouse shall be done by\--\
(1) cartmen appointed and licensed by the Customs Services; or\
(2) carriers designated under section 551 to carry bonded merchandise;
who shall give bond, in a penal sum to be fixed by the Customs Service,
for the protection of the Government against any loss of, or damage to,
the merchandise while being so carted. The cartage of merchandise
designated for examination at the appraiser\'s stores and of merchandise
taken into custody by the customs officer as unclaimed shall be
performed by such persons as may be designated, under contract or
otherwise, by the Secretary of the Treasury, and under such regulations
for the protection of the owners thereof and of the revenue as the
Secretary of the Treasury shall prescribe.

\* \* \* \* \*

Part V\--Enforcement Provisions

\* \* \* \* \*

**~~[SEC. 583. CERTIFICATION OF MANIFEST.]{.underline}~~**\
\
\
~~The master of every vessel and the person in charge of every vehicle
bound to a port or place in the United States shall deliver to the
officer of the customs or Coast Guard who shall first demand it of him,
the original and one copy of the manifest of such vessel or vehicle, and
such officer shall certify on the original manifest to the inspection
thereof and return the same to the master of other person in charge.~~\
\
**[SEC. 584. FALSITY OR LACK OF MANIFEST\--PENALTIES.]{.underline}**\
\
\
(a) General Rule.\--(1) Any master of any vessel and any person in
charge of any vehicle bound to the United States who does not produce
the manifest to the ~~officer demanding the same~~ officer (whether of
the Customs Service or the Coast Guard) demanding the same shall be
liable to a penalty of \$1,000, and if any merchandise, including sea
stores, is found on board of or after having been unladen from such
vessel or vehicle which is not included or described in said manifest or
does not agree therewith, the master of such vessel or the person in
charge of such vehicle or the owner of such vessel or vehicle or any
person directly or indirectly responsible for any discrepancy between
the merchandise and said manifest\" immediately after \"or the owner of
such vessel or vehicle shall be liable to a penalty equal to the lesser
of \$10,000 or the domestic value of the merchandise so found or
unladen, and any such merchandise belonging or consigned to the master
or other officer or to any of the crew of such vessel, or the owner or
person in charge of such vehicle, shall be subject to forfeiture, and if
any merchandise described in such manifest is not found on board the
vessel or vehicle the master or other person in charge or the owner of
such vessel or vehicle or any person directly or indirectly responsible
for any discrepancy between the merchandise and said manifest\"
immediately after \"or the owner of such vessel or vehicle shall be
subject to a penalty of \$1,000: Provided, That if the ~~appropriate
customs officer~~ Customs Service shall be satisfied that the manifest
was lost or mislaid without intentional fraud, or was defaced by
accident, or is incorrect by reason or clerical error or other mistake
and that no part of the merchandise not found on board was unshipped or
discharged except as specified in the report of the master, said
penalties shall not be incurred. For purposes of this subsection, the
term \"clerical error\" means a nonnegligent, inadvertent, or
typographical mistake in the preparation; assembly, or submission
(electronically or otherwise) of the manifest.\
(2) If any of such merchandise so found consists of heroin, morphine, or
cocaine, isonipecaine, or opiate, the master of such vessel or person in
charge of such vehicle or the owner of such vessel or vehicle or any
person directly or indirectly responsible for heroin, morphine, cocaine;
isonipecaine, or opiate being in such merchandise shall be liable to a
penalty of \$1,000 for each ounce thereof so found. If any of such
merchandise so found consists of smoking opium, opium prepared for
smoking, or marihuana, the master of such vessel or person in charge of
such vehicle or the owner of such vessel or vehicle or any person
directly or indirectly responsible for smoking opium, opium prepared for
smoking, or marihuana being in such merchandise shall be liable to a
penalty of \$500 for each ounce thereof so found. If any of such
merchandise so found consists of crude opium, the master of such vessel
or person in charge of such vehicle or the owner of such vessel or
vehicle or any person directly or indirectly responsible for crude opium
being in such merchandise shall be liable to a penalty of \$200 for each
ounce thereof so found. Such penalties shall, notwithstanding the
proviso in section 594 of this Act (relating to the immunity of vessels
or vehicles used as common carriers), constitute a lien upon such vessel
which may be enforced by a libel in rem; except that the master or owner
of a vessel used by any person as a common carrier in the transaction of
business as such common carrier shall not be liable to such penalties
and the vessel shall not be held subject to the lien, if it appears to
the satisfaction of the court that neither the master nor any of the
officers (including licensed and unlicensed officers and petty officers)
nor the owner of the vessel knew, and could not, by the exercise of the
highest degree of care and diligence, have known, that such narcotic
drugs were on board. Clearance of any such vessel may be withheld until
such penalties are paid or until a bond, satisfactory to the
~~appropriate customs officer~~ Customs Service, is given for the
payment thereof. The provisions of this paragraph shall not prevent the
forfeiture of any such vessel or vehicle under any other provision of
law. As used in this paragraph, the terms \"opiate\" and \"marihuana\"
shall have the same meaning given those terms by sections 102(17) and
102(15), respectively, of the Controlled Substances Act.\
(3) If any of such merchandise (sea stores excepted), the importation of
which into the United States is prohibited, or which consists of any
spirits, wines, or other alcoholic liquors for the importation of which
into the United States a certificate is required under section 7 of the
Anti-Smuggling Act and the required certificate be not shown, be so
found upon any vessel not exceeding five hundred net tons, the vessel
shall, in addition to any other penalties herein or by law provided, be
seized and forfeited, and, if any manifested merchandise (sea stores
excepted) consisting of any such spirits, wines, or other alcoholic
liquors be found upon any such vessel and the required certificate be
not shown, the master of the vessel shall be liable to the penalty
herein provided in the case of merchandise not duly manifested:
Provided, That if the ~~appropriate customs officer~~ Customs Service
shall be satisfied that the certificate required for the importation of
any spirits, wines, or other alcoholic liquors was issued and was lost
or mislaid without intentional fraud, or was defaced by accident, or is
incorrect by reason of clerical error or other mistake, said penalties
shall not be incurred.\
(b) Procedures.\--(1) If ~~the appropriate customs officer~~ the Customs
Service has reasonable cause to believe that there has been a violation
of subsection (a)(1) and determines that further proceedings are
warranted, ~~he~~ the Customs Service shall issue or electronically
transmit to the person concerned a ~~written~~ notice of ~~his
intention~~ intent to issue or electronically transmit a claim for a
monetary penalty. Such notice shall\--\
(A)\* \* \*

\* \* \* \* \*

\(F\) inform such person that he will have a reasonable opportunity to
make representations, both oral and written, as to why such penalty
claim should not be issued. No notice is required under this subsection
for any violation of subsection (a)(1) for which the proposed penalty is
\$1,000 or less.\
(2) After considering representations, if any, made by the person
concerned pursuant to the notice issued under paragraph (1), ~~the
appropriate customs officer~~ the Customs Service shall determine
whether any violations of subsection (a)(1), as alleged in the notice,
has occurred. If ~~such officer~~ the Customs Service determines that
there was no violation, ~~he~~ the Customs Service shall promptly issue
or electronically transmit a ~~written~~ statement of the determination
to the person to whom the notice was sent. If ~~such officer~~ the
Customs Service determines that there was a violation, ~~he~~ the
Customs Service shall issue or electronically transmit a ~~written~~
penalty claim to such person. The ~~written~~ penalty claim shall
specify all changes in the information provided under subparagraphs (A)
through (E) of paragraph (1).\
\
**~~[SEC. 585. DEPARTURE BEFORE REPORT OR ENTRY.]{.underline}~~**\
\
\
~~If any vessel or vehicle from a foreign port or place arrives within
the limits of any collection district and departs or attempts to depart,
except from stress of weather or other necessity, without making a
report or entry under the provisions of this Act, or if any merchandise
is unladen therefrom before such report or entry, the master of such
vessel shall be liable to a penalty of \$5,000, and the person in charge
of such vehicle shall be liable to a penalty of \$500, and any such
vessel or vehicle shall be forfeited, and any officer of the customs may
cause such vessel or vehicle to be arrested and brought back to the most
convenient port of the United States.~~\
\
**[SEC. 586. UNLAWFUL UNLADING OR TRANSSHIPMENT]{.underline}**\
\
\
(a) The master of any vessel from a foreign port or place, or of a
hovering vessel which has received or delivered merchandise while
outside the territorial sea, who allows any merchandise (including sea
stores) to be unladen from such vessel at any time after its arrival
within the customs waters and before such vessel has come to the proper
place for the discharge of such merchandise, and before he has received
a permit to unlade, shall be liable to a penalty equal to twice the
value of the merchandise but not less than \$10,000, and such vessel and
its cargo and the merchandise so unladen shall be seized and forfeited.\
(b) The master of any vessel from a foreign port or place, or of a
hovering vessel which has received or delivered merchandise while
outside the territorial sea, who allows any merchandise (including sea
stores), the importation of which into the United States is prohibited,
or which consists of any spirits, wines, or other alcoholic liquors, to
be unladen from his vessel at any place upon the high seas adjacent to
the customs waters of the United States to be transshipped to or placed
in or received on any vessel of any description, with knowledge, or
under circumstances indicating the purpose to render it possible, that
such merchandise, or any part thereof, may be introduced, or attempted
to be introduced, into the United States in violation of law, shall be
liable to a penalty equal to twice the value of the merchandise by not
less than \$10,000, and the vessel from which the merchandise is so
unladen, and its cargo and such merchandise, shall be seized and
forfeited.\
(c) The master of any vessel from a foreign port or place, or of a
hovering vessel which has received or delivered merchandise while
outside the territorial sea, who allows any merchandise (including sea
stores) destined to the United States, the importation of which into the
United States is prohibited, or which consists, of any spirits, wines,
or other alcoholic liquors, to be unlade without permit to unlade, at
any place upon the high seas adjacent to the customs water of the United
States, to be transshipped to or placed in or received on any vessel of
the United States or any other vessel which is owned by any person a
citizen of, or domiciled in, the United States, or any corporation
incorporated in the United States, shall be liable to a penalty equal to
twice the value of the merchandise but not less than \$10,000, and the
vessel from which the merchandise is so unladen, and its cargo and such
merchandise, shall be seized and forfeited.

\* \* \* \* \*

\(f\) Whenever any part of the cargo or stores of a vessel has been
unladen or transshipped because of accident, stress of weather, or other
necessity, the master of such vessel and the master of any vessel to
which such cargo or stores has been transshipped shall, as soon as
possible thereafter, notify ~~the appropriate customs officer of the~~
the Customs Service at the district within which such unlading or
transshipment has occurred, or ~~the appropriate customs officer within
the~~ the Customs Service at the district at which such vessel shall
first arrive thereafter, and shall furnish proof that such unlading or
transshipment was made necessary by accident, stress of weather, or
other unavoidable cause, and if ~~the appropriate customs officer is~~
the Customs Service is satisfied that the unlading or transshipment was
in fact due to accident, stress of weather, or other necessity, the
penalties described in this section shall not be incurred.

\* \* \* \* \*

**[SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND
NEGLIGENCE.]{.underline}**\
\
\
(a) Prohibition.\--\
(1) General rule.\--Without regard to whether the United States is or
may be deprived of all or a portion of any lawful duty thereby, no
person, by fraud, gross negligence, or negligence\--\
(A) may enter, introduce, or attempt to enter or introduce any
merchandise into the commerce of the United States by means of\--\
(i) any document or electronically transmitted data or information,
written or oral statement, or act which is material and false, or\
(ii) any omission which is material, or\
(B) may aid or abet any other person to violate subparagraph (A).\
(2) Exception.\--Clerical errors or mistakes of fact are not violations
of paragraph (1) unless they are part of a pattern of negligent conduct.
The mere nonintentional repetition by an electronic system of an initial
clerical error does not constitute a pattern of negligent conduct.\
(b) Procedures.\--\
(1) Pre-penalty notice.\--\
(A) In general.\--If the ~~appropriate customs officer~~ Customs Service
has reasonable cause to believe that there has been a violation of
subsection (a) and determines that further proceedings are warranted,
~~he~~ it shall issue to the person concerned a written notice of
~~his~~ its intention to issue a claim for a monetary penalty. Such
notice shall\--\
(i) describe the merchandise;\
(ii) set forth the details of entry or introduction, the attempted entry
or introduction, or the aiding or procuring of the entry or
introduction;

\* \* \* \* \*

\(2\) Penalty claim.\--After considering representations, if any, made
by the person concerned pursuant to the notice issued under paragraph
(1), the ~~appropriate customs officer~~ Customs Service shall determine
whether any violation of subsection (a), as alleged in the notice, has
occurred. If ~~such officer~~ the Customs Service determines that there
was no violation, ~~he~~ it shall promptly issue a written statement of
the determination to the person to whom the notice was sent. If ~~such
officer~~ the Customs Service determines that there was a violation,
~~he~~ it shall issue a written penalty claim to such person. The
written penalty claim shall specify all changes in the information
provided under clauses (i) through (vi) of paragraph (1)(A). Such person
shall have a reasonable opportunity under section 618 of this Act to
make representations, both oral and written, seeking remission or
mitigation of the monetary penalty. At the conclusion of any proceeding
under such section 618, the ~~appropriate customs officer~~ Customs
Service shall provide to the person concerned a written statement which
sets forth the final determination and the findings of fact and
conclusions of law on which such determination is based.\
(c) Maximum Penalties.\--\
(1) \* \* \*

\* \* \* \* \*

\(4\) Prior disclosure.\--If the person concerned discloses the
circumstances of a violation of subsection (a) before, or without
knowledge of, the commencement of a formal investigation of such
violation, with respect to such violation, merchandise shall not be
seized and any monetary penalty to be assessed under subsection (c)
shall not exceed\--\
(A) if the violation resulted from fraud\--\
(i) an amount equal to 100 percent of the lawful duties of which the
United States is or may be deprived, so long as such person tenders the
unpaid amount of the lawful duties at the ~~time of disclosure or within
thirty days, or such longer period as the appropriate customs officer
may provide, after notice by the appropriate customs officer of his~~
time of disclosure, or within 30 days (or such longer period as the
Customs Service may provide) after notice by the Customs Service of its
calculation of such unpaid amount, or\
(ii) if such violation did not affect the assessment of duties, 10
percent of the dutiable value; or\
(B) if such violation resulted from negligence or gross negligence, the
interest (computed from the date of liquidation at the prevailing rate
of interest applied under section 6621 of the Internal Revenue Code of
1954) on the amount of lawful duties of which the United States is or
may be deprived so long as such person tenders the unpaid amount of the
lawful duties at the ~~time of disclosure or~~\
within 30 days, or such longer period as the appropriate customs\
officer may provide, after notice by the appropriate customs officer\
of his time of disclosure, or within 30 days (or such longer period as
the Customs Service may provide) after notice by the Customs Service of
its calculation of such unpaid amount. The person asserting lack of
knowledge of the commencement of a formal investigation has the burden
of proof in establishing such lack of knowledge. For purposes of this
section, a formal investigation of a violation is considered to be
commenced with regard to the disclosing party and the disclosed
information on the date recorded in writing by the Customs Service as
the date on which facts and circumstances were discovered or information
was received which caused the Customs Service to believe that a
possibility of a violation of subsection (a) existed.\
(5) Prior disclosure regarding nafta claims.\--An importer shall not be
subject to penalties under subsection (a) for making an incorrect claim
for preferential tariff treatment under section 202 of the North
American Free Trade Agreement Implementation Act if the importer\--\
(A) has reason to believe that the NAFTA Certificate of Origin (as
defined in section 508(b)(1)) on which the claim was based contains
incorrect information; and\
(B) in accordance with regulations issued by the Secretary, voluntarily
and promptly makes a corrected declaration and pays any duties owing.\
~~(5)~~ (6) Seizure.\--If the Secretary has reasonable cause to believe
that a person has violated the provisions of subsection (a) and that
such person is insolvent or beyond the jurisdiction of the United States
or that seizure is otherwise essential to protect the revenue of the
United States or to prevent the introduction of prohibited or restricted
merchandise into the customs territory of the United States, then such
merchandise may be seized and, upon assessment of a monetary penalty,
forfeited unless the monetary penalty is paid within the time specified
by law. Within a reasonable time after any such seizure is made, the
Secretary shall issue to the person concerned a written statement
containing the reasons for the seizure. After seizure of merchandise
under this subsection, the Secretary may, in the case of restricted
merchandise, and shall, in the case of any other merchandise (other than
prohibited merchandise), return such merchandise upon the deposit of
security not to exceed the maximum monetary penalty which may be
assessed under subsection (c).

\* \* \* \* \*

\(d\) Deprivation of Lawful Duties, Taxes or Fees.\--Notwithstanding
section 514 of this Act, if the United States has been deprived of
lawful duties, taxes, or fees as a result of a violation of subsection
(a), ~~the appropriate customs officer~~ the Customs Service shall
require that such lawful duties, taxes or fees be restored, whether or
not a monetary penalty is assessed.

\* \* \* \* \*

\(f\) False Certifications Regarding Exports To NAFTA Countries.\--\
(1) In general.\--Subject to paragraph (3), it is unlawful for any
person to certify falsely, by fraud, gross negligence, or negligence, in
a NAFTA Certificate of Origin (as defined in section 508(b)(1)) that a
good to be exported to a NAFTA country (as defined in section 2(4) of
the North American Free Trade Agreement Implementation Act) qualifies
under the rules of origin set out in section 202 of that Act.\
(2) Applicable provisions.\--The procedures and penalties of this
section that apply to a violation of subsection (a) also apply to a
violation of paragraph (1), except that\--\
(A) subsection (d) does not apply, and\
(B) subsection (c)(5) applies only if the person voluntarily and
promptly provides, to all persons to whom the person provided the NAFTA
Certificate of Origin, written notice of the falsity of the
Certificate.\
(3) Exception.\--A person may not be considered to have violated
paragraph (1) if\--\
(A) the information was correct at the time it was provided in a NAFTA
Certificate of Origin but was later rendered incorrect due to a change
in circumstances; and\
(B) the person voluntarily and promptly provides written notice of the
change to all persons to whom the person provided the Certificate of
Origin.\
**[SEC. 593A. PENALTIES FOR FALSE DRAWBACK CLAIMS.]{.underline}**\
\
\
(A) Prohibition.\--\
(1) General rule.\--No person, by fraud, or negligence\--\
(A) may seek, induce or affect, or attempt to seek, induce, or affect,
the payment or credit to that person or others of any drawback claim by
means of\--\
(i) any document, written or oral statement, or electronically
transmitted data or information, or act which is material and false, or\
(ii) any omission which is material; or\
(B) may aid or abet any other person to violate subparagraph (A).\
(2) Exception.\--Clerical errors or mistakes of fact are not violations
of paragraph (1) unless they are part of a pattern of negligent conduct.
The mere noninternational repetition by an electronic system of an
initial clerical error does not constitute a pattern of negligent
conduct.\
(b) Procedures.\--\
(1) Prepenalty notice.\--\
(A) In general.\--If the Customs Service has reasonable cause to believe
that there has been a violation of subsection (a) and determines that
further proceedings are warranted, the Customs Service shall issue to
the person concerned a written notice of intent to issue a claim for a
monetary penalty. Such notice shall\--\
(i) identify the drawback claim;\
(ii) set forth the details relating to the seeking, inducing, or
affecting, or the attempted seeking, inducing, or affecting, or the
aiding or procuring of, the drawback claim;\
(iii) specify all laws and regulations allegedly violated;\
(iv) disclose all the material facts which establish the alleged
violation;\
(v) state whether the alleged violation occurred as a result of fraud or
negligence;\
(vi) state the estimated actual or potential loss of revenue due to the
drawback claim, and, taking into account all circumstances, the amount
of the proposed monetary penalty; and\
(vii) inform such person that he shall have a reasonable opportunity to
make representations, both oral and written, as to why a claim for a
monetary penalty should not be issued in the amount stated.\
(B) Exceptions.\--The Customs Service may not issue a prepenalty notice
if the amount of the penalty in the penalty claim issued under paragraph
(2) is \$1,000 or less. In such cases, the Customs Service may proceed
directly with a penalty claim.\
(C) Prior approval.\--No prepenalty notice in which the alleged
violation occurred as a result of fraud shall be issued without the
prior approval of Customs Headquarters.\
(2) Penalty claim.\--After considering representations, if any, made by
the person concerned pursuant to the notice issued under paragraph (1),
the Customs Service shall determine whether any violation of subsection\
(a), as alleged in the notice, has occurred. If the Customs Service
determines that there was no violation, the Customs Service shall
promptly issue a written statement of the determination to the person to
whom the notice was sent. If the Customs Service determines that there
was a violation, Customs shall issue a written penalty claim to such
person. The written penalty claim shall specify all changes in the
information provided under clauses (i) through (vii) of paragraph
(1)(A). Such person shall have a reasonable opportunity under section
618 to make representations, both oral and written, seeking remission or
mitigation of the monetary penalty. At the conclusion of any proceeding
under section 618, the Customs Service shall provide to the person
concerned a written statement which sets forth the final determination,
and the findings of fact and conclusions of law on which such
determination is based.\
(c) Maximum Penalties.\--\
(1) Fraud.\--A fraudulent violation of subsection (a) of this section is
punishable by a civil penalty in an amount not to exceed 3 times the
actual or potential loss of revenue.\
(2) Negligence.\--\
(A) In general.\--A negligent violation of subsection (a) is punishable
by a civil penalty in an amount not to exceed 20 percent of the actual
or potential loss of revenue for the 1st violation.\
(B) Repetitive violations.\--If the Customs Service determines that a
repeat negligent violation occurs relating to the same issue, the
penalty amount for the 2d violation shall be in an amount not to exceed
50 percent of the total actual or potential loss of revenue. The penalty
amount for each succeeding repetitive negligent violation shall be in an
amount not to exceed the actual or potential loss of revenue. If the
same party commits a nonrepetitive violation, that violation shall be
subject to a penalty not to exceed 20 percent of the actual or potential
loss of revenue.\
(3) Prior disclosure.\--\
(A) In general.\--Subject to subparagraph (B), if the person concerned
discloses the circumstances of a violation of subsection\
(a) before, or without knowledge of the commencement of, a formal
investigation of such violation, the monetary penalty assessed under
this subsection may not exceed\--\
(i) if the violation resulted from fraud, an amount equal to the actual
or potential revenue of which the United States is or may be deprived as
a result of overpayment of the claim; or\
(ii) if the violation resulted from negligence, an amount equal to the
interest computed on the basis of the prevailing rate of interest
applied under section 6621 of the Internal Revenue Code of 1986 on the
amount of actual revenue of which the United States is or may be
deprived during the period that\--\
(I) begins on the date of the overpayment of the claim; and\
(II) ends on the date on which the person concerned tenders the amount
of the overpayment.\
(B) Condition affecting penalty limitations.\--The limitations in
subparagraph (A) on the amount of the monetary penalty to be assessed
under subsection (c) apply only if the person concerned tenders the
amount of the overpayment made on the claim at the time of disclosure,
or within 30 days (or such longer period as the Customs Service may
provide), after notice by the Customs Service of its calculation of the
amount of the overpayment.\
(C) Burden of proof.\--The person asserting lack of knowledge of the
commencement of a formal investigation has the burden of proof in
establishing such lack of knowledge.\
(4) Commencement of investigation.\--For purposes of this section, a
formal investigation of a violation is considered to be commenced with
regard to the disclosing party and the disclosed information on the date
recorded in writing by the Customs Service as the date on which facts
and circumstances were discovered or information was received which
caused the Customs Service to believe that a possibility of a violation
of subsection (a) existed.\
(5) Exclusivity.\--Penalty claims under this section shall be the
exclusive civil remedy for any drawback related violation of subsection\
(a).\
(d) Deprivation of Lawful Revenue.\--Notwithstanding section 514, if the
United States has been deprived of lawful duties and taxes resulting
from a violation of subsection (a), the Customs Service shall require
that such duties and taxes be restored whether or not a monetary penalty
is assessed.\
(e) Drawback Compliance Program.\--\
(1) In general.\--After consultation with the drawback trade community,
the Customs Service shall establish a drawback compliance program in
which claimants and other parties in interest may participate after
being certified by the Customs Service under paragraph (2).
Participation in the drawback compliance program is voluntary.\
(2) Certification.\--A party may be certified as a participant in the
drawback compliance program after meeting the general requirements
established under the program or after negotiating an alternative
program suited to the needs of the party and the Customs Service.
Certification requirements shall take into account the size and nature
of the party\'s drawback program and the volume of claims. In order to
be certified, the participant must be able to demonstrate that it\--\
(A) understands the legal requirements for filing claims, including the
nature of the records required to be maintained and produced and the
time periods involved;\
(B) has in place procedures to explain the Customs Service requirements
to those employees that are involved in the preparation of claims, and
the maintenance and production of required records;\
(C) has in place procedures regarding the preparation of claims and
maintenance of required records, and the production of such records to
the Customs Service;\
(D) has designated a dependable individual or individuals to be
responsible for compliance under the program and whose duties include
maintaining familiarity with the drawback requirements of Customs
Service;\
(E) has a record maintenance procedure approved by the Customs Service
for original records, or, if approved by the Customs Service, for
alternate records or recordkeeping formats other than the original
records; and\
(F) has procedures for notifying the Customs Service of variances to,
and violations of, the requirements of the drawback compliance program
or any negotiated alternative programs, and for taking corrective action
when notified by the Customs Service for violations or problems
regarding such program.\
(f) Alternatives to Penalties.\--\
(1) In general.\--When a party that\--\
(A) has been certified as a participant in the drawback compliance
program under subsection (e); and\
(B) is generally in compliance with the appropriate procedures and
requirements of the program; commits a violation of subsection (a), the
Customs Service, shall, in the absence of fraud or repeated violations,
and in lieu of a monetary penalty, issue a written notice of the
violation to the party. Repeated violations by a party may result in the
issuance of penalties and removal of certification under the program
until corrective action, satisfactory to the Customs Service, is taken.\
(2) Contents of notice.\--A notice of violation issued under paragraph\
(1) shall\--\
(A) state that the party has violated subsection (a);\
(B) explain the nature of the violation; and\
(C) warn the party that future violations of subsection (a) may result
in the imposition of monetary penalties.\
(3) Response to notice.\--Within a reasonable time after receiving
written notice under paragraph (1), the party shall notify the Customs
Service of the steps it has taken to prevent a recurrence of the
violation.\
(g) Repetitive Violations.\--\
(1) A party who has been issued a written notice under subsection\
(f)(1) and subsequently commits a repeat negligent violation involving
the same issue is subject to the following monetary penalties:\
(A) 2d violation.\--An amount not to exceed 20 percent of the loss of
revenue.\
(B) 3d violation.\--An amount not to exceed 50 percent of the loss of
revenue.\
(C) 4th and subsequent violations.\--An amount not to exceed 100 percent
of the loss of revenue.\
(2) If a party that has been certified as a participant in the drawback
compliance program under subsection (e) commits an alleged violation
which was not repetitive, the party shall be issued a \"warning
letter\", and, for any subsequent violation, shall be subject to the
same maximum penalty amounts stated in paragraph (1).\
(h) Regulation.\--The Secretary shall promulgate regulations and
guidelines to implement this section. Such regulations shall specify
that for purposes of subsection (g), a repeat negligent violation
involving the same issue shall be treated as a repetitive violation for
a maximum period of 3 years.\
(i) Court of International Trade Proceedings.\--Notwithstanding any
other provision of law, in any proceeding commenced by the United States
in the Court of International Trade for the recovery of any monetary
penalty claimed under this section\--\
(1) all issues, including the amount of the penalty, shall be tried de
novo;\
(2) if the monetary penalty is based on fraud, the United States shall
have the burden of proof to establish the alleged violation by clear and
convincing evidence; and\
(3) if the monetary penalty is based on negligence, the United States
shall have the burden of proof to establish the act or omission
constituting the violation, and the alleged violator shall have the
burden of providing evidence that the act or omission did not occur as a
result of negligence.

\* \* \* \* \*

**[SEC. 596. AIDING UNLAWFUL IMPORTATION.]{.underline}**

\* \* \* \* \*

\(a\) \* \* \*\
~~(c) Any merchandise that is introduced or attempted to be introduced
into the United States contrary to law (other than in violation of
section 592) may be seized and forfeited.~~\
(c) Merchandise which is introduced or attempted to be introduced into
the United States contrary to law shall be treated as follows:\
(1) The merchandise shall be seized and forfeited if it\--\
(A) is stolen, smuggled, or clandestinely imported or introduced;\
(B) is a controlled substance, as defined in the Controlled Substances
Act (21 U.S.C. 801 et seq.), and is not imported in accordance with
applicable law; or\
(C) is a contraband article, as defined in section 1 of the Act of
August 9, 1939 (49 U.S.C. App. 781).\
(2) The merchandise may be seized and forfeited if\--\
(A) its importation or entry is subject to any restriction or
prohibition which is imposed by law relating to health, safety, or
conservation and the merchandise is not in compliance with the
applicable rule, regulation, or statute;\
(B) its importation or entry requires a license, permit or other
authorization of an agency of the United States Government and the
merchandise is not accompanied by such license, permit, or
authorization;\
(C) it is merchandise or packaging in which copyright, trademark, or
trade name protection violations are involved (including, but not
limited to, violations of section 42, 43, or 45 of the Act of July 5,
1946 (15 U.S.C. 1124, 1125, or 1127), section 506 or 509 of title 17,
United States Code, or section 2318 or 2320 of title 18, United States
Code);\
(D) it is trade dress merchandise involved in the violation of a court
order citing section 43 of such Act of July 5, 1946 (15 U.S.C. 1125);\
(E) it is merchandise which is marked intentionally in violation of
section 304; or\
(F) it is merchandise for which the importer has received written
notices that previous importations of identical merchandise from the
same supplier were found to have been marked in violation of section
304.\
(3) If the importation or entry of the merchandise is subject to
quantitative restrictions requiring a visa, permit, license, or other
similar document, or stamp from the United States Government or from a
foreign government or issuing authority pursuant to a bilateral or
multilateral agreement, the merchandise shall be subject to detention in
accordance with section 499 unless the appropriate visa, license,
permit, or similar document or stamp is presented to the Customs
Service; but if the visa, permit, license, or similar document or stamp
which is presented in connection with the importation or entry of the
merchandise is counterfeit, the merchandise may be seized and
forfeited.\
(4) If the merchandise is imported or introduced contrary to a provision
of law which governs the classification of value of merchandise and
there are no issues as to the admissibility of the merchandise into the
United States, it shall not be seized except in accordance with section
592.\
(5) In any case where the seizure and forfeiture of merchandise are
required or authorized by this section, the Secretary may\--\
(A) remit the forfeiture under section 618, or\
(B) permit the exportation of the merchandise, unless its release would
adversely affect health, safety, or conservation or be in contravention
of a bilateral or multilateral agreement or treaty.

\* \* \* \* \*

**[SEC. 612. SEIZURE; SUMMARY SALE.]{.underline}**\
\
\
(a) Whenever it appears to ~~the appropriate customs officer~~ the
Customs Service that any vessel, vehicle, aircraft, merchandise, or
baggage seized under the customs laws is liable to perish or to waste or
to be greatly reduced in value by keeping, or that the expense of
keeping the same is disproportionate to the value thereof, and such
vessel, vehicle, aircraft, merchandise, or baggage is subject to section
607, and such vessel, vehicle, aircraft, merchandise, or baggage has not
been delivered under bond, ~~such officer~~ the Customs Service shall
proceed forthwith to advistise and sell the same at auction under
regulations to be prescribed by the Secretary of the Treasury. If such
vessel, vehicle, aircraft, merchandise, or baggage is not subject to
section 607, ~~such officer~~ the Customs Service shall forthwith
transmit ~~the appraiser\'s return and his~~ its report of the seizure
to the United States attorney, who shall petition the court to order an
immediate sale of such vessel, vehicle, aircraft, merchandise, or
baggage, and if the ends of justice require it the court shall order
such immediate sale, the proceeds thereof to be deposited with the court
to await the final determination of the condemnation proceedings.
Whether such sale be made by ~~the customs officer~~ the Customs Service
or by order of the court, the proceeds thereof shall be held subject to
claims of parties in interest to the same extent as the vessel, vehicle,
aircraft, merchandise, or baggage so sold would have been subject to
such claim.\
~~(b) If the expense of keeping the vessel, vehicle, aircraft,
merchandise, or baggage is disproportionate to the value thereof, and
such value is less than \$1,000, such officer may proceed forthwith to
order destruction or other appropriate disposition of such property,
under regulations prescribed by the Secretary of the Treasury.~~\
(b) If the Customs Service determines that the expense of keeping the
vessel, vehicle, aircraft, merchandise, or baggage is disproportionate
to the value thereof, the Customs Service may promptly order the
destruction or other appropriate disposition of such property under
regulations prescribed by the Secretary. No customs officer shall be
liable for the destruction or other disposition of property made
pursuant to this section.

\* \* \* \* \*

**[SEC. 621. LIMITATION OF ACTIONS.]{.underline}**\
\
\
No suit or action to recover any duty under section 593A(d), or any
pecuniary penalty or forfeiture of property accruing under the customs
laws shall be instituted unless such suit or action is commenced within
five years after the time when the alleged offense was ~~discovered:
Provided, That the time of the absence from the United States of the
person subject to such penalty or forfeiture, or of any concealment or
absence of the property, shall not be reckoned within this period of
limitation.~~ discovered; except that\--\
(1) in the case of an alleged violation of section 592 or 593A, no suit
or action (including a suit or action for restoration of lawful duties
under subsection (d) of such sections) may be instituted unless
commenced within 5 years after the date of the alleged violation or, if
such violation arises out of fraud, within 5 years after the date of
discovery of fraud, and\
(2) the time of the absence from the United States of the person subject
to the penalty or forfeiture, or of any concealment or absence of the
property, shall not be reckoned within the 5-year period of limitation.

\* \* \* \* \*

**[SEC. 623. BONDS AND OTHER SECURITY.]{.underline}**\
\
\
(a) \* \* \*\
(b) Whenever a bond is required or authorized by a law, regulation, or
instruction which the Secretary of the Treasury or the Customs Service
is authorized to enforce, the Secretary of the Treasury may\--\
(1) Except as otherwise specifically provided by law, prescribe the
conditions and form of such bond and the manner in which the bond may be
filed with or, pursuant to an authorized electronic data interchange
system, transmitted to the Customs Service, and fix the amount of
penalty thereof, whether for the payment of liquidated damages or of a
penal sum: Provided, That in the case of an alleged violation of section
592 of this Act arising out of gross negligence or negligence, such suit
or action shall not be instituted more than five years after the date
the alleged violation was committed: Provided further, That when a
consolidated bond authorized by paragraph 4 of this subsection is taken,
the Secretary of the Treasury may fix the penalty of such bond without
regard to any other provision of law, regulation, or instruction.

\* \* \* \* \*

\(d\) No condition in any bond taken to assure compliance with any law,
regulation, or instruction which the Secretary of the Treasury or the
Customs Service is authorized to enforce shall be held invalid on the
ground that such condition is not specified in the law, regulation, or
instruction authorizing or requiring the taking of such bond. Any bond
transmitted to the Customs Service pursuant to an authorized electronic
data interchange system shall have the same force and effect and be
binding upon the parties thereto as if such bond were manually executed,
signed, and filed.

\* \* \* \* \*

**~~[SEC. 625. PUBLICATION OF DECISIONS.]{.underline}~~**\
\
\
~~Within 120 days after issuing any precedential decision (including any
ruling letter, internal advice memorandum, or protest review decision)
under this Act with respect to any customs transaction, the Secretary
shall have such decision published in the Customs Bulletin or shall
otherwise make such decision available for public inspection.~~\
**[SEC. 625. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC
INFORMATION.]{.underline}**\
\
\
(a) Publication.\--Within 90 days after the date of issuance of any
interpretive ruling (including any ruling letter, or internal advice
memorandum) or protest review decision under this chapter with respect
to any customs transaction, the Secretary shall have such ruling or
decision published in the Customs Bulletin or shall otherwise make such
ruling or decision available for public inspection.\
(b) Appeals.\--A person may appeal an adverse interpretive ruling and
any interpretation of any regulation prescribed to implement such ruling
to a higher level of authority within the Customs Service for de novo
review. Upon a reasonable showing of business necessity, any such appeal
shall be considered and decided no later than 60 days following the date
on which the appeal is filed. The Secretary shall issue regulations to
implement this subsection.\
(c) Modification and Revocation.\--A proposed interpretive ruling or
decision which would\--\
(1) modify (other than to correct a clerical error) or revoke a prior
interpretive ruling or decision which has been in effect for at least 60
days; or\
(2) have the effect of modifying the treatment previously accorded by
the Customs Service to substantially identical transactions; shall be
published in the Customs Bulletin. The Secretary shall give interested
parties an opportunity to submit, during not less than the 30-day period
after the date of such publication, comments on the correctness of the
proposed ruling or decision. After consideration of any comments
received, the Secretary shall publish a final ruling or decision in the
Customs Bulletin within 30 days after the closing of the comment period.
The final ruling or decision shall become effective 60 days after the
date of its publication.\
(d) Publication of Customs Decisions That Limit Court Decisions.\--A
decision that proposes to limit the application of a court decision
shall be published in the Customs Bulletin together with notice of
opportunity for public comment thereon prior to a final decision.\
(e) Public Information.\--The Secretary may make available in writing or
through electronic media, in an efficient, comprehensive and timely
manner, all information, including directives, memoranda, electronic
messages and telexes which contain instructions, requirements, methods
or advice necessary for importers and exporters to comply with the
Customs laws and regulations. All information which may be made
available pursuant to this subsection shall be subject to any exemption
from disclosure provided by section 552 of title 5, United States Code.

\* \* \* \* \*

**[SEC. 628. EXCHANGE OF INFORMATION.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) The Secretary may authorize customs officers to exchange
information with any government agency of a NAFTA country, as defined in
section 2(4) of the North American Free Trade Agreement Implementation
Act, if the Secretary\--\
(1) reasonably believes the exchange of information is necessary to
implement chapter 3, 4, or 5 of the North American Free Trade Agreement,
and\
(2) obtains assurances from such country that the information will be
held in confidence and used only for governmental purposes.

\* \* \* \* \*

**[SEC. 630. AUTHORITY TO SETTLE CLAIMS.]{.underline}**\
\
\
(a) In General.\--With respect to a claim that cannot be settled under
chapter 171 of title 28, United States Code, the Secretary may settle,
for not more than \$50,000 in any one case, a claim for damage to, or
loss of, privately owned property caused by an investigative or law
enforcement officer (as defined in section 2680(h) of title 28, United
States Code) who is employed by the Customs Service and acting within
the scope of his or her employment.\
(b) Limitations.\--The Secretary may not pay a claim under subsection
(a) that\--\
(1) concerns commercial property;\
(2) is presented to the Secretary more than 1 year after it occurs; or\
(3) is presented by an officer or employee of the United States
Government and arose within the scope of employment.\
(c) Final Settlement.\--A claim may be paid under this section only if
the claimant accepts the amount of settlement in complete satisfaction
of the claim.\
**[SEC. 631. USE OF PRIVATE COLLECTION AGENCIES.]{.underline}**\
\
\
(a) In General.\--Notwithstanding any other provision of law, the
Secretary, under such terms and conditions as the Secretary considers
appropriate, shall enter into contracts and incur obligations with one
or more persons for collection services to recover indebtedness arising
under the customs laws and owed the United States Government, but only
after the Customs Service has exhausted all administrative efforts,
including all claims against applicable surety bonds, to collect the
indebtedness.\
(b) Contract Requirements.\--Any contract entered into under subsection
(a) shall provide that\--\
(1) the Secretary retains the authority to resolve a dispute, compromise
a claim, end collection action, and refer a matter to the Attorney
General to bring a civil action; and\
(2) the person is subject to\--\
(A) section 552a of title 5, United States Code, to the extent provided
in subsection (m) as such section; and\
(B) laws and regulations of the United States Government and State
governments related to debt collection practices.

Part VI\--Miscellaneous Provisions

**[SEC. 641. CUSTOMS BROKERS.]{.underline}**\
\
\
(a) Definitions.\--As used in this section:\
(1) The term \"customs broker\" means any person granted a customs
broker\'s license by the Secretary under subsection (b).\
(2) The term \"customs business\" means those activities involving
transaction with the Customs Service concerning the entry and
admissibility of merchandise, its classification and valuation, the
payment of duties, taxes, or other charges assessed or collected by the
Customs Service upon merchandise by reason of its importation, or the
refund, rebate, or drawback thereof. It also includes the preparation of
documents or forms in any format and the electronic transmission of
documents, invoices, bills, or parts thereof, intended to be filed with
the Customs Service in furtherance of such activities, whether or not
signed or filed by the preparer, or activities relating to such
preparation, but does not include the mere electronic transmission of
data received for transmission to Customs.

\* \* \* \* \*

\(c\) Customs Broker\'s Permits.\--\
~~(1) In general.\--Each person granted a customs broker\'s license
under subsection (b) shall\--~~\
~~(A) be issued a permit, in accordance with regulations prescribed~~\
under this section, for each customs district in which that person\
conducts customs business; and\
~~(B) except as provided in paragraph (2), regularly employ in each~~\
customs district for which a permit is so issued at least one\
individual who is licensed under subsection (b)(2) to exercise\
responsible supervision and control over the customs business\
conducted by that person in that district.\
(1) In general.\--Each person granted a customs broker\'s license under
subsection (b) shall be issued, in accordance with such regulations as
the Secretary shall prescribe, either or both of the following:\
(A) A national permit for the conduct of such customs business as the
Secretary prescribes by regulation.\
(B) A permit for each customs district in which that person conducts
customs business and, except as provided in paragraph (2), regularly
employs at least 1 individual who is licensed under subsection (b)(2) to
exercise responsible supervision and control over the customs business
conducted by that person in that district.

\* \* \* \* \*

\(4\) Appointment of subagents.\--Notwithstanding subsection (c)(1),
upon the implementation by the Secretary under section 413(b)(2) of the
component of the National Customs Automation Program referred to in
section 411(a)(2)(B), a licensed broker may appoint another licensed
broker holding a permit in a customs district to act on its behalf as
its subagent in that district if such activity relates to the filing of
information that is permitted by law or regulation to be filed
electronically. A licensed broker appointing a subagent pursuant to this
paragraph shall remain liable for any and all obligations arising under
bond and any and all duties, taxes, and fees, as well as any other
liabilities imposed by law, and shall be precluded from delegating to a
subagent such liability.\
(d) Disciplinary Proceedings.\--\
(1) \* \* \*\
(2) Procedures.\--\
(A) \* \* \*\
(B) Revocation or suspension.\--~~The appropriate customs officers~~ The
Customs Service may, for good and sufficient reason, serve notice in
writing upon any customs broker to show cause why a license or permit
issued under this section should not be revoked or suspended. The notice
shall be in the form of a statement specifically setting forth the
grounds of the complaint, and shall allow the customs broker 30 days to
respond. If no response is filed, or ~~the~~\
appropriate customs officer the Customs Service determines that the
revocation or suspension is still warranted, ~~he~~ it shall notify the
customs broker in writing of a hearing to be held within ~~15~~ 30 days,
or at a later date if the broker requests an extension and shows good
cause therefor, before an administrative law judge appointed pursuant to
section 3105 of title 5, United States Code, who shall serve as the
hearing officer. If the customs broker waives the hearing, or the broker
or his designated representative fails to appear at the appointed time
and place, the hearing officer shall make findings and recommendations
based on the record submitted by the parties. At the hearing, the
customs broker may be represented by counsel, and all proceedings,
including the proof of the charges and the response thereto shall be
presented with testimony taken under oath and the right of
cross-examination accorded to both parties. A transcript of the hearing
shall be made and a copy will be provided to ~~the appropriate customs
officer and the customs broker; they~~ the Customs Service and the
customs broker; which shall thereafter be provided reasonable
opportunity to file a post-hearing brief. Following the conclusion of
the hearing, the hearing officer shall transmit promptly the record of
the hearing along with ~~his~~ the findings of fact and recommendations
to the Secretary for decision. The Secretary will issue a written
decision, based solely on the record, setting forth his findings of fact
and the reasons ~~for his~~\
decision for the decision. Such decision may provide for the sanction
contained in the notice to show cause or any lesser sanction authorized
by this subsection, including a monetary penalty not to exceed \$30,000,
then was contained in the notice to show cause.

\* \* \* \* \*

\(f\) Regulations by the Secretary.\--The Secretary may prescribe such
rules and regulations relating to the customs business of customs
brokers as the Secretary considers necessary to protect importers and
the revenue of the United States, and to carry out the provisions of
this section, including rules and regulations governing the licensing of
or issuance of permits to customs brokers, the keeping of books,
accounts, and records by customs brokers, and documents and
correspondence, and the furnishing by customs brokers of any other
information relating to their customs business to any duly accredited
officer or employee of the ~~United States Customs Service.~~ Customs
Service. The Secretary may not prohibit customs brokers from limiting
their liability to other persons in the conduct of customs business. For
purposes of this subsection or any other provision of this Act
pertaining to recordkeeping, all data required to be retained by a
customs broker may be kept on microfilm, optical disc, magnetic tapes,
disks or drums, video files or any other electrically generated medium.
Pursuant to such regulations as the Secretary shall prescribe, the
conversion of data to such storage medium may be accomplished at any
time subsequent to the relevant customs transaction and the data may be
retained in a centralized basis according to such broker\'s business
system.

\* \* \* \* \*

**TITLE VII\--COUNTERVAILING AND ANTIDUMPING DUTIES**

\* \* \* \* \*

Subtitle D\--General Provisions

**[SEC. 771. DEFINITIONS; SPECIAL RULES.]{.underline}**\
\
\
For purposes of this title\--\
(1) \* \* \*

\* \* \* \* \*

~~(18)~~ (21) United states-canada agreement.\--The term \"United
States- Canada Agreement\" means the United States-Canada Free-Trade
Agreement.\
(22) NAFTA.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
(23) Entry.\--The term \"entry\" includes, in appropriate circumstances
as determined by the administering authority, a reconciliation entry
created under a reconciliation process, defined in section 401(s), that
is initiated by an importer. The liability of an importer under an
antidumping or countervailing duty proceeding for entries of merchandise
subject to the proceeding will attach to the corresponding
reconciliation entry or entries. Suspension of liquidation of the
reconciliation entry or entries, for the purpose of enforcing this
title, is equivalent to the suspension of liquidation of the
corresponding individual entries; but the suspension of liquidation of
the reconciliation entry or entries for such purpose does not preclude
liquidation for any other purpose.

\* \* \* \* \*

**[SEC. 777. ACCESS TO INFORMATION.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(f\) Disclosure of Proprietary Information Under Protective Orders
Issued Pursuant to the North American Free Trade Agreement or the United
States- Canada Agreement.\--\
(1) Issuance of protective orders.\--\
(A) In general.\--If binational panel review of a determination under
this title is requested pursuant to article 1904 of the NAFTA or the
United States-Canada Agreement, or an extraordinary challenge committee
is convened under Annex 1904.13 of the NAFTA or the United States-Canada
Agreement, the administering authority or the Commission, as
appropriate, may make available to authorized persons, under a
protective order described in paragraph (2), a copy of all proprietary
material in the administrative record made during the proceeding in
question. If the administrating authority or the Commission claims a
privilege as to a document or portion of a document in the
administrative record of the proceeding in question and a binational
panel or extraordinary challenge committee finds that in camera
inspection or limited disclosure of that document or portion thereof is
required by United States law, the administering authority or the
Commission, as appropriate, may restrict access to such document or
portion thereof to the authorized persons identified by the panel or
committee as requiring access and may require such persons to obtain
access under a protective order described in paragraph (2).\
(B) Authorized persons.\--For purposes of this subsection, the term\
\"authorized persons\" means\--\
(i) \* \* \*

\* \* \* \* \*

\(iii\) any officer or employee of the United States Government
designated by the administering authority or the Commission, as
appropriate, to whom disclosure is necessary in order to make
recommendations to the Trade Representative regarding the convening of
extraordinary challenge committees under chapter 19 of the NAFTA or the
Agreement, and\
(iv) any officer or employee of the ~~Government of Canada~~\
designated by an authorized agency of Canada Government of a free trade
area country (as defined in section 516A(f)(10)) designated by an
authorized agency of such country to whom disclosure is necessary in
order to make decisions regarding the convening of extraordinary
challenge committees under chapter 19 of the NAFTA or the Agreement.

\* \* \* \* \*

\(2\) Contents of protective order.\--Each protective order issued under
this subsection shall be in such form and contain such requirements as
the administering authority or the Commission may determine by
regulation to be appropriate. The administering authority and the
Commission shall ensure that regulations issued pursuant to this
paragraph shall be designed to provide an opportunity for participation
in the binational panel proceeding, including any extraordinary
challenge, equivalent to that available for judicial review of
determinations by the administering authority or the Commission that are
not subject to review by a binational panel.\
(3) Prohibited acts.\--It is unlawful for any person to violate, to
induce the violation of, or knowingly to receive information the receipt
of which constitutes a violation of, any provision of a protective order
issued under this subsection or to violate, to induce the violation of,
or knowingly to receive information the receipt of which constitutes a
violation of, any provision of an undertaking entered into with an
authorized ~~agency of Canada~~ agency of a free trade area country (as
defined in section 516A(f)(10)) to protect proprietary material during
binational panel or extraordinary challenge committee review pursuant to
article 1904 of the NAFTA or the United States-Canada Agreement.\
(4) Sanctions for violation of protective orders.\--Any person, except a
judge appointed to a binational panel or an extraordinary challenge
committee under section 402(b) of the North American Free Trade
Agreement Implementation Act, who is found by the administering
authority or the Commission, as appropriate, after notice and an
opportunity for a hearing in accordance with section 554 of title 5,
United States Code, to have committed an act prohibited by paragraph (3)
shall be liable to the United States for a civil penalty and shall be
subject to such other administrative sanctions, including, but not
limited to, debarment from practice before the administering authority
or the Commission, as the administering authority or the Commission
determines to be appropriate. The amount of the civil penalty shall not
exceed \$100,000 for each violation. Each day of a continuing violation
shall constitute a separate violation. The amount of such civil penalty
and other sanctions shall be assessed by the administering authority or
the Commission by written notice, except that assessment shall be made
by the administering authority for violation, or inducement of a
violation or receipt of information with reason to know that such
information was disclosed in violation, of an undertaking entered into
by any person with an authorized ~~agency of Canada~~ agency of a free
trade area country (as defined in section 516A(f)(10)).

\-\-\-\-\-\-\-\-\--

**Section 3 of the Act of June 18, 1934 (Commonly Known as the Foreign
Trade Zones Act)**\
\
\
AN ACT To provide for the establishment, operation, and maintenance of
foreign-trade zones in ports of entry of the United States, to expedite
and encourage foreign commerce, and for other purposes

\* \* \* \* \*

Sec. 3. (a) Foreign and domestic merchandise of every description,
except such as is prohibited by law, may, without being subject to the
customs laws of the United States, except as otherwise provided in this
Act, be brought into a zone and may be stored, sold, exhibited, broken
up, repacked, assembled, distributed, sorted, graded, cleaned, mixed
with foreign or domestic merchandise, or otherwise manipulated, or be
manufactured except as otherwise provided in this Act, and be exported,
destroyed, or sent into customs territory of the United States
therefrom, in the original package or otherwise; but when foreign
merchandise is so sent from a zone into customs territory of the United
States it shall be subject to the laws and regulations of the United
States affecting imported merchandise: Provided, That whenever the
privilege shall be requested and there has been no manipulation or
manufacture effecting a change in tariff classification, the appropriate
customs officer shall take under supervision any lot or part of a lot of
foreign merchandise in a zone, cause it to be appraised and taxes
determined and duties liquidated thereon. Merchandise so taken under
supervision may be stored, manipulated, or manufactured under the
supervision and regulations prescribed by the Secretary of the Treasury,
and whether mixed or manufactured with domestic merchandise or not may,
under regulations prescribed by the Secretary of the Treasury, be
exported or destroyed, or may be sent into customs territory upon the
payment of such liquidated duties and determined taxes thereon. If
merchandise so taken under supervision has been manipulated or
manufactured, such duties and taxes shall be payable on the quantity of
such foreign merchandise used in the manipulation or manufacture of the
entered article. Allowance shall be made for recoverable and
irrecoverable waste; and if recoverable waste is sent into customs
territory, it shall be dutiable and taxable in its condition and
quantity and at its weight at the time of entry. Where two or more
products result from the manipulation or manufacture of merchandise in a
zone the liquidated duties and determined taxes shall be distributed to
the several products in accordance with their relative value at the time
of separation with due allowance for waste as provided for above:
Provided further, That subject to such regulations respecting identity
and the safeguarding of the revenue as the Secretary of the Treasury may
deem necessary, articles, the growth, product, or manufacture of the
United States, on which all internal-revenue taxes have been paid, if
subject thereto, and articles previously imported on which duty and/or
tax has been paid, or which have been admitted free of duty and tax, may
be taken into a zone from the customs territory of the United States,
placed under the supervision of the appropriate customs officer, and
whether or not they have been combined with or made part, while in such
zone, of other articles, may be brought back thereto free of quotas,
duty, or tax: Provided further, That if in the opinion of the Secretary
of the Treasury their identity has been lost, such articles not entitled
to free entry by reason of noncompliance with the requirements made
hereunder by the Secretary of the Treasury shall be treated when they
reenter customs territory of the United States as foreign merchandise
under the provisions of the tariff and internal-revenue laws in force at
that time: Provided further, That under the rules and regulations of the
controlling Federal agencies, articles which have been taken into a zone
from customs territory for the sole purpose of exportation, destruction
(except destruction of distilled spirits, wines, and fermented malt
liquors), or storage shall be considered to be exported for the purpose
of\--\
(1) the draw-back, warehousing, and bonding, or any other provisions of
the Tariff Act of 1930, as amended, and the regulations thereunder; and\
(2) the statutes and bonds exacted for the payment of drawback, refund,
or exemption from liability for internal-revenue taxes and for the
purposes of the internal-revenue laws generally and the regulations
thereunder. Such a transfer may also be considered an exportation for
the purposes of other Federal laws insofar as Federal agencies charged
with the enforcement of those laws deem it advisable. Such articles may
not be returned to customs territory for domestic consumption except
where the Foreign-Trade Zones Board deems such return to be in the
public interest, in which event the articles shall be subject to the
provisions of paragraph 1615 (f) of the Tariff Act of 1930, as amended:
Provided further, That no operation involving any foreign or domestic
merchandise brought into a zone which operation would be subject to any
provision or provisions of section 1807, chapter 15, chapter 16, chapter
17, chapter 21, chapter 23, chapter 24, chapter 25, chapter 26, or
chapter 32 of the Internal Revenue Code if performed in customs
territory, or involving the manufacture of any article provided for in
paragraph 367 or paragraph 368 of the Tariff Act of 1930, shall be
permitted in a zone except those operations (other than rectification of
distilled spirits and wines, or the manufacture or production of
alcoholic products unfit for beverage purposes) which were permissible
under this Act prior to July 1, 1949: Provided further, That articles
produced or manufactured in a zone and exported therefrom shall on
subsequent importation into the customs territory of the United States
be subject to the import laws applicable to like articles manufactured
in a foreign country, except that articles produced or manufactured in a
zone exclusively with the use of domestic merchandise, the identity of
which has been maintained in accordance with the second proviso of this
section, may, on such importation, be entered as American goods
returned: Provided further, That no merchandise that consists of goods
subject to NAFTA drawback, as defined in section 203(a) of the North
American Free Trade Agreement Implementation Act, that is manufactured
or otherwise changed in condition shall be exported to a NAFTA country,
as defined in section 2(4) of that Act, without an assessment of a duty
on the merchandise in its condition and quantity, and at its weight, at
the time of its exportation (or if the privilege in the first proviso to
this subsection was requested, an assessment of a duty on the
merchandise in its condition and quantity, and at its weight, at the
time of its admission into the zone) and the payment of the assessed
duty before the 61st day after the date of exportation of the article,
except that upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid or owed to the NAFTA
country on the article, the customs duty may be waived or reduced
(subject to section 508(b)(2)(B) of the Tariff Act of 1930) in an amount
that does not exceed the lesser of (1) the total amount of cutoms duties
paid or owed on the merchandise on importation into the United States,
or (2) the total amount of customs duties paid on the article to the
NAFTA country: Provided further, That, if Canada ceases to be a NAFTA
country and the suspension of the operation of the United States-Canada
Free-Trade Agreement thereafter terminates, with the exception of
drawback eligible goods under section 204(a) of the United States-Canada
Free-Trade Agreement Implementation Act of 1988, No article manufactured
or otherwise changed in condition (except a change by cleaning, testing
or repacking) shall be exported to Canada ~~on or after January 1, 1994,
or such later date as may be proclaimed by the President under section
204(b)(2)(B) of such Act of 1988,~~ during the period such Agreement is
in operation without the payment of a duty that shall be payable on the
article in its condition and quantity, and at its weight, at the time of
its exportation to Canada unless the privilege in the first proviso to
this subsection was requested.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 13031 of the Consolidated Omnibus Budget Reconciliation Act of
1985**\
\
\
SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.\
\
(a) Schedule of Fees.\--In addition to any other fee authorized by law,
the Secretary of the Treasury shall charge and collect the following
fees for the provision of customs services in connection with the
following:\
(1) \* \* \*

\* \* \* \* \*

~~(5) For the arrival of each passenger aboard a commercial vessel or
commercial aircraft from a place outside the United States (other than a
place referred to in subsection (b)(1)(A)), \$5.~~\
(5)(A) For fiscal years 1994, 1995, 1996, and 1997, for the arrival of
each passenger aboard a commercial vessel or commercial aircraft from
outside the customs territory of the United States, \$6.50.\
(B) For fiscal year 1998 and each fiscal year thereafter, for the
arrival of each passenger aboard a commercial vessel or commercial
aircraft from a place outside the United States (other than a place
referred to in subsection (b)(1)(A) of this section), \$5.\
(b) Limitation on Fees.\--(1) No fee may be charged under subsection (a)
for customs services provided in connection with\--\
(A) the arrival of any passenger whose journey\--\
(i) \* \* \*

\* \* \* \* \* Subparagraph (A) shall not apply to fiscal years 1994,
1995, 1996, and 1997.

\* \* \* \* \*

~~(10) The fee charged under subsection (a) (9) or (10) of this section
with respect to goods of Canadian origin (as determined under section
202 of the United States-Canada Free-Trade Agreement Implementation Act
of 1988) shall be in accordance with article 403 of the United
States-Canada Free-Trade Agreement. Any service for which an exemption
from such fee is provided by reason of this paragraph may not be funded
with money contained in the Customs User Fee Account.~~\
(10)(A) The fee charged under subsection (a) (9) or (10) with respect to
goods of Canadian origin (as determined under section 202 of the United
States-Canada Free-Trade Agreement) when the United States-Canada
Free-Trade Agreement is in force shall be in accordance with section 403
of that Agreement.\
(B) For goods qualifying under the rules of origin set out in section
202 of the North American Free Trade Agreement Implementation Act, the
fee under subsection (a) (9) or (10)\--\
(i) may not be charged with respect to goods that qualify to be marked
as goods of Canada pursuant to Annex 311 of the North American Free
Trade Agreement, for such time as Canada is a NAFTA country, as defined
in section 2(4) of such Implementation Act; and\
(ii) may not be increased after December 31, 1993, and may not be
charged after June 29, 1999, with respect to goods that qualify to be
marked as goods of Mexico pursuant to such Annex 311, for such time as
Mexico is a NAFTA country. Any service for which an exemption from such
fee is provided by reason of this paragraph may not be funded with money
contained in the Customs User Fee Account.\
(f) Disposition of Fees.\--There is established in the general fund of
the Treasury a separate account which shall be known as the \"Customs
User Fee Account\". Notwithstanding section 524 of the Tariff Act of
1930 (19 U.S.C. 1524), there shall be deposited as offsetting receipts
into the Customs User Fee Account all fees collected under subsection
(a) ~~except that portion of such fees that is required under paragraph
(3) for the direct reimbursement of appropriations~~ except\--\
(A) the portion of such fees that is required under paragraph (3) for
the direct reimbursement of appropriations, and\
(B) the portion of such fees that is determined by the Secretary to be
excess fees under paragraph (5).

\* \* \* \* \*

(3)(A) The Secretary of the Treasury, in accordance with section 524 of
the Tariff Act of 1930 and subject to subparagraph (B), shall directly
reimburse, from the fees collected under subsection (a) ~~(other than
subsection (a) (9) or (10)~~ other than the fees under subsection (a)
(9) and (10) and the excess fees determined by the Secretary under
paragraph\
(5)), each appropriation for the amount paid out of that appropriation
for the costs incurred by the Secretary\--\
(i) \* \* \*

\* \* \* \* \*

\(4\) At the close of fiscal year 1988 and each even-numbered fiscal
year occurring thereafter, the Secretary of the Treasury shall submit a
report to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate regarding how
the fees imposed ~~under subsection (a)~~ under subsection (a) (other
than the excess fees determined by the Secretary under paragraph (5))
should be adjusted in order that the balance of the Customs User Fee
Account approximates a zero balance. Before making recommendations
regarding any such adjustments, the Secretary of the Treasury shall
provide adequate opportunity for public comment. The recommendations
shall, as precisely as possible, propose fees which reflect the actual
costs to the United States Government for the commercial services
provided by the United States Customs Service.\
(5) At the close of each of fiscal years 1994, 1995, 1996, and 1997, the
Secretary of the Treasury shall determine the amount of the fees
collected under paragraph (5)(A) of subsection (a) for that fiscal year
that exceeds the amount of such fees that would have been collected for
such fiscal year if the fees that were in effect on the day before the
effective date of this paragraph applied to such fiscal year. The amount
of the excess fees determined under the preceding sentence shall be
deposited in the Customs User Fee Account and shall be available for
reimbursement of inspectional costs (including passenger processing
costs) not otherwise reimbursed under this section, and shall be
available only to the extent provided in appropriations Acts.\
(g) Regulations and Enforcement.\--(1) ~~In addition to the regulations
required under paragraph (2), the~~The Secretary of the Treasury may
prescribe such rules and regulations as may be necessary to carry out
the provisions of this section. Regulations issued by the Secretary of
the Treasury under this subsection with respect to the collection of the
fees charged under subsection (a)(5) and the remittance of such fees to
the Treasury of the United States shall be consistent with the
regulations issued by the Secretary of the Treasury for the collection
and remittance of the taxes imposed by subchapter C of chapter 33 of the
Internal Revenue Code of 1954, but only to the extent the regulations
issued with respect to such taxes do not conflict with the provisions of
this section. ~~(2) The Secretary of the Treasury shall prescribe
regulations governing the work shifts of customs personnel at airports.
Such regulations shall provide, among such other factors considered
appropriate by the Secretary, that\--~~\
~~(A) the work shifts will be adjusted, as necessary, to meet cyclical
and seasonal demands and to minimize the use of overtime;~~\
~~(B) the work shifts will not be arbitrarily reduced or compressed;
and~~\
~~(C) consultation with the Advisory Committee on Commercial Operations
of the United States Customs Service (established under section 9501(c)
of the Omnibus Budget Reconciliation Act of 1987) will be carried out
before adjustments are made in the work shifts. (3)~~ (2) Except to the
extent otherwise provided in regulations, all administrative and
enforcement provisions of customs laws and regulations, other than those
laws and regulations relating to drawback, shall apply with respect to
any fee prescribed under subsection (a) of this section, and with
respect to persons liable therefor, as if such fee is a customs duty.
For purposes of the preceding sentence, any penalty expressed in terms
of a relationship to the amount of the duty shall be treated as not less
than the amount which bears a similar relationship to the amount of the
fee assessed. For purposes of determining the jurisdiction of any court
of the United States or any agency of the United States, any fee
prescribed under subsection (a) of this section shall be treated as if
such fee is a customs duty.

\* \* \* \* \*

\(j\) Effective Dates.\--(1) \* \* \*

\* \* \* \* \*

\(3\) Fees may not be charged under subsection (a) after ~~September 30,
1998.~~ September 30, 2003.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Trade Act of 1974**

\* \* \* \* \*

**TABLE OF CONTENTS**\
\
\
TITLE I\--NEGOTIATING AND OTHER AUTHORITY

\* \* \* \* \*

TITLE II\--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION

Chapter 1\--Positive Adjustment by Industries Injured by Imports

\* \* \* \* \*

Chapter 2\--Adjustment Assistance for Workers

Subchapter A\--Petitions and Determinations

\* \* \* \* \*

Subchapter C\--General Provisions

Sec. 239. Agreements with States.\
Sec. 240. Administration absent State agreement.\
Sec. 241. Payments to States.

\* \* \* \* \*

Sec. 249. Subpena power. Sec. 249A. Nonduplication of assistance.

Subchapter D\--NAFTA Transitional Adjustment Assistance Program

Sec. 250. Establishment of transitional program.

\* \* \* \* \*

**TITLE I\--NEGOTIATING AND OTHER AUTHORITY**

\* \* \* \* \*

CHAPTER 8\--IDENTIFICATION OF MARKET BARRIERS AND CERTAIN UNFAIR TRADE
ACTIONS

\* \* \* \* \*

**[SEC. 182. IDENTIFICATION OF COUNTRIES THAT DENY ADEQUATE PROTECTION,
OR MARKET ACCESS, FOR INTELLECTUAL PROPERTY RIGHTS.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(f\) Special Rule for Actions Affecting United States Cultural
Industries.\--\
(1) In general.\--By no later than the date that is 30 days after the
date on which the annual report is submitted to Congressional committees
under section 181(b), the Trade Representative shall identify any act,
policy, or practice of Canada which\--\
(A) affects cultural industries,\
(B) is adopted or expanded after December 17, 1992, and\
(C) is actionable under article 2106 of the North American Free Trade
Agreement.\
(2) Special rules for identifications.\--For purposes of section
302(b)(2)(A), an act, policy, or practice identified under this
subsection shall be treated as an act, policy, or practice that is the
basis for identification of a country under subsection (a)(2), unless
the United States has already taken action pursuant to article 2106 of
the North American Free Trade Agreement in response to such act, policy,
or practice. In deciding whether to identify an act, policy, or practice
under paragraph (1), the Trade Representative shall\--\
(A) consult with and take into account the views of representatives of
the relevant domestic industries, appropriate committees established
pursuant to section 135, and appropriate officers of the Federal
Government, and\
(B) take into account the information from such sources as may be
available to the Trade Representative and such information as may be
submitted to the Trade Representative by interested persons, including
information contained in reports submitted under section 181(b).\
(3) Cultural industries.\--For purposes of this subsection, the term
\"cultural industries\" means persons engaged in any of the following
activities:\
(A) The publication, distribution, or sale of books, magazines,
periodicals, or newspapers in print or machine readable form but not
including the sole activity of printing or typesetting any of the
foregoing.\
(B) The production, distribution, sale, or exhibition of film or video
recordings.\
(C) The production, distribution, sale, or exhibition of audio or video
music recordings.\
(D) The publication, distribution, or sale of music in print or machine
readable form.\
(E) Radio communications in which the transmissions are intended for
direct reception by the general public, and all radio, television, and
cable broadcasting undertakings and all satellite programming and
broadcast network services.\
\
**TITLE II\--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION**

CHAPTER 1\--POSITIVE ADJUSTMENT BY INDUSTRIES INJURED BY IMPORTS

\* \* \* \* \*

**[SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY
COMMISSION.]{.underline}**\
\
\
(a) Petitions and Adjustment Plans.\--\
(1) \* \* \*

\* \* \* \* \*

\(8\) The procedures concerning the release of confidential business
information set forth in section 332(g) of the Tariff Act of 1930 shall
apply with respect to information received by the Commission in the
course of investigations conducted under this chapter and part 1 of
title III of the North American Free Trade Agreement Implementation Act.

\* \* \* \* \*

\(d\) Provisional Relief.\--\
(1)(A) An entity representing a domestic industry that produces a
perishable agricultural product or citrus product that is like or
directly competitive with an imported perishable agricultural product or
citrus product may file a request with the Trade Representative for the
monitoring of imports of that product under subparagraph (B). Within 21
days after receiving the request, the Trade Representative shall
determine if\--\
(i) the imported product is a perishable agricultural product or citrus
product; and\
(ii) there is a reasonable indication that such product is being
imported into the United States in such increased quantities as to be,
or likely to be, a substantial cause of serious injury, or the threat
thereof, to such domestic industry.

\* \* \* \* \*

\(C\) If a petition filed under subsection (a)\--\
(i) alleges injury from imports of a perishable agricultural product or
citrus product that has been, on the date the allegation is included in
the petition, subject to monitoring by the Commission under paragraph
(2) for not less than 90 days; and\
(ii) requests that provisional relief be provided under this subsection
with respect to such imports; the Commission shall, not later than the
21st day after the day on which the request was filed, make a
determination, on the basis of available information, whether increased
imports (either actual or relative to domestic production) of the
perishable agricultural product or citrus product are a substantial
cause of serious injury, or the threat thereof, to the domestic industry
producing a like or directly competitive perishable product or citrus
product, and whether either\--\
(I) the serious injury is likely to be difficult to repair by reason of
perishability of the like or directly competitive agricultural product;
or\
(II) the serious injury cannot be timely prevented through investigation
under subsection (b) and action under section 203.

\* \* \* \* \*

\(5\) For purposes of this subsection:\
(A) The term \"citrus product\" means any processed oranges or
grapefruit, or any orange or grapefruit juice, including concentrate.\
~~(A)~~ (B) A perishable agricultural product is any agricultural
article, including livestock, regarding which the Trade Representative
considers action under this section to be appropriate after taking into
account\--\
(i) whether the article has\--

\* \* \* \* \*

~~(B)~~ (C) The term \"provisional relief\" means\--\
(i) any increase in, or imposition of, any duty;

\* \* \* \* \*

CHAPTER 2\--ADJUSTMENT ASSISTANCE FOR WORKERS

Subchapter A\--Petitions and Determinations

**[SEC. 221. PETITIONS.]{.underline}**\
\
\
(a) A petition for a certification of eligibility to apply for
adjustment assistance under this ~~chapter~~ subchapter may be filed
with the Secretary of Labor (hereinafter in this chapter referred to as
the \"Secretary\") by a group of workers (including workers in any
agricultural firm or subdivision of an agricultural firm) or by their
certified or recognized union or other duly authorized representative.
Upon receipt of the petition, the Secretary shall promptly publish
notice in the Federal Register that he has received the petition and
initiated an investigation.

\* \* \* \* \*

**[SEC. 222. GROUP ELIGIBILITY REQUIREMENTS.]{.underline}**\
\
\
(a) The Secretary shall certify a group of workers (including workers in
any agricultural firm or subdivision of an agricultural firm) as
eligible to apply for adjustment assistance under this ~~chapter~~
subchapter if he determines\--\
(1) \* \* \*

\* \* \* \* \*

**[SEC. 223. DETERMINATIONS BY SECRETARY OF LABOR.]{.underline}**\
\
\
(a) As soon as possible after the date on which a petition is filed
under section 221, but in any event not later than 60 days after that
date, the Secretary shall determine whether the petitioning group meets
the requirements of section 222 and shall issue a certification of
eligibility to apply for assistance under this ~~chapter~~ subchapter
covering workers in any group which meets such requirements. Each
certification shall specify the date on which the total or partial
separation began or threatened to begin.

\* \* \* \* \*

**[SEC. 225. BENEFIT INFORMATION TO WORKERS.]{.underline}**\
\
\
(a) \* \* \*\
(b)(1) The Secretary shall provide written notice through the mail of
the benefits available under this chapter to each worker whom the
Secretary has reason to believe is covered by a certification made under
subchapter A or subchapter D of this chapter\--\
(A) at the time such certification is made, if the worker was partially
or totally separated from the adversely affected employment before such
certification, or\
(B) at the time of the total or partial separation of the worker from
the adversely affected employment, if subparagraph (A) does not apply.\
(2) The Secretary shall publish notice of the benefits available under
this chapter to workers covered by each certification made under
subchapter A or subchapter D in newspapers of general circulation in the
areas in which such workers reside.

\* \* \* \* \*

Subchapter C\--General Provisions

\* \* \* \* \*

**[SEC. 245. AUTHORIZATION OF APPROPRIATIONS. ~~There~~ (a) In
General.\--There are authorized to be appropriated to the Department of
Labor, for each of the fiscal years 1993, 1994, 1995, 1996, 1997, and
1998, such sums as may be necessary to carry out the purposes of this
chapter, other than subchapter D.]{.underline}**\
\
(b) Subchapter D.\--There are authorized to be appropriated to the
Department of Labor, for each of fiscal years 1994, 1995, 1996, 1997,
and 1998, such sums as may be necessary to carry out the purposes of
subchapter D of this chapter.

\* \* \* \* \*

**[SEC. 249A. NONDUPLICATION OF ASSISTANCE.]{.underline}**\
\
\
No worker may receive assistance relating to a separation pursuant to
certifications under both subchapters A and D of this chapter.

Subchapter D\--NAFTA Transitional Adjustment Assistance Program

**[SEC. 250. ESTABLISHMENT OF TRANSITIONAL PROGRAM.]{.underline}**\
\
\
(a) Group Eligibility Requirements.\--\
(1) Criteria.\--A group of workers (including workers in any
agricultural firm or subdivision of an agricultural firm) shall be
certified as eligible to apply for adjustment assistance under this
subchapter pursuant to a petition filed under subsection (b) if the
Secretary determines that a significant number or proportion of the
workers in such workers\' firm or an appropriate subdivision of the firm
have become totally or partially separated, or are threatened to become
totally or partially separated, and either\--\
(A) that\--\
(i) the sales or production, or both, of such firm or subdivision have
decreased absolutely,\
(ii) imports from Mexico or Canada of articles like or directly
competitive with articles produced by such firm or subdivision have
increased, and\
(iii) the increase in imports under clause (ii) contributed importantly
to such workers\' separation or threat of separation and to the decline
in the sales or production of such firm or subdivision; or\
(B) that there has been a shift in production by such workers\' firm or
subdivision to Mexico or Canada of articles like or directly competitive
with articles which are produced by the firm or subdivision.\
(2) Definition of contributed importantly.\--The term \"contributed
importantly\", as used in paragraph (1)(A)(iii), means a cause which is
important but not necessarily more important than any other cause.\
(3) Regulations.\--The Secretary shall issue regulations relating to the
application of the criteria described in paragraph (1) in making
preliminary findings under subsection (b) and determinations under
subsection (c).\
(b) Preliminary Findings and Basic Assistance.\--\
(1) Filing of petitions.\--A petition for certification of eligibility
to apply for adjustment assistance under this subchapter may be filed by
a group of workers (including workers in any agricultural firm or
subdivision of an agricultural firm) or by their certified or recognized
union or other duly authorized representative with the Governor of the
State in which such workers\' firm or subdivision thereof is located.\
(2) Findings and assistance.\--Upon receipt of a petition under
paragraph (1), the Governor shall\--\
(A) notify the Secretary that the Governor has received the petition;\
(B) within 10 days after receiving the petition\--\
(i) make a preliminary finding as to whether the petition meets the
criteria described in subsection (a)(1) (and for purposes of this clause
the criteria described under subparagraph (A)(iii) of such subsection
shall be disregarded), and\
(ii) transmit the petition, together with a statement of the finding
under clause (i) and reasons therefor, to the Secretary for action under
subsection (c); and\
(C) if the preliminary finding under subparagraph (B)(i) is affirmative,
ensure that rapid response and basic readjustment services authorized
under other Federal law are made available to the workers.\
(c) Review of Petitions by Secretary; Certifications.\--\
(1) In general.\--The Secretary, within 30 days after receiving a
petition under subsection (b), shall determine whether the petition
meets the criteria described in subsection (a)(1). Upon a determination
that the petition meets such criteria, the Secretary shall issue to
workers covered by the petition a certification of eligibility to apply
for assistance described in subsection (d).\
(2) Denial of certification.\--Upon denial of certification with respect
to a petition under paragraph (1), the Secretary shall review the
petition in accordance with the requirements of subchapter A to
determine if the workers may be certified under such subchapter.\
(d) Comprehensive Assistance.\--Workers covered by certification issued
by the Secretary under subsection (c) shall be provided, in the same
manner and to the same extent as workers covered under a certification
under subchapter A, the following:\
(1) Employment services described in section 235.\
(2) Training described in section 236, except that notwithstanding the
provisions of section 236(a)(2)(A), the total amount of payments for
training under this subchapter for any fiscal year shall not exceed
\$30,000,000.\
(3) Trade readjustment allowances described in sections 231 through 234,
except that\--\
(A) the provisions of sections 231(a)(5)(C) and 231(c), authorizing the
payment of trade readjustment allowances upon a finding that it is not
feasible or appropriate to approve a training program for a worker,
shall not be applicable to payment of such allowances under this
subchapter; and\
(B) notwithstanding the provisions of section 233(b), in order for a
worker to qualify for trade readjustment allowances under this
subchapter, the worker shall be enrolled in a training program approved
by the Secretary under section 236(a) by the later of\--\
(i) the last day of the 16th week of such worker\'s initial unemployment
compensation benefit period, or\
(ii) the last day of the 6th week after the week in which the Secretary
issues a certification covering such worker. In cases of extenuating
circumstances relating to enrollment in a training program, the
Secretary may extend the time for enrollment for a period not to exceed
30 days .\
(4) Job search allowances described in section 237.\
(5) Relocation allowances described in section 238.\
(e) Administration.\--The provisions of subchapter C shall apply to the
administration of the program under this subchapter in the same manner
and to the same extent as such provisions apply to the administration of
the program under subchapters A and B, except that the agreement between
the Secretary and the States described in section 239 shall specify the
procedures that will be used to carry out the certification process
under subsection (c) and the procedures for providing relevant data by
the Secretary to assist the States in making preliminary findings under
subsection (b).

\* \* \* \* \*

CHAPTER 5\--MISCELLANEOUS PROVISIONS

\* \* \* \* \*

**[SEC. 284. JUDICIAL REVIEW.]{.underline}**\
\
\
(a) A worker, group of workers, certified or recognized union, or
authorized representative of such worker or group aggrieved by a final
determination of the Secretary of Labor under section 223 or section
250(c) of this title, a firm or its representative or any other
interested domestic party aggrieved by a final determination of the
Secretary of Commerce under section 251 of this title, or a community or
any other interested domestic party aggrieved by a final determination
of the Secretary of Commerce under section 271 of this title may, within
sixty days after notice of such determination, commence a civil action
in the United States Court of International Trade for review of such
determination. The clerk of such court shall send a copy of the summons
and the complaint in such action to the Secretary of Labor or the
Secretary of Commerce, as the case may be. Upon receiving a copy of such
summons and complaint, such Secretary shall promptly certify and file in
such court the record on which he based such determination.

\* \* \* \* \*

**[SEC. 285. TERMINATION.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) ~~No~~ (1) Except as provided in paragraph (2), no assistance,
vouchers, allowances, or other payments may be provided under chapter 2,
and no technical assistance may be provided under chapter 3, after
September 30, 1998.\
(2)(A) Except as provided in subparagraph (B), no assistance, vouchers,
allowances, or other payments may be provided under subchapter D of
chapter 2 after the day that is the earlier of\--\
(i) September 30, 1998, or\
(ii) the date on which legislation, establishing a program providing
dislocated workers with comprehensive assistance substantially similar
to the assistance provided by such subchapter D, becomes effective.\
(B) Notwithstanding subparagraph (A), if, on or before the day described
in subparagraph (A), a worker\--\
(i) is certified as eligible to apply for assistance, under subchapter D
of chapter 2; and\
(ii) is otherwise eligible to receive assistance in accordance with
section 250, such worker shall continue to be eligible to receive such
assistance for any week for which the worker meets the eligibility
requirements of such section.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Meat Import Act of 1979**\
\
\
Sec. 2. (a) This section may be cited as the \"Meat Import Act of
1979\".\
(b) For purposes of this section\--\
(1) The term \"entered\" means entered, or withdrawn from warehouse, for
consumption in the customs territory of the United States.\
(2) The term \"meat articles\" means the articles provided for in the
Tariff Schedules of the United States (19 U.S.C. 1202) under\--\
(A) item 106.10 (relating to fresh, chilled, or frozen cattle meat);\
(B) items 106.22 and 106.25 (relating to fresh, chilled, or frozen meat
of goats and sheep (except lambs)); and\
(C) items 107.55 and 107.62 (relating to prepared and preserved beef and
veal (except sausage)), if the articles are prepared, whether fresh,
chilled, or frozen, but not otherwise preserved. ~~Such term does not
include any article described in subparagraph (A), (B), or (C)
originating in Canada (as determined in accordance with section 202 of
the United States-Canada Free-Trade Agreement Implementation Act of
1988).~~\
(3) The term \"meat articles\" does not include any article described in
paragraph (2) that\--\
(A) originates in a NAFTA country (as determined in accordance with
section 202 of the NAFTA Act), or\
(B) originates in Canada (as determined in accordance with section 202
of the United States-Canada Free-Trade Agreement Implementation Act of
1988) during such time as the United States-Canada Free-Trade Agreement
is in force with respect to, and the United States applies such
Agreement to, Canada.\
~~\[(3)\]~~ (4) The term \'Secretary\' means the Secretary of
Agriculture.\
(5) The term \"NAFTA Act\" means the North American Free Trade Agreement
Implementation Act.\
(6) The term \"NAFTA country\" has the meaning given such term in
section 2(4) of the NAFTA Act.

\* \* \* \* \*

(f)(1) If the aggregate quantity estimated before any calendar quarter
by the Secretary under subsection (e)(2) is 110 percent or more of the
aggregate quantity estimated by him under subsection (e)(1), and if
there is no limitation in effect under this section for such calendar
year with respect to meat articles, the President shall by proclamation
limit the total quantity of meat articles which may be entered during
such calendar year to the aggregate quantity estimated for such calendar
year by the Secretary under subsection (e)(1); except that no limitation
imposed under this paragraph for any calendar year may be less than (A)
1,193,000,000 pounds if no import limitation on Canadian products is in
effect under subsection (1), or (B) 1,250,000,000 pounds if an import
limitation on Canadian products is in effect under subsection (1). The
President shall include in the articles subject to any limit proclaimed
under this paragraph any article of meat provided for in item 107.61 of
the Tariff Schedules of the United States (relating to high-quality beef
specially processed into fancy cuts~~.~~ , except that the President may
exclude any such article originating in a NAFTA country (as determined
in accordance with section 202 of the NAFTA Act) or, if paragraph (3)(B)
applies, any such article originating in Canada as determined in
accordance with such paragraph (3)(B).

\* \* \* \* \*

\(i\) The Secretary shall allocate the total quantity proclaimed under
subsection (f)(1) and any increase in such quantity provided for under
subsection (g) among supplying countries other than Canada and Mexico on
the basis of the shares of the United States market for meat articles
such countries other than Canada and Mexico supplied during a
representative period. Notwithstanding the preceding sentence, due
account may be given to special factors which have affected or may
affect the trade in meat articles or cattle. The Secretary shall certify
such allocations to the Secretary of the Treasury.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 358e of the Agricultural Adjustment Act of 1938**\
\
\
SEC. 358e. MARKETING PENALTIES AND DISPOSITION OF ADDITIONAL PEANUTS FOR
1991 THROUGH 1997 CROPS OF PEANUTS.\
\
(a) \* \* \*

\* \* \* \* \*

\(d\) Handling and Disposal of Additional Peanuts.\--\
(1) \* \* \*

\* \* \* \* \*

~~(6) Reentry of exported peanuts.\--If any additional peanuts exported
by a handler are reentered into the United States in commercial
quantities as determined by the Secretary, the importer thereof shall be
subject to a penalty at a rate equal to 140 percent of the loan level
for quota peanuts on the quantity of peanuts reentered.~~\
(6) Reentry of exported peanuts.\--\
(A) Penalty.\--If any additional peanuts exported by a handler are
reentered into the United States in commercial quantities as determined
by the Secretary, the importer of the peanuts shall be subject to a
penalty at a rate equal to 140 percent of the loan level for quota
peanuts on the quantity of peanuts reentered.\
(B) Records.\--Each person, firm, or handler who imports peanuts into
the United States shall maintain such records and documents as are
required by the Secretary to ensure compliance with this subsection.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 1542 of the Food, Agriculture, Conservation, and Trade Act of
1990**\
\
\
\
SEC. 1542. PROMOTION OF AGRICULTURAL EXPORTS TO EMERGING DEMOCRACIES.\
\
(a) \* \* \*

\* \* \* \* \*

\(d\) E (Kika) de la Garza Agricultural Fellowship Program.\--The
Secretary of Agriculture (hereafter in this section referred to as the
\"Secretary\") shall establish a program, to be known as the \"E (Kika)
de la Garza Agricultural Fellowship Program\", to develop agricultural
markets in emerging democracies and to promote cooperation and exchange
of information between agricultural institutions and agribusinesses in
the United States and the Soviet Union, as follows:\
(1) \* \* \*

\* \* \* \* \*

\(3\) Agricultural fellowships for nafta countries.\--\
(A) In general.\--The Secretary shall grant fellowships to individuals
from countries that are parties to the North American Free Trade
Agreement (referred to in this paragraph as \"NAFTA\") to study
agriculture in the United States, and to individuals in the United
States to study agriculture in other NAFTA countries.\
(B) Purpose.\--The purpose of fellowships granted under this paragraph
is\--\
(i) to allow the recipients to expand their knowledge and understanding
of agricultural systems and practices in other NAFTA countries;\
(ii) to facilitate the improvement of agricultural systems in NAFTA
countries; and\
(iii) to establish and expand agricultural trade linkages between the
United States and other NAFTA countries.\
(C) Eligible recipients.\--The Secretary may provide fellowships under
this paragraph to agricultural producers and consultants, government
officials, and other individuals from the private and public sectors.\
(D) Acceptance of gifts.\--The Secretary may accept money, funds,
property, and services of every kind of gift, devise, bequest, grant, or
otherwise, and may in any manner, dispose of all of the holdings and use
the receipts generated from the disposition to carry out this paragraph.
Receipts under this paragraph shall remain available until expended.\
(E) Authorization of appropriation.\--There are authorized to be
appropriated such sums as are necessary to carry out this paragraph.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 104 of Title 35, United States Code**\
\
\
~~Sec. 104. Invention made abroad~~\
\
~~In proceedings in the Patent and Trademark Office and in the courts,
an applicant for a patent, or a patentee, may not establish a date of
invention by reference to knowledge or use thereof, or other activity
with respect thereto, in a foreign country, except as provided in
sections 119 and 365 of this title. Where an invention was made by a
person, civil or military, while domiciled in the United States and
serving in a foreign country in connection with operations by or on
behalf of the United States, he shall be entitled to the same rights of
priority with respect to such invention as if the same had been made in
the United States.~~ Sec. 104. Invention made abroad\
\
(a) In General.\--In proceedings in the Patent and Trademark Office, in
the courts, and before any other competent authority, an applicant for a
patent, or a patentee, may not establish a date of invention by
reference to knowledge or use thereof, or other activity with respect
thereto, in a foreign country other than a NAFTA country, except as
provided in sections 119 and 365 of this title. Where an invention was
made by a person, civil or military, while domiciled in the United
States or a NAFTA country and serving in any other country in connection
with operations by or on behalf of the United States or a NAFTA country,
the person shall be entitled to the same rights of priority in the
United States with respect to such invention as if such invention had
been made in the United States or a NAFTA country. To the extent that
any information in a NAFTA country concerning knowledge, use, or other
activity relevant to proving or disproving a date of invention has not
been made available for use in a proceeding in the Office, a court, or
any other competent authority to the same extent as such information
could be made available in the United States, the Commissioner, court,
or such other authority shall draw appropriate inferences, or take other
action permitted by statute, rule, or regulation, in favor of the party
that requested the information in the proceeding.\
(b) Definition.\--As used in this section, the term \"NAFTA country\"
has the meaning given that term in section 2(4) of the North American
Free Trade Agreement Implementation Act.

\-\-\-\-\-\-\-\-\--

**Section 4 of the Record Rental Amendment of 1985**\
\
\
EFFECTIVE DATE\
\
Sec. 4. (a) \* \* \*

\* \* \* \* \*

\(c\) The amendments made by this Act shall not apply to rentals,
leasings, lendings (or acts or practices in the nature of rentals,
leasings, or lendings) occurring after the date which is 13 years after
the date of the enactment of this Act.

\-\-\-\-\-\-\-\-\--

**Trademark Act of 1946**

\* \* \* \* \*

**TITLE I\--THE PRINCIPAL REGISTER**

\* \* \* \* \*

MARKS REGISTRABLE ON THE PRINCIPAL REGISTER

**[Sec. 2. No trade-mark by which the goods of the applicant may be
distinguished from the goods of others shall be refused registration on
the principal register on account of its nature unless
it\--]{.underline}**\
\
(a) \* \* \*

\* \* \* \* \*

~~(e) Consists of a mark which, (1) when used on or in connection with
the goods of the applicant is merely descriptive or deceptively
misdescriptive of them, or (2) when used on or in connection with the
goods of the applicant is primarily geographically descriptive or
deceptively misdescriptive of them, except as indications of regional
origin may be registrable under section 4 hereof, or (3) is primarily
merely a surname.~~\
(e) Consists of a mark which (1) when used on or in connection with the
goods of the applicant is merely descriptive or deceptively
misdescriptive of them, (2) when used on or in connection with the goods
of the applicant is primarily geographically descriptive of them, except
as indications of regional origin may be registrable under section 4,
(3) when used on or in connection with the goods of the applicant is
primarily geographically deceptively misdescriptive of them, or (4) is
primarily merely a surname.\
(f) Except as expressly excluded in paragraphs (a), (b), (c), ~~and
(d)~~ (d), and (e)(3) of this section, nothing herein shall prevent the
registration of a mark used by the applicant which has become
distinctive of the applicant\'s goods in commerce. The Commissioner may
accept as prima facie evidence that the mark has become distinctive, as
used on or in connection with the applicant\'s goods in commerce, proof
of substantially exclusive and continuous use thereof as a mark by the
applicant in commerce for the five years before the date on which the
claim of distinctiveness is made. Nothing in this section shall prevent
the registration of a mark which, when used on or in connection with the
goods of the applicant, is primarily geographically deceptively
misdescriptive of them, and which became distinctive of the applicant\'s
goods in commerce before the date of the enactment of the North American
Free Trade Agreement Implementation Act.

\* \* \* \* \*

**TITLE II\--THE SUPPLEMENTAL REGISTER**\
\
\
**[Sec. 23. (a) In addition to the principal register, the Commissioner
shall keep a continuation of the register provided in paragraph (b) of
section 1 of the Act of March 19, 1920, entitled \"An Act to give effect
to certain provisions of the convention for the protection of
trade-marks and commercial names, made and signed in the city of Buenos
Aires, in the Argentine Republic, August 20, 1910, and for other
purposes\", to be called the supplemental register. All marks capable of
distinguishing applicant\'s goods or services and not registrable on the
principal register herein provided, except those declared to be
unregistrable under subsections (a), (b), (c), ~~and (d)~~ (d), and
(e)(3) of section 2 of this Act, which are in lawful use in commerce by
the owner thereof, on or in connection with any goods or services may be
registered on the supplemental register upon the payment of the
prescribed fee and compliance with the provisions of subsections (a) and
(e) of section 1 so far as they are applicable. Nothing in this section
shall prevent the registration on the supplemental register of a mark,
capable of distinguishing the applicant\'s goods or services and not
registrable on the principal register under this Act, that is declared
to be unregistrable under section 2(e)(3), if such mark has been in
lawful use in commerce by the owner thereof, on or in connection with
any goods or services, since before the date of the enactment of the
North American Free Trade Agreement Implementation Act.]{.underline}**

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**TITLE 17, UNITED STATES CODE**

\* \* \* \* \*

Chapter 1\--Subject Matter and Scope of Copyright

Sec. 101. Definitions. 102. Subject matter of copyright: In general.
103. Subject matter of copyright: Compilations and derivative works.
104. Subject matter of copyright: National origin. 104A. Copyright in
certain motion pictures.

\* \* \* \* \*

**[Sec. 104A. Copyright in certain motion pictures]{.underline}**\
\
\
(a) Restoration of Copyright.\--Subject to subsections (b) and (c)\--\
(1) any motion picture that is first fixed or published in the territory
of a NAFTA country as defined in section 2(4) of the North American Free
Trade Agreement Implementation Act to which Annex 1705.7 of the North
American Free Trade Agreement applies, and\
(2) any work included in such motion picture that is first fixed in or
published with such motion picture. that entered the public domain in
the United States because it was first published on or after January 1,
1978, and before March 1, 1989, without the notice required by section
401, 402, or 403 of this title, the absence of which has not been
excused by the operation of section 405 of this title, as such sections
were in effect during that period, shall have copyright protection under
this title for the remainder of the term of copyright protection to
which it would have been entitled in the United States had it been
published with such notice.\
(b) Effective Date of Protection.\--The protection provided under
subsection (a) shall become effective, with respect to any motion
picture or work included in such motion picture meeting the criteria of
that subsection, 1 year after the date on which the North American Free
Trade Agreement enters into force with respect to, and the United States
applies the Agreement to, the country in whose territory the motion
picture was first fixed or published if, before the end of that 1-year
period, the copyright owner in the motion picture or work files with the
Copyright Office a statement of intent to have copyright protection
restored under subsection (a). The Copyright Office shall publish in the
Federal Register promptly after that effective date a list of motion
pictures, and works included in such motion pictures, for which
protection is provided under subsection (a).\
(c) Use of Previously Owned Copies.\--A national or domiciliary of the
United States who, before the date of the enactment of the North
American Free Trade Agreement Implementation Act, made or acquired
copies of a motion picture, or other work included in such motion
picture, that is subject to protection under subsection (a), may sell or
distribute such copies or continue to perform publicly such motion
picture and other work without liability for such sale, distribution, or
performance, for a period of 1 year after the date on which the list of
motion pictures, and works included in such motion pictures, that are
subject to protection under subsection (a) is published in the Federal
Register under subsection (b).

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 214 of the Immigration and Nationality Act**

ADMISSION OF NONIMMIGRANTS Sec. 214. (a) \* \* \*

\* \* \* \* \*

(e)(1) Notwithstanding any other provision of this Act, an alien who is
a citizen of Canada and seeks to enter the United States under and
pursuant to the provisions of Annex 1502.1 (United States of America),
Part C\-- Professionals, of the United States-Canada Free-Trade
Agreement to engage in business activities at a professional level as
provided for therein may be admitted for such purpose under regulations
of the Attorney General promulgated after consultation with the
Secretaries of State and Labor.\
(2) An alien who is a citizen of Canada or Mexico, and the spouse and
children of any such alien if accompanying or following to join such
alien, who seeks to enter the United States under and pursuant to the
provisions of Section D of Annex 1603 of the North American Free Trade
Agreement (in this subsection referred to as \"NAFTA\") to engage in
business activities at a professional level as provided for in such
Annex, may be admitted for such purpose under regulations of the
Attorney General promulgated after consultation with the Secretaries of
State and Labor. For purposes of this Act, including the issuance of
entry documents and the application of subsection (b), such alien shall
be treated as if seeking classification, or classifiable, as a
nonimmigrant under section 101(a)(15). The admission of an alien who is
a citizen of Mexico shall be subject to paragraphs (3), (4), and (5).
For purposes of this paragraph and paragraphs (3), (4), and (5), the
term \"citizen of Mexico\" means \"citizen\" as defined in Annex 1608 of
NAFTA.\
(3) The Attorney General shall establish an annual numerical limit on
admissions under paragraph (2) of aliens who are citizens of Mexico, as
set forth in Appendix 1603.D.4 of Annex 1603 of the NAFTA. Subject to
paragraph (4), the annual numerical limit\--\
(A) beginning with the second year that NAFTA is in force, may be
increased in accordance with the provisions of paragraph 5(a) of Section
D of such Annex, and\
(B) shall cease to apply as provided for in paragraph 3 of such
Appendix.\
(4) The annual numerical limit referred to in paragraph (3) may be
increased or shall cease to apply (other than by operation of paragraph
3 of such Appendix) only if\--\
(A) the President has obtained advice regarding the proposed action from
the appropriate advisory committees established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155);\
(B) the President has submitted a report to the Committee on the
Judiciary of the Senate and the Committee on the Judiciary of the House
of Representatives that sets forth\--\
(i) the action proposed to be taken and the reasons therefor, and\
(ii) the advice obtained under subparagraph (A);\
(C) a period of at least 60 calendar days that begins on the first day
on which the President has met the requirements of subparagraphs (A)
and\
(B) with respect to such action has expired; and\
(D) the President has consulted with such committees regarding the
proposed action during the period referred to in subparagraph (C).\
(5) During the period that the provisions of Appendix 1603.D.4 of Annex
1603 of the NAFTA apply, the entry of an alien who is a citizen of
Mexico under and pursuant to the provisions of Section D of Annex 1603
of NAFTA shall be subject to the attestation requirement of section
212(m), in the case of a registered nurse, or the application
requirement of section 212(n), in the case of all other professions set
out in Appendix 1603.D.1 of Annex 1603 of NAFTA, and the petition
requirement of subsection (c), to the extent and in the manner
prescribed in regulations promulgated by the Secretary of Labor, with
respect to sections 212(m) and 212(n), and the Attorney General, with
respect to subsection (c).

\* \* \* \* \*

\(j\) Notwithstanding any other provision of this Act, an alien who is a
citizen of Canada or Mexico who seeks to enter the United States under
and pursuant to the provisions of Section B, Section C, or Section D of
Annex 1603 of the North American Free Trade Agreement, shall not be
classified as a nonimmigrant under such provisions if there is in
progress a strike or lockout in the course of a labor dispute in the
occupational classification at the place or intended place of
employment, unless such alien establishes, pursuant to regulations
promulgated by the Attorney General, that the alien\'s entry will not
affect adversely the settlement of the strike or lockout or the
employment of any person who is involved in the strike or lockout.
Notice of a determination under this subsection shall be given as may be
required by paragraph 3 of article 1603 of such Agreement. For purposes
of this subsection, the term \"citizen of Mexico\" means \"citizen\" as
defined in Annex 1608 of such Agreement.

\-\-\-\-\-\-\-\-\--

**Trade Agreements Act of 1979**\
\
\
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; PURPOSES.\
\
(a) Short Title.\--This Act may be cited as the \"Trade Agreements Act
of 1979\".\
(b) Table of Contents.\-- Sec. 1. Short title; table of contents;
purposes. Sec. 2. Approval of trade agreements. Sec. 3. Relationship of
trade agreements to United States law.

TITLE I\--COUNTERVAILING AND ANTIDUMPING DUTIES

\* \* \* \* \*

TITLE IV\--TECHNICAL BARRIERS TO TRADE (STANDARDS)

Subtitle A\--Obligations of the United States\
Sec. 401. Certain standards-related activities. Sec. 402. Federal
standards-related activities. Sec. 403. State and private
standards-related activities.

\* \* \* \* \*

**TITLE III\--GOVERNMENT PROCUREMENT**\
\
\
**[SEC. 301. GENERAL AUTHORITY TO MODIFY DISCRIMINATORY PURCHASING
REQUIREMENTS]{.underline}**\
\
\
(a) Presidential Waiver of Discriminatory Purchasing
Requirements.\--~~The President~~ Subject to subsection (f) of this
section, the President may waive, in whole or in part, with respect to
eligible products of any foreign country or instrumentality designated
under subsection (b), and suppliers of such products, the application of
any law, regulation, procedure, or practice regarding Government
procurement that would, if applied to such products and suppliers,
result in treatment less favorable than that accorded\--\
(1) to United States products and suppliers of such products; or\
(2) to eligible products of another foreign country or instrumentality
which is a party to the Agreement and suppliers of such products.\
(b) Designation of Eligible Countries and Instrumentalities.\--The
President may designate a foreign country or instrumentality for
purposes of subsection (a) only if he determines that such country or
instrumentality\--\
(1) is a country or instrumentality which (A) has become a party to the
Agreement or the North American Free Trade Agreement, and (B) will
provide appropriate reciprocal competitive government procurement
opportunities to United States products and suppliers of such products;

\* \* \* \* \*

\(e\) Procurement Procedures by Certain Federal
Agencies.\--Notwithstanding any other provision of law, the President
may direct any agency of the United States listed in Annex 1001.1a-2 of
the North American Free Trade Agreement to procure eligible products in
compliance with the procedural provisions of chapter 10 of such
Agreement.\
(f) Small Business and Minority Preferences.\--The authority of the
President under subsection (a) of this section to waive any law,
regulation, procedure, or practice regarding Government procurement does
not authorize the waiver of any small business or minority preference.\
\
**[SEC. 302. AUTHORITY TO ENCOURAGE RECIPROCAL COMPETITIVE PROCUREMENT
PRACTICES.]{.underline}**\
\
\
(a) Authority To Bar Procurement From Non-Designated Countries.\--With
respect to procurement covered by the Agreement, the President, in order
to encourage additional countries to become parties to the Agreement and
to provide appropriate reciprocal competitive government procurement
opportunities to United States products and suppliers of such
products\--\
(1) shall prohibit the procurement, after the date on which any waiver
under section 301(a) first takes effect, of products (A) which are
products of a foreign country or instrumentality which is not designated
pursuant to section 301(b), and (B) which ~~would otherwise be eligible
products~~ are products covered under the Agreement for procurement by
the United States; and

\* \* \* \* \*

**[SEC. 308. DEFINITIONS.]{.underline}**\
\
\
As used in this title\--\
(1) \* \* \*

\* \* \* \* \*

\(4\) Eligible products.\--\
~~(A) In general.\--The term \"eligible product\" means, with respect to
any foreign country or instrumentality, a product or service of that
country or instrumentality which is covered under the Agreement for
procurement by the United States.~~\
(A) In general.\--The term \"eligible product\" means, with respect to
any foreign country or instrumentality that is\--\
(i) a party to the Agreement, a product or service of that country or
instrumentality which is covered under the Agreement for procurement by
the United States; or\
(ii) a party to the North American Free Trade Agreement, a product or
service of that country or instrumentality which is covered under the
North American Free Trade Agreement for procurement by the United
States.

\* \* \* \* \*

**TITLE IV\--TECHNICAL BARRIERS TO TRADE (STANDARDS)**

\* \* \* \* \*

Subtitle B\--Functions of Federal Agencies

**[SEC. 411. FUNCTIONS OF ~~SPECIAL~~ TRADE
REPRESENTATIVE.]{.underline}**\
\
\
(a) In General.The ~~Special~~ Trade Representative shall coordiante the
consideration of international trade policy issues that arise as a
result of, and shall develop international trade policy as it relates
to, the implementation of this title.\
(b) Negotiating Functions.\--The ~~Special~~ Trade Representative has
responsibility for coordinating United States discussions and
negotiations with foreign countries for the purpose of establishing
mutual arrangements with respect to standard-related activities. In
carrying out this responsibility, the ~~Special~~ Trade Representative
shall inform and consult with any Federal agency having expertise in the
matter\
(c) Cross Reference.\--\
\
**[SEC. 412. ESTABLISHMENT AND OPERATION OF TECHNICAL
OFFICES.]{.underline}**\
\
\
(a) Establishment.\--\
(1) For nonagricultural products.\--The Secretary of Commerce shall
establish and maintain within the Department of Commerce a technical
office that shall carry out the functions prescribed under subsection
(b) with respect to nonagricultural products.\
(2) For agricultural products.\--The Secretary of Agriculture shall
establish and maintain within the Department of Agriculture a technical
office that shall carry out the functions prescribed under subsection
(b) with respect to agricultural products.\
(b) Functions of Offices.\--The President shall prescribe for each
technical office established under subsection (a) such functions as the
President deems necessary or appropriate to implement this title.\
\
**[SEC. 413. REPRESENTATION OF UNITED STATES INTERESTS BEFORE
INTERNATIONAL STANDARDS ORGANIZATIONS.]{.underline}**\
\
\
(a) Oversight and Consultation.\--The Secretary concerned shall\--\
(1) inform, and consult and coordinate with, the ~~Special~~ Trade
Representative with respect to international standards-related
activities identified under paragraph (2);

\* \* \* \* \*

**[SEC. 415 CONTRACTS AND GRANTS.]{.underline}**\
\
\
(a) In General.\--For purposes of carrying out this title, and otherwise
encouraging compliance with the Agreement, the ~~Special~~ Trade
Representative and the Secretary concerned may each, with respect to
functions for which responsible under this title, make grants to, or
enter into contracts with, any other Federal agency, any State agency,
or any private person, to assist such agency or person to implement
appropriate programs and activities, including, but not limited to,
programs and activities\--\
(1) to increase awareness of proposed and adopted standards-related
activities;\
(2) to facilitate international trade through the appropriate
international and domestic standards-related activities;\
(3) to provide, if appropriate, and pursuant to section 413, adequate
United States representation in international standards-related
activities; and\
(4) to encourage United States exports through increased awareness of
foreign standards-related activities that may affect United States
exports. No contract entered into under this section shall be effective
except to such extent, and in such amount, as is provided in advance in
appropriation Acts.\
(b) Terms and Conditions.\--Any contract entered into, or any grant
made, under subsection (a) shall be subject to such terms and conditions
as the ~~Special~~ Trade Representative or Secretary concerned shall by
regulation prescribe as being necessary or appropriate to protect the
interests of the United States.\
(c) Limitations.\--Financial assistance extended under this section
shall not exceed 75 percent of the total costs (as established by the
~~Special~~ Trade Representative or Secretary concerned, as the case may
be) of the program or activity for which assistance is made available.
The non-Federal share of such costs shall be made in cash or kind,
consistent with the maintenance of the program or activity concerned.\
(d) Audit.\--Each recipient of a grant or contract under this section
shall make available to the ~~Special~~ Trade Representative or
Secretary concerned, as the case may be, and to the Comptroller General
of the United States, for purposes of audit and examination, any book,
document, paper and record that is pertinent to the funds received under
such grant or contract.\
\
**[SEC. 416. TECHNICAL ASSISTANCE.]{.underline}**\
\
\
The ~~Special~~ Trade Representative and the Secretary concerned may
each, with respect to functions for which responsible under this title,
make available, on a reimbursable basis or otherwise, to any other
Federal agency, State agency, or private person such assistance,
including, but not limited to, employees, services, and facilities, as
may be appropriate to assist such agency or person in carrying out
standards-related activities in a manner consistent with this title.\
\
**[SEC. 417. CONSULTATIONS WITH REPRESENTATIVES OF DOMESTIC
INTERESTS.]{.underline}**\
\
\
In carrying out the functions for which responsible under this title,
the ~~Special~~ Trade Representative or Secretary concerned shall
solicit technical and policy advice from the committees, established
under section 135 of the Trade Act of 1974 (19 U.S.C. 2155), that
represent the interests concerned, and may solicit advice from
appropriate State agencies and private persons.\
\
Subtitle C\--Administrative and Judicial Proceedings Regarding
Standards-Related Activities

CHAPTER 1\--REPRESENTATIONS ALLEGING UNITED STATES VIOLATIONS OR
OBLIGATIONS

**[SEC. 421. RIGHTS OF ACTION UNDER THIS CHAPTER.]{.underline}**\
\
\
Except as provided under this chapter, the provisions of this subtitle
do not create any right of action under the laws of the United States
with respect to allegations that any standards-related activity engaged
in within the United States violates the obligations of the United
States under the Agreement.\
\
**[SEC. 422. REPRESENTATIONS.]{.underline}**\
\
\
Any\--\
(1) Party to the Agreement; or\
(2) foreign country that is not a Party to the Agreement but is found by
the ~~Special~~ Trade Representative to extend rights and privileges to
the United States that are substantially the same as those that would be
so extended if that foreign country were a Party to the Agreement: may
make a representation to the ~~Special~~ Trade Representative alleging
that a standards-related activity engaged in within the United States
violates the obligations of the United States under the Agreement. Any
such representation must be made in accordance with procedures that the
~~Special~~ Trade Representative shall by regulation prescribe and must
provide a reasonable indication that the standards-related activity
concerned is having a significant trade effect. No person other than a
Party to the Agreement or a foreign country described in paragraph (2)
may make such a representation.\
\
**[SEC. 423. ACTION AFTER RECEIPT OF REPRESENTATIONS.]{.underline}**\
\
\
(a) Review.\--Upon receipt of any representation made under section 422,
the ~~Special~~ Trade Representative shall review the issues concerned
in consultation with\--\
(1) the agency or person alleged to be engaging in violations under the
Agreement;\
(2) the member agencies of the interagency trade organization
established under section 242(a) of the Trade Expansion Act of 1962 (19
U.S.C. 1872((A));\
(3) other appropriate Federal agencies; and\
(4) appropriate representatives referred to in section 417.\
(b) Resolution.\--The ~~Special~~ Trade Representative shall undertake
to resolve, on a mutually satisfactory basis, the issues set forth in
the representation through consultation with the parties concerned.\
\
**[SEC. 424. PROCEDURE AFTER FINDING BY INTERNATIONAL
FORUM.]{.underline}**\
\
\
(a) In General.\--If an appropriate international forum finds that a
standards-related activity being engaged in within the United States
conflicts with the obligations of the United States under the Agreement,
the interagency trade organization established under section 242(a) of
the Trade Expansion Act of 1962 (19 U.S.C. 1872(a)) shall review the
finding and the matters related thereto with a view to recommending
appropriate action.\
(b) Cross Reference.\--\
\
For provisions of law regarding remedies available to domestic persons
alleging that standards activities engaged in by Parties to the
Agreement (other than the United States) violate the obligations of the
Agreement, see section 301 of the Trade Act of 1974 (19 U.S.C. 2411).

CHAPTER 2\--OTHER PROCEEDINGS REGARDING CERTAIN STANDARDS-RELATED
ACTIVITIES

**[SEC. 441. FINDINGS OF RECIPROCITY REQUIRED IN ADMINISTRATIVE
PROCEEDINGS.]{.underline}**\
\
\
(a) In General.\--Except as provided under chapter 1, no Federal agency
may consider a complaint or petition against any standards-related
activity regarding an imported product, if that activity is engaged in
with the United States and is covered by the Agreement, unless the
~~Special~~ Trade Representative finds, and informs the agency concerned
in writing, that\--\
(1) the country of origin of the imported product is a Party to the
Agreement or a foreign country described in section 422(2); and\
(2) the dispute settlement procedures provided under the Agreement are
not appropriate.\
(b) Exemptions.\--This section does not apply with respect to causes of
action arising under\--\
(1) the antitrust laws as defined in subsection (a) of the first section
of the Clayton Act (15 U.S.C. 12(a)); or\
(2) statutes administered by the Secretary of Agriculture. This section
does not apply with respect to petitions and proceedings that are
provided for under the practices of any Federal agency for the purpose
of ensuring, in accordance with section 553 of title 5, United States
Code, that interested persons are given an opportunity to participate in
agency rulemaking or to seek the issuance, amendment, or repeal of a
rule.

\* \* \* \* \*

Subtitle D\--Definitions and Miscellaneous Provisions\
\
**[SEC. 451. DEFINITIONS.]{.underline}**\
\
\
As used in this title\--\
(1) Agreement.\--The term \"Agreement\" means the Agreement on Technical
Barriers to Trade approved under section 2(a) of this Act.

\* \* \* \* \*

~~(12) Special representative.\--The term \"Special Representative\"
means the Special Representative for Trade Negotiations.~~\
(12) Trade representative.\--The term \"Trade Representative\" means the
United States Trade Representative.

\* \* \* \* \*

**[SEC. 453. REPORTS TO CONGRESS ON OPERATION OF
AGREEMENT.]{.underline}**\
\
\
As soon as practicable after the close of the 3-year period beginning on
the date on which this title takes effect, and as soon as practicable
after the close of each succeeding 3-year period, the ~~Special~~ Trade
Representative shall prepare and submit to Congress a report containing
an evaluation of the operation of the Agreement, both domestically and
internationally, during the period.\
\
**[SEC. 454. EFFECTIVE DATE.]{.underline}**\
\
\
This title shall take effect on January 1, 1980, of the Agreement enters
into force with respect to the United States by that date.

Subtitle E\--Standards and Measures Under the North American Free Trade
Agreement

CHAPTER 1\--SANITARY AND PHYTOSANITARY MEASURES

**[SEC. 461. GENERAL.]{.underline}**\
\
\
Nothing in this chapter may be construed\--\
(1) to prohibit a Federal agency or State agency from engaging in
activity related to sanitary or phytosanitary measures to protect human,
animal, or plant life or health; or\
(2) to limit the authority of a Federal agency or State agency to
determine the level of protection of human, animal, or plant life or
health the agency considers appropriate.\
**[SEC. 462. INQUIRY POINT.]{.underline}**\
\
\
The standards information center maintained under section 414 shall, in
addition to the functions specified therein, make available to the
public relevant documents, at such reasonable fees as the Secretary of
Commerce may prescribe, and information regarding\--\
(1) any sanitary or phytosanitary measure of general application,
including any control or inspection procedure or approval procedure
proposed, adopted, or maintained by a Federal or State agency;\
(2) the procedures of a Federal or State agency for risk assessment, and
factors the agency considers in conducting the assessment and in
establishing the levels of protection that the agency considers
appropriate;\
(3) the membership and participation of the Federal Government and State
governments in international and regional sanitary and phytosanitary
organizations and systems, and in bilateral and multilateral
arrangements regarding sanitary and phytosanitary measures, and the
provisions of those systems and arrangements; and\
(4) the location of notices of the type required under article 719 of
the NAFTA, or where the information contained in such notices can be
obtained.\
**[SEC. 463. CHAPTER DEFINITIONS.]{.underline}**\
\
\
Notwithstanding section 451, for purposes of this chapter\--\
(1) Animal.\--The term \"animal\" includes fish, bees, and wild fauna.\
(2) Approval procedure.\--The term \"approval procedure\" means any
registration, notification, or other mandatory administrative procedure
for\--\
(A) approving the use of an additive for a stated purpose or under
stated conditions, or\
(B) establishing a tolerance for a stated purpose or under stated
conditions for a contaminant, in a food, beverage, or feedstuff prior to
permitting the use of the additive or the marketing of a food, beverage,
or feedstuff containing the additive or contaminant.\
(3) Contaminant.\--The term \"contaminant\" includes pesticide and
veterinary drug residues and extraneous matter.\
(4) Control or inspection procedure.\--The term \"control or inspection
procedure\" means any procedure used, directly or indirectly, to
determine that a sanitary or phytosanitary measure is fulfilled,
including sampling, testing, inspection, evaluation, verification,
monitoring, auditing, assurance of conformity, accreditation,
registration, certification, or other procedure involving the physical
examination of a good, of the packaging of a good, or of the equipment
or facilities directly related to production, marketing, or use of a
good, but does not mean an approval procedure.\
(5) Plant.\--The term \"plant\" includes wild flora.\
(6) Risk assessment.\--The term \"risk assessment\" means an evaluation
of\--\
(A) the potential for the introduction, establishment or spread of a
pest or disease and associated biological and economic consequences; or\
(B) the potential for adverse effects on human or animal life or health
arising from the presence of an additive, contaminant, toxin or
disease-causing organism in a food, beverage, or feedstuff.\
(7) Sanitary or phytosanitary measure.\--\
(A) In general.\--The term \"sanitary or phytosanitary measure\" means a
measure to\--\
(i) protect animal or plant life or health in the United States from
risks arising from the introduction, establishment, or spread of a pest
or disease;\
(ii) protect human or animal life or health in the United States from
risks arising from the presence of an additive, contaminant, toxin, or
disease-causing organism in a food, beverage, or feedstuff;\
(iii) protect human life or health in the United States from risks
arising from a disease-causing organism or pest carried by an animal or
plant, or a product thereof; or\
(iv) prevent or limit other damage in the United States arising from the
introduction, establishment, or spread of a pest.\
(B) Form.\--The form of a sanitary or phytosanitary measure includes\--\
(i) end product criteria;\
(ii) a product-related processing or production method;\
(iii) a testing, inspection, certification, or approval procedure;\
(iv) a relevant statistical method;\
(v) a sampling procedure;\
(vi) a method of risk assessment;\
(vii) a packaging and labeling requirement directly related to food
safety; and\
(viii) a quarantine treatment, such as a relevant requirement associated
with the transportation of animals or plants or with material necessary
for their survival during transportation.

CHAPTER 2\--STANDARDS-RELATED MEASURES

**[SEC. 471. GENERAL.]{.underline}**\
\
\
(a) No Bar To Engaging in Standards Activity.\--Nothing in this chapter
shall be construed\--\
(1) to prohibit a Federal agency from engaging in activity related to
standards-related measures, including any such measure relating to
safety, the protection of human, animal, or plant life or health, the
environment or consumers; or\
(2) to limit the authority of a Federal agency to determine the level it
considers appropriate of safety or of protection of human, animal, or
plant life or health, the environment or consumers.\
(b) Exclusion.\--This chapter does not apply to\--\
(1) technical specifications prepared by a Federal agency for production
or consumption requirements of the agency; or\
(2) sanitary or phytosanitary measures under chapter 1.\
**[SEC. 472. INQUIRY POINT.]{.underline}**\
\
\
The standards information center maintained under section 414 shall, in
addition to the functions specified therein, make available to the
public relevant documents, at such reasonable fees as the Secretary of
Commerce may prescribe, and information regarding\--\
(1) the membership and participation of the Federal Government, State
governments, and relevant nongovernmental bodies in the United States in
international and regional standardizing bodies and conformity
assessment systems, and in bilateral and multilateral arrangements
regarding standards-related measures, and the provisions of those
systems and arrangements;\
(2) the location of notices of the type required under article 909 of
the NAFTA, or where the information contained in such notice can be
obtained; and\
(3) the Federal agency procedures for assessment of risk, and factors
the agency considers in conducting the assessment and establishing the
levels of protection that the agency considers appropriate.\
**[SEC. 473. CHAPTER DEFINITIONS.]{.underline}**\
\
\
Notwithstanding section 451, for purposes of this chapter\--\
(1) Approval procedure.\--The term \"approval procedure\" means any
registration, notification, or other mandatory administrative procedure
for granting permission for a good or service to be produced, marketed,
or used for a stated purpose or under stated conditions.\
(2) Conformity assessment procedure.\--The term \"conformity assessment
procedure\" means any procedure used, directly or indirectly, to
determine that a technical regulation or standard is fulfilled,
including sampling, testing, inspection, evaluation, verification,
monitoring, auditing, assurance of conformity, accreditation,
registration, or approval used for such a purpose, but does not mean an
approval procedure.\
(3) Objective.\--The term \"objective\" includes\--\
(A) safety,\
(B) protection of human, animal, or plant life or health, the
environment or consumers, including matters relating to quality and
identifiability of goods or services, and\
(C) sustainable development, but does not include the protection of
domestic production.\
(4) Service.\--The term \"service\" means a land transportation service
or a telecommunications service.\
(5) Standard.\--The term \"standard\" means\--\
(A) characteristics for a good or a service,\
(B) characteristics, rules, or guidelines for\--\
(i) processes or production methods relating to such good, or\
(ii) operating methods relating to such service, and\
(C) provisions specifying terminology, symbols, packaging, marking, or
labelling for\--\
(i) a good or its related process or production methods, or\
(ii) a service or its related operating methods, for common and repeated
use, including explanatory and other related provisions set out in a
document approved by a standardizing body, with which compliance is not
mandatory.\
(6) Standards-related measure.\--The term \"standards-related measure\"
means a standard, technical regulation, or conformity assessment
procedure.\
(7) Technical regulation.\--The term \"technical regulation\" means\--\
(A) characteristics or their related processes and production methods
for a good,\
(B) characteristics for a service or its related operating methods, or\
(C) provisions specifying terminology, symbols, packaging, marking, or
labelling for\--\
(i) a good or its related process or production method, or\
(ii) a service or its related operating method, set out in a document,
including applicable administrative, explanatory, and other related
provisions, with which compliance is mandatory.\
(8) Telecommunications service.\--The term \"telecommunications
service\" means a service provided by means of the transmission and
reception of signals by any electromagnetic means, but does not mean the
cable, broadcast, or other electromagnetic distribution of radio or
television programming to the public generally.

CHAPTER 3\--SUBTITLE DEFINITIONS

**[SEC. 481. DEFINITIONS.]{.underline}**\
\
\
Notwithstanding section 451, for purposes of this subtitle\--\
(1) NAFTA.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
(2) State.\--The term \"State\" means any of the several States, the
District of Columbia, and the Commonwealth of Puerto Rico.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 302 of the Federal Seed Act**\
\
\
Sec. 302. (a) \* \* \*

\* \* \* \* \*

\(e\) The provisions of this title requiring certain seeds to be stained
shall not apply\--\
(1) to alfalfa or clover seed originating in Canada or Mexico, or

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Act of August 30, 1890**\
\
\
**[Chapter 839]{.underline}**\
\
.\--An act providing for an inspection of meats for exportation,
prohibiting the importation of adulterated articles of food or drink,
and authorizing the President to make proclamation in certain cases, and
for other purposes.

\* \* \* \* \*

**[Sec. 6.]{.underline}**\
\
The importation of cattle, sheep, and other ruminants, and swine, which
are diseased or infected with any disease, or which shall have been
exposed to such infection within sixty days next before their
exportation, is prohibited~~: Provided, That the Secretary of
Agriculture, within his discretion and under such regulations as he may
prescribe, is authorized to permit the admission from Mexico into the
State of Texas of cattle which have been infested with or exposed to
ticks upon being freed therefrom, and the admission from the British
Virgin Islands into the Virgin Islands of the United States, for
slaughter only, of cattle which have been infested with or exposed to
ticks upon being freed therefrom.~~ , except that the Secretary of
Agriculture, in accordance with such regulations as the Secretary may
issue, may (1) permit the importation of cattle, sheep, or other
ruminants, and swine, from Canada or Mexico, and (2) permit the
importation from the British Virgin Islands into the Virgin Islands of
the United States, for slaughter only, of cattle that have been infested
with or exposed to ticks on being freed from the ticks. Any person who
knowingly violates any provision of this section or sections 7 through
10 of this Act or any regulation prescribed by the Secretary of
Agriculture under any such section shall be guilty of a misdemeanor and
shall, on conviction, be punished by a fine not exceeding \$5,000 by
imprisonment not exceeding one year, or both. Any person who violates
any such provision or any such regulation may be assessed a civil
penalty by the Secretary of Agriculture not exceeding \$1,000. The
Secretary may issue an order assessing such civil penalty only after
notice and an opportunity for an agency hearing on the record. Such
order shall be treated as a final order reviewable under chapter 158 of
title 28, United States Code. The validity of such order may not be
reviewed in an action to collect such civil penalty.

\* \* \* \* \*

**[Sec. 10. Inspection of Animals.]{.underline}**\
\
~~Sec. 10. That the Secretary of Agriculture shall~~\--(a) In
General.\-- Except as provided in subsection (b), the Secretary of
Agriculture shall cause careful inspection to be made by a suitable
officer of all imported animals described in this act, to ascertain
whether such animals are infected with contagious diseases or have been
exposed to infection so as to be dangerous to other animals, which shall
then either be placed in quarantine or dealt with according to the
regulations of the Secretary of Agriculture; and all food, litter,
manure, clothing, utensils, and other appliances that have been so
related to such animals on board ship as to be judged liable to convey
infection shall be dealt with according to the regulations of the
Secretary of Agriculture; and the Secretary of Agriculture may cause
inspection to be made of all animals described in this act intended for
exportation, and provide for the disinfection of all vessels engaged in
the transportation thereof, and of all barges or other vessels used in
the conveyance of such animals intended for export to the ocean steamer
or other vessels, and of all attendants and their clothing, and of all
head-ropes and other appliances used in such exportation, by such orders
and regulations as he may prescribe; and if, upon such inspection, any
such animals shall be adjudged, under the regulations of the Secretary
of Agriculture, to be infected or to have been exposed to infection so
as to be dangerous to other animals, they shall not be allowed to be
placed upon any vessel for exportation; the expense of all the
inspection and disinfection provided for in this section to be borne by
the owners of the vessels on which such animals are exported.\
(b) Exception.\--The Secretary of Agriculture, in accordance with such
regulations as the Secretary may issue, may waive any provision of
subsection (a) in the case of shipments between the United States and
Canada or Mexico.\
\
**Section 1 of the Act of August 31, 1922**

(Commonly referred to as the Honeybee Act)

CHAPTER. 301.\--An Act To regulate foreign commerce in the importation
into the United States of the adult honeybee (Apis mellifica).

Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,\
(a) In order to prevent the introduction and spread of diseases and
parasites harmful to honeybees, and the introduction of genetically
undesirable germ plasma of honeybees, the importation into the United
States of all honeybees is prohibited, except that honeybees may be
imported into the United States\--\
(1) by the United States Department of Agriculture for experimental or
scientific purposes ~~, or~~;\
(2) from countries determined by the Secretary of Agriculture\--\
(A) to be free of disease or parasites harmful to honeybees, and
undesirable species or subspecies of honeybees; and\
(B) to have in operation precautions adequate to prevent the importation
of honeybees from other countries where harmful disease or parasites, or
undesirable species or subspecies, of honeybees exist~~.~~ ; or\
(3) from Canada or Mexico, subject to such terms and conditions as the
Secretary of Agriculture determines appropriate, if the Secretary
determines that the region of Canada or Mexico from which the honeybees
originated is, and is likely to remain, free of diseases or parasites
harmful to honeybees, and undesirable species or subspecies of
honeybees.\
(b) Honeybee semen may be imported into the United States only from (1)
countries determined by the Secretary of Agriculture to be free of
undesirable species or subspecies of honeybees, and which have in
operation precautions adequate to prevent the importation of such
undesirable honeybees and their semen, or (2) Canada or Mexico, if the
Secretary of Agriculture determines that the region of Canada or Mexico
from which the imports originate is, and is likely to remain, free of
undesirable species or subspecies of honeybees:

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 17 of the Poultry Products Inspection Act**\
\
\
IMPORTS\
\
Sec. 17. (a) \* \* \*

\* \* \* \* \*

(d)(1) Notwithstanding any other provision of law, except as provided in
paragraph (2), all poultry, or parts or products thereof, capable of use
as human food offered for importation into the United States shall\--\
(A) be subject to the same inspection, sanitary, quality, species
verification, and residue standards applied to products produced in the
United States; and\
(B) have been processed in facilities and under conditions that are the
same as those under which similar products are processed in the United
States.\
(2)(A) Notwithstanding any other provision of law, all poultry, or parts
or products of poultry, capable of use as human food offered for
importation into the United States from Canada and Mexico shall\--\
(i) comply with paragraph (1); or\
(ii)(I) be subject to inspection, sanitary, quality, species
verification, and residue standards that are equivalent to United States
standards; and\
(II) have been processed in facilities and under conditions that meet
standards that are equivalent to United States standards.\
(B) The Secretary may treat as equivalent to a United States standard a
standard of Canada or Mexico described in subparagraph (A)(ii) if the
exporting country provides the Secretary with scientific evidence or
other information, in accordance with risk assessment methodologies
agreed to by the Secretary and the exporting country, to demonstrate
that the standard of the exporting country achieves the level of
protection that the Secretary considers appropriate.\
(C) The Secretary may\--\
(i) determine, on a scientific basis, that the standard of the exporting
country does not achieve the level of protection that the Secretary
considers appropriate; and\
(ii) provide the basis for the determination in writing to the exporting
country on request.\
~~(2)~~ (3) Any such imported poultry article that does not meet such
standards shall not be permitted entry into the United States.\
~~(3)~~ (4) The Secretary shall enforce this subsection through\--\
(A) random inspections for such species verification and for residues;
and\
(B) random sampling and testing of internal organs and fat of carcasses
for residues at the point of slaughter by the exporting country, in
accordance with methods approved by the Secretary.

\-\-\-\-\-\-\-\-\--

**Section 20 of the Federal Meat Inspection Act**\
\
\
Sec. 20. (a) \* \* \*

\* \* \* \* \*

\(e\) Not later than March 1 of each year the Secretary shall submit to
the Committee on Agriculture of the House of Representatives and the
Committee on Agriculture and Forestry of the Senate a comprehensive and
detailed written report with respect to the administration of this
section during the immediately preceding calendar year. Such report
shall include, but shall ~~not be limited to\--~~ not be limited to the
following:\
(1)(A) Subject to subparagraphs (B) and (C), a certification by the
Secretary that foreign plants in Canada and Mexico that export carcasses
or meat or meat products referred to in subsection (a) have complied
with paragraph (2) or with requirements that are equivalent to United
States requirements with regard to all inspection and building
construction standards, and all other provisions of this Act and
regulations issued under this Act.\
(B) Subject to subparagraph (C), the Secretary may treat as equivalent
to a United States requirement a requirement described in subparagraph\
(A) if the exporting country provides the Secretary with scientific
evidence or other information, in accordance with risk assessment
methodologies agreed to by the Secretary and the exporting country, to
demonstrate that the requirement or standard of the exporting country
achieves the level of protection that the Secretary considers
appropriate.\
(C) The Secretary may\--\
(i) determine, on a scientific basis, that a requirement of an exporting
country does not achieve the level of protection that the Secretary
considers appropriate; and\
(ii) provide the basis for the determination to the exporting country in
writing on request.\
(2) A certification by the Secretary that, except as provided in
paragraph (1), foreign plants that export carcasses or meat or meat
products referred to in subsection (a) have complied with requirements
that are at least equal to all inspection and building construction
standards and all other provisions of this Act and regulations issued
under this Act.\
~~(1) a certification by the Secretary that foreign plants exporting
carcasses or meat or meat products referred to in subsection (a) of this
section have complied with requirements at least equal to all the
inspection, building construction standards, and all other provisions of
this Act and regulations issued thereunder;~~\
~~(2) the~~ (3) The names and locations of plants authorized or
permitted to have imported into the United States therefrom carcasses or
meat or meat products referred to in subsection (a) of this
section~~;~~.\
~~(3) the~~ (4) The number of inspectors employed by the Department of
Agriculture in the calendar year concerned who were assigned to inspect
plants referred to in paragraph (e)(2) hereof and the frequency with
which each such plant was inspected by such inspectors~~;~~.\
~~(4) the~~ (5) The number of inspectors licensed by each country from
which any imports subject to the provisions of this section were
imported who were assigned, during the calendar year concerned, to
inspect such imports and the facilities in which such imports were
handled and the frequency and effectiveness of such inspections~~;~~.\
~~(5) the~~ (6) The total volume of carcasses or meat or meat products
referred to in subsection (a) of this section which was imported into
the United States during the calendar year concerned from each country,
including a separate itemization of the volume of each major category of
such imports from each country during such year, and a detailed report
of rejections of plants and products because of failure to meet
appropriate standards prescribed by this Act~~; and~~.\
~~(6) the~~ (7) The name of each foreign country that applies standards
for the importation of meat articles from the United States that are
described in subsection (h)(2).

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 503 of the Motor Vehicle Information and Cost Savings Act**

DETERMINATION OF AVERAGE FUEL ECONOMY

Sec. 503. (a) \* \* \*\
(b)(1) \* \* \*\
(2) For purposes of this subsection:\
(A) \* \* \*

\* \* \* \* \*

\(E\) ~~An~~ Except as provided in subparagraph (G), an automobile shall
be considered domestically manufactured in any model year if at least 75
percent of the cost to the manufacturer of such automobile is
attributable to value added in the United States or Canada, unless the
assembly of such automobile is completed in Canada and such automobile
is not imported into the United States prior to the expiration of 30
days following the end of such model year. The EPA Administrator may
prescribe rules for purposes of carrying out ~~this subparagraph~~ this
subparagraph and subparagraph (G).

\* \* \* \* \*

(G)(i) In accordance with the schedule set out in clause (ii), an
automobile shall be considered domestically manufactured in a model year
if at least 75 percent of the cost to the manufacturer of the automobile
is attributable to value added in the United States, Canada, or Mexico,
unless the assembly of the automobile is completed in Canada or Mexico
and the automobile is not imported into the United States prior to the
expiration of 30 days following the end of that model year.\
(ii) Clause (i) shall apply to all automobiles manufactured by a
manufacturer and sold in the United States, wherever assembled, in
accordance with the following schedule:\
(I) With respect to a manufacturer that initiated the assembly of
automobiles in Mexico before model year 1992, the manufacturer may
elect, at any time between January 1, 1997, and January 1, 2004, to have
clause (i) apply to all automobiles it manufactures, beginning with the
model year commencing after the date of such election.\
(II) With respect to a manufacturer initiating the assembly of
automobiles in Mexico after model year 1991, clause (i) shall apply to
all automobiles it manufactures, beginning with the model year
commencing after January 1, 1994, or the model year commencing after the
date that the manufacturer initiates the assembly of automobiles in
Mexico, whichever is later.\
(III) With respect to a manufacturer not described by subclause (I) or
(II) assembling automobiles in the United States or Canada but not in
Mexico, the manufacturer may elect, at any time between January 1, 1997,
and January 1, 2004, to have clause (i) apply to all automobiles it
manufactures, beginning with the model year commencing after the date of
such election, except that if such manufacturer initiates the assembly
of automobiles in Mexico before making such election, this subclause
shall not apply and the manufacturer shall be subject to clause (II).\
(IV) With respect to a manufacturer not assembling automobiles in the
United States, Canada, or Mexico, clause (i) shall apply to all
automobiles it manufactures, beginning with the model year commencing
after January 1, 1994.\
(V) With respect to a manufacturer authorized to make an election under
subclause (I) or (III) which has not made that election within the
specified period, clause (i) shall apply to all automobiles it
manufactures, beginning with the model year commencing after January 1,
2004.\
(iii) The Secretary shall prescribe reasonable procedures for elections
under this subparagraph, and the EPA Administrator may prescribe rules
for purposes of carrying out this subparagraph.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 401 of the Rural Electrification Act of 1938**\
\
\
Sec. 401. The Act entitled \"An Act to provide for rural
electrification, and for other purposes\", approved May 20, 1936 (49
Stat. 1363), is hereby amended as follows: (a) By inserting in
subsection (a) of section 3 thereof immediately following the date
\"June 30, 1937\" the phrase \"and \$100,000,000 for the fiscal year
ending June 30, 1939\" and (b) by striking out the date \"June 30,
1937\" appearing at the end of subsection (e) of such section 3 and
inserting in lieu thereof the date \"June 30, 1939\".\
In making loans pursuant to this title and pursuant to the Rural
Electrification Act of 1936, the Administrator of the Rural
Electrification Administration shall require that, to the extent
practicable and the cost of which is not unreasonable, the borrower
agree to use in connection with the expenditure of such funds only such
unmanufactured articles, materials, and supplies, as have been mined or
produced in the United States, Mexico, or Canada, and only such
manufactured articles, materials, and supplies as have been manufactured
in the United States, Mexico, or Canada substantially all from articles,
materials, or supplies mined, produced, or manufactured, as the case may
be, in the United States, Mexico, or Canada.\
\
**TITLE 28, UNITED STATES CODE**

\* \* \* \* \*

PART IV\--JURISDICTION AND VENUE

\* \* \* \* \*

**CHAPTER 95\--COURT OF INTERNATIONAL TRADE**

\* \* \* \* \*

Sec. 1581. Civil actions against the United States and agencies and
officers thereof. 1582. Civil actions commenced by the United States.
1583. Counterclaims, cross-claims, and third-party actions. ~~1584.
Civil actions under the United States-Canada Free-Trade Agreement.~~
1584. Civil actions under the North American Free Trade Agreement or the
United States-Canada Free-Trade Agreement.\
\
**[Sec. 1581. Civil actions against the United States and agencies and
officers thereof]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(g\) The Court of International Trade shall have exclusive jurisdiction
of any civil action commenced to review\--\
(1) any decision of the Secretary of the Treasury to deny a customs
broker\'s license under section 641(b)(2) or (3) of the Tariff Act of
1930, or to deny a customs broker\'s permit under section 641(c)(1) of
such Act, or to revoke a license or permit under section 641(b)(5) or\
(c)(2) of such Act; ~~and~~\
(2) any decision of the Secretary of the Treasury to revoke or suspend a
customs broker\'s license or permit, or impose a monetary penalty in
lieu thereof, under section 641(d)(2)(B) of the Tariff Act of 1930~~.~~;
and\
(3) any decision or order of the Customs Service to deny, suspend, or
revoke accreditation of a private laboratory under section 499(b) of the
Tariff Act of 1930.

\* \* \* \* \*

\(i\) In addition to the jurisdiction conferred upon the Court of
International Trade by subsections (a)-(h) of this section and subject
to the exception set forth in subsection (j) of this section, the Court
of International Trade shall have exclusive jurisdiction of any civil
action commenced against the United States, its agencies, or its
officers, that arises out of any law of the United States providing
for\--\
(1) revenue from imports or tonnage;\
(2) tariffs, duties, fees, or other taxes on the importation of
merchandise for reasons other than the raising of revenue;\
(3) embargoes or other quantitative restrictions on the importation of
merchandise for reasons other than the protection of the public health
or safety; or\
(4) administration and enforcement with respect to the matters referred
to in paragraphs (1)-(3) of this subsection and subsections (a)-\
(h) of this section. This subsection shall not confer jurisdiction over
an antidumping or countervailing duty determination which is reviewable
either by the Court of International Trade under section 516A(a) of the
Tariff Act of 1930 or by a binational panel under article 1904 of the
North American Free Trade Agreement or the United States-Canada
Free-Trade Agreement, and section 516A(g) of the Tariff Act of 1930.

\* \* \* \* \*

**[Sec. 1582. Civil actions commenced by the United
States]{.underline}**\
\
\
The Court of International Trade shall have exclusive jurisdiction of
any civil action which arises out of an import transaction and which is
commenced by the United States\--\
(1) to recover a civil penalty under section 592, 593A, 641(b)(6),
641(d)(2)(A), 704(i)(2), or 734(i)(2) of the Tariff Act of 1930;

\* \* \* \* \*

**~~[Sec. 1584. Civil actions under the United States-Canada Free-Trade
Agreement]{.underline}~~**\
\
\
**[Sec. 1584. Civil actions under the North American Free Trade
Agreement or the United States-Canada Free-Trade
Agreement]{.underline}**\
\
\
The United States Court of International Trade shall have exclusive
jurisdiction of any civil action which arises under section ~~777(d)~~
777(f)\
Sec. 1584. Civil actions under the North American Free Trade Agreement
or the United States-Canada Free-Trade Agreement of the Tariff Act of
1930 and is commenced by the United States to enforce administrative
sanctions levied for violation of a protective order or an undertaking.

\* \* \* \* \*

PART VI\--PARTICULAR PROCEEDINGS

\* \* \* \* \*

**CHAPTER 151\--DECLARATORY JUDGMENTS**

\* \* \* \* \*

**[Sec. 2201. Creation of remedy]{.underline}**\
\
\
(a) In a case of actual controversy within its jurisdiction, except with
respect to Federal taxes other than actions brought under action 7428 of
the Internal Revenue Code of 1986, a proceeding under section 505 or
1146 of title 11, or in any civil action involving an antidumping or
countervailing duty proceeding regarding a class or kind of ~~Canadian
merchandise~~ merchandise of a free trade area country (as defined in
section 516(f)(1) of the Tariff Act of 1930), as determined by the
administering authority, any court of the United States, upon the filing
of an appropriate pleading, may declare the rights and other legal
relations of any interested party seeking such declaration, whether or
not further relief is or could be sought. Any such declaration shall
have the force and effect of a final judgment or decree and shall be
reviewable as much.

\* \* \* \* \*

**CHAPTER 169\--COURT OF INTERNATIONAL TRADE PROCEDURE**

\* \* \* \* \*

**[Sec. 2631. Persons entitled to commence a civil
action]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

(g)(1)\* \* \*

\* \* \* \* \*

\(3\) A civil action to review any decision or order of the Customs
Service to deny, suspend, or revoke accreditation of a private
laboratory under section 499(b) of the Tariff Act of 1930 may be
commenced in the Court of International Trade by the person whose
accreditation was denied, suspended, or revoked.

\* \* \* \* \*

**[Sec. 2635. Filing of official documents]{.underline}**\
\
\
~~(a)(1) Upon service of the summons on the Secretary of the Treasury in
any civil action contesting the denial of a protest under section 515 of
the Tariff Act of 1930 or the denial of a petition under section 516 of
such Act, the appropriate customs officer shall forthwith transmit to
the clerk of the Court of International Trade, as prescribed by its
rules, and as a part of the official record\--~~\
~~(A) the consumption or other entry and the entry summary;~~\
~~(B) the commercial invoice;~~\
~~(C) the special customs invoice;~~\
~~(D) a copy of the protest or petition;~~\
~~(E) a copy of the denial, in whole or in part, of the protest or
petition;~~\
~~(F) the importer\'s exhibits;~~\
~~(G) the official and other representative samples;~~\
~~(H) any official laboratory reports; and~~\
~~(I) a copy of any board relating to the entry.~~\
~~(2) If any of the items listed in paragraph (1) of this subsection do
not exist in a particular civil action, an affirmative statement to that
effect shall be transmitted to the clerk of the court.~~\
(a) In any action commenced in the Court of International Trade
contesting the denial of a protest under section 515 of the Tariff Act
of 1930 or the denial of a petition under section 516 of such Act, the
Customs Service, as prescribed by the rules of the court, shall file
with the clerk of the court, as part of the official record, any
document, paper, information or data relating to the entry of
merchandise and the administrative determination that is the subject of
the protest or petition.

\* \* \* \* \*

**[Sec. 2636. Time for commencement of action]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(h\) A civil action contesting the denial, suspension, or revocation by
the Customs Service of a private laboratory\'s accreditation under
section 499(b) of the Tariff Act of 1930 is barred unless commenced in
accordance with the rules of the Court of International Trade within 60
days after the date of the decision or order of the Customs Service.
(h)(i) A civil action of which the Court of International Trade has
jurisdiction under section 1581 of this title, other than an action
specified in subsection (a)-(h) of this section, is barred unless
commenced in accordance with the rules of the court within two years
after the cause of action first accrues.

\* \* \* \* \*

**[Sec. 2640. Scope and standard of review]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(d\) In any civil action commenced to review any order or decision of
the Customs Service under section 499(b) of the Tariff Act of 1930, the
court shall review the action on the basis of the record before the
Customs Service at the time of issuing such decision or order.\
~~(d)~~ (e) In any civil action not specified in the section, the Court
of International Trade shall review the matter as provided in section
706 of title 5.

\* \* \* \* \*

**[Sec. 2642. Analysis of imported merchandise]{.underline}**\
\
\
The Court of International Trade may order an analysis of imported
merchandise and reports thereon by laboratories or agencies of the
United States or laboratories accredited by the Customs Services under
section 499(b) of the Tariff Act of 1930.

\* \* \* \* \*

CHAPTER 169\--COURT OF INTERNATIONAL TRADE PROCEDURE

\* \* \* \* \*

**[Sec. 2643. Relief]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

(c)(1) \* \* \*

\* \* \* \* \*

\(5\) In any civil action involving an antidumping or countervailing
duty proceeding regarding a class or kind of ~~Canadian merchandise,~~
merchandise of a free trade area country (as defined in section
516A(f)(10) of the Tariff Act of 1930), as determined by the
administering authority, the Court of International Trade may not order
declaratory relief.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**INTERNAL REVENUE CODE**

\* \* \* \* \*

Subtitle C\--Employment Taxes

\* \* \* \* \*

**CHAPTER 23\--FEDERAL UNEMPLOYMENT TAX ACT**

\* \* \* \* \*

**[SEC. 3304. APPROVAL OF STATE LAWS.]{.underline}**\
\
\
(a) Requirements.\--The Secretary of Labor shall approve any State law
submitted to him, within 30 days of such submission, which he finds
provides that\--\
(1) \* \* \*

\* \* \* \* \*

\(4\) all money withdrawn from the unemployment fund of the State shall
be used solely in the payment of unemployment compensation, exclusive of
expenses of administration, and for refunds of sums erroneously paid
into such fund and refunds paid in accordance with the provisions of
section 3305 (b); except that\--\
(A) \* \* \*

\* \* \* \* \*

\(D\) amounts may be deducted from unemployment benefits and used to
repay overpayments as provided in section 303(g) of the Social Security
Act; ~~and~~\
(E) amounts may be withdrawn for the payment of short-time compensation
under a plan approved by the Secretary of Labor; and\
(F) amounts may be withdrawn for the payment of allowances under a
self-employment assistance program (as defined in section 3306(t));

\* \* \* \* \*

**[SEC. 3306. DEFINITIONS.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(f\) Unemployment Fund.\--For purposes of this chapter, the term
\"unemployment fund\" means a special fund, established under a State
law and administered by a State agency, for the payment of compensation.
Any sums standing to the account of the State agency in the Unemployment
Trust Fund established by section 904 of the Social Security Act, as
amended (42 U.S.C. 1104), shall be deemed to be a part of the
unemployment fund of the State, and no sums paid out of the Unemployment
Trust Fund to such State agency shall cease to be a part of the
unemployment fund of the State until expended by such State agency. An
unemployment fund shall be deemed to be maintained during a taxable year
only if throughout such year, or such portion of the year as the
unemployment fund was in existence, no part of the moneys of such fund
was expended for any purpose other than the payment of compensation
(exclusive of expenses of administration) and for refunds of sums
erroneously paid into such fund and refunds paid in accordance with the
provisions of section 3305 (b); except that\--\
(1) \* \* \*

\* \* \* \* \*

\(3\) amounts may be deducted from unemployment benefits and used to
repay overpayments as provided in section 303(g) of the Social Security
Act; ~~and~~\
(4) amounts may be withdrawn for the payment of short-time compensation
under a plan approved by the Secretary of Labor~~.~~; and\
(5) amounts may be withdrawn for the payment of allowances under a
self-employment assistance program (as defined in subsection (t)).

\* \* \* \* \*

\(t\) Self-Employment Assistance Program.\--For the purposes of this
chapter, the term \"self-employment assistance program\" means a program
under which\--\
(1) individuals who meet the requirements described in paragraph (3) are
eligible to receive an allowance in lieu of regular unemployment
compensation under the State law for the purpose of assisting such
individuals in establishing a business and becoming self-employed;\
(2) the allowance payable to individuals pursuant to paragraph (1) is a
payable in the same amount, at the same interval, on the same terms, and
subject to the same conditions, as regular unemployment compensation
under the State law, except that\--\
(A) State requirements relating to availability for work, active search
for work, and refusal to accept work are not applicable to such
individuals;\
(B) State requirements relating to disqualifying income are not
applicable to income earned from self-employment by such individuals;
and\
(C) such individuals are considered to be unemployed for the purposes of
Federal and State laws applicable to unemployment compensation, as long
as such individuals meet the requirements applicable under this
subsection;\
(3) individuals may receive the allowance described in paragraph (1) if
such individuals\--\
(A) are eligible to receive regular unemployment compensation under the
State law, or would be eligible to receive such compensation except for
the requirements described in subparagraph (A) or (B) of paragraph (2);\
(B) are identified pursuant to a State worker profiling system as
individuals likely to exhaust regular unemployment compensation and\
(C) are participating in self-employment assistance activities which\--\
(i) include entrepreneurial training, business counseling, and technical
assistance; and\
(ii) are approved by the State agency; and\
(D) are actively engaged on a full-time basis in activities (which may
include training) relating to the establishment of a business and
becoming self-employed;\
(4) the aggregate number of individuals receiving the allowance under
the program does not at any time exceed 5 percent of the number of
individuals receiving regular unemployment compensation under the State
law at such time;\
(5) the program does not result in any cost to the Unemployment Trust
Fund (established by section 904(a) of the Social Security Act) in
excess of the cost that would be incurred by such State and charged to
such Fund if the State had not participated in such program; and\
(6) the program meets such other requirements as the Secretary of Labor
determines to be appropriate.

\* \* \* \* \*

Subtitle F\--Procedure and Administration

\* \* \* \* \*

**CHAPTER 61\--INFORMATION AND RETURNS**

\* \* \* \* \*

Subchapter B\--Miscellaneous Provisions

\* \* \* \* \*

**[SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN
INFORMATION.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(l\) Disclosure of Returns and Return Information for Purposes Other
Than Tax Administration.\--\
(1) \* \* \*

\* \* \* \* \*

\(14\) Disclosure of return information to united states customs
service.\--The Secretary may, upon written request from the Commissioner
of the United States Customs Service, disclose to officers and employees
of the Department of the Treasury such return information with respect
to taxes imposed by chapters 1 and 6 as the Secretary may prescribe by
regulations, solely for the purpose of, and only to the extent necessary
in\--\
(A) ascertaining the correctness of any entry in audits as provided for
in section 509 of the Tariff Act of 1930 (19 U.S.C. 1509), or\
(B) other actions to recover any loss of revenue, or to collect duties,
taxes, and fees, determined to be due and owing pursuant to such audits.

\* \* \* \* \*

\(p\) Procedure and Recordkeeping.\--\
(1) \* \* \*

\* \* \* \* \*

\(3\) Records of inspection and disclosure.\--\
(A) System of recordkeeping.\--Except as otherwise provided by this
paragraph, the Secretary shall maintain a permanent system of
standardized records or accountings of all requests for inspection or
disclosure of returns and return information (including the reasons for
and dates of such requests) and of returns and return information
inspected or disclosed under this section. Notwithstanding the
provisions of section 552a(c) of title 5, United States Code, the
Secretary shall not be required to maintain a record or accounting of
requests for inspection or disclosure of returns and return information,
or of returns and return information inspected or disclosed, under the
authority of subsections (c), (e), (h)(1),\
(3)(A), or (4), (i)(4), (7)(A)(ii), or (8), (k)(1), (2), or (6),\
(l)(1), (4)(B), (5), (7), (8), (9), (10), (11), (12), ~~or (13)~~\
(13), or (14), (m), or (n). The records or accountings required to be
maintained under this paragraph shall be available for examination by
the Joint Committee on Taxation or the Chief of Staff of such joint
committee. Such record or accounting shall also be available for
examination by such person or persons as may be, but only to the extent,
authorized to make such examination under section 552a(c)(3) of title 5,
United States Code.

\* \* \* \* \*

\(4\) Safeguards.\--Any Federal agency described in subsection (h)(2),
(h)(6), (i)(1), (2), (3), (5), or (8), (j)(1) or (2), (l)(1), (2), (3),
(5), (10), (11), ~~or (13)~~ (13), or (14), or (o)(1), the General
Accounting Office, or any agency, body, or commission described in
subsection (d), (i)(3)(B)(i), or (8) or (l)(6), (7), (8), (9), or (12)
shall, as a condition for receiving returns or return information\--\
(A) establish and maintain, to the satisfaction of the Secretary, a
permanent system of standardized records with respect to any request,
the reason or such request, and the date of such request made by or of
it and any disclosure of return or return information made by or to it;\
(B) establish and maintain, to the satisfaction of the Secretary, a
secure area or place in which such returns or return information shall
be stored;\
(C) restrict, to the satisfaction of the Secretary, access to the
returns or return information only to persons whose duties or
responsibilities require access and to whom disclosure may be made under
the provisions of this title;\
(D) provide such other safeguards which the Secretary determines (and
which he prescribes in regulations) to be necessary or appropriate to
protect the confidentiality of the returns or return information;\
(E) furnish a report to the Secretary, at such time and containing such
information as the Secretary may prescribe, which describes the
procedures established and utilized by such agency, body, or commission
or the General Accounting Office for ensuring the confidentiality of
returns and return information required by this paragraph; and\
(F) upon completion of use of such returns or return information\--\
(i) in the case of an agency, body, or commission described in
subsection (d), (i)(3)(B)(i), or (l)(6), (7), (8), (9), return to the
Secretary such returns or return information (along with any copies made
therefrom) or make such returns or return information undisclosable in
any manner and furnish a written report to the Secretary describing such
manner,\
(ii) in the case of an agency described in subsections (h)(2),\
(h)(6), (i)(1), (2), (3), (5), or (8), (j)(1) or (2), (l)(1), (2),\
(3), (5), (10), (11), (12), ~~or (13)~~ (13), or (14), or (o)(1), or the
General Accounting Office, either\--\
(I) return to the Secretary such returns or return information\
(along with any copies made therefrom),\
(II) otherwise make such returns or return information undisclosable,
or\
(III) to the extent not so returned or make undisclosable, ensure that
the conditions of subparagraphs (A), (B), (C), (D), and (E) of this
paragraph continue to be met with respect to such returns or return
information, and\
(iii) in the case of the Department of Health and Human Services for
purposes of subsection (m)(6), destroy all such return information upon
completion of its use in providing the notification for which the
information was obtained, so as to make such information undisclosable;
except that the conditions of subparagraphs (A), (B), (C), (D), and (E)
shall cease to apply with respect to any return or return information
if, and to the extent that, such return or return information is
disclosed in the course of any judicial or administrative proceeding and
made a part of the public record thereof. If the Secretary determines
that any such agency, body, or commission or the General Accounting
Office has failed to, or does not, meet the requirements of this
paragraph, he may, after any proceedings for review established under
paragraph (7), take such actions as are necessary to ensure such
requirements are met, including refusing to disclose returns or return
information to such agency body, or commission or the General Accounting
Office until he determines that such requirements have been or will be
met. In the case of any agency which receives any mailing address under
paragraph (2), (4), (6), or (7) of subsection (m) and which discloses
any such mailing address to any agent or which receives any information
under subsection (l)(12)(B) and which discloses any such information to
any agent, this paragraph shall apply to such agency and each such agent
(except that, in the case of an agent, any report to the Secretary or
other action with respect to the Secretary shall be made or taken
through such agency). For purposes of applying this paragraph in any
case to which subsection (m)(6) applies, the term \"return information\"
includes related blood donor records (as defined in section 1141(h)(2)
of the Social Security Act).

\* \* \* \* \*

**CHAPTER 64\--COLLECTION**

\* \* \* \* \*

Subchapter A\--General Provisions

\* \* \* \* \*

**[SEC. 6302. MODE OR TIME OF COLLECTION.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(h\) Use of Electronic Fund Transfer System for Collection of Certain
Taxes.\--\
(1) Establishment of system.\--\
(A) In general.\--The Secretary shall prescribe such regulations as may
be necessary for the development and implementation of an electronic
fund transfer system which is required to be used for the collection of
depository taxes. Such system shall be designed in such manner as may be
necessary to ensure that such taxes are credited to the general account
of the Treasury on the date on which such taxes would otherwise have
been required to be deposited under the Federal tax deposit system.\
(B) Exemptions.\--The regulations prescribed under subparagraph (A) may
contain such exemptions as the Secretary may deem appropriate.\
(2) Phase-in requirements.\--\
(A) In general.\--Except as provided in subparagraph (B), the
regulations referred to in paragraph (1)\--\
(i) shall contain appropriate procedures to assure that an orderly
conversion from the Federal tax deposit system to the electronic fund
transfer system is accomplished, and\
(ii) may provide for a phase-in of such electronic fund transfer system
by classes of taxpayers based on the aggregate undeposited taxes of such
taxpayers at the close of specified periods and any other factors the
Secretary may deem appropriate.\
(B) Phase-in requirements.\--The phase-in of the electronic fund
transfer system shall be designed in such manner as may be necessary to
ensure that\--\
(i) during each fiscal year beginning after September 30, 1993, at least
the applicable required percentage of the total depository taxes imposed
by chapters 21, 22, and 24 shall be collected by means of electronic
fund transfer, and\
(ii) during each fiscal year beginning after September 30, 1993, at
least the applicable required percentage of the total other depository
taxes shall be collected by means of electronic fund transfer.\
(C) Applicable required percentage.\--\
(i) In the case of the depository taxes imposed by chapters 21, 22, and
24, the applicable required percentage is\--\
(I) 3 percent for fiscal year 1994,\
(II) 16.9 percent for fiscal year 1995,\
(III) 20.1 percent for fiscal year 1996,\
(IV) 58.3 percent for fiscal years 1997 and 1998, and\
(V) 94 percent for fiscal year 1999 and all fiscal years thereafter.\
(ii) In the case of other depository taxes, the applicable required
percentage is\--\
(I) 3 percent for fiscal year 1994,\
(II) 20 percent for fiscal year 1995,\
(III) 30 percent for fiscal year 1996,\
(IV) 60 percent for fiscal years 1997 and 1998, and\
(V) 94 percent for fiscal year 1999 and all fiscal years thereafter.\
(3) Definitions.\--For purposes of this subsection\--\
(A) Depository tax.\--The term \"depository tax\" means any tax if the
Secretary is authorized to require deposits of such tax.\
(B) Electronic fund transfer.\--The term \"electronic fund transfer\"
means any transfer of funds, other than a transaction originated by
check, draft, or similar paper instrument, which is initiated through an
electronic terminal, telephonic instrument, or computer or magnetic tape
so as to order, instruct, or authorize a financial institution or other
financial intermediary to debit or credit an account.\
(4) Coordination with other electronic fund transfer requirements.\--\
(A) Coordination with certain excise taxes.\--In determining whether the
requirements of subparagraph (B) of paragraph (2) are met, taxes
required to be paid by electronic fund transfer under sections 5061(e)
and 5703(b) shall be disregarded.\
(B) Additional requirement.\--Under regulations, any tax required to be
paid by electronic fund transfer under section 5061(e) or 5703(b) shall
be paid in such a manner as to ensure that the requirements of the
second sentence of paragraph (1)(A) of this subsection are satisfied.\
~~(h)~~ (i) Cross References.\--\
For treatment of earned income advance amounts as payment of withholding
and FICA taxes, see section 3507(d).

\* \* \* \* \*

Subtitle I\--Trust Fund Code

\* \* \* \* \*

**CHAPTER 98\--TRUST FUND CODE**

\* \* \* \* \*

Subchapter A\--Establishment of Trust Funds

\* \* \* \* \*

**[SEC. 9505. HARBOR MAINTENANCE TRUST FUND.]{.underline}**\
\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) Expenditures From Harbor Maintenance Trust Fund.\--Amounts in the
Harbor Maintenance Trust Fund shall be available, as provided by
appropriation Acts, for making expenditures\--\
(1) \* \* \*

\* \* \* \* \*

~~(3) for the payment of all expenses of administration incurred\--~~\
~~(A) by the Department of The Treasury in administering subchapter~~\
A of chapter 36 (relating to harbor maintenance tax), but not in\
excess of \$5,000,000 for any fiscal year, and\
~~(B) for periods during which no fee applies under paragraph (9)~~\
or (10) of section 13031(a) of the Consolidated Omnibus Budget\
Reconciliation Act of 1985.\
(3) for the payment of all expenses of administration incurred by the
Department of the Treasury, the Army Corps of Engineers, and the
Department of Commerce related to the administration of subchapter A of
chapter 36 (relating to harbor maintenance tax), but not in excess of
\$5,000,000 for any fiscal year.

\-\-\-\-\-\-\-\-\--

**Section 303 of the Social Security Act**\
\
PROVISIONS OF STATE LAWS\
Sec. 303. (a) The Secretary of Labor shall make no certification for
payment to any State unless he finds that the law of such State,
approved by the Secretary of Labor under the Federal Unemployment Tax
Act, includes provision for\--\
(1) \* \* \*

\* \* \* \* \*

\(5\) Expenditure of all money withdrawn from an unemployment fund of
such State, in the payment of unemployment compensation, exclusive of
expenses of administration, and for refunds of sums erroneously paid
into such fund and refunds paid in accordance with the provisions of
section 3305(b) of the Federal Unemployment Tax Act: Provided, That an
mount equal to the amount of employee payments into the unemployment
fund of a State may be used in the payment of cash benefits to
individuals with respect to their disability, exclusive of expenses of
administration: Provided further, That the amounts specified by section
903(c)(2) may, subject to the conditions prescribed in such section, be
used for expenses incurred by the State for administration of its
unemployment compensation law and public employment offices: Provided
further, That nothing in this paragraph shall be construed to prohibit
deducting an amount from unemployment compensation otherwise payable to
an individual and using the amount so deducted to pay for health
insurance if the individual elected to have such deduction made and such
deduction was made under a program approved by the Secretary of Labor:
Provided further, That amounts may be deducted from unemployment
benefits and used to repay overpayments as provided in subsection (g):
Provided further, That amounts may be withdrawn for the payment of
short-time compensation under a plan approved by the Secretary of Labor
~~; and~~ : Provided further, That amounts may be withdrawn for the
payment of allowances under a self-employment assistance program (as
defined in section 3306(t) of the Internal Revenue Code of 1986); and

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Caribbean Basin Economic Recovery Act**

\* \* \* \* \*

**TITLE II\--CARIBBEAN BASIN INITIATIVE**\
\
\
**[SEC. 201. SHORT TITLE.]{.underline}**\
\
\
This title may be cited as the \"Caribbean Basin Economic Recovery
Act\".\
\
Subtitle A\--Duty-Free Treatment

\* \* \* \* \*

**[SEC. 219. CENTER FOR THE STUDY 0F WESTERN HEMISPHERIC
TRADE.]{.underline}**\
\
\
(a) Establishment.\--The Commissioner of Customs, after consultation
with appropriate officials in the State of Texas, is authorized and
directed to make grants to an institution (or a consortium of such
institutions) to assist such institution in planning, establishing, and
operating a Center for the Study of Western Hemispheric Trade (hereafter
in this section referred to as the \"Center\". The Commissioner of
Customs shall make the first grant not later than December 1, 1994, and
the Center shall be established not later than February 1, 1995.\
(b) Scope of the Center.\--The Center shall be a year-round program
operated by an institution located in the State of Texas (or a
consortium of such institutions), the purpose of which is to promote and
study trade between and among Western Hemisphere countries. The Center
shall conduct activities designed to examine\--\
(1) the impact of the NAFTA on the economies in, and trade within, the
Western Hemisphere,\
(2) the negotiation of any future free trade agreements, including
possible accessions to the NAFTA; and\
(3) adjusting tariffs, reducing nontariff barriers, improving relations
among customs officials, and promoting economic relations among
countries in the Western Hemisphere.\
(c) Consultation; Selection Criteria.\--The Commissioner of Customs
shall consult with appropriate officials of the State of Texas and
private sector authorities with respect to selecting, planning, and
establishing the Center. In selecting the appropriate institution, the
Commissioner of Customs shall give consideration to\--\
(1) the institution\'s ability to carry out the programs and activities
described in this section; and\
(2) any resources the institution can provide the Center in addition to
Federal funds provided under this program.\
(d) Programs and Activities.\--The Center shall conduct the following
activities:\
(1) Provide forums for international discussion and debate for
representatives from countries in the Western Hemisphere regarding
issues which affect trade and other economic relations within the
hemisphere, including the impact of the NAFTA on individual economies
and the desirability and feasibility of possible accessions to the NAFTA
by such countries.\
(2) Conduct studies and research projects on subjects which affect
Western Hemisphere trade, including tariffs, customs, regional and
national economics, business development and finance, production and
personnel management, manufacturing, agriculture, engineering,
transportation, immigration, telecommunications, medicine, science,
urban studies, border demographics, social anthropology, and
population.\
(3) Publish materials, disseminate information, and conduct seminars and
conferences to support and educate representatives from countries in the
Western Hemisphere who seek to do business with or invest in other
Western Hemisphere countries.\
(4) Provide grants, fellowships, endowed chairs, and financial
assistance to outstanding scholars and authorities from Western
Hemisphere countries.\
(5) Provide grants, fellowships, and other financial assistance to
qualified graduate students, from Western Hemisphere countries, to study
at the center.\
(6) Implement academic exchange programs and other cooperative research
and instructional agreements with the complementary North/South Center
at the University of Miami at Coral Gables.\
(e) Definitions.\--For purposes of this section\--\
(a) Nafta.\--The term \"NAFTA\" means the North American Free Trade
Agreement.\
(2) Western hemisphere countries.\--The terms \"Western Hemisphere
countries\", \"countries in the Western Hemisphere\", and \"Western
Hemisphere\" means Canada, the United States, Mexico, countries located
in South America, beneficiary countries (as defined by section 212), the
Commonwealth of Puerto Rico, and the United States Virgin Islands.\
(f) Fees for Seminars and Publications.\--Notwithstanding any other
provision of law, a grant made under this section may provide that the
Center may charge a reasonable fee for attendance at seminars and
conferences and for copies of publications, studies, reports, and other
documents the Center publishes. The Center may waive such fees in any
case in which it determines imposing a fee would impose a financial
hardship and the purposes of the Center would be served by granting such
a waiver.\
(g) Duration of Grant.\--The Commissioner of Customs is directed to make
grants to any institution or institutions selected as the Center for
fiscal years 1994, 1995, 1996, and 1997.\
(h) Report.\--The Commissioner of Customs shall, no later than July 1,
1994, and annually thereafter for years for which grants are made,
submit a written report to the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of Representatives. The
first report shall include\--\
(1) a statement identifying the institution or institutions selected as
the Center,\
(2) the reasons for selecting the institution or institutions as the
Center, and\
(3) the plan of such institution or institutions for operating the
Center. Each subsequent report shall include information with respect to
the operations of the Center, the collaboration of the Center with, and
dissemination of information to, Government policymakers and the
business community with respect to the study of Western Hemispheric
trade by the Center, and the plan and efforts of the Center to continue
operations after grants under this section have expired.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Revised Statutes of the United States**

\* \* \* \* \*

**TITLE XXXIV\--COLLECTION OF DUTIES UPON IMPORTS**

\* \* \* \* \*

CHAPTER FOUR\--ENTRY OF MERCHANDISE

\* \* \* \* \*

**~~[Sec. 2792. Vessels used exclusively as ferry-boats carrying
passengers, baggage, and merchandise, shall not be required to enter and
clear, nor shall the masters of such vessels be required to present
manifests, or to pay entrance or clearance fees, or fees for receiving
or certifying manifests, but they shall, upon arrival in the United
States, be required to report such baggage and merchandise to the proper
officer of the customs according to law.]{.underline}~~**\
\
~~Any passenger vessel engaged triweekly or oftener in trade between
ports of the United States and foreign ports shall be exempt from
entrance and clearance fees and tonnage taxes while such service
triweekly or oftener is maintained.~~\
**[Sec. 2793. ~~Enrolled or licensed vessels engaged in the foreign and
coasting trade on the northern, northeastern, and northwestern frontiers
of the United States,~~ Documented vessels with a coastwise, Great Lakes
endorsement, departing from or arriving at a port in one district to or
from a port in another district, and also touching at intermediate
foreign ports, shall not thereby become liable to the payment of entry
and clearance fees or tonnage tax, as if from or to foreign ports~~; but
such vessel shall, notwithstanding, be required to enter and clear;
except that when such vessels are on such voyages on the Great Lakes and
touch at foreign ports for the purpose of taking on bunker fuel only,
they may be exempted from entering and clearing under such rules and
regulations as the Secretary of Commerce may prescribe, notwithstanding
any other provisions of law: Provided, That this exception shall not
apply to such vessels if, while at such foreign port, they land or take
on board any passengers, or any merchandise other than bunker fuel,
receive orders, discharge any seamen by mutual consent, or engage any
seamen to replace those discharged by mutual consent, or transact any
other business save that of taking on bunker fuel.~~]{.underline}**

\* \* \* \* \*

CHAPTER ELEVEN\--PROVISIONS APPLYING TO COMMERCE WITH CONTIGUOUS
COUNTRIES

\* \* \* \* \*

**~~[Sec. 3111. If any vessel enrolled or licensed to engage in the
foreign and coasting trade on the northern, northeastern, and
northwestern frontiers of the United States shall touch at any port in
the adjacent British provinces, and the master of such vessel shall
purchase any merchandise for the use of the vessel, the master of the
vessel shall report the same, with cost and quantity thereof, to an
officer of the customs at the first port in the United States at which
he shall next arrive, designating them as \"sea- stores\"; and in the
oath to be taken by such master of such vessel, on making such report,
he shall declare that the articles so specified or designated
\"sea-stores\" are truly intended for the use exclusively of the vessel,
and are not intended for sale, transfer, or private use. If any greater
quantity of dutiable articles shall be found on board such vessel than
are specified in such report or entry of such articles, or any part
thereof shall be landed without a permit from an officer of the customs,
such articles, together with the vessel, her apparel, tackle, and
furniture, shall be forfeited.]{.underline}~~**

\* \* \* \* \*

**~~[Sec. 3118. The master of any vessel so enrolled or licensed shall,
before departing from a port in one collection-district to a place in
another collection-district, where there is no custom-house, file his
manifest, and obtain a clearance in the same manner, and make oath to
the manifest, which manifest and clearance shall be delivered to the
proper officer of customs at the port at which the vessel next arrives
after leaving the place of destination specified in the
clearance.]{.underline}~~**\
\
**~~[Sec. 3119. Nothing contained in the three preceding sections shall
exempt masters of vessels from reporting, as now required by law, any
merchandise destined for any foreign port. No permit shall be required
for the unloading of cargo brought from an American
port.]{.underline}~~**

\* \* \* \* \*

**~~[Sec. 3122. The master of any vessel so enrolled or licensed,
destined with a cargo from a place in the United States, at which there
may be no custom-house, to a port where there may be a custom-house,
shall, within twenty-four hours after arrival at the port of
destination, deliver to the proper officer of the customs a manifest,
subscribed by him, setting forth the cargo laden at the place of
departure, or laden or unladen at any intermediate port, or place, to
the truth or which manifest he shall make oath before such officer. If
the vessel, however, have no cargo, the master shall not be required to
deliver such manifest.]{.underline}~~**

\* \* \* \* \*

**~~[Sec. 3124. The manifests, certificates of clearance, and oaths,
provided for by the eight preceding sections, shall be in such form, and
prepared, filled up, and executed in such manner as the Secretary of the
Treasury may from time to time prescribe.]{.underline}~~**\
\
**~~[Sec. 3125. If the master of any enrolled or licensed vessel shall
neglect or fail to comply with any of the provisions or requirements of
the nine preceding sections, such master shall forfeit and pay to the
United States the sum of twenty dollars for each and every failure or
neglect, and for which sum the vessel shall be liable, and may be
summarily proceeded against, by way of libel, in any district court of
the United States.]{.underline}~~**

\* \* \* \* \*

**[Sec. 3126. ~~Any vessel, on being duly registered in pursuance of the
laws of the United States,~~ Any United States documented vessel with a
registry or coastwise endorsement, or both may engage in trade between
one port in the United States and one or more ports within the same,
with the privilege of touching at one or more foreign ports during the
voyage, and land and take in thereat merchandise, passengers and their
baggage, and letters, and mails. All such vessels shall be furnished by
the appropriate customs officers of the ports at which they shall take
in their cargoes in the United States, with certified manifests, setting
forth the particulars of the cargoes, the marks, number of packages; by
whom shipped, to whom consigned, at what port to be delivered;
designating such merchandise as is entitled to drawback, or to the
privilege of being placed in warehouse; and the masters of all such
vessels shall, on their arrival at any port of the United States from
any foreign port at which such vessel may have touched, as herein
provided, conform to the laws providing for the delivery of manifests of
cargo and passengers taken on board at such foreign port, and all other
laws regulating the report and entry of vessels from foreign ports, and
be subject to all the penalties therein prescribed.]{.underline}**\
\
**[Sec. 3127. Any foreign merchandise taken in at one port of the United
States to be conveyed ~~in registered vessels~~ a United States
documented vessel with a registry or coastwise endorsement, or both, to
any other port within the same, either under the provisions relating to
warehouses, or under the laws regulating the transportation coastwise of
merchandise entitled to drawback, as well as any merchandise not
entitled to drawback, but on which the import duties chargeable by law
shall have been duly paid, shall not become subject to any import duty
by reason of the vessel in which they may arrive having touched at a
foreign port during the voyage.]{.underline}**

\* \* \* \* \*

**TITLE XLVIII\--REGULATION OF COMMERCE AND NAVIGATION**

Chapter One\--Registry and Recording

\* \* \* \* \*

**[Sec. 4136. ~~The Secretary of Commerce may issue a register or
enrollment~~ The Secretary of Transportation may issue a certificate of
documentation with a coastwise endorsement for any vessel wrecked on the
coasts of the United States or her possessions or adjacent waters, when
purchased by a citizen or citizens of the United States and thereupon
repaired in a shipyard in the United States or her possessions, if it
shall be proved to the satisfaction of the ~~Secretary of Commerce~~
Secretary of Transportation, if he deems it necessary , through a board
of three appraisers appointed by him, that the said repairs put upon
such vessels are equal to three times the appraised salved value of the
vessel: Provided, That the expense of the appraisal herein provided for
shall be borne by the owner of the vessel: Provided further, That if any
of the material matters of fact sworn to or represented by the owner, or
at his instance, to obtain the register of any vessel are not true,
there shall be a forfeiture to the United States of the vessel in
respect to which the oath shall have been made, together with tackel,
apparel, and furniture thereof.]{.underline}**

\* \* \* \* \*

Chapter Two\--Clearance and Entry

\* \* \* \* \*

**~~[Sec. 4197. The master or person having the charge or command of any
vessel bound to a foreign port shall deliver to the collector of the
district from which such vessel is about to depart a manifest of all the
cargo on board the same, and the value thereof, by him subscribed, and
shall swear to the truth thereof; whereupon the collector shall grant a
clearance for such vessel and her cargo, but without specifying the
particulars thereof in the clearance, unless required by the master or
other person having the charge or command of such vessel so to do. In
any vessel bound to a foreign port (other than a licensed yacht or an
undocumented American pleasure vessel not engaged in any trade nor in
any way violating the customs or navigation laws of the United States)
departs from any port or place in the United States without a clearance,
or if the master delivers a false manifest, or does not answer truly the
questions demanded of him, or, having received a clearance adds to the
cargo of such vessel without having mentioned in the report outwards the
intention to do so, or if the departure of the vessel is delayed beyond
the second day after obtaining clearance without reporting the delay to
the collector, the master or other person having the charge or command
of such vessel shall be liable to a penalty of not more than \$1,000 nor
less the \$500, or if the cargo consists in any part of narcotic drugs,
or any spirits, wines, or other alcoholic liquors (sea stores excepted),
a penalty of not more than \$5,000 nor less than \$1,000 for each
offense, and the vessel shall be detained in any port of the United
States until the said penalty is paid or secured: Provided, That in
order that the commerce of the United States may move with expedition
and without undue delay, the Secretary of Commerce is hereby authorized
to make regulations permitting the master of any vessel taking on cargo
for a foreign port or for a port in noncontiguous territory belonging to
the United States to file a manifest as hereinbefore provided, and if
the manifest be not a complete manifest and it so appears upon such
manifest, the collector of customs may grant clearance to the vessel in
case of an incomplete manifest, taking from the owner of the vessel, who
may act in the premises by a duly authorized attorney in fact, a bond
with security approved by the collector of customs in the penal sum of
\$1,000, conditioned that the master or someone for him will file a
completed outward manifest not later than the fourth business day after
the clearance of the vessel. In the event that the said complete outward
manifest be not filed as required by the provisions of this section and
the regulations made by the Secretary of Commerce in pursuance hereof,
then a penalty of \$50 for each day\'s delinquency beyond the allowed
period of four days for filing the completed manifest shall be exacted,
and if the completed manifest be not filed within the three days
following the four-day period, then for each succeeding day of
delinquency a penalty of \$100 shall be exacted. Suit may be instituted
in the name of the United States against the principal and surety on the
bond for the recovery of any penalties that may accrue and be exacted in
accordance with the terms of the bond.]{.underline}~~**\
\
**[SEC. 4197. CLEARANCE; VESSELS.]{.underline}**\
\
\
(a) When Required; Vessels of the United States.\--Except as otherwise
provided by law, any vessel of the United States shall obtain clearance
from the Customs Service before proceeding from a port or place in the
United States\--\
(1) for a foreign port or place;\
(2) for another port or place in the United States if the vessel has on
board bonded merchandise or foreign merchandise for which entry has not
been made; or\
(3) outside the territorial sea to visit a hovering vessel or to receive
merchandise while outside the territorial sea.\
(b) When Required; Other Vessels.\--Except as otherwise provided by law,
any vessel that is not a vessel of the United States shall obtain
clearance from the Customs Service before proceeding from a port or
place in the United States\--\
(1) for a foreign port or place;\
(2) for another port or place in the United States; or\
(3) outside the territorial sea to visit a hovering vessel or to receive
or deliver merchandise while outside the territorial sea.\
(c) Regulations.\--The Secretary of the Treasury may by regulation\--\
(1) prescribe the manner in which clearance under this section is to
obtained, including the documents, data or information which shall be
submitted or transmitted, pursuant to an authorized data interchange
system, to obtain the clearance;\
(2) permit the Customs Service to grant clearance for vessel under this
section before all requirements for clearance are complied with, but
only if the owner or operator of the vessel files a bond in an amount
set by the Secretary of the Treasury conditioned upon the compliance by
the owner or operator with all specified requirements for clearance
within a time period (not exceeding 4 business days) established by the
Secretary of the Treasury; and\
(3) authorize the Customs Service to permit clearance of any vessel to
be obtained at a place other than a designated port of entry, under such
conditions as he may prescribe.\
**~~[Sec. 4198. The oath to be taken by the master or commander of the
vessel shall be as follows:]{.underline}~~**\
\
\
District of\
\
~~I, (insert the name), master or commander of the (insert the
denomination and name of the vessel), bound from the port of (insert the
name of the port or place sailing from) to ((insert the name of the port
or place bound to), do solemnly, sincerely, and truly swear (or affirm,
as the case may be) that the manifest of the cargo on board the said
(insert denomination and name of the vessel), now delivered by me to the
collector of this district, and subscribed with my name, contains,
according to the best of my knowledge and belief, a full, just, and true
account of all the goods, wares, and merchandise now actually laden on
board the said vessel, and of the value thereof; and if any other goods,
wares, or merchandise shall be laden or put on board the said (insert
denomination and name of vessel) previous to her sailing from this port,
I will immediately report the same to the said collector. I do also
swear (or affirm) that I verily believe that duties on all the foreign
merchandise therein specified have been paid or secured, according to
law, and that no part thereof is intended to be relanded within the
United States, and that if by distress or other unavoidable accident it
shall become necessary to reland the same, I will forthwith make a just
and true report thereof to the collector of the customs of the district
wherein such distress or accident may happen. So help me God.~~\
**~~[Sec. 4199. (a) Copies of bills of lading or equivalent commercial
documents relating to all cargo encompassed by the manifest required
under this chapter shall be attached to such manifest and delivered to
the appropriate officer of the United States Customs Service at the time
such manifest is delivered.]{.underline}~~**\
\
~~(b) The following information shall be included on such manifest, or
on attached copies of bills of lading or equivalent commercial
documents:~~\
~~(1) Name and address of shipper.~~\
~~(2) Description of the cargo.~~\
~~(3) Number of packages and gross weight.~~\
~~(4) Name of vessel or carrier.~~\
~~(5) Port of exit.~~\
~~(6) Port of destination.~~\
~~(c) Except as provided in subsection (d), the following information
contained on such manifest, or on attached copies of bills of lading or
equivalent commercial documents, shall be available for public
disclosure:~~\
~~(1) Name and address of shipper, unless the shipper has made a
biennial certification claiming confidential treatment pursuant to
procedures adopted by the Secretary of the Treasury.~~\
~~(2) General character of the cargo.~~\
~~(3) Number of packages and gross weight.~~\
~~(4) Name of vessel or carrier.~~\
~~(5) Port of exit.~~\
~~(6) Port of destination.~~\
~~(7) Country of destination.~~\
~~(d) The information listed in subsection (c) shall not be available
for public disclosure if\--~~\
~~(1) the Secretary of the Treasury makes an affirmative finding on a
shipment-by-shipment basis that disclosure is likely to pose a threat of
personal injury or property damage; or~~\
~~(2) the information is exempt under the provisions of section
552(b)(1) of title 5 of the United States Code.~~\
~~(e) The Secretary of the Treasury, in order to allow for the timely
dissemination and publication of the information listed in subsection
(c) above, is authorized to establish procedures to provide access to
manifests, or attached bills of lading or equivalent commercial
documents which shall include provisions for adequate protection against
the public disclosure of information not available for public disclosure
from such manifests or attached bills of lading, or equivalent
commercial documents.~~

\* \* \* \* \*

**~~[Sec. 4201. The form of a clearance, to be granted to a ship or
vessel on her departure to a foreign port or place, shall be as follows:
District of \-\-\-\-\--, ss, \-\-\-\-\--]{.underline}~~**\
\
~~Port of \-\-\-\-\--:\-\-\-\-\--~~\
~~These are to certify all whom it doth concern, that \-\-\-\-\-\-\--,
master or commander of the \-\-\-\-\-\-\--, burden \-\-\-\-\-\-\-- tons,
or thereabouts, mounted with \-\-\-\-\-\-\-- guns, navigated with
\-\-\-\-\-\-\-- men, \-\-\-\-\-\-\-- built, and bound for
\-\-\-\-\-\-\--, having on board \-\-\-\-\-\-\--, hath here entered and
cleared his said vessel according to law. Given under our hands and
seals, at the custom-house of \-\-\-\-\-\-\--, this \-\-\-\-\-\-\-- day
of \-\-\-\-\-\-\--, one thousand \-\-\-\-\-\-\--, and in the
\-\-\-\-\-\-\-- year of the Independence of the United States of
America.~~

\* \* \* \* \*

**~~[Sec. 4207. Whenever any clearance is granted to any vessel of the
United States, duly registered as such, and bound on any foreign voyage,
the collector of the district shall annex thereto, in every case, a copy
of the rates or tariffs of fees which diplomatic and consular officers
are entitled, by the regulations prescribed by the President, to receive
for their services.]{.underline}~~**\
\
**~~[Sec. 4208. The master or person having charge or command of any
steamboat on Lake Champlain, when going from the United States into the
province of Quebec, may deliver a manifest of the cargo on board, and
take a clearance from the collector of the district through which any
such boat shall last pass, when leaving the United States, without
regard to the place from which any such boat shall have commenced her
voyage, or where her cargo shall have been taken on
board.]{.underline}~~**

\* \* \* \* \*

**~~[Sec. 4213. It shall be the duty of all masters of vessels for whom
any official services shall be performed by any consular officer,
without the payment of a fee, to require a written statement of such
services from such consular officer, and, after certifying as to whether
such statement is correct, to furnish it to the collector of the
district in which such vessels shall first arrive on their return to the
United States; and if any such master of a vessel shall fail to furnish
such statement, he shall be liable to a fine of not exceeding fifty
dollars, unless such master shall state under oath that no such
statement was furnished him by said consular officer. And it shall be
the duty of every collector to forward to the Secretary of the Treasury
all such statements as shall have been furnished to him, and also a
statement of all certified invoices which shall have come to his office,
giving the dates of the certificates, and the names of the persons for
whom and of the consular officer by whom the same were
certified.]{.underline}~~**

\* \* \* \* \*

Chapter Three\--Tonnage Duties

\* \* \* \* \*

**~~[Sec. 4221. In cases of vessels making regular daily trips between
any port of the United States and any port in the Dominion of Canada,
wholly upon interior waters not navigable to the ocean, no tonnage or
clearance fees shall be charged against such vessel by the officers of
the United States, except upon the first clearing of such vessel in each
year.]{.underline}~~**\
\
**~~[Sec. 4222. No consul or consular agent of the United States shall
exact tonnage fees from any vessel of the United States, touching at or
near ports in Canada, on her regular voyage from one port to another
within the United States, unless such consul or consular agent shall
perform some official services, required by law for such vessel, when
she shall thus touch at a Canadian port.]{.underline}~~**

\* \* \* \* \*

**TITLE XLIX\--REGULATION OF VESSELS IN FOREIGN COMMERCE**

\* \* \* \* \*

TITLE XLIX

\* \* \* \* \*

**~~[Sec. 4306. Every vessel of the United States, going to any foreign
country, shall, before she departs from the United States, at the
request of the master, be furnished by the collector for the district
where such vessel may be, with a passport, the form for which shall be
prescribed by the Secretary of State. In order to be entitled to such
passport, the master of every such vessel shall be bound, with
sufficient sureties, to the Treasury of the United States, in the
penalty of two thousand dollars, conditioned that the passport shall not
be applied to the use or protection of any other vessel than the one
described in it; and that, in case of the loss or sale of any vessel
having such passport, the same shall, within three months, be delivered
up to the collector from whom it was received, if the loss or sale take
place within the United States; or within six months, if the same shall
happen at any place nearer than the Cape of Good Hope; and within
eighteen months, if at a more distant place.]{.underline}~~**\
\
**~~[Sec. 4307. If any vessel of the United States shall depart
therefrom, and shall be found to any foreign country, other than to some
port in America, without such passport, the master of such vessel shall
be liable to a penalty of two hundred dollars for every such
offense.]{.underline}~~**\
\
**~~[Sec. 4308. Every unregistered vessel owned by a citizen of the
United States, and sailing with a sea-letter, going to any foreign
country, shall, before she departs from the United States, at the
request of the master, be furnished by the collector of the district
where such vessel may be with a passport, for which the master shall be
subject to the rules and conditions prescribed for vessels of the United
States.]{.underline}~~**

\* \* \* \* \*

**TITLE L\--REGULATION OF VESSELS IN DOMESTIC COMMERCE**

\* \* \* \* \*

**~~[Sec. 4332. Every surveyor who certifies a manifest, or grants any
permit, or who receives any certified manifest, or any permit, as is
provided for in this Title, shall make return thereof monthly, or
sooner, if it can conveniently be made, to the collector of the district
where such surveyor resides.]{.underline}~~**

\* \* \* \* \*

**[Sec. 4336. Any officer concerned in the collection of the revenue may
at all times inspect the ~~register or enrollment or license of any
vessel~~ certificate of documentation of any documented vessel or any
document in lieu thereof; and if the master or other person in charge or
command of any such vessel shall not exhibit the same, when required by
such officer, unless the vessel is one which by regulation of the
~~Secretary of the Treasury is not required to have its register or
enrollment or license~~ Secretary of Transportation is not required to
have its certificate of documentation or document in lieu thereof on
board, such master or person in charge or command shall be liable to a
penalty of \$100, unless the failure to do so is willful, in which case
he shall be liable to a penalty of \$1,000 and to a fine of not more
than \$1,000 or imprisonment for not more than one year, or
both.]{.underline}**

\* \* \* \* \*

**~~[Sec. 4348. The seacoasts and navigable rivers of the United States
and Porto Rico shall be divided into five great districts: The first to
include all the collection districts on the seacoasts and navigable
rivers between the northern boundary of the State of Maine and the
southern boundary of the State of Texas; the second to consist of the
island of Porto Rico; the third to include the collection districts on
the seacoasts and navigable rivers between the southern boundary of the
State of California and the northern boundary of the State of
Washington; the fourth to consist of the Territory of Alaska; the fifth
to consist of the Territory of Hawaii.]{.underline}~~**

\* \* \* \* \*

**~~[Sec. 4358. The coasting trade between the territory ceded to the
United States by the Emperor of Russia and any other portion of the
United States shall be regulated in accordance with the provisions of
law applicable to such trade between any two great
districts.]{.underline}~~**

\* \* \* \* \*

**~~[Sec. 4361. Whenever any vessel of the United States, registered
according to law, is employed in going from any one district in the
United States to any other district, such vessel, and the master
thereof, with the goods she may have on board previous to her departure
from the district where she may be, and also upon her arrival in any
other district, shall be subject, except as to the payment of fees, to
the same regulations, provisions, penalties, and forfeitures, and the
like duties are imposed on like officers, as are provided for vessels
licensed for carrying on the coasting-trade. Nothing herein contained
shall be construed to extend to registered vessels of the United States
having on board merchandise of foreign growth or manufacture, brought
into the United States, in such vessel, from a foreign port, and on
which the duties have not been paid according to law.]{.underline}~~**\
\
**~~[Sec. 4362. The collector of the district of Philadelphia may grant
permits for the transportation of merchandise of foreign growth or
manufacture across the State of New Jersey to the district of New York,
or across the State of Delaware to any district in the State of Maryland
or Virginia; and the collector of the district of New York may grant
like permits for transportation across the State of New Jersey; and the
collector of any district of Maryland or Virginia may grant like permits
for transportation across the State of Delaware to the district of
Philadelphia. Every such permit shall express the name of the owner, or
person sending the merchandise, and of the person to whom the
merchandise is consigned, with the marks, numbers, and description of
the packages, whether bale, box chest, or otherwise, and the kind of
goods contained therein, and the date when granted; and the owner, or
person sending such goods, shall swear that they were legally imported,
and the duties paid. Where the merchandise, to be so transported, shall
be of less value than eight hundred dollars, the permit shall not be
deemed necessary.]{.underline}~~**\
\
**~~[Sec. 4363. The owner or consignee of all merchandise transported
under the provisions of the preceding section and for the transportation
whereof a permit is necessary, shall, within twenty-four hours after the
arrival thereof at the place to which such merchandise was permitted to
be transported, report the same to the collector of the district where
it has arrived, and shall deliver up the permit accompanying the same;
and if the owner or consignee shall neglect or refuse to make due entry
of such merchandise within the time and in the manner directed, all such
merchandise shall be subject to forfeiture; and if the permit granted
shall not be given up within the time limited for making the report, the
person to whom it was granted, neglecting or refusing to deliver it up,
shall be liable to a penalty of fifty dollars for every twenty-four
hours it shall be withheld afterward.]{.underline}~~**\
\
**~~[Sec. 4364. Whenever any vessel, licensed for carrying on the
fishery, is intended to touch and trade at any foreign port, it shall be
the duty of the master or owner to obtain permission for that purpose
from the collector of the district where such vessel may be, previous to
her departure, and the master of every such vessel shall deliver like
manifests, and make like entries, both of the vessel and of the
merchandise on board, within the same time, and under the same penalty,
as are by law provided for vessels of the United States arriving from a
foreign port.]{.underline}~~**\
\
**~~[Sec. 4365. Whenever a vessel, licensed for carrying on the
fisheries, is found within three leagues of the coast, with merchandise
of foreign growth or manufacture, exceeding the value of five hundred
dollars, without having such permission as is directed by the preceding
section, such vessel, together with the merchandise of foreign growth or
manufacture imported therein, shall be subject to seizure and
forfeiture.]{.underline}~~**\
\
**~~[Sec. 4366. The master of every vessel employed in the
transportation of merchandise from district to district, that shall put
into a port other than the one to which she was bound, shall, within
twenty-four hours of his arrival, if there be an officer residing at
such port, and she continue there so long, make report of his arrival to
such officer, with the name of the place he came from, and to which he
is bound, with an account of his lading; and every master who neglects
or refuses so to do shall be liable to a penalty of twenty
dollars.]{.underline}~~**\
\
**~~[Sec. 4367. The master of every foreign vessel bound from a district
in the United States to any other district within the same, shall, in
all cases previous to her departure from such district, deliver to the
collector of such district duplicate manifests of the lading on board
such vessel, if there be any, or, if there be none, he shall declare
that such is the case; and to the truth of such manifest or declaration
he shall swear, and also obtain a permit from the collector, authorizing
him to proceed to the place of his destination.]{.underline}~~**\
\
**~~[Sec. 4368. The master of every foreign vessel, on his arrival
within any district from any other district, shall, in all cases, within
forty-eight hours after his arrival, and previous to the unlading of any
goods from on board such vessel, deliver to the collector of the
district where he may have arrived, a manifest of the goods laden on
board such vessel, if any there be; or if in ballast only, he shall so
declare; he shall swear to the truth of such manifest or declaration,
and shall also swear that such manifest contains an account of all the
merchandise which was on board such vessel at the time, or has been
since her departure for the place from whence she shall be reported last
to have sailed; and he shall also deliver to such collector the permit
which was given him from the collector of the district from whence he
sailed.]{.underline}~~**\
\
**~~[Sec. 4369. Every master of any foreign vessel who neglects or
refuses to comply with any of the requirements of the two preceding
sections, shall be liable to a penalty of one hundred dollars. Nothing
therein contained shall, however, be construed as affecting the payment
of tonnage, or any other requirements to which such vessels are subject
by law.]{.underline}~~**

\* \* \* \* \*

**TITLE LIII\--MERCHANT SEAMEN**

\* \* \* \* \*

Chapter Five\--Protection and Relief

\* \* \* \* \*

**~~[Sec. 4573. Before a clearance is granted to any vessel bound on a
foreign voyage or engaged in the whale-fishery, the master thereof shall
deliver to the collector of the customs a list containing the names,
places of birth and residence, and description of the persons who
compose his ship\'s company; to which list the oath of the captain shall
be annexed, that the list contains the names of his crew, together with
the places of their birth and residence, as far as he can ascertain
them; and the collector shall deliver him a certified copy thereof, for
which the collector shall be entitled to receive the sum of twenty-five
cents.]{.underline}~~**\
\
**~~[Sec. 4574. In all cases of private vessels of the United States
sailing from a port in the United States to a foreign port, the list of
the crew shall be examined by the collector for the district from which
the vessel shall clear, and, if approved of by him, shall be certified
accordingly. No person shall be admitted or employed on board of any
such vessel unless his name shall have been entered in the list of the
crew, approved and certified by the collector for the district from
which the vessel shall clear. The collector, before he delivers the list
of the crew, approved and certified, to the master or proper officer of
the vessel to which the same belongs, shall cause the same to be
recorded in a book by him for that purpose to be provided, and the
record shall be open for the inspection of all persons, and a certified
copy thereof shall be admitted in evidence in any court in which any
question may arise under any of the provisions of the
Title.]{.underline}~~**\
\
**~~[Sec. 4575. The following rules shall be observed with reference to
vessels bound on any foreign voyage:]{.underline}~~**\
\
~~First. The duplicate list of the ship\'s company, required to be made
out by the master and delivered to the collector of the customs, under
section forty-five hundred and seventy-three, shall be a fair copy in
one uniform handwriting, without erasure or interlineation.~~\
~~Second. It shall be the duty of the owners of every such vessel to
obtain from the collector of the customs of the district from which the
clearance is made, a true and certified copy of the shipping-articles,
containing the names of the crew, which shall be written in a uniform
hand, without erasures of interlineations.~~\
~~Third. These documents, which shall be deemed to contain all the
conditions of contract with the crew as to their service, pay, voyage,
and all other things, shall be produced by the master, and laid before
any consul, or other commercial agent of the United States, whenever he
may deem their contents necessary to enable him to discharge the duties
imposed upon him by law toward any mariner applying to him for his aid
or assistance.~~\
~~Fourth. All interlineations, erasures, or writing in a hand different
from that in which such duplicates were originally made, shall be deemed
fraudulent alterations, working no change in such papers, unless
satisfactorily explained in a manner consistent with innocent purposes
and the provisions of law which guard the rights of mariners.~~\
~~Fifth. If any master of a vessel shall proceed on a foreign voyage
without the documents herein required, or refuse to produce them when
required, or to perform the duties imposed by this section, or shall
violate the provisions thereof, he shall be liable to each and every
individual injured thereby in damages, to be recovered in any court of
the United States in the district where such delinquent may reside or be
found, and in addition thereto be punishable by a fine of one hundred
dollars for each offense.~~\
~~Sixth. It shall be the duty of the boarding-officer to report all
violations of this section to the collector of the port where any vessel
may arrive, and the collector shall report the same to the Secretary of
the Treasury and to the United States attorney in his district.~~\
**~~[Sec. 4576. The master of every vessel bound on a foreign voyage or
engaged in the whale fishery shall exhibit the certified copy of the
list of the crew to the first boarding officer at the first port in the
United States at which he shall arrive on his return, and also produce
the persons named therein to the boarding officer, whose duty it shall
be to examine the men with such list and to report the same to the
collector; and it shall be the duty of the collector at the port of
arrival, where the same is different from the port from which the vessel
originally sailed, to transmit a copy of the list so reported to him to
the collector of the port from which such vessel originally sailed. For
each failure to produce any person on the certified copy of the list of
the crew the master and owner shall be severally liable to a penalty of
four hundred dollars, to be sued for, prosecuted, and disposed of in
such manner as penalties and forfeitures which may be incurred for
offenses against the laws relating to the collection of duties; but such
penalties shall not be incurred on account of the master not producing
to the first boarding officer any of the persons contained in the list
who may have been discharged in a foreign country with the consent of
the consul, vice-consul, commercial agent, or vice-commercial agent
there residing, certified in writing, under his hand and official seal,
to be produced to the collector with the other persons composing the
crew, nor on account of any such person dying or absconding or being
forcibly impressed into other service of which satisfactory proof shall
also be exhibited to the collector.]{.underline}~~**

\* \* \* \* \*

**II.\--NATIONAL BANKS**

Chapter One\--Organization and Powers

\* \* \* \* \*

**[Sec. 5136. Upon duly making and filing articles of association and an
organization certificate, the association shall become, as from the date
of the execution of its organization certificate, a body corporate, and
as such, and in the name designated in the organization certificate, it
shall have power\--]{.underline}**\
\
First. To adopt and use a corporate seal.\
Second. To have succession from the date of the approval of this Act, or
from the date of its organization if organized after such date of
approval until such time as it be dissolved by the act of its
shareholders owning two- thirds of its stock, or until its franchise
becomes forfeited by reason of violation of law, or until terminated by
either a general or a special Act of Congress or until its affairs be
placed in the hands of a receiver and finally wound up by him.\
Third. To make contracts.\
Fourth. To sue and be sued, complain and defend, in any court of law and
equity, as fully as natural persons.\
Fifth. To elect or appoint directors, and by its board of directors to
appoint a president, vice-president, cashier, and other officers, define
their duties, require bonds of them and fix the penalty thereof, dismiss
such officers or any of them at pleasure, and appoint others to fill
their places.\
Sixth. To prescribe, by its board of directors, by-laws not inconsistent
with law, regulating the manner in which its stock shall be transferred,
its directors elected or appointed, its officers appointed, its property
transferred, its general business conducted, and the privileges granted
to it by law exercised and enjoyed.\
Seventh. To exercise by its board of directors or duly authorized
officers or agents, subject to law, all such incidental powers as shall
be necessary to carry on the business of banking; by discounting and
negotiating promissory notes, drafts, bills of exchange, and other
evidences of debt; by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money on personal security; and
by obtaining, issuing, and circulating notes according to the provisions
of this title. The business of dealing in securities and stock by the
association shall be limited to purchasing and selling such securities
and stock without recourse, solely upon the order, and for the account
of, customers, and in no case for its own account, and the association
shall not underwrite any issue of securities or stock: Provided, That
the association may purchase for its own account investment securities
under such limitations and restrictions as the Comptroller of the
Currency may by regulation prescribe. In no event shall the total amount
of the investment securities of any one obligor or maker, held by the
association for its own account, exceed at any time 10 per centum of its
capital stock actually paid in and unimpaired and 10 per centum of its
unimpaired surplus fund, except that this limitation shall not require
any association to dispose of any securities lawfully held by it on the
date of enactment of the Banking Act of 1935. As used in this section
the term \"investment securities\" shall mean marketable obligations
evidencing indebtedness of any person, copartnership, association, or
corporation in the form of bonds, notes and/or debentures commonly known
as investment securities under such further definition of the term
\"investment securities\" as may by regulation be prescribed by the
Comptroller of the Currency. Except as hereinafter provided or otherwise
permitted by law, nothing herein contained shall authorize the purchase
by the association for its own account of any shares of stock of any
corporation. The limitations and restrictions herein contained as to
dealing in, underwriting and purchasing for its own account, investment
securities shall not apply to obligations of the United States, or
general obligations of any State or of any political subdivision
thereof, or obligations of the Washington Metropolitan Area Transit
Authority which are guaranteed by the Secretary of Transportation under
section 9 of the National Capital Transportation Act of 1969, or
obligations issued under authority of the Federal Farm Loan Act, as
amended, or issued by the thirteen banks for cooperatives or any of them
or the Federal Home Loan Banks, or obligations which are insured by the
Secretary of Housing and Urban Development under title XI of the
National Housing Act, or obligations which are insured by the Secretary
of Housing and Urban Development (hereafter in this sentence referred to
as the \"Secretary\" pursuant to section 207 of the National Housing
Act, if the debentures to be issued in payment of such insured
obligations are guaranteed as to principal and interest by the United
States, or obligations, participations, or other instruments of or
issued by the Federal National Mortgage Association or the Government
National Mortgage Association, or mortgages, obligations, or other
securities which are or ever have been sold by the Federal Home Loan
Mortgage Corporation pursuant to section 305 or section 306 of the
Federal Home Loan Mortgage Corporation Act or obligations of the Federal
Financing Bank or obligations of the Environmental Financing Authority
or obligations or other instruments or securities of the Student Loan
Marketing Association, or such obligations of any local public agency
(as defined in section 110 (h) of the Housing Act of 1949) as are
secured by an agreement between the local public agency and the
Secretary in which the local public agency agrees to borrow from said
Secretary and said Secretary agrees to lend to said local public agency,
monies in an aggregate amount which (together with any other monies
irrevocably committed to the payment of interest on such obligations)
will suffice to pay, when due, the interest on and all installments
(including the final installment) of the principal of such obligations,
which monies under the terms of said agreement are required to be used
for such payments, or such obligations of a public housing agency (as
defined in the United States Housing Act of 1937, as amended) as are
secured (1) by an agreement between the public housing agency and the
Secretary in which the public housing agency agrees to borrow from the
Secretary and the Secretary agrees to lend to the public housing agency,
prior to the maturity of such obligations, monies in an amount which
(together with any other monies irrevocably committed to the payment of
interest on such obligations) will suffice to pay the principal of such
obligations with interest to maturity thereon, which monies under the
terms of said agreement are required to be used for the purpose of
paying the principal of and the interest on such obligations at their
maturity, (2) by a pledge of annual contributions under an annual
contributions contract between such public housing agency and the
Secretary if such contract shall contain the covenant by the Secretary
which is authorized by subsection (b) of section 22 of the United States
Housing Act of 1937, as amended, and if the maximum sum and the maximum
period specified in such contract pursuant to said subsection 22(b)
shall not be less than the annual amount and the period for payment
which are requisite to provide for the payment when due of all
installments of principal and interest on such obligations, or (3) by a
pledge or both annual contributions under an annual contributions
contract containing the covenant by the Secretary which is authorized by
section 6(g) of the United States Housing Act of 1937, and a loan under
an agreement between the local public housing agency and the Secretary
in which the public housing agency agrees to borrow from the Secretary,
and the Secretary agrees to lend to the public housing agency, prior to
the maturity of the obligations involved, moneys in an amount which
(together with any other moneys irrevocably committed under the annual
contributions contract to the payment of principal and interest on such
obligations) will suffice to provide for the payment when due of all
installments of principal and interest on such obligations, which moneys
under the terms of the agreement are required to be used for the purpose
of paying the principal and interest on such obligations at their
maturity: Provided, That in carrying on the business commonly known as
the safe-deposit business the association shall not invest in the
capital stock of a corporation organized under the law of any State to
conduct a safe-deposit business in an amount in excess of 15 per centum
of the capital stock of the association actually paid in and unimpaired
and 15 per centum of its unimpaired surplus. The limitations and
restrictions herein contained as to dealing in and underwriting
investment securities shall not apply to obligations issued by the
International Bank for Reconstruction and Development, the European Bank
for Reconstruction and Development, the Inter- American Development
Bank, the North American Development Bank, the Asian Development Bank,
the African Development Bank, the Inter-American Investment Corporation,
or the International Finance Corporation, or obligations issued by any
State or political subdivision or any agency of a State or political
subdivision for housing, university, or dormitory purposes, which are at
the time eligible for purchase by a national bank for its own account,
nor to bonds, notes and other obligations issued by the Tennessee Valley
Authority or by the United States Postal Service: Provided, That no
association shall hold obligations issued by any of said organizations
as a result of underwriting, dealing, or purchasing for its own account
(and for this purpose obligations as to which it is under commitment
shall be deemed to be held by it) in a total amount exceeding at any one
time 10 per centum of its capital stock actually paid in and unimpaired
and 10 per centum of its unimpaired surplus fund. Notwithstanding any
other provision in this paragraph, the association may purchase for its
own account shares of stock issued by a corporation authorized to be
created pursuant to title IX of the Housing and Urban Development Act of
1968, and may make investments in a partnership, limited partnership, or
joint venture formed pursuant to section 907(a) or 907(c) of that Act.
Notwithstanding any other provision of this paragraph, the association
may purchase for its own account shares of stock issued by any State
housing corporation incorporated in the State in which the association
is located and may make investments in loans and commitments for loans
to any such corporation: Provided, That in no event shall the total
amount of such stock held for its own account and such investments in
loans and commitments made by the association exceed at any time 5 per
centum of its capital stock actually paid in and unimpaired plus 5 per
centum of its unimpaired surplus fund. Notwithstanding any other
provision in this paragraph, the association may purchase for its own
account shares of stock issued by a corporation organized solely for the
purpose of making loans to farmers and ranchers for agricultural
purposes, including the breeding, raising, fattening, or marketing of
livestock. However, unless the association owns at least 80 per centum
of the stock of such agricultural credit corporation the amount invested
by the association at any one time in the stock of such corporation
shall not exceed 20 per centum of the unimpaired capital and surplus of
the association: Provided further, That notwithstanding any other
provision of this paragraph, the association may purchase for its own
account shares of stock of a bank insured by the Federal Deposit
Insurance Corporation or a holding company which owns or controls such
an insured bank if the stock of such bank or company is owned
exclusively (except to the extent directors\' qualifying shares are
required by law) by depository institutions and such bank or company and
all subsidiaries thereof are engaged exclusively in providing services
for other depository institutions and their officers, directors, and
employees, but in no event shall the total amount of such stock held by
the association in any bank or holding company exceed at any time 10 per
centum of the associations capital stock and paid in and unimpaired
surplus and in no event shall the purchase of such stock result in an
association\'s acquiring more than 5 per centum of any class of voting
securities of such bank or company. The limitations and restrictions
contained in this paragraph as to an association purchasing for its own
account investment securities shall not apply to securities that (A) are
offered and sold pursuant to section 4(5) of the Securities Act of 1933
(15 U.S.C. 77d(5)); or (B) are mortgage related securities (as that term
is defined in section 3(a)(41) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(41))), subject to such regulations as the Comptroller
of the Currency may prescribe, including regulations prescribing minimum
size of the issue (at the time of initial distribution) or minimum
aggregate sales prices, or both. A national banking association may deal
in, underwrite, and purchase for such association\'s own account
qualified Canadian government obligations to the same extent that such
association may deal in, underwrite, and purchase for such
association\'s own account obligations of the United States or general
obligations of any State or of any political subdivision thereof. For
purposes of this paragraph\--\
(1) \* \* \*

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Harmonized Tariff Schedule of the United States**

\* \* \* \* \*

**General notes**

\* \* \* \* \*

4\. Exemptions. For the purposes of general note 1\--\
(a) \* \* \*

\* \* \* \* \*

\(c\) records, diagrams and other data with regard to any business,
engineering or exploration operation whether on paper, cards,
photographs, blueprints, tapes or other media, ~~and~~\
(d) articles returned from space within the purview of section 484a of
the Tariff Act of 1930, and\
(e) articles exported from the United States which are returned within
45 days after such exportation from the United States as undeliverable
and which have not left the custody of the carrier or foreign customs
service, are not goods subject to the provisions of the tariff schedule.
No exportation referred to in subdivision (e) may be treated as
satisfying any requirement for exportation in order to receive a benefit
from, or meet an obligation to, the United States as a result of such
exportation.

\* \* \* \* \*

**SECTION XVII\--VEHICLES, AIRCRAFT, VESSELS AND ASSOCIATED TRANSPORT
EQUIPMENT**

\* \* \* \* \*

**[Chapter 86\--Railway or Tramway Locomotives, Rolling Stock and Parts
Thereof; Railway or Tramway Track Fixtures and Fittings and Parts
Thereof; Mechanical (Including Electro-Mechanical) Traffic Signaling
Equipment of all Kinds]{.underline}**\
\
Notes\
\
1. \* \* \*

\* \* \* \* \*

4\. Railway locomotives (provided for in headings 8601 and 8602) and
railway freight cars (provided for in heading 8606) on which no duty is
owed are not subject to the entry or release requirements for imported
merchandise set forth in sections 448 and 484 of the Tariff Act of 1930.
The Secretary of the Treasury may by regulation establish appropriate
reporting requirements, including the requirement that a bond be posted
to ensure compliance.

\* \* \* \* \*

**SECTION XXII\--SPECIAL CLASSIFICATION PROVISIONS; TEMPORARY
LEGISLATION; TEMPORARY MODIFICATIONS ESTABLISHED PURSUANT TO TRADE
LEGISLATION; ADDITIONAL IMPORT RESTRICTIONS ESTABLISHED PURSUANT TO
SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED**\
\
\
**[Chapter 98\--Special Classification Provisions]{.underline}**

\* \* \* \* \*

SUBCHAPTER III\--SUBSTANTIAL CONTAINERS OR HOLDERS

U.S. Notes\
\
1. \* \* \*

\* \* \* \* \*

4\. Instruments of international traffic, such as containers, lift vans,
rail cars and locomotives, truck cabs and trailers, etc, are exempt from
formal entry procedures but are required to be accounted for when
imported and exported into and out of the United States, respectively,
through the manifesting procedures required for all international
carriers by the United States Customs Service. Fees associated with the
importation of such instruments of international traffic shall be
reported and paid on a periodic basis as required by regulations issued
by the Secretary of the Treasury and in accordance with 1956 Customs
Convention on Containers (20 UST 30; TIAS 6634).

\* \* \* \* \*

**[Chapter 99\--Temporary Legislation; Temporary Modifications
Established Pursuant to Trade Legislation; Additional Import
Restrictions Established Pursuant to Section 22 of the Agricultural
Adjustment Act, as Amended]{.underline}**

\* \* \* \* \*

SUBCHAPTER V\--TEMPORARY MODIFICATIONS ESTABLISHED PURSUANT TO THE
UNITED STATES-CANADA FREE TRADE AGREEMENT

U.S. Notes\
\
1. \* \* \*

\* \* \* \* \*

9\. Railway freight cars provided for in subheadings 9905.86.05 and
9905.86.10 are not subject to the entry or release requirements for
imported merchandise set forth in sections 448 and 484 of the Tariff Act
of 1930. The Secretary of the Treasury may by regulation establish
appropriate reporting requirements, including the requirement that a
bond be posted to ensure compliance.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**SECTION 9703 OF TITLE 31, UNITED STATES CODE**\
\
\
Sec. 9703. Department of the Treasury Forfeiture Fund\
\
(a) In General.\--There is established in the Treasury of the United
States a fund to be known as the \"Department of the Treasury Forfeiture
Fund\" (referred to in this section as the \"Fund\"). The Fund shall be
available to the Secretary, without fiscal year limitation, with respect
to seizures and forfeitures made pursuant to any law (other than section
7301 or 7302 of the Internal Revenue Code of 1986) enforced or
administered by the Department of the Treasury or the United States
Coast Guard for the following law enforcement purposes:\
(1) \* \* \*\
(2) At the discretion of the Secretary\--\
(A) \* \* \*

\* \* \* \* \*

\(E\) the payment of claims against employees of the Customs Service
settled by the Secretary under section 630 of the Tariff Act of 1930;\
~~(E)~~ (F) payment for equipment for any vessel, vehicle, or aircraft
available for official use by a State or local law enforcement agency to
enable the vessel, vehicle, or aircraft to assist in law enforcement
functions if the vessel, vehicle, or aircraft will be used in joint law
enforcement operations with a Department of the Treasury law enforcement
organization;\
~~(F)~~ (G) payment of overtime salaries, travel, fuel, training,
equipment, and other similar costs of State or local law enforcement
officers that are incurred in joint law enforcement operations with a
Department of the Treasury law enforcement organization;\
~~(G)~~ (H) reimbursement of private persons for expenses incurred by
such persons in cooperating with a Department of the Treasury law
enforcement organization in investigations and undercover law
enforcement operations;\
~~(H)~~ (I) payment for training foreign law enforcement personnel with
respect to seizure or forfeiture activities of the Department of the
Treasury; and\
~~(I)~~ (J) payment made pursuant to guidelines promulgated by the
Secretary, if such payment is necessary and directly related to seizure
and forfeiture program expenses for\--\
(i) the purchase or lease of automatic data processing systems\
(not less than a majority of which use will be related to such program);

\* \* \* \* \*

\(e\) Investments.\--Amounts in the Fund, and in any holding accounts
associated with the Fund, which are not currently needed for the
purposes of this section ~~shall~~ may be kept on deposit or invested in
obligations of, or guaranteed by, the United States and all earnings on
such investments ~~shall~~ may be deposited in the Fund.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Act of June 16, 1937**\
\
AN ACT To expedite the dispatch of vessels from certain ports of call.\
\
~~Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That in order to expedite the
dispatch of vessels carrying passengers operating on regular schedules
and arriving at night or on a Sunday or a holiday at a port in the
United States at which such vessel is required by law to report arrival
and make entry and from which it is required to obtain a clearance, the
appropriate customs officer, if the vessel departs during the same
night, Sunday, or holiday on which it arrives may, under such
regulations as may be prescribed the Secretary of the Treasury, receive
the report of arrival and entry of such vessel from and give clearance
for such vessel to the master or other proper officer thereof on board
such vessel: Provided, That bond, as prescribed in section 451 of the
Tariff Act of 1930, is given to secure reimbursement to the Government
for the compensation of, and expenses incurred by, such customs officers
in performing such services, who shall be entitled to rates of
compensation fixed on the same basis and payable in the same manner and
upon the same terms and conditions as in the case of customs officers
and employees assigned to lading or unlading at night or on Sunday or a
holiday.~~

\-\-\-\-\-\-\-\-\--

**Section 965 of Title 18, United States Code**\
\
\
Sec. 965. Verified statements as prerequisite to vessel\'s departure\
\
(a) During a war in which the United States is a neutral nation, every
master or person having charge or command of any vessel, domestic or
foreign, whether requiring clearance or not, before departure of such
vessel from port shall, in addition to the facts required by ~~sections
91, 92, and 94 of Title 46~~ section 431 of the Tariff Act of 1930 (19
U.S.C. 1431) and section 4197 of the Revised Statutes of the United
States (46 U.S.C. App. 91), to be set out in the masters\' and
shippers\' manifests before clearance will be issued to vessels bound to
foreign ports, deliver to the ~~collector of customs for the district
wherein such vessel is then located~~ Customs Service a statement, duly
verified by oath, that the cargo or any part of the cargo is or is not
to be delivered to other vessels in port or to be transshipped on the
high seas, and, if it is to be so delivered or transshipped, stating the
kind and quantities and the value of the total quantity of each kind of
article so to be delivered or transshipped, and the name of the person,
corporation, vessel, or government to whom the delivery or transshipment
is to be made; and the owners, shippers, or consignors of the cargo of
such vessel shall in the same manner and under the same conditions
deliver to the ~~collector~~ Customs Service like statements under oath
as to the cargo or the parts thereof laden or shipped by them,
respectively.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 9 of the Act To Prevent Pollution From Ships**\
\
\
Sec. 9. (a) \* \* \*

\* \* \* \* \*

\(e\) If any ship subject to the MARPOL Protocol or this Act, its owner,
operator, or person in charge is liable for a fine or civil penalty
under this section, or if reasonable cause exists to believe that the
ship, its owner, operator, or person in charge may be subject to a fine
or civil penalty under this section, the Secretary of the Treasury, upon
the request of the Secretary, ~~shall refuse or revoke\--~~\
~~(1) the clearance required by section 4197 of the Revised Statutes of
the United States, as amended (46 U.S.C. 91); or~~\
~~(2) a permit to proceed under section 4367 of the revised Statutes of
the United States (46 U.S.C. 313) or section 443 of the Tariff Act 1930,
as amended (19 U.S.C. 1443). Clearance or a permit to proceed may be
granted upon the filing of a bond or other surety satisfactory to the
Secretary.~~ shall refuse or revoke the clearance required by section
4197 of the Revised Statutes of the United States (46 U.S.C. App. 91).
Clearance may be granted upon the filing of a bond or other surety
satisfactory to the Secretary.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Act of October 3, 1913**\
\
\
**CHAPTER 16.\--An Act To reduce tariff duties and to provide revenue
for the Government, and for other purposes.**

\* \* \* \* \*

Section IV.\
A. \* \* \*

\* \* \* \* \*

**[J. SUBSECTION 1.]{.underline}**\
\
\
A discriminating duty of 10 per centum ad valorem, in addition to the
duties imposed by law, shall be levied, collected, and paid on all
goods, wares, or merchandise which shall be imported in vessels not of
the United States, or which being the production or manufacture of any
foreign country not contiguous to the United States, shall come into the
United States from such contiguous country; but this discriminating duty
shall not apply to goods, wares, or merchandise which shall be imported
in vessels not of the United States entitled at the time of such
importation by treaty or convention or Act of Congress to be entered in
the ports of the United States on payment of the same duties as shall
then be payable on goods, wares, and merchandise imported in vessels of
the United States, nor to goods, wares, and merchandise imported in a
vessel owned by citizens of the United States, but not a vessel of the
United States, if such vessel, after entering an American port, shall
before leaving the same be ~~registered as a vessel of the United
States,~~ documented under chapter 121 of title 46, United States Code,
nor to such foreign products or manufactures as shall be imported from
such contiguous countries in the usual course of strictly retail trade.

\* \* \* \* \*

**[J. SUBSECTION 3.]{.underline}**\
\
\
Section 130 of this title shall not apply to vessels or goods, wares, or
merchandise imported in vessels of a foreign nation which does not
maintain a similar regulation against ~~vessels of the United States~~
United States documented vessels nor to any vessel owned by citizens of
the United States but not a vessel of the United States if such vessel
after entering an American port shall, before leaving the same, be
~~registered as a vessel of the United States.~~ documented under
chapter 121 of title 46, United States Code.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Act of August 5, 1935**\
\
\
AN ACT To protect the revenue of the United States and provide measures
for the more effective enforcement of the laws respecting the revenue,
to prevent smuggling, to authorize customs-enforcement areas, and for
other purposes.\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,\
\
**TITLE I**\
\
\
Section 1. (a) \* \* \*

\* \* \* \* \*

**[Sec. 4. Subject to appeal to the Secretary of Commerce and under such
regulations as he may prescribe, ~~whenever the collector of customs of
the district in which any vessel is, or is sought to be, registered,
enrolled, licensed, or numbered~~ when the Secretary of Transportation
is shown upon evidence which he deems sufficient that such vessel is
being, or is intended to be, employed to smuggle, transport, or
otherwise assist in the unlawful introduction or importation into the
United States of any merchandise or person, or to smuggle any
merchandise into the territory of any foreign government in violation of
the laws there in force, if under the laws of such foreign government
any penalty or forfeiture is provided for violation of the laws of the
United States respecting the customs revenue, or whenever, from the
design or fitting of any vessel or the nature of any repairs made
thereon, it is apparent to ~~such collector~~ the Secretary of
Transportation that such vessel has been built or adapted for the
purpose of smuggling merchandise, the ~~said collector shall revoke the
registry, enrollment, license, or number of said vessel~~ the Secretary
of Transportation shall revoke any endorsement on the vessel\'s
certificate of documentation or number (when the Secretary is the
authority issuing the number under chapter 123 of title 46, United
States Code) or refuse the same if application be made therefor, as the
case may be. ~~Such collector and all persons~~ The Secretary of
Transportation and all persons acting by or under his direction shall be
indemnified from any penalties or actions for damages for carrying out
the provisions of this section.]{.underline}**

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Act of November 6, 1966**\
\
\
AN ACT To require evidence of adequate financial responsibility to pay
judgments for personal injury or death, or to repay fares in the event
of nonperformance of voyages, to establish minimum standards for
passenger vessels and to require disclosure of construction details on
passenger vessels, and for other purposes.

\* \* \* \* \*

**[Sec. 2. (a) \* \* \*]{.underline}**

\* \* \* \* \*

\(e\) ~~The collector of customs at~~ At the port or place of departure
from the United States of any vessel described in subsection (a) of this
section, the Customs Service shall refuse the clearance required by
section 4197 of the Revised Statutes (46 U.S.C. 91) to any such vessel
which does not have evidence furnished by the Federal Maritime
Commission that the provisions of this section have been complied with.\
**[Sec. 3. (a) \* \* \*]{.underline}**

\* \* \* \* \*

\(e\) ~~The collector of customs at~~ At the port or place of departure
from the United States of any vessel described in subsection (a) of this
section, the Customs Service shall refuse the clearance required by
section 4197 of the Revised Statues (46 U.S.C. 91) to any such vessel
which does not have evidence furnished by the Federal Maritime
Commissioner that the provisions of this section have been complied
with.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 1 of the Act of February 10, 1900**\
\
\
**CHAPTER 15.\--An Act Relating to Cuban vessels.**\
\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled. ~~That vessels owned by
citizens of Cuba and documented as such by officers of the United States
shall hereafter be entitled in ports of the United States to the rights
and privileges of vessels of the most favored nation, and they and their
cargoes shall be subject to no higher charges in ports of the United
States than are imposed on the vessels and cargoes of the most favored
nation in the same trade.~~

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 2 of the Act of April 29, 1908**\
\
\
**CHAPTER 152.\--An Act To repeal an Act approved April thirtieth,
nineteen hundred and six, entitled \"An Act to regulate shipping in
trade between ports of the United States and ports or places in the
Philippine Archipelago, between ports or places in the Philippine
Archipelago, and for other purposes,\" and for other purposes.**\
\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That until Congress shall have
authorized the registry as vessels of the United States of vessels owned
in the Philippine Islands, the government of the Philippine Islands is
hereby authorized to adopt, from time to time, and enforce regulations
governing the transportation of merchandise and passengers between ports
or places in the Philippine Archipelago.\
**~~[Sec. 2. That on and after the passage of this Act the same tonnage
taxes shall be levied, collected, and paid upon all foreign vessels
coming into the United States from the Philippine Islands which are
required by law to be levied, collected, and paid upon vessels coming
into the United States from foreign countries.]{.underline}~~**

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 1 of the Act of July 1, 1916**\
\
\
**CHAPTER 209.\--An Act Making appropriations for sundry civil expenses
of the Government for the fiscal year ending June thirtieth, nineteen
hundred and seventeen, and for other purposes.**\
\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That the following sums are
appropriated, out of any money in the Treasury not otherwise
appropriated, for the fiscal year ending June thirtieth, nineteen
hundred and seventeen, namely:

\* \* \* \* \*

~~That the internal-revenue taxes imposed by the Philippine Legislature
under the law enacted by that body on December twenty-first, nineteen
hundred and fifteen, as amended by the law enacted by that body on
February fourth, nineteen hundred and sixteen, and the tonnage tax on
vessels engaged in foreign trade enacted by that body on February
fourth, nineteen hundred and sixteen, are hereby legalized and ratified,
and the collection of all such taxes heretofore or hereafter is hereby
legalized, ratified, and confirmed as fully to all intents and purposes
as if the same had by prior Act of Congress been specifically authorized
and directed.~~

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**The Act of July 3, 1926**\
\
\
**CHAPTER 757.\--An Act To create a sixth great district to include all
the collection districts on the Great Lakes, their connecting and
tributary waters, as far east as the Raquette River, New York.**\
\
\
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, ~~That there is hereby created,
in addition to the five great districts provided by section 4348 of the
Revised Statutes as amended by the Act of May 12, 1906, a sixth great
district to include all the collection districts on the Great Lakes,
their connecting and tributary waters, as far east as the Raquette
River, New York.~~\
**~~[Sec. 2. Enrolled and licensed vessels operating in the great
district herein created shall be subject to all of the requirements of
licensed and enrolled and licensed vessels imposed by sections 4349,
4350, 4351, and 4352 of the Revised Statutes and amendments and laws
supplementary thereto: Provided, That nothing herein shall affect the
rights or privileges reserved to seamen under existing
law.]{.underline}~~**\
\
**[Sec. 3. Sections 3116 and 3117 of the Revised Statutes are hereby
repealed.]{.underline}**

\-\-\-\-\-\-\-\-\--

**Act of May 4, 1934**\
\
\
Authorizing pursers or licensed deck officers of vessels to perform the
duties of the masters of such vessels in relation to entrance and
clearance of same.\
\
~~Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That whenever, under any
provision or provisions of any statute of the United States, it is made
the duty of the masters of vessels to make entry and clearance of same,
it shall be lawful for such duties to be performed by any licensed deck
officer or purser of such vessel; and when such duties are performed by
a licensed deck officer or purser of such vessel, such acts shall have
the same force and effect as if performed by masters of such vessels:
Provided, That nothing herein contained shall relieve the master of any
penalty or liability provided by any statute relating to the entry or
clearance of vessels.~~

\-\-\-\-\-\-\-\-\--

**Section 1403 of the Water Resources Development Act of 1986**\
\
\
SEC. 1403. CREATION OF HARBOR MAINTENANCE TRUST FUND.\
\
(a) \* \* \*\
~~(b) Authorization of Appropriations.\--There are authorized to be
appropriated to the Department of the Treasury (from the fees collected
under paragraphs (9) and (10) of section 13031(a) of the Consolidated
Omnibus Budget Reconciliation Act of 1985) such sums as may be necessary
to pay all expenses of administration incurred by such Department in
administering subchapter A of chapter 36 of the Internal Revenue Code of
1954 for periods to which such fees apply.~~

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 9501 of the Omnibus Budget Reconciliation Act of 1987**\
\
\
SEC. 9501. CUSTOMS USER FEES.\
\
(a) \* \* \*

\* \* \* \* \*

\(c\) Analysis Regarding the CES Program; Effect on Implementation of
Program.\--\
(1) \* \* \*

\* \* \* \* \*

\(3\) The Commissioner of Customs is authorized to obtain from the
operators of centralized cargo examination stations information
regarding the fees paid to them for the provision of services at these
stations.

\* \* \* \* \*

\-\-\-\-\-\-\-\-\--\
\
**Section 123 of the Customs and Trade Act of 1990**\
\
\
SEC. 123. ANNUAL NATIONAL TRADE AND CUSTOMS LAW VIOLATION ESTIMATES AND
ENFORCEMENT STRATEGY.\
\
(a) \* \* \*

\* \* \* \* \*

\(d\) Compliance Program.\--The Commissioner of Customs shall\--\
(1) devise and implement a methodology for estimating the level of
compliance with the laws administered by the Customs Service; and\
(2) include as an additional part of the report required to be submitted
under subsection (a) for each of fiscal years 1994, 1995, and 1996, an
evaluation of the extent to which such compliance was obtained during
the 12-month period preceding the 60th day before each such fiscal
year.\
~~(d)~~ (e) Confidentiality.\--The contents of any report submitted to
the Committees under subsection (a) or (c)(2) are confidential and
disclosure of all or part of the contents is restricted to\--\
(1) officers and employees of the United States designated by the
Commissioner of Customs;\
(2) the chairman of each of the Committees; and\
(3) those members of each of the Committees and staff persons of each of
the Committees who are authorized by the Chairman thereof to have access
to the contents.

\-\-\-\-\-\-\-\-\--

**Section 402 of the Agricultural Trade Development and Assistance Act
of 1954**\
\
\
SEC. 402. DEFINITIONS.\
\
As used in this Act:\
(1) \* \* \*\
~~(2) Agricultural commodity.\--The term \"agricultural commodity\",
unless otherwise provided for in this Act, includes any agricultural
commodity or the products thereof produced in the United States,
including wood and processed wood products, fish, and livestock as well
as value-added, fortified, or high-value agricultural products.
Effective beginning on October 1, 1991, for purposes of title II, a
product of an agricultural commodity shall not be considered to be
produced in the United States if it contains any ingredient that is not
produced in the United States, if that ingredient is produced and is
commercially available in the United States at fair and reasonable
prices.~~\
(2) Agricultural commodity.\--\
(A) In general.\--The term \"agricultural commodity\" means\--\
(i) with respect to any agricultural commodity other than a product of
an agricultural commodity, an agricultural commodity entirely produced
in the United States; and\
(ii) with respect to a product of an agricultural commodity\--\
(I) a product all of the agricultural components of which are entirely
produced in the United States; or\
(II) any other product the Secretary may designate that contains any
agricultural component that is not entirely produced in the United
States if\--\
(aa) the component is an added, de minimis component,\
(bb) the component is not commercially produced in the United States,
and\
(cc) there is no acceptable substitute for the component that is
commercially produced in the United States.\
(B) Specific commodities.\--For purposes of this paragraph\--\
(i) fish entirely produced in the United States include fish harvested
by a documented fishing vessel as defined in title 46, United States
Code, in waters that are not waters (including the territorial sea) of a
foreign country; and\
(ii) the term \"agricultural commodity\" includes wood and processed
wood products, fish, and livestock, and value-added, fortified, or
high-value agricultural products, that meet the requirements of this
paragraph.