63 FR 49666 September 17, 1998

DEPARTMENT OF COMMERCE

International Trade Administration

15 CFR Part 303

DEPARTMENT OF THE INTERIOR

Office of Territorial and International Affairs
[Docket No. 980716178-8234-02]
RIN 0625-AA53


Limit on Duty-Free Insular Watches in Calendar Year 1999

AGENCIES: Import Administration, International Trade Administration,
Department of Commerce; Office of Insular Affairs, Department of the
Interior.

ACTION: Final rule.

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

SUMMARY: This action amends the Departments' ITA regulations governing
duty-exemption allocations and duty-refund entitlements for watch
producers in the United States' insular possessions (the Virgin
Islands, Guam, and American Samoa) and the Northern Mariana Islands.
The amendments change the value limit for watches eligible for duty-
exemption, update the creditable wage ceiling, modify the new entrant
invitation language and establish the total quantity and respective
territorial shares of insular watches and watch movements which are
allowed to enter the United States free of duty during calendar year
1999.

EFFECTIVE DATE: September 17, 1998.

FOR FURTHER INFORMATION CONTACT: Faye Robinson, (202) 482-3526.

SUPPLEMENTARY INFORMATION: We published proposed regulatory revisions
on July 28, 1998 (63 FR 40230) and invited comments. We received no
comments.

    The insular possessions watch industry provision in Sec. 110 of
Pub. L. No. 97-446 (96 Stat. 2331) (1983) as amended by Sec. 602 of
Pub. L. No. 103-465 (108 Stat. 4991) (1994) additional U.S. Note 5 to
chapter 91 of the Harmonized Tariff Schedule requires the Secretary of
Commerce and the Secretary of the Interior, acting jointly, to
establish a limit on the quantity of watches and watch movements which
may be entered free of duty during each calendar year. The law also
requires the Secretaries to establish the shares of this limited
quantity which may be entered from the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands. Regulations on the
establishment of these quantities and shares are contained in Secs.
303.3 and 303.4 of title 15, Code of Federal Regulations (15 CFR 303.3
and 303.4). The Departments establish for calendar year 1999 a total
quantity of 3,740,000 units and respective territorial shares as shown
in the following table:


Virgin Islands..........................................  2,240,000
Guam....................................................    500,000
American Samoa..........................................    500,000
Northern Mariana Islands................................    500,000



    The rule raises the maximum value of components for duty-free
treatment of watches from $200 to $500 by amending Sec. 303.14(b)(3).
This change increases the value of imported components that may be used
in the assembly of duty-free insular watches. The increased value level
is intended to provide the

[[Page 49667]]

producers with a greater choice in the kinds of watches they assemble,
thereby affording them an opportunity to increase shipments and raise
territorial employment.
    The rule also raises from $35,000 to $38,650 the maximum dollar
amount of wages creditable in the calculation of the value of the
production incentive certificate by amending Sec. 303.14(a)(1)(i). The
increase in the maximum creditable wage limit is intended to keep pace
with inflation. The ceiling was last raised in 1994.
    Finally, the amendment eliminates subparagraphs (1) and (2) of Sec.
303.14(d) and consolidates provisions on new entrant invitations in a
revised Sec. 303.14(d). There currently is no producer in Guam, leaving
the Virgin Islands as the only territory with an active industry. The
change removes the need to amend the regulations when such production
shifts occur.
    Under the Administrative Procedure Act, 5 U.S.C. 553(d)(1), the
effective date of this rule need not be delayed for 30 days because
this rule relieves restrictions. The restrictions are relieved by
raising the value limit on watches which are allowed into the United
States free of duty and raising the creditable wage ceiling used in the
calculation of the duty refund.
    Regulatory Flexibility Act. In accordance with the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., the Assistant General Counsel
for Legislation and Regulation has certified to the Chief Counsel,
Small Business Administration, that the rule will not have a
significant economic impact on a substantial number of small entities.
This is because the rulemaking affects only the five watch companies
currently participating in the insular possessions watch program, all
of which are located in the Virgin Islands. Although there is a
reduction of the 1999 Virgin Islands territorial share of duty-
exemption, the reduced amount still represents more than twice the
amount of duty-free shipments used in 1997. Accordingly, the reduction
for the 1999 annual duty-exemption for the Virgin Islands will not
impose any cost or have any economic effect on these small companies.
    Similarly, updating the creditable wage ceiling, simplifying and
updating the new entrant invitation language, and raising the value
limit for watches eligible for duty-exemption will not impose any cost
or have any other adverse economic effect on the producers.
    Paperwork Reduction Act. This rulemaking involves information
collection activities subject to the Paperwork Reduction Act of 1980,
44 U.S.C. 3501 et seq. which are currently approved by the Office of
Management and Budget under control numbers 0625-0040 and 0625-0134.
The amendments will not increase the information burden on the public.
    Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with a collection of information unless it
displays a currently valid OMB Control Number.
    It has been determined that the rulemaking is not significant for
purposes of Executive Order 12866.

List of Subjects in 15 CFR Part 303

    Administrative practice and procedure, American Samoa, Customs
duties and inspection, Guam, Imports, Marketing quotas, Northern
Mariana Islands, Reporting and recordkeeping requirements, Virgin
Islands, Watches and jewelry.
    For reasons set forth above, we are amending 15 CFR Part 303 as
follows:

PART 303 [AMENDED]

    1. The authority citation for 15 CFR Part 303 continues to read
as follows:

    Authority: Pub. L. 94-241, 90 Stat. 263 (48 U.S.C. 1681, note);
Pub. L. 97-446, 96 Stat. 2331 (19 U.S.C. 1202, note); Pub. L. 103-
465, 108 Stat. 4991.


Sec. 303.14  [Amended]

    2. Section 303.14(a)(1)(i) is amended by removing ``$35,000'' and
adding ``$38,650'' in its place.
    3. Section 303.14(b)(3) is amended by removing ``$200'' and adding
``$500'' in its place.
    4. Section 303.14(d) is revised to read as follows:


Sec. 303.14  Allocation factors and miscellaneous provisions.

* * * * *
    (d) New entrant invitations. Applications from new firms are
invited for any unused portion of any territorial share.
* * * * *
    5. Section 303.14(e) is amended by removing ``2,640,000'' and
adding ``2,240,000'' in its place.

Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration,
Department of Commerce.

Allen Stayman,
Director, Office of Insular Affairs,
Department of the Interior.

[FR Doc. 98-24962 Filed 9-16-98; 8:45 am]
BILLING CODE 3510-DS-P; 4310-93-P