Calendar No. 214

106TH CONGRESS

1ST SESSION S. 1389

A BILL

To provide additional trade benefits to certain

beneficiary countries in the Caribbean.

JULY 16, 1999

Read twice and placed on the calendar
II

Calendar No. 214

106TH CONGRESS

1ST SESSION S. 1389

To provide additional trade benefits to certain beneficiary countries in the

Caribbean.

IN THE SENATE OF THE UNITED STATES

JULY 16, 1999

Mr. ROTH, from the Committee on Finance, reported the following original

bill; which was read twice and placed on the calendar

A BILL

To provide additional trade benefits to certain beneficiary

countries in the Caribbean.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘United States-Caribbean Basin Trade Enhancement

6 Act’’.

7 (b) TABLE OF CONTENTS.—The table of contents for

8 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and policy.
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Sec. 3. Definitions.

TITLE I—TRADE BENEFITS FOR CARIBBEAN BASIN COUNTRIES

Sec. 101. Temporary provisions to provide additional trade benefits to certain

beneficiary countries.

Sec. 102. Adequate and effective protection for intellectual property rights.

TITLE II—REVENUE PROVISIONS

Sec. 201. Suspension of limitation on cover over of tax on distilled spirits.

Sec. 202. Modification of installment method and repeal of installment method

for accrual method taxpayers.

1 SEC. 2. FINDINGS AND POLICY.

2 (a) FINDINGS.—Congress makes the following find3 ings:

4 (1) The Caribbean Basin Economic Recovery

5 Act (referred to in this Act as ‘‘CBERA’’) rep6 resents a permanent commitment by the United

7 States to encourage the development of strong demo8 cratic governments and revitalized economies in

9 neighboring countries in the Caribbean Basin.

10 (2) Thirty-four democratically elected leaders

11 agreed at the 1994 Summit of the Americas to con12 clude negotiation of a Free Trade Area of the Amer13 icas (referred to in this Act as ‘‘FTAA’’) by the year

14 2005.

15 (3) The economic security of the countries in

16 the Caribbean Basin will be enhanced by the comple17 tion of the FTAA.

18 (4) Offering temporary benefits to Caribbean

19 Basin countries will enhance trade between the

20 United States and the Caribbean Basin, encourage
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1 development of trade and investment policies that

2 will facilitate participation of Caribbean Basin coun3 tries in the FTAA, preserve the United States com4 mitment to Caribbean Basin beneficiary countries,

5 help further economic development in the Caribbean

6 Basin region, and accelerate the trend toward more

7 open economies in the region.

8 (5) Promotion of the growth of free enterprise

9 and economic opportunity in the Caribbean Basin

10 will enhance the national security interests of the

11 United States.

12 (6) Increased trade and economic activity be13 tween the United States and Caribbean Basin bene14 ficiary countries will create expanding export oppor15 tunities for United States businesses and workers.

16 (b) POLICY.—It is the policy of the United States

17 to—

18 (1) offer Caribbean Basin beneficiary countries

19 willing to prepare to become a party to the FTAA

20 or a comparable trade agreement, tariff treatment

21 essentially equivalent to that accorded to products of

22 NAFTA countries for certain products not currently

23 eligible for duty-free treatment under the CBERA;

24 and
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1 (2) seek the participation of Caribbean Basin

2 beneficiary countries in the FTAA or a trade agree3 ment comparable to the FTAA at the earliest pos4 sible date, with the goal of achieving full participa5 tion in such agreement not later than 2005.

6 SEC. 3. DEFINITIONS.

7 In this Act:

8 (1) BENEFICIARY COUNTRY.—The term ‘‘bene9 ficiary country’’ has the meaning given the term in

10 section 212(a)(1)(A) of the Caribbean Basin Eco11 nomic Recovery Act (19 U.S.C. 2702(a)(1)(A)).

12 (2) CBTEA.—The term ‘‘CBTEA’’ means the

13 United States-Caribbean Basin Trade Enhancement

14 Act.

15 (3) NAFTA.—The term ‘‘NAFTA’’ means the

16 North American Free Trade Agreement entered into

17 between the United States, Mexico, and Canada on

18 December 17, 1992.

19 (4) NAFTA COUNTRY.—The term ‘‘NAFTA

20 country’’ means any country with respect to which

21 the NAFTA is in force.

22 (5) WTO AND WTO MEMBER.—The terms

23 ‘‘WTO’’ and ‘‘WTO member’’ have the meanings

24 given those terms in section 2 of the Uruguay

25 Round Agreements Act (19 U.S.C. 3501).
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1 TITLE I—TRADE BENEFITS FOR

2 CARIBBEAN BASIN COUNTRIES

3 SEC. 101. TEMPORARY PROVISIONS TO PROVIDE ADDI4 TIONAL TRADE BENEFITS TO CERTAIN BENE5 FICIARY COUNTRIES.

6 (a) TEMPORARY PROVISIONS.—Section 213(b) of the

7 Caribbean Basin Economic Recovery Act (19 U.S.C.

8 2703(b)) is amended to read as follows:

9 ‘‘(b) IMPORT-SENSITIVE ARTICLES.—

10 ‘‘(1) IN GENERAL.—Subject to paragraphs (2)

11 through (5), the duty-free treatment provided under

12 this title does not apply to—

13 ‘‘(A) textile and apparel articles which

14 were not eligible articles for purposes of this

15 title on January 1, 1994, as this title was in ef16 fect on that date;

17 ‘‘(B) footwear not designated at the time

18 of the effective date of this title as eligible arti19 cles for the purpose of the generalized system

20 of preferences under title V of the Trade Act of

21 1974;

22 ‘‘(C) tuna, prepared or preserved in any

23 manner, in airtight containers;
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1 ‘‘(D) petroleum, or any product derived

2 from petroleum, provided for in headings 2709

3 and 2710 of the HTS;

4 ‘‘(E) watches and watch parts (including

5 cases, bracelets, and straps), of whatever type

6 including, but not limited to, mechanical, quartz

7 digital or quartz analog, if such watches or

8 watch parts contain any material which is the

9 product of any country with respect to which

10 HTS column 2 rates of duty apply; or

11 ‘‘(F) articles to which reduced rates of

12 duty apply under subsection (h).

13 ‘‘(2) TRANSITION PERIOD TREATMENT OF CER14 TAIN TEXTILE AND APPAREL ARTICLES.—

15 ‘‘(A) PRODUCTS COVERED.—During the

16 transition period, the preferential treatment de17 scribed in subparagraph (B) shall apply to the

18 following products:

19 ‘‘(i) APPAREL ARTICLES ASSEMBLED

20 IN A CBTEA BENEFICIARY COUNTRY.—Ap21 parel articles assembled in a CBTEA bene22 ficiary country from fabrics wholly formed

23 and cut in the United States, from yarns

24 wholly formed in the United States that

25 are—
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1 ‘‘(I) entered under subheading

2 9802.00.80 of the HTS; or

3 ‘‘(II) entered under chapter 61

4 or 62 of the HTS, if, after such as5 sembly, the articles would have quali6 fied for entry under subheading

7 9802.00.80 of the HTS but for the

8 fact that the articles were subjected to

9 stone-washing, enzyme-washing, acid

10 washing, perma-pressing, oven-baking,

11 bleaching, garment-dyeing, or other

12 similar processes.

13 ‘‘(ii) APPAREL ARTICLES CUT AND AS14 SEMBLED IN A CBTEA BENEFICIARY COUN15 TRY.—Apparel articles cut in a CBTEA

16 beneficiary country from fabric wholly

17 formed in the United States from yarns

18 wholly formed in the United States, if such

19 articles are assembled in such country with

20 thread formed in the United States.

21 ‘‘(iii) HANDLOOMED, HANDMADE, AND

22 FOLKLORE ARTICLES.—A handloomed,

23 handmade, or folklore article of a CBTEA

24 beneficiary country identified under sub25 paragraph (C) that is certified as such by
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1 the competent authority of such beneficiary

2 country.

3 ‘‘(iv) TEXTILE LUGGAGE.—Textile

4 luggage—

5 ‘‘(I) assembled in a CBTEA ben6 eficiary country from fabric wholly

7 formed and cut in the United States,

8 from yarns wholly formed in the

9 United States, that is entered under

10 subheading 9802.00.80 of the HTS;

11 or

12 ‘‘(II) assembled from fabric cut

13 in a CBTEA beneficiary country from

14 fabric wholly formed in the United

15 States from yarns wholly formed in

16 the United States, if such luggage is

17 assembled in such country with thread

18 formed in the United States.

19 ‘‘(B) PREFERENTIAL TREATMENT.—Ex20 cept as provided in subparagraph (E), during

21 the transition period, the articles described in

22 subparagraph (A) shall enter the United States

23 free of duty and free of any quantitative limita24 tions.
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1 ‘‘(C) HANDLOOMED, HANDMADE, AND

2 FOLKLORE ARTICLES DEFINED.—For purposes

3 of subparagraph (A)(iii), the President, after

4 consultation with the CBTEA beneficiary coun5 try concerned, shall determine which, if any,

6 particular textile and apparel goods of the coun7 try shall be treated as being handloomed, hand8 made, or folklore goods of a kind described in

9 section 2.3 (a), (b), or (c) or Appendix 3.1.B.11

10 of the Annex.

11 ‘‘(D) PENALTIES FOR TRANS12 SHIPMENTS.—

13 ‘‘(i) PENALTIES FOR EXPORTERS.—If

14 the President determines, based on suffi15 cient evidence, that an exporter has en16 gaged in transshipment with respect to

17 textile or apparel products from a CBTEA

18 beneficiary country, then the President

19 shall deny all benefits under this title to

20 such exporter, and any successor of such

21 exporter, for a period of 2 years.

22 ‘‘(ii) PENALTIES FOR COUNTRIES.—

23 Whenever the President finds, based on

24 sufficient evidence, that transshipment has

25 occurred, the President shall request that
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1 the CBTEA beneficiary country or coun2 tries through whose territory the trans3 shipment has occurred take all necessary

4 and appropriate actions to prevent such

5 transshipment. If the President determines

6 that a country is not taking such actions,

7 the President shall reduce the quantities of

8 textile and apparel articles that may be im9 ported into the United States from such

10 country by the quantity of the trans11 shipped articles multiplied by 3.

12 ‘‘(iii) TRANSSHIPMENT DESCRIBED.—

13 Transshipment within the meaning of this

14 subparagraph has occurred when pref15 erential treatment for a textile or apparel

16 article under subparagraph (B) has been

17 claimed on the basis of material false in18 formation concerning the country of origin,

19 manufacture, processing, or assembly of

20 the article or any of its components. For

21 purposes of this clause, false information is

22 material if disclosure of the true informa23 tion would mean or would have meant that

24 the article is or was ineligible for pref-
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1 erential treatment under subparagraph

2 (B).

3 ‘‘(E) BILATERAL EMERGENCY ACTIONS.—

4 ‘‘(i) IN GENERAL.—The President

5 may take bilateral emergency tariff actions

6 of a kind described in section 4 of the

7 Annex with respect to any apparel article

8 imported from a CBTEA beneficiary coun9 try if the application of tariff treatment

10 under subparagraph (B) to such article re11 sults in conditions that would be cause for

12 the taking of such actions under such sec13 tion 4 with respect to a like article de14 scribed in the same 8-digit subheading of

15 the HTS that is imported from Mexico.

16 ‘‘(ii) RULES RELATING TO BILATERAL

17 EMERGENCY ACTION.—For purposes of ap18 plying bilateral emergency action under

19 this subparagraph—

20 ‘‘(I) the requirements of para21 graph (5) of section 4 of the Annex

22 (relating to providing compensation)

23 shall not apply;

24 ‘‘(II) the term ‘transition period’

25 in section 4 of the Annex shall have
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1 the meaning given that term in para2 graph (5)(D) of this subsection; and

3 ‘‘(III) the requirements to con4 sult specified in section 4 of the

5 Annex shall be treated as satisfied if

6 the President requests consultations

7 with the beneficiary country in ques8 tion and the country does not agree to

9 consult within the time period speci10 fied under section 4.

11 ‘‘(3) TRANSITION PERIOD TREATMENT OF CER12 TAIN OTHER ARTICLES ORIGINATING IN BENE13 FICIARY COUNTRIES.—

14 ‘‘(A) EQUIVALENT TARIFF TREATMENT.—

15 ‘‘(i) IN GENERAL.—Subject to clause

16 (ii), the tariff treatment accorded at any

17 time during the transition period to any

18 article referred to in any of subparagraphs

19 (B) through (F) of paragraph (1) that

20 originates in the territory of a CBTEA

21 beneficiary country shall be identical to the

22 tariff treatment that is accorded at such

23 time under Annex 302.2 of the NAFTA to

24 an article described in the same 8-digit

25 subheading of the HTS that is a good of
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1 Mexico and is imported into the United

2 States.

3 ‘‘(ii) EXCEPTION.—Clause (i) does not

4 apply to any article accorded duty-free

5 treatment under U.S. Note 2(b) to sub6 chapter II of chapter 98 of the HTS.

7 ‘‘(B) RELATIONSHIP TO SUBSECTION (h)

8 DUTY REDUCTIONS.—If at any time during the

9 transition period the rate of duty that would

10 (but for action taken under subparagraph (A)(i)

11 in regard to such period) apply with respect to

12 any article under subsection (h) is a rate of

13 duty that is lower than the rate of duty result14 ing from such action, then such lower rate of

15 duty shall be applied for the purposes of imple16 menting such action.

17 ‘‘(4) CUSTOMS PROCEDURES.—

18 ‘‘(A) IN GENERAL.—

19 ‘‘(i) REGULATIONS.—Any importer

20 that claims preferential treatment under

21 paragraph (2) or (3) shall comply with

22 customs procedures similar in all material

23 respects to the requirements of Article

24 502(1) of the NAFTA as implemented

25 pursuant to United States law, in accord-
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1 ance with regulations promulgated by the

2 Secretary of the Treasury.

3 ‘‘(ii) DETERMINATION.—

4 ‘‘(I) IN GENERAL.—In order to

5 qualify for the preferential treatment

6 under paragraph (2) or (3) and for a

7 Certificate of Origin to be valid with

8 respect to any article for which such

9 treatment is claimed, there shall be in

10 effect a determination by the Presi11 dent that each country described in

12 subclause (II)—

13 ‘‘(aa) has implemented and

14 follows, or

15 ‘‘(bb) is making substantial

16 progress toward implementing

17 and following,

18 procedures and requirements similar

19 in all material respects to the relevant

20 procedures and requirements under

21 chapter 5 of the NAFTA.

22 ‘‘(II) COUNTRY DESCRIBED.—A

23 country is described in this subclause

24 if it is a CBTEA beneficiary

25 country—
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1 ‘‘(aa) from which the article

2 is exported, or

3 ‘‘(bb) in which materials

4 used in the production of the ar5 ticle originate or in which the ar6 ticle or such materials undergo

7 production that contributes to a

8 claim that the article is eligible

9 for preferential treatment.

10 ‘‘(B) CERTIFICATE OF ORIGIN.—The Cer11 tificate of Origin that otherwise would be re12 quired pursuant to the provisions of subpara13 graph (A) shall not be required in the case of

14 an article imported under paragraph (2) or (3)

15 if such Certificate of Origin would not be re16 quired under Article 503 of the NAFTA (as im17 plemented pursuant to United States law), if

18 the article were imported from Mexico.

19 ‘‘(5) DEFINITIONS AND SPECIAL RULES.—For

20 purposes of this subsection—

21 ‘‘(A) ANNEX.—The term ‘the Annex’

22 means Annex 300–B of the NAFTA.

23 ‘‘(B) CBTEA BENEFICIARY COUNTRY.—

24 ‘‘(i) IN GENERAL.—The term

25 ‘CBTEA beneficiary country’ means any
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1 ‘beneficiary country’, as defined by section

2 212(a)(1)(A) of this title, which the Presi3 dent determines has demonstrated a com4 mitment to—

5 ‘‘(I) undertake its obligations

6 under the WTO on or ahead of sched7 ule;

8 ‘‘(II) participate in negotiations

9 toward the completion of the FTAA

10 or a comparable trade agreement; and

11 ‘‘(III) undertake other steps nec12 essary for that country to become a

13 party to the FTAA or a comparable

14 trade agreement.

15 ‘‘(ii) CRITERIA FOR DETERMINA16 TION.—In making the determination under

17 clause (i), the President may consider the

18 criteria in sections 212 (b) and (c) and

19 other appropriate criteria, including—

20 ‘‘(I) the extent to which the

21 country follows accepted rules of

22 international trade provided for under

23 the agreements listed in section

24 101(d) of the Uruguay Round Agree25 ments Act;
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1 ‘‘(II) the extent to which the

2 country provides protection of intellec3 tual property rights—

4 ‘‘(aa) in accordance with

5 standards established in the

6 Agreement on Trade-Related As7 pects of Intellectual Property

8 Rights described in section

9 101(d)(15) of the Uruguay

10 Round Agreements Act;

11 ‘‘(bb) in accordance with

12 standards established in chapter

13 17 of the NAFTA; and

14 ‘‘(cc) by granting the hold15 ers of copyrights the ability to

16 control the importation and sale

17 of products that embody copy18 righted works, extending the pe19 riod set forth in Article 1711(6)

20 of NAFTA for protecting test

21 data for agricultural chemicals to

22 10 years, protecting trademarks

23 regardless of their subsequent

24 designation as geographic indica25 tions, and providing enforcement
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1 against the importation of in2 fringing products at the border;

3 ‘‘(III) the extent to which the country

4 provides protections to investors and in5 vestments of the United States substan6 tially equivalent to those set forth in chap7 ter 11 of the NAFTA;

8 ‘‘(IV) the extent to which the country

9 provides the United States and other WTO

10 members nondiscriminatory, equitable, and

11 reasonable market access with respect to

12 the products for which benefits are pro13 vided under paragraphs (2) and (3), and in

14 other relevant product sectors as deter15 mined by the President;

16 ‘‘(V) the extent to which the country

17 provides internationally recognized worker

18 rights, including—

19 ‘‘(aa) the right of associa20 tion,

21 ‘‘(bb) the right to organize

22 and bargain collectively,

23 ‘‘(cc) prohibition on the use

24 of any form of coerced or com25 pulsory labor,
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1 ‘‘(dd) a minimum age for

2 the employment of children, and

3 ‘‘(ee) acceptable conditions

4 of work with respect to minimum

5 wages, hours of work, and occu6 pational safety and health;

7 ‘‘(VI) whether the country has

8 met the counter-narcotics certification

9 criteria set forth in section 490 of the

10 Foreign Assistance Act of 1961 (22

11 U.S.C. 2291j) for eligibility for

12 United States assistance;

13 ‘‘(VII) the extent to which the

14 country becomes a party to and imple15 ments the Inter-American Convention

16 Against Corruption, and becomes

17 party to a convention regarding the

18 extradition of its nationals;

19 ‘‘(VIII) the extent to which the

20 country—

21 ‘‘(aa) supports the multilat22 eral and regional objectives of the

23 United States with respect to

24 government procurement, includ25 ing the negotiation of government
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1 procurement provisions as part of

2 the FTAA and conclusion of a

3 WTO transparency agreement as

4 provided in the declaration of the

5 WTO Ministerial Conference held

6 in Singapore on December 9

7 through 13, 1996, and

8 ‘‘(bb) applies transparent

9 and competitive procedures in

10 government procurement equiva11 lent to those contained in the

12 WTO Agreement on Government

13 Procurement (described in sec14 tion 101(d)(17) of the Uruguay

15 Round Agreements Act);

16 ‘‘(IX) the extent to which the

17 country follows the rules on customs

18 valuation set forth in the WTO Agree19 ment on Implementation of Article

20 VII of the GATT 1994 (described in

21 section 101(d)(8) of the Uruguay

22 Round Agreements Act);

23 ‘‘(X) the extent to which the

24 country affords to products of the

25 United States which the President de-
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1 termines to be of commercial impor2 tance to the United States with re3 spect to such country, and on a non4 discriminatory basis to like products

5 of other WTO members, tariff treat6 ment that is no less favorable than

7 the most favorable tariff treatment

8 provided by the country to any other

9 country pursuant to any free trade

10 agreement to which such country is a

11 party, other than the Central Amer12 ican Common Market or the Carib13 bean Community and Common Mar14 ket.

15 ‘‘(C) CBTEA ORIGINATING GOOD.—

16 ‘‘(i) IN GENERAL.—The term

17 ‘CBTEA originating good’ means a good

18 that meets the rules of origin for a good

19 set forth in chapter 4 of the NAFTA as

20 implemented pursuant to United States

21 law.

22 ‘‘(ii) APPLICATION OF CHAPTER 4.—

23 In applying chapter 4 with respect to a

24 CBTEA beneficiary country for purposes

25 of this subsection—
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1 ‘‘(I) no country other than the

2 United States and a CBTEA bene3 ficiary country may be treated as

4 being a party to the NAFTA;

5 ‘‘(II) any reference to trade be6 tween the United States and Mexico

7 shall be deemed to refer to trade be8 tween the United States and a

9 CBTEA beneficiary country;

10 ‘‘(III) any reference to a party

11 shall be deemed to refer to a CBTEA

12 beneficiary country or the United

13 States; and

14 ‘‘(IV) any reference to parties

15 shall be deemed to refer to any com16 bination of CBTEA beneficiary coun17 tries or to the United States and a

18 CBTEA beneficiary country (or any

19 combination thereof).

20 ‘‘(D) TRANSITION PERIOD.—The term

21 ‘transition period’ means, with respect to a

22 CBTEA beneficiary country, the period that be23 gins on October 1, 1999, and ends on the ear24 lier of—

25 ‘‘(i) December 31, 2004, or
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1 ‘‘(ii) the date on which the FTAA or

2 a comparable trade agreement enters into

3 force with respect to the United States and

4 the CBTEA beneficiary country.

5 ‘‘(E) CBTEA.—The term ‘CBTEA’ means

6 the United States-Caribbean Basin Trade En7 hancement Act.

8 ‘‘(F) FTAA.—The term ‘FTAA’ means

9 the Free Trade Area of the Americas.’’.

10 (b) DETERMINATION REGARDING RETENTION OF

11 DESIGNATION.—Section 212(e) of the Caribbean Basin

12 Economic Recovery Act (19 U.S.C. 2702(e)) is amended—

13 (1) in paragraph (1)—

14 (A) by redesignating subparagraphs (A)

15 and (B) as clauses (i) and (ii), respectively;

16 (B) by inserting ‘‘(A)’’ after ‘‘(1)’’;

17 (C) by striking ‘‘would be barred’’ and all

18 that follows through the end period and insert19 ing: ‘‘no longer satisfies one or more of the con20 ditions for designation as a beneficiary country

21 set forth in subsection (b) or such country fails

22 adequately to meet one or more of the criteria

23 set forth in subsection (c).’’; and

24 (D) by adding at the end the following:
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1 ‘‘(B) The President may, after the require2 ments of subsection (a)(2) and paragraph (2)

3 have been met—

4 ‘‘(i) withdraw or suspend the designa5 tion of any country as a CBTEA bene6 ficiary country, or

7 ‘‘(ii) withdraw, suspend, or limit the

8 application of preferential treatment under

9 section 213(b) (2) and (3) to any article of

10 any country, if, after such designation, the

11 President determines that as a result of

12 changed circumstances, the performance of

13 such country is not satisfactory under the

14 criteria set forth in section 213(b)(5)(B).’’;

15 and

16 (2) by adding after paragraph (2) the following

17 new paragraph:

18 ‘‘(3) If preferential treatment under section

19 213(b) (2) and (3) is withdrawn, suspended, or lim20 ited with respect to a CBTEA beneficiary country,

21 such country shall not be deemed to be a ‘party’ for

22 the purposes of applying section 213(b)(5)(C) to im23 ports of articles for which preferential treatment has

24 been withdrawn, suspended, or limited with respect

25 to such country.’’.
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1 (c) REPORTING REQUIREMENTS.—

2 (1) Section 212(f) of the Caribbean Basin Eco3 nomic Recovery Act (19 U.S.C. 2702(f)) is amended

4 to read as follows:

5 ‘‘(f) REPORTING REQUIREMENTS.—

6 ‘‘(1) IN GENERAL.—Not later than December

7 31, 2001, and every 2 years thereafter during the

8 period this title is in effect, the United States Trade

9 Representative shall submit to Congress a report re10 garding the operation of this title, including—

11 ‘‘(A) with respect to subsections (b) and

12 (c), the results of a general review of bene13 ficiary countries based on the considerations de14 scribed in such subsections; and

15 ‘‘(B) the performance of each beneficiary

16 country or CBTEA beneficiary country, as the

17 case may be, under the criteria set forth in sec18 tion 213(b)(5)(B)(ii).

19 ‘‘(2) PUBLIC COMMENT.—Before submitting the

20 report described in paragraph (1), the United States

21 Trade Representative shall publish a notice in the

22 Federal Register requesting public comments on

23 whether beneficiary countries are meeting the cri24 teria listed in section 213(b)(5)(B)(i), and on the

25 performance of each beneficiary country or CBTEA
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1 beneficiary country, as the case may be, with respect

2 to the criteria listed in section 213(b)(5)(B)(ii).’’.

3 (2) Section 203(f) of the Andean Trade Pref4 erence Act (19 U.S.C. 3202(f)) is amended—

5 (A) by striking ‘‘TRIENNIAL REPORT’’ in

6 the heading and inserting ‘‘REPORT’’; and

7 (B) by striking ‘‘On or before’’ and all that

8 follows through ‘‘enactment of this title’’ and

9 inserting ‘‘Not later than March 31, 2000 and

10 annually thereafter’’.

11 (d) INTERNATIONAL TRADE COMMISSION RE12 PORTS.—

13 (1) Section 215(a) of the Caribbean Basin Eco14 nomic Recovery Act (19 U.S.C. 2704(a)) is amended

15 to read as follows:

16 ‘‘(a) REPORTING REQUIREMENT.—

17 ‘‘(1) IN GENERAL.—The United States Inter18 national Trade Commission (in this section referred

19 to as the ‘Commission’) shall submit to Congress

20 and the President biennial reports regarding the eco21 nomic impact of this title on United States indus22 tries and consumers and on the economy of the ben23 eficiary countries.

24 ‘‘(2) FIRST REPORT.—The first report shall be

25 submitted not later than September 30, 2001.
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1 ‘‘(3) TREATMENT OF PUERTO RICO, ETC.—For

2 purposes of this section, industries in the Common3 wealth of Puerto Rico and the insular possessions of

4 the United States are considered to be United States

5 industries.’’.

6 (2) Section 206(a) of the Andean Trade Pref7 erence Act (19 U.S.C. 3204(a)) is amended to read

8 as follows:

9 ‘‘(a) REPORTING REQUIREMENTS.—

10 ‘‘(1) IN GENERAL.—The United States Inter11 national Trade Commission (in this section referred

12 to as the ‘Commission’) shall submit to Congress

13 and the President biennial reports regarding the eco14 nomic impact of this title on United States indus15 tries and consumers, and, in conjunction with other

16 agencies, the effectiveness of this title in promoting

17 drug-related crop eradication and crop substitution

18 efforts of the beneficiary countries.

19 ‘‘(2) SUBMISSION.—During the period that this

20 title is in effect, the report required by paragraph

21 (1) shall be submitted on December 31 of each year

22 that the report required by section 215 of the Carib23 bean Basin Economic Recovery Act is not submitted.

24 ‘‘(3) TREATMENT OF PUERTO RICO, ETC.—For

25 purposes of this section, industries in the Common-
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1 wealth of Puerto Rico and the insular possessions of

2 the United States are considered to be United States

3 industries.’’.

4 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

5 (1) IN GENERAL.—

6 (A) Section 211 of the Caribbean Basin

7 Economic Recovery Act (19 U.S.C. 2701) is

8 amended by inserting ‘‘(or other preferential

9 treatment)’’ after ‘‘treatment’’.

10 (B) Section 213(a)(1) of the Caribbean

11 Basin Economic Recovery Act (19 U.S.C.

12 2703(a)(1)) is amended by inserting ‘‘and ex13 cept as provided in subsection (b) (2) and (3),’’

14 after ‘‘Tax Reform Act of 1986,’’.

15 (2) DEFINITIONS.—Section 212(a)(1) of the

16 Caribbean Basin Economic Recovery Act (19 U.S.C.

17 2702(a)(1)) is amended by adding at the end the

18 following new subparagraphs:

19 ‘‘(D) The term ‘NAFTA’ means the North

20 American Free Trade Agreement entered into

21 between the United States, Mexico, and Canada

22 on December 17, 1992.

23 ‘‘(E) The terms ‘WTO’ and ‘WTO mem24 ber’ have the meanings given those terms in
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1 section 2 of the Uruguay Round Agreements

2 Act (19 U.S.C. 3501).’’.

3 SEC. 102. ADEQUATE AND EFFECTIVE PROTECTION FOR IN4 TELLECTUAL PROPERTY RIGHTS.

5 Section 212(c) of the Caribbean Basin Economic Re6 covery Act (19 U.S.C. 2702(c)) is amended by adding at

7 the end the following flush sentence:

8 ‘‘Notwithstanding any other provision of law, the Presi9 dent may determine that a country is not providing ade10 quate and effective protection of intellectual property

11 rights under paragraph (9), even if the country is in com12 pliance with the country’s obligations under the Agree13 ment on Trade-Related Aspects of Intellectual Property

14 Rights described in section 101(d)(15) of the Uruguay

15 Round Agreements Act (19 U.S.C. 3511(d)(15)).’’.

16 TITLE II—REVENUE PROVISIONS

17 SEC. 201. SUSPENSION OF LIMITATION ON COVER OVER OF

18 TAX ON DISTILLED SPIRITS.

19 (a) IN GENERAL.—Section 7652(f) of the Internal

20 Revenue Code of 1986 (relating to limitation on cover over

21 of tax on distilled spirits) is amended by adding at the

22 end the following new sentence:

23 ‘‘The preceding sentence shall not apply to articles that

24 are tax-determined after June 30, 1999, and before Octo25 ber 1, 1999.’’
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1 (b) EFFECTIVE DATE.—

2 (1) IN GENERAL.—The amendment made by

3 this section shall apply to articles that are tax-deter4 mined after June 30, 1999.

5 (2) SPECIAL RULE.—

6 (A) IN GENERAL.—The treasury of Puerto

7 Rico shall make a Conservation Trust Fund

8 transfer within 30 days after the date of each

9 cover over payment (made to such treasury

10 under section 7652(e) of the Internal Revenue

11 Code of 1986) to which section 7652(f) of such

12 Code does not apply by reason of the last sen13 tence thereof.

14 (B) CONSERVATION TRUST FUND TRANS15 FER.—

16 (i) IN GENERAL.—For purposes of

17 this paragraph, the term ‘‘Conservation

18 Trust Fund transfer’’ means a transfer to

19 the Puerto Rico Conservation Trust Fund

20 of an amount equal to 50 cents per proof

21 gallon of the taxes imposed under section

22 5001 or section 7652 of such Code on dis23 tilled spirits that are covered over to the

24 treasury of Puerto Rico under section

25 7652(e) of such Code.
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1 (ii) TREATMENT OF TRANSFER.—

2 Each Conservation Trust Fund transfer

3 shall be treated as principal for an endow4 ment, the income from which to be avail5 able for use by the Puerto Rico Conserva6 tion Trust Fund for the purposes for

7 which the Trust Fund was established.

8 (iii) RESULT OF NONTRANSFER.—

9 (I) IN GENERAL.—Upon notifica10 tion by the Secretary of the Interior

11 that a Conservation Trust Fund

12 transfer has not been made by the

13 treasury of Puerto Rico as required by

14 subparagraph (A), the Secretary of

15 the Treasury shall, except as provided

16 in subclause (II), deduct and withhold

17 from the next cover over payment to

18 be made to the treasury of Puerto

19 Rico under section 7652(e) of such

20 Code an amount equal to the appro21 priate Conservation Trust Fund

22 transfer and interest thereon at the

23 underpayment rate established under

24 section 6621 of such Code as of the

25 due date of such transfer. The Sec-
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1 retary of the Treasury shall transfer

2 such amount deducted and withheld,

3 and the interest thereon, directly to

4 the Puerto Rico Conservation Trust

5 Fund.

6 (II) GOOD CAUSE EXCEPTION.—

7 If the Secretary of the Interior finds,

8 after consultation with the Governor

9 of Puerto Rico, that the failure by the

10 treasury of Puerto Rico to make a re11 quired transfer was for good cause,

12 and notifies the Secretary of the

13 Treasury of the finding of such good

14 cause before the due date of the next

15 cover over payment following the noti16 fication of nontransfer, then the Sec17 retary of the Treasury shall not de18 duct the amount of such nontransfer

19 from any cover over payment.

20 (C) PUERTO RICO CONSERVATION TRUST

21 FUND.—For purposes of this paragraph, the

22 term ‘‘Puerto Rico Conservation Trust Fund’’

23 means the fund established pursuant to a

24 Memorandum of Understanding between the

25 United States Department of the Interior and
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1 the Commonwealth of Puerto Rico, dated De2 cember 24, 1968.

3 SEC. 202. MODIFICATION OF INSTALLMENT METHOD AND

4 REPEAL OF INSTALLMENT METHOD FOR AC5 CRUAL METHOD TAXPAYERS.

6 (a) REPEAL OF INSTALLMENT METHOD FOR AC7 CRUAL BASIS TAXPAYERS.—

8 (1) IN GENERAL.—Subsection (a) of section

9 453 of the Internal Revenue Code of 1986 (relating

10 to installment method) is amended to read as fol11 lows:

12 ‘‘(a) USE OF INSTALLMENT METHOD.—

13 ‘‘(1) IN GENERAL.—Except as otherwise pro14 vided in this section, income from an installment

15 sale shall be taken into account for purposes of this

16 title under the installment method.

17 ‘‘(2) ACCRUAL METHOD TAXPAYER.—The in18 stallment method shall not apply to income from an

19 installment sale if such income would be reported

20 under an accrual method of accounting without re21 gard to this section. The preceding sentence shall

22 not apply to a disposition described in subparagraph

23 (A) or (B) of subsection (l)(2).’’

24 (2) CONFORMING AMENDMENTS.—Sections

25 453(d)(1), 453(i)(1), and 453(k) of such Code are
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1 each amended by striking ‘‘(a)’’ each place it ap2 pears and inserting ‘‘(a)(1)’’.

3 (b) MODIFICATION OF PLEDGE RULES.—Paragraph

4 (4) of section 453A(d) of the Internal Revenue Code of

5 1986 (relating to pledges, etc., of installment obligations)

6 is amended by adding at the end the following: ‘‘A pay7 ment shall be treated as directly secured by an interest

8 in an installment obligation to the extent an arrangement

9 allows the taxpayer to satisfy all or a portion of the indebt10 edness with the installment obligation.’’

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to sales or other dispositions occur13 ring on or after the date of the enactment of this Act.