49–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 114–101 

AGOA EXTENSION AND ENHANCEMENT ACT OF 2015 

MAY 1, 2015.—Committed to the Committee of the Whole House on the State of the 

Union and ordered to be printed 

Mr. RYAN of Wisconsin, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

[To accompany H.R. 1891] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 1891) to extend the African Growth and Opportunity Act, 

the Generalized System of Preferences, the preferential duty treatment program for Haiti, and for other purposes, having considered 

the same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

I. SUMMARY AND BACKGROUND ................................................................. 2 

A. Purpose and Summary ......................................................................... 2 

B. Background and Need for Legislation ................................................ 3 

C. Legislative History ............................................................................... 7 

II. EXPLANATION OF THE BILL ...................................................................... 8 

Title I: Extension of African Growth and Opportunity Act ................... 8 

Title II: Extension of Generalized System of Preferences ...................... 17 

Title III: Extension of Preferential Duty Treatment Program for 

Haiti .................................................................................................... 19 

Title IV: Other Provisions ......................................................................... 20 

III. VOTES OF THE COMMITTEE ...................................................................... 21 

IV. BUDGET EFFECTS OF THE BILL ............................................................... 21 

A. Committee Estimate of Budgetary Effects ......................................... 21 

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority ...................................................................... 22 

C. Cost Estimate Prepared by the Congressional Budget Office ........... 22 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE 

HOUSE .......................................................................................................... 28 

A. Committee Oversight Findings and Recommendations .................... 28 

B. Statement of General Performance Goals and Objectives ................ 28 

C. Information Relating to Unfunded Mandates .................................... 28 

D. Applicability of House Rule XXI 5(b) .................................................. 29 


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E. Tax Complexity Analysis ..................................................................... 29 

F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 

Benefits ............................................................................................... 29 

G. Duplication of Federal Programs ........................................................ 29 

H. Disclosure of Directed Rule Makings ................................................. 30 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 30 

A. Text of Existing Law Amended or Repealed by the Bill, as Reported .................................................................................................. 30 

B. Changes in Existing Law Proposed by the Bill, as Reported ........... 90 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

African Growth and Opportunity Act 

Title I reaffirms Congress’s commitment to sub-Saharan Africa 

by ensuring a long-term extension of the African Growth and Opportunity Act, which is the cornerstone of the trade and investment 

relationship between the United States and sub-Saharan Africa. 

First enacted in 2000, AGOA provides preferential duty treatment to sub-Saharan African countries that continue to make 

progress on economic and political reform; market incentives and 

private sector growth; the eradication of poverty; and the importance of women to economic growth and development. Currently 39 

countries receive benefits under AGOA. 

The bill reaffirms Congress’s commitment to sub-Saharan Africa 

through findings and statements of policy on the importance of 

AGOA and expanding trade and investment ties between the 

United States and sub-Saharan Africa. The bill takes note of 

AGOA’s successes in promoting trade and investment ties between 

the United States and sub-Saharan Africa, as well as its success 

in promoting economic growth, development, poverty reduction, democracy, the rule of law, and stability in sub-Saharan Africa. The 

bill also finds that the elimination of barriers to trade will improve 

utilization of AGOA and further strengthen trade and investment 

ties. 

Benefits under AGOA are set to expire on September 30, 2015. 

The bill provides a long-term extension of AGOA for 10 years, including a 10-year extension of the third-country fabric provisions. 

The bill promotes greater regional integration by expanding the 

rule of origin to allow for combining inputs from all AGOA beneficiaries to count towards meeting the rule of origin for AGOA-eligible products. The bill also simplifies customs procedures to make 

it easier to complete paperwork on imports from AGOA beneficiaries. 

The bill includes statements of policy encouraging the adoption 

of the WTO Trade Facilitation Agreement. The bill also addresses 

unfair practices by the European Union that condition access to the 

European market on signing trade agreements. 

Under existing law, the President must annually evaluate whether AGOA beneficiaries are making continual progress in meeting 

the eligibility criteria in the statute. These criteria include, for example, whether countries in sub-Saharan Africa have established, 

or are making continual progress toward meeting the criteria outlined in the original AGOA legislation. While this bill does not 

change the eligibility criteria, it does include several key improvements to the annual review process. For example, the bill provides 


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flexibility to allow the Administration to withdraw, suspend, or 

limit benefits under AGOA if it determines that such action would 

be more effective than termination. In addition, the bill ensures 

greater predictability and certainty by requiring the Administration to notify Congress and any affected country at least 60 days 

before removing a country from the program or withdrawing, suspending, or limiting any benefits. The bill also reinstates an exhaustive biennial report to Congress on AGOA countries and utilization of the program, which will further strengthen Congressional 

oversight of the program. 

Furthermore, the bill improves transparency and participation in 

the annual AGOA review process by making it more public and ensuring that the Administration establishes mechanisms for public 

input. One such mechanism is the creation of a new petition process that allows any party, at any time, to petition USTR about 

whether a country is meeting the AGOA eligibility criteria. Another 

mechanism allows the President to conduct out-of-cycle reviews of 

eligible countries and a sense of Congress that the President 

should initiate a review of South Africa or any other beneficiary 

country that is not in compliance with Section 104(a) of AGOA 

within 30 days of enactment. 

Recognizing that those countries with strategies for taking advantage of the benefits of AGOA tend to have the most success 

under the program, the bill encourages AGOA beneficiaries to develop biennial utilization strategies and commits the United States 

to working with AGOA beneficiaries to develop and implement 

such strategies. 

The bill reaffirms the United States’ commitment to deepen and 

expand trade and investment relationships with sub-Saharan Africa, including through the negotiation of free trade agreements, by 

requiring the Administration to develop a long-term strategy for 

negotiating trade agreements with sub-Saharan Africa and setting 

clear statements of U.S. policy. 

Title II would extend the Generalized System of Preferences 

(GSP) through December 31, 2017, and provide retroactive benefits 

to July 31, 2013 for products that would be eligible as of the effective date. The program expired on July 31, 2013. It would also 

make certain cotton articles eligible for Least-Developed Beneficiary Developing Countries (LDBDCs), implementing U.S. WTO 

commitments. 

Title III would extend benefits now available to Haiti under the 

Caribbean Basin Economic Recovery Act (CBERA), as amended, 

through 2025. 

Title IV would offset revenue for budgetary purposes. 

B. BACKGROUND AND NEED FOR LEGISLATION

African Growth and Opportunity Act 

AGOA has been the cornerstone of United States economic engagement with sub-Saharan Africa since it was enacted in 2000. 

Congress has legislated five times since AGOA’s original enactment 

to extend and expand the benefits under AGOA. 

Economic and political conditions have improved dramatically 

since AGOA was first enacted. The AGOA Ambassadors Working 

Group estimates that AGOA has generated about 350,000 direct 


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jobs and 1 million indirect jobs in sub-Saharan Africa and about 

100,000 jobs in the United States. 

Approximately 70 percent of imports from AGOA-eligible countries entered under the AGOA program in 2013 (another 20 percent 

enter under GSP), though the level of utilization varies from country to country. Since adoption of AGOA in 2000, U.S. imports under 

the program grew more than three-fold, rising from $7.6 billion in 

2001 to $24.8 billion in 2013. Petroleum products continue to account for the largest portion of AGOA imports, with an 82 percent 

share of overall AGOA imports in 2013. Apparel products account 

for only 1–2 percent of total products imported under the AGOA 

program but support tens of thousands of jobs in Africa. 

Overall, AGOA has had a positive impact on foreign direct investment flows to sub-Saharan Africa. Since enactment of AGOA, 

U.S. investment has grown at an annual rate of 14 percent, and 

the U.S. investment stock has increased by about six times. Despite 

this strong growth, U.S. direct investment in sub-Saharan Africa 

accounts for only 1 percent of total U.S. direct investment outflows. 

Similarly, political conditions have strengthened in many African 

countries. According to its report, AGOA: Eligibility Process and 

Economic Development in Sub-Saharan Africa [GAO–15–300], the 

General Accountability Office concluded that, although isolating 

impacts is difficult, AGOA-eligible countries had higher average income-per person than ineligible countries and higher governance 

scores than ineligible countries, including on rule of law and political stability criteria. 

Even as trade and investment have grown, significant economic 

and political challenges remain in sub-Saharan Africa. Major barriers remain to U.S.-African trade and investment as well as intraAfrican trade, including high tariffs, forced localization requirements, legal restrictions on investment, and customs barriers, 

among others. Substantial supply-side constraints, such as poor infrastructure, lack of regional integration, and other obstacles, also 

contribute to depress trade and investment flows. 

Committee Oversight: As part of its oversight function, the Committee has conducted a thorough process of reviewing AGOA legislation and consulting with interested stakeholders about the possibility of extending and renewing AGOA. This process includes congressional hearings, participation in AGOA Forum meetings by 

Committee Members and staff, informal consultations with interested stakeholders including the African diplomatic corps and senior African officials, as well as studies from the International Trade 

Commission and the General Accountability Office. All of these efforts have informed the Committee’s development of this legislation 

and confirmed the need to extend AGOA for another ten years. 

To supplement the research conducted by the International 

Trade Commission, in December 2013 a group of bipartisan leaders 

from the House Ways and Means Committee, Senate Finance Committee, House Foreign Affairs Committee, and Senate Foreign Relations Committee requested the General Accountability Office 

(GAO) to conduct a study to examine the contribution of AGOA to 

economic growth and political reform, barriers to AGOA utilization, 

as well as potential ways to strengthen the program. To date, GAO 

has produced four reports. 


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The first report, ‘‘African Growth and Opportunity Act: Observations on Competitiveness and Diversification of U.S. Imports from 

Beneficiary Countries’’ [GAO–14–722R], examined the competitiveness and diversification of U.S. imports under AGOA from 2001 to 

2013. GAO found that U.S. imports from AGOA countries have increased significantly since the program was implemented in 2001 

but remain a small share of total U.S. imports. GAO also noted 

that while imports of non-oil and mineral products have increased, 

oil and mineral products still represent the vast majority of U.S. 

imports from sub-Saharan Africa. 

The second report, ‘‘African Growth and Opportunity Act: USAID 

Could Enhance Utilization by Working with More Countries to Develop Export Strategies’’ [GAO–15–218], examined U.S. government trade capacity building (TCB) assistance in support of AGOA, 

and the extent to which USAID has made efforts to develop strategic approaches to AGOA utilization with sub-Saharan African 

countries. The GAO report highlighted several trade-related challenges in sub-Saharan Africa that benefit from TCB assistance. In 

addition to lacking marketing expertise, market information, and 

business contacts to effectively export to the U.S. market, many 

AGOA-eligible countries have poor infrastructure conditions that 

undermine export competitiveness. GAO recommended encouraging 

AGOA beneficiary countries to develop utilization strategies and to 

use those strategies to coordinate TCB efforts. 

The third report, ‘‘African Growth and Opportunity Act: Eligibility Process and Economic Development in Sub-Saharan Africa’’ 

[GAO–15–300], analyzed the annual AGOA eligibility review process, the role of AGOA in supporting reform objectives, and how 

sub-Saharan African countries have developed since the enactment 

of AGOA. GAO determined that AGOA-beneficiaries fared better on 

economic and development metrics than sub-Saharan African countries that did not participate in the program. GAO also found that 

since AGOA was enacted, income per person has been higher in 

AGOA-eligible countries, on average, than in ineligible countries. 

Moreover, AGOA beneficiaries have received more foreign aid per 

person and higher foreign direct investment than countries that 

have not participated in the program. 

The fourth report, ‘‘African Growth and Opportunity Act: Lessons 

Learned from Other Countries’ Trade Arrangements with Sub-Saharan Africa’’ [GAO–15–393R], examined the recommendations for 

AGOA made by the Administration and recommended that Congress enact a long-term extension of AGOA to reduce risks for investors, although it also cautioned that a long-term extension could 

limit U.S. flexibility in making changes to its trading arrangement 

with sub-Saharan African countries. Moreover, GAO found that 

many U.S. domestic commodity groups and producers have raised 

concerns about expanding AGOA’s product coverage. GAO examined changing the rules of origin and concluded that some rules of 

origin changes could increase use of AGOA preferences, but there 

is an increased likelihood that the benefits would accrue to nonAGOA countries. Lastly, GAO examined changing the eligibility 

criteria and review processes and found that revising eligibility criteria could limit preferences to fewer countries and may negatively 

impact regional integration. 


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Generalized System of Preferences 

Title V of the Trade Act of 1974, as amended, grants authority 

to the President to provide duty-free treatment on imports of eligible articles from designated beneficiary developing countries 

(BDCs), subject to certain conditions and limitations. To qualify for 

GSP benefits, each beneficiary country is subject to mandatory and 

discretionary eligibility criteria. 

The purpose of the GSP program is to promote three broad policy 

goals: (1) to foster economic development in developing economies 

through increased trade rather than foreign aid; (2) to promote 

U.S. trade interests by encouraging beneficiary countries to open 

their markets and comply more fully with international trading 

rules; and (3) to help maintain U.S. international competitiveness 

by lowering costs for U.S. business, as well as lowering prices for 

American consumers. 

The program expired on July 31, 2013. This bill extends the Generalized System of Preferences (GSP) until December 31, 2017 and 

provides retroactive relief to eligible products that were imported 

during GSP’s lapse. 

The bill promotes export growth and economic development for 

developing countries by continuing to provide duty-free entry for 

approximately 5,000 agricultural and non-agricultural products 

from 126 designated beneficiary countries and territories. It also 

benefits U.S. companies by eliminating an estimated $2 million a 

day in tariffs on imported goods, supporting an estimated 80,000 

jobs in the United States through the movement of GSP products 

from ports to manufacturers, farmers, and stores. Renewal of GSP 

fosters innovation and U.S. competitiveness in the global marketplace by lowering costs for intermediate goods, including components, parts, and material imported from designated beneficiary developing countries. 

In addition, Title II implements certain commitments taken by 

the United States relating to cotton. At the World Trade Organization’s Eighth Ministerial Conference, the United States agreed to 

adopt duty-free and quota-free treatment for certain upland cotton 

for LDBDCs. In 2012, the Administration, after seeking input from 

the International Trade Commission (ITC) and consulting with 

Congress, added the appropriate in-quota tariff lines to the GSP 

program. This bill makes the out-of-quota tariff lines eligible under 

GSP. The ITC analyzed whether there would be any negative effect 

from making these products duty-free and quota-free for LDBDCs, 

and it received no statements of opposition. 

Preference Programs for Haiti 

Congress first provided expanded benefits on apparel exports 

from Haiti to the United States in the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006 (HOPE I). 

The program was extended and expanded in 2008 through HOPE 

II legislation. After the devastating earthquake in 2010, Congress 

adopted the HELP Act, which included additional flexibility and 

further extended the program. 

In 2006, Haiti’s exports to the United States totaled just $496.1 

million. In 2014, they totaled $908.2 million. While conditions have 

improved, economic conditions in Haiti remain challenging and 


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long-term certainty is important to continuing to attract investment to Haiti. 

The bill would extend the HOPE and HELP programs for products from Haiti until September 30, 2025. Such an extension would 

promote export growth and economic development for Haiti by continuing to provide duty-free entry for a variety of products, including certain apparel products. 

C. LEGISLATIVE HISTORY

Background 

H.R. 1891, to extend the African Growth and Opportunity Act, 

the Generalized System of Preferences, the preferential duty treatment program for Haiti, and for other purposes, was introduced on 

April 17, 2015, and was referred to the Committee on Ways and 

Means. 

Committee hearings 

On July 18, 2013, the Committee held a hearing on the U.S. 

trade agenda with Ambassador Michael Froman, the United States 

Trade Representative. The hearing included discussion about the 

importance of the preferences programs and the upcoming expiration of GSP. 

On April 3, 2014, the Committee held a hearing on the U.S. 

trade agenda with Ambassador Michael Froman, United States 

Trade Representative. Among the issues covered was the need for 

renewal of GSP and extension of AGOA and the importance of both 

programs in furthering the U.S. trade agenda. 

On July 29, 2014, the Subcommittee on Trade held a hearing on 

U.S. trade with Africa and the African Growth and Opportunity 

Act. The hearing focus included: (1) deepening and expanding trade 

and investment ties with sub-Saharan Africa; (2) the effectiveness 

of AGOA and potential revisions to the program to promote improved utilization; (3) barriers to trade in Africa; (4) barriers to regional integration in Africa; and (5) capacity building and efforts to 

promote regional integration and integration into global supply 

chains, including through implementation of the WTO Trade Facilitation Agreement. 

On August 4–5, 2014, Representatives Young and Rangel participated in the Africa Growth and Opportunity Act (AGOA) Forum in 

Washington, D.C. and met with officials from the United States 

and AGOA countries. 

On February 3, 2015, the Committee held a hearing on the U.S. 

trade agenda with Ambassador Michael Froman, United States 

Trade Representative. The Committee heard testimony about the 

importance of AGOA and GSP renewal, including the benefits of 

the preferences programs for international development and the 

U.S. economy. 

On April 22, 2015, the Committee held a hearing on expanding 

American trade with accountability and transparency with Treasury Secretary Jack Lew, Agriculture Secretary Tom Vilsack, and 

Commerce Secretary Penny Prtizker. The Committee heard testimony on the Administration’s support for this legislation and timely renewal of the preference programs. 


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Committee action 

The Committee on Ways and Means marked up H.R. 1891, to extend the African Growth and Opportunity Act, the Generalized System of Preferences, the preferential duty treatment program for 

Haiti, and for other purposes, on April 23, 2015, and ordered the 

bill favorably reported by voice vote (with a quorum being present). 

II. EXPLANATION OF THE BILL 

TITLE I: EXTENSION OF AFRICAN GROWTH AND 

OPPORTUNITY ACT 

SECTION 101: SHORT TITLE

Present law 

No provision. 

Explanation of provision 

Section 101 entitles the bill the ‘‘AGOA Extension and Enhancement Act of 2015’’. 

Reason for change 

The Committee believes that the short title reflects the significant revision and expansion of the AGOA program. 

Effective date 

The provision is effective upon enactment. 

SECTION 102: FINDINGS

Present law 

This section supplements and updates findings in previous 

AGOA legislation, including Section 102 of the African Growth and 

Opportunity Act. 

Explanation of provision 

In Section 102, Congress finds that: 

(1) Since its enactment, the African Growth and Opportunity Act 

has been the centerpiece of trade relations between the United 

States and sub-Saharan Africa and has enhanced trade, investment, job creation, and democratic institutions throughout Africa. 

(2) Trade and investment, as facilitated by the African Growth 

and Opportunity Act, promote economic growth, development, poverty reduction, democracy, the rule of law, and stability in sub-Saharan Africa. 

(3) Trade between the United States and sub-Saharan Africa has 

more than tripled since the enactment of the African Growth and 

Opportunity Act in 2000, and United States direct investment in 

sub-Saharan Africa has grown almost six-fold. 

(4) It is in the interest of the United States to engage and compete in emerging markets in sub-Saharan African countries, to 

boost trade and investment between the United States and sub-Saharan African countries, and to renew and strengthen the African 

Growth and Opportunity Act. 

(5) The long-term economic security of the United States is enhanced by strong economic and political ties with the fastest-growVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\HR101.XXX HR101

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ing economies in the world, many of which are in sub-Saharan Africa. 

(6) It is a goal of the United States to further integrate sub-Saharan African countries into the global economy, stimulate economic development in Africa, and diversify sources of growth in 

sub-Saharan Africa. 

(7) To that end, implementation of the Agreement on Trade Facilitation of the World Trade Organization would strengthen regional integration efforts in sub-Saharan Africa and contribute to 

economic growth in the region. 

(8) The elimination of barriers to trade and investment in subSaharan Africa, including high tariffs, forced localization requirements, restrictions on investment, and customs barriers, will create 

opportunities for workers, businesses, farmers, and ranchers in the 

United States and sub-Saharan African countries. 

(9) The elimination of such barriers will improve utilization of 

the African Growth and Opportunity Act and strengthen regional 

and global integration, accelerate economic growth in sub-Saharan 

Africa, and enhance the trade relationship between the United 

States and sub-Saharan Africa. 

Reason for change 

These provisions supplement and update Congressional findings 

to reflect the success of AGOA since its enactment and continuing 

challenges in sub-Saharan Africa. This section reaffirms Congress’s 

commitment to sub-Saharan Africa through findings on the importance of AGOA and expanding trade and investment ties between 

the United States and sub-Saharan Africa. This section takes note 

of AGOA’s successes in promoting trade and investment ties between the United States and sub-Saharan Africa, as well as its success in promoting economic growth, development, poverty reduction, democracy, the rule of law, and stability in sub-Saharan Africa. 

The Committee notes the positive effect that digital trade has 

had in supporting development among AGOA beneficiaries. The 

President should continue to encourage sub-Saharan Africa to promote policies that expand Internet access and to eliminate barriers 

to the digital economy in Africa, including through the AGOA. 

This section also finds that the elimination of barriers to trade 

will improve utilization of AGOA and further strengthen trade and 

investment ties. The Committee remains concerned by persistent 

tariff and non-tariff barriers to trade and investment in sub-Saharan Africa that impede trade and regional integration. In addition 

to persistently high-tariffs, non-tariff barriers impede U.S. exports 

sub-Saharan Africa as well as regional trade. 

Effective date 

The provision is effective upon enactment. 

SECTION 103: EXTENSION OF THE AFRICAN GROWTH AND OPPORTUNITY

ACT

Present law 

Under current law, AGOA and the special rule of origin on thirdcountry fabric expires on September 30, 2015. 


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Explanation of provision 

Section 103 extends AGOA and the special rule of origin on 

third-country fabric from September 30, 2015 to September 30, 

2025. 

Reason for change 

The Committee believes that long-term extension is important to 

encourage investment and support current investors. Extension of 

the third-country fabric provision is important to continue to support the development of the textile and apparel industry in Africa 

and support integration of the textile and apparel industry into 

global supply chains. At the same time, the Committee is supportive of efforts underway to develop a more integrated African 

supply chain so that further renewal of third-country fabric provisions will not be necessary. 

Effective date 

The provision is effective upon enactment. 

SECTION 104: PROMOTING GREATER REGIONAL INTEGRATION

Present law 

Section 506A(b) of the Trade Act of 1974 provides the rules of origin for AGOA-eligible products. 

Explanation of provision 

Section 104(a) allows producers to include the direct costs of 

processing operations performed in one or more beneficiary sub-Saharan African countries or former beneficiary sub-Saharan African 

countries in achieving the required minimum 35 percent local value 

content. 

Section 104(b) allows a producer to include value-added from any 

AGOA-beneficiary country or former AGOA beneficiary country in 

calculating the required minimum 35 percent local value content. 

Section 104(c) authorizes the President to amend the Harmonized Tariff Schedule of the United States (HTSUS) to add the 

special tariff treatment symbol ‘‘D’’ in the ‘‘Special’’ subcolumn of 

the HTSUS for every product with the special tariff treatment symbol ‘‘A’’ in the ‘‘Special’’ subcolumn to clarify that every article described in section 503(a)(1) of title V of the Trade Act of 1974 that 

is the growth, product, or manufacture of a beneficiary sub-Saharan African country will be eligible for the preferential tariff treatment described in amended section 506A(b)(2). 

Reason for change 

These provisions simplify the rules of origin for AGOA and encourage further regional integration. 

In order to encourage greater regional integration in Africa, section 104(a) amends section 506A(b)(2) of the Trade Act of 1974, as 

amended, to allow accumulation of the direct costs of processing operations performed in one or more beneficiary sub-Saharan African 

countries or former beneficiary sub-Saharan African countries in 

achieving the required minimum 35 percent local value content. 

The Committee believes that this will continue to promote greater 

regional integration in Africa. 


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Section 104(b) ensures that the general rules of origin governing 

duty-free treatment under the GSP program would apply to any article described in section 503(a)(1) of title V of the Trade Act of 

1974 that is the growth, product or manufacture of a beneficiary 

sub-Saharan African country. The general rule of origin governing 

duty-free treatment under the GSP program would continue to 

apply to imports from beneficiary sub-Saharan African countries of 

any item, other than textiles or apparel products or textile luggage, 

that is designated as import sensitive under section 503(b)(1) of 

title V of the Trade Act of 1974. 

Section 104(c) authorizes the President to simplify import paperwork and eliminates confusion by allowing importers of products 

under AGOA to mark ‘‘D’’ in all instances for any AGOA- or GSPeligible product. 

Effective date 

The amendments made by sections 104(a) and (b) apply to eligible products 30 days after enactment. Section 104(c) is effective immediately upon enactment. 

SECTION 105: MONITORING AND REVIEW OF ELIGIBILITY

Present law 

Section 506A(a) of the Trade Act of 1974 authorizes the President to designate sub-Saharan African countries as eligible for 

AGOA benefits and requires the President to monitor, review, and 

report to Congress annually on the progress of each sub-Saharan 

country in meeting the eligibility criteria set forth in the AGOA 

statute. 

Explanation of provision 

Section 105(a) amends section 506A(a)(3) of the Trade Act of 

1974 to require the President to provide at least 60 days’ notification and explanation to Congress and the sub-Saharan African 

country in question of his intention to terminate the designation of 

such country as a beneficiary sub-Saharan African country. 

Section 105(b) amends section 506A of the Trade Act of 1974 to 

allow the President to withdraw, suspend, or limit duty-free treatment for certain articles if he determines that such treatment 

would be more effective in promoting compliance with eligibility requirements than terminating benefits. The President is required to 

notify Congress and the country in question at least 60 days in advance of any action, along with the reasons for such action. 

Section 105(c) amends section 506A of the Trade Act of 1974 to 

require the President to annually publish in the Federal Register, 

as part of the annual monitoring and review of countries, a notice 

of the annual review and a request for public comments on whether 

beneficiary countries are meeting the eligibility criteria. It also requires the United States Trade Representative to hold a public 

hearing within 30 days of the President’s publication. 

Section 105(c) also requires the President to create a new petition process in which interested parties may file a petition with the 

United States Trade Representative at any time regarding the compliance of any AGOA beneficiary country. 


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Section 105(c) authorizes the President to initiate an out-of-cycle 

review of any beneficiary sub-Saharan African country, at any 

time, to determine whether it is making continual progress in 

meeting the eligibility criteria. If a country fails the out-of-cycle review, the President shall terminate or withdraw, suspend, or limit 

the application of duty-free treatment. The President shall consult 

with Congress before initiating an investigation and report after a 

conclusion. In addition, it is the sense of Congress that the President should initiate a review of South Africa or any other beneficiary country that is not in compliance with Section 104(a) of 

AGOA within 30 days of enactment. 

Reason for change 

Under current practice, the President is not required to provide 

advanced notice to Congress of his intent to terminate the designation of a beneficiary country. As a result, the President has often 

notified Congress fewer than 10 days before benefits are to be terminated. This does not provide adequate certainty and predictability for the program. Section 105(a) brings notification obligations under AGOA in line with the notification obligations under 

the GSP program. 

The purpose of section 105(b) of the bill is to provide the President with greater flexibility in administering the program when a 

country is found to violate one or more of the eligibility criteria. 

Under the current statute, the President’s only option is to terminate eligibility for the program, effective January 1 of the following 

year. However, in some cases, termination of all benefits is not necessarily the most effective way to address the underlying problem. 

For example, if a beneficiary’s actions and policies with regards to 

a specific sector of their economy violate the eligibility criteria, 

then the most effective action to address the violation may be to 

limit AGOA benefits with respect to that sector, rather than for all 

products. Similarly, if there is an event that contravenes the eligibility criteria that may be temporary in nature, then suspension of 

benefits for a limited period of time may be a more effective way 

to address the issue than termination of benefits altogether. Finally, if an event occurs that is so egregious that the Administration determines benefits should be removed before January 1 of the 

following year, this language gives the President the authority to 

withdraw those benefits within 60 days, with termination to follow 

on January 1 of the following year. The Committee expects that the 

Administration will, in appropriate circumstances, make full use of 

the additional flexibility provided in this section to address situations where beneficiary countries have taken steps which violate 

eligibility criteria and which may limit or exclude international 

trade and investment. 

While this provision provides additional flexibility, the default for 

a breach of the criteria remains termination of benefits on January 

1 of the following year because AGOA provides benefits above and 

beyond GSP and includes additional eligibility criteria. As such, before invoking the flexibilities set out in the bill, the President must 

determine that withdrawing, suspending, or limiting benefits under 

the bill is more effective in promoting compliance with the criteria 

than terminating benefits and shall notify Congress of the rationale 

for this determination. 


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As the Committee has noted in the findings section, it has heard 

significant concerns about new and continuing barriers to trade in 

sub-Saharan Africa. Section 105(c) enhances existing consultation 

requirements and creates a new petition process that allows for interested parties to have their concerns adequately aired at any 

time. The Committee intends for this process to improve input into 

the AGOA-eligibility review process and better inform the Administration of developments. The Administration should take these petitions into account when annually reviewing AGOA eligibility and 

in informing out-of-cycle reviews. 

Under current law the Administration can review a country’s eligibility at any time. However, the Committee believes that statutorily establishing a formal out-of-cycle review provides an additional tool to the Administration to regularly review a country’s eligibility. The Committee does not intend for out-of-cycle reviews to 

be common. Instead, a formal out-of-cycle review should be instituted by the Administration only when it has exhausted all other 

options. Such a review should occur prior to taking steps to terminate a country’s eligibility or withdraw, suspend, or limit benefits, 

should such action be necessary. These reviews should be conducted promptly, and reporting to Congress required by this provision should be detailed. If the Administration determines not to 

take action as a result of an out-of-cycle review, the Committee expects regular consultations and continued monitoring of developments. 

This section also includes a Sense of Congress provision directing 

the Administration to initiate a review of South Africa, and any 

other similarly situated country, within 30 days of enactment. The 

Committee remains very concerned by several steps taken by South 

Africa, including imposition of sanitary and phytosanitary measures that are not based on science and restrict U.S. exports. For 

example, poultry and poultry products face either express importation bans or SPS measures tantamount to an importation ban. 

Similarly, South Africa limits imports of certain cuts and ages of 

U.S. beef, as well as other U.S. ruminant animals and products. 

With respect to pork and pork products, South Africa maintains 

import restrictions on U.S. pork that require unnecessary, and 

highly onerous, export certificates that are not based on science. 

The Committee is also concerned that some AGOA beneficiaries 

have failed to fully implement their WTO obligations. In particular, 

the Committee notes that South Africa imposes anti-dumping duties on U.S. poultry using methodologies that appear to be inconsistent with WTO obligations. These duties have been in place for 

nearly as long as the AGOA program and have effectively shut the 

market to U.S. exports. Similarly, the Committee is concerned by 

recent discussions of policies in South Africa that would restrict investment in certain sectors and potentially even nationalize existing investments. 

Furthermore, the Committee is concerned by South Africa’s deteriorating foreign investment climate, including its termination of 

bilateral investment treaties and recent legislative proposals to 

limit foreign ownership in certain sectors. 

Effective date 

The provision is effective upon enactment. 


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SECTION 106: BIENNIAL AGOA UTILIZATION STRATEGIES

Present law 

No provision. 

Explanation of provision 

Section 106(a) establishes a Sense of Congress that eligible subSaharan African countries should develop biennial AGOA Utilization Strategies to more effectively and strategically utilize benefits 

available under AGOA and that the United States trade capacity 

building agencies should work with and provide appropriate resources in developing and implementing these strategies. It also 

encourages USTR to consider requesting strategies from Regional 

Economic Communities, as appropriate. 

Section 106(b) establishes that AGOA Utilization Strategies 

should identify strategic needs and priorities to bolster AGOA utilization and sets forth suggested content. 

Section 106(c) calls on AGOA eligible countries and USTR to 

publish public versions of their utilization plans on the Internet. 

Reason for change 

These provisions implement recommendations from the Government Accountability Office that the United States encourage the 

development of utilization strategies. At its hearing last year on 

AGOA, the Committee also received testimony that those countries 

that have unilaterally adopted AGOA utilization strategies have 

more effectively grown and diversified exports under AGOA. The 

Committee believes that these AGOA utilization strategies should 

inform trade capacity building efforts, including allocation of resources. 

Effective date 

The provision is effective upon enactment. 

SECTION 107: DEEPENING AND EXPANDING TRADE AND INVESTMENT

TIES BETWEEN SUB-SAHARAN AFRICA AND THE UNITED STATES

Present law 

This provision builds on findings in previous AGOA legislation, 

including Section 103 of the African Growth and Opportunity Act. 

Explanation of provision 

This section establishes the policy of the United States to deepen 

and expand investment ties between sub-Saharan Africa and the 

United States. 

Section 107(a) establishes that the United States should continue 

to seek all opportunities to deepen and expand ties between subSaharan Africa and the United States through accession by sub-Saharan African countries to the World Trade Organization and negotiation of Trade and Investment Framework Agreements, Bilateral 

Investment Treaties, and Free Trade Agreements with individual 

countries and regional economic communities. 

Section 107(b) states that the United States should continue to 

seek to agreements with individual countries as well as regional 

economic communities, as appropriate. 


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Section 107(c) provides that the United States should continue to 

promote the full implementation of commitments made under WTO 

agreements to improve AGOA utilization and promote trade and investment. 

Section 107(d) provides that the United States should continue to 

promote the negotiation of trade agreements that cover substantially all trade between parties, and to object in all forums if other 

countries negotiate agreements that do not cover substantially all 

trade. 

Reason for change 

The Committee believes that deeper trade and investment ties 

between sub-Saharan Africa and the United States will further 

mutually-shared development and national security goals. The 

Committee encourages the Administration to expand our Trade and 

Investment Framework Agreements (TIFAs) and Bilateral Investment Treaties (BITs), including by concluding BITs with regional 

groupings. As countries become ready, the United States should 

transition to FTAs for the most robust trade relationship. 

Section 107(c) addresses several important points. First, sub-Saharan African countries that are already members of the World 

Trade Organization should fully implement existing commitments 

and be in compliance with their obligations. The Committee believes that full implementation of these commitments is important 

to encouraging more robust trade and investment relationships. 

Second, full implementation of the WTO Trade Facilitation 

Agreement (TFA), which was agreed to in December 2013 at the 

9th WTO Ministerial, will facilitate removing barriers to trade and 

promoting infrastructure development within sub-Saharan Africa. 

Analysis by the Peterson Institute for International Economics suggests that implementation of the TFA could add $1 trillion to the 

global economy. The TFA also provides flexibility to developing 

countries and least developed countries (LDCs) as well as mechanisms for technical assistance to support implementation. These 

provisions will be especially significant in sub-Saharan Africa, 

where lower levels of automation and transparency contribute to 

higher transaction costs, and a significant percentage of countries 

are landlocked (and therefore must transit other countries’ borders 

just to reach their export destination). 

Already, Mauritius has submitted its ratification instrument to 

the WTO. The Committee welcomes this important step and encourages all AGOA beneficiaries to promptly take the necessary 

steps to submit ratification instruments to the WTO prior to the 

10th WTO Ministerial in Kenya in December 2015. 

Section 107(d) reflects the Committee’s strong concerns about the 

EU’s efforts to push African countries from its own unilateral preference program into reciprocal, bilateral trade agreements—what it 

calls Economic Partnership Agreements (EPAs), which do not cover 

substantially all trade. Of particular concern, the tariff preferences 

in the EU-South Africa EPA have now largely entered into force, 

and U.S. exporters are at a significant disadvantage. These EPAs 

raise WTO concerns because they are reported not to cover substantially all trade and carve out many economically significant 

and sensitive sectors. The EU continues to push EPAs with many 

AGOA members that would further disadvantage U.S. exporters. 


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The Committee believes that AGOA is—and should remain—a 

unilateral preference program and does not intend to seek reciprocity through AGOA. However, the Committee notes that the 

EU’s approach disadvantages U.S. companies seeking to do business with Africa and raises serious policy and development concerns. 

Effective date 

The provision is effective upon enactment. 

SECTION 108: REPORTS

Present law 

Reports required under AGOA have expired. 

Explanation of provision 

Section 108(a) requires the President to submit a biennial comprehensive report to Congress on the trade and investment relationship between the United States and sub-Saharan Africa. The 

first such report must be submitted not later than one year after 

the date of enactment. 

Section 108(b) requires the United States Trade Representative 

to submit to Congress every five years a report that evaluates each 

AGOA eligible country’s path toward becoming a trade agreement 

partner, identifies sub-Saharan countries that have expressed an 

interest in entering into a free trade agreement with the United 

States, and establishes a plan for negotiating and concluding such 

agreements. The first such report must be submitted not later than 

one year after the date of enactment. 

Section 108(c) sunsets these reports consistent with the duration 

of this Act. 

Reason for change 

Both of these reports were required under the original AGOA 

legislation, but expired in 2007. The Committee found these reports 

to be valuable and an important aspect of its oversight. As a result, 

it is renewing both reports, with some modifications to reflect developments. 

The report required in section 108(a) should be comprehensive in 

its review of each country’s performance against the required eligibility criteria. In particular, the Committee expects that the Administration will thoroughly review each aspect of the eligibility 

criteria and where an AGOA-eligible country is making less than 

full progress towards meeting the criteria, provide detailed information on the actions the Administration will take to ensure that 

greater progress is made. 

The report required in section 108(b) is meant to supplement and 

expand upon the section 108(a) report. In this report, the Administration is expected to provide an analysis that allows the Committee to evaluate and understand which AGOA-eligible countries 

may soon be ready for trade agreement negotiations and where 

gaps exist between existing U.S. trade agreement practice and the 

domestic laws of those countries. The Administration should also 

use this gap-analysis to inform its selection of potential trade 

agreement negotiating partners. In particular, the Committee notes 


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that the Administration should carefully evaluate the feasibility of 

negotiating a trade agreement with each AGOA-eligible country (or 

regional economic community, if appropriate) and not just those 

AGOA-eligible countries that the Administration has sought to negotiate with in the past. 

Effective date 

The provision is effective upon enactment. 

SECTION 109: TECHNICAL AMENDMENTS

Present law 

No provision. 

Explanation of provision 

Section 109 deletes section 104(b) of the African Growth and Opportunity Act, as amended. 

Reason for change 

Section 104(b) of the African Growth and Opportunity Act is duplicative of other provisions. 

Effective date 

The provision is effective upon enactment. 

SECTION 110: DEFINITIONS

Present law 

Section 506A of the Trade Act of 1974 and Section 107 of the African Growth and Opportunity Act. 

Explanation of provision 

Section 110 defines terms used in this bill in the same way as 

previous legislation. 

Reason for change 

This section ensures that the terms used in this bill have the 

same meaning as previous legislation. 

Effective date 

The provision is effective upon enactment. 

TITLE II: EXTENSION OF GENERALIZED SYSTEM OF 

PREFERENCES 

SECTION 201: EXTENSION OF THE GENERALIZED SYSTEM OF

PREFERENCES

Present law 

Title V of the Trade Act of 1974 contains the legislative authorization for the GSP program. Section 505 of the Trade Act of 1974, 

as amended, provides that no duty-free treatment under Title V 

shall remain in effect after July 31, 2013. 


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Explanation of provision 

Section 201 amends Section 505 of the Trade Act of 1974 to extend the Generalized System of Preferences program until December 31, 2017, and retroactively applies to goods imported on or 

after July 31, 2013 that would have been eligible for duty-free 

treatment under the GSP program as of the date of enactment. 

Reasons for change 

The Committee believes GSP has been a highly effective program 

in meeting its goals of fostering development in developing economies through trade, promoting U.S. trade interests by encouraging 

beneficiary countries to open their markets and comply with international trade rules, and maintaining U.S. competitiveness by lowering costs for U.S. businesses and lowering prices for U.S. consumers. Further, to prevent an unintended gap in duty-free treatment, the Committee provides for a retroactive extension of the 

program. 

Effective date 

This provision applies to eligible imports 30 days after enactment. 

SECTION 202: AUTHORITY TO DESIGNATE CERTAIN COTTON ARTICLES

AS ELIGIBLE ARTICLES ONLY FOR LDBDCS UNDER GSP

Present law 

Section 505(b) of the Trade Act of 1974 prohibits the President 

from designating certain articles as eligible for duty-free treatment. 

Explanation of provision 

Section 202 amends Section 503(b) of the Trade Act of 1974 to 

authorize the President to designate certain cotton articles, classifiable under subheadings 5201.00.18, 5201.00.28, 5201.00.38, 

5202.99.30, and 5203.00.30 of the Harmonized Tariff Schedules of 

the United States, as eligible articles for countries designated as 

least-developed beneficiary developing countries under the GSP 

program. 

Reasons for change 

The Committee believes that authorizing the President to designate certain cotton articles as eligible articles for LDBDCs would 

encourage continued and enhanced economic engagement between 

LDBDCs and the international marketplace. The Committee, while 

recognizing the sensitivity of cotton product imports, believes that 

the extension of eligibility to cotton articles classifiable under subheading 5201.00.18, 5201.00.28, 5201.00.38, 5202.99.30, and 

5203.00.30 will promote the objectives of the GSP program and will 

not disadvantage the integrity or competitiveness of the U.S. domestic cotton industry. 

Effective date 

This provision is effective upon enactment. 


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SECTION 203: APPLICATION OF COMPETITIVE NEED LIMITATION AND

WAIVER UNDER GENERALIZED SYSTEM OF PREFERENCES WITH RESPECT TO ARTICLES OF BENEFICIARY DEVELOPING COUNTRIES EXPORTED TO THE UNITED STATES DURING CALENDAR YEAR 2014

Present law 

Section 503(c)(2) and (d) of the Trade Act of 1974 provides for the 

administration of competitive need limitations and waivers. 

Present law requires the Administration to complete this process 

by July 1 of each year. 

Explanation of provision 

Section 203 allows the Administration to complete the competitive need limitation and waiver determinations by October 1, 2015 

for products entered in 2014. 

Reasons for change 

This provision allows additional time for the Administration to 

conduct its annual competitive need limitations and waivers review. 

Effective date 

This provision is effective immediately upon enactment. 

TITLE III: EXTENSION OF PREFERENTIAL DUTY 

TREATMENT PROGRAM FOR HAITI 

SECTION 301: EXTENSION OF PREFERENTIAL DUTY TREATMENT

PROGRAM FOR HAITI

Present law 

Under the Caribbean Basin Economic Recovery Act, benefits 

under Section 213A(b)(1)(B)(v)(I) begin to expire on December 20, 

2017 and under Section 213A(h) all benefits expire on September 

30, 2020. 

Explanation of provision 

Section 301 amends Section 213A of the Caribbean Basin Economic Recovery Act to extend benefits to Haiti through September 

30, 2025. 

Reasons for change 

The Committee believes the HOPE and HELP programs have 

played an important role in helping to improve the economic conditions in Haiti and supporting recovery since the devastating earthquake in 2010. Studies suggest that HOPE/HELP support an estimated 30,000 jobs in Haiti that are created by the apparel industry, the core export industry and primary source of employment 

growth. A long-term extension of HOPE/HELP will further encourage foreign investment and job creation by extending trade preferences to reinvigorate the apparel industry and attract new and 

expanded foreign direct investment. This extension also reaffirms 

U.S. foreign policy and national security interests by promoting 

trade and long-term investments in Haiti. 


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1Sec. 6655. 

2Sec. 6655(d)(1). 

3Sec. 6655(d)(2) and (g)(2). 

Effective date 

This provision is effective upon enactment. 

TITLE IV: OTHER PROVISIONS 

SECTION 401: CUSTOMS USER FEES

Present law 

Under Section 13031(a) of the Consolidated Omnibus Budget 

Reconciliation Act of 1985, the Secretary of the Treasury is authorized to charge and collect fees for the provision of certain customs 

services. Pursuant to Section 13031(j)(3), the Secretary of the 

Treasury may not charge fees for the provision of certain customs 

services after September 30, 2024. 

Explanation of the provision 

Section 401(a) amends Section 13031(j)(3)(A) of the Consolidated 

Omnibus Budget Reconciliation Act of 1985 to extend the period 

that the Secretary of the Treasury may charge for certain customs 

services for imported goods from September 30, 2024 to July 7, 

2025. 

Section 401(b) extends the ad valorem rate for the Merchandise 

Processing Fee collected by Customs and Border Protection that 

offsets the costs incurred in processing and inspecting imports, 

from June 30, 2021 to June 30, 2025. 

Reasons for change 

The Committee believes it is appropriate to extend the merchandise processing fees for budgetary offset purposes. 

Effective date 

This provision is effective upon enactment. 

SECTION 402: TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES

Present law 

In general, corporations are required to make quarterly estimated tax payments of their income tax liability.1 For a corporation whose taxable year is a calendar year, these estimated tax 

payments must be made by April 15, June 15, September 15, and 

December 15. The amount of any required estimated payment is 25 

percent of the required annual payment.2 The required annual payment is 100 percent of the tax liability for the taxable year or the 

preceding taxable year. The option to use the preceding taxable 

year is not available if the preceding taxable year was not a 12- 

month taxable year or the corporation did not file a return in the 

preceding taxable year showing a liability for tax. Further, in the 

case of a corporation with taxable income of at least $1 million in 

any of the three immediately preceding taxable years, the option to 

use the preceding taxable year is only available for the first installment of such corporation’s taxable year.3 In addition, in the case 

of a corporation with assets of at least $1 billion (determined as of 


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4 African Growth and Opportunity Act, Pub. L. No. 112–163, sec. 4. 

the end of the preceding taxable year), payments due in July, August or September of 2017, are increased to 100.25 percent of the 

payment otherwise due.4 For each of the periods affected, the next 

required payment is reduced accordingly (i.e., payments due in October, November, or December of 2017 are reduced to 99.75 percent 

of the payment otherwise due). 

Explanation of the provision 

In the case of a corporation with assets of at least $1 billion (determined as of the end of the preceding taxable year), the provision 

increases the amount of the required installment of estimated tax 

otherwise due in July, August, or September of 2020 by 5.25 percent of such amount (determined without regard to any increase in 

such amount not contained in the Internal Revenue Code) (i.e., 

payments due in July, August or September of 2020, are increased 

to 105.25 percent of the payment otherwise due). The next required 

installment is reduced accordingly (i.e., payments due in October, 

November, or December of 2020 are reduced to 94.75 percent of the 

payment otherwise due). 

Reasons for change 

The Committee believes it is appropriate to adjust the quarterly 

estimated tax payment requirements for corporations with $1 billion or more in assets to ensure that the legislation complies with 

certain Senate procedural requirements. 

Effective date 

The proposal is effective on the date of enactment of the Act. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the vote of the Committee on Ways and Means in its consideration of H.R. 1891, to extend the African Growth and Opportunity Act, the Generalized System of Preferences, the preferential 

duty treatment program for Haiti, and for other purposes, on April 

23, 2015. 

The bill, H.R. 1891, was ordered favorably reported by voice vote 

(with a quorum being present). 

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the bill, H.R. 1891, as reported. 

The bill, as reported, is estimated to have the following effect on 

Federal budget receipts for fiscal years 2015–2025: 


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FISCAL YEARS 

[Millions of dollars] 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015–20 2015–25 

... .......... .......... 3,781 ¥3,781 .......... .............. .......... .......... 3,781 ..........

Pursuant to clause 8 of rule XIII of the Rules of the House of 

Representatives, the following statement is made by the Joint Committee on Taxation with respect to the provisions of the bill amending the Internal Revenue Code of 1986: the gross budgetary effect 

(before incorporating macroeconomic effects) in any fiscal year is 

less than 0.25 percent of the current projected gross domestic product of the United States for that fiscal year; therefore, the bill is 

not ‘‘major legislation’’ for purposes of requiring that the estimate 

include the budgetary effects of changes in economic output, employment, capital stock and other macroeconomic variables. 

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the revenue 

provision of the bill involves no new or increased budget authority. 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the following statement by CBO is provided. 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 29, 2015. 

Hon. PAUL RYAN, 

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. 1891, a bill to extend the 

African Growth and Opportunity Act, the Generalized System of 

Preferences, the preferential duty treatment program for Haiti, and 

for other purposes. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Mark Grabowicz for 

federal spending and Ann Futrell and Susan Willie for federal revenues. 

Sincerely, 

KEITH HALL, Director. 

Enclosure. 

H.R. 1891—A bill to extend the African Growth and Opportunity 

Act, the Generalized System of Preferences, the preferential duty 

treatment program for Haiti, and for other purposes 

Summary: H.R. 1891 would extend the reduced tariff rates currently imposed on products imported under the African Growth and 

Opportunity Act (AGOA), the Generalized System of Preferences 


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(GSP), and the Haitian Hemispheric Opportunity through Partnership Encouragement Act. The bill also would shift some corporate 

income tax payments between fiscal years and increase the rate of 

certain fees collected by Customs and Border Protection (CBP) as 

well as extend the authority to collect those fees. 

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting H.R. 1891 would reduce both direct spending 

and revenues by about $5.8 billion over the 2015–2025 period—resulting in a reduction in deficits over the 11-year period of $16 million. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues. CBO estimates that 

certain Congressional reports called for under H.R. 1891 would cost 

$1 million over the 2015–2020 period, assuming availability of appropriated funds. 

CBO has determined that the nontax provisions of the bill contain no intergovernmental mandates as defined in the Unfunded 

Mandates Reform Act (UMRA) and would not affect the budgets of 

state, local, or tribal governments. JCT has determined that the 

tax provisions of the bill contain no intergovernmental or privatesector mandates. 

CBO has determined that the nontax provisions of H.R. 1891 

contain private-sector mandates on entities required to pay merchandise processing fees. CBO estimates the aggregate cost of the 

mandates would exceed the annual threshold established in UMRA 

for private-sector mandates ($154 million in 2015, adjusted annually for inflation). 

Estimated cost to the Federal Government: The estimated budgetary effects of H.R. 1891 are shown in the following table. The 

costs of this legislation fall within budget functions 750 (administration of justice) and 370 (advancement of commerce). 


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By fiscal year, in millions of dollars— 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015– 2020 2015– 2025 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ............................................................................................ 0 0 0 0 0 0 ¥162 ¥873 ¥916 ¥962 ¥2,948 0 ¥5,861 

Estimated Outlays ........................................................................................................... 0 0 0 0 0 0 ¥162 ¥873 ¥916 ¥962 ¥2,948 0 ¥5,861 

CHANGES IN REVENUES 

Extension of African Growth and Opportunity Act .......................................................... * ¥121 ¥130 ¥238 ¥284 ¥298 ¥312 ¥329 ¥345 ¥365 ¥387 ¥1,071 ¥2,809 

Extension of General System of Preferences ................................................................... ¥1,051 ¥627 ¥665 ¥173 0 0 0 0 0 0 0 ¥2,516 ¥2,516 

Extension of Preferential Duty Treatment for Haiti ......................................................... 0 0 0 0 ¥12 ¥17 ¥75 ¥97 ¥101 ¥106 ¥112 ¥29 ¥520 

Shift in Payment of Corporate Estimated Tax ................................................................ 0 0 0 0 0 3,781 ¥3,781 0 0 0 0 3,781 0 

Total Changes in Revenues .................................................................................... ¥1,051 ¥748 ¥795 ¥411 ¥296 3,466 ¥4,168 ¥426 ¥446 ¥471 ¥499 165 ¥5,845 

NET INCREASE OR DECREASE (¥) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES 

Impact on Deficit ............................................................................................................. 1,051 748 795 411 296 ¥3,466 4,006 ¥447 ¥470 ¥491 ¥2,449 ¥165 ¥16 

Sources: Congressional Budget Office and the Staff of the Joint Committee on Taxation Notes: This estimate assumes enactment of H.R. 1891 by July 1, 2015; * = between ¥$500,000 and zero. 

For direct spending, negative numbers indicate a decrease in outlays; for revenues, negative numbers indicate a reduction in revenues. Components may not sum to totals because of rounding. CBO estimates that implementing H.R. 1891 would cost about $1 million over the 2015–2020 period, assuming availability of appropriated funds, to prepare Congressional reports. 


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Basis of estimate: For this estimate, CBO assumes that H.R. 

1891 will be enacted by July 1, 2015. 

Direct spending 

Under current law, the authority to charge merchandise processing fees collected by Customs and Border Protection will expire 

after September 30, 2024. The bill would extend the authority to 

collect those fees through July 7, 2025. The bill also would raise 

the rate of the merchandise processing fee from 0.21 percent to 

0.3464 percent of the value of goods entering the U.S. for the period beginning July 1, 2021, and ending June 30, 2025. CBO estimates those actions would increase offsetting receipts (certain collections that are treated as reductions in direct spending) by about 

$5.9 billion over the 2021–2025 period. To project collections of 

merchandise processing fees, CBO assumes that the fees collected 

in future years will grow at the same rate seen in recent years— 

about 5 percent. In 2014 collections from the merchandise processing fee totaled $2.3 billion. By 2024 CBO estimates those collections will total about $2.7 billion under current law. CBO expects 

that the proposed increase in the fee rate would have a very minor 

effect on the value of goods entering the U.S. 

Revenues 

CBO’s estimates of the revenue effects of proposals to lower tariff 

rates charged on imports from certain countries or on certain goods 

are based on historical data about the value and volume of those 

goods entering the United States. Using that historical data, CBO 

develops a baseline of future collections that accounts for expected 

growth in trade over the next ten years. To estimate tariff collections under the proposed legislation, CBO considers both general 

growth in trade as well as changes in demand that are likely to result from lower rates. The changes in revenues for each of the programs discussed below reflect the difference between the baseline 

estimate of collections for each program using effective tariff rates 

under current law and projected collections under each proposal 

using the proposed duty rate, net of payroll and income tax offsets. 

CBO assumes that the lower tariffs under the legislation would result in an increase in overall imports, as well as a diversion of imports from countries that would not be eligible for lower tariffs to 

those that would. 

Extension of African Growth and Opportunity Act. Under AGOA 

the U.S. provides nonreciprocal tariff reductions to roughly 40 eligible sub-Saharan countries for certain goods that the U.S. imports. 

The bill would extend the authority for reduced tariffs under 

AGOA, which are set to expire at the end of September 30, 2015, 

through September 30, 2025. The bill also would extend the special 

rule that may apply to certain lesser-developed sub-Saharan countries under AGOA. The special rule also expires on September 30, 

2015. Under this rule a lesser-developed country may export dutyfree to the United States any apparel good that is assembled within the country, regardless of the origin of the fabric or yarn. In addition, the bill would revise the rules of origin for AGOA beneficiary countries under GSP to expand the value of products that 

would qualify for duty free treatment. 


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CBO estimates that extending and amending AGOA would reduce revenues by $2.8 billion over the 2015–2025 period, net of 

payroll and income tax offsets. That estimate includes the revenue 

loss after December 31, 2017, from imports that are eligible for 

duty free treatment under GSP (which the bill extends through December 31, 2017). 

Extension of General System of Preferences. Under the GSP the 

U.S. affords nonreciprocal tariff reductions to approximately 130 

developing countries. Generally, duty-free treatment of imported 

goods from GSP-designated developing countries is extended to 

products that are predominately produced only in those countries. 

The bill would renew GSP, which expired on July 31, 2013, and 

continue its authority through December 31, 2017. Under the bill, 

importers or exporters that would have otherwise qualified for reduced tariffs under GSP could obtain refunds for tariffs paid after 

July 30, 2013, that would not have been payable had GSP been in 

effect. CBO estimates that renewing GSP would reduce revenues 

by $2.5 billion over the 2015–2025 period, net of payroll and income tax offsets. This estimate includes the cost, through December 31, 2017, of imports that are eligible for duty free treatment 

under the African Growth Opportunity Act (which expires in September 2015). 

Extension of preferential duty treatment for Haiti. Under the 

Haitian Hemispheric Opportunity through Partnership Encouragement Act, certain textile and apparel goods imported to the U.S. 

from Haiti are eligible for duty-free treatment if restrictions regarding the source of the yarns and fabrics used in the imported 

goods are met. Portions of this program will begin to expire in 

2016; H.R. 1891 would extend this duty-free status through 2025. 

CBO estimates that enacting this provision would reduce revenues 

by $520 million over the 2015–2025 period, net of payroll and income tax offsets. 

Shift in payment of corporate estimated tax. H.R. 1891 would 

shift payments of corporate estimated taxes between fiscal years 

2020 and 2021. For corporations with at least $1 billion in assets, 

the bill would increase the portion of corporate estimated payments 

due from July through September in 2020. The staff of JCT estimates that those changes would increase revenues by $3.8 billion 

in 2020 and reduce revenues by the same amount in 2021. 

Spending Subject to Appropriation 

H.R. 1891 would require the United States Trade Representative 

to prepare a series of reports on trade activities with sub-Saharan 

African countries and their interest in entering into free trade 

agreements with the United States. Based on the cost of similar reports, CBO estimates that the costs to prepare that series would 

be significantly less than $500,000 annually, and would total about 

$1 million over the 2015–2020 period. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays and revenues that are subject to those pay-asyou-go procedures are shown in the following table. 


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27 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1891, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON APRIL 23, 2015 

By fiscal year, in millions of dollars— 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015– 2020 2015– 2025 

NET INCREASE OR DECREASE (-) IN THE DEFICIT 

Statutory Pay-As-You-Go Impact ................................................. 1,051 748 795 411 296 ¥3,466 4,006 ¥447 ¥470 ¥491 ¥2,449 ¥165 ¥16 

Memorandum: 

Changes in Outlays ............................................................ 0 0 0 0 0 0 ¥162 ¥873 ¥916 ¥962 ¥2,948 0 ¥5,861 

Changes in Revenues ......................................................... ¥1,051 ¥748 ¥795 ¥411 ¥296 3,466 ¥4,168 ¥426 ¥446 ¥471 ¥499 165 ¥5,845 


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Estimated impact on state, local, and tribal governments: CBO 

has determined that the nontax provisions of the bill contain no 

intergovernmental mandates as defined in UMRA and would not 

affect the budgets of state, local, or tribal governments. JCT has 

determined that the tax provisions of the bill contain no intergovernmental mandates. 

Estimated impact on the private sector: CBO has determined 

that the nontax provisions of H.R. 1891 would impose private-sector mandates, as defined in UMRA, on entities required to pay 

merchandise processing fees. The bill would extend those fees 

through July 7, 2025; the fee rates would increase beginning July 

1, 2021, and ending June 30, 2025. Some of the entities that are 

required to pay merchandise processing fees may also accrue savings related to the preferential tariff treatment accorded to certain 

products that would be extended under the bill. However, CBO estimates that the aggregate costs of the mandates would exceed the 

annual threshold established in UMRA for private-sector mandates 

($154 million in 2015, adjusted annually for inflation). 

JCT has determined that the tax provisions of H.R. 1891 contain 

no private-sector mandates as defined in UMRA. 

Previous CBO estimate: On April 17, 2015, CBO transmitted an 

estimate of the effects on direct spending and revenues of H.R. 

1891, as introduced by the House Committee on Ways and Means 

on April 17, 2015. Estimated costs for both versions of H.R. 1891 

are the same. 

Estimate prepared by: Federal Costs: Mark Grabowicz; Federal 

Revenues: Ann Futrell, Susan Willie, and staff of the Joint Committee on Taxation; Impact on State, Local, and Tribal Governments: Jon Sperl; Impact on the Private Sector: Paige Piper/Bach. 

Estimate approved by: Theresa Gullo, Assistant Director for 

Budget Analysis. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives (relating to oversight findings), the Committee advises that it was as a result of the Committee’s review of 

the provisions of H.R. 1891 that the Committee concluded that it 

is appropriate to report the bill favorably to the House of Representatives with the recommendation that the bill do pass. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill contains no measure that authorizes funding, so no statement of general performance goals and objectives for which any measure authorizes funding is required. 

C. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 


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The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

D. APPLICABILITY OF HOUSE RULE XXI 5(b) 

Rule XXI 5(b) of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase may not 

be considered as passed or agreed to unless so determined by a 

vote of not less than three-fifths of the Members voting, a quorum 

being present.’’ The Committee has carefully reviewed the bill, and 

states that the bill does not involve any Federal income tax rate 

increases within the meaning of the rule. 

E. TAX COMPLEXITY ANALYSIS

The following statement is made pursuant to clause 3(h)(1) of 

rule XIII of the Rules of the House of Representatives. Section 

4022(b) of the Internal Revenue Service Restructuring and Reform 

Act of 1998 requires the staff of the Joint Committee on Taxation 

(in consultation with the Internal Revenue Service and the Treasury Department) to provide a tax complexity analysis. The complexity analysis is required for all legislation reported by the Senate Committee on Finance, the House Committee on Ways and 

Means, or any committee of conference if the legislation includes a 

provision that directly or indirectly amends the Internal Revenue 

Code and has widespread applicability to individuals or small businesses. 

Pursuant to clause 3(h)(1) of rule XIII of the Rules of the House 

of Representatives, the staff of the Joint Committee on Taxation 

has determined that a complexity analysis is not required under 

section 4022(b) of the IRS Reform Act because the bill contains no 

provisions that amend the Internal Revenue Code and that have 

‘‘widespread applicability’’ to individuals or small businesses, within the meaning of the rule. 

F. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND

LIMITED TARIFF BENEFITS

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill, and states that the revenue provisions of the bill 

do not contain any congressional earmarks, limited tax benefits, or 

limited tariff benefits within the meaning of the rule. 

G. DUPLICATION OF FEDERAL PROGRAMS

In compliance with Sec. 3(j)(2) of H. Res. 5 (114th Congress), the 

Committee states that no provision of the bill establishes or reauthorizes: (1) a program of the Federal Government known to be duplicative of another Federal program, (2) a program included in any 

report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111–139, or (3) a program related 

to a program identified in the most recent Catalog of Federal Domestic Assistance, published pursuant to the Federal Program InVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00029 Fmt 6659 Sfmt 6602 E:\HR\OC\HR101.XXX HR101

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formation Act (Public Law 95–220, as amended by Public Law 98– 

169). 

H. DISCLOSURE OF DIRECTED RULE MAKINGS

In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), the 

following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

TEXT OF EXISTING LAW AMENDED OR REPEALED BY THE BILL, AS

REPORTED

In compliance with clause 3(e)(1)(A) of rule XIII of the Rules of 

the House of Representatives, the text of each section proposed to 

be amended or repealed by the bill, as reported, is shown below: 

TRADE ACT OF 1974 

* * * * * * * 

TITLE V—GENERALIZED SYSTEM OF 

PREFERENCES 

* * * * * * * 

SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES. 

(a) ELIGIBLE ARTICLES.— 

(1) DESIGNATION.— 

(A) IN GENERAL.—Except as provided in subsection (b), 

the President is authorized to designate articles as eligible 

articles from all beneficiary developing countries for purposes of this title by Executive order or Presidential proclamation after receiving the advice of the International 

Trade Commission in accordance with subsection (e). 

(B) LEAST-DEVELOPED BENEFICIARY DEVELOPING COUNTRIES.—Except for articles described in subparagraphs (A), 

(B), and (E) of subsection (b)(1) and articles described in 

paragraphs (2) and (3) of subsection (b), the President 

may, in carrying out section 502(d)(1) and subsection (c)(1) 

of this section, designate articles as eligible articles only 

for countries designated as least-developed beneficiary developing countries under section 502(a)(2) if, after receiving the advice of the International Trade Commission in 

accordance with subsection (e) of this section, the President determines that such articles are not import-sensitive 

in the context of imports from least-developed beneficiary 

developing countries. 

(C) THREE-YEAR RULE.—If, after receiving the advice of 

the International Trade Commission under subsection (e), 

an article has been formally considered for designation as 

an eligible article under this title and denied such designaVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6601 E:\HR\OC\HR101.XXX HR101

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tion, such article may not be reconsidered for such designation for a period of 3 years after such denial. 

(2) RULE OF ORIGIN.— (A) GENERAL RULE.—The duty-free treatment provided 

under this title shall apply to any eligible article which is 

the growth, product, or manufacture of a beneficiary developing country if— 

(i) that article is imported directly from a beneficiary developing country into the customs territory of 

the United States; and 

(ii) the sum of— 

(I) the cost or value of the materials produced in 

the beneficiary developing country or any two or 

more such countries that are members of the same 

association of countries and are treated as one 

country under section 507(2), plus 

(II) the direct costs of processing operations performed in such beneficiary developing country or 

such member countries, 

is not less than 35 percent of the appraised value of 

such article at the time it is entered. 

(B) EXCLUSIONS.—An article shall not be treated as the 

growth, product, or manufacture of a beneficiary developing country by virtue of having merely undergone— 

(i) simple combining or packaging operations, or 

(ii) mere dilution with water or mere dilution with 

another substance that does not materially alter the 

characteristics of the article. 

(3) REGULATIONS.—The Secretary of the Treasury, after consulting with the United States Trade Representative, shall prescribe such regulations as may be necessary to carry out paragraph (2), including, but not limited to, regulations providing 

that, in order to be eligible for duty-free treatment under this 

title, an article— 

(A) must be wholly the growth, product, or manufacture 

of a beneficiary developing country, or 

(B) must be a new or different article of commerce which 

has been grown, produced, or manufactured in the beneficiary developing country. 

(b) ARTICLES THAT MAY NOT BE DESIGNATED AS ELIGIBLE ARTICLES.— 

(1) IMPORT SENSITIVE ARTICLES.—The President may not designate any article as an eligible article under subsection (a) if 

such article is within one of the following categories of importsensitive articles: 

(A) Except as provided in paragraph (4), textile and apparel articles which were not eligible articles for purposes 

of this title on January 1, 1994, as this title was in effect 

on such date. 

(B) Watches, except those watches entered after June 

30, 1989, that the President specifically determines, after 

public notice and comment, will not cause material injury 

to watch or watch band, strap, or bracelet manufacturing 

and assembly operations in the United States or the 

United States insular possessions. 


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(C) Import-sensitive electronic articles. 

(D) Import-sensitive steel articles. 

(E) Footwear, handbags, luggage, flat goods, work 

gloves, and leather wearing apparel which were not eligible articles for purposes of this title on January 1, 1995, 

as this title was in effect on such date. 

(F) Import-sensitive semimanufactured and manufactured glass products. 

(G) Any other articles which the President determines to 

be import-sensitive in the context of the Generalized System of Preferences. 

(2) ARTICLES AGAINST WHICH OTHER ACTIONS TAKEN.—An article shall not be an eligible article for purposes of this title for 

any period during which such article is the subject of any action proclaimed pursuant to section 203 of this Act (19 U.S.C. 

2253) or section 232 or 351 of the Trade Expansion Act of 1962 

(19 U.S.C. 1862, 1981). 

(3) AGRICULTURAL PRODUCTS.—No quantity of an agricultural product subject to a tariff-rate quota that exceeds the inquota quantity shall be eligible for duty-free treatment under 

this title. 

(4) CERTAIN HAND-KNOTTED OR HAND-WOVEN CARPETS.—Notwithstanding paragraph (1)(A), the President may designate as 

an eligible article or articles under subsection (a) carpets or 

rugs which are hand-loomed, hand-woven, hand-hooked, handtufted, or hand-knotted, and classifiable under subheading 

5701.10.16, 5701.10.40, 5701.90.10, 5701.90.20, 5702.10.90, 

5702.42.20, 5702.49.10, 5702.51.20, 5702.91.30, 5702.92.00, 

5702.99.10, 5703.10.00, 5703.20.10, or 5703.30.00 of the Harmonized Tariff Schedule of the United States. 

(c) WITHDRAWAL, SUSPENSION, OR LIMITATION OF DUTY-FREE

TREATMENT; COMPETITIVE NEED LIMITATION.— 

(1) IN GENERAL.—The President may withdraw, suspend, or 

limit the application of the duty-free treatment accorded under 

this title with respect to any article, except that no rate of duty 

may be established with respect to any article pursuant to this 

subsection other than the rate which would apply but for this 

title. In taking any action under this subsection, the President 

shall consider the factors set forth in sections 501 and 502(c). 

(2) COMPETITIVE NEED LIMITATION.— 

(A) BASIS FOR WITHDRAWAL OF DUTY-FREE TREATMENT.— 

(i) IN GENERAL.—Except as provided in clause (ii) 

and subject to subsection (d), whenever the President 

determines that a beneficiary developing country has 

exported (directly or indirectly) to the United States 

during any calendar year beginning after December 

31, 1995— 

(I) a quantity of an eligible article having an appraised value in excess of the applicable amount 

for the calendar year, or 

(II) a quantity of an eligible article equal to or 

exceeding 50 percent of the appraised value of the 

total imports of that article into the United States 

during any calendar year, 


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the President shall, not later than July 1 of the next 

calendar year, terminate the duty-free treatment for 

that article from that beneficiary developing country. 

(ii) ANNUAL ADJUSTMENT OF APPLICABLE AMOUNT.— 

For purposes of applying clause (i), the applicable 

amount is— 

(I) for 1996, $75,000,000, and 

(II) for each calendar year thereafter, an 

amount equal to the applicable amount in effect 

for the preceding calendar year plus $5,000,000. 

(B) COUNTRY DEFINED.—For purposes of this paragraph, 

the term ‘‘country’’ does not include an association of countries which is treated as one country under section 507(2), 

but does include a country which is a member of any such 

association. 

(C) REDESIGNATIONS.—A country which is no longer 

treated as a beneficiary developing country with respect to 

an eligible article by reason of subparagraph (A) may, subject to the considerations set forth in sections 501 and 502, 

be redesignated a beneficiary developing country with respect to such article if imports of such article from such 

country did not exceed the limitations in subparagraph (A) 

during the preceding calendar year. 

(D) LEAST-DEVELOPED BENEFICIARY DEVELOPING COUNTRIES AND BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Subparagraph (A) shall not apply to any least-developed beneficiary developing country or any beneficiary 

sub-Saharan African country. 

(E) ARTICLES NOT PRODUCED IN THE UNITED STATES EXCLUDED.—Subparagraph (A)(i)(II) shall not apply with respect to any eligible article if a like or directly competitive 

article was not produced in the United States on January 

1, 1995. 

(F) DE MINIMIS WAIVERS.— 

(i) IN GENERAL.—The President may disregard subparagraph (A)(i)(II) with respect to any eligible article 

from any beneficiary developing country if the aggregate appraised value of the imports of such article into 

the United States during the preceding calendar year 

does not exceed the applicable amount for such preceding calendar year. 

(ii) APPLICABLE AMOUNT.—For purposes of applying 

clause (i), the applicable amount is— 

(I) for calendar year 1996, $13,000,000, and 

(II) for each calendar year thereafter, an 

amount equal to the applicable amount in effect 

for the preceding calendar year plus $500,000. 

(d) WAIVER OF COMPETITIVE NEED LIMITATION.— 

(1) IN GENERAL.—The President may waive the application of 

subsection (c)(2) with respect to any eligible article of any beneficiary developing country if, before July 1 of the calendar 

year beginning after the calendar year for which a determination described in subsection (c)(2)(A) was made with respect to 

such eligible article, the President— 


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(A) receives the advice of the International Trade Commission under section 332 of the Tariff Act of 1930 on 

whether any industry in the United States is likely to be 

adversely affected by such waiver, 

(B) determines, based on the considerations described in 

sections 501 and 502(c) and the advice described in subparagraph (A), that such waiver is in the national economic interest of the United States, and 

(C) publishes the determination described in subparagraph (B) in the Federal Register. 

(2) CONSIDERATIONS BY THE PRESIDENT.—In making any determination under paragraph (1), the President shall give great 

weight to— 

(A) the extent to which the beneficiary developing country has assured the United States that such country will 

provide equitable and reasonable access to the markets 

and basic commodity resources of such country, and 

(B) the extent to which such country provides adequate 

and effective protection of intellectual property rights. 

(3) OTHER BASES FOR WAIVER.—The President may waive the 

application of subsection (c)(2) if, before July 1 of the calendar 

year beginning after the calendar year for which a determination described in subsection (c)(2) was made with respect to a 

beneficiary developing country, the President determines 

that— 

(A) there has been a historical preferential trade relationship between the United States and such country, 

(B) there is a treaty or trade agreement in force covering 

economic relations between such country and the United 

States, and 

(C) such country does not discriminate against, or impose unjustifiable or unreasonable barriers to, United 

States commerce, 

and the President publishes that determination in the Federal 

Register. 

(4) LIMITATIONS ON WAIVERS.— 

(A) IN GENERAL.—The President may not exercise the 

waiver authority under this subsection with respect to a 

quantity of an eligible article entered during any calendar 

year beginning after 1995, the aggregate appraised value 

of which equals or exceeds 30 percent of the aggregate appraised value of all articles that entered duty-free under 

this title during the preceding calendar year. 

(B) OTHER WAIVER LIMITS.—(i) The President may not 

exercise the waiver authority provided under this subsection with respect to a quantity of an eligible article entered during any calendar year beginning after 1995, the 

aggregate appraised value of which exceeds 15 percent of 

the aggregate appraised value of all articles that have entered duty-free under this title during the preceding calendar year from those beneficiary developing countries 

which for the preceding calendar year— 

(I) had a per capita gross national product (calculated on the basis of the best available information, 


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including that of the International Bank for Reconstruction and Development) of $5,000 or more; or 

(II) had exported (either directly or indirectly) to the 

United States a quantity of articles that was duty-free 

under this title that had an aggregate appraised value 

of more than 10 percent of the aggregate appraised 

value of all articles that entered duty-free under this 

title during that year. 

(ii) Not later than July 1 of each year, the President 

should revoke any waiver that has then been in effect with 

respect to an article for 5 years or more if the beneficiary 

developing country has exported to the United States (directly or indirectly) during the preceding calendar year a 

quantity of the article— 

(I) having an appraised value in excess of 1.5 times 

the applicable amount set forth in subsection 

(c)(2)(A)(ii) for that calendar year; or 

(II) exceeding 75 percent of the appraised value of 

the total imports of that article into the United States 

during that calendar year. 

(C) CALCULATION OF LIMITATIONS.—There shall be counted against the limitations imposed under subparagraphs 

(A) and (B) for any calendar year only that value of any 

eligible article of any country that— 

(i) entered duty-free under this title during such calendar year; and 

(ii) is in excess of the value of that article that 

would have been so entered during such calendar year 

if the limitations under subsection (c)(2)(A) applied. 

(5) EFFECTIVE PERIOD OF WAIVER.—Any waiver granted 

under this subsection shall remain in effect until the President 

determines that such waiver is no longer warranted due to 

changed circumstances. 

(e) INTERNATIONAL TRADE COMMISSION ADVICE.—Before designating articles as eligible articles under subsection (a)(1), the President shall publish and furnish the International Trade Commission 

with lists of articles which may be considered 

for designation as eligible articles for purposes of this title. The 

provisions of sections 131, 132, 133, and 134 shall be complied with 

as though action under section 501 and this section were action 

under section 123 to carry out a trade agreement entered into 

under section 123. 

(f) SPECIAL RULE CONCERNING PUERTO RICO.—No action under 

this title may affect any tariff duty imposed by the Legislature of 

Puerto Rico pursuant to section 319 of the Tariff Act of 1930 on coffee imported into Puerto Rico. 

* * * * * * * 

SEC. 505. DATE OF TERMINATION. 

No duty-free treatment provided under this title shall remain in 

effect after July 31, 2013. 

* * * * * * * 


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SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR 

CERTAIN BENEFITS. 

(a) AUTHORITY TO DESIGNATE.— 

(1) IN GENERAL.—Notwithstanding any other provision of 

law, the President is authorized to designate a country listed 

in section 107 of the African Growth and Opportunity Act as 

a beneficiary sub-Saharan African country eligible for the benefits described in subsection (b)— 

(A) if the President determines that the country meets 

the eligibility requirements set forth in section 104 of that 

Act, as such requirements are in effect on the date of the 

enactment of that Act; and 

(B) subject to the authority granted to the President 

under subsections (a), (d), and (e) of section 502, if the 

country otherwise meets the eligibility criteria set forth in 

section 502. 

(2) MONITORING AND REVIEW OF CERTAIN COUNTRIES.—The 

President shall monitor, review, and report to Congress annually on the progress of each country listed in section 107 of the 

African Growth and Opportunity Act in meeting the requirements described in paragraph (1) in order to determine the 

current or potential eligibility of each country to be designated 

as a beneficiary sub-Saharan African country for purposes of 

this section. The President’s determinations, and explanations 

of such determinations, with specific analysis of the eligibility 

requirements described in paragraph (1)(A), shall be included 

in the annual report required by section 106 of the African 

Growth and Opportunity Act. 

(3) CONTINUING COMPLIANCE.—If the President determines 

that a beneficiary sub-Saharan African country is not making 

continual progress in meeting the requirements described in 

paragraph (1), the President shall terminate the designation of 

that country as a beneficiary sub-Saharan African country for 

purposes of this section, effective on January 1 of the year following the year in which such determination is made. 

(b) PREFERENTIAL TARIFF TREATMENT FOR CERTAIN ARTICLES.— 

(1) IN GENERAL.—The President may provide duty-free treatment for any article described in section 503(b)(1)(B) through 

(G) that is the growth, product, or manufacture of a beneficiary 

sub-Saharan African country described in subsection (a), if, 

after receiving the advice of the International Trade Commission in accordance with section 503(e), the President determines that such article is not import-sensitive in the context 

of imports from beneficiary sub-Saharan African countries. 

(2) RULES OF ORIGIN.—The duty-free treatment provided 

under paragraph (1) shall apply to any article described in that 

paragraph that meets the requirements of section 503(a)(2), except that— 

(A) if the cost or value of materials produced in the customs territory of the United States is included with respect 

to that article, an amount not to exceed 15 percent of the 

appraised value of the article at the time it is entered that 

is attributed to such United States cost or value may be 

applied toward determining the percentage referred to in 

subparagraph (A) of section 503(a)(2); and 


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(B) the cost or value of the materials included with respect to that article that are produced in one or more beneficiary sub-Saharan African countries or former beneficiary 

sub-Saharan African countries shall be applied in determining such percentage. 

(c) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES, ETC.—For 

purposes of this title— 

(1) the terms ‘‘beneficiary sub-Saharan African country’’ and 

‘‘beneficiary sub-Saharan African countries’’ mean a country or 

countries listed in section 107 of the African Growth and Opportunity Act that the President has determined is eligible 

under subsection (a) of this section. 

(2) the term ‘‘former beneficiary sub-Saharan African country’’ means a country that, after being designated as a beneficiary sub-Saharan African country under the African Growth 

and Opportunity Act, ceased to be designated as such a country by reason of its entering into a free trade agreement with 

the United States. 

SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN 

COUNTRIES. 

In the case of a beneficiary sub-Saharan African country, as defined in section 506A(c), duty-free treatment provided under this 

title shall remain in effect through September 30, 2015. 

* * * * * * * 

AFRICAN GROWTH AND OPPORTUNITY ACT 

* * * * * * * 

TITLE I—EXTENSION OF CERTAIN 

TRADE BENEFITS TO SUB-SAHARAN 

AFRICA 

Subtitle A—Trade Policy for Sub-Saharan 

Africa 

* * * * * * * 

SEC. 104. ELIGIBILITY REQUIREMENTS. 

(a) IN GENERAL.—The President is authorized to designate a subSaharan African country as an eligible sub-Saharan African country if the President determines that the country— 

(1) has established, or is making continual progress toward 

establishing— 

(A) a market-based economy that protects private property rights, incorporates an open rules-based trading system, and minimizes government interference in the economy through measures such as price controls, subsidies, 

and government ownership of economic assets; 

(B) the rule of law, political pluralism, and the right to 

due process, a fair trial, and equal protection under the 

law; 


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(C) the elimination of barriers to United States trade 

and investment, including by— 

(i) the provision of national treatment and measures 

to create an environment conducive to domestic and 

foreign investment; 

(ii) the protection of intellectual property; and 

(iii) the resolution of bilateral trade and investment 

disputes; 

(D) economic policies to reduce poverty, increase the 

availability of health care and educational opportunities, 

expand physical infrastructure, promote the development 

of private enterprise, and encourage the formation of capital markets through micro-credit or other programs; 

(E) a system to combat corruption and bribery, such as 

signing and implementing the Convention on Combating 

Bribery of Foreign Public Officials in International Business Transactions; and 

(F) protection of internationally recognized worker 

rights, including the right of association, the right to organize and bargain collectively, a prohibition on the use of 

any form of forced or compulsory labor, a minimum age for 

the employment of children, and acceptable conditions of 

work with respect to minimum wages, hours of work, and 

occupational safety and health; 

(2) does not engage in activities that undermine United 

States national security or foreign policy interests; and 

(3) does not engage in gross violations of internationally recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to 

eliminate human rights violations and terrorist activities. 

(b) CONTINUING COMPLIANCE.—If the President determines that 

an eligible sub-Saharan African country is not making continual 

progress in meeting the requirements described in subsection 

(a)(1), the President shall terminate the designation of the country 

made pursuant to subsection (a). 

* * * * * * * 

Subtitle B—Trade Benefits 

* * * * * * * 

SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL. 

(a) PREFERENTIAL TREATMENT.—Textile and apparel articles described in subsection (b) that are imported directly into the customs territory of the United States from a beneficiary sub-Saharan 

African country described in section 506A(c) of the Trade Act of 

1974, shall enter the United States free of duty and free of any 

quantitative limitations in accordance with the provisions set forth 

in subsection (b), if the country has satisfied the requirements set 

forth in section 113. 

(b) PRODUCTS COVERED.—Subject to subsection (c), the preferential treatment described in subsection (a) shall apply only to 

the following textile and apparel products: 

(1) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Apparel articles 


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sewn or otherwise assembled in one or more beneficiary subSaharan African countries from fabrics wholly formed and cut, 

or from components knit-to-shape, in the United States from 

yarns wholly formed in the United States, or both (including 

fabrics not formed from yarns, if such fabrics are classifiable 

under heading 5602 or 5603 of the Harmonized Tariff Schedule 

of the United States and are wholly formed and cut in the 

United States) that are— 

(A) entered under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States; or 

(B) entered under chapter 61 or 62 of the Harmonized 

Tariff Schedule of the United States, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the Harmonized Tariff Schedule of 

the United States but for the fact that the articles were 

embroidered or subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, 

garment-dyeing, screen printing, or other similar processes. 

(2) OTHER APPAREL ARTICLES ASSEMBLED IN ONE OR MORE

BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Apparel articles sewn or otherwise assembled in one or more beneficiary 

sub-Saharan African countries with thread formed in the 

United States from fabrics wholly formed in the United States 

and cut in one or more beneficiary sub-Saharan African countries from yarns wholly formed in the United States, or from 

components knit-to-shape in the United States from yarns 

wholly formed in the United States, or both (including fabrics 

not formed from yarns, if such fabrics are classifiable under 

heading 5602 or 5603 of the Harmonized Tariff Schedule of the 

United States and are wholly formed in the United States). 

(3) APPAREL ARTICLES FROM REGIONAL FABRIC OR YARNS.— 

Apparel articles wholly assembled in one or more beneficiary 

sub-Saharan African countries from fabric wholly formed in 

one or more beneficiary sub-Saharan African countries from 

yarns originating in the United States or one or more beneficiary sub-Saharan African countries or former beneficiary 

sub-Saharan African countries, or both (including fabrics not 

formed from yarns, if such fabrics are classified under heading 

5602 or 5603 of the Harmonized Tariff Schedule of the United 

States and are wholly formed in one or more beneficiary subSaharan African countries), or from components knit-to-shape 

in one or more beneficiary sub-Saharan African countries from 

yarns originating in the United States or one or more beneficiary sub-Saharan African countries or former beneficiary 

sub-Saharan African countries, or both, or apparel articles 

wholly formed on seamless knitting machines in a beneficiary 

sub-Saharan African country from yarns originating in the 

United States or one or more beneficiary sub-Saharan African 

countries or former beneficiary sub-Saharan African countries, 

or both, whether or not the apparel articles are also made from 

any of the fabrics, fabric components formed, or components 

knit-to-shape described in paragraph (1) or (2) (unless the apparel articles are made exclusively from any of the fabrics, fabVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00039 Fmt 6659 Sfmt 6601 E:\HR\OC\HR101.XXX HR101

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ric components formed, or components knit-to-shape described 

in paragraph (1) or (2)), subject to the following: 

(A) LIMITATIONS ON BENEFITS.— (i) IN GENERAL.—Preferential treatment under this 

paragraph shall be extended in the 1-year period beginning October 1, 2003, and in each of the 11 succeeding 1-year periods, to imports of apparel articles 

in an amount not to exceed the applicable percentage 

of the aggregate square meter equivalents of all apparel articles imported into the United States in the 

preceding 12-month period for which data are available. 

(ii) APPLICABLE PERCENTAGE.—For purposes of this 

subparagraph, the term ‘‘applicable percentage’’ 

means— 

(I) 4.747 percent for the 1-year period beginning 

October 1, 2003, increased in each of the 5 succeeding 1-year periods by equal increments, so 

that for the 1-year period beginning October 1, 

2007, the applicable percentage does not exceed 7 

percent; and 

(II) for each succeeding 1-year period until September 30, 2015, not to exceed 7 percent. 

(B) SURGE MECHANISM.— (i) IMPORT MONITORING.—The Secretary of Commerce shall monitor imports of articles described in 

this paragraph on a monthly basis to determine if 

there has been a surge in imports of such articles. In 

order to permit public access to preliminary international trade data and to facilitate the early identification of potentially disruptive import surges, the Director of the Office of Management and Budget may 

grant an exception to the publication dates established 

for the release of data on United States international 

trade in covered articles, if the Director notifies Congress of the early release of the data. 

(ii) DETERMINATION OF DAMAGE OR THREAT THERE- OF.—Whenever the Secretary of Commerce determines, based on the data described in clause (i), or 

pursuant to a written request made by an interested 

party, that there has been a surge in imports of an article described in this paragraph from a beneficiary 

sub-Saharan African country, the Secretary shall determine whether such article from such country is 

being imported in such increased quantities as to 

cause serious damage, or threat thereof, to the domestic industry producing a like or directly competitive article. If the Secretary’s determination is affirmative, 

the President shall suspend the duty-free treatment 

provided for such article under this paragraph. If the 

inquiry is initiated at the request of an interested 

party, the Secretary shall make the determination 

within 60 days after the date of the request. 

(iii) FACTORS TO CONSIDER.—In determining whether 

a domestic industry has been seriously damaged, or is 


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41 

threatened with serious damage, the Secretary shall 

examine the effect of the imports on relevant economic 

indicators such as domestic production, sales, market 

share, capacity utilization, inventories, employment, 

profits, exports, prices, and investment. 

(iv) PROCEDURE.— 

(I) INITIATION.—The Secretary of Commerce 

shall initiate an inquiry within 10 days after receiving a written request and supporting information for an inquiry from an interested party. Notice of initiation of an inquiry shall be published 

in the Federal Register. 

(II) PARTICIPATION BY INTERESTED PARTIES.— 

The Secretary of Commerce shall establish procedures to ensure participation in the inquiry by interested parties. 

(III) NOTICE OF DETERMINATION.—The Secretary 

shall publish the determination described in 

clause (ii) in the Federal Register. 

(IV) INFORMATION AVAILABLE.—If relevant information is not available on the record or any party 

withholds information that has been requested by 

the Secretary, the Secretary shall make the determination on the basis of the facts available. When 

the Secretary relies on information submitted in 

the inquiry as facts available, the Secretary shall, 

to the extent practicable, corroborate the information from independent sources that are reasonably 

available to the Secretary. 

(v) INTERESTED PARTY.—For purposes of this subparagraph, the term ‘‘interested party’’ means any producer of a like or directly competitive article, a certified union or recognized union or group of workers 

which is representative of an industry engaged in the 

manufacture, production, or sale in the United States 

of a like or directly competitive article, a trade or business association representing producers or sellers of 

like or directly competitive articles, producers engaged 

in the production of essential inputs for like or directly 

competitive articles, a certified union or group of 

workers which is representative of an industry engaged in the manufacture, production, or sale of essential inputs for the like or directly competitive article, 

or a trade or business association representing companies engaged in the manufacture, production, or sale 

of such essential inputs. 

(4) SWEATERS KNIT-TO-SHAPE FROM CASHMERE OR MERINO

WOOL.— 

(A) CASHMERE.—Sweaters, in chief weight of cashmere, 

knit-to-shape in one or more beneficiary sub-Saharan African countries and classifiable under subheading 6110.10 of 

the Harmonized Tariff Schedule of the United States. 

(B) MERINO WOOL.—Sweaters, 50 percent or more by 

weight of wool measuring 21.5 microns in diameter or 


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42 

finer, knit-to-shape in one or more beneficiary sub-Saharan African countries. 

(5) APPAREL ARTICLES WHOLLY ASSEMBLED FROM FABRIC OR

YARN NOT AVAILABLE IN COMMERCIAL QUANTITIES IN THE

UNITED STATES.— (A) IN GENERAL.—Apparel articles that are both cut (or 

knit-to-shape) and sewn or otherwise assembled in one or 

more beneficiary sub-Saharan African countries, to the extent that apparel articles of such fabrics or yarns would be 

eligible for preferential treatment, without regard to the 

source of the fabrics or yarns, under Annex 401 to the 

NAFTA. 

(B) ADDITIONAL APPAREL ARTICLES.—At the request of 

any interested party and subject to the following requirements, the President is authorized to proclaim the treatment provided under subparagraph (A) for yarns or fabrics 

not described in subparagraph (A) if— 

(i) the President determines that such yarns or fabrics cannot be supplied by the domestic industry in 

commercial quantities in a timely manner; 

(ii) the President has obtained advice regarding the 

proposed action from the appropriate advisory committee established under section 135 of the Trade Act 

of 1974 (19 U.S.C. 2155) and the United States International Trade Commission; 

(iii) within 60 calendar days after the request, the 

President has submitted a report to the Committee on 

Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate that sets 

forth— 

(I) the action proposed to be proclaimed and the 

reasons for such action; and 

(II) the advice obtained under clause (ii); 

(iv) a period of 60 calendar days, beginning with the 

first day on which the President has met the requirements of subclauses (I) and (II) of clause (iii), has expired; and 

(v) the President has consulted with such committees regarding the proposed action during the period 

referred to in clause (iii). 

(C) REMOVAL OF DESIGNATION OF FABRICS OR YARNS NOT

AVAILABLE IN COMMERCIAL QUANTITIES.—If the President 

determines that any fabric or yarn was determined to be 

eligible for preferential treatment under subparagraph (A) 

on the basis of fraud, the President is authorized to remove that designation from that fabric or yarn with respect to articles entered after such removal. 

(6) HANDLOOMED, HANDMADE, FOLKLORE ARTICLES AND ETHNIC PRINTED FABRICS.— (A) IN GENERAL.—A handloomed, handmade, folklore article or an ethnic printed fabric of a beneficiary sub-Saharan African country or countries that is certified as such 

by the competent authority of such beneficiary country or 

countries. For purposes of this section, the President, after 

consultation with the beneficiary sub-Saharan African 


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43 

country or countries concerned, shall determine which, if 

any, particular textile and apparel goods of the country (or 

countries) shall be treated as being handloomed, handmade, or folklore articles or an ethnic printed fabric. 

(B) REQUIREMENTS FOR ETHNIC PRINTED FABRIC.—Ethnic 

printed fabrics qualified under this paragraph are— 

(i) fabrics containing a selvedge on both edges, having a width of less than 50 inches, classifiable under 

subheading 5208.52.30 or 5208.52.40 of the Harmonized Tariff Schedule of the United States; 

(ii) of the type that contains designs, symbols, and 

other characteristics of African prints— 

(I) normally produced for and sold on the indigenous African market; and 

(II) normally sold in Africa by the piece as opposed to being tailored into garments before being 

sold in indigenous African markets; 

(iii) printed, including waxed, in one or more eligible 

beneficiary sub-Saharan countries; and 

(iv) fabrics formed in the United States, from yarns 

formed in the United States, or from fabric formed in 

one or more beneficiary sub-Saharan African country 

from yarn originating in either the United States or 

one or more beneficiary sub-Saharan African countries. 

(7) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENE- FICIARY SUB-SAHARAN AFRICAN COUNTRIES FROM UNITED STATES

AND BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY COMPONENTS.—Apparel articles sewn or otherwise assembled in one 

or more beneficiary sub-Saharan African countries with thread 

formed in the United States from components cut in the 

United States and one or more beneficiary sub-Saharan African countries or former beneficiary sub-Saharan African countries from fabric wholly formed in the United States from 

yarns wholly formed in the United States, or from components 

knit-to-shape in the United States and one or more beneficiary 

sub-Saharan African countries or former beneficiary sub-Saharan African countries from yarns wholly formed in the United 

States, or both (including fabrics not formed from yarns, if 

such fabrics are classifiable under heading 5602 or 5603 of the 

Harmonized Tariff Schedule of the United States). 

(8) TEXTILE ARTICLES ORIGINATING ENTIRELY IN ONE OR MORE

LESSER DEVELOPED BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Textile and textile articles classifiable under chapters 

50 through 60 or chapter 63 of the Harmonized Tariff Schedule 

of the United States that are products of a lesser developed 

beneficiary sub-Saharan African country and are wholly 

formed in one or more such countries from fibers, yarns, fabrics, fabric components, or components knit-to-shape that are 

the product of one or more such countries. 

(c) LESSER DEVELOPED COUNTRIES.— (1) PREFERENTIAL TREATMENT OF PRODUCTS THROUGH SEP- TEMBER 30, 2015.— 

(A) PRODUCTS COVERED.—In addition to the products described in subsection (b) the preferential treatment deVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00043 Fmt 6659 Sfmt 6601 E:\HR\OC\HR101.XXX HR101

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scribed in subsection (a) shall apply through September 

30, 2015, to apparel articles wholly assembled, or knit-toshape and wholly assembled, or both, in one or more lesser 

developed beneficiary sub-Saharan African countries, regardless of the country of origin of the fabric or the yarn 

used to make such articles, in an amount not to exceed the 

applicable percentage of the aggregate square meter 

equivalents of all apparel articles imported into the United 

States in the preceding 12-month period for which data are 

available. 

(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the term ‘‘applicable percentage’’ means— 

(i) 2.9285 percent for the 1-year period beginning on 

October 1, 2005; and 

(ii) 3.5 percent for the 1-year period beginning on 

October 1, 2006, and each 1-year period thereafter 

through September 30, 2015. 

(2) APPLICABILITY OF OTHER PROVISIONS.—Subsection 

(b)(3)(B) applies to apparel articles eligible for preferential 

treatment under this subsection to the same extent as that 

subsection applies to apparel articles eligible for preferential 

treatment under subsection (b)(3). 

(3) DEFINITION.—In this subsection, the term ‘‘lesser developed beneficiary sub-Saharan African country’’ means— 

(A) a beneficiary sub-Saharan African country that had a per capita gross national product of less than $1,500 in 

1998, as measured by the International Bank for Reconstruction and Development; 

(B) Botswana; 

(C) Namibia; and 

(D) Mauritius. 

(d) TREATMENT OF QUOTAS ON TEXTILE AND APPAREL IMPORTS

FROM KENYA AND MAURITIUS.—The President shall eliminate the 

existing quotas on textile and apparel articles imported into the 

United States— 

(1) from Kenya within 30 days after that country adopts an 

effective visa system to prevent unlawful transshipment of textile and apparel articles and the use of counterfeit documents 

relating to the importation of the articles into the United 

States; and 

(2) from Mauritius within 30 days after that country adopts 

such a visa system. 

The Customs Service shall provide the necessary technical assistance to Kenya and Mauritius in the development and implementation of the visa systems. 

(e) SPECIAL RULES.— 

(1) FINDINGS AND TRIMMINGS.— 

(A) GENERAL RULE.—An article otherwise eligible for 

preferential treatment under this section shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if the value of such 

findings and trimmings do not exceed 25 percent of the 

cost of the components of the assembled article. Examples 

of findings and trimmings are sewing thread, hooks and 

eyes, snaps, buttons, ‘‘bow buds’’, decorative lace trim, 


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45 

elastic strips, and zippers, including zipper tapes and labels. Elastic strips are considered findings or trimmings 

only if they are each less than 1 inch in width and used 

in the production of brassieres. 

(B) CERTAIN INTERLININGS.— 

(i) GENERAL RULE.—An article otherwise eligible for 

preferential treatment under this section shall not be 

ineligible for such treatment because the article contains certain interlinings of foreign origin, if the value 

of such interlinings (and any findings and trimmings) 

does not exceed 25 percent of the cost of the components of the assembled article. 

(ii) INTERLININGS DESCRIBED.—Interlinings eligible 

for the treatment described in clause (i) include only 

a chest type plate, a ‘‘hymo’’ piece, or ‘‘sleeve header’’, 

of woven or weft-inserted warp knit construction and 

of coarse animal hair or man-made filaments. 

(iii) TERMINATION OF TREATMENT.—The treatment 

described in this subparagraph shall terminate if the 

President makes a determination that United States 

manufacturers are producing such interlinings in the 

United States in commercial quantities. 

(C) EXCEPTION.—In the case of an article described in 

subsection (b)(2), sewing thread shall not be treated as 

findings or trimmings under subparagraph (A). 

(2) DE MINIMIS RULE.—An article otherwise eligible for preferential treatment under this section shall not be ineligible for 

such treatment because the article contains fibers or yarns not 

wholly formed in the United States or one or more beneficiary 

sub-Saharan African countries or former beneficiary sub-Saharan African countries if the total weight of all such fibers and 

yarns is not more than 10 percent of the total weight of the 

article. 

(3) CERTAIN COMPONENTS.—An article otherwise eligible for 

preferential treatment under this section will not be ineligible 

for such treatment because the article contains— 

(A) any collars or cuffs (cut or knit-to-shape), 

(B) drawstrings, 

(C) shoulder pads or other padding, 

(D) waistbands, 

(E) belt attached to the article, 

(F) straps containing elastic, or 

(G) elbow patches, 

that do not meet the requirements set forth in subsections (b) 

and (c), regardless of the country of origin of the item referred 

to in the applicable subparagraph of this paragraph. 

(f) DEFINITIONS.—In this section and section 113: 

(1) AGREEMENT ON TEXTILES AND CLOTHING.—The term 

‘‘Agreement on Textiles and Clothing’’ means the Agreement 

on Textiles and Clothing referred to in section 101(d)(4) of the 

Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)). 

(2) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY, ETC.—The 

terms ‘‘beneficiary sub-Saharan African country’’ and ‘‘beneficiary sub-Saharan African countries’’ have the same meaning 


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46 

5The period following the point dash in paragraph (2) is so in law. See section 15403(1)(C) 

of Public Law 110–246. 

as such terms have under section 506A(c) of the Trade Act of 

1974. 

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

Free Trade Agreement entered into between the United States, 

Mexico, and Canada on December 17, 1992. 

(4) FORMER SUB-SAHARAN AFRICAN COUNTRY.—The term 

‘‘former sub-Saharan African country’’ means a country that, 

after being designated as a beneficiary sub-Saharan African 

country under this Act, ceased to be designated as such a beneficiary sub-Saharan country by reason of its entering into a 

free trade agreement with the United States. 

(5) ENTER; ENTERED.—The terms ‘‘enter’’ and ‘‘entered’’ refer 

to the entry, or withdrawal from warehouse for consumption, 

in the customs territory of the United States. 

(g) EFFECTIVE DATE.—This section takes effect on October 1, 

2000, and shall remain in effect through September 30, 2015. 

* * * * * * * 

CARIBBEAN BASIN ECONOMIC RECOVERY ACT 

* * * * * * * 

TITLE II—CARIBBEAN BASIN INITIATIVE 

* * * * * * * 

SUBTITLE A—DUTY-FREE TREATMENT

* * * * * * * 

SEC. 213A. SPECIAL RULES FOR HAITI. 

(a) DEFINITIONS.—In this section: 

(1) INITIAL APPLICABLE 1-YEAR PERIOD.—The term ‘‘initial applicable 1-year period’’ means the 1-year period beginning on 

December 20, 2006. 

(2) APPROPRIATE CONGRESSIONAL COMMITTEES.—. 5 The term 

‘‘appropriate congressional committees’’ means the Committee 

on Finance of the Senate and the Committee on Ways and 

Means of the House of Representatives. 

(3) CORE LABOR STANDARDS.—The term ‘‘core labor standards’’ means— 

(A) freedom of association; 

(B) the effective recognition of the right to bargain collectively; 

(C) the elimination of all forms of compulsory or forced 

labor; 

(D) the effective abolition of child labor and a prohibition 

on the worst forms of child labor; and 

(E) the elimination of discrimination in respect of employment and occupation. 

(4) ENTER; ENTRY.—The terms ‘‘enter’’ and ‘‘entry’’ refer to 

the entry, or withdrawal from warehouse for consumption, in 

the customs territory of the United States. 


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47 

6So in law. The closing quotes should appear before the closing period. 

(5) IMPORTED DIRECTLY FROM HAITI OR THE DOMINICAN RE- PUBLIC.—Articles are ‘‘imported directly from Haiti or the Dominican Republic’’ if— 

(A) the articles are shipped directly from Haiti or the 

Dominican Republic into the United States without passing through the territory of any intermediate country; or 

(B) the articles are shipped from Haiti or the Dominican 

Republic into the United States through the territory of an 

intermediate country, and— 

(i) the articles in the shipment do not enter into the 

commerce of any intermediate country, and the invoices, bills of lading, and other shipping documents 

specify the United States as the final destination; or 

(ii) the invoices and other documents do not specify 

the United States as the final destination, but the articles in the shipment— 

(I) remain under the control of the customs authority in the intermediate country; 

(II) do not enter into the commerce of the intermediate country except for the purpose of a sale 

other than at retail; and 

(III) have not been subjected to operations in 

the intermediate country other than loading, unloading, or other activities necessary to preserve 

the articles in good condition. 

(6) KNIT-TO-SHAPE.—A good is ‘‘knit-to-shape’’ if 50 percent 

or more of the exterior surface area of the good is formed by 

major parts that have been knitted or crocheted directly to the 

shape used in the good, with no consideration being given to 

patch pockets, applique ́s, or the like. Minor cutting, trimming, 

or sewing of those major parts shall not affect the determination of whether a good is ‘‘knit-to-shape.’’ 6

(7) TAICNAR PROGRAM.—The term ‘‘TAICNAR Program’’ 

means the Technical Assistance Improvement and Compliance 

Needs Assessment and Remediation Program established pursuant to subsection (e). 

(8) WHOLLY ASSEMBLED.—A good is ‘‘wholly assembled’’ in 

Haiti if all components, of which there must be at least two, 

pre-existed in essentially the same condition as found in the 

finished good and were combined to form the finished good in 

Haiti. Minor attachments and minor embellishments (for example, applique ́s, beads, spangles, embroidery, and buttons) 

not appreciably affecting the identity of the good, and minor 

subassemblies (for example, collars, cuffs, plackets, and pockets), shall not affect the determination of whether a good is 

‘‘wholly assembled’’ in Haiti. 

(b) APPAREL AND OTHER TEXTILE ARTICLES.— 

(1) VALUE-ADDED RULE FOR APPAREL ARTICLES.— 

(A) IN GENERAL.—Apparel articles described in subparagraph (B) of a producer or entity controlling production 

that are imported directly from Haiti or the Dominican Republic shall enter the United States free of duty during the 

initial applicable 1-year period and any 1-year period 


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48 

7The amendment made by section 15402(a)(3)(A)(iv) of Public Law 110–246 was carried out 

to reflect the probable intent of Congress. Such amendment states to strike ‘‘subparagraph 

(E)(I)’’ and insert ‘‘clause (v)(I)’’, which probably should have been made to strike ‘‘subparagraph 

(E)(i)’’. 

thereafter, subject to the limitations set forth in subparagraphs (B) and (C), and subject to subparagraph (D). 

(B) APPAREL ARTICLES DESCRIBED.— (i) IN GENERAL.—In the initial applicable 1-year period and any 1-year period thereafter, apparel articles 

described in this paragraph are apparel articles that 

are wholly assembled, or are knit-to-shape, in Haiti 

from any combination of fabrics, fabric components, 

components knit-to-shape, and yarns, only if, for each 

entry in that 1-year period, the sum of— 

(I) the cost or value of the materials produced in 

Haiti or one or more countries described in clause 

(iii), or any combination thereof, plus 

(II) the direct costs of processing operations (as 

defined in section 213(a)(3)) performed in Haiti or 

one or more countries described in clause (iii), or 

any combination thereof, 

is not less than the applicable percentage (as defined 

in clause (v)(I) 7) of the declared customs value of such 

apparel articles. 

(ii) DEDUCTIONS.—In calculating cost or value under 

clause (i)(I), there shall be deducted the cost or value 

of— 

(I) any foreign materials that are used in the 

production of the apparel articles in Haiti; and 

(II) any foreign materials that are used in the 

production of the materials described in clause 

(i)(I). 

(iii) COUNTRIES DESCRIBED.—The countries referred 

to in clause (i) are the following: 

(I) The United States. 

(II) Any country that is a party to a free trade 

agreement with the United States that is in effect 

on the date of the enactment of the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, or that enters into force 

thereafter. 

(III) Any country designated as a beneficiary 

country under section 213(b)(5)(B) of this Act. 

(IV) Any country designated as a beneficiary 

country under section 506A(a)(1) of the Trade Act 

of 1974 (19 U.S.C. 2466a(a)(1)), if a finding has 

been made by the President or the President’s 

designee, and published in the Federal Register, 

that the country has satisfied the requirements of 

section 113 of the African Growth and Opportunity Act (19 U.S.C. 3722). 

(V) Any country designated as a beneficiary 

country under section 204(b)(6)(B) of the Andean 

Trade Preference Act (19 U.S.C. 3203(b)(6)(B)). 

(iv) ANNUAL AGGREGATION.— 


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(I) INITIAL APPLICABLE 1-YEAR PERIOD.—In the 

initial applicable 1-year period, the requirements 

under clause (i) relating to applicable percentage 

may also be met for articles of a producer or an 

entity controlling production that enter during the 

initial applicable 1-year period by aggregating— 

(aa) the cost or value of materials under 

subclause (I) of clause (i), and 

(bb) the direct costs of processing operations 

under subclause (II) of clause (i), 

of all apparel articles of that producer or entity 

controlling production that are wholly assembled, 

or are knit-to-shape, in Haiti and are entered during the initial applicable 1-year period. 

(II) OTHER 1-YEAR PERIODS.—In any 1-year period after the initial applicable 1-year period, the 

requirements under clause (i) relating to applicable percentage may also be met for articles of a 

producer or an entity controlling production that 

enter during the 1-year period by aggregating— 

(aa) the cost or value of materials under 

subclause (I) of clause (i), and 

(bb) the direct costs of processing operations 

under subclause (II) of clause (i), 

of all apparel articles of that producer or entity 

controlling production that are wholly assembled, 

or are knit-to-shape, in Haiti and are entered during the preceding 1-year period. 

(III) DEDUCTIONS.—In calculating cost or value 

under subclause (I)(aa) or (II)(aa), there shall be 

deducted the cost or value of— 

(aa) any foreign materials that are used in 

the production of the apparel articles in Haiti; 

and 

(bb) any foreign materials that are used in 

the production of the materials described in 

subclause (I)(aa) or (II)(aa) (as the case may 

be). 

(IV) INCLUSION IN CALCULATION OF OTHER ARTI- CLES RECEIVING PREFERENTIAL TREATMENT.—Entries of apparel articles that receive preferential 

treatment under any provision of law other than 

this subparagraph or are subject to the ‘‘General’’ 

column 1 rate of duty under the HTS are not included in the annual aggregation under subclause 

(I) or (II) unless the producer or entity controlling 

production elects, at the time the annual aggregation calculation is made, to include such entries in 

such aggregation. 

(v) DEFINITIONS.—In this paragraph: 

(I) APPLICABLE PERCENTAGE.—The term ‘‘applicable percentage’’ means— 

(aa) 50 percent or more during the initial 

applicable 1-year period and the succeeding 8 

1-year periods; 


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50 

(bb) 55 percent or more during the 1-year 

period beginning on December 20, 2015, and 

the 1-year period beginning on December 20, 

2016; and 

(cc) 60 percent or more during the 1-year 

period beginning on December 20, 2017. 

(II) FOREIGN MATERIAL.—The term ‘‘foreign material’’ means a material produced in a country 

other than Haiti or any country described in 

clause (iii). 

(vi) DEVELOPMENT OF PROCEDURE TO ENSURE COMPLIANCE.— 

(I) IN GENERAL.—U.S. Customs and Border Protection of the Department of Homeland Security 

shall develop and implement methods and procedures to ensure ongoing compliance with the requirements set forth in clauses (i) and (iv). 

(II) NONCOMPLIANCE.—If U.S. Customs and Border Protection finds that a producer or an entity 

controlling production has not satisfied such requirements in the initial applicable 1-year period 

or any 1-year period thereafter, either for individual entries entered pursuant to clause (i) or for 

entries entered in aggregate pursuant to clause 

(iv), then apparel articles described in clause (i) of 

that producer or entity shall be ineligible for preferential treatment under paragraph (1) during 

any succeeding 1-year period until— 

(aa) the cost or value of materials under 

subclause (I) of clause (i), plus 

(bb) the direct costs of processing operations 

under subclause (II) of clause (i), 

of that producer or entity controlling production, 

is not less than the applicable percentage under 

clause (v)(I), plus 10 percent, of the aggregate declared customs value of all apparel articles of that 

producer or entity controlling production that are 

wholly assembled, or are knit-to-shape, in Haiti 

and are entered during the preceding 1-year period. 

(III) RETROACTIVE APPLICATION OF DUTY-FREE

TREATMENT.—If— 

(aa) a producer or an entity controlling production is ineligible for preferential treatment 

under subparagraph (A) in the initial applicable 1-year period or any 1-year period thereafter because that producer or entity controlling production did not satisfy the requirements of clause (i) or (iv), and 

(bb) that producer or entity controlling production satisfies the requirements of subclause (II) of this clause in that 1-year period, 

then, notwithstanding section 514 of the Tariff Act 

of 1930 (19 U.S.C. 1514) or any other provision of 

law, upon proper request filed with U.S. Customs 


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51 

and Border Protection before the 90th day after 

U.S. Customs and Border Protection determines 

that item (bb) applies, the entry of any articles— 

(AA) that was made during that 1-year period, and 

(BB) with respect to which there would 

have been preferential treatment under subparagraph (A) if the producer or entity controlling production had satisfied the requirements in clause (i) or (iv) (as the case may 

be), 

shall be liquidated or reliquidated as though such 

preferential treatment under subparagraph (A) 

applied to such entry. 

(vii) FABRICS NOT AVAILABLE IN COMMERCIAL QUANTITIES.— 

(I) IN GENERAL.—For purposes of determining 

the applicable percentage under clause (i) or (iv), 

there may be included in that percentage— 

(aa) the cost of fabrics or yarns to the extent that apparel articles of such fabrics or 

yarns would be eligible for preferential treatment, without regard to the source of the fabrics or yarns, under Annex 401 of the NAFTA; 

and 

(bb) the cost of fabrics or yarns that are 

designated as not being available in commercial quantities for purposes of— 

(AA) section 213(b)(2)(A)(v) of this Act, 

(BB) section 112(b)(5) of the African Growth 

and Opportunity Act, 

(CC) section 204(b)(3)(B)(i)(III) or (ii) of the 

Andean Trade Preference Act, or 

(DD) any other provision, relating to determining whether a textile or apparel article is 

an originating good eligible for preferential 

treatment, of a law that implements a free 

trade agreement that enters into force with 

respect to the United States, 

without regard to the source of the fabrics or 

yarns. 

(II) REMOVAL OF DESIGNATION OF FABRICS OR

YARNS NOT AVAILABLE IN COMMERCIAL QUANTITIES.—If the President determines that— 

(aa) any fabric or yarn described in subclause (I)(aa) was determined to be eligible for 

preferential treatment, or 

(bb) any fabric or yarn described in subclause (I)(bb) was designated as not being 

available in commercial quantities, 

on the basis of fraud, the President is authorized 

to remove the eligibility or designation (as the 

case may be) of that fabric or yarn with respect to 

articles entered after such removal. 


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(C) QUANTITATIVE LIMITATIONS.—The preferential treatment described in subparagraph (A) shall be extended, 

during each of the 1-year periods set forth in the following 

table, to not more than the corresponding percentage of 

the aggregate square meter equivalents of all apparel articles imported into the United States in the most recent 12- 

month period for which data are available: 

During: the corresponding 

percentage is: 

the initial applicable 1-year period ....... 1 percent.

each of the succeeding 11 1-year periods ........................................................ 1.25 percent. 

No preferential treatment shall be provided under subparagraph (A) after December 19, 2018. 

(D) OTHER PREFERENTIAL TREATMENT NOT AFFECTED BY

QUANTITATIVE LIMITATIONS.—Any apparel article that 

qualifies for preferential treatment under paragraph (2), 

(3), (4), or (5) or any other provision of this title shall not 

be subject to, or included in the calculation of, the quantitative limitations under subparagraph (C). 

(2) SPECIAL RULE FOR WOVEN ARTICLES AND CERTAIN KNIT AR- TICLES.— 

(A) SPECIAL RULE FOR ARTICLES OF CHAPTER 62 OF THE

HTS.— (i) GENERAL RULE.—Any apparel article classifiable 

under chapter 62 of the HTS that is wholly assembled, 

or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or 

yarns and is imported directly from Haiti or the Dominican Republic shall enter the United States free of 

duty, subject to clauses (ii) and (iii), without regard to 

the source of the fabric, fabric components, components knit-to-shape, or yarns from which the article is 

made. 

(ii) LIMITATION.—Except as provided in paragraph 

(2A), the preferential treatment described in clause (i) 

shall be extended, in the 1-year period beginning October 1, 2008, and in each of the 11 succeeding 1-year 

periods, to not more than 70,000,000 square meter 

equivalents of apparel articles described in such 

clause. 

(iii) OTHER PREFERENTIAL TREATMENT NOT AFFECTED

BY QUANTITATIVE LIMITATION.—Any apparel article 

that qualifies for preferential treatment under paragraph (1), (3), (4), or (5) or subparagraph (B) of this 

paragraph or any other provision of this title shall not 

be subject to, or included in the calculation of, the 

quantitative limitation under clause (ii). 

(B) SPECIAL RULE FOR CERTAIN ARTICLES OF CHAPTER 61

OF THE HTS.— 


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(i) GENERAL RULE.—Any apparel article classifiable 

under chapter 61 of the HTS that is wholly assembled, 

or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or 

yarns and is imported directly from Haiti or the Dominican Republic shall enter the United States free of 

duty, subject to clauses (ii), (iii), and (iv), without regard to the source of the fabric, fabric components, 

components knit-to-shape, or yarns from which the article is made. 

(ii) EXCLUSIONS.—The preferential treatment described in clause (i) shall not apply to the following: 

(I) The following apparel articles of cotton, for 

men or boys, that are classifiable under subheading 6109.10.00 of the HTS: 

(aa) All white T-shirts, with short hemmed 

sleeves and hemmed bottom, with crew or 

round neckline or with V-neck and with a mitered seam at the center of the V, and without 

pockets, trim, or embroidery. 

(bb) All white singlets, without pockets, 

trim, or embroidery. 

(cc) Other T-shirts, but not including thermal undershirts. 

(II) T-shirts for men or boys that are classifiable 

under subheading 6109.90.10. 

(III) The following apparel articles of cotton, for 

men or boys, that are classifiable under subheading 6110.20.20 of the HTS: 

(aa) Sweatshirts. 

(bb) Pullovers, other than sweaters, vests, 

or garments imported as part of playsuits. 

(IV) Sweatshirts for men or boys, of man-made 

fibers and containing less than 65 percent by 

weight of man-made fibers, that are classifiable 

under subheading 6110.30.30 of the HTS. 

(iii) LIMITATION.—Except as provided in paragraph 

(2A), the preferential treatment described in clause (i) 

shall be extended, in the 1-year period beginning October 1, 2008, and in each of the 11 succeeding 1-year 

periods, to not more than 70,000,000 square meter 

equivalents of apparel articles described in such 

clause. 

(iv) OTHER PREFERENTIAL TREATMENT NOT AFFECTED

BY QUANTITATIVE LIMITATION.—Any apparel article 

that qualifies for preferential treatment under paragraph (1), (3), (4), or (5) or subparagraph (A) of this 

paragraph or any other provision of this title shall not 

be subject to, or included in the calculation of, the 

quantitative limitation under clause (iii). 

(2A) SPECIAL RULE FOR CERTAIN WOVEN ARTICLES AND CER- TAIN KNIT ARTICLES ENTERED DURING FISCAL YEAR 2010 AND

SUCCEEDING 1-YEAR PERIODS.— 

(A) IN GENERAL.—Except as provided in subparagraphs 

(B) and (C) and subject to subparagraph (D), if 52,000,000 


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54 

square meter equivalents of apparel articles described in 

paragraph (2)(A)(i) or (2)(B)(i) enter the United States during the 1-year period beginning October 1, 2009, or any of 

the succeeding 1-year periods, the President shall extend 

the preferential treatment described in paragraph (2)(A)(i) 

or (2)(B)(i) (as the case may be) to not more than 

200,000,000 square meter equivalents of apparel articles 

described in paragraph (2)(A)(i) or (2)(B)(i) (as the case 

may be) during that 1-year period, and shall publish notice 

of the extension in the Federal Register. 

(B) EXCEPTION FOR CERTAIN WOVEN ARTICLES.— (i) IN GENERAL.—In the case of apparel articles described in clause (ii), subparagraph (A) shall be applied by substituting ‘‘70,000,000’’ for ‘‘200,000,000’’. 

(ii) APPAREL ARTICLES DESCRIBED.—Apparel articles 

described in this clause are apparel articles described 

in paragraph (2)(A)(i) that are the following: 

(I) CATEGORY 347.—Apparel articles in category 

347 that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6203.19.1020 ..................... 6203.42.4011 .................... 6203.42.4061 

6203.19.9020 ................... 6203.42.4016 .................... 6203.49.8020 

6203.22.3020 ................... 6203.42.4026 .................... 6210.40.9033 

6203.22.3030 ................... 6203.42.4036 .................... 6211.20.1520 

6203.42.4003 ................... 6203.42.4046 .................... 6211.20.3810 

6203.42.4006 ................... 6203.42.4051 .................... 6211.32.0040 

(II) CATEGORY 348.—Apparel articles in category 

348 that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6204.12.0030 ..................... 6204.62.4011 .................... 6204.69.9010 

6204.19.8030 ................... 6204.62.4021 .................... 6210.50.9060 

6204.22.3040 ................... 6204.62.4031 .................... 6211.20.1550 

6204.22.3050 ................... 6204.62.4041 .................... 6211.20.6810 

6204.29.4034 ................. 6204.62.4051 .................... 6211.42.0030 

6204.62.3000 ................. 6204.62.4056 .................... 6217.90.9050 

6204.62.4003 ................. 6204.62.4066 ....................

6204.62.4006 ................. 6204.69.6010 ....................

(III) CATEGORY 647.—Apparel articles in category 647 that fall within the following statistical 

reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6203.23.0060 ..................... 6203.43.4020 .................... 6203.49.8030 

6203.23.0070 ................. 6203.43.4030 .................... 6210.40.5031 

6203.29.2030 ................. 6203.43.4040 .................... 6210.40.5039 

6203.29.2035 ................. 6203.49.1500 .................... 6211.20.1525 

6203.43.2500 ................... 6203.49.2015 .................... 6211.20.3820 

6203.43.3510 ................. 6203.49.2030 .................... 6211.33.0030 


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6203.43.3590 ................. 6203.49.2045 ....................

6203.43.4010 ................... 6203.49.2060 ....................

(IV) CATEGORY 648.—Apparel articles in category 

648 that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6204.23.0040 ..................... 6204.63.3510 .................... 6204.69.6030 

6204.23.0045 ................... 6204.63.3530 .................... 6204.69.9030 

6204.29.2020 ................. 6204.63.3532 .................... 6210.50.5031 

6204.29.2025 ................... 6204.63.3540 .................... 6210.50.5039 

6204.29.4038 ................... 6204.69.2510 .................... 6211.20.1555 

6204.63.2000 ................. 6204.69.2530 .................... 6211.20.6820 

6204.63.3010 ................. 6204.69.2540 .................... 6211.43.0040 

6204.63.3090 ................. 6204.69.2560 .................... 6217.90.9060 

(C) EXCEPTION FOR CERTAIN KNIT ARTICLES.— (i) IN GENERAL.—In the case of apparel articles described in clause (ii), subparagraph (A) shall be applied by substituting ‘‘85,000,000’’ for ‘‘200,000,000’’. 

(ii) APPAREL ARTICLES DESCRIBED.—Apparel articles 

described in this clause are apparel articles described 

in paragraph (2)(B)(i) that fall within the following 

statistical reporting numbers of the HTS (as in effect 

on the day before the date of the enactment of this 

paragraph), other than shirts with plackets and pointed collars: 

6105.10.0010 ..................... 6109.10.0040 .................... 6110.30.3053 

6109.10.0018 ................... 6109.10.0045 .................... 6110.30.3059 

6109.10.0027 ................... 6110.20.2079 ....................

(D) VERIFICATION WITH RESPECT TO TRANSSHIPMENT FOR

CERTAIN APPAREL ARTICLES.— (i) IN GENERAL.—Not later than April 1, July 1, October 1, and January 1 of each year, the Commissioner 

responsible for United States Customs and Border 

Protection shall verify that apparel articles imported 

into the United States under this paragraph are not 

being unlawfully transshipped (within the meaning of 

subsection (f)) into the United States. 

(ii) REPORT TO PRESIDENT.—If the Commissioner determines pursuant to clause (i) that apparel articles 

imported into the United States under this paragraph 

are being unlawfully transshipped into the United 

States, the Commissioner shall report that determination to the President. 

(iii) AUTHORITY TO REDUCE QUANTITATIVE LIMITA- TION.—If, in any 1-year period with respect to which 

the President extends preferential treatment as described in this paragraph, the Commissioner reports to 

the President pursuant to clause (ii) regarding unlawful transshipments, the President— 

(I) may modify the quantitative limitation under 

this paragraph as the President considers appropriate to account for such transshipments; and 


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56 

(II) if the President modifies the limitation 

under subclause (I), shall publish notice of the 

modification in the Federal Register. 

(E) CATEGORY DEFINED.—In this paragraph, the term 

‘‘category’’ means the number assigned under the U.S. Textile and Apparel Category System of the Office of Textiles 

and Apparel of the Department of Commerce, as listed in 

the HTS under the applicable heading or subheading (as 

in effect on the day before the date of the enactment of 

this paragraph). 

(3) APPAREL AND OTHER ARTICLES SUBJECT TO CERTAIN ASSEMBLY RULES.— 

(A) BRASSIERES.—Any apparel article classifiable under 

subheading 6212.10 of the HTS that is wholly assembled, 

or knit-to-shape, in Haiti from any combination of fabrics, 

fabric components, components knit-to-shape, or yarns and 

is imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, fabric components, components 

knit-to-shape, or yarns from which the article is made. 

(B) OTHER APPAREL ARTICLES.—Any of the following apparel articles that is wholly assembled, or knit-to-shape, in 

Haiti from any combination of fabrics, fabric components, 

components knit-to-shape, or yarns and is imported directly from Haiti or the Dominican Republic shall enter 

the United States free of duty, without regard to the 

source of the fabric, fabric components, components knitto-shape, or yarns from which the article is made: 

(i) Any apparel article that is of a type listed in 

chapter rule 3, 4, or 5 for chapter 61 of the HTS (as 

such chapter rules are contained in section A of the 

Annex to Proclamation 8213 of the President of December 20, 2007) as being excluded from the scope of 

such chapter rule, when such chapter rule is applied 

to determine whether an apparel article is an originating good for purposes of general note 29(n) to the 

HTS, except that, for purposes of this clause, reference 

in such chapter rules to ‘‘6104.12.00’’ shall be deemed 

to be a reference to ‘‘6104.19.60’’. 

(ii)(I) Subject to subclause (II), any apparel article 

that is of a type listed in chapter rule 3(a), 4(a), or 5(a) 

for chapter 62 of the HTS, as such chapter rules are 

contained in paragraph 9 of section A of the Annex to 

Proclamation 8213 of the President of December 20, 

2007. 

(II) Subclause (I) shall not include any apparel article to which subparagraph (A) of this paragraph applies. 

(C) LUGGAGE AND SIMILAR ITEMS.—Any article classifiable under subheading 4202.12, 4202.22, 4202.32 or 

4202.92 of the HTS that is wholly assembled in Haiti and 

is imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, components, or materials from 

which the article is made. 


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57 

(D) HEADGEAR.—Any article classifiable under heading 

6501, 6502, or 6504 of the HTS, or under subheading 

6505.90 of the HTS, that is wholly assembled, knit-toshape, or formed in Haiti from any combination of fabrics, 

fabric components, components knit-to-shape, or yarns and 

is imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, fabric components, components 

knit-to-shape, or yarns from which the article is made. 

(E) CERTAIN SLEEPWEAR.—Any of the following apparel 

articles that is wholly assembled, or knit-to-shape, in Haiti 

from any combination of fabrics, fabric components, components knit-to-shape, or yarns and is imported directly from 

Haiti or the Dominican Republic shall enter the United 

States free of duty, without regard to the source of the fabric, fabric components, components knit-to-shape, or yarns 

from which the article is made: 

(i) Pajama bottoms and other sleepwear for women 

and girls, of cotton, that are classifiable under subheading 6208.91.30, or of man-made fibers, that are 

classifiable under subheading 6208.92.00. 

(ii) Pajama bottoms and other sleepwear for girls, of 

other textile materials, that are classifiable under subheading 6208.99.20. 

(F) CERTAIN OTHER APPAREL ARTICLES.— 

(i) IN GENERAL.—Any of the apparel articles described in clause (ii) that is wholly assembled, or knitto-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns 

and is imported directly from Haiti or the Dominican 

Republic shall enter the United States free of duty, 

without regard to the source of the fabric, fabric components, components knit-to-shape, or yarns from 

which the article is made. 

(ii) ARTICLES DESCRIBED.—Apparel articles described 

in this clause are apparel articles in the following category numbers that fall within the following statistical 

reporting numbers of the HTS (as in effect on the day 

before the date of the enactment of this subparagraph): 

Category Number HTS Statistical 

Reporting Number 

334 6101.90.9010 

6112.11.0010 

6103.22.0010 

6113.00.9015 

335 6104.22.0010 

6104.29.2010 


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6112.11.0020 

336 6104.49.9010 

338 6103.22.0050 

6105.90.8010 

6112.11.0030 

339 6104.22.0060 

6104.29.2049 

6106.90.2510 

6106.90.3010 

6110.20.1031 

6110.20.1033 

6112.11.0040 

342 6104.22.0030 

6104.29.2022 

6104.52.0010 

6104.52.0020 

6104.59.8010 

350 6107.91.0040 

6107.91.0090 

351 6107.21.0010 

6107.21.0020 

6107.91.0030 

6108.31.0010 

6108.31.0020 

433 6103.23.0007 

6103.29.0520 

6103.31.0000 

6103.33.1000 

6103.39.8020 

434 6101.30.1500 

6101.90.0500 

6101.90.9020 

6103.23.0005 

6103.29.0510 

435 6102.30.1000 

6102.90.9010 

6104.23.0010 

6104.29.0510 


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6104.29.2012 

6104.33.1000 

6104.39.2020 

438 6103.23.0025 

6103.29.0550 

6104.23.0020 

6104.29.0560 

6104.29.2051 

6105.90.1000 

6105.90.8020 

6106.20.1020 

6106.90.1010 

6106.90.1020 

6106.90.2520 

6106.90.3020 

6110.11.0070 

6110.12.2070 

6110.12.2080 

6110.19.0070 

6110.19.0080 

6110.30.1550 

6110.30.1560 

633 6103.23.0037 

6103.29.1015 

6103.33.2000 

6103.39.1000 

6103.39.8030 

634 6101.30.1000 

6101.90.9030 

6103.23.0036 

6103.29.1010 

6112.12.0010 

6112.19.1010 

6112.20.1010 

6112.20.1030 

6113.00.9025 

635 6102.30.0500 

6102.90.9015 

6104.23.0026 

6104.29.1010 

6104.29.2014 

6104.39.2030 


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6112.12.0020 

6112.19.1020 

6112.20.1020 

6112.20.1040 

6113.00.9030 

636 6104.49.9030 

6104.44.2020 

638 6103.23.0075 

6103.29.1050 

6105.90.8030 

6110.30.1050 

6110.30.2051 

6110.30.2053 

6112.12.0030 

6112.19.1030 

639 6104.23.0036 

6104.29.1050 

6104.29.2055 

6106.90.2530 

6106.90.3030 

6110.30.1060 

6110.30.2061 

6110.30.2063 

6112.12.0040 

6112.19.1040 

651 6107.22.0010 

6107.22.0015 

6107.22.0025 

6107.99.1030 

6108.32.0015 

(iii) CATEGORY DEFINED.—In this subparagraph, the 

term ‘‘category’’ has the meaning given that term in 

paragraph (2A)(E) of this subsection. 

(G) MADE-UP TEXTILE ARTICLES.— (i) IN GENERAL.—Any of the made-up textile articles 

described in clauses (ii) and (iii) that is wholly assembled, or knit-to-shape, in Haiti from any combination 

of fabrics, fabric components, components knit-toshape, or yarns and is imported directly from Haiti or 

the Dominican Republic shall enter the United States 

free of duty, without regard to the source of the fabric, 

fabric components, components knit-to-shape, or yarns 

from which the article is made. 


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(ii) ARTICLES DESCRIBED.—Made-up textile articles 

described in this clause are articles in the following 

category numbers that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this subparagraph): 

Category Number HTS Statistical 

Reporting Number 

363 6302.60.0020 

6302.91.0015 

6302.91.0035 

6307.90.8940 

369 6304.91.0020 

6304.92.0000 

6302.60.0010 

6302.60.0030 

6302.91.0005 

6302.91.0050 

6307.90.8910 

6307.90.8945 

5701.90.2020 

5702.39.2010 

5702.50.5600 

5702.99.0500 

5702.99.1500 

5705.00.2020 

5807.10.0510 

5807.90.0510 

6307.90.3010 

6301.30.0010 

6305.20.0000 

6307.10.1020 

6307.10.1090 

6406.10.7700 

9404.90.1000 

9404.90.9505 

6301.30.0020 

6302.91.0045 

465 5701.10.9000 

5702.50.2000 

5702.50.4000 

5702.91.3000 

5702.91.4000 


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5703.10.2000 

5703.10.8000 

5704.10.0010 

5705.00.2005 

5705.00.2015 

5702.31.1000 

5702.31.2000 

469 6304.19.3040 

6304.91.0050 

6304.99.1500 

6304.99.6010 

5601.29.0020 

6302.39.0010 

6406.10.9020 

665 5701.90.1030 

5701.90.2030 

5702.32.1000 

5702.32.2000 

5702.42.2090 

5702.50.5200 

5702.92.1000 

5702.92.9000 

5703.20.1000 

5703.30.2000 

5703.30.8030 

5703.30.8080 

5704.10.0090 

5705.00.2030 

5703.20.2010 

5703.20.2090 

666 6304.11.2000 

6304.91.0040 

6304.93.0000 

6304.99.6020 

6301.40.0010 

6301.40.0020 

6301.90.0010 

669 5601.10.2000 

5601.22.0090 

5807.10.0520 

5807.90.0520 

6307.90.3020 


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6305.32.0010 

6305.32.0020 

6305.32.0050 

6305.32.0060 

6305.39.0000 

6406.10.9040 

6308.00.0020 

899 6304.11.3000 

6304.19.3060 

6304.91.0070 

6304.99.3500 

6304.99.6040 

5601.29.0090 

6301.90.0030 

6305.90.0000 

6406.10.9060 

900 5601.29.0010 

5701.90.2010 

6301.90.0020 

(iii) OTHER ARTICLES DESCRIBED.—Made-up textile 

articles described in this clause are articles that fall 

within statistical reporting number 6406.10.9090 of 

the HTS (as in effect on the day before the date of the 

enactment of this subparagraph). 

(iv) CATEGORY DEFINED.—In this subparagraph, the 

term ‘‘category’’ has the meaning given that term in 

paragraph (2A)(E) of this subsection. 

(4) EARNED IMPORT ALLOWANCE RULE.— 

(A) IN GENERAL.—Apparel articles wholly assembled, or 

knit-to-shape, in Haiti from any combination of fabrics, 

fabric components, components knit-to-shape, or yarns and 

imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, fabric components, components 

knit-to-shape, or yarns from which the articles are made, 

if such apparel articles are accompanied by an earned import allowance certificate that reflects the amount of credits equal to the total square meter equivalents of such apparel articles, in accordance with the program established 

under subparagraph (B). For purposes of determining the 

quantity of square meter equivalents under this subparagraph, the conversion factors listed in ‘‘Correlation: U.S. 

Textile and Apparel Industry Category System with the 

Harmonized Tariff Schedule of the United States of America, 2008’’, or its successor publications, of the United 

States Department of Commerce, shall apply. 

(B) EARNED IMPORT ALLOWANCE PROGRAM.— 


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(i) ESTABLISHMENT.—The Secretary of Commerce 

shall establish a program to provide earned import allowance certificates to any producer or entity controlling production for purposes of subparagraph (A), 

based on the elements described in clause (ii). 

(ii) ELEMENTS.—The elements referred to in clause 

(i) are the following: 

(I) One credit shall be issued to a producer or 

an entity controlling production for every two 

square meter equivalents of qualifying woven fabric or qualifying knit fabric that the producer or 

entity controlling production can demonstrate that 

it purchased for the manufacture in Haiti of articles like or similar to any article eligible for preferential treatment under subparagraph (A). The 

Secretary of Commerce shall, if requested by a 

producer or entity controlling production, create 

and maintain an account for such producer or entity controlling production, into which such credits 

shall be deposited. 

(II) Such producer or entity controlling production may redeem credits issued under subclause 

(I) for earned import allowance certificates reflecting such number of earned credits as the producer 

or entity may request and has available. 

(III) The Secretary of Commerce may require 

any textile mill or other entity located in the 

United States that exports to Haiti qualifying 

woven fabric or qualifying knit fabric to submit, 

upon such export or upon request, documentation, 

such as a Shipper’s Export Declaration, to the 

Secretary of Commerce— 

(aa) verifying that the qualifying woven fabric or qualifying knit fabric was exported to a 

producer in Haiti or to an entity controlling 

production; and 

(bb) identifying such producer or entity controlling production, and the quantity and description of qualifying woven fabric or qualifying knit fabric exported to such producer or 

entity controlling production. 

(IV) The Secretary of Commerce may require 

that a producer or entity controlling production 

submit documentation to verify purchases of 

qualifying woven fabric or qualifying knit fabric. 

(V) The Secretary of Commerce may make available to each person or entity identified in documentation submitted under subclause (III) or (IV) 

information contained in such documentation that 

relates to the purchase of qualifying woven fabric 

or qualifying knit fabric involving such person or 

entity. 

(VI) The program under this subparagraph shall 

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closure of information in electronic format, including information with respect to the earned import 

allowance certificates required under subparagraph (A)(i). 

(VII) The Secretary of Commerce may reconcile 

discrepancies in information provided under subclause (III) or (IV) and verify the accuracy of such 

information. 

(VIII) The Secretary of Commerce shall establish procedures to carry out the program under 

this subparagraph and may establish additional 

requirements to carry out this subparagraph. 

Such additional requirements may include— 

(aa) submissions by textile mills or other 

entities in the United States documenting exports of yarns wholly formed in the United 

States to countries described in paragraph 

(1)(B)(iii) for the manufacture of qualifying 

knit fabric; and 

(bb) procedures imposed on producers or entities controlling production to allow the Secretary of Commerce to obtain and verify information relating to the production of qualifying 

knit fabric. 

(iii) QUALIFYING WOVEN FABRIC DEFINED.—For purposes of this subparagraph, the term ‘‘qualifying 

woven fabric’’ means fabric wholly formed in the 

United States from yarns wholly formed in the United 

States, except that— 

(I) fabric otherwise eligible as qualifying woven 

fabric shall not be ineligible as qualifying woven 

fabric because the fabric contains nylon filament 

yarn to which section 213(b)(2)(A)(vii)(IV) applies; 

(II) fabric that would otherwise be ineligible as 

qualifying woven fabric because the fabric contains yarns not wholly formed in the United 

States shall not be ineligible as qualifying woven 

fabric if the total weight of all such yarns is not 

more than 10 percent of the total weight of the 

fabric; and 

(III) fabric otherwise eligible as qualifying 

woven fabric shall not be ineligible as qualifying 

fabric because the fabric contains yarns covered 

by clause (i) or (ii) of paragraph (5)(A). 

(iv) QUALIFYING KNIT FABRIC DEFINED.—For purposes of this subparagraph, the term ‘‘qualifying knit 

fabric’’ means fabric or knit-to-shape components 

wholly formed or knit-to-shape in any country or any 

combination of countries described in paragraph 

(1)(B)(iii), from yarns wholly formed in the United 

States, except that— 

(I) fabric or knit-to-shape components otherwise 

eligible as qualifying knit fabric shall not be ineligible as qualifying knit fabric because the fabric 

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8Section 2(f) of Public Law 112–234 amends section 231A(b)(4) by striking subparagraph (C) 

and redesignating subparagraph (D) as subparagraph (C). The amendment was executed to section 213A since the Act does not contain a section 231A in order to reflect the probable intent 

of Congress. 

ment yarn to which section 213(b)(2)(A)(vii)(IV) 

applies; 

(II) fabric or knit-to-shape components that 

would otherwise be ineligible as qualifying knit 

fabric because the fabric or knit-to-shape components contain yarns not wholly formed in the 

United States shall not be ineligible as qualifying 

knit fabric if the total weight of all such yarns is 

not more than 10 percent of the total weight of 

the fabric or knit-to-shape components; and 

(III) fabric or knit-to-shape components otherwise eligible as qualifying knit fabric shall not be 

ineligible as qualifying knit fabric because the fabric or knit-to-shape components contain yarns covered by clause (i) or (ii) of paragraph (5)(A). 

(C) 8 ENFORCEMENT PROVISIONS.— 

(i) FRAUDULENT CLAIMS OF PREFERENCE.—Any person who makes a false claim for preference under the 

program established under subparagraph (B) shall be 

subject to any applicable civil or criminal penalty that 

may be imposed under the customs laws of the United 

States or under title 18, United States Code. 

(ii) PENALTIES FOR OTHER FRAUDULENT INFORMATION.—The Secretary of Commerce may establish and 

impose penalties for the submission to the Secretary of 

Commerce of fraudulent information under the program established under subparagraph (B), other than 

a claim described in clause (i). 

(5) SHORT SUPPLY PROVISION.— 

(A) IN GENERAL.—Any apparel article that is wholly assembled, or knit-to-shape, in Haiti from any combination 

of fabrics, fabric components, components knit-to-shape, or 

yarns and is imported directly from Haiti or the Dominican Republic shall enter the United States free of duty, 

without regard to the source of the fabrics, fabric components, components knit-to-shape, or yarns from which the 

article is made, if the fabrics, fabric components, components knit-to-shape, or yarns comprising the component 

that determines the tariff classification of the article are of 

any of the following: 

(i) Fabrics or yarns, to the extent that apparel articles of such fabrics or yarns would be eligible for preferential treatment, without regard to the source of the 

fabrics or yarns, under Annex 401 of the NAFTA. 

(ii) Fabrics or yarns, to the extent that such fabrics 

or yarns are designated as not being available in commercial quantities for purposes of— 

(I) section 213(b)(2)(A)(v) of this Act; 

(II) section 112(b)(5) of the African Growth and 

Opportunity Act; 


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(III) clause (i)(III) or (ii) of section 204(b)(3)(B) 

of the Andean Trade Preference Act; or 

(IV) any other provision, relating to determining 

whether a textile or apparel article is an originating good eligible for preferential treatment, of 

a law that implements a free trade agreement entered into by the United States that is in effect at 

the time the claim for preferential treatment is 

made. 

(B) REMOVAL OF DESIGNATION OF FABRICS OR YARNS NOT

AVAILABLE IN COMMERCIAL QUANTITIES.—If the President 

determines that— 

(i) any fabric or yarn described in clause (i) of subparagraph (A) was determined to be eligible for preferential treatment, or 

(ii) any fabric or yarn described in clause (ii) of subparagraph (A) was designated as not being available 

in commercial quantities, 

on the basis of fraud, the President is authorized to remove the eligibility or designation (as the case may be) of 

that fabric or yarn with respect to articles entered after 

such removal. 

(6) OTHER PREFERENTIAL TREATMENT NOT AFFECTED.—The 

duty-free treatment provided under this subsection is in addition to any other preferential treatment under this title. 

(c) SPECIAL RULE FOR CERTAIN WIRE HARNESS AUTOMOTIVE COM- PONENTS.— (1) IN GENERAL.—Any wire harness automotive component 

that is the product or manufacture of Haiti and is imported directly from Haiti into the customs territory of the United 

States shall enter the United States free of duty, during the 

10-year period beginning on the date of the enactment of the 

Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, if Haiti has met the requirements of subsection (d) and if the sum of— 

(A) the cost or value of the materials produced in Haiti 

or one or more countries described in subsection (b)(2)(C), 

or any combination thereof, plus 

(B) the direct costs of processing operations (as defined 

in section 213(a)(3)) performed in Haiti or the United 

States, or both, 

is not less than 50 percent of the declared customs value of 

such wire harness automotive component. 

(2) WIRE HARNESS AUTOMOTIVE COMPONENT.—For purposes 

of this subsection, the term ‘‘wire harness automotive component’’ means any article provided for in subheading 8544.30.00 

of the HTS, as in effect on the date of the enactment of the 

Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006. 

(d) ELIGIBILITY REQUIREMENTS.— (1) IN GENERAL.—Haiti shall be eligible for preferential treatment under this section if the President determines and certifies to Congress that Haiti— 

(A) has established, or is making continual progress toward establishing— 


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(i) a market-based economy that protects private 

property rights, incorporates an open rules-based trading system, and minimizes government interference in 

the economy through measures such as price controls, 

subsidies, and government ownership of economic assets; 

(ii) the rule of law, political pluralism, and the right 

to due process, a fair trial, and equal protection under 

the law; 

(iii) the elimination of barriers to United States 

trade and investment, including by— 

(I) the provision of national treatment and 

measures to create an environment conducive to 

domestic and foreign investment; 

(II) the protection of intellectual property; and 

(III) the resolution of bilateral trade and investment disputes; 

(iv) economic policies to reduce poverty, increase the 

availability of health care and educational opportunities, expand physical infrastructure, promote the development of private enterprise, and encourage the 

formation of capital markets through microcredit or 

other programs; 

(v) a system to combat corruption and bribery, such 

as signing and implementing the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and 

(vi) protection of internationally recognized worker 

rights, including the right of association, the right to 

organize and bargain collectively, a prohibition on the 

use of any form of forced or compulsory labor, a minimum age for the employment of children, and acceptable conditions of work with respect to minimum 

wages, hours of work, and occupational safety and 

health; 

(B) does not engage in activities that undermine United 

States national security or foreign policy interests; and 

(C) does not engage in gross violations of internationally 

recognized human rights or provide support for acts of 

international terrorism and cooperates in international efforts to eliminate human rights violations and terrorist activities. 

(2) TIME LIMIT FOR DETERMINATION.—The President shall determine whether Haiti meets the requirements of paragraph 

(1) not later than 90 days after the date of the enactment of 

the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006. 

(3) CONTINUING COMPLIANCE.—If the President determines 

that Haiti is not making continual progress in meeting the requirements described in paragraph (1)(A), the President shall 

terminate the preferential treatment under this section. 

(4) PETITION PROCESS.—Any interested party may file a request to have the status of Haiti reviewed with respect to the 

eligibility requirements listed in paragraph (1), and the President shall provide for this purpose the same procedures as 


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those that are provided for reviewing the status of eligible beneficiary developing countries with respect to the designation 

criteria listed in subsections (b) and (c) of section 502 of the 

Trade Act of 1974 (19 U.S.C. 2642 (b) and (c)). 

(e) TECHNICAL ASSISTANCE IMPROVEMENT AND COMPLIANCE

NEEDS ASSESSMENT AND REMEDIATION PROGRAM.— 

(1) CONTINUED ELIGIBILITY FOR PREFERENCES.— 

(A) PRESIDENTIAL CERTIFICATION OF COMPLIANCE BY

HAITI WITH REQUIREMENTS.—Upon the expiration of the 16- 

month period beginning on the date of the enactment of 

the Haitian Hemispheric Opportunity through Partnership 

Encouragement Act of 2008, Haiti shall continue to be eligible for the preferential treatment provided under subsection (b) only if the President determines and certifies to 

the Congress that— 

(i) Haiti has implemented the requirements set forth 

in paragraphs (2) and (3); and 

(ii) Haiti has agreed to require producers of articles 

for which duty-free treatment may be requested under 

subsection (b) to participate in the TAICNAR Program 

described in paragraph (3) and has developed a system 

to ensure participation in such program by such producers, including by developing and maintaining the 

registry described in paragraph (2)(B)(i). 

(B) EXTENSION.—The President may extend the period 

for compliance by Haiti under subparagraph (A) if the 

President— 

(i) determines that Haiti has made a good faith effort toward such compliance and has agreed to take 

additional steps to come into full compliance that are 

satisfactory to the President; and 

(ii) provides to the appropriate congressional committees, not later than 6 months after the last day of 

the 16-month period specified in subparagraph (A), 

and every 6 months thereafter, a report identifying 

the steps that Haiti has agreed to take to come into 

full compliance and the progress made over the preceding 6-month period in implementing such steps. 

(C) CONTINUING COMPLIANCE.— 

(i) TERMINATION OF PREFERENTIAL TREATMENT.—If, 

after making a certification under subparagraph (A), 

the President determines that Haiti is no longer meeting the requirements set forth in subparagraph (A), 

the President shall terminate the preferential treatment provided under subsection (b), unless the President determines, after consulting with the appropriate 

congressional committees, that meeting such requirements is not practicable because of extraordinary circumstances existing in Haiti when the determination 

is made. 

(ii) SUBSEQUENT COMPLIANCE.—If the President, 

after terminating preferential treatment under clause 

(i), determines that Haiti is meeting the requirements 

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state the application of preferential treatment under 

subsection (b). 

(2) LABOR OMBUDSMAN.— (A) IN GENERAL.—The requirement under this paragraph 

is that Haiti has established an independent Labor Ombudsman’s Office within the national government that— 

(i) reports directly to the President of Haiti; 

(ii) is headed by a Labor Ombudsman chosen by the 

President of Haiti, in consultation with Haitian labor 

unions and industry associations; and 

(iii) is vested with the authority to perform the functions described in subparagraph (B). 

(B) FUNCTIONS.—The functions of the Labor Ombudsman’s Office shall include— 

(i) developing and maintaining a registry of producers of articles for which duty-free treatment may 

be requested under subsection (b), and developing, in 

consultation and coordination with any other appropriate officials of the Government of Haiti, a system to 

ensure participation by such producers in the 

TAICNAR Program described in paragraph (3); 

(ii) overseeing the implementation of the TAICNAR 

Program described in paragraph (3); 

(iii) receiving and investigating comments from any 

interested party regarding the conditions described in 

paragraph (3)(B) in facilities of producers listed in the 

registry described in clause (i) and, where appropriate, 

referring such comments or the result of such investigations to the appropriate Haitian authorities, or to 

the entity operating the TAICNAR Program described 

in paragraph (3); 

(iv) assisting, in consultation and coordination with 

any other appropriate Haitian authorities, producers 

listed in the registry described in clause (i) in meeting 

the conditions set forth in paragraph (3)(B); and 

(v) coordinating, with the assistance of the entity operating the TAICNAR Program described in paragraph 

(3), a tripartite committee comprised of appropriate 

representatives of government agencies, employers, 

and workers, as well as other relevant interested parties, for the purposes of evaluating progress in implementing the TAICNAR Program described in paragraph (3), and consulting on improving core labor 

standards and working conditions in the textile and 

apparel sector in Haiti, and on other matters of common concern relating to such core labor standards and 

working conditions. 

(3) TECHNICAL ASSISTANCE IMPROVEMENT AND COMPLIANCE

NEEDS ASSESSMENT AND REMEDIATION PROGRAM.— (A) IN GENERAL.—The requirement under this paragraph 

is that Haiti, in cooperation with the International Labor 

Organization, has established a Technical Assistance Improvement and Compliance Needs Assessment and Remediation Program meeting the requirements under subparagraph (C)— 


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(i) to assess compliance by producers listed in the 

registry described in paragraph (2)(B)(i) with the conditions set forth in subparagraph (B) and to assist 

such producers in meeting such conditions; and 

(ii) to provide assistance to improve the capacity of 

the Government of Haiti— 

(I) to inspect facilities of producers listed in the 

registry described in paragraph (2)(B)(i); and 

(II) to enforce national labor laws and resolve 

labor disputes, including through measures described in subparagraph (E). 

(B) CONDITIONS DESCRIBED.—The conditions referred to 

in subparagraph (A) are— 

(i) compliance with core labor standards; and 

(ii) compliance with the labor laws of Haiti that relate directly to core labor standards and to ensuring 

acceptable conditions of work with respect to minimum wages, hours of work, and occupational health 

and safety. 

(C) REQUIREMENTS.—The requirements for the 

TAICNAR Program are that the program— 

(i) be operated by the International Labor Organization (or any subdivision, instrumentality, or designee 

thereof), which prepares the biannual reports described in subparagraph (D); 

(ii) be developed through a participatory process 

that includes the Labor Ombudsman described in 

paragraph (2) and appropriate representatives of government agencies, employers, and workers; 

(iii) assess compliance by each producer listed in the 

registry described in paragraph (2)(B)(i) with the conditions set forth in subparagraph (B) and identify any 

deficiencies by such producer with respect to meeting 

such conditions, including by— 

(I) conducting unannounced site visits to manufacturing facilities of the producer; 

(II) conducting confidential interviews separately with workers and management of the facilities of the producer; 

(III) providing to management and workers, and 

where applicable, worker organizations in the facilities of the producer, on a confidential basis— 

(aa) the results of the assessment carried 

out under this clause; and 

(bb) specific suggestions for remediating 

any such deficiencies; 

(iv) assist the producer in remediating any deficiencies identified under clause (iii); 

(v) conduct prompt follow-up site visits to the facilities of the producer to assess progress on remediation 

of any deficiencies identified under clause (iii); and 

(vi) provide training to workers and management of 

the producer, and where appropriate, to other persons 

or entities, to promote compliance with subparagraph 

(B). 


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(D) BIANNUAL REPORT.—The biannual reports referred to 

in subparagraph (C)(i) are a report, by the entity operating 

the TAICNAR Program, that is published (and available to 

the public in a readily accessible manner) on a biannual 

basis, beginning 6 months after Haiti implements the 

TAICNAR Program under this paragraph, covering the 

preceding 6-month period, and that includes the following: 

(i) The name of each producer listed in the registry 

described in paragraph (2)(B)(i) that has been identified as having met the conditions under subparagraph 

(B). 

(ii) The name of each producer listed in the registry 

described in paragraph (2)(B)(i) that has been identified as having deficiencies with respect to the conditions under subparagraph (B), and has failed to remedy such deficiencies. 

(iii) For each producer listed under clause (ii)— 

(I) a description of the deficiencies found to exist 

and the specific suggestions for remediating such 

deficiencies made by the entity operating the 

TAICNAR Program; 

(II) a description of the efforts by the producer 

to remediate the deficiencies, including a description of assistance provided by any entity to assist 

in such remediation; and 

(III) with respect to deficiencies that have not 

been remediated, the amount of time that has 

elapsed since the deficiencies were first identified 

in a report under this subparagraph. 

(iv) For each producer identified as having deficiencies with respect to the conditions described under 

subparagraph (B) in a prior report under this subparagraph, a description of the progress made in remediating such deficiencies since the submission of the 

prior report, and an assessment of whether any aspect 

of such deficiencies persists. 

(E) CAPACITY BUILDING.—The assistance to the Government of Haiti referred to in subparagraph (A)(ii) shall include programs— 

(i) to review the labor laws and regulations of Haiti 

and to develop and implement strategies for bringing 

the laws and regulations into conformity with core 

labor standards; 

(ii) to develop additional strategies for facilitating 

protection of core labor standards and providing acceptable conditions of work with respect to minimum 

wages, hours of work, and occupational safety and 

health, including through legal, regulatory, and institutional reform; 

(iii) to increase awareness of worker rights, including under core labor standards and national labor 

laws; 

(iv) to promote consultation and cooperation between 

government representatives, employers, worker representatives, and United States importers on matters 


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relating to core labor standards and national labor 

laws; 

(v) to assist the Labor Ombudsman appointed pursuant to paragraph (2) in establishing and coordinating operation of the committee described in paragraph (2)(B)(v); 

(vi) to assist worker representatives in more fully 

and effectively advocating on behalf of their members; 

and 

(vii) to provide on-the-job training and technical assistance to labor inspectors, judicial officers, and other 

relevant personnel to build their capacity to enforce 

national labor laws and resolve labor disputes. 

(4) COMPLIANCE WITH ELIGIBILITY CRITERIA.— 

(A) COUNTRY COMPLIANCE WITH WORKER RIGHTS ELIGIBILITY CRITERIA.—In making a determination of whether 

Haiti is meeting the requirement set forth in subsection 

(d)(1)(A)(vi) relating to internationally recognized worker 

rights, the President shall consider the reports produced 

under paragraph (3)(D). 

(B) PRODUCER ELIGIBILITY.— 

(i) IDENTIFICATION OF PRODUCERS.—Beginning in the 

second calendar year after the President makes the 

certification under paragraph (1)(A), the President 

shall identify on a biennial basis whether a producer 

listed in the registry described in paragraph (2)(B)(i) 

has failed to comply with core labor standards and 

with the labor laws of Haiti that directly relate to and 

are consistent with core labor standards. 

(ii) ASSISTANCE TO PRODUCERS; WITHDRAWAL, ETC., 

OF PREFERENTIAL TREATMENT.—For each producer that 

the President identifies under clause (i), the President 

shall seek to assist such producer in coming into compliance with core labor standards and with the labor 

laws of Haiti that directly relate to and are consistent 

with core labor standards. If such efforts fail, the 

President shall withdraw, suspend, or limit the application of preferential treatment under subsection (b) 

to articles of such producer. 

(iii) REINSTATING PREFERENTIAL TREATMENT.—If the 

President, after withdrawing, suspending, or limiting 

the application of preferential treatment under clause 

(ii) to articles of a producer, determines that such producer is complying with core labor standards and with 

the labor laws of Haiti that directly relate to and are 

consistent with core labor standards, the President 

shall reinstate the application of preferential treatment under subsection (b) to the articles of the producer. 

(iv) CONSIDERATION OF REPORTS.—In making the 

identification under clause (i) and the determination 

under clause (iii), the President shall consider the reports made available under paragraph (3)(D). 

(5) REPORTS BY THE PRESIDENT.— 


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(A) IN GENERAL.—Not later than one year after the date 

of the enactment of the Haitian Hemispheric Opportunity 

through Partnership Encouragement Act of 2008, and annually thereafter, the President shall transmit to the appropriate congressional committees a report on the implementation of this subsection during the preceding 1-year 

period. 

(B) MATTERS TO BE INCLUDED.—Each report required by 

subparagraph (A) shall include the following: 

(i) An explanation of the efforts of Haiti, the President, and the International Labor Organization to 

carry out this subsection. 

(ii) A summary of each report produced under paragraph (3)(D) during the preceding 1-year period and a 

summary of the findings contained in such report. 

(iii) Identifications made under paragraph (4)(B)(i) 

and determinations made under paragraph (4)(B)(iii). 

(6) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this subsection the sum of 

$10,000,000 for the period beginning on October 1, 2008, and 

ending on September 30, 2013. 

(f) CONDITIONS REGARDING ENFORCEMENT OF CIRCUMVENTION.— 

(1) IN GENERAL.—The preferential treatment under subsection (b)(1) shall not apply unless the President certifies to 

Congress that Haiti is meeting the following conditions: 

(A) Haiti has adopted an effective visa system, domestic 

laws, and enforcement procedures applicable to articles described in subsection (b) to prevent unlawful transshipment of the articles and the use of counterfeit documents relating to the importation of the articles into the 

United States. 

(B) Haiti has enacted legislation or promulgated regulations that would permit U.S. Customs and Border Protection verification teams to have the access necessary to investigate thoroughly allegations of transshipment through 

such country. 

(C) Haiti agrees to report, on a timely basis, at the request of U.S. Customs and Border Protection, on the total 

exports from and imports into that country of articles described in subsection (b), consistent with the manner in 

which the records are kept by Haiti. 

(D) Haiti agrees to cooperate fully with the United 

States to address and take action necessary to prevent circumvention as provided in Article 5 of the Agreement on 

Textiles and Clothing. 

(E) Haiti agrees to require all producers and exporters 

of articles described in subsection (b) in that country to 

maintain complete records of the production and the export of such articles, including materials used in the production, for at least 5 years after the production or export 

(as the case may be). 

(F) Haiti agrees to report, on a timely basis, at the request of U.S. Customs and Border Protection, documentation establishing the country of origin of articles described 


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in subsection (b) as used by that country in implementing 

an effective visa system. 

(2) DEFINITION OF TRANSSHIPMENT.—Transshipment within 

the meaning of this subsection has occurred when preferential 

treatment for a textile or apparel article under this section has 

been claimed on the basis of material false information concerning the country of origin, manufacture, processing, or assembly of the article or any of its components. For purposes of 

this paragraph, false information is material if disclosure of 

the true information would mean or would have meant that 

the article is or was ineligible for preferential treatment under 

this section. 

(3) LIMITATION ON GOODS SHIPPED FROM THE DOMINICAN REPUBLIC.— 

(A) LIMITATION.—Notwithstanding subsection (a)(5), relating to the definition of ‘‘imported directly from Haiti or 

the Dominican Republic’’, articles described in subsection 

(b) that are shipped from the Dominican Republic, directly 

or through the territory of an intermediate country, whether or not such articles undergo processing in the Dominican Republic, shall not be considered to be ‘‘imported directly from Haiti or the Dominican Republic’’ until the 

President certifies to the Congress that Haiti and the Dominican Republic have developed procedures to prevent 

unlawful transshipment of the articles and the use of 

counterfeit documents related to the importation of the articles into the United States. 

(B) TECHNICAL AND OTHER ASSISTANCE.—The Commissioner responsible for U.S. Customs and Border Protection 

shall provide technical and other assistance to Haiti and 

the Dominican Republic to develop expeditiously the procedures described in subparagraph (A). 

(g) REGULATIONS.—The President shall issue regulations to carry 

out this section not later than 180 days after the date of the enactment of the Haitian Hemispheric Opportunity through Partnership 

Encouragement Act of 2006. The President shall consult with the 

Committee on Ways and Means of the House of Representatives 

and the Committee on Finance of the Senate in preparing such regulations. 

(h) TERMINATION.—Except as provided in subsection (b)(1), the 

duty-free treatment provided under this section shall remain in effect until September 30, 2020. 

* * * * * * * 

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: 


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(1) For the arrival of a commercial vessel of 100 net tons or 

more, $397. 

(2) For the arrival of a commercial truck, $5. 

(3) For the arrival of each railroad car carrying passengers or commercial freight, $7.50. 

(4) For all arrivals made during a calendar year by a private vessel or private aircraft, $25. 

(5)(A) Subject to subparagraph (B), 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)(i) of this section), $5. 

(B) For the arrival of each passenger aboard a commercial 

vessel from a place referred to in subsection (b)(1)(A)(i) of this 

section, $1.75. 

(6) For each item of dutiable mail for which a document is 

prepared by a customs officer, $5. 

(7) For each customs broker permit held by an individual, partnership, association, or corporate customs broker, $125 per 

year. 

(8) For the arrival of a barge or other bulk carrier from Can- ada or Mexico, $100. 

(9)(A) For the processing of merchandise that is formally entered or released during any fiscal year, a fee in an amount 

equal to 0.21 percent ad valorem, unless adjusted under subparagraph (B). 

(B)(i) The Secretary of the Treasury may adjust the ad valorem rate specified in subparagraph (A) to an ad valorem rate 

(but not to a rate of more than 0.21 percent nor less than 0.15 

percent) and the amounts specified in subsection (b)(8)(A)(i) 

(but not to more than $485 nor less than $21) to rates and 

amounts which would, if charged, offset the salaries and expenses that will likely be incurred by the Customs Service in 

the processing of such entries and releases during the fiscal 

year in which such costs are incurred. 

(ii) In determining the amount of any adjustment under 

clause (i), the Secretary of the Treasury shall take into account 

whether there is a surplus or deficit in the fund established 

under subsection (f) with respect to the provision of customs 

services for the processing of formal entries and releases of 

merchandise. 

(iii) An adjustment may not be made under clause (i) with 

respect to the fee charged during any fiscal year unless the 

Secretary of the Treasury— 

(I) not later than 45 days after the date of the enactment 

of the Act providing full-year appropriations for the Customs Service for that fiscal year, publishes in the Federal 

Register a notice of intent to adjust the fee under this 

paragraph and the amount of such adjustment; 

(II) provides a period of not less than 30 days following 

publication of the notice described in subclause (I) for public comment and consultation with the Committee on Finance of the Senate and the Committee on Ways and 

Means of the House of Representatives regarding the proposed adjustment and the methodology used to determine 

such adjustment; 


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77 

(III) upon the expiration of the period provided under 

subclause (II), notifies such committees in writing regarding the final determination to adjust the fee, the amount 

of such adjustment, and the methodology used to determine such adjustment; and 

(IV) upon the expiration of the 15-day period following 

the written notification described in subclause (III), submits for publication in the Federal Register notice of the 

final determination regarding the adjustment of the fee. 

(iv) The 15-day period referred to in clause (iii)(IV) shall be 

computed by excluding— 

(I) the days on which 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 subclause (I), when either House is not in session. 

(v) An adjustment made under this subparagraph shall become effective with respect to formal entries and releases made 

on or after the 15th calendar day after the date of publication 

of the notice described in clause (iii)(IV) and shall remain in 

effect until adjusted under this subparagraph. 

(C) Any fee charged under this paragraph, whether or not 

adjusted under subparagraph (B), is subject to the limitations 

in subsection (b)(8)(A). 

(10) For the processing of merchandise that is informally entered or released, other than at— 

(A) a centralized hub facility, 

(B) an express consignment carrier facility, or 

(C) a small airport or other facility to which section 236 

of the Trade and Tariff Act of 1984 applies, if more than 

25,000 informal entries were cleared through such airport 

or facility during the fiscal year preceding such entry or 

release, a fee of— 

(i) $2 if the entry or release is automated and not 

prepared by customs personnel; 

(ii) $6 if the entry or release is manual and not prepared by customs personnel; or 

(iii) $9 if the entry or release, whether automated or 

manual, is prepared by customs personnel. 

For provisions relating to the informal entry or release of 

merchandise at facilities referred to in subparagraphs (A), 

(B), and (C), see subsection (b)(9). 

(b) LIMITATIONS ON FEES.—(1)(A) Except as provided in subsection (a)(5)(B) of this section, no fee may be charged under subsection (a) of this section for customs services provided in connection with— 

(i) the arrival of any passenger whose journey— 

(I) originated in a territory or possession of the United 

States; or 

(II) originated in the United States and was limited to 

territories and possessions of the United States; 

(ii) the arrival of any railroad car the journey of which originates and terminates in the same country, but only if no passengers board or disembark from the train and no cargo is 

loaded or unloaded from such car while the car is within any 


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78 

country other than the country in which such car originates 

and terminates; 

(iii) the arrival of a ferry, except for a ferry whose operations 

begin on or after August 1, 1999, and that operates south of 

27 degrees latitude and east of 89 degrees longitude; or 

(iv) the arrival of any passenger on board a commercial vessel traveling only between ports which are within the customs 

territory of the United States. 

(B) The exemption provided for in subparagraph (A) shall not 

apply in the case of the arrival of any passenger on board a commercial vessel whose journey originates and terminates at the 

same place in the United States if there are no intervening stops. 

(C) The exemption provided for in subparagraph (A)(i) shall not 

apply to fiscal years 1994, 1995, 1996, and 1997. 

(2) No fee may be charged under subsection (a)(2) for the arrival 

of a commercial truck during any calendar year after a total of 

$100 in fees has been paid to the Secretary of the Treasury for the 

provision of customs services for all arrivals of such commercial 

truck during such calendar year. 

(3) No fee may be charged under subsection (a)(3) for the arrival 

of a railroad car whether passenger or freight during any calendar 

year after a total of $100 in fees has been paid to the Secretary 

of the Treasury for the provision of customs services for all arrivals 

of such passenger or freight rail car during such calendar year. 

(4)(A) No fee may be charged under subsection (a)(5) with respect 

to the arrival of any passenger— 

(i) who is in transit to a destination outside the customs territory of the United States, and 

(ii) for whom customs inspectional services are not provided. 

(B) In the case of a commercial vessel making a single voyage involving 2 or more United States ports with respect to which the 

passengers would otherwise be charged a fee pursuant to subsection (a)(5), such fee shall be charged only 1 time for each passenger. 

(5) No fee may be charged under subsection (a)(1) for the arrival 

of— 

(A) a vessel during a calendar year after a total of $5,955 in 

fees charged under paragraph (1) or (8) of subsection (a) has 

been paid to the Secretary of the Treasury for the provision of 

customs services for all arrivals of such vessel during such calendar year, 

(B) any vessel which, at the time of the arrival, is being used 

solely as a tugboat, or 

(C) any barge or other bulk carrier from Canada or Mexico. 

(6) No fee may be charged under subsection (a)(8) for the arrival 

of a barge or other bulk carrier during a calendar year after a total 

of $1,500 in fees charged under paragraph (1) or (8) of subsection 

(a) has been paid to the Secretary of the Treasury for the provision 

of customs services for all arrivals of such barge or other bulk carrier during such calendar year. 

(7) No fee may be charged under paragraph (2), (3), or (4) of subsection (a) for the arrival of any— 

(A) commercial truck, 

(B) railroad car, or 

(C) private vessel, 


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79 

that is being transported, at the time of the arrival, by any vessel 

that is not a ferry. 

(8)(A)(i) Subject to clause (ii), the fee charged under subsection 

(a)(9) for the formal entry or release of merchandise may not exceed $485 or be less than $25, unless adjusted pursuant to subsection (a)(9)(B). 

(ii) A surcharge of $3 shall be added to the fee determined after 

application of clause (i) for any manual entry or release of merchandise. 

(B) No fee may be charged under subsection (a) (9) or (10) for the 

processing of any article that is— 

(i) provided for under any item in chapter 98 of the Harmonized Tariff Schedule of the United States, except subheading 9802.00.60 or 9802.00.80, 

(ii) a product of an insular possession of the United States, 

or 

(iii) a product of any country listed in subdivision (c)(ii)(B) or 

(c)(v) of general note 3 to such Schedule. 

(C) For purposes of applying subsection (a) (9) or (10)— 

(i) expenses incurred by the Secretary of the Treasury in the 

processing of merchandise do not include costs incurred in— 

(I) air passenger processing, 

(II) export control, or 

(III) international affairs, and 

(ii) any reference to a manual formal or informal entry or release includes any entry or release filed by a broker or importer that requires the inputting of cargo selectivity data into 

the Automated Commercial System by customs personnel, except when— 

(I) the broker or importer is certified as an ABI cargo release filer under the Automated Commercial System at 

any port within the United States, or 

(II) the entry or release is filed at ports prior to the full 

implementation of the cargo selectivity data system by the 

Customs Service at such ports. 

(D) The fee charged under subsection (a)(9) or (10) with respect 

to the processing of merchandise shall— 

(i) be paid by the importer of record of the merchandise; 

(ii) except as otherwise provided in this paragraph, be based 

on the value of the merchandise as determined under section 

402 of the Tariff Act of 1930; 

(iii) in the case of merchandise classified under subheading 

9802.00.60 of the Harmonized Tariff Schedule of the United 

States, be applied to the value of the foreign repairs or alterations to the merchandise; 

(iv) in the case of merchandise classified under heading 

9802.00.80 of such Schedule, be applied to the full value of the 

merchandise, less the cost or value of the component United 

States products; 

(v) in the case of agricultural products of the United States 

that are processed and packed in a foreign trade zone, be applied only to the value of material used to make the container 

for such merchandise, if such merchandise is subject to entry 

and the container is of a kind normally used for packing such 

merchandise; and 


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80 

(vi) in the case of merchandise entered from a foreign trade 

zone (other than merchandise to which clause (v) applies), be 

applied only to the value of the privileged or nonprivileged foreign status merchandise under section 3 of the Act of June 18, 

1934 (commonly known as the Foreign Trade Zones Act, 19 

U.S.C. 81c). 

With respect to merchandise that is classified under subheading 

9802.00.60 or heading 9802.00.80 of such Schedule and is duty-free, 

the Secretary may collect the fee charged on the processing of the 

merchandise under subsection (a) (9) or (10) on the basis of aggregate data derived from financial and manufacturing reports used 

by the importer in the normal course of business, rather than on 

the basis of entry-by-entry accounting. 

(E) For purposes of subsection (a) (9) and (10), merchandise is 

entered or released, as the case may be, if the merchandise is— 

(i) permitted or released under section 448(b) of the Tariff 

Act of 1930, 

(ii) entered or released from customs custody under section 

484(a)(1)(A) of the Tariff Act of 1930, or 

(iii) withdrawn from warehouse for consumption. 

(9)(A) With respect to the processing of letters, documents, 

records, shipments, merchandise, or any other item that is valued 

at an amount that is $2,000 or less (or such higher amount as the 

Secretary of the Treasury may set by regulation pursuant to section 498 of the Tariff Act of 1930), except such items entered for 

transportation and exportation or immediate exportation at a centralized hub facility, an express consignment carrier facility, or a 

small airport or other facility, the following reimbursements and 

payments are required: 

(i) In the case of a small airport or other facility— 

(I) the reimbursement which such facility is required to 

make during the fiscal year under section 9701 of title 31, 

United States Code or section 236 of the Trade and Tariff 

Act of 1984; and 

(II) an annual payment by the facility to the Secretary 

of the Treasury, which is in lieu of the payment of fees 

under subsection (a)(10) for such fiscal year, in an amount 

equal to the reimbursement under subclause (I). 

(ii) Notwithstanding subsection (e)(6) and subject to the provisions of subparagraph (B), in the case of an express consignment carrier facility or centralized hub facility— 

(I) $.66 per individual airway bill or bill of lading; and 

(II) if the merchandise is formally entered, the fee provided for in subsection (a)(9), if applicable. 

(B)(i) Beginning in fiscal year 2004, the Secretary of the Treasury may adjust (not more than once per fiscal year) the amount described in subparagraph (A)(ii) to an amount that is not less than 

$.35 and not more than $1.00 per individual airway bill or bill of 

lading. The Secretary shall provide notice in the Federal Register 

of a proposed adjustment under the preceding sentence and the 

reasons therefor and shall allow for public comment on the proposed adjustment. 

(ii) Notwithstanding section 451 of the Tariff Act of 

1930, the payment required by subparagraph (A)(ii) (I) or 

(II) shall be the only payment required for reimbursement 


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81 

of the Customs Service in connection with the processing 

of an individual airway bill or bill of lading in accordance 

with such subparagraph and for providing services at express consignment carrier facilities or centralized hub facilities, except that the Customs Service may require such 

facilities to cover expenses of the Customs Service for adequate office space, equipment, furnishings, supplies, and 

security. 

(iii)(I) The payment required by subparagraph (A)(ii) and 

clause (ii) of this subparagraph shall be paid on a quarterly basis by the carrier using the facility to the Customs 

Service in accordance with regulations prescribed by the 

Secretary of the Treasury. 

(II) 50 percent of the amount of payments received 

under subparagraph (A)(ii) and clause (ii) of this subparagraph shall, in accordance with section 524 of the Tariff 

Act of 1930, be deposited in the Customs User Fee Account 

and shall be used to directly reimburse each appropriation 

for the amount paid out of that appropriation for the costs 

incurred in providing services to express consignment carrier facilities or centralized hub facilities. Amounts deposited in accordance with the preceding sentence shall be 

available until expended for the provision of customs services to express consignment carrier facilities or centralized 

hub facilities. 

(III) Notwithstanding section 524 of the Tariff Act of 

1930, the remaining 50 percent of the amount of payments 

received under subparagraph (A)(ii) and clause (ii) of this 

subparagraph shall be paid to the Secretary of the Treasury, which is in lieu of the payment of fees under subsection (a)(10) of this section. 

(C) For purposes of this paragraph: 

(i) The terms ‘‘centralized hub facility’’ and ‘‘express consignment carrier facility’’ have the respective meanings that are 

applied to such terms in part 128 of chapter I of title 19, Code 

of Federal Regulations. Nothing in this paragraph shall be construed as prohibiting the Secretary of the Treasury from processing merchandise that is informally entered or released at 

any centralized hub facility or express consignment carrier facility during the normal operating hours of the Customs Service, subject to reimbursement and payment under subparagraph (A). 

(ii) The term ‘‘small airport or other facility’’ means any airport or facility to which section 236 of the Trade and Tariff Act 

of 1984 applies, if more than 25,000 informal entries were 

cleared through such airport or facility during the preceding 

fiscal year. 

(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 Implementation Act of 1988) when the United States-Canada Free-Trade 

Agreement is in force shall be in accordance with article 403 of that 

Agreement. 


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82 

(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. 

(11) No fee may be charged under subsection (a) (9) or (10) with 

respect to products of Israel if an exemption with respect to the fee 

is implemented under section 112 of the Customs and Trade Act 

of 1990. 

(12) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Chile Free Trade Agreement Implementation 

Act. 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. 

(13) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Singapore Free Trade Agreement Implementation Act. 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. 

(14) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States-Australia Free Trade Agreement Implementation Act. 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. 

(15) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the Dominican Republic-Central America-United States Free 

Trade Agreement Implementation Act. 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. 

(16) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Bahrain Free Trade Agreement Implementation Act. 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. 

(17) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Oman Free Trade Agreement Implementation 

Act. Any service for which an exemption from such fee is provided 


SSpencer on DSK4SPTVN1PROD with REPORTS
83 

by reason of this paragraph may not be funded with money contained in the Customs User Fee Account. 

(18) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States-Peru Trade Promotion Agreement Implementation Act. 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. 

(19) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States–Korea Free Trade Agreement Implementation 

Act. 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. 

(20) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States–Colombia Trade Promotion Agreement Implementation Act. 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. 

(21) No fee may be charged under subsection (a)(9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States–Panama Trade Promotion Agreement Implementation Act. 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. 

(c) DEFINITIONS.—For purposes of this section— 

(1) The term ‘‘ferry’’ means any vessel which is being used— 

(A) to provide transportation only between places that 

are no more than 300 miles apart, and 

(B) to transport only— 

(i) passengers, or 

(ii) vehicles, or railroad cars, which are being used, 

or have been used, in transporting passengers or 

goods. 

(2) The term ‘‘arrival’’ means arrival at a port of entry in the 

customs territory of the United States. 

(3) The term ‘‘customs territory of the United States’’ has the 

meaning given to such term by general note 2 of the Harmonized Tariff Schedule of the United States. 

(4) The term ‘‘customs broker permit’’ means a permit issued 

under section 641(c) of the Tariff Act of 1930 (19 U.S.C. 

1641(c)). 

(5) The term ‘‘barge or other bulk carrier’’ means any vessel 

which— 

(A) is not self-propelled, or 

(B) transports fungible goods that are not packaged in 

any form. 

(d) COLLECTION.—(1) Each person that issues a document or ticket to an individual for transportation by a commercial vessel or 

commercial aircraft into the customs territory of the United States 

shall— 

(A) collect from that individual the fee charged under subsection (a)(5) at the time the document or ticket is issued; and 


SSpencer on DSK4SPTVN1PROD with REPORTS
84 

(B) separately identify on that document or ticket the fee 

charged under subsection (a)(5) as a Federal inspection fee. 

(2) If— 

(A) a document or ticket for transportation of a passenger 

into the customs territory of the United States is issued in a 

foreign country; and 

(B) the fee charged under subsection (a)(5) is not collected at 

the time such document or ticket is issued; 

the person providing transportation to such passenger shall collect 

such fee at the time such passenger departs from the customs territory of the United States and shall provide such passenger a receipt for the payment of such fee. 

(3) The person who collects fees under paragraph (1) or (2) shall 

remit those fees to the Secretary of the Treasury at any time before 

the date that is 31 days after the close of the calendar quarter in 

which the fees are collected. 

(4)(A) Notice of the date on which payment of the fee imposed by 

subsection (a)(7) is due shall be published by the Secretary of the 

Treasury in the Federal Register by no later than the date that is 

60 days before such due date. 

(B) A customs broker permit may be revoked or suspended for 

nonpayment of the fee imposed by subsection (a)(7) only if notice 

of the date on which payment of such fee is due was published in 

the Federal Register at least 60 days before such due date. 

(C) The customs broker’s license issued under section 641(b) of 

the Tariff Act of 1930 (19 U.S.C. 1641(b)) may not be revoked or 

suspended merely by reason of nonpayment of the fee imposed 

under subsection (a)(7). 

(e) PROVISION OF CUSTOMS SERVICES.— 

(1) Notwithstanding section 451 of the Tariff Act of 1930 (19 

U.S.C. 1451) or any other provision of law (other than paragraph 

(2)), the customs services required to be provided to passengers 

upon arrival in the United States shall be adequately provided in 

connection with scheduled airline flights at customs serviced airports when needed and at no cost (other than the fees imposed 

under subsection (a)) to airlines and airline passengers. 

(2)(A) This subsection shall not apply with respect to any airport 

to which section 236 of the Trade and Tariff Act of 1984 (19 U.S.C. 

58b) applies. 

(B) Subparagraph (C) of paragraph (6) shall not apply with respect to any foreign trade zone or subzone that is located at, or in 

the vicinity of, an airport to which section 236 of the Trade and 

Tariff Act of 1984 applies. 

(3) Notwithstanding section 451 of the Tariff Act of 1930 (19 

U.S.C. 1451) or any other provision of law— 

(A) the customs services required to be provided to passengers upon arrival in the United States shall be adequately 

provided in connection with scheduled airline flights when 

needed at places located outside the customs territory of the 

United States at which a customs officer is stationed for the 

purpose of providing such customs services, and 

(B) other than the fees imposed under subsection (a), the airlines and airline passengers shall not be required to reimburse 

the Secretary of the Treasury for the costs of providing overtime customs inspectional services at such places. 


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85 

(4) Notwithstanding any other provision of law, all customs services (including, but not limited to, normal and overtime clearance 

and preclearance services) shall be adequately provided, when requested, for— 

(A) the clearance of any commercial vessel, vehicle, or aircraft or its passengers, crew, stores, material, or cargo arriving, departing, or transiting the United States; 

(B) the preclearance at any customs facility outside the 

United States of any commercial vessel, vehicle or aircraft or 

its passengers, crew, stores, material, or cargo; and 

(C) the inspection or release of commercial cargo or other 

commercial shipments being entered into, or withdrawn from, 

the customs territory of the United States. 

(5) For purposes of this subsection, customs services shall be 

treated as being ‘‘adequately provided’’ if such of those services that 

are necessary to meet the needs of parties subject to customs inspection are provided in a timely manner taking into account factors such as— 

(A) the unavoidability of weather, mechanical, and other 

delays; 

(B) the necessity for prompt and efficient passenger and baggage clearance; 

(C) the perishability of cargo; 

(D) the desirability or unavoidability of late night and early 

morning arrivals from various time zones; 

(E) the availability (in accordance with regulations prescribed under subsection (g)(2)) of customs personnel and resources; and 

(F) the need for specific enforcement checks. 

(6) Notwithstanding any other provision of law except paragraph 

(2), during any period when fees are authorized under subsection 

(a), no charges, other than such fees, may be collected— 

(A) for any— 

(i) cargo inspection, clearance, or other customs activity, 

expense, or service performed (regardless whether performed outside of normal business hours on an overtime 

basis), or 

(ii) customs personnel provided, 

in connection with the arrival or departure of any commercial 

vessel, vehicle, or aircraft, or its passengers, crew, stores, material, or cargo, in the United States; 

(B) for any preclearance or other customs activity, expense, 

or service performed, and any customs personnel provided, outside the United States in connection with the departure of any 

commercial vessel, vehicle, or aircraft, or its passengers, crew, 

stores, material, or cargo, for the United States; or 

(C) in connection with— 

(i) the activation or operation (including Customs Service supervision) of any foreign trade zone or subzone established under the Act of June 18, 1934 (commonly known 

as the Foreign Trade Zones Act, 19 U.S.C. 81a et seq.), or 

(ii) the designation or operation (including Customs 

Service supervision) of any bonded warehouse under section 555 of the Tariff Act of 1930 (19 U.S.C. 1555). 


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86 

(f) DISPOSITION OF FEES.—(1) 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— 

(A) the portion of such fees that is required under paragraph 

(3) for the direct reimbursement of appropriations, and 

(B) amounts deposited into the Customs Commercial and 

Homeland Security Automation Account under paragraph (4). 

(2) Except as otherwise provided in this subsection, all funds in 

the Customs User Fee Account shall be available, to the extent provided for in appropriations Acts, to pay the costs (other than costs 

for which direct reimbursement under paragraph (3) is required) 

incurred by the United States Customs Service in conducting customs revenue functions as defined in section 415 of the Homeland 

Security Act of 2002 (other than functions performed by the Office 

of International Affairs referred to in section 415(8) of that Act), 

and for automation (including the Automation Commercial Environment computer system), and for no other purpose. To the extent 

that funds in the Customs User Fee Account are insufficient to pay 

the costs of such customs revenue functions, customs duties in an 

amount equal to the amount of such insufficiency shall be available, to the extent provided for in appropriations Acts, to pay the 

costs of such customs revenue functions in the amount of such insufficiency, and shall be available for no other purpose. The provisions of the first and second sentences of this paragraph specifying 

the purposes for which amounts in the Customs User Fee Account 

may be made available shall not be superseded except by a provision of law which specifically modifies or supersedes such provisions. So long as there is a surplus of funds in the Customs User 

Fee Account, the Secretary of the Treasury may not reduce personnel staffing levels for providing commercial clearance and 

preclearance services. 

(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 the fees under subsection (a) (9) and (10) and the excess fees determined by the Secretary under paragraph (4)), each 

appropriation for the amount paid out of that appropriation for the 

costs incurred by the Secretary— 

(i) in— 

(I) paying overtime compensation under section 5(a) of 

the Act of February 13, 1911, 

(II) paying premium pay under section 5(b) of the Act of 

February 13, 1911, but the amount for which reimbursement may be made under this subclause may not, for any 

fiscal year, exceed the difference between the total cost of 

all the premium pay for such year calculated under section 

5(b) and the cost of the night and holiday premium pay 

that the Customs Service would have incurred for the 

same inspectional work on the day before the effective date 

of section 13813 of the Omnibus Budget Reconciliation Act 

of 1993, 


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87 

(III) paying agency contributions to the Civil Service Retirement and Disability Fund to match deductions from 

the overtime compensation paid under subclause (I), 

(IV) providing all preclearance services for which the recipients of such services are not required to reimburse the 

Secretary of the Treasury, and 

(V) paying foreign language proficiency awards under 

section 13812(b) of the Omnibus Budget Reconciliation Act 

of 1993, 

(ii) to the extent funds remain available after making reimbursements under clause (i), in providing salaries for full-time 

and part-time inspectional personnel and equipment that enhance customs services for those persons or entities that are 

required to pay fees under paragraphs (1) through (8) of subsection (a) (distributed on a basis proportionate to the fees collected under paragraphs (1) through (8) of subsection (a), and 

(iii) to the extent funds remain available after making reimbursements under clause (ii), in providing salaries for up to 50 

full-time equivalent inspectional positions to provide 

preclearance services. 

The transfer of funds required under subparagraph (C)(iii) has priority over reimbursements under this subparagraph to carry out 

subclauses (II), (III), (IV), and (V) of clause (i). Funds described in 

clause (ii) shall only be available to reimburse costs in excess of the 

highest amount appropriated for such costs during the period beginning with fiscal year 1990 and ending with the current fiscal 

year. 

(B) Reimbursement of appropriations under this paragraph— 

(i) shall be subject to apportionment or similar administrative practices; 

(ii) shall be made at least quarterly; and 

(iii) to the extent necessary, may be made on the basis of estimates made by the Secretary of the Treasury and adjustments shall be made in subsequent reimbursements to the extent that the estimates were in excess of, or less than, the 

amounts required to be reimbursed. 

(C)(i) For fiscal year 1991 and subsequent fiscal years, the 

amount required to reimburse costs described in subparagraph 

(A)(i) shall be projected from actual requirements, and only the excess of collections over such projected costs for such fiscal year 

shall be used as provided in subparagraph (A)(ii). 

(ii) The excess of collections over inspectional overtime and 

preclearance costs (under subparagraph (A)(i)) reimbursed for fiscal 

years 1989 and 1990 shall be available in fiscal year 1991 and subsequent fiscal years for the purposes described in subparagraph 

(A)(ii), except that $30,000,000 of such excess shall remain without 

fiscal year limitation in a contingency fund and, in any fiscal year 

in which receipts are insufficient to cover the costs described in 

subparagraph (A) (i) and (ii), shall be used for— 

(I) the costs of providing the services described in subparagraph (A)(i), and 

(II) after the costs described in subclause (I) are paid, the 

costs of providing the personnel and equipment described in 

subparagraph (A)(ii) at the preceding fiscal year level. 


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(iii) For each fiscal year, the Secretary of the Treasury shall calculate the difference between— 

(I) the estimated cost for overtime compensation that would 

have been incurred during that fiscal year for inspectional 

services if section 5 of the Act of February 13, 1911 (19 U.S.C. 

261 and 267), as in effect before the enactment of section 

13811 of the Omnibus Budget Reconciliation Act of 1993, had 

governed such costs, and 

(II) the actual cost for overtime compensation, premium pay, 

and agency retirement contributions that is incurred during 

that fiscal year in regard to inspectional services under section 

5 of the Act of February 13, 1911, as amended by section 13811 

of the Omnibus Budget Reconciliation Act of 1993, and under 

section 8331(3) of title 5, United States Code, as amended by 

section 13812(a)(1) of such Act of 1993, plus the actual cost 

that is incurred during that fiscal year for foreign language 

proficiency awards under section 13812(b) of such Act of 1993, 

and shall transfer from the Customs User Fee Account to the General Fund of the Treasury an amount equal to the difference calculated under this clause, or $18,000,000, whichever amount is 

less. Transfers shall be made under this clause at least quarterly 

and on the basis of estimates to the same extent as are reimbursements under subparagraph (B)(iii). 

(D) Nothing in this paragraph shall be construed to preclude the 

use of appropriated funds, from sources other than the fees collected under subsection (a), to pay the costs set forth in clauses (i), 

(ii), and (iii) of subparagraph (A). 

(4)(A) There is created within the general fund of the Treasury 

a separate account that shall be known as the ‘‘Customs Commercial and Homeland Security Automation Account’’. In each of fiscal 

years 2003, 2004, and 2005 there shall be deposited into the Account from fees collected under subsection (a)(9)(A), $350,000,000. 

(B) There is authorized to be appropriated from the Account in 

fiscal years 2003 through 2005 such amounts as are available in 

that Account for the development, establishment, and implementation of the Automated Commercial Environment computer system 

for the processing of merchandise that is entered or released and 

for other purposes related to the functions of the Department of 

Homeland Security. Amounts appropriated pursuant to this subparagraph are authorized to remain available until expended. 

(C) In adjusting the fee imposed by subsection (a)(9)(A) for fiscal 

year 2006, the Secretary of the Treasury shall reduce the amount 

estimated to be collected in fiscal year 2006 by the amount by 

which total fees deposited to the Account during fiscal years 2003, 

2004, and 2005 exceed total appropriations from that Account. 

(5) Of the amounts collected in fiscal year 1999 under paragraphs 

(9) and (10) of subsection (a), $50,000,000 shall be available to the 

Customs Service, subject to appropriations Acts, for automated 

commercial systems. Amounts made available under this paragraph shall remain available until expended. 

(g) REGULATIONS AND ENFORCEMENT.—(1) 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) 


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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) 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. 

(h) CONFORMING AMENDMENTS.—(1) Subsection (i) of section 305 

of the Rail Passenger Service Act (45 U.S.C. 545(i)) is amended by 

striking out the last sentence thereof. 

(2) Subsection (e) of section 53 of the Airport and Airway Development Act of 1970 (49 U.S.C. 1741(e)) is repealed. 

(i) EFFECT ON OTHER AUTHORITY.—Except with respect to customs services for which fees are imposed under subsection (a), 

nothing in this section shall be construed as affecting the authority 

of the Secretary of the Treasury to charge fees under section 214(b) 

of the Customs Procedural Reform and Simplification Act of 1978 

(19 U.S.C. 58a). 

(j) EFFECTIVE DATES.—(1) Except as otherwise provided in this 

subsection, the provisions of this section, and the amendments and 

repeals made by this section, shall apply with respect to customs 

services rendered after the date that is 90 days after the date of 

enactment of this Act. 

(2) Fees may be charged under subsection (a)(5) only with respect 

to customs services rendered in regard to arriving passengers using 

transportation for which documents or tickets were issued after the 

date that is 90 days after such date of enactment. 

(3)(A) Fees may not be charged under paragraphs (9) and (10) of 

subsection (a) after September 30, 2024. 

(B)(i) Subject to clause (ii), Fees may not be charged under paragraphs (1) through (8) of subsection (a) after September 30, 2024. 

(ii) In fiscal year 2006 and in each succeeding fiscal year for 

which fees under paragraphs (1) through (8) of subsection (a) are 

authorized— 

(I) the Secretary of the Treasury shall charge fees under 

each such paragraph in amounts that are reasonably related to 

the costs of providing customs services in connection with the 

activity or item for which the fee is charged under such paragraph, except that in no case may the fee charged under any 

such paragraph exceed by more than 10 percent the amount 

otherwise prescribed by such paragraph; 


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(II) the amount of fees collected under such paragraphs may 

not exceed, in the aggregate, the amounts paid in that fiscal 

year for the costs described in subsection (f)(3)(A) incurred in 

providing customs services in connection with the activity or 

item for which the fees are charged under such paragraphs; 

(III) a fee may not be collected under any such paragraph except to the extent such fee will be expended to pay the costs 

described in subsection (f)(3)(A) incurred in providing customs 

services in connection with the activity or item for which the 

fee is charged under such paragraph; and 

(IV) any fee collected under any such paragraph shall be 

available for expenditure only to pay the costs described in 

subsection (f)(3)(A) incurred in providing customs services in 

connection with the activity or item for which the fee is 

charged under such paragraph. 

(k) ADVISORY COMMITTEE.—The Commissioner of Customs shall 

establish an advisory committee whose membership shall consist of 

representatives from the airline, cruise ship, and other transportation industries who may be subject to fees under subsection (a). 

The advisory committee shall not be subject to termination under 

section 14 of the Federal Advisory Committee Act. The advisory 

committee shall meet on a periodic basis and shall advise the Commissioner on issues related to the performance of the inspectional 

services of the United States Customs Service. Such advice shall 

include, but not be limited to, such issues as the time periods during which such services should be performed, the proper number 

and deployment of inspection officers, the level of fees, and the appropriateness of any proposed fee. The Commissioner shall give 

consideration to the views of the advisory committee in the exercise 

of his or her duties. 

* * * * * * * 

SECTION 503 OF THE UNITED STATES–KOREA FREE 

TRADE AGREEMENT IMPLEMENTATION ACT 

SEC. 503. RATE FOR MERCHANDISE PROCESSING FEES. 

For the period beginning on December 1, 2015, and ending on 

June 30, 2021, section 13031(a)(9) of the Consolidated Omnibus 

Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)) shall be applied and administered— 

(1) in subparagraph (A), by substituting ‘‘0.3464’’ for ‘‘0.21’’; 

and 

(2) in subparagraph (B)(i), by substituting ‘‘0.3464’’ for 

‘‘0.21’’. 

B. CHANGES IN EXISTING LAW PROPOSED BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of 

the House of Representatives, changes in existing law proposed 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): 


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91 

TRADE ACT OF 1974 

* * * * * * * 

TITLE V—GENERALIZED SYSTEM OF 

PREFERENCES 

* * * * * * * 

SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES. 

(a) ELIGIBLE ARTICLES.— 

(1) DESIGNATION.— 

(A) IN GENERAL.—Except as provided in subsection (b), 

the President is authorized to designate articles as eligible 

articles from all beneficiary developing countries for purposes of this title by Executive order or Presidential proclamation after receiving the advice of the International 

Trade Commission in accordance with subsection (e). 

(B) LEAST-DEVELOPED BENEFICIARY DEVELOPING COUNTRIES.—Except for articles described in subparagraphs (A), 

(B), and (E) of subsection (b)(1) and articles described in 

paragraphs (2) and (3) of subsection (b), the President 

may, in carrying out section 502(d)(1) and subsection (c)(1) 

of this section, designate articles as eligible articles only 

for countries designated as least-developed beneficiary developing countries under section 502(a)(2) if, after receiving the advice of the International Trade Commission in 

accordance with subsection (e) of this section, the President determines that such articles are not import-sensitive 

in the context of imports from least-developed beneficiary 

developing countries. 

(C) THREE-YEAR RULE.—If, after receiving the advice of 

the International Trade Commission under subsection (e), 

an article has been formally considered for designation as 

an eligible article under this title and denied such designation, such article may not be reconsidered for such designation for a period of 3 years after such denial. 

(2) RULE OF ORIGIN.— 

(A) GENERAL RULE.—The duty-free treatment provided 

under this title shall apply to any eligible article which is 

the growth, product, or manufacture of a beneficiary developing country if— 

(i) that article is imported directly from a beneficiary developing country into the customs territory of 

the United States; and 

(ii) the sum of— 

(I) the cost or value of the materials produced in 

the beneficiary developing country or any two or 

more such countries that are members of the same 

association of countries and are treated as one 

country under section 507(2), plus 

(II) the direct costs of processing operations performed in such beneficiary developing country or 

such member countries, 


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is not less than 35 percent of the appraised value of 

such article at the time it is entered. 

(B) EXCLUSIONS.—An article shall not be treated as the 

growth, product, or manufacture of a beneficiary developing country by virtue of having merely undergone— 

(i) simple combining or packaging operations, or 

(ii) mere dilution with water or mere dilution with 

another substance that does not materially alter the 

characteristics of the article. 

(3) REGULATIONS.—The Secretary of the Treasury, after consulting with the United States Trade Representative, shall prescribe such regulations as may be necessary to carry out paragraph (2), including, but not limited to, regulations providing 

that, in order to be eligible for duty-free treatment under this 

title, an article— 

(A) must be wholly the growth, product, or manufacture 

of a beneficiary developing country, or 

(B) must be a new or different article of commerce which 

has been grown, produced, or manufactured in the beneficiary developing country. 

(b) ARTICLES THAT MAY NOT BE DESIGNATED AS ELIGIBLE ARTI- CLES.— 

(1) IMPORT SENSITIVE ARTICLES.—The President may not designate any article as an eligible article under subsection (a) if 

such article is within one of the following categories of importsensitive articles: 

(A) Except as provided in paragraph (4), textile and apparel articles which were not eligible articles for purposes 

of this title on January 1, 1994, as this title was in effect 

on such date. 

(B) Watches, except those watches entered after June 

30, 1989, that the President specifically determines, after 

public notice and comment, will not cause material injury 

to watch or watch band, strap, or bracelet manufacturing 

and assembly operations in the United States or the 

United States insular possessions. 

(C) Import-sensitive electronic articles. 

(D) Import-sensitive steel articles. 

(E) Footwear, handbags, luggage, flat goods, work 

gloves, and leather wearing apparel which were not eligible articles for purposes of this title on January 1, 1995, 

as this title was in effect on such date. 

(F) Import-sensitive semimanufactured and manufactured glass products. 

(G) Any other articles which the President determines to 

be import-sensitive in the context of the Generalized System of Preferences. 

(2) ARTICLES AGAINST WHICH OTHER ACTIONS TAKEN.—An article shall not be an eligible article for purposes of this title for 

any period during which such article is the subject of any action proclaimed pursuant to section 203 of this Act (19 U.S.C. 

2253) or section 232 or 351 of the Trade Expansion Act of 1962 

(19 U.S.C. 1862, 1981). 

(3) AGRICULTURAL PRODUCTS.—No quantity of an agricultural product subject to a tariff-rate quota that exceeds the inVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00092 Fmt 6659 Sfmt 6602 E:\HR\OC\HR101.XXX HR101

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quota quantity shall be eligible for duty-free treatment under 

this title. 

(4) CERTAIN HAND-KNOTTED OR HAND-WOVEN CARPETS.—Notwithstanding paragraph (1)(A), the President may designate as 

an eligible article or articles under subsection (a) carpets or 

rugs which are hand-loomed, hand-woven, hand-hooked, handtufted, or hand-knotted, and classifiable under subheading 

5701.10.16, 5701.10.40, 5701.90.10, 5701.90.20, 5702.10.90, 

5702.42.20, 5702.49.10, 5702.51.20, 5702.91.30, 5702.92.00, 

5702.99.10, 5703.10.00, 5703.20.10, or 5703.30.00 of the Harmonized Tariff Schedule of the United States. 

(5) CERTAIN COTTON ARTICLES.—Notwithstanding paragraph 

(3), the President may designate as an eligible article or articles 

under subsection (a)(1)(B) only for countries designated as 

least-developed beneficiary developing countries under section 

502(a)(2) cotton articles classifiable under subheading 

5201.00.18, 5201.00.28, 5201.00.38, 5202.99.30, or 5203.00.30 

of the Harmonized Tariff Schedule of the United States. 

(c) WITHDRAWAL, SUSPENSION, OR LIMITATION OF DUTY-FREE

TREATMENT; COMPETITIVE NEED LIMITATION.— 

(1) IN GENERAL.—The President may withdraw, suspend, or 

limit the application of the duty-free treatment accorded under 

this title with respect to any article, except that no rate of duty 

may be established with respect to any article pursuant to this 

subsection other than the rate which would apply but for this 

title. In taking any action under this subsection, the President 

shall consider the factors set forth in sections 501 and 502(c). 

(2) COMPETITIVE NEED LIMITATION.— (A) BASIS FOR WITHDRAWAL OF DUTY-FREE TREATMENT.— 

(i) IN GENERAL.—Except as provided in clause (ii) 

and subject to subsection (d), whenever the President 

determines that a beneficiary developing country has 

exported (directly or indirectly) to the United States 

during any calendar year beginning after December 

31, 1995— 

(I) a quantity of an eligible article having an appraised value in excess of the applicable amount 

for the calendar year, or 

(II) a quantity of an eligible article equal to or 

exceeding 50 percent of the appraised value of the 

total imports of that article into the United States 

during any calendar year, 

the President shall, not later than July 1 of the next 

calendar year, terminate the duty-free treatment for 

that article from that beneficiary developing country. 

(ii) ANNUAL ADJUSTMENT OF APPLICABLE AMOUNT.— 

For purposes of applying clause (i), the applicable 

amount is— 

(I) for 1996, $75,000,000, and 

(II) for each calendar year thereafter, an 

amount equal to the applicable amount in effect 

for the preceding calendar year plus $5,000,000. 

(B) COUNTRY DEFINED.—For purposes of this paragraph, 

the term ‘‘country’’ does not include an association of countries which is treated as one country under section 507(2), 


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94 

but does include a country which is a member of any such 

association. 

(C) REDESIGNATIONS.—A country which is no longer 

treated as a beneficiary developing country with respect to 

an eligible article by reason of subparagraph (A) may, subject to the considerations set forth in sections 501 and 502, 

be redesignated a beneficiary developing country with respect to such article if imports of such article from such 

country did not exceed the limitations in subparagraph (A) 

during the preceding calendar year. 

(D) LEAST-DEVELOPED BENEFICIARY DEVELOPING COUNTRIES AND BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Subparagraph (A) shall not apply to any least-developed beneficiary developing country or any beneficiary 

sub-Saharan African country. 

(E) ARTICLES NOT PRODUCED IN THE UNITED STATES EXCLUDED.—Subparagraph (A)(i)(II) shall not apply with respect to any eligible article if a like or directly competitive 

article was not produced in the United States on January 

1, 1995. 

(F) DE MINIMIS WAIVERS.— 

(i) IN GENERAL.—The President may disregard subparagraph (A)(i)(II) with respect to any eligible article 

from any beneficiary developing country if the aggregate appraised value of the imports of such article into 

the United States during the preceding calendar year 

does not exceed the applicable amount for such preceding calendar year. 

(ii) APPLICABLE AMOUNT.—For purposes of applying 

clause (i), the applicable amount is— 

(I) for calendar year 1996, $13,000,000, and 

(II) for each calendar year thereafter, an 

amount equal to the applicable amount in effect 

for the preceding calendar year plus $500,000. 

(d) WAIVER OF COMPETITIVE NEED LIMITATION.— 

(1) IN GENERAL.—The President may waive the application of 

subsection (c)(2) with respect to any eligible article of any beneficiary developing country if, before July 1 of the calendar 

year beginning after the calendar year for which a determination described in subsection (c)(2)(A) was made with respect to 

such eligible article, the President— 

(A) receives the advice of the International Trade Commission under section 332 of the Tariff Act of 1930 on 

whether any industry in the United States is likely to be 

adversely affected by such waiver, 

(B) determines, based on the considerations described in 

sections 501 and 502(c) and the advice described in subparagraph (A), that such waiver is in the national economic interest of the United States, and 

(C) publishes the determination described in subparagraph (B) in the Federal Register. 

(2) CONSIDERATIONS BY THE PRESIDENT.—In making any determination under paragraph (1), the President shall give great 

weight to— 


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(A) the extent to which the beneficiary developing country has assured the United States that such country will 

provide equitable and reasonable access to the markets 

and basic commodity resources of such country, and 

(B) the extent to which such country provides adequate 

and effective protection of intellectual property rights. 

(3) OTHER BASES FOR WAIVER.—The President may waive the 

application of subsection (c)(2) if, before July 1 of the calendar 

year beginning after the calendar year for which a determination described in subsection (c)(2) was made with respect to a 

beneficiary developing country, the President determines 

that— 

(A) there has been a historical preferential trade relationship between the United States and such country, 

(B) there is a treaty or trade agreement in force covering 

economic relations between such country and the United 

States, and 

(C) such country does not discriminate against, or impose unjustifiable or unreasonable barriers to, United 

States commerce, 

and the President publishes that determination in the Federal 

Register. 

(4) LIMITATIONS ON WAIVERS.— (A) IN GENERAL.—The President may not exercise the 

waiver authority under this subsection with respect to a 

quantity of an eligible article entered during any calendar 

year beginning after 1995, the aggregate appraised value 

of which equals or exceeds 30 percent of the aggregate appraised value of all articles that entered duty-free under 

this title during the preceding calendar year. 

(B) OTHER WAIVER LIMITS.—(i) The President may not 

exercise the waiver authority provided under this subsection with respect to a quantity of an eligible article entered during any calendar year beginning after 1995, the 

aggregate appraised value of which exceeds 15 percent of 

the aggregate appraised value of all articles that have entered duty-free under this title during the preceding calendar year from those beneficiary developing countries 

which for the preceding calendar year— 

(I) had a per capita gross national product (calculated on the basis of the best available information, 

including that of the International Bank for Reconstruction and Development) of $5,000 or more; or 

(II) had exported (either directly or indirectly) to the 

United States a quantity of articles that was duty-free 

under this title that had an aggregate appraised value 

of more than 10 percent of the aggregate appraised 

value of all articles that entered duty-free under this 

title during that year. 

(ii) Not later than July 1 of each year, the President 

should revoke any waiver that has then been in effect with 

respect to an article for 5 years or more if the beneficiary 

developing country has exported to the United States (directly or indirectly) during the preceding calendar year a 

quantity of the article— 


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(I) having an appraised value in excess of 1.5 times 

the applicable amount set forth in subsection 

(c)(2)(A)(ii) for that calendar year; or 

(II) exceeding 75 percent of the appraised value of 

the total imports of that article into the United States 

during that calendar year. 

(C) CALCULATION OF LIMITATIONS.—There shall be counted against the limitations imposed under subparagraphs 

(A) and (B) for any calendar year only that value of any 

eligible article of any country that— 

(i) entered duty-free under this title during such calendar year; and 

(ii) is in excess of the value of that article that 

would have been so entered during such calendar year 

if the limitations under subsection (c)(2)(A) applied. 

(5) EFFECTIVE PERIOD OF WAIVER.—Any waiver granted 

under this subsection shall remain in effect until the President 

determines that such waiver is no longer warranted due to 

changed circumstances. 

(e) INTERNATIONAL TRADE COMMISSION ADVICE.—Before designating articles as eligible articles under subsection (a)(1), the President shall publish and furnish the International Trade Commission 

with lists of articles which may be considered 

for designation as eligible articles for purposes of this title. The 

provisions of sections 131, 132, 133, and 134 shall be complied with 

as though action under section 501 and this section were action 

under section 123 to carry out a trade agreement entered into 

under section 123. 

(f) SPECIAL RULE CONCERNING PUERTO RICO.—No action under 

this title may affect any tariff duty imposed by the Legislature of 

Puerto Rico pursuant to section 319 of the Tariff Act of 1930 on coffee imported into Puerto Rico. 

* * * * * * * 

SEC. 505. DATE OF TERMINATION. 

No duty-free treatment provided under this title shall remain in 

effect after øJuly 31, 2013¿ December 31, 2017. 

* * * * * * * 

SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR 

CERTAIN BENEFITS. 

(a) AUTHORITY TO DESIGNATE.— 

(1) IN GENERAL.—Notwithstanding any other provision of 

law, the President is authorized to designate a country listed 

in section 107 of the African Growth and Opportunity Act as 

a beneficiary sub-Saharan African country eligible for the benefits described in subsection (b)— 

(A) if the President determines that the country meets 

the eligibility requirements set forth in section 104 of that 

Act, as such requirements are in effect on the date of the 

enactment of that Act; and 

(B) subject to the authority granted to the President 

under subsections (a), (d), and (e) of section 502, if the 

country otherwise meets the eligibility criteria set forth in 

section 502. 


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(2) MONITORING AND REVIEW OF CERTAIN COUNTRIES.—The 

President shall monitor, review, and report to Congress annually on the progress of each country listed in section 107 of the 

African Growth and Opportunity Act in meeting the requirements described in paragraph (1) in order to determine the 

current or potential eligibility of each country to be designated 

as a beneficiary sub-Saharan African country for purposes of 

this section. The President’s determinations, and explanations 

of such determinations, with specific analysis of the eligibility 

requirements described in paragraph (1)(A), shall be included 

in the annual report required by section 106 of the African 

Growth and Opportunity Act. 

(3) CONTINUING COMPLIANCE.—øIf the President¿ 

(A) IN GENERAL.—If the President determines that a beneficiary sub-Saharan African country is not making continual 

progress in meeting the requirements described in paragraph 

(1), the President shall terminate the designation of that country as a beneficiary sub-Saharan African country for purposes 

of this section, effective on January 1 of the year following the 

year in which such determination is made. 

(B) NOTIFICATION.—The President may not terminate the 

designation of a country as a beneficiary sub-Saharan African country under subparagraph (A) unless, at least 60 

days before the termination of such designation, the President notifies Congress and notifies the country of the President’s intention to terminate such designation, together 

with the considerations entering into the decision to terminate such designation. 

(b) PREFERENTIAL TARIFF TREATMENT FOR CERTAIN ARTICLES.— 

(1) IN GENERAL.—The President may provide duty-free treatment for any article described in section 503(b)(1)(B) through 

(G) that is the growth, product, or manufacture of a beneficiary 

sub-Saharan African country described in subsection (a), if, 

after receiving the advice of the International Trade Commission in accordance with section 503(e), the President determines that such article is not import-sensitive in the context 

of imports from beneficiary sub-Saharan African countries. 

(2) RULES OF ORIGIN.—The duty-free treatment provided 

under paragraph (1) shall apply to any article described in that 

paragraph that meets the requirements of section 503(a)(2), except that— 

(A) if the cost or value of materials produced in the customs territory of the United States is included with respect 

to that article, an amount not to exceed 15 percent of the 

appraised value of the article at the time it is entered that 

is attributed to such United States cost or value may be 

applied toward determining the percentage referred to in 

subparagraph (A) of section 503(a)(2); øand¿ 

(B) the cost or value of the materials included with respect to that article that are produced in one or more beneficiary sub-Saharan African countries or former beneficiary 

sub-Saharan African countries shall be applied in determining such percentageø.¿; and 

(C) the direct costs of processing operations performed in 

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tries or former beneficiary sub-Saharan African countries 

shall be applied in determining such percentage. 

(3) RULES OF ORIGIN UNDER THIS TITLE.—The exceptions set 

forth in subparagraphs (A), (B), and (C) of paragraph (2) shall 

also apply to any article described in section 503(a)(1) that is 

the growth, product, or manufacture of a beneficiary sub-Saharan African country for purposes of any determination to provide duty-free treatment with respect to such article. 

(c) WITHDRAWAL, SUSPENSION, OR LIMITATION OF PREFERENTIAL

TARIFF TREATMENT.— (1) IN GENERAL.—The President may withdraw, suspend, or 

limit the application of duty-free treatment provided for any article described in subsection (b)(1) of this section or section 112 

of the African Growth and Opportunity Act with respect to a 

beneficiary sub-Saharan African country if the President determines that withdrawing, suspending, or limiting such duty-free 

treatment would be more effective in promoting compliance by 

the country with the requirements described in subsection (a)(1) 

than terminating the designation of the country as a beneficiary 

sub-Saharan African country for purposes of this section. 

(2) NOTIFICATION.—The President may not withdraw, suspend, or limit the application of duty-free treatment under 

paragraph (1) unless, at least 60 days before such withdrawal, 

suspension, or limitation, the President notifies Congress and 

notifies the country of the President’s intention to withdraw, 

suspend, or limit such duty-free treatment, together with the 

considerations entering into the decision to terminate such designation. 

(d) REVIEW AND PUBLIC COMMENTS ON ELIGIBILITY REQUIREMENTS.— 

(1) IN GENERAL.—In carrying out subsection (a)(2), the President shall publish annually in the Federal Register a notice of 

review and request for public comments on whether beneficiary 

sub-Saharan African countries are meeting the eligibility requirements set forth in section 104 of the African Growth and 

Opportunity Act and the eligibility criteria set forth in section 

502 of this Act. 

(2) PUBLIC HEARING.—The United States Trade Representative shall, not later than 30 days after the date on which the 

President publishes the notice of review and request for public 

comments under paragraph (1)— 

(A) hold a public hearing on such review and request for 

public comments; and 

(B) publish in the Federal Register, before such hearing 

is held, notice of— 

(i) the time and place of such hearing; and 

(ii) the time and place at which such public comments will be accepted. 

(3) PETITION PROCESS.— (A) IN GENERAL.—Not later than 60 days after the date 

of the enactment of this subsection, the President shall establish a process to allow any interested person, at any 

time, to file a petition with the Office of the United States 

Trade Representative with respect to the compliance of any 

country listed in section 107 of the African Growth and OpVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00098 Fmt 6659 Sfmt 6603 E:\HR\OC\HR101.XXX HR101

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portunity Act with the eligibility requirements set forth in 

section 104 of such Act and the eligibility criteria set forth 

in section 502 of this Act. 

(B) USE OF PETITIONS.—The President shall take into account all petitions filed pursuant to subparagraph (A) in 

making determinations of compliance under subsections 

(a)(3)(A) and (c) and in preparing any reports required by 

this title as such reports apply with respect to beneficiary 

sub-Saharan African countries. 

(4) OUT-OF-CYCLE REVIEWS.— (A) IN GENERAL.—The President may, at any time, initiate an out-of-cycle review of whether a beneficiary sub-Saharan African country is making continual progress in 

meeting the requirements described in paragraph (1). The 

President shall give due consideration to petitions received 

under paragraph (3) in determining whether to initiate an 

out-of-cycle review under this subparagraph. 

(B) CONGRESSIONAL NOTIFICATION.—Before initiating an 

out-of-cycle review under subparagraph (A), the President 

shall notify and consult with Congress. 

(C) CONSEQUENCES OF REVIEW.—If, pursuant to an outof-cycle review conducted under subparagraph (A), the 

President determines that a beneficiary sub-Saharan African country does not meet the requirements set forth in section 104(a) of the African Growth and Opportunity Act (19 

U.S.C. 3703(a)), the President shall, subject to the requirements of subsections (a)(3)(B) and (c)(2), terminate the designation of the country as a beneficiary sub-Saharan African country or withdraw, suspend, or limit the application 

of duty-free treatment with respect to articles from the 

country. 

(D) REPORTS.—After each out-of-cycle review conducted 

under subparagraph (A) with respect to a country, the 

President shall submit to the Committee on Finance of the 

Senate and the Committee on Ways and Means of the 

House of Representatives a report on the review and any 

determination of the President to terminate the designation 

of the country as a beneficiary sub-Saharan African country or withdraw, suspend, or limit the application of dutyfree treatment with respect to articles from the country 

under subparagraph (C). 

(E) SENSE OF CONGRESS.—Recognizing that concerns 

have been raised about the compliance with section 104(a) 

of the African Growth and Opportunity Act (19 U.S.C. 

3703(a)) of some beneficiary sub-Saharan African countries, 

the President should initiate an out-of-cycle review under 

subparagraph (A) with respect to South Africa, the most developed of the beneficiary sub-Saharan African countries, 

and other beneficiary countries as appropriate, not later 

than 30 days after the date of the enactment of this subsection. 

ø(c)¿ (e) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES, ETC.— For purposes of this title— 

(1) the terms ‘‘beneficiary sub-Saharan African country’’ and 

‘‘beneficiary sub-Saharan African countries’’ mean a country or 


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100 

countries listed in section 107 of the African Growth and Opportunity Act that the President has determined is eligible 

under subsection (a) of this section. 

(2) the term ‘‘former beneficiary sub-Saharan African country’’ means a country that, after being designated as a beneficiary sub-Saharan African country under the African Growth 

and Opportunity Act, ceased to be designated as such a country by reason of its entering into a free trade agreement with 

the United States. 

SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN 

COUNTRIES. 

In the case of a beneficiary sub-Saharan African country, as defined in section 506A(c), duty-free treatment provided under this 

title shall remain in effect through øSeptember 30, 2015¿ September 30, 2025. 

* * * * * * * 

AFRICAN GROWTH AND OPPORTUNITY ACT 

* * * * * * * 

TITLE I—EXTENSION OF CERTAIN 

TRADE BENEFITS TO SUB-SAHARAN 

AFRICA 

Subtitle A—Trade Policy for Sub-Saharan 

Africa 

* * * * * * * 

SEC. 104. ELIGIBILITY REQUIREMENTS. 

ø(a) IN GENERAL.—¿ The President is authorized to designate a 

sub-Saharan African country as an eligible sub-Saharan African 

country if the President determines that the country— 

(1) has established, or is making continual progress toward 

establishing— 

(A) a market-based economy that protects private property rights, incorporates an open rules-based trading system, and minimizes government interference in the economy through measures such as price controls, subsidies, 

and government ownership of economic assets; 

(B) the rule of law, political pluralism, and the right to 

due process, a fair trial, and equal protection under the 

law; 

(C) the elimination of barriers to United States trade 

and investment, including by— 

(i) the provision of national treatment and measures 

to create an environment conducive to domestic and 

foreign investment; 

(ii) the protection of intellectual property; and 

(iii) the resolution of bilateral trade and investment 

disputes; 


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(D) economic policies to reduce poverty, increase the 

availability of health care and educational opportunities, 

expand physical infrastructure, promote the development 

of private enterprise, and encourage the formation of capital markets through micro-credit or other programs; 

(E) a system to combat corruption and bribery, such as 

signing and implementing the Convention on Combating 

Bribery of Foreign Public Officials in International Business Transactions; and 

(F) protection of internationally recognized worker 

rights, including the right of association, the right to organize and bargain collectively, a prohibition on the use of 

any form of forced or compulsory labor, a minimum age for 

the employment of children, and acceptable conditions of 

work with respect to minimum wages, hours of work, and 

occupational safety and health; 

(2) does not engage in activities that undermine United 

States national security or foreign policy interests; and 

(3) does not engage in gross violations of internationally recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to 

eliminate human rights violations and terrorist activities. 

ø(b) CONTINUING COMPLIANCE.—If the President determines that 

an eligible sub-Saharan African country is not making continual 

progress in meeting the requirements described in subsection 

(a)(1), the President shall terminate the designation of the country 

made pursuant to subsection (a).¿ 

* * * * * * * 

Subtitle B—Trade Benefits 

* * * * * * * 

SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL. 

(a) PREFERENTIAL TREATMENT.—Textile and apparel articles described in subsection (b) that are imported directly into the customs territory of the United States from a beneficiary sub-Saharan 

African country described in section 506A(c) of the Trade Act of 

1974, shall enter the United States free of duty and free of any 

quantitative limitations in accordance with the provisions set forth 

in subsection (b), if the country has satisfied the requirements set 

forth in section 113. 

(b) PRODUCTS COVERED.—Subject to subsection (c), the preferential treatment described in subsection (a) shall apply only to 

the following textile and apparel products: 

(1) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENE- FICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Apparel articles 

sewn or otherwise assembled in one or more beneficiary subSaharan African countries from fabrics wholly formed and cut, 

or from components knit-to-shape, in the United States from 

yarns wholly formed in the United States, or both (including 

fabrics not formed from yarns, if such fabrics are classifiable 

under heading 5602 or 5603 of the Harmonized Tariff Schedule 

of the United States and are wholly formed and cut in the 

United States) that are— 


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(A) entered under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States; or 

(B) entered under chapter 61 or 62 of the Harmonized 

Tariff Schedule of the United States, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the Harmonized Tariff Schedule of 

the United States but for the fact that the articles were 

embroidered or subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, 

garment-dyeing, screen printing, or other similar processes. 

(2) OTHER APPAREL ARTICLES ASSEMBLED IN ONE OR MORE

BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES.—Apparel articles sewn or otherwise assembled in one or more beneficiary 

sub-Saharan African countries with thread formed in the 

United States from fabrics wholly formed in the United States 

and cut in one or more beneficiary sub-Saharan African countries from yarns wholly formed in the United States, or from 

components knit-to-shape in the United States from yarns 

wholly formed in the United States, or both (including fabrics 

not formed from yarns, if such fabrics are classifiable under 

heading 5602 or 5603 of the Harmonized Tariff Schedule of the 

United States and are wholly formed in the United States). 

(3) APPAREL ARTICLES FROM REGIONAL FABRIC OR YARNS.— Apparel articles wholly assembled in one or more beneficiary 

sub-Saharan African countries from fabric wholly formed in 

one or more beneficiary sub-Saharan African countries from 

yarns originating in the United States or one or more beneficiary sub-Saharan African countries or former beneficiary 

sub-Saharan African countries, or both (including fabrics not 

formed from yarns, if such fabrics are classified under heading 

5602 or 5603 of the Harmonized Tariff Schedule of the United 

States and are wholly formed in one or more beneficiary subSaharan African countries), or from components knit-to-shape 

in one or more beneficiary sub-Saharan African countries from 

yarns originating in the United States or one or more beneficiary sub-Saharan African countries or former beneficiary 

sub-Saharan African countries, or both, or apparel articles 

wholly formed on seamless knitting machines in a beneficiary 

sub-Saharan African country from yarns originating in the 

United States or one or more beneficiary sub-Saharan African 

countries or former beneficiary sub-Saharan African countries, 

or both, whether or not the apparel articles are also made from 

any of the fabrics, fabric components formed, or components 

knit-to-shape described in paragraph (1) or (2) (unless the apparel articles are made exclusively from any of the fabrics, fabric components formed, or components knit-to-shape described 

in paragraph (1) or (2)), subject to the following: 

(A) LIMITATIONS ON BENEFITS.— (i) IN GENERAL.—Preferential treatment under this 

paragraph shall be extended in the 1-year period beginning October 1, 2003, and in each of the ø11 succeeding¿ 21 succeeding 1-year periods, to imports of 

apparel articles in an amount not to exceed the applicable percentage of the aggregate square meter 


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equivalents of all apparel articles imported into the 

United States in the preceding 12-month period for 

which data are available. 

(ii) APPLICABLE PERCENTAGE.—For purposes of this 

subparagraph, the term ‘‘applicable percentage’’ 

means— 

(I) 4.747 percent for the 1-year period beginning 

October 1, 2003, increased in each of the 5 succeeding 1-year periods by equal increments, so 

that for the 1-year period beginning October 1, 

2007, the applicable percentage does not exceed 7 

percent; and 

(II) for each succeeding 1-year period until 

øSeptember 30, 2015¿ September 30, 2025, not to 

exceed 7 percent. 

(B) SURGE MECHANISM.— 

(i) IMPORT MONITORING.—The Secretary of Commerce shall monitor imports of articles described in 

this paragraph on a monthly basis to determine if 

there has been a surge in imports of such articles. In 

order to permit public access to preliminary international trade data and to facilitate the early identification of potentially disruptive import surges, the Director of the Office of Management and Budget may 

grant an exception to the publication dates established 

for the release of data on United States international 

trade in covered articles, if the Director notifies Congress of the early release of the data. 

(ii) DETERMINATION OF DAMAGE OR THREAT THEREOF.—Whenever the Secretary of Commerce determines, based on the data described in clause (i), or 

pursuant to a written request made by an interested 

party, that there has been a surge in imports of an article described in this paragraph from a beneficiary 

sub-Saharan African country, the Secretary shall determine whether such article from such country is 

being imported in such increased quantities as to 

cause serious damage, or threat thereof, to the domestic industry producing a like or directly competitive article. If the Secretary’s determination is affirmative, 

the President shall suspend the duty-free treatment 

provided for such article under this paragraph. If the 

inquiry is initiated at the request of an interested 

party, the Secretary shall make the determination 

within 60 days after the date of the request. 

(iii) FACTORS TO CONSIDER.—In determining whether 

a domestic industry has been seriously damaged, or is 

threatened with serious damage, the Secretary shall 

examine the effect of the imports on relevant economic 

indicators such as domestic production, sales, market 

share, capacity utilization, inventories, employment, 

profits, exports, prices, and investment. 

(iv) PROCEDURE.— 

(I) INITIATION.—The Secretary of Commerce 

shall initiate an inquiry within 10 days after reVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00103 Fmt 6659 Sfmt 6601 E:\HR\OC\HR101.XXX HR101

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ceiving a written request and supporting information for an inquiry from an interested party. Notice of initiation of an inquiry shall be published 

in the Federal Register. 

(II) PARTICIPATION BY INTERESTED PARTIES.— The Secretary of Commerce shall establish procedures to ensure participation in the inquiry by interested parties. 

(III) NOTICE OF DETERMINATION.—The Secretary 

shall publish the determination described in 

clause (ii) in the Federal Register. 

(IV) INFORMATION AVAILABLE.—If relevant information is not available on the record or any party 

withholds information that has been requested by 

the Secretary, the Secretary shall make the determination on the basis of the facts available. When 

the Secretary relies on information submitted in 

the inquiry as facts available, the Secretary shall, 

to the extent practicable, corroborate the information from independent sources that are reasonably 

available to the Secretary. 

(v) INTERESTED PARTY.—For purposes of this subparagraph, the term ‘‘interested party’’ means any producer of a like or directly competitive article, a certified union or recognized union or group of workers 

which is representative of an industry engaged in the 

manufacture, production, or sale in the United States 

of a like or directly competitive article, a trade or business association representing producers or sellers of 

like or directly competitive articles, producers engaged 

in the production of essential inputs for like or directly 

competitive articles, a certified union or group of 

workers which is representative of an industry engaged in the manufacture, production, or sale of essential inputs for the like or directly competitive article, 

or a trade or business association representing companies engaged in the manufacture, production, or sale 

of such essential inputs. 

(4) SWEATERS KNIT-TO-SHAPE FROM CASHMERE OR MERINO

WOOL.— 

(A) CASHMERE.—Sweaters, in chief weight of cashmere, 

knit-to-shape in one or more beneficiary sub-Saharan African countries and classifiable under subheading 6110.10 of 

the Harmonized Tariff Schedule of the United States. 

(B) MERINO WOOL.—Sweaters, 50 percent or more by 

weight of wool measuring 21.5 microns in diameter or 

finer, knit-to-shape in one or more beneficiary sub-Saharan African countries. 

(5) APPAREL ARTICLES WHOLLY ASSEMBLED FROM FABRIC OR

YARN NOT AVAILABLE IN COMMERCIAL QUANTITIES IN THE

UNITED STATES.— (A) IN GENERAL.—Apparel articles that are both cut (or 

knit-to-shape) and sewn or otherwise assembled in one or 

more beneficiary sub-Saharan African countries, to the extent that apparel articles of such fabrics or yarns would be 


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eligible for preferential treatment, without regard to the 

source of the fabrics or yarns, under Annex 401 to the 

NAFTA. 

(B) ADDITIONAL APPAREL ARTICLES.—At the request of 

any interested party and subject to the following requirements, the President is authorized to proclaim the treatment provided under subparagraph (A) for yarns or fabrics 

not described in subparagraph (A) if— 

(i) the President determines that such yarns or fabrics cannot be supplied by the domestic industry in 

commercial quantities in a timely manner; 

(ii) the President has obtained advice regarding the 

proposed action from the appropriate advisory committee established under section 135 of the Trade Act 

of 1974 (19 U.S.C. 2155) and the United States International Trade Commission; 

(iii) within 60 calendar days after the request, the 

President has submitted a report to the Committee on 

Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate that sets 

forth— 

(I) the action proposed to be proclaimed and the 

reasons for such action; and 

(II) the advice obtained under clause (ii); 

(iv) a period of 60 calendar days, beginning with the 

first day on which the President has met the requirements of subclauses (I) and (II) of clause (iii), has expired; and 

(v) the President has consulted with such committees regarding the proposed action during the period 

referred to in clause (iii). 

(C) REMOVAL OF DESIGNATION OF FABRICS OR YARNS NOT

AVAILABLE IN COMMERCIAL QUANTITIES.—If the President 

determines that any fabric or yarn was determined to be 

eligible for preferential treatment under subparagraph (A) 

on the basis of fraud, the President is authorized to remove that designation from that fabric or yarn with respect to articles entered after such removal. 

(6) HANDLOOMED, HANDMADE, FOLKLORE ARTICLES AND ETHNIC PRINTED FABRICS.— 

(A) IN GENERAL.—A handloomed, handmade, folklore article or an ethnic printed fabric of a beneficiary sub-Saharan African country or countries that is certified as such 

by the competent authority of such beneficiary country or 

countries. For purposes of this section, the President, after 

consultation with the beneficiary sub-Saharan African 

country or countries concerned, shall determine which, if 

any, particular textile and apparel goods of the country (or 

countries) shall be treated as being handloomed, handmade, or folklore articles or an ethnic printed fabric. 

(B) REQUIREMENTS FOR ETHNIC PRINTED FABRIC.—Ethnic 

printed fabrics qualified under this paragraph are— 

(i) fabrics containing a selvedge on both edges, having a width of less than 50 inches, classifiable under 


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subheading 5208.52.30 or 5208.52.40 of the Harmonized Tariff Schedule of the United States; 

(ii) of the type that contains designs, symbols, and 

other characteristics of African prints— 

(I) normally produced for and sold on the indigenous African market; and 

(II) normally sold in Africa by the piece as opposed to being tailored into garments before being 

sold in indigenous African markets; 

(iii) printed, including waxed, in one or more eligible 

beneficiary sub-Saharan countries; and 

(iv) fabrics formed in the United States, from yarns 

formed in the United States, or from fabric formed in 

one or more beneficiary sub-Saharan African country 

from yarn originating in either the United States or 

one or more beneficiary sub-Saharan African countries. 

(7) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES FROM UNITED STATES

AND BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY COMPO- NENTS.—Apparel articles sewn or otherwise assembled in one 

or more beneficiary sub-Saharan African countries with thread 

formed in the United States from components cut in the 

United States and one or more beneficiary sub-Saharan African countries or former beneficiary sub-Saharan African countries from fabric wholly formed in the United States from 

yarns wholly formed in the United States, or from components 

knit-to-shape in the United States and one or more beneficiary 

sub-Saharan African countries or former beneficiary sub-Saharan African countries from yarns wholly formed in the United 

States, or both (including fabrics not formed from yarns, if 

such fabrics are classifiable under heading 5602 or 5603 of the 

Harmonized Tariff Schedule of the United States). 

(8) TEXTILE ARTICLES ORIGINATING ENTIRELY IN ONE OR MORE

LESSER DEVELOPED BENEFICIARY SUB-SAHARAN AFRICAN COUN- TRIES.—Textile and textile articles classifiable under chapters 

50 through 60 or chapter 63 of the Harmonized Tariff Schedule 

of the United States that are products of a lesser developed 

beneficiary sub-Saharan African country and are wholly 

formed in one or more such countries from fibers, yarns, fabrics, fabric components, or components knit-to-shape that are 

the product of one or more such countries. 

(c) LESSER DEVELOPED COUNTRIES.— 

(1) PREFERENTIAL TREATMENT OF PRODUCTS THROUGH øSEPTEMBER 30, 2015¿ SEPTEMBER 30, 2025.— 

(A) PRODUCTS COVERED.—In addition to the products described in subsection (b) the preferential treatment described in subsection (a) shall apply through øSeptember 

30, 2015¿ September 30, 2025, to apparel articles wholly 

assembled, or knit-to-shape and wholly assembled, or both, 

in one or more lesser developed beneficiary sub-Saharan 

African countries, regardless of the country of origin of the 

fabric or the yarn used to make such articles, in an 

amount not to exceed the applicable percentage of the aggregate square meter equivalents of all apparel articles 


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imported into the United States in the preceding 12-month 

period for which data are available. 

(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the term ‘‘applicable percentage’’ means— 

(i) 2.9285 percent for the 1-year period beginning on 

October 1, 2005; and 

(ii) 3.5 percent for the 1-year period beginning on 

October 1, 2006, and each 1-year period thereafter 

through øSeptember 30, 2015¿ September 30, 2025. (2) APPLICABILITY OF OTHER PROVISIONS.—Subsection 

(b)(3)(B) applies to apparel articles eligible for preferential 

treatment under this subsection to the same extent as that 

subsection applies to apparel articles eligible for preferential 

treatment under subsection (b)(3). 

(3) DEFINITION.—In this subsection, the term ‘‘lesser developed beneficiary sub-Saharan African country’’ means— 

(A) a beneficiary sub-Saharan African country that had 

a per capita gross national product of less than $1,500 in 

1998, as measured by the International Bank for Reconstruction and Development; 

(B) Botswana; 

(C) Namibia; and 

(D) Mauritius. 

(d) TREATMENT OF QUOTAS ON TEXTILE AND APPAREL IMPORTS

FROM KENYA AND MAURITIUS.—The President shall eliminate the 

existing quotas on textile and apparel articles imported into the 

United States— 

(1) from Kenya within 30 days after that country adopts an 

effective visa system to prevent unlawful transshipment of textile and apparel articles and the use of counterfeit documents 

relating to the importation of the articles into the United 

States; and 

(2) from Mauritius within 30 days after that country adopts 

such a visa system. 

The Customs Service shall provide the necessary technical assistance to Kenya and Mauritius in the development and implementation of the visa systems. 

(e) SPECIAL RULES.— (1) FINDINGS AND TRIMMINGS.— (A) GENERAL RULE.—An article otherwise eligible for 

preferential treatment under this section shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if the value of such 

findings and trimmings do not exceed 25 percent of the 

cost of the components of the assembled article. Examples 

of findings and trimmings are sewing thread, hooks and 

eyes, snaps, buttons, ‘‘bow buds’’, decorative lace trim, 

elastic strips, and zippers, including zipper tapes and labels. Elastic strips are considered findings or trimmings 

only if they are each less than 1 inch in width and used 

in the production of brassieres. 

(B) CERTAIN INTERLININGS.— (i) GENERAL RULE.—An article otherwise eligible for 

preferential treatment under this section shall not be 

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tains certain interlinings of foreign origin, if the value 

of such interlinings (and any findings and trimmings) 

does not exceed 25 percent of the cost of the components of the assembled article. 

(ii) INTERLININGS DESCRIBED.—Interlinings eligible 

for the treatment described in clause (i) include only 

a chest type plate, a ‘‘hymo’’ piece, or ‘‘sleeve header’’, 

of woven or weft-inserted warp knit construction and 

of coarse animal hair or man-made filaments. 

(iii) TERMINATION OF TREATMENT.—The treatment 

described in this subparagraph shall terminate if the 

President makes a determination that United States 

manufacturers are producing such interlinings in the 

United States in commercial quantities. 

(C) EXCEPTION.—In the case of an article described in 

subsection (b)(2), sewing thread shall not be treated as 

findings or trimmings under subparagraph (A). 

(2) DE MINIMIS RULE.—An article otherwise eligible for preferential treatment under this section shall not be ineligible for 

such treatment because the article contains fibers or yarns not 

wholly formed in the United States or one or more beneficiary 

sub-Saharan African countries or former beneficiary sub-Saharan African countries if the total weight of all such fibers and 

yarns is not more than 10 percent of the total weight of the 

article. 

(3) CERTAIN COMPONENTS.—An article otherwise eligible for 

preferential treatment under this section will not be ineligible 

for such treatment because the article contains— 

(A) any collars or cuffs (cut or knit-to-shape), 

(B) drawstrings, 

(C) shoulder pads or other padding, 

(D) waistbands, 

(E) belt attached to the article, 

(F) straps containing elastic, or 

(G) elbow patches, 

that do not meet the requirements set forth in subsections (b) 

and (c), regardless of the country of origin of the item referred 

to in the applicable subparagraph of this paragraph. 

(f) DEFINITIONS.—In this section and section 113: 

(1) AGREEMENT ON TEXTILES AND CLOTHING.—The term 

‘‘Agreement on Textiles and Clothing’’ means the Agreement 

on Textiles and Clothing referred to in section 101(d)(4) of the 

Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)). 

(2) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY, ETC.—The 

terms ‘‘beneficiary sub-Saharan African country’’ and ‘‘beneficiary sub-Saharan African countries’’ have the same meaning 

as such terms have under section 506A(c) of the Trade Act of 

1974. 

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

Free Trade Agreement entered into between the United States, 

Mexico, and Canada on December 17, 1992. 

(4) FORMER SUB-SAHARAN AFRICAN COUNTRY.—The term 

‘‘former sub-Saharan African country’’ means a country that, 

after being designated as a beneficiary sub-Saharan African 

country under this Act, ceased to be designated as such a beneVerDate Sep 11 2014 06:01 May 02, 2015 Jkt 049006 PO 00000 Frm 00108 Fmt 6659 Sfmt 6601 E:\HR\OC\HR101.XXX HR101

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ficiary sub-Saharan country by reason of its entering into a 

free trade agreement with the United States. 

(5) ENTER; ENTERED.—The terms ‘‘enter’’ and ‘‘entered’’ refer 

to the entry, or withdrawal from warehouse for consumption, 

in the customs territory of the United States. 

(g) EFFECTIVE DATE.—This section takes effect on October 1, 

2000, and shall remain in effect through øSeptember 30, 2015¿ 

September 30, 2025. 

* * * * * * * 

CARIBBEAN BASIN ECONOMIC RECOVERY ACT 

* * * * * * * 

TITLE II—CARIBBEAN BASIN INITIATIVE 

* * * * * * * 

SUBTITLE A—DUTY-FREE TREATMENT

* * * * * * * 

SEC. 213A. SPECIAL RULES FOR HAITI. 

(a) DEFINITIONS.—In this section: 

(1) INITIAL APPLICABLE 1-YEAR PERIOD.—The term ‘‘initial applicable 1-year period’’ means the 1-year period beginning on 

December 20, 2006. 

(2) APPROPRIATE CONGRESSIONAL COMMITTEES.—.—The term 

‘‘appropriate congressional committees’’ means the Committee 

on Finance of the Senate and the Committee on Ways and 

Means of the House of Representatives. 

(3) CORE LABOR STANDARDS.—The term ‘‘core labor standards’’ means— 

(A) freedom of association; 

(B) the effective recognition of the right to bargain collectively; 

(C) the elimination of all forms of compulsory or forced 

labor; 

(D) the effective abolition of child labor and a prohibition 

on the worst forms of child labor; and 

(E) the elimination of discrimination in respect of employment and occupation. 

(4) ENTER; ENTRY.—The terms ‘‘enter’’ and ‘‘entry’’ refer to 

the entry, or withdrawal from warehouse for consumption, in 

the customs territory of the United States. 

(5) IMPORTED DIRECTLY FROM HAITI OR THE DOMINICAN REPUBLIC.—Articles are ‘‘imported directly from Haiti or the Dominican Republic’’ if— 

(A) the articles are shipped directly from Haiti or the 

Dominican Republic into the United States without passing through the territory of any intermediate country; or 

(B) the articles are shipped from Haiti or the Dominican 

Republic into the United States through the territory of an 

intermediate country, and— 

(i) the articles in the shipment do not enter into the 

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voices, bills of lading, and other shipping documents 

specify the United States as the final destination; or 

(ii) the invoices and other documents do not specify 

the United States as the final destination, but the articles in the shipment— 

(I) remain under the control of the customs authority in the intermediate country; 

(II) do not enter into the commerce of the intermediate country except for the purpose of a sale 

other than at retail; and 

(III) have not been subjected to operations in 

the intermediate country other than loading, unloading, or other activities necessary to preserve 

the articles in good condition. 

(6) KNIT-TO-SHAPE.—A good is ‘‘knit-to-shape’’ if 50 percent 

or more of the exterior surface area of the good is formed by 

major parts that have been knitted or crocheted directly to the 

shape used in the good, with no consideration being given to 

patch pockets, applique ́s, or the like. Minor cutting, trimming, 

or sewing of those major parts shall not affect the determination of whether a good is ‘‘knit-to-shape.’’ 

(7) TAICNAR PROGRAM.—The term ‘‘TAICNAR Program’’ 

means the Technical Assistance Improvement and Compliance 

Needs Assessment and Remediation Program established pursuant to subsection (e). 

(8) WHOLLY ASSEMBLED.—A good is ‘‘wholly assembled’’ in 

Haiti if all components, of which there must be at least two, 

pre-existed in essentially the same condition as found in the 

finished good and were combined to form the finished good in 

Haiti. Minor attachments and minor embellishments (for example, applique ́s, beads, spangles, embroidery, and buttons) 

not appreciably affecting the identity of the good, and minor 

subassemblies (for example, collars, cuffs, plackets, and pockets), shall not affect the determination of whether a good is 

‘‘wholly assembled’’ in Haiti. 

(b) APPAREL AND OTHER TEXTILE ARTICLES.— (1) VALUE-ADDED RULE FOR APPAREL ARTICLES.— (A) IN GENERAL.—Apparel articles described in subparagraph (B) of a producer or entity controlling production 

that are imported directly from Haiti or the Dominican Republic shall enter the United States free of duty during the 

initial applicable 1-year period and any 1-year period 

thereafter, subject to the limitations set forth in subparagraphs (B) and (C), and subject to subparagraph (D). 

(B) APPAREL ARTICLES DESCRIBED.— 

(i) IN GENERAL.—In the initial applicable 1-year period and any 1-year period thereafter, apparel articles 

described in this paragraph are apparel articles that 

are wholly assembled, or are knit-to-shape, in Haiti 

from any combination of fabrics, fabric components, 

components knit-to-shape, and yarns, only if, for each 

entry in that 1-year period, the sum of— 

(I) the cost or value of the materials produced in 

Haiti or one or more countries described in clause 

(iii), or any combination thereof, plus 


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111 

(II) the direct costs of processing operations (as 

defined in section 213(a)(3)) performed in Haiti or 

one or more countries described in clause (iii), or 

any combination thereof, 

is not less than the applicable percentage (as defined 

in clause (v)(I)) of the declared customs value of such 

apparel articles. 

(ii) DEDUCTIONS.—In calculating cost or value under 

clause (i)(I), there shall be deducted the cost or value 

of— 

(I) any foreign materials that are used in the 

production of the apparel articles in Haiti; and 

(II) any foreign materials that are used in the 

production of the materials described in clause 

(i)(I). 

(iii) COUNTRIES DESCRIBED.—The countries referred 

to in clause (i) are the following: 

(I) The United States. 

(II) Any country that is a party to a free trade 

agreement with the United States that is in effect 

on the date of the enactment of the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, or that enters into force 

thereafter. 

(III) Any country designated as a beneficiary 

country under section 213(b)(5)(B) of this Act. 

(IV) Any country designated as a beneficiary 

country under section 506A(a)(1) of the Trade Act 

of 1974 (19 U.S.C. 2466a(a)(1)), if a finding has 

been made by the President or the President’s 

designee, and published in the Federal Register, 

that the country has satisfied the requirements of 

section 113 of the African Growth and Opportunity Act (19 U.S.C. 3722). 

(V) Any country designated as a beneficiary 

country under section 204(b)(6)(B) of the Andean 

Trade Preference Act (19 U.S.C. 3203(b)(6)(B)). 

(iv) ANNUAL AGGREGATION.— (I) INITIAL APPLICABLE 1-YEAR PERIOD.—In the 

initial applicable 1-year period, the requirements 

under clause (i) relating to applicable percentage 

may also be met for articles of a producer or an 

entity controlling production that enter during the 

initial applicable 1-year period by aggregating— 

(aa) the cost or value of materials under 

subclause (I) of clause (i), and 

(bb) the direct costs of processing operations 

under subclause (II) of clause (i), 

of all apparel articles of that producer or entity 

controlling production that are wholly assembled, 

or are knit-to-shape, in Haiti and are entered during the initial applicable 1-year period. 

(II) OTHER 1-YEAR PERIODS.—In any 1-year period after the initial applicable 1-year period, the 

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ble percentage may also be met for articles of a 

producer or an entity controlling production that 

enter during the 1-year period by aggregating— 

(aa) the cost or value of materials under 

subclause (I) of clause (i), and 

(bb) the direct costs of processing operations 

under subclause (II) of clause (i), 

of all apparel articles of that producer or entity 

controlling production that are wholly assembled, 

or are knit-to-shape, in Haiti and are entered during the preceding 1-year period. 

(III) DEDUCTIONS.—In calculating cost or value 

under subclause (I)(aa) or (II)(aa), there shall be 

deducted the cost or value of— 

(aa) any foreign materials that are used in 

the production of the apparel articles in Haiti; 

and 

(bb) any foreign materials that are used in 

the production of the materials described in 

subclause (I)(aa) or (II)(aa) (as the case may 

be). 

(IV) INCLUSION IN CALCULATION OF OTHER ARTI- CLES RECEIVING PREFERENTIAL TREATMENT.—Entries of apparel articles that receive preferential 

treatment under any provision of law other than 

this subparagraph or are subject to the ‘‘General’’ 

column 1 rate of duty under the HTS are not included in the annual aggregation under subclause 

(I) or (II) unless the producer or entity controlling 

production elects, at the time the annual aggregation calculation is made, to include such entries in 

such aggregation. 

(v) DEFINITIONS.—In this paragraph: 

(I) APPLICABLE PERCENTAGE.—The term ‘‘applicable percentage’’ means— 

(aa) 50 percent or more during the initial 

applicable 1-year period and the succeeding 8 

1-year periods; 

(bb) 55 percent or more during the 1-year 

period beginning on December 20, 2015, and 

the 1-year period beginning on December 20, 

2016; and 

ø(cc) 60 percent or more during the 1-year 

period beginning on December 20, 2017.¿ 

(cc) 60 percent or more during the 1-year period beginning on December 20, 2017, and 

each of the 7 succeeding 1-year periods. 

(II) FOREIGN MATERIAL.—The term ‘‘foreign material’’ means a material produced in a country 

other than Haiti or any country described in 

clause (iii). 

(vi) DEVELOPMENT OF PROCEDURE TO ENSURE COM- PLIANCE.— 

(I) IN GENERAL.—U.S. Customs and Border Protection of the Department of Homeland Security 


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shall develop and implement methods and procedures to ensure ongoing compliance with the requirements set forth in clauses (i) and (iv). 

(II) NONCOMPLIANCE.—If U.S. Customs and Border Protection finds that a producer or an entity 

controlling production has not satisfied such requirements in the initial applicable 1-year period 

or any 1-year period thereafter, either for individual entries entered pursuant to clause (i) or for 

entries entered in aggregate pursuant to clause 

(iv), then apparel articles described in clause (i) of 

that producer or entity shall be ineligible for preferential treatment under paragraph (1) during 

any succeeding 1-year period until— 

(aa) the cost or value of materials under 

subclause (I) of clause (i), plus 

(bb) the direct costs of processing operations 

under subclause (II) of clause (i), 

of that producer or entity controlling production, 

is not less than the applicable percentage under 

clause (v)(I), plus 10 percent, of the aggregate declared customs value of all apparel articles of that 

producer or entity controlling production that are 

wholly assembled, or are knit-to-shape, in Haiti 

and are entered during the preceding 1-year period. 

(III) RETROACTIVE APPLICATION OF DUTY-FREE

TREATMENT.—If— 

(aa) a producer or an entity controlling production is ineligible for preferential treatment 

under subparagraph (A) in the initial applicable 1-year period or any 1-year period thereafter because that producer or entity controlling production did not satisfy the requirements of clause (i) or (iv), and 

(bb) that producer or entity controlling production satisfies the requirements of subclause (II) of this clause in that 1-year period, 

then, notwithstanding section 514 of the Tariff Act 

of 1930 (19 U.S.C. 1514) or any other provision of 

law, upon proper request filed with U.S. Customs 

and Border Protection before the 90th day after 

U.S. Customs and Border Protection determines 

that item (bb) applies, the entry of any articles— 

(AA) that was made during that 1-year period, and 

(BB) with respect to which there would 

have been preferential treatment under subparagraph (A) if the producer or entity controlling production had satisfied the requirements in clause (i) or (iv) (as the case may 

be), 

shall be liquidated or reliquidated as though such 

preferential treatment under subparagraph (A) 

applied to such entry. 


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(vii) FABRICS NOT AVAILABLE IN COMMERCIAL QUANTITIES.— 

(I) IN GENERAL.—For purposes of determining 

the applicable percentage under clause (i) or (iv), 

there may be included in that percentage— 

(aa) the cost of fabrics or yarns to the extent that apparel articles of such fabrics or 

yarns would be eligible for preferential treatment, without regard to the source of the fabrics or yarns, under Annex 401 of the NAFTA; 

and 

(bb) the cost of fabrics or yarns that are 

designated as not being available in commercial quantities for purposes of— 

(AA) section 213(b)(2)(A)(v) of this Act, 

(BB) section 112(b)(5) of the African Growth 

and Opportunity Act, 

(CC) section 204(b)(3)(B)(i)(III) or (ii) of the 

Andean Trade Preference Act, or 

(DD) any other provision, relating to determining whether a textile or apparel article is 

an originating good eligible for preferential 

treatment, of a law that implements a free 

trade agreement that enters into force with 

respect to the United States, 

without regard to the source of the fabrics or 

yarns. 

(II) REMOVAL OF DESIGNATION OF FABRICS OR

YARNS NOT AVAILABLE IN COMMERCIAL QUANTITIES.—If the President determines that— 

(aa) any fabric or yarn described in subclause (I)(aa) was determined to be eligible for 

preferential treatment, or 

(bb) any fabric or yarn described in subclause (I)(bb) was designated as not being 

available in commercial quantities, 

on the basis of fraud, the President is authorized 

to remove the eligibility or designation (as the 

case may be) of that fabric or yarn with respect to 

articles entered after such removal. 

(C) QUANTITATIVE LIMITATIONS.—The preferential treatment described in subparagraph (A) shall be extended, 

during each of the 1-year periods set forth in the following 

table, to not more than the corresponding percentage of 

the aggregate square meter equivalents of all apparel articles imported into the United States in the most recent 12- 

month period for which data are available: 

During: the corresponding 

percentage is: 

the initial applicable 1-year period ....... 1 percent.


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each of the succeeding 11 1-year periods ........................................................ 1.25 percent. 

No preferential treatment shall be provided under subparagraph (A) after øDecember 19, 2018¿ December 19, 

2025. 

(D) OTHER PREFERENTIAL TREATMENT NOT AFFECTED BY

QUANTITATIVE LIMITATIONS.—Any apparel article that 

qualifies for preferential treatment under paragraph (2), 

(3), (4), or (5) or any other provision of this title shall not 

be subject to, or included in the calculation of, the quantitative limitations under subparagraph (C). 

(2) SPECIAL RULE FOR WOVEN ARTICLES AND CERTAIN KNIT ARTICLES.— 

(A) SPECIAL RULE FOR ARTICLES OF CHAPTER 62 OF THE

HTS.— 

(i) GENERAL RULE.—Any apparel article classifiable 

under chapter 62 of the HTS that is wholly assembled, 

or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or 

yarns and is imported directly from Haiti or the Dominican Republic shall enter the United States free of 

duty, subject to clauses (ii) and (iii), without regard to 

the source of the fabric, fabric components, components knit-to-shape, or yarns from which the article is 

made. 

(ii) LIMITATION.—Except as provided in paragraph 

(2A), the preferential treatment described in clause (i) 

shall be extended, in the 1-year period beginning October 1, 2008, and in each of the ø11 succeeding 1-year 

periods¿ 16 succeeding 1-year periods, to not more 

than 70,000,000 square meter equivalents of apparel 

articles described in such clause. 

(iii) OTHER PREFERENTIAL TREATMENT NOT AFFECTED

BY QUANTITATIVE LIMITATION.—Any apparel article 

that qualifies for preferential treatment under paragraph (1), (3), (4), or (5) or subparagraph (B) of this 

paragraph or any other provision of this title shall not 

be subject to, or included in the calculation of, the 

quantitative limitation under clause (ii). 

(B) SPECIAL RULE FOR CERTAIN ARTICLES OF CHAPTER 61

OF THE HTS.— 

(i) GENERAL RULE.—Any apparel article classifiable 

under chapter 61 of the HTS that is wholly assembled, 

or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or 

yarns and is imported directly from Haiti or the Dominican Republic shall enter the United States free of 

duty, subject to clauses (ii), (iii), and (iv), without regard to the source of the fabric, fabric components, 

components knit-to-shape, or yarns from which the article is made. 


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(ii) EXCLUSIONS.—The preferential treatment described in clause (i) shall not apply to the following: 

(I) The following apparel articles of cotton, for 

men or boys, that are classifiable under subheading 6109.10.00 of the HTS: 

(aa) All white T-shirts, with short hemmed 

sleeves and hemmed bottom, with crew or 

round neckline or with V-neck and with a mitered seam at the center of the V, and without 

pockets, trim, or embroidery. 

(bb) All white singlets, without pockets, 

trim, or embroidery. 

(cc) Other T-shirts, but not including thermal undershirts. 

(II) T-shirts for men or boys that are classifiable 

under subheading 6109.90.10. 

(III) The following apparel articles of cotton, for 

men or boys, that are classifiable under subheading 6110.20.20 of the HTS: 

(aa) Sweatshirts. 

(bb) Pullovers, other than sweaters, vests, 

or garments imported as part of playsuits. 

(IV) Sweatshirts for men or boys, of man-made 

fibers and containing less than 65 percent by 

weight of man-made fibers, that are classifiable 

under subheading 6110.30.30 of the HTS. 

(iii) LIMITATION.—Except as provided in paragraph 

(2A), the preferential treatment described in clause (i) 

shall be extended, in the 1-year period beginning October 1, 2008, and in each of the ø11 succeeding 1-year 

periods¿ 16 succeeding 1-year periods, to not more 

than 70,000,000 square meter equivalents of apparel 

articles described in such clause. 

(iv) OTHER PREFERENTIAL TREATMENT NOT AFFECTED

BY QUANTITATIVE LIMITATION.—Any apparel article 

that qualifies for preferential treatment under paragraph (1), (3), (4), or (5) or subparagraph (A) of this 

paragraph or any other provision of this title shall not 

be subject to, or included in the calculation of, the 

quantitative limitation under clause (iii). 

(2A) SPECIAL RULE FOR CERTAIN WOVEN ARTICLES AND CERTAIN KNIT ARTICLES ENTERED DURING FISCAL YEAR 2010 AND

SUCCEEDING 1-YEAR PERIODS.— 

(A) IN GENERAL.—Except as provided in subparagraphs 

(B) and (C) and subject to subparagraph (D), if 52,000,000 

square meter equivalents of apparel articles described in 

paragraph (2)(A)(i) or (2)(B)(i) enter the United States during the 1-year period beginning October 1, 2009, or any of 

the succeeding 1-year periods, the President shall extend 

the preferential treatment described in paragraph (2)(A)(i) 

or (2)(B)(i) (as the case may be) to not more than 

200,000,000 square meter equivalents of apparel articles 

described in paragraph (2)(A)(i) or (2)(B)(i) (as the case 

may be) during that 1-year period, and shall publish notice 

of the extension in the Federal Register. 


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(B) EXCEPTION FOR CERTAIN WOVEN ARTICLES.— (i) IN GENERAL.—In the case of apparel articles described in clause (ii), subparagraph (A) shall be applied by substituting ‘‘70,000,000’’ for ‘‘200,000,000’’. 

(ii) APPAREL ARTICLES DESCRIBED.—Apparel articles 

described in this clause are apparel articles described 

in paragraph (2)(A)(i) that are the following: 

(I) CATEGORY 347.—Apparel articles in category 

347 that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6203.19.1020 ..................... 6203.42.4011 .................... 6203.42.4061 

6203.19.9020 ................... 6203.42.4016 .................... 6203.49.8020 

6203.22.3020 ................... 6203.42.4026 .................... 6210.40.9033 

6203.22.3030 ................... 6203.42.4036 .................... 6211.20.1520 

6203.42.4003 ................... 6203.42.4046 .................... 6211.20.3810 

6203.42.4006 ................... 6203.42.4051 .................... 6211.32.0040 

(II) CATEGORY 348.—Apparel articles in category 

348 that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6204.12.0030 ..................... 6204.62.4011 .................... 6204.69.9010 

6204.19.8030 ................... 6204.62.4021 .................... 6210.50.9060 

6204.22.3040 ................... 6204.62.4031 .................... 6211.20.1550 

6204.22.3050 ................... 6204.62.4041 .................... 6211.20.6810 

6204.29.4034 ................... 6204.62.4051 .................... 6211.42.0030 

6204.62.3000 ................... 6204.62.4056 .................... 6217.90.9050 

6204.62.4003 ................... 6204.62.4066 ....................

6204.62.4006 ................... 6204.69.6010 ....................

(III) CATEGORY 647.—Apparel articles in category 647 that fall within the following statistical 

reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6203.23.0060 ..................... 6203.43.4020 .................... 6203.49.8030 

6203.23.0070 ................... 6203.43.4030 .................... 6210.40.5031 

6203.29.2030 ................... 6203.43.4040 .................... 6210.40.5039 

6203.29.2035 ................... 6203.49.1500 .................... 6211.20.1525 

6203.43.2500 ................... 6203.49.2015 .................... 6211.20.3820 

6203.43.3510 ................... 6203.49.2030 .................... 6211.33.0030 

6203.43.3590 ................... 6203.49.2045 ....................

6203.43.4010 ................... 6203.49.2060 ....................

(IV) CATEGORY 648.—Apparel articles in category 

648 that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this paragraph): 

6204.23.0040 ..................... 6204.63.3510 .................... 6204.69.6030 

6204.23.0045 ................... 6204.63.3530 .................... 6204.69.9030 


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6204.29.2020 ................... 6204.63.3532 .................... 6210.50.5031 

6204.29.2025 ................... 6204.63.3540 .................... 6210.50.5039 

6204.29.4038 ................... 6204.69.2510 .................... 6211.20.1555 

6204.63.2000 ................... 6204.69.2530 .................... 6211.20.6820 

6204.63.3010 ................... 6204.69.2540 .................... 6211.43.0040 

6204.63.3090 ................... 6204.69.2560 .................... 6217.90.9060 

(C) EXCEPTION FOR CERTAIN KNIT ARTICLES.— (i) IN GENERAL.—In the case of apparel articles described in clause (ii), subparagraph (A) shall be applied by substituting ‘‘85,000,000’’ for ‘‘200,000,000’’. 

(ii) APPAREL ARTICLES DESCRIBED.—Apparel articles 

described in this clause are apparel articles described 

in paragraph (2)(B)(i) that fall within the following 

statistical reporting numbers of the HTS (as in effect 

on the day before the date of the enactment of this 

paragraph), other than shirts with plackets and pointed collars: 

6105.10.0010 ..................... 6109.10.0040 .................... 6110.30.3053 

6109.10.0018 ................... 6109.10.0045 .................... 6110.30.3059 

6109.10.0027 ................... 6110.20.2079 ....................

(D) VERIFICATION WITH RESPECT TO TRANSSHIPMENT FOR

CERTAIN APPAREL ARTICLES.— (i) IN GENERAL.—Not later than April 1, July 1, October 1, and January 1 of each year, the Commissioner 

responsible for United States Customs and Border 

Protection shall verify that apparel articles imported 

into the United States under this paragraph are not 

being unlawfully transshipped (within the meaning of 

subsection (f)) into the United States. 

(ii) REPORT TO PRESIDENT.—If the Commissioner determines pursuant to clause (i) that apparel articles 

imported into the United States under this paragraph 

are being unlawfully transshipped into the United 

States, the Commissioner shall report that determination to the President. 

(iii) AUTHORITY TO REDUCE QUANTITATIVE LIMITA- TION.—If, in any 1-year period with respect to which 

the President extends preferential treatment as described in this paragraph, the Commissioner reports to 

the President pursuant to clause (ii) regarding unlawful transshipments, the President— 

(I) may modify the quantitative limitation under 

this paragraph as the President considers appropriate to account for such transshipments; and 

(II) if the President modifies the limitation 

under subclause (I), shall publish notice of the 

modification in the Federal Register. 

(E) CATEGORY DEFINED.—In this paragraph, the term 

‘‘category’’ means the number assigned under the U.S. Textile and Apparel Category System of the Office of Textiles 

and Apparel of the Department of Commerce, as listed in 

the HTS under the applicable heading or subheading (as 

in effect on the day before the date of the enactment of 

this paragraph). 


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(3) APPAREL AND OTHER ARTICLES SUBJECT TO CERTAIN ASSEMBLY RULES.— 

(A) BRASSIERES.—Any apparel article classifiable under 

subheading 6212.10 of the HTS that is wholly assembled, 

or knit-to-shape, in Haiti from any combination of fabrics, 

fabric components, components knit-to-shape, or yarns and 

is imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, fabric components, components 

knit-to-shape, or yarns from which the article is made. 

(B) OTHER APPAREL ARTICLES.—Any of the following apparel articles that is wholly assembled, or knit-to-shape, in 

Haiti from any combination of fabrics, fabric components, 

components knit-to-shape, or yarns and is imported directly from Haiti or the Dominican Republic shall enter 

the United States free of duty, without regard to the 

source of the fabric, fabric components, components knitto-shape, or yarns from which the article is made: 

(i) Any apparel article that is of a type listed in 

chapter rule 3, 4, or 5 for chapter 61 of the HTS (as 

such chapter rules are contained in section A of the 

Annex to Proclamation 8213 of the President of December 20, 2007) as being excluded from the scope of 

such chapter rule, when such chapter rule is applied 

to determine whether an apparel article is an originating good for purposes of general note 29(n) to the 

HTS, except that, for purposes of this clause, reference 

in such chapter rules to ‘‘6104.12.00’’ shall be deemed 

to be a reference to ‘‘6104.19.60’’. 

(ii)(I) Subject to subclause (II), any apparel article 

that is of a type listed in chapter rule 3(a), 4(a), or 5(a) 

for chapter 62 of the HTS, as such chapter rules are 

contained in paragraph 9 of section A of the Annex to 

Proclamation 8213 of the President of December 20, 

2007. 

(II) Subclause (I) shall not include any apparel article to which subparagraph (A) of this paragraph applies. 

(C) LUGGAGE AND SIMILAR ITEMS.—Any article classifiable under subheading 4202.12, 4202.22, 4202.32 or 

4202.92 of the HTS that is wholly assembled in Haiti and 

is imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, components, or materials from 

which the article is made. 

(D) HEADGEAR.—Any article classifiable under heading 

6501, 6502, or 6504 of the HTS, or under subheading 

6505.90 of the HTS, that is wholly assembled, knit-toshape, or formed in Haiti from any combination of fabrics, 

fabric components, components knit-to-shape, or yarns and 

is imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, fabric components, components 

knit-to-shape, or yarns from which the article is made. 


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(E) CERTAIN SLEEPWEAR.—Any of the following apparel 

articles that is wholly assembled, or knit-to-shape, in Haiti 

from any combination of fabrics, fabric components, components knit-to-shape, or yarns and is imported directly from 

Haiti or the Dominican Republic shall enter the United 

States free of duty, without regard to the source of the fabric, fabric components, components knit-to-shape, or yarns 

from which the article is made: 

(i) Pajama bottoms and other sleepwear for women 

and girls, of cotton, that are classifiable under subheading 6208.91.30, or of man-made fibers, that are 

classifiable under subheading 6208.92.00. 

(ii) Pajama bottoms and other sleepwear for girls, of 

other textile materials, that are classifiable under subheading 6208.99.20. 

(F) CERTAIN OTHER APPAREL ARTICLES.— 

(i) IN GENERAL.—Any of the apparel articles described in clause (ii) that is wholly assembled, or knitto-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns 

and is imported directly from Haiti or the Dominican 

Republic shall enter the United States free of duty, 

without regard to the source of the fabric, fabric components, components knit-to-shape, or yarns from 

which the article is made. 

(ii) ARTICLES DESCRIBED.—Apparel articles described 

in this clause are apparel articles in the following category numbers that fall within the following statistical 

reporting numbers of the HTS (as in effect on the day 

before the date of the enactment of this subparagraph): 

Category Number HTS Statistical 

Reporting Number 

334 6101.90.9010 

6112.11.0010 

6103.22.0010 

6113.00.9015 

335 6104.22.0010 

6104.29.2010 

6112.11.0020 

336 6104.49.9010 

338 6103.22.0050 

6105.90.8010 

6112.11.0030 

339 6104.22.0060 


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121 

6104.29.2049 

6106.90.2510 

6106.90.3010 

6110.20.1031 

6110.20.1033 

6112.11.0040 

342 6104.22.0030 

6104.29.2022 

6104.52.0010 

6104.52.0020 

6104.59.8010 

350 6107.91.0040 

6107.91.0090 

351 6107.21.0010 

6107.21.0020 

6107.91.0030 

6108.31.0010 

6108.31.0020 

433 6103.23.0007 

6103.29.0520 

6103.31.0000 

6103.33.1000 

6103.39.8020 

434 6101.30.1500 

6101.90.0500 

6101.90.9020 

6103.23.0005 

6103.29.0510 

435 6102.30.1000 

6102.90.9010 

6104.23.0010 

6104.29.0510 

6104.29.2012 

6104.33.1000 

6104.39.2020 

438 6103.23.0025 

6103.29.0550 

6104.23.0020 

6104.29.0560 

6104.29.2051 


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122 

6105.90.1000 

6105.90.8020 

6106.20.1020 

6106.90.1010 

6106.90.1020 

6106.90.2520 

6106.90.3020 

6110.11.0070 

6110.12.2070 

6110.12.2080 

6110.19.0070 

6110.19.0080 

6110.30.1550 

6110.30.1560 

633 6103.23.0037 

6103.29.1015 

6103.33.2000 

6103.39.1000 

6103.39.8030 

634 6101.30.1000 

6101.90.9030 

6103.23.0036 

6103.29.1010 

6112.12.0010 

6112.19.1010 

6112.20.1010 

6112.20.1030 

6113.00.9025 

635 6102.30.0500 

6102.90.9015 

6104.23.0026 

6104.29.1010 

6104.29.2014 

6104.39.2030 

6112.12.0020 

6112.19.1020 

6112.20.1020 

6112.20.1040 

6113.00.9030 

636 6104.49.9030 

6104.44.2020 


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123 

638 6103.23.0075 

6103.29.1050 

6105.90.8030 

6110.30.1050 

6110.30.2051 

6110.30.2053 

6112.12.0030 

6112.19.1030 

639 6104.23.0036 

6104.29.1050 

6104.29.2055 

6106.90.2530 

6106.90.3030 

6110.30.1060 

6110.30.2061 

6110.30.2063 

6112.12.0040 

6112.19.1040 

651 6107.22.0010 

6107.22.0015 

6107.22.0025 

6107.99.1030 

6108.32.0015 

(iii) CATEGORY DEFINED.—In this subparagraph, the 

term ‘‘category’’ has the meaning given that term in 

paragraph (2A)(E) of this subsection. 

(G) MADE-UP TEXTILE ARTICLES.— 

(i) IN GENERAL.—Any of the made-up textile articles 

described in clauses (ii) and (iii) that is wholly assembled, or knit-to-shape, in Haiti from any combination 

of fabrics, fabric components, components knit-toshape, or yarns and is imported directly from Haiti or 

the Dominican Republic shall enter the United States 

free of duty, without regard to the source of the fabric, 

fabric components, components knit-to-shape, or yarns 

from which the article is made. 

(ii) ARTICLES DESCRIBED.—Made-up textile articles 

described in this clause are articles in the following 

category numbers that fall within the following statistical reporting numbers of the HTS (as in effect on the 

day before the date of the enactment of this subparagraph): 

Category Number HTS Statistical 

Reporting Number 


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124 

363 6302.60.0020 

6302.91.0015 

6302.91.0035 

6307.90.8940 

369 6304.91.0020 

6304.92.0000 

6302.60.0010 

6302.60.0030 

6302.91.0005 

6302.91.0050 

6307.90.8910 

6307.90.8945 

5701.90.2020 

5702.39.2010 

5702.50.5600 

5702.99.0500 

5702.99.1500 

5705.00.2020 

5807.10.0510 

5807.90.0510 

6307.90.3010 

6301.30.0010 

6305.20.0000 

6307.10.1020 

6307.10.1090 

6406.10.7700 

9404.90.1000 

9404.90.9505 

6301.30.0020 

6302.91.0045 

465 5701.10.9000 

5702.50.2000 

5702.50.4000 

5702.91.3000 

5702.91.4000 

5703.10.2000 

5703.10.8000 

5704.10.0010 

5705.00.2005 

5705.00.2015 

5702.31.1000 

5702.31.2000 

469 6304.19.3040 


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125 

6304.91.0050 

6304.99.1500 

6304.99.6010 

5601.29.0020 

6302.39.0010 

6406.10.9020 

665 5701.90.1030 

5701.90.2030 

5702.32.1000 

5702.32.2000 

5702.42.2090 

5702.50.5200 

5702.92.1000 

5702.92.9000 

5703.20.1000 

5703.30.2000 

5703.30.8030 

5703.30.8080 

5704.10.0090 

5705.00.2030 

5703.20.2010 

5703.20.2090 

666 6304.11.2000 

6304.91.0040 

6304.93.0000 

6304.99.6020 

6301.40.0010 

6301.40.0020 

6301.90.0010 

669 5601.10.2000 

5601.22.0090 

5807.10.0520 

5807.90.0520 

6307.90.3020 

6305.32.0010 

6305.32.0020 

6305.32.0050 

6305.32.0060 

6305.39.0000 

6406.10.9040 

6308.00.0020 

899 6304.11.3000 


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126 

6304.19.3060 

6304.91.0070 

6304.99.3500 

6304.99.6040 

5601.29.0090 

6301.90.0030 

6305.90.0000 

6406.10.9060 

900 5601.29.0010 

5701.90.2010 

6301.90.0020 

(iii) OTHER ARTICLES DESCRIBED.—Made-up textile 

articles described in this clause are articles that fall 

within statistical reporting number 6406.10.9090 of 

the HTS (as in effect on the day before the date of the 

enactment of this subparagraph). 

(iv) CATEGORY DEFINED.—In this subparagraph, the 

term ‘‘category’’ has the meaning given that term in 

paragraph (2A)(E) of this subsection. 

(4) EARNED IMPORT ALLOWANCE RULE.— (A) IN GENERAL.—Apparel articles wholly assembled, or 

knit-to-shape, in Haiti from any combination of fabrics, 

fabric components, components knit-to-shape, or yarns and 

imported directly from Haiti or the Dominican Republic 

shall enter the United States free of duty, without regard 

to the source of the fabric, fabric components, components 

knit-to-shape, or yarns from which the articles are made, 

if such apparel articles are accompanied by an earned import allowance certificate that reflects the amount of credits equal to the total square meter equivalents of such apparel articles, in accordance with the program established 

under subparagraph (B). For purposes of determining the 

quantity of square meter equivalents under this subparagraph, the conversion factors listed in ‘‘Correlation: U.S. 

Textile and Apparel Industry Category System with the 

Harmonized Tariff Schedule of the United States of America, 2008’’, or its successor publications, of the United 

States Department of Commerce, shall apply. 

(B) EARNED IMPORT ALLOWANCE PROGRAM.— 

(i) ESTABLISHMENT.—The Secretary of Commerce 

shall establish a program to provide earned import allowance certificates to any producer or entity controlling production for purposes of subparagraph (A), 

based on the elements described in clause (ii). 

(ii) ELEMENTS.—The elements referred to in clause 

(i) are the following: 

(I) One credit shall be issued to a producer or 

an entity controlling production for every two 

square meter equivalents of qualifying woven fabric or qualifying knit fabric that the producer or 

entity controlling production can demonstrate that 


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127 

it purchased for the manufacture in Haiti of articles like or similar to any article eligible for preferential treatment under subparagraph (A). The 

Secretary of Commerce shall, if requested by a 

producer or entity controlling production, create 

and maintain an account for such producer or entity controlling production, into which such credits 

shall be deposited. 

(II) Such producer or entity controlling production may redeem credits issued under subclause 

(I) for earned import allowance certificates reflecting such number of earned credits as the producer 

or entity may request and has available. 

(III) The Secretary of Commerce may require 

any textile mill or other entity located in the 

United States that exports to Haiti qualifying 

woven fabric or qualifying knit fabric to submit, 

upon such export or upon request, documentation, 

such as a Shipper’s Export Declaration, to the 

Secretary of Commerce— 

(aa) verifying that the qualifying woven fabric or qualifying knit fabric was exported to a 

producer in Haiti or to an entity controlling 

production; and 

(bb) identifying such producer or entity controlling production, and the quantity and description of qualifying woven fabric or qualifying knit fabric exported to such producer or 

entity controlling production. 

(IV) The Secretary of Commerce may require 

that a producer or entity controlling production 

submit documentation to verify purchases of 

qualifying woven fabric or qualifying knit fabric. 

(V) The Secretary of Commerce may make available to each person or entity identified in documentation submitted under subclause (III) or (IV) 

information contained in such documentation that 

relates to the purchase of qualifying woven fabric 

or qualifying knit fabric involving such person or 

entity. 

(VI) The program under this subparagraph shall 

be established so as to allow, to the extent feasible, the submission, storage, retrieval, and disclosure of information in electronic format, including information with respect to the earned import 

allowance certificates required under subparagraph (A)(i). 

(VII) The Secretary of Commerce may reconcile 

discrepancies in information provided under subclause (III) or (IV) and verify the accuracy of such 

information. 

(VIII) The Secretary of Commerce shall establish procedures to carry out the program under 

this subparagraph and may establish additional 


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requirements to carry out this subparagraph. 

Such additional requirements may include— 

(aa) submissions by textile mills or other 

entities in the United States documenting exports of yarns wholly formed in the United 

States to countries described in paragraph 

(1)(B)(iii) for the manufacture of qualifying 

knit fabric; and 

(bb) procedures imposed on producers or entities controlling production to allow the Secretary of Commerce to obtain and verify information relating to the production of qualifying 

knit fabric. 

(iii) QUALIFYING WOVEN FABRIC DEFINED.—For purposes of this subparagraph, the term ‘‘qualifying 

woven fabric’’ means fabric wholly formed in the 

United States from yarns wholly formed in the United 

States, except that— 

(I) fabric otherwise eligible as qualifying woven 

fabric shall not be ineligible as qualifying woven 

fabric because the fabric contains nylon filament 

yarn to which section 213(b)(2)(A)(vii)(IV) applies; 

(II) fabric that would otherwise be ineligible as 

qualifying woven fabric because the fabric contains yarns not wholly formed in the United 

States shall not be ineligible as qualifying woven 

fabric if the total weight of all such yarns is not 

more than 10 percent of the total weight of the 

fabric; and 

(III) fabric otherwise eligible as qualifying 

woven fabric shall not be ineligible as qualifying 

fabric because the fabric contains yarns covered 

by clause (i) or (ii) of paragraph (5)(A). 

(iv) QUALIFYING KNIT FABRIC DEFINED.—For purposes of this subparagraph, the term ‘‘qualifying knit 

fabric’’ means fabric or knit-to-shape components 

wholly formed or knit-to-shape in any country or any 

combination of countries described in paragraph 

(1)(B)(iii), from yarns wholly formed in the United 

States, except that— 

(I) fabric or knit-to-shape components otherwise 

eligible as qualifying knit fabric shall not be ineligible as qualifying knit fabric because the fabric 

or knit-to-shape components contain nylon filament yarn to which section 213(b)(2)(A)(vii)(IV) 

applies; 

(II) fabric or knit-to-shape components that 

would otherwise be ineligible as qualifying knit 

fabric because the fabric or knit-to-shape components contain yarns not wholly formed in the 

United States shall not be ineligible as qualifying 

knit fabric if the total weight of all such yarns is 

not more than 10 percent of the total weight of 

the fabric or knit-to-shape components; and 


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129 

(III) fabric or knit-to-shape components otherwise eligible as qualifying knit fabric shall not be 

ineligible as qualifying knit fabric because the fabric or knit-to-shape components contain yarns covered by clause (i) or (ii) of paragraph (5)(A). 

(C) ENFORCEMENT PROVISIONS.— (i) FRAUDULENT CLAIMS OF PREFERENCE.—Any person who makes a false claim for preference under the 

program established under subparagraph (B) shall be 

subject to any applicable civil or criminal penalty that 

may be imposed under the customs laws of the United 

States or under title 18, United States Code. 

(ii) PENALTIES FOR OTHER FRAUDULENT INFORMATION.—The Secretary of Commerce may establish and 

impose penalties for the submission to the Secretary of 

Commerce of fraudulent information under the program established under subparagraph (B), other than 

a claim described in clause (i). 

(5) SHORT SUPPLY PROVISION.— 

(A) IN GENERAL.—Any apparel article that is wholly assembled, or knit-to-shape, in Haiti from any combination 

of fabrics, fabric components, components knit-to-shape, or 

yarns and is imported directly from Haiti or the Dominican Republic shall enter the United States free of duty, 

without regard to the source of the fabrics, fabric components, components knit-to-shape, or yarns from which the 

article is made, if the fabrics, fabric components, components knit-to-shape, or yarns comprising the component 

that determines the tariff classification of the article are of 

any of the following: 

(i) Fabrics or yarns, to the extent that apparel articles of such fabrics or yarns would be eligible for preferential treatment, without regard to the source of the 

fabrics or yarns, under Annex 401 of the NAFTA. 

(ii) Fabrics or yarns, to the extent that such fabrics 

or yarns are designated as not being available in commercial quantities for purposes of— 

(I) section 213(b)(2)(A)(v) of this Act; 

(II) section 112(b)(5) of the African Growth and 

Opportunity Act; 

(III) clause (i)(III) or (ii) of section 204(b)(3)(B) 

of the Andean Trade Preference Act; or 

(IV) any other provision, relating to determining 

whether a textile or apparel article is an originating good eligible for preferential treatment, of 

a law that implements a free trade agreement entered into by the United States that is in effect at 

the time the claim for preferential treatment is 

made. 

(B) REMOVAL OF DESIGNATION OF FABRICS OR YARNS NOT

AVAILABLE IN COMMERCIAL QUANTITIES.—If the President 

determines that— 

(i) any fabric or yarn described in clause (i) of subparagraph (A) was determined to be eligible for preferential treatment, or 


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130 

(ii) any fabric or yarn described in clause (ii) of subparagraph (A) was designated as not being available 

in commercial quantities, 

on the basis of fraud, the President is authorized to remove the eligibility or designation (as the case may be) of 

that fabric or yarn with respect to articles entered after 

such removal. 

(6) OTHER PREFERENTIAL TREATMENT NOT AFFECTED.—The 

duty-free treatment provided under this subsection is in addition to any other preferential treatment under this title. 

(c) SPECIAL RULE FOR CERTAIN WIRE HARNESS AUTOMOTIVE COMPONENTS.— 

(1) IN GENERAL.—Any wire harness automotive component 

that is the product or manufacture of Haiti and is imported directly from Haiti into the customs territory of the United 

States shall enter the United States free of duty, during the 

10-year period beginning on the date of the enactment of the 

Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, if Haiti has met the requirements of subsection (d) and if the sum of— 

(A) the cost or value of the materials produced in Haiti 

or one or more countries described in subsection (b)(2)(C), 

or any combination thereof, plus 

(B) the direct costs of processing operations (as defined 

in section 213(a)(3)) performed in Haiti or the United 

States, or both, 

is not less than 50 percent of the declared customs value of 

such wire harness automotive component. 

(2) WIRE HARNESS AUTOMOTIVE COMPONENT.—For purposes 

of this subsection, the term ‘‘wire harness automotive component’’ means any article provided for in subheading 8544.30.00 

of the HTS, as in effect on the date of the enactment of the 

Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006. 

(d) ELIGIBILITY REQUIREMENTS.— (1) IN GENERAL.—Haiti shall be eligible for preferential treatment under this section if the President determines and certifies to Congress that Haiti— 

(A) has established, or is making continual progress toward establishing— 

(i) a market-based economy that protects private 

property rights, incorporates an open rules-based trading system, and minimizes government interference in 

the economy through measures such as price controls, 

subsidies, and government ownership of economic assets; 

(ii) the rule of law, political pluralism, and the right 

to due process, a fair trial, and equal protection under 

the law; 

(iii) the elimination of barriers to United States 

trade and investment, including by— 

(I) the provision of national treatment and 

measures to create an environment conducive to 

domestic and foreign investment; 

(II) the protection of intellectual property; and 


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131 

(III) the resolution of bilateral trade and investment disputes; 

(iv) economic policies to reduce poverty, increase the 

availability of health care and educational opportunities, expand physical infrastructure, promote the development of private enterprise, and encourage the 

formation of capital markets through microcredit or 

other programs; 

(v) a system to combat corruption and bribery, such 

as signing and implementing the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and 

(vi) protection of internationally recognized worker 

rights, including the right of association, the right to 

organize and bargain collectively, a prohibition on the 

use of any form of forced or compulsory labor, a minimum age for the employment of children, and acceptable conditions of work with respect to minimum 

wages, hours of work, and occupational safety and 

health; 

(B) does not engage in activities that undermine United 

States national security or foreign policy interests; and 

(C) does not engage in gross violations of internationally 

recognized human rights or provide support for acts of 

international terrorism and cooperates in international efforts to eliminate human rights violations and terrorist activities. 

(2) TIME LIMIT FOR DETERMINATION.—The President shall determine whether Haiti meets the requirements of paragraph 

(1) not later than 90 days after the date of the enactment of 

the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006. 

(3) CONTINUING COMPLIANCE.—If the President determines 

that Haiti is not making continual progress in meeting the requirements described in paragraph (1)(A), the President shall 

terminate the preferential treatment under this section. 

(4) PETITION PROCESS.—Any interested party may file a request to have the status of Haiti reviewed with respect to the 

eligibility requirements listed in paragraph (1), and the President shall provide for this purpose the same procedures as 

those that are provided for reviewing the status of eligible beneficiary developing countries with respect to the designation 

criteria listed in subsections (b) and (c) of section 502 of the 

Trade Act of 1974 (19 U.S.C. 2642 (b) and (c)). 

(e) TECHNICAL ASSISTANCE IMPROVEMENT AND COMPLIANCE

NEEDS ASSESSMENT AND REMEDIATION PROGRAM.— 

(1) CONTINUED ELIGIBILITY FOR PREFERENCES.— 

(A) PRESIDENTIAL CERTIFICATION OF COMPLIANCE BY

HAITI WITH REQUIREMENTS.—Upon the expiration of the 16- 

month period beginning on the date of the enactment of 

the Haitian Hemispheric Opportunity through Partnership 

Encouragement Act of 2008, Haiti shall continue to be eligible for the preferential treatment provided under subsection (b) only if the President determines and certifies to 

the Congress that— 


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132 

(i) Haiti has implemented the requirements set forth 

in paragraphs (2) and (3); and 

(ii) Haiti has agreed to require producers of articles 

for which duty-free treatment may be requested under 

subsection (b) to participate in the TAICNAR Program 

described in paragraph (3) and has developed a system 

to ensure participation in such program by such producers, including by developing and maintaining the 

registry described in paragraph (2)(B)(i). 

(B) EXTENSION.—The President may extend the period 

for compliance by Haiti under subparagraph (A) if the 

President— 

(i) determines that Haiti has made a good faith effort toward such compliance and has agreed to take 

additional steps to come into full compliance that are 

satisfactory to the President; and 

(ii) provides to the appropriate congressional committees, not later than 6 months after the last day of 

the 16-month period specified in subparagraph (A), 

and every 6 months thereafter, a report identifying 

the steps that Haiti has agreed to take to come into 

full compliance and the progress made over the preceding 6-month period in implementing such steps. 

(C) CONTINUING COMPLIANCE.— (i) TERMINATION OF PREFERENTIAL TREATMENT.—If, 

after making a certification under subparagraph (A), 

the President determines that Haiti is no longer meeting the requirements set forth in subparagraph (A), 

the President shall terminate the preferential treatment provided under subsection (b), unless the President determines, after consulting with the appropriate 

congressional committees, that meeting such requirements is not practicable because of extraordinary circumstances existing in Haiti when the determination 

is made. 

(ii) SUBSEQUENT COMPLIANCE.—If the President, 

after terminating preferential treatment under clause 

(i), determines that Haiti is meeting the requirements 

set forth in subparagraph (A), the President shall reinstate the application of preferential treatment under 

subsection (b). 

(2) LABOR OMBUDSMAN.— 

(A) IN GENERAL.—The requirement under this paragraph 

is that Haiti has established an independent Labor Ombudsman’s Office within the national government that— 

(i) reports directly to the President of Haiti; 

(ii) is headed by a Labor Ombudsman chosen by the 

President of Haiti, in consultation with Haitian labor 

unions and industry associations; and 

(iii) is vested with the authority to perform the functions described in subparagraph (B). 

(B) FUNCTIONS.—The functions of the Labor Ombudsman’s Office shall include— 

(i) developing and maintaining a registry of producers of articles for which duty-free treatment may 


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133 

be requested under subsection (b), and developing, in 

consultation and coordination with any other appropriate officials of the Government of Haiti, a system to 

ensure participation by such producers in the 

TAICNAR Program described in paragraph (3); 

(ii) overseeing the implementation of the TAICNAR 

Program described in paragraph (3); 

(iii) receiving and investigating comments from any 

interested party regarding the conditions described in 

paragraph (3)(B) in facilities of producers listed in the 

registry described in clause (i) and, where appropriate, 

referring such comments or the result of such investigations to the appropriate Haitian authorities, or to 

the entity operating the TAICNAR Program described 

in paragraph (3); 

(iv) assisting, in consultation and coordination with 

any other appropriate Haitian authorities, producers 

listed in the registry described in clause (i) in meeting 

the conditions set forth in paragraph (3)(B); and 

(v) coordinating, with the assistance of the entity operating the TAICNAR Program described in paragraph 

(3), a tripartite committee comprised of appropriate 

representatives of government agencies, employers, 

and workers, as well as other relevant interested parties, for the purposes of evaluating progress in implementing the TAICNAR Program described in paragraph (3), and consulting on improving core labor 

standards and working conditions in the textile and 

apparel sector in Haiti, and on other matters of common concern relating to such core labor standards and 

working conditions. 

(3) TECHNICAL ASSISTANCE IMPROVEMENT AND COMPLIANCE

NEEDS ASSESSMENT AND REMEDIATION PROGRAM.— (A) IN GENERAL.—The requirement under this paragraph 

is that Haiti, in cooperation with the International Labor 

Organization, has established a Technical Assistance Improvement and Compliance Needs Assessment and Remediation Program meeting the requirements under subparagraph (C)— 

(i) to assess compliance by producers listed in the 

registry described in paragraph (2)(B)(i) with the conditions set forth in subparagraph (B) and to assist 

such producers in meeting such conditions; and 

(ii) to provide assistance to improve the capacity of 

the Government of Haiti— 

(I) to inspect facilities of producers listed in the 

registry described in paragraph (2)(B)(i); and 

(II) to enforce national labor laws and resolve 

labor disputes, including through measures described in subparagraph (E). 

(B) CONDITIONS DESCRIBED.—The conditions referred to 

in subparagraph (A) are— 

(i) compliance with core labor standards; and 

(ii) compliance with the labor laws of Haiti that relate directly to core labor standards and to ensuring 


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134 

acceptable conditions of work with respect to minimum wages, hours of work, and occupational health 

and safety. 

(C) REQUIREMENTS.—The requirements for the 

TAICNAR Program are that the program— 

(i) be operated by the International Labor Organization (or any subdivision, instrumentality, or designee 

thereof), which prepares the biannual reports described in subparagraph (D); 

(ii) be developed through a participatory process 

that includes the Labor Ombudsman described in 

paragraph (2) and appropriate representatives of government agencies, employers, and workers; 

(iii) assess compliance by each producer listed in the 

registry described in paragraph (2)(B)(i) with the conditions set forth in subparagraph (B) and identify any 

deficiencies by such producer with respect to meeting 

such conditions, including by— 

(I) conducting unannounced site visits to manufacturing facilities of the producer; 

(II) conducting confidential interviews separately with workers and management of the facilities of the producer; 

(III) providing to management and workers, and 

where applicable, worker organizations in the facilities of the producer, on a confidential basis— 

(aa) the results of the assessment carried 

out under this clause; and 

(bb) specific suggestions for remediating 

any such deficiencies; 

(iv) assist the producer in remediating any deficiencies identified under clause (iii); 

(v) conduct prompt follow-up site visits to the facilities of the producer to assess progress on remediation 

of any deficiencies identified under clause (iii); and 

(vi) provide training to workers and management of 

the producer, and where appropriate, to other persons 

or entities, to promote compliance with subparagraph 

(B). 

(D) BIANNUAL REPORT.—The biannual reports referred to 

in subparagraph (C)(i) are a report, by the entity operating 

the TAICNAR Program, that is published (and available to 

the public in a readily accessible manner) on a biannual 

basis, beginning 6 months after Haiti implements the 

TAICNAR Program under this paragraph, covering the 

preceding 6-month period, and that includes the following: 

(i) The name of each producer listed in the registry 

described in paragraph (2)(B)(i) that has been identified as having met the conditions under subparagraph 

(B). 

(ii) The name of each producer listed in the registry 

described in paragraph (2)(B)(i) that has been identified as having deficiencies with respect to the conditions under subparagraph (B), and has failed to remedy such deficiencies. 


SSpencer on DSK4SPTVN1PROD with REPORTS
135 

(iii) For each producer listed under clause (ii)— 

(I) a description of the deficiencies found to exist 

and the specific suggestions for remediating such 

deficiencies made by the entity operating the 

TAICNAR Program; 

(II) a description of the efforts by the producer 

to remediate the deficiencies, including a description of assistance provided by any entity to assist 

in such remediation; and 

(III) with respect to deficiencies that have not 

been remediated, the amount of time that has 

elapsed since the deficiencies were first identified 

in a report under this subparagraph. 

(iv) For each producer identified as having deficiencies with respect to the conditions described under 

subparagraph (B) in a prior report under this subparagraph, a description of the progress made in remediating such deficiencies since the submission of the 

prior report, and an assessment of whether any aspect 

of such deficiencies persists. 

(E) CAPACITY BUILDING.—The assistance to the Government of Haiti referred to in subparagraph (A)(ii) shall include programs— 

(i) to review the labor laws and regulations of Haiti 

and to develop and implement strategies for bringing 

the laws and regulations into conformity with core 

labor standards; 

(ii) to develop additional strategies for facilitating 

protection of core labor standards and providing acceptable conditions of work with respect to minimum 

wages, hours of work, and occupational safety and 

health, including through legal, regulatory, and institutional reform; 

(iii) to increase awareness of worker rights, including under core labor standards and national labor 

laws; 

(iv) to promote consultation and cooperation between 

government representatives, employers, worker representatives, and United States importers on matters 

relating to core labor standards and national labor 

laws; 

(v) to assist the Labor Ombudsman appointed pursuant to paragraph (2) in establishing and coordinating operation of the committee described in paragraph (2)(B)(v); 

(vi) to assist worker representatives in more fully 

and effectively advocating on behalf of their members; 

and 

(vii) to provide on-the-job training and technical assistance to labor inspectors, judicial officers, and other 

relevant personnel to build their capacity to enforce 

national labor laws and resolve labor disputes. 

(4) COMPLIANCE WITH ELIGIBILITY CRITERIA.— 

(A) COUNTRY COMPLIANCE WITH WORKER RIGHTS ELIGIBILITY CRITERIA.—In making a determination of whether 


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136 

Haiti is meeting the requirement set forth in subsection 

(d)(1)(A)(vi) relating to internationally recognized worker 

rights, the President shall consider the reports produced 

under paragraph (3)(D). 

(B) PRODUCER ELIGIBILITY.— (i) IDENTIFICATION OF PRODUCERS.—Beginning in the 

second calendar year after the President makes the 

certification under paragraph (1)(A), the President 

shall identify on a biennial basis whether a producer 

listed in the registry described in paragraph (2)(B)(i) 

has failed to comply with core labor standards and 

with the labor laws of Haiti that directly relate to and 

are consistent with core labor standards. 

(ii) ASSISTANCE TO PRODUCERS; WITHDRAWAL, ETC., 

OF PREFERENTIAL TREATMENT.—For each producer that 

the President identifies under clause (i), the President 

shall seek to assist such producer in coming into compliance with core labor standards and with the labor 

laws of Haiti that directly relate to and are consistent 

with core labor standards. If such efforts fail, the 

President shall withdraw, suspend, or limit the application of preferential treatment under subsection (b) 

to articles of such producer. 

(iii) REINSTATING PREFERENTIAL TREATMENT.—If the 

President, after withdrawing, suspending, or limiting 

the application of preferential treatment under clause 

(ii) to articles of a producer, determines that such producer is complying with core labor standards and with 

the labor laws of Haiti that directly relate to and are 

consistent with core labor standards, the President 

shall reinstate the application of preferential treatment under subsection (b) to the articles of the producer. 

(iv) CONSIDERATION OF REPORTS.—In making the 

identification under clause (i) and the determination 

under clause (iii), the President shall consider the reports made available under paragraph (3)(D). 

(5) REPORTS BY THE PRESIDENT.— (A) IN GENERAL.—Not later than one year after the date 

of the enactment of the Haitian Hemispheric Opportunity 

through Partnership Encouragement Act of 2008, and annually thereafter, the President shall transmit to the appropriate congressional committees a report on the implementation of this subsection during the preceding 1-year 

period. 

(B) MATTERS TO BE INCLUDED.—Each report required by 

subparagraph (A) shall include the following: 

(i) An explanation of the efforts of Haiti, the President, and the International Labor Organization to 

carry out this subsection. 

(ii) A summary of each report produced under paragraph (3)(D) during the preceding 1-year period and a 

summary of the findings contained in such report. 

(iii) Identifications made under paragraph (4)(B)(i) 

and determinations made under paragraph (4)(B)(iii). 


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137 

(6) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this subsection the sum of 

$10,000,000 for the period beginning on October 1, 2008, and 

ending on September 30, 2013. 

(f) CONDITIONS REGARDING ENFORCEMENT OF CIRCUMVENTION.— (1) IN GENERAL.—The preferential treatment under subsection (b)(1) shall not apply unless the President certifies to 

Congress that Haiti is meeting the following conditions: 

(A) Haiti has adopted an effective visa system, domestic 

laws, and enforcement procedures applicable to articles described in subsection (b) to prevent unlawful transshipment of the articles and the use of counterfeit documents relating to the importation of the articles into the 

United States. 

(B) Haiti has enacted legislation or promulgated regulations that would permit U.S. Customs and Border Protection verification teams to have the access necessary to investigate thoroughly allegations of transshipment through 

such country. 

(C) Haiti agrees to report, on a timely basis, at the request of U.S. Customs and Border Protection, on the total 

exports from and imports into that country of articles described in subsection (b), consistent with the manner in 

which the records are kept by Haiti. 

(D) Haiti agrees to cooperate fully with the United 

States to address and take action necessary to prevent circumvention as provided in Article 5 of the Agreement on 

Textiles and Clothing. 

(E) Haiti agrees to require all producers and exporters 

of articles described in subsection (b) in that country to 

maintain complete records of the production and the export of such articles, including materials used in the production, for at least 5 years after the production or export 

(as the case may be). 

(F) Haiti agrees to report, on a timely basis, at the request of U.S. Customs and Border Protection, documentation establishing the country of origin of articles described 

in subsection (b) as used by that country in implementing 

an effective visa system. 

(2) DEFINITION OF TRANSSHIPMENT.—Transshipment within 

the meaning of this subsection has occurred when preferential 

treatment for a textile or apparel article under this section has 

been claimed on the basis of material false information concerning the country of origin, manufacture, processing, or assembly of the article or any of its components. For purposes of 

this paragraph, false information is material if disclosure of 

the true information would mean or would have meant that 

the article is or was ineligible for preferential treatment under 

this section. 

(3) LIMITATION ON GOODS SHIPPED FROM THE DOMINICAN RE- PUBLIC.— 

(A) LIMITATION.—Notwithstanding subsection (a)(5), relating to the definition of ‘‘imported directly from Haiti or 

the Dominican Republic’’, articles described in subsection 

(b) that are shipped from the Dominican Republic, directly 


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or through the territory of an intermediate country, whether or not such articles undergo processing in the Dominican Republic, shall not be considered to be ‘‘imported directly from Haiti or the Dominican Republic’’ until the 

President certifies to the Congress that Haiti and the Dominican Republic have developed procedures to prevent 

unlawful transshipment of the articles and the use of 

counterfeit documents related to the importation of the articles into the United States. 

(B) TECHNICAL AND OTHER ASSISTANCE.—The Commissioner responsible for U.S. Customs and Border Protection 

shall provide technical and other assistance to Haiti and 

the Dominican Republic to develop expeditiously the procedures described in subparagraph (A). 

(g) REGULATIONS.—The President shall issue regulations to carry 

out this section not later than 180 days after the date of the enactment of the Haitian Hemispheric Opportunity through Partnership 

Encouragement Act of 2006. The President shall consult with the 

Committee on Ways and Means of the House of Representatives 

and the Committee on Finance of the Senate in preparing such regulations. 

(h) TERMINATION.—Except as provided in subsection (b)(1), the 

duty-free treatment provided under this section shall remain in effect until øSeptember 30, 2020¿ September 30, 2025. 

* * * * * * * 

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) For the arrival of a commercial vessel of 100 net tons or 

more, $397. 

(2) For the arrival of a commercial truck, $5. 

(3) For the arrival of each railroad car carrying passengers or commercial freight, $7.50. 

(4) For all arrivals made during a calendar year by a private vessel or private aircraft, $25. 

(5)(A) Subject to subparagraph (B), 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)(i) of this section), $5. 

(B) For the arrival of each passenger aboard a commercial 

vessel from a place referred to in subsection (b)(1)(A)(i) of this 

section, $1.75. 

(6) For each item of dutiable mail for which a document is 

prepared by a customs officer, $5. 

(7) For each customs broker permit held by an individual, partnership, association, or corporate customs broker, $125 per 

year. 


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(8) For the arrival of a barge or other bulk carrier from Can- ada or Mexico, $100. 

(9)(A) For the processing of merchandise that is formally entered or released during any fiscal year, a fee in an amount 

equal to 0.21 percent ad valorem, unless adjusted under subparagraph (B). 

(B)(i) The Secretary of the Treasury may adjust the ad valorem rate specified in subparagraph (A) to an ad valorem rate 

(but not to a rate of more than 0.21 percent nor less than 0.15 

percent) and the amounts specified in subsection (b)(8)(A)(i) 

(but not to more than $485 nor less than $21) to rates and 

amounts which would, if charged, offset the salaries and expenses that will likely be incurred by the Customs Service in 

the processing of such entries and releases during the fiscal 

year in which such costs are incurred. 

(ii) In determining the amount of any adjustment under 

clause (i), the Secretary of the Treasury shall take into account 

whether there is a surplus or deficit in the fund established 

under subsection (f) with respect to the provision of customs 

services for the processing of formal entries and releases of 

merchandise. 

(iii) An adjustment may not be made under clause (i) with 

respect to the fee charged during any fiscal year unless the 

Secretary of the Treasury— 

(I) not later than 45 days after the date of the enactment 

of the Act providing full-year appropriations for the Customs Service for that fiscal year, publishes in the Federal 

Register a notice of intent to adjust the fee under this 

paragraph and the amount of such adjustment; 

(II) provides a period of not less than 30 days following 

publication of the notice described in subclause (I) for public comment and consultation with the Committee on Finance of the Senate and the Committee on Ways and 

Means of the House of Representatives regarding the proposed adjustment and the methodology used to determine 

such adjustment; 

(III) upon the expiration of the period provided under 

subclause (II), notifies such committees in writing regarding the final determination to adjust the fee, the amount 

of such adjustment, and the methodology used to determine such adjustment; and 

(IV) upon the expiration of the 15-day period following 

the written notification described in subclause (III), submits for publication in the Federal Register notice of the 

final determination regarding the adjustment of the fee. 

(iv) The 15-day period referred to in clause (iii)(IV) shall be 

computed by excluding— 

(I) the days on which 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 subclause (I), when either House is not in session. 

(v) An adjustment made under this subparagraph shall become effective with respect to formal entries and releases made 

on or after the 15th calendar day after the date of publication 


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of the notice described in clause (iii)(IV) and shall remain in 

effect until adjusted under this subparagraph. 

(C) Any fee charged under this paragraph, whether or not 

adjusted under subparagraph (B), is subject to the limitations 

in subsection (b)(8)(A). 

(10) For the processing of merchandise that is informally entered or released, other than at— 

(A) a centralized hub facility, 

(B) an express consignment carrier facility, or 

(C) a small airport or other facility to which section 236 

of the Trade and Tariff Act of 1984 applies, if more than 

25,000 informal entries were cleared through such airport 

or facility during the fiscal year preceding such entry or 

release, a fee of— 

(i) $2 if the entry or release is automated and not 

prepared by customs personnel; (ii) $6 if the entry or release is manual and not prepared by customs personnel; or (iii) $9 if the entry or release, whether automated or 

manual, is prepared by customs personnel. 

For provisions relating to the informal entry or release of 

merchandise at facilities referred to in subparagraphs (A), 

(B), and (C), see subsection (b)(9). 

(b) LIMITATIONS ON FEES.—(1)(A) Except as provided in subsection (a)(5)(B) of this section, no fee may be charged under subsection (a) of this section for customs services provided in connection with— 

(i) the arrival of any passenger whose journey— 

(I) originated in a territory or possession of the United 

States; or 

(II) originated in the United States and was limited to 

territories and possessions of the United States; 

(ii) the arrival of any railroad car the journey of which originates and terminates in the same country, but only if no passengers board or disembark from the train and no cargo is 

loaded or unloaded from such car while the car is within any 

country other than the country in which such car originates 

and terminates; 

(iii) the arrival of a ferry, except for a ferry whose operations 

begin on or after August 1, 1999, and that operates south of 

27 degrees latitude and east of 89 degrees longitude; or 

(iv) the arrival of any passenger on board a commercial vessel traveling only between ports which are within the customs 

territory of the United States. 

(B) The exemption provided for in subparagraph (A) shall not 

apply in the case of the arrival of any passenger on board a commercial vessel whose journey originates and terminates at the 

same place in the United States if there are no intervening stops. 

(C) The exemption provided for in subparagraph (A)(i) shall not 

apply to fiscal years 1994, 1995, 1996, and 1997. 

(2) No fee may be charged under subsection (a)(2) for the arrival 

of a commercial truck during any calendar year after a total of 

$100 in fees has been paid to the Secretary of the Treasury for the 

provision of customs services for all arrivals of such commercial 

truck during such calendar year. 


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(3) No fee may be charged under subsection (a)(3) for the arrival 

of a railroad car whether passenger or freight during any calendar 

year after a total of $100 in fees has been paid to the Secretary 

of the Treasury for the provision of customs services for all arrivals 

of such passenger or freight rail car during such calendar year. 

(4)(A) No fee may be charged under subsection (a)(5) with respect 

to the arrival of any passenger— 

(i) who is in transit to a destination outside the customs territory of the United States, and 

(ii) for whom customs inspectional services are not provided. 

(B) In the case of a commercial vessel making a single voyage involving 2 or more United States ports with respect to which the 

passengers would otherwise be charged a fee pursuant to subsection (a)(5), such fee shall be charged only 1 time for each passenger. 

(5) No fee may be charged under subsection (a)(1) for the arrival 

of— 

(A) a vessel during a calendar year after a total of $5,955 in 

fees charged under paragraph (1) or (8) of subsection (a) has 

been paid to the Secretary of the Treasury for the provision of 

customs services for all arrivals of such vessel during such calendar year, 

(B) any vessel which, at the time of the arrival, is being used 

solely as a tugboat, or 

(C) any barge or other bulk carrier from Canada or Mexico. 

(6) No fee may be charged under subsection (a)(8) for the arrival 

of a barge or other bulk carrier during a calendar year after a total 

of $1,500 in fees charged under paragraph (1) or (8) of subsection 

(a) has been paid to the Secretary of the Treasury for the provision 

of customs services for all arrivals of such barge or other bulk carrier during such calendar year. 

(7) No fee may be charged under paragraph (2), (3), or (4) of subsection (a) for the arrival of any— 

(A) commercial truck, 

(B) railroad car, or 

(C) private vessel, 

that is being transported, at the time of the arrival, by any vessel 

that is not a ferry. 

(8)(A)(i) Subject to clause (ii), the fee charged under subsection 

(a)(9) for the formal entry or release of merchandise may not exceed $485 or be less than $25, unless adjusted pursuant to subsection (a)(9)(B). 

(ii) A surcharge of $3 shall be added to the fee determined after 

application of clause (i) for any manual entry or release of merchandise. 

(B) No fee may be charged under subsection (a) (9) or (10) for the 

processing of any article that is— 

(i) provided for under any item in chapter 98 of the Harmonized Tariff Schedule of the United States, except subheading 9802.00.60 or 9802.00.80, 

(ii) a product of an insular possession of the United States, 

or 

(iii) a product of any country listed in subdivision (c)(ii)(B) or 

(c)(v) of general note 3 to such Schedule. 

(C) For purposes of applying subsection (a) (9) or (10)— 


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142 

(i) expenses incurred by the Secretary of the Treasury in the 

processing of merchandise do not include costs incurred in— 

(I) air passenger processing, 

(II) export control, or 

(III) international affairs, and 

(ii) any reference to a manual formal or informal entry or release includes any entry or release filed by a broker or importer that requires the inputting of cargo selectivity data into 

the Automated Commercial System by customs personnel, except when— 

(I) the broker or importer is certified as an ABI cargo release filer under the Automated Commercial System at 

any port within the United States, or 

(II) the entry or release is filed at ports prior to the full 

implementation of the cargo selectivity data system by the 

Customs Service at such ports. 

(D) The fee charged under subsection (a)(9) or (10) with respect 

to the processing of merchandise shall— 

(i) be paid by the importer of record of the merchandise; 

(ii) except as otherwise provided in this paragraph, be based 

on the value of the merchandise as determined under section 

402 of the Tariff Act of 1930; 

(iii) in the case of merchandise classified under subheading 

9802.00.60 of the Harmonized Tariff Schedule of the United 

States, be applied to the value of the foreign repairs or alterations to the merchandise; 

(iv) in the case of merchandise classified under heading 

9802.00.80 of such Schedule, be applied to the full value of the 

merchandise, less the cost or value of the component United 

States products; 

(v) in the case of agricultural products of the United States 

that are processed and packed in a foreign trade zone, be applied only to the value of material used to make the container 

for such merchandise, if such merchandise is subject to entry 

and the container is of a kind normally used for packing such 

merchandise; and 

(vi) in the case of merchandise entered from a foreign trade 

zone (other than merchandise to which clause (v) applies), be 

applied only to the value of the privileged or nonprivileged foreign status merchandise under section 3 of the Act of June 18, 

1934 (commonly known as the Foreign Trade Zones Act, 19 

U.S.C. 81c). 

With respect to merchandise that is classified under subheading 

9802.00.60 or heading 9802.00.80 of such Schedule and is duty-free, 

the Secretary may collect the fee charged on the processing of the 

merchandise under subsection (a) (9) or (10) on the basis of aggregate data derived from financial and manufacturing reports used 

by the importer in the normal course of business, rather than on 

the basis of entry-by-entry accounting. 

(E) For purposes of subsection (a) (9) and (10), merchandise is 

entered or released, as the case may be, if the merchandise is— 

(i) permitted or released under section 448(b) of the Tariff 

Act of 1930, 

(ii) entered or released from customs custody under section 

484(a)(1)(A) of the Tariff Act of 1930, or 


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143 

(iii) withdrawn from warehouse for consumption. 

(9)(A) With respect to the processing of letters, documents, 

records, shipments, merchandise, or any other item that is valued 

at an amount that is $2,000 or less (or such higher amount as the 

Secretary of the Treasury may set by regulation pursuant to section 498 of the Tariff Act of 1930), except such items entered for 

transportation and exportation or immediate exportation at a centralized hub facility, an express consignment carrier facility, or a 

small airport or other facility, the following reimbursements and 

payments are required: 

(i) In the case of a small airport or other facility— 

(I) the reimbursement which such facility is required to 

make during the fiscal year under section 9701 of title 31, 

United States Code or section 236 of the Trade and Tariff 

Act of 1984; and 

(II) an annual payment by the facility to the Secretary 

of the Treasury, which is in lieu of the payment of fees 

under subsection (a)(10) for such fiscal year, in an amount 

equal to the reimbursement under subclause (I). 

(ii) Notwithstanding subsection (e)(6) and subject to the provisions of subparagraph (B), in the case of an express consignment carrier facility or centralized hub facility— (I) $.66 per individual airway bill or bill of lading; and 

(II) if the merchandise is formally entered, the fee provided for in subsection (a)(9), if applicable. 

(B)(i) Beginning in fiscal year 2004, the Secretary of the Treasury may adjust (not more than once per fiscal year) the amount described in subparagraph (A)(ii) to an amount that is not less than 

$.35 and not more than $1.00 per individual airway bill or bill of 

lading. The Secretary shall provide notice in the Federal Register 

of a proposed adjustment under the preceding sentence and the 

reasons therefor and shall allow for public comment on the proposed adjustment. 

(ii) Notwithstanding section 451 of the Tariff Act of 

1930, the payment required by subparagraph (A)(ii) (I) or 

(II) shall be the only payment required for reimbursement 

of the Customs Service in connection with the processing 

of an individual airway bill or bill of lading in accordance 

with such subparagraph and for providing services at express consignment carrier facilities or centralized hub facilities, except that the Customs Service may require such 

facilities to cover expenses of the Customs Service for adequate office space, equipment, furnishings, supplies, and 

security. 

(iii)(I) The payment required by subparagraph (A)(ii) and 

clause (ii) of this subparagraph shall be paid on a quarterly basis by the carrier using the facility to the Customs 

Service in accordance with regulations prescribed by the 

Secretary of the Treasury. 

(II) 50 percent of the amount of payments received 

under subparagraph (A)(ii) and clause (ii) of this subparagraph shall, in accordance with section 524 of the Tariff 

Act of 1930, be deposited in the Customs User Fee Account 

and shall be used to directly reimburse each appropriation 

for the amount paid out of that appropriation for the costs 


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incurred in providing services to express consignment carrier facilities or centralized hub facilities. Amounts deposited in accordance with the preceding sentence shall be 

available until expended for the provision of customs services to express consignment carrier facilities or centralized 

hub facilities. 

(III) Notwithstanding section 524 of the Tariff Act of 

1930, the remaining 50 percent of the amount of payments 

received under subparagraph (A)(ii) and clause (ii) of this 

subparagraph shall be paid to the Secretary of the Treasury, which is in lieu of the payment of fees under subsection (a)(10) of this section. 

(C) For purposes of this paragraph: 

(i) The terms ‘‘centralized hub facility’’ and ‘‘express consignment carrier facility’’ have the respective meanings that are 

applied to such terms in part 128 of chapter I of title 19, Code 

of Federal Regulations. Nothing in this paragraph shall be construed as prohibiting the Secretary of the Treasury from processing merchandise that is informally entered or released at 

any centralized hub facility or express consignment carrier facility during the normal operating hours of the Customs Service, subject to reimbursement and payment under subparagraph (A). 

(ii) The term ‘‘small airport or other facility’’ means any airport or facility to which section 236 of the Trade and Tariff Act 

of 1984 applies, if more than 25,000 informal entries were 

cleared through such airport or facility during the preceding 

fiscal year. 

(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 Implementation Act of 1988) when the United States-Canada Free-Trade 

Agreement is in force shall be in accordance with article 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. 

(11) No fee may be charged under subsection (a) (9) or (10) with 

respect to products of Israel if an exemption with respect to the fee 

is implemented under section 112 of the Customs and Trade Act 

of 1990. 

(12) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 


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of the United States-Chile Free Trade Agreement Implementation 

Act. 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. 

(13) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Singapore Free Trade Agreement Implementation Act. 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. 

(14) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States-Australia Free Trade Agreement Implementation Act. 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. 

(15) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the Dominican Republic-Central America-United States Free 

Trade Agreement Implementation Act. 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. 

(16) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Bahrain Free Trade Agreement Implementation Act. 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. 

(17) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States-Oman Free Trade Agreement Implementation 

Act. 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. 

(18) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States-Peru Trade Promotion Agreement Implementation Act. 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. 

(19) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 202 

of the United States–Korea Free Trade Agreement Implementation 

Act. 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. 

(20) No fee may be charged under subsection (a) (9) or (10) with 

respect to goods that qualify as originating goods under section 203 

of the United States–Colombia Trade Promotion Agreement Implementation Act. 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. 

(21) No fee may be charged under subsection (a)(9) or (10) with 

respect to goods that qualify as originating goods under section 203 


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146 

of the United States–Panama Trade Promotion Agreement Implementation Act. 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. 

(c) DEFINITIONS.—For purposes of this section— 

(1) The term ‘‘ferry’’ means any vessel which is being used— 

(A) to provide transportation only between places that 

are no more than 300 miles apart, and 

(B) to transport only— 

(i) passengers, or 

(ii) vehicles, or railroad cars, which are being used, 

or have been used, in transporting passengers or 

goods. 

(2) The term ‘‘arrival’’ means arrival at a port of entry in the 

customs territory of the United States. 

(3) The term ‘‘customs territory of the United States’’ has the 

meaning given to such term by general note 2 of the Harmonized Tariff Schedule of the United States. 

(4) The term ‘‘customs broker permit’’ means a permit issued 

under section 641(c) of the Tariff Act of 1930 (19 U.S.C. 

1641(c)). 

(5) The term ‘‘barge or other bulk carrier’’ means any vessel 

which— 

(A) is not self-propelled, or 

(B) transports fungible goods that are not packaged in 

any form. 

(d) COLLECTION.—(1) Each person that issues a document or ticket to an individual for transportation by a commercial vessel or 

commercial aircraft into the customs territory of the United States 

shall— 

(A) collect from that individual the fee charged under subsection (a)(5) at the time the document or ticket is issued; and 

(B) separately identify on that document or ticket the fee 

charged under subsection (a)(5) as a Federal inspection fee. 

(2) If— 

(A) a document or ticket for transportation of a passenger 

into the customs territory of the United States is issued in a 

foreign country; and 

(B) the fee charged under subsection (a)(5) is not collected at 

the time such document or ticket is issued; 

the person providing transportation to such passenger shall collect 

such fee at the time such passenger departs from the customs territory of the United States and shall provide such passenger a receipt for the payment of such fee. 

(3) The person who collects fees under paragraph (1) or (2) shall 

remit those fees to the Secretary of the Treasury at any time before 

the date that is 31 days after the close of the calendar quarter in 

which the fees are collected. 

(4)(A) Notice of the date on which payment of the fee imposed by 

subsection (a)(7) is due shall be published by the Secretary of the 

Treasury in the Federal Register by no later than the date that is 

60 days before such due date. 

(B) A customs broker permit may be revoked or suspended for 

nonpayment of the fee imposed by subsection (a)(7) only if notice 


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147 

of the date on which payment of such fee is due was published in 

the Federal Register at least 60 days before such due date. 

(C) The customs broker’s license issued under section 641(b) of 

the Tariff Act of 1930 (19 U.S.C. 1641(b)) may not be revoked or 

suspended merely by reason of nonpayment of the fee imposed 

under subsection (a)(7). 

(e) PROVISION OF CUSTOMS SERVICES.— (1) Notwithstanding section 451 of the Tariff Act of 1930 (19 

U.S.C. 1451) or any other provision of law (other than paragraph 

(2)), the customs services required to be provided to passengers 

upon arrival in the United States shall be adequately provided in 

connection with scheduled airline flights at customs serviced airports when needed and at no cost (other than the fees imposed 

under subsection (a)) to airlines and airline passengers. 

(2)(A) This subsection shall not apply with respect to any airport 

to which section 236 of the Trade and Tariff Act of 1984 (19 U.S.C. 

58b) applies. 

(B) Subparagraph (C) of paragraph (6) shall not apply with respect to any foreign trade zone or subzone that is located at, or in 

the vicinity of, an airport to which section 236 of the Trade and 

Tariff Act of 1984 applies. 

(3) Notwithstanding section 451 of the Tariff Act of 1930 (19 

U.S.C. 1451) or any other provision of law— 

(A) the customs services required to be provided to passengers upon arrival in the United States shall be adequately 

provided in connection with scheduled airline flights when 

needed at places located outside the customs territory of the 

United States at which a customs officer is stationed for the 

purpose of providing such customs services, and 

(B) other than the fees imposed under subsection (a), the airlines and airline passengers shall not be required to reimburse 

the Secretary of the Treasury for the costs of providing overtime customs inspectional services at such places. 

(4) Notwithstanding any other provision of law, all customs services (including, but not limited to, normal and overtime clearance 

and preclearance services) shall be adequately provided, when requested, for— 

(A) the clearance of any commercial vessel, vehicle, or aircraft or its passengers, crew, stores, material, or cargo arriving, departing, or transiting the United States; 

(B) the preclearance at any customs facility outside the 

United States of any commercial vessel, vehicle or aircraft or 

its passengers, crew, stores, material, or cargo; and 

(C) the inspection or release of commercial cargo or other 

commercial shipments being entered into, or withdrawn from, 

the customs territory of the United States. 

(5) For purposes of this subsection, customs services shall be 

treated as being ‘‘adequately provided’’ if such of those services that 

are necessary to meet the needs of parties subject to customs inspection are provided in a timely manner taking into account factors such as— 

(A) the unavoidability of weather, mechanical, and other 

delays; 

(B) the necessity for prompt and efficient passenger and baggage clearance; 


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148 

(C) the perishability of cargo; 

(D) the desirability or unavoidability of late night and early 

morning arrivals from various time zones; 

(E) the availability (in accordance with regulations prescribed under subsection (g)(2)) of customs personnel and resources; and 

(F) the need for specific enforcement checks. 

(6) Notwithstanding any other provision of law except paragraph 

(2), during any period when fees are authorized under subsection 

(a), no charges, other than such fees, may be collected— 

(A) for any— 

(i) cargo inspection, clearance, or other customs activity, 

expense, or service performed (regardless whether performed outside of normal business hours on an overtime 

basis), or 

(ii) customs personnel provided, 

in connection with the arrival or departure of any commercial 

vessel, vehicle, or aircraft, or its passengers, crew, stores, material, or cargo, in the United States; 

(B) for any preclearance or other customs activity, expense, 

or service performed, and any customs personnel provided, outside the United States in connection with the departure of any 

commercial vessel, vehicle, or aircraft, or its passengers, crew, 

stores, material, or cargo, for the United States; or 

(C) in connection with— 

(i) the activation or operation (including Customs Service supervision) of any foreign trade zone or subzone established under the Act of June 18, 1934 (commonly known 

as the Foreign Trade Zones Act, 19 U.S.C. 81a et seq.), or 

(ii) the designation or operation (including Customs 

Service supervision) of any bonded warehouse under section 555 of the Tariff Act of 1930 (19 U.S.C. 1555). 

(f) DISPOSITION OF FEES.—(1) 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— 

(A) the portion of such fees that is required under paragraph 

(3) for the direct reimbursement of appropriations, and 

(B) amounts deposited into the Customs Commercial and 

Homeland Security Automation Account under paragraph (4). 

(2) Except as otherwise provided in this subsection, all funds in 

the Customs User Fee Account shall be available, to the extent provided for in appropriations Acts, to pay the costs (other than costs 

for which direct reimbursement under paragraph (3) is required) 

incurred by the United States Customs Service in conducting customs revenue functions as defined in section 415 of the Homeland 

Security Act of 2002 (other than functions performed by the Office 

of International Affairs referred to in section 415(8) of that Act), 

and for automation (including the Automation Commercial Environment computer system), and for no other purpose. To the extent 

that funds in the Customs User Fee Account are insufficient to pay 

the costs of such customs revenue functions, customs duties in an 

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able, to the extent provided for in appropriations Acts, to pay the 

costs of such customs revenue functions in the amount of such insufficiency, and shall be available for no other purpose. The provisions of the first and second sentences of this paragraph specifying 

the purposes for which amounts in the Customs User Fee Account 

may be made available shall not be superseded except by a provision of law which specifically modifies or supersedes such provisions. So long as there is a surplus of funds in the Customs User 

Fee Account, the Secretary of the Treasury may not reduce personnel staffing levels for providing commercial clearance and 

preclearance services. 

(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 the fees under subsection (a) (9) and (10) and the excess fees determined by the Secretary under paragraph (4)), each 

appropriation for the amount paid out of that appropriation for the 

costs incurred by the Secretary— 

(i) in— 

(I) paying overtime compensation under section 5(a) of 

the Act of February 13, 1911, 

(II) paying premium pay under section 5(b) of the Act of 

February 13, 1911, but the amount for which reimbursement may be made under this subclause may not, for any 

fiscal year, exceed the difference between the total cost of 

all the premium pay for such year calculated under section 

5(b) and the cost of the night and holiday premium pay 

that the Customs Service would have incurred for the 

same inspectional work on the day before the effective date 

of section 13813 of the Omnibus Budget Reconciliation Act 

of 1993, 

(III) paying agency contributions to the Civil Service Retirement and Disability Fund to match deductions from 

the overtime compensation paid under subclause (I), 

(IV) providing all preclearance services for which the recipients of such services are not required to reimburse the 

Secretary of the Treasury, and 

(V) paying foreign language proficiency awards under 

section 13812(b) of the Omnibus Budget Reconciliation Act 

of 1993, 

(ii) to the extent funds remain available after making reimbursements under clause (i), in providing salaries for full-time 

and part-time inspectional personnel and equipment that enhance customs services for those persons or entities that are 

required to pay fees under paragraphs (1) through (8) of subsection (a) (distributed on a basis proportionate to the fees collected under paragraphs (1) through (8) of subsection (a), and 

(iii) to the extent funds remain available after making reimbursements under clause (ii), in providing salaries for up to 50 

full-time equivalent inspectional positions to provide 

preclearance services. 

The transfer of funds required under subparagraph (C)(iii) has priority over reimbursements under this subparagraph to carry out 

subclauses (II), (III), (IV), and (V) of clause (i). Funds described in 

clause (ii) shall only be available to reimburse costs in excess of the 


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150 

highest amount appropriated for such costs during the period beginning with fiscal year 1990 and ending with the current fiscal 

year. 

(B) Reimbursement of appropriations under this paragraph— 

(i) shall be subject to apportionment or similar administrative practices; 

(ii) shall be made at least quarterly; and 

(iii) to the extent necessary, may be made on the basis of estimates made by the Secretary of the Treasury and adjustments shall be made in subsequent reimbursements to the extent that the estimates were in excess of, or less than, the 

amounts required to be reimbursed. 

(C)(i) For fiscal year 1991 and subsequent fiscal years, the 

amount required to reimburse costs described in subparagraph 

(A)(i) shall be projected from actual requirements, and only the excess of collections over such projected costs for such fiscal year 

shall be used as provided in subparagraph (A)(ii). 

(ii) The excess of collections over inspectional overtime and 

preclearance costs (under subparagraph (A)(i)) reimbursed for fiscal 

years 1989 and 1990 shall be available in fiscal year 1991 and subsequent fiscal years for the purposes described in subparagraph 

(A)(ii), except that $30,000,000 of such excess shall remain without 

fiscal year limitation in a contingency fund and, in any fiscal year 

in which receipts are insufficient to cover the costs described in 

subparagraph (A) (i) and (ii), shall be used for— 

(I) the costs of providing the services described in subparagraph (A)(i), and 

(II) after the costs described in subclause (I) are paid, the 

costs of providing the personnel and equipment described in 

subparagraph (A)(ii) at the preceding fiscal year level. 

(iii) For each fiscal year, the Secretary of the Treasury shall calculate the difference between— 

(I) the estimated cost for overtime compensation that would 

have been incurred during that fiscal year for inspectional 

services if section 5 of the Act of February 13, 1911 (19 U.S.C. 

261 and 267), as in effect before the enactment of section 

13811 of the Omnibus Budget Reconciliation Act of 1993, had 

governed such costs, and 

(II) the actual cost for overtime compensation, premium pay, 

and agency retirement contributions that is incurred during 

that fiscal year in regard to inspectional services under section 

5 of the Act of February 13, 1911, as amended by section 13811 

of the Omnibus Budget Reconciliation Act of 1993, and under 

section 8331(3) of title 5, United States Code, as amended by 

section 13812(a)(1) of such Act of 1993, plus the actual cost 

that is incurred during that fiscal year for foreign language 

proficiency awards under section 13812(b) of such Act of 1993, 

and shall transfer from the Customs User Fee Account to the General Fund of the Treasury an amount equal to the difference calculated under this clause, or $18,000,000, whichever amount is 

less. Transfers shall be made under this clause at least quarterly 

and on the basis of estimates to the same extent as are reimbursements under subparagraph (B)(iii). 

(D) Nothing in this paragraph shall be construed to preclude the 

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lected under subsection (a), to pay the costs set forth in clauses (i), 

(ii), and (iii) of subparagraph (A). 

(4)(A) There is created within the general fund of the Treasury 

a separate account that shall be known as the ‘‘Customs Commercial and Homeland Security Automation Account’’. In each of fiscal 

years 2003, 2004, and 2005 there shall be deposited into the Account from fees collected under subsection (a)(9)(A), $350,000,000. 

(B) There is authorized to be appropriated from the Account in 

fiscal years 2003 through 2005 such amounts as are available in 

that Account for the development, establishment, and implementation of the Automated Commercial Environment computer system 

for the processing of merchandise that is entered or released and 

for other purposes related to the functions of the Department of 

Homeland Security. Amounts appropriated pursuant to this subparagraph are authorized to remain available until expended. 

(C) In adjusting the fee imposed by subsection (a)(9)(A) for fiscal 

year 2006, the Secretary of the Treasury shall reduce the amount 

estimated to be collected in fiscal year 2006 by the amount by 

which total fees deposited to the Account during fiscal years 2003, 

2004, and 2005 exceed total appropriations from that Account. 

(5) Of the amounts collected in fiscal year 1999 under paragraphs (9) and (10) of subsection (a), $50,000,000 shall be available to the 

Customs Service, subject to appropriations Acts, for automated 

commercial systems. Amounts made available under this paragraph shall remain available until expended. 

(g) REGULATIONS AND ENFORCEMENT.—(1) 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) 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. 

(h) CONFORMING AMENDMENTS.—(1) Subsection (i) of section 305 

of the Rail Passenger Service Act (45 U.S.C. 545(i)) is amended by 

striking out the last sentence thereof. 

(2) Subsection (e) of section 53 of the Airport and Airway Development Act of 1970 (49 U.S.C. 1741(e)) is repealed. 


SSpencer on DSK4SPTVN1PROD with REPORTS
152 

(i) EFFECT ON OTHER AUTHORITY.—Except with respect to customs services for which fees are imposed under subsection (a), 

nothing in this section shall be construed as affecting the authority 

of the Secretary of the Treasury to charge fees under section 214(b) 

of the Customs Procedural Reform and Simplification Act of 1978 

(19 U.S.C. 58a). 

(j) EFFECTIVE DATES.—(1) Except as otherwise provided in this 

subsection, the provisions of this section, and the amendments and 

repeals made by this section, shall apply with respect to customs 

services rendered after the date that is 90 days after the date of 

enactment of this Act. 

(2) Fees may be charged under subsection (a)(5) only with respect 

to customs services rendered in regard to arriving passengers using 

transportation for which documents or tickets were issued after the 

date that is 90 days after such date of enactment. 

(3)(A) Fees may not be charged under paragraphs (9) and (10) of 

subsection (a) after øSeptember 30, 2024¿ July 7, 2025. (B)(i) Subject to clause (ii), Fees may not be charged under paragraphs (1) through (8) of subsection (a) after September 30, 2024. 

(ii) In fiscal year 2006 and in each succeeding fiscal year for 

which fees under paragraphs (1) through (8) of subsection (a) are 

authorized— 

(I) the Secretary of the Treasury shall charge fees under 

each such paragraph in amounts that are reasonably related to 

the costs of providing customs services in connection with the 

activity or item for which the fee is charged under such paragraph, except that in no case may the fee charged under any 

such paragraph exceed by more than 10 percent the amount 

otherwise prescribed by such paragraph; 

(II) the amount of fees collected under such paragraphs may 

not exceed, in the aggregate, the amounts paid in that fiscal 

year for the costs described in subsection (f)(3)(A) incurred in 

providing customs services in connection with the activity or 

item for which the fees are charged under such paragraphs; 

(III) a fee may not be collected under any such paragraph except to the extent such fee will be expended to pay the costs 

described in subsection (f)(3)(A) incurred in providing customs 

services in connection with the activity or item for which the 

fee is charged under such paragraph; and 

(IV) any fee collected under any such paragraph shall be 

available for expenditure only to pay the costs described in 

subsection (f)(3)(A) incurred in providing customs services in 

connection with the activity or item for which the fee is 

charged under such paragraph. 

(k) ADVISORY COMMITTEE.—The Commissioner of Customs shall 

establish an advisory committee whose membership shall consist of 

representatives from the airline, cruise ship, and other transportation industries who may be subject to fees under subsection (a). 

The advisory committee shall not be subject to termination under 

section 14 of the Federal Advisory Committee Act. The advisory 

committee shall meet on a periodic basis and shall advise the Commissioner on issues related to the performance of the inspectional 

services of the United States Customs Service. Such advice shall 

include, but not be limited to, such issues as the time periods during which such services should be performed, the proper number 


SSpencer on DSK4SPTVN1PROD with REPORTS
153 

and deployment of inspection officers, the level of fees, and the appropriateness of any proposed fee. The Commissioner shall give 

consideration to the views of the advisory committee in the exercise 

of his or her duties. 

* * * * * * * 

SECTION 503 OF THE UNITED STATES–KOREA FREE 

TRADE AGREEMENT IMPLEMENTATION ACT 

SEC. 503. RATE FOR MERCHANDISE PROCESSING FEES. 

For the period beginning on December 1, 2015, and ending on 

June 30, ø2021¿ 2025, section 13031(a)(9) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)) shall 

be applied and administered— 

(1) in subparagraph (A), by substituting ‘‘0.3464’’ for ‘‘0.21’’; 

and 

(2) in subparagraph (B)(i), by substituting ‘‘0.3464’’ for 

‘‘0.21’’. 

Æ 


SSpencer on DSK4SPTVN1PROD with REPORTS