108TH CONGRESS REPT. 108–224 " HOUSE OF REPRESENTATIVES ! 1st Session Part 2

UNITED STATES-CHILE FREE TRADE AGREEMENT 

IMPLEMENTATION ACT

JULY 22, 2003.—Ordered to be printed 

Mr. SENSENBRENNER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 2738] 

[Including cost estimate of the Congressional Budget Office]

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 2738) to implement the United States-Chile Free Trade 

Agreement, having considered the same, reports favorably thereon 

without amendment and recommends that the bill do pass.

CONTENTS 

Page 

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

Background and Need for the Legislation ............................................................. 2

Hearings ................................................................................................................... 11

Committee Consideration ........................................................................................ 11

Vote of the Committee ............................................................................................. 12

Committee Oversight Findings ............................................................................... 12

New Budget Authority and Tax Expenditures ...................................................... 12

Congressional Budget Office Cost Estimate .......................................................... 12

Performance Goals and Objectives ......................................................................... 15

Constitutional Authority Statement ...................................................................... 15

Section-by-Section Analysis and Discussion .......................................................... 15

Changes in Existing Law Made by the Bill, as Reported ..................................... 20

Agency Correspondence ........................................................................................... 46

Markup Transcript .................................................................................................. 51

Mock Markup Transcript ........................................................................................ 155

Minority Views ......................................................................................................... 203

2

1 19 U.S.C. § 3805 et. seq. (2002). 2 19 U.S.C. § 2191 et. seq. (2002). 3The full text of the U.S.-Chile FTA is available at: <http://www.ustr.gov/new/fta/chile. htm>. 

4See generally, J.F. Hornbeck, CRS Report for Congress, The U.S.-Chile Free Trade Agreement: Economic and Trade Policy Issues, June 26, 2003. 

PURPOSE AND SUMMARY

On June 6, 2003, the United States and Chile entered into a Free 

Trade Agreement (‘‘FTA’’) after several rounds of negotiation that 

commenced in December of 2000. H.R. 2738 approves the U.S.-

Chile FTA submitted to Congress on July 15, 2003 and makes 

changes to United States law necessary to ensure compliance with 

the agreement. The legislation contains four titles: Title I, ‘‘Approval of, and General Provisions Relating to the Agreement;’’ Title 

II, ‘‘Customs Provisions;’’ Title III, ‘‘Relief from Imports;’’ and Title 

IV, ‘‘Temporary Entry of Business Persons.’’ The Committee’s consideration of H.R. 2738 was limited to title IV of the legislation. 

Title IV establishes 1,400 annual professional worker visas for 

Chilean citizens to enter the United States on a temporary basis. 

H.R. 2738 was considered pursuant to the Bipartisan Trade Promotion Authority Act of 2002 1 and the Trade Act of 1974.2 As a 

result, the legislation was considered on an expedited basis which 

did not permit committees of jurisdiction to amend the legislation 

after its formal introduction. However, the Committee made several changes to draft implementing legislation transmitted to the 

Committee for a pre-introduction ‘‘mock markup’’ on July 10, 2003. 

These changes were substantially reflected in H.R. 2738. 

BACKGROUND AND NEED FOR THE LEGISLATION

U.S.-CHILE FREE TRADE AGREEMENT

Background 

On June 6, 2003, the United States and Chile entered into a bilateral FTA, concluding a 14-round negotiation process that began 

in December of 2000.3 Chile is recognized as one of the most open, 

reformed, and developed economies in Latin America. The Bush 

Administration has asserted that a U.S.-Chile FTA would expand 

U.S. exports, provide a basis for broader hemispheric trade liberalization, enhance regional economic and political cooperation, and 

support economic and trade reform in Latin America. Chile has 

pursued trade liberalization agreements with a number of its trading partners, including Bolivia, Mexico, Venezuela, Colombia, Ecuador, Peru, and Argentina. In addition, Chile has signed FTAs with 

Canada and Mexico. In April and October 2002, Chile completed 

negotiations for an FTA with the European Union and South 

Korea, and is negotiating FTAs with Japan, New Zealand, and 

Singapore. Proponents of the U.S.-Chile FTA have argued that 

Chile’s current trade agreements with U.S. economic competitors 

place U.S. exporters at a commercial disadvantage and that eliminating these tariffs would enhance U.S. commercial interests. In 

2001, Chile’s per capita income level was second only to Argentina’s 

in Latin America and will likely be first once data reflect Argentina’s current financial crisis.4

The United States is Chile’s largest trading partner, accounting 

for 20 percent of Chilean exports and 15 percent of imports in 

3

5See U.S. Trade Balance With Chile, U.S. Census Bureau, Foreign Trade Division, U.S. DEPT. OF COMMERCE, <http://landview.census.gov/foreign-trade/balance/c3370.html>. 6See Id. 

7 Inter-American Development Bank (IDB), Integration and Trade in the Americas: Periodic 

Note, December 2000, <http://www.iadb.org/int/itd/english/periodic notes/May02/intro.pdf>. 8 U.S.-Chile Free Trade Agreement: Potential Economywide and Selected Sectoral Effects, U.S. 

INTL. TRADE COMM., Publication 3605, (June 2003), <ftp://ftp.usitc.gov/pub/reports/studies/

pub3605.PDF>. 

2002. By contrast, Chile is the United States’ 34th largest export 

destination and 36th largest import contributor, accounting for 0.3 

percent of U.S. trade.5 U.S. products exported to Chile are mostly 

capital goods. These include: machinery (31 percent), particularly 

computers, office machinery, and industrial equipment such as gas 

turbines and bulldozers; electrical machinery (16 percent) including 

television and radio transmission apparatus, telephone equipment, 

spare parts, integrated circuits, sound recording equipment and 

media; vehicles (8 percent) mostly trucks and passenger cars; aircraft and parts (5 percent) and optical/medical instruments (5 percent).6 The top five U.S. imports from Chile are natural resource 

based goods that reflect some refining of the basic resource, but little value-added manufacturing activity. They account for nearly 70 

percent of total imports from Chile and include: copper articles (19 

percent), mostly refined alloys; edible fruits and nuts (18 percent), 

most of which are grapes; fish (15 percent), mostly salmon; wood 

(13 percent), various types of lumber; and beverages (4 percent), 

virtually all wine.7

Last month, the United States International Trade Commission 

(ITC) released a comprehensive study assessing the likely impact 

of the U.S.-Chile FTA on the U.S. economy, providing both quantitative and qualitative estimates of the FTA’s possible effects. The 

overall estimate of the ITC study was that by 2016, when the full 

effect of tariff eliminations would be felt, U.S. exports to Chile 

would increase in a range between 18 percent and 52 percent and 

U.S. imports would rise between 6 percent and 14 percent. The 

study notes that this flow of goods would be very small relative to 

total U.S. trade and that the economy-wide effects on trade, production, and overall economic welfare would be small to negligible 

(in a range of negative 0.001 percent to a positive 0.003 percent of 

GDP).8

Summary of U.S.-Chile FTA Provisions Pertaining to the Jurisdiction of the Committee on the Judiciary 

Although the Committee’s formal legislative consideration of 

H.R. 2738 was limited to title IV of the legislation, which implemented changes to United States immigration law, the U.S.-Chile 

FTA also contained intellectual property and competition chapters 

that fall within the jurisdiction of the Committee. 

Intellectual Property Rights (IPR) 

Chile is a signatory to the Trade Related Intellectual Property 

Rights (TRIPS), but has not yet ratified its implementing provisions. In addition, Chile has signed two World Intellectual Property 

Organization (WIPO) treaties, but has also not fully complied with 

these obligations. The U.S.-Chile FTA reaffirms obligations under 

TRIPS and adds another layer of protection which would potentially increase revenues to a number of industries including: motion 

4

9Supra, note 5, at 109 and 118. 

picture, sound recording, business software, book publishing, pharmaceuticals, and agricultural chemicals.9

Chapter 17 of the Agreement requires Chile to ratify or accede 

to several international IPR agreements, including the International Convention for the Protection of New Varieties of Plants 

(UPOV 1991), the Trademark Law Treaty, the Brussels Convention 

relating to the Distribution of Program-Carrying Satellite Signals, 

and the Patent Cooperation Treaty. The FTA also enhances enforcement of intellectual property rights. Non-discrimination obligations apply to all types of intellectual property. The FTA ensures 

government involvement in resolving disputes between trademarks 

and Internet domain names (important to prevent ‘‘cyber-squatting’’ of trademarked domain names). It also applies the principle 

of ‘‘first-in-time, first-in-right’’ to trademarks and geographical indicators (place-names) applied to products. 

The Agreement streamlines the trademark filing process by allowing applicants to use their own national patent/trademark offices for filing trademark applications. The FTA ensures that only 

authors, composers, and other copyright owners have the right the 

make their works available online. Copyright owners maintain 

rights to temporary copies of their works on computers. Copyrighted works and phonograms are protected for extended terms, 

consistent with U.S. standards and international trends. The FTA 

also contains anti-circumvention provisions aimed at preventing 

tampering with technologies (such as embedded codes on discs) 

that are designed to prevent piracy and unauthorized distribution 

over the Internet. It also ensures that governments use only legitimate computer software (in order to set a positive example for private users). Chile is to prohibit the production of optical discs (CDs, 

DVDs or software) without a source identification code unless authorized by the copyright holder in writing. 

Under the FTA, protection for encrypted program-carrying satellite signals extends to the signals themselves as well as the programming. This is designed to prevent piracy of satellite television 

programming. Both sides agreed to criminalize unauthorized reception and redistribution of satellite signals. The Agreement also contains limited liability for Internet Service Providers (ISPs)—reflecting the balance struck in the U.S. Digital Millennium Copyright 

Act between legitimate ISP activity and the infringement of copyrights. In essence, both sides are to provide immunity to Internet 

service providers for complying with notification and take-down 

procedures when material suspected to be infringing on copyright 

is hosted on their servers. The FTA provides for a patent term to 

be extended to compensate for up-front administrative or regulatory delays in granting the original patent, consistent with U.S. 

practice. The grounds for revoking a patent are limited to the same 

grounds required to originally refuse a patent. This is to protect 

against arbitrary revocation. 

The Agreement provides further protections for patents covering 

biotech plants and animals. Chile is to accede to the International 

Convention for the Protection of New Varieties of Plants. It also 

provides for protection against imports of pharmaceutical products 

without a patent-holder’s consent by allowing lawsuits when conVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00004 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
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tracts are breached. Under the FTA, test data and trade secrets 

submitted to a government for the purpose of product approval are 

to be protected against disclosure for a period of 5 years for pharmaceuticals and 10 years for agricultural chemicals. The FTA also 

closes potential loopholes to these provisions and is designed to ensure that government marketing-approval agencies will not grant 

approval to patent-violating products. 

In addition, the Agreement provides for criminal penalties for 

companies that make pirated copies from legitimate products. The 

Chilean government guarantees that it has authority to seize, forfeit, and destroy counterfeit and pirated goods and the equipment 

used to produce them. IPR laws are to be enforced against traded 

goods, including trans-shipments, to deter violators from using U.S. 

or Chilean ports or free-trade zones to traffic in pirated products. 

The FTA mandates both statutory and actual damages under Chilean law for IPR violations (as a deterrent against piracy) and provides that monetary damages be awarded even if actual economic 

harm (retail value, profits made by violators) cannot be determined. Chile is to cooperate in preventing pirated and counterfeit 

goods from being imported into the United States. Finally, the FTA 

sharply restricts Chile from using compulsory licenses to copy patented drugs and sets up new barriers to the import of patented 

drugs sold at lower prices in third countries. 

Competition Policy/Antitrust 

H.R. 2738 contains no changes to United States antitrust law. 

However, a summary of provisions related to competition/antitrust 

contained in the U.S.-Chile FTA is set forth below. 

Chapter 16 of the Agreement helps ensure that the opportunities 

created by trade liberalization are supported by healthy competitive domestic markets, allowing the firms of each country to compete unhampered by anticompetitive business conduct in either 

country’s territory. Firms that are subject to antitrust enforcement 

action will be guaranteed some basic procedural safeguards. Since 

these protections already exist in the United States, no changes to 

United States law are necessary. While state monopolies and state 

enterprises do not account for a significant portion of either country’s economy, the provisions governing these entities will help 

eliminate the potential for either party to favor domestic firms in 

the sale or purchase of goods and services. 

Specifically, chapter 16 ensures that both countries:

• Enforce domestic antitrust law that prohibits anticompetitive 

business conduct;

• Cooperate in the enforcement of antitrust law;

• Ensure that any private or public monopolies designated by 

either country, and any state enterprises, be subject to disciplinary action for abusing their status or otherwise discriminating in a manner that harms the interests of the 

other country.

• Explicitly recognize that anticompetitive conduct threatens 

the free flow of bilateral trade and investment, and seek to 

secure the benefits of the FTA by prohibiting such conduct, 

encouraging economically sound competition policies, and 

furthering transparency and cooperation;

6

• Expand NAFTA’s competition provisions by affirming that 

antitrust laws be enforced in a neutral manner that does not 

discriminate on the basis of nationality;

• Ensure basic procedural rights for firms that are subject to 

antitrust enforcement actions: each country will provide a 

right to be heard and to present evidence before imposing a 

sanction or remedy;

• Provide for consultations and further transparency by allowing either country to request from the other specific public 

information regarding antitrust enforcement activity, official 

monopolies and state enterprises, and any exemptions from 

their antitrust laws.

Finally, it is important to note that the provisions regarding 

antitrust law and enforcement are not subject to dispute settlement. 

Temporary Entry 

Title IV of the pre-introduction draft implementing legislation for 

the U.S.-Chile FTA that the Administration forwarded to the Committee for its ‘‘mock markup’’ on July 10, 2003, effectuated U.S. 

commitments under chapter 14 of the U.S.-Chile FTA pertaining to 

the temporary entry of business persons. However, this draft legislation was considerably amended during the Committee’s ‘‘mock 

markup’’ on July 10, 2003. These Committee recommendations 

were then incorporated into the introduced version of H.R. 2738. 

These changes are highlighted in the ‘‘Pre-Introduction ‘Mock 

Markup’ of U.S.-Chile FTA Implementing Legislation and Committee Amendments Incorporated Into H.R. 2738’’ section of this report. 

In general, chapter 14 of the U.S.-Chile FTA is consistent with 

existing provisions of the Immigration and Nationality Act (‘‘INA’’). 

The four categories of persons eligible for admission under the 

Agreement’s expedited procedures correspond to existing INA nonimmigrant and related classifications. 

In order to provide for the admission of business visitors and 

intra-company transferees, no changes in U.S. statutes are required. Limited technical changes are needed to provide for the admission of traders and investors and professionals. Legislation is 

also required to implement article 14.3(2) of the Agreement regarding labor disputes. 

Traders and Investors 

Under Section B of Annex 14.3 of the Agreement, citizens of 

Chile are eligible for temporary entry as traders and investors. 

This category provides for admission under requirements identical 

to those governing admission under INA § 101(a)(15)(E) (8 U.S.C. 

§ 1101(a)(15)(E)), which permits entry for persons to carry on substantial trade in goods or services or to develop and direct investment operations. 

Section 101(a)(15)(E) of the INA currently conditions admission 

into the United States upon authorization pursuant to a treaty of 

commerce and navigation. Since the Agreement is not a treaty of 

commerce and navigation, and no such treaty exists between the 

United States and Chile, legislation is necessary to accord treaty 

7

trader and investor status to Chilean citizens qualifying for entry 

under Section B. 

Section 401 of the draft legislation did not amend section 

101(a)(15)(E). Instead, it used a mechanism similar to that provided in § 341(a) of the North American Free Trade Agreement Implementation Act, which in turn was based upon the Act of June 

18, 1954 (68 Stat. 264, 8 U.S.C. § 1184(a)). The Act of June 18, 

1954 conferred treaty trader and investor status upon nationals of 

the Philippines on a reciprocal basis secured by an agreement entered into by the President of the United States and the President 

of the Philippines. 

Professionals 

Section 402(a) of the draft bill amended § 101(a)(15) of the INA 

(8 U.S.C. § 1101(a)(15)), which defines categories of persons entitled 

to enter the United States as nonimmigrants. Section 402(a) of the 

draft bill inserted a new subparagraph (W) at the end of INA 

§ 101(a)(15). Subparagraph (W) would have established a new category of aliens entitled to enter the United States temporarily as 

nonimmigrants. These aliens would have been citizens of countries 

with which the United States had entered into free trade agreements and who sought to come to the United States temporarily to 

engage in business activities at the professional level. Entry into 

the United States under subparagraph (W) would have been subject to regulations issued by the Secretary of Homeland Security 

implementing numerical limitations provided for in the applicable 

agreement, as set forth in new paragraph (8) of INA § 214(g), as 

added by the bill. The Department of Labor would have issued regulations governing temporary entry of professionals under this proposed provision of law. This amendment to the INA would have implemented Section D of Annex 14.3 of the Agreement. 

New INA § 101(a)(15)(W) also provided for the entry of spouses 

and children accompanying or following to join business persons 

entering under this category. The purpose of this provision was to 

grant express authorization for current Immigration and Naturalization Service practice, which is to admit such persons, but not 

allow them to be employed in the United States unless they independently met all applicable INA requirements. 

Persons seeking temporary entry into the United States under 

§ 101(a)(15)(W) would have been:

• considered to be seeking nonimmigrant status;

• subject to general requirements relating to admission of nonimmigrants, including those pertaining to the issuance of 

entry documents and the presumption set out in INA 

§ 214(b) (8 U.S.C. § 1184(b)); and

• accorded nonimmigrant status on admission.

It should be noted that while there are many similarities in the 

way professionals would have been treated under § 101(a)(15)(W) of 

the INA, as proposed by the bill, and the way H-1B professionals 

are treated, a determination of admissibility under subparagraph 

(W) would have neither foreclosed nor established eligibility for 

entry as an H-1B professional. Further, § 101(a)(15)(W) would not 

have authorized a professional to establish a business or practice 

8

in the United States in which the professional will be self-employed. 

Numerical Limitations 

Paragraph six of Section D of Annex 14.3 of the Agreement permits the United States to establish an annual numerical limit on 

temporary entries under the Agreement of Chilean professionals. 

Under the proposed paragraph (8) of INA § 214(g) that would have 

been added by § 402(a) of the draft bill, the Secretary of Homeland 

Security would have issued regulations establishing an annual 

limit of up to 1,400 new temporary entry applications from Chilean 

professionals, as provided in Appendix 14.3(D)(6) of the Agreement. 

Labor Attestations 

Under § (D)(5) of Annex 14.3 of the Agreement, the United States 

may require that an attestation of compliance with labor and immigration laws be made a condition for the temporary entry of Chilean professionals. This provision allows U.S. labor and immigration 

officials to ensure that U.S. employers are not hiring Chilean professionals as a way to put pressure on U.S. employees to accept 

lower wages or less favorable terms and conditions of employment. 

Section 402(b) of the draft legislation would have implemented 

the attestation requirement under the Agreement. Section 402(b) of 

the draft bill would have amended § 212 of the INA (8 U.S.C. 

§ 1182) by adding a new subsection (s) to the end of that section. 

INA § 212(s)(1), which would have been added by § 402(b) of the 

bill, required a U.S. employer seeking a temporary entry visa for 

a Chilean professional to file an attestation with the Secretary of 

Labor. The attestation would have consisted of four core elements 

similar to those required for attestations under the ‘‘H-1B’’ visa 

program. See 8 U.S.C. § 1182(n)(1)(A)–(C). Thus, an employer 

would have been required to attest that:

• It would pay the employee the higher of: (a) the actual wage 

paid to all other individuals with similar experience and 

qualifications for the specific employment in question, or (b) 

the prevailing wage level for the occupational classification 

in the area of employment.

• It will provide working conditions for the employee that will 

not adversely affect the working conditions of workers similarly employed.

• There is no strike or lockout in the course of a labor dispute 

in the occupational classification at the place of employment.

• The employer has provided notice of its attestation to its employees’ bargaining representative in the occupational classification in the area for which the employee is sought or, absent such a representative, has otherwise notified its employees.

The remainder of new INA § 212(s) contains provisions for enforcing the labor attestation requirement. Like the contents of the attestation itself, the enforcement requirements are based on requirements under the ‘‘H-1B’’ visa program. INA § 212(s)(2)(A) requires 

an employer to make copies of labor attestations (and such accompanying documents as are necessary) available for public examination at the employer’s principal place of business or worksite. INA 

9

§ 212(s)(2)(B) requires the Secretary of Labor to compile a list of all 

labor attestations filed including, with respect to each attestation, 

the wage rate, number of alien professionals sought for employment, period of intended employment, and date of need. INA 

§ 212(s)(2)(C) provides that the Secretary of Labor shall accept a 

labor attestation within 7 days of filing and issue the certification 

necessary for an alien to enter the United States as a nonimmigrant under INA § 101(a)(15)(W), unless the attestation is incomplete or obviously inaccurate. 

INA § 212(s)(3)(A) requires the Secretary of Labor to establish a 

process for the receipt, investigation, and disposition of complaints 

respecting an employer’s failure to meet a condition specified in a 

labor attestation or an employer’s misrepresentation of material 

facts in such an attestation. Section 212(s)(3) also sets forth penalties that may be imposed for violation of the labor attestation requirements, including monetary fines and denial of applications for 

visas under INA section 101(a)(15)(W) for specified periods. INA 

§ 212(s)(4) defines certain terms used in INA § 212(s). 

Labor Disputes 

Article 14.3(2) of the Agreement establishes an important safeguard for the domestic labor force in the United States and Chile, 

respectively. It permits either government to refuse to issue an immigration document authorizing employment where the temporary 

entry of a business person might affect adversely the settlement of 

a labor dispute or the employment of a person involved in such dispute. Article 14.3(2) thus allows the United States to deny temporary entry to a Chilean business person whose activities in the 

United States require employment authorization if admission 

might interfere with an ongoing labor dispute. If the United States 

invokes article 14.3(2), it must inform the business person in writing of the reasons for its action and notify Chile. 

Section 403 of the draft bill implements article 14.3(2) of the 

Agreement by amending INA § 214(j) (8 U.S.C. § 1184(j)), designating current subsection (j) as paragraph (1) and inserting a new 

paragraph (2). New paragraph (2) of INA § 214(j) provides authority to refuse nonimmigrant classification under specified circumstances to a Chilean business person seeking to enter the 

United States under and pursuant to the Agreement. In particular, 

nonimmigrant classification must be refused if there is a strike or 

lockout affecting the relevant occupational classification at the 

Chilean business person’s place of employment or intended place of 

employment in the United States, unless that person establishes, 

pursuant to regulations issued by the Secretary of Homeland Security after consultations with the Secretary of Labor, that the business person’s entry will not adversely affect the settlement of the 

strike or lockout or the employment of any person involved in the 

strike or lockout. 

New paragraph (2) also requires the provision of notice to the affected Chilean business persons and to Chile of a determination to 

deny nonimmigrant classification, as required under article 14.3(3) 

of the Agreement. INA § 214(j)(2) as inserted by the bill applies 

only to requests for temporary entry by traders and investors, 

intra-company transferees, and professionals—i.e., the categories of 

nonimmigrants that require employment authorization under U.S. 

10

law (corresponding to Sections B, C, and D of Annex 14.3 of the 

Agreement). Employment in the U.S. labor market is not permitted 

for business visitors, as defined in INA § 101(a)(15)(B) (8 U.S.C. 

1101(a)(15)(B)) (corresponding to Section A of Annex 14.3 of the 

Agreement); violations of status under that provision that involve 

labor disputes are fully redressable under existing law. 

Section 214(j)(2) is similar to existing INA provisions that prohibit admission in certain circumstances where interference with a 

labor dispute may result. For example, under INA § 212(n)(1)(B) (8 

U.S.C. § 1182(n)(1)(B)), the U.S. employer sponsoring an alien for 

admission must certify that there is no strike or lockout in the occupational classification at the place of employment. Additionally, 

§ 214(j)(2) will supplement INA § 237(a)(1)(C) (8 U.S.C. 

1227(a)(1)(C)) and related INA provisions that now authorize deportation of an alien admitted under a particular nonimmigrant 

category if the alien ceases to perform the type of work permitted 

under that category or misrepresented the nature of the work at 

the time of admission. The Department of Labor will provide strike 

certifications to the Department of Homeland Security, as it has 

provided to the Immigration and Naturalization Service under existing provisions, pursuant to 8 C.F.R. 214.2(h)(17). 

Administrative Action 

Chile will be added to the list of countries, maintained by the Department of State, whose citizens are eligible for treaty trader and 

treaty investor status under INA § 101(a)(15)(E). With respect to 

professionals provided for under Section D of Annex 14.3 of the 

Agreement, in all cases where a state license is required to engage 

in a particular activity in the United States, such professionals will 

be required to obtain the appropriate state license. Pursuant to 

INA § 101(a)(15)(W) as added by section 402(a) of the bill, the Secretary of Homeland Security will issue regulations implementing 

the numerical limits set forth in Appendix 14.3(D)(6) of the Agreement. The Secretary of Labor would have issued regulations implementing the labor attestation provisions in new subsection (s) of 

INA § 212. The administrative agencies responsible for administering the other amendments to the INA described above will promulgate regulations to implement those amendments. 

Pre-Introduction ‘‘Mock Markup’’ of U.S.-Chile FTA Implementing 

Legislation and Committee Amendments Incorporated Into H.R. 

2738

On July 10, 2003, the Committee held a pre-introduction ‘‘mock 

markup’’ of draft implementing legislation submitted by the Administration to the Committee. The Committee’s consideration of 

this draft legislation was limited to title IV of the draft implementing legislation. During this meeting, Chairman Sensenbrenner, Ranking Member Conyers, and several Members of the 

Committee made it clear that they opposed the inclusion of immigration provisions in H.R. 2738 and that they would not support 

any future FTA that included substantive changes to United States 

immigration law. 

11

Judiciary Committee Amendments to Draft Implementing 

Legislation 

The Committee reported several amendments to the immigration 

provisions by voice vote. The amendments were reflected in H.R. 

2738. 

First, the Committee reported an amendment by Representative 

King to transfer the new ‘‘W’’ professional worker visa category for 

citizens of Chile to section 101(a)(15)(H)(i)(b(1) of the Immigration 

and Nationality Act, rather than 101(a)(15)(W) as provided for in 

the draft implementing legislation. Representative King’s amendment also ensured that in future years, the national H-1B visa cap 

will be reduced in two situations. First, the number of H-1B visas 

available in a fiscal year will be reduced by the number of Chilean 

citizens granted extensions of H-1B1 status in that fiscal year after 

having previously been granted five or more consecutive prior extensions. Second, the number of H-1B visas available in a fiscal 

year will be reduced by the number of H-1B1 visas allocated (1,400 

for citizens of Chile). However, if at the end of a fiscal year, the 

6,800 slots reserved for citizens of Chile and Singapore have not 

been exhausted, the number of H-1B visas available for that fiscal 

year will be adjusted upwards by the number of unused Chile/

Singapore visas. These newly available H-1B visas may be issued 

within the first 45 days of the next fiscal year to aliens who had 

applied for such visas during the fiscal year for which the adjustment was made. 

The Committee also reported an amendment offered by Representatives Berman and Conyers requiring that an application for 

every second extension for an H-1B1 visa be accompanied by a new 

employer attestation. This will have the effect of requiring the employer to update the prevailing wage determination at such time. 

The amendment also requires that an employer pay a fee when H1B1 status is initially granted and after every second extension of 

that status. The fee shall be the same as the fee an employer must 

pay when petitioning for an H-1B visa. However, if no fee is being 

assessed under the H-1B program, no fee shall be imposed under 

the H-1B1 program. 

Finally, the implementing legislation now clarifies that an employer generally cannot sponsor an alien for an E, L, or H-1B1 visa 

it there is any labor dispute occurring in the occupational classification at the place of employment, regardless of whether the labor 

dispute is classified as a strike or lockout. In this regard, worker 

protections in H.R. 2738 are broader than those contained in the 

H-1B visa category. 

HEARINGS

No hearings were held on H.R. 2738 before the Committee on the 

Judiciary. 

COMMITTEE CONSIDERATION

On July 16, 2003, the Committee met in open session and ordered favorably reported the bill H.R. 2738 without amendment by 

voice vote, a quorum being present. 

12

VOTE OF THE COMMITTEE

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

House of Representatives, the Committee notes that there were no 

recorded votes during the committee consideration of H.R. 2738. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of Rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of Rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of Rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

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

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 2738, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 21, 2003. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2738, a bill to implement 

the United States-Chile Free Trade Agreement. 

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

to provide them. The CBO staff contact is Annabelle Bartsch, who 

can be reached at 226–2680. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN.

Enclosure

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 2738—A bill to implement the United States-Chile Free Trade 

Agreement. 

SUMMARY

H.R. 2738 would approve the free trade agreement (FTA) between the government of the United States and the government of 

Chile that was entered into on June 6, 2003. It would provide for 

tariff reductions and other changes in law related to implementation of the agreement, such as provisions dealing with dispute settlement, rules of origin, and safeguard measures for textile and apVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00012 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
13

parel industries. The bill also would allow the temporary entry of 

certain business persons into the United States. 

The Congressional Budget Office estimates that enacting the bill 

would reduce revenues by $5 million in 2004, by $38 million over 

the 2004–2008 period, and by $109 million over the 2004–2013 period, net of income and payroll tax offsets. The bill would not have 

a significant effect on direct spending or spending subject to appropriation. CBO has determined that H.R. 2738 contains no intergovernmental or private-sector mandates as defined in the Unfunded 

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

State, local, or tribal governments. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 2738 is shown in the following table.

BASIS OF ESTIMATE

Revenues 

Under the United States-Chile agreement, all tariffs on U.S. imports from Chile would be phased out over time. The tariffs would 

be phased out for individual products at varying rates according to 

one of several different timetables ranging from immediate elimination to partial elimination over 10 years. According to the U.S. 

International Trade Commission (USITC), the U.S. collected $24 

million in customs duties in 2002 on about $3.6 billion of imports 

from Chile. These imports consist mostly of edible fruits and nuts, 

articles of wood or copper, fish and crustaceans, and certain organic 

chemicals. Based on these data, CBO estimates that phasing out 

tariff rates as outlined in the U.S.-Chile agreement would reduce 

revenues by $5 million in 2004, by $38 million over the 2004–2008 

period, and by $109 million over the 2004–2013 period, net of income and payroll tax offsets. 

This estimate includes the effects of increased imports from Chile 

that would result from the reduced prices of imported products in 

the United States, reflecting the lower tariff rates. It is likely that 

some of the increase in U.S. imports from Chile would displace imports from other countries. In the absence of specific data on the 

extent of this substitution effect, CBO assumes that an amount 


CBO1A.eps
14

equal to one-half of the increase in U.S. imports from Chile would 

displace imports from other countries. 

H.R. 2738 would also allow the Secretary of Labor to assess civil 

monetary penalties on employers for violations of the labor attestation process with respect to certain workers from Chile. CBO expects that any additional revenues collected as a result would 

amount to less than $500,000 in any year. 

Direct Spending 

Title IV of the bill would establish a new nonimmigrant category 

for certain professional workers from Chile. The legislation would 

limit the number of annual entries under this category to 1,400, 

plus spouses and children. The Bureau of Citizenship and Immigration Services (BCIS) would charge fees of about $100 to provide 

nonimmigrant visas, so CBO estimates that the agency would collect less than $1 million annually in offsetting receipts (a credit 

against direct spending). The agency is authorized to spend such 

fees without further appropriation, so the net impact on BCIS 

spending would not be significant. 

Under current law, the Department of State also collects $100 

application fee for nonimmigrant visas. These collections are spent 

on border security and consular functions. CBO estimates that the 

net budgetary impact would be less than $500,000 a year. 

Spending Subject to Appropriation 

Title I of H.R. 2738 would authorize the appropriation the necessary funds for the Department of Commerce to pay the United 

States’ share of the costs of the dispute settlement procedures established by the agreement. Based on information from the agency, 

CBO estimates that implementing this provision would cost 

$100,000 in 2004, and $250,000 in each of the following years, subject to the availability of appropriated funds. 

Title III would require the International Trade Commission (ITC) 

to investigate claims of injury to domestic industries as a result of 

the FTA. The ITC would have 120 days to determine whether a domestic industry has been injured, and if so, would recommend the 

necessary amount of import relief. The ITC would also submit a report on its determination to the President. According to the ITC, 

similar FTAs have resulted in only a handful of cases each year, 

at an average cost of about $200,000 per investigation. Based on 

this information, CBO estimates the bill would have no significant 

effect on spending subject to appropriation. 

SUMMARY OF EFFECT ON REVENUES AND DIRECT SPENDING

The overall effects of H.R. 2738 on revenues and direct spending 

are shown in the following table.

15

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

The bill contains no intergovernmental or private-sector mandates as defined in UMRA and would not affect the budgets of 

State, local, or tribal governments. 

ESTIMATE PREPARED BY: 

Federal Revenues: Annabelle Bartsch (226–2680) 

Federal Spending: 

Dispute Settlements—Melissa Zimmerman (226–2860) 

Immigration—Mark Grabowicz (226–2860), Christi HawleySadoti (226–2820), and Sunita D’Monte (226–2840) 

Impact on State, Local, and Tribal Governments: Melissa Merrell 

(225–3220) 

Impact on the Private Sector: Paige Piper/Bach (226–0207) 

ESTIMATE APPROVED BY: 

G. Thomas Woodward 

Assistant Director for Tax Analysis 

Peter H. Fontaine 

Deputy Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

H.R. 2738 does not authorize funding. Therefore, clause 3(c)(4) of 

Rule XIII of the Rules of the House of Representatives is inapplicable. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

The following section-by-section analysis describes the sections of 

H.R. 2738 within the rule X jurisdiction of the Committee on the 

Judiciary. 

TITLE IV. TEMPORARY ENTRY FOR BUSINESS PERSONS

It should be emphasized that all grounds of inadmissibility found 

at section 212(a) of the Immigration and Nationality Act (INA), as 

the section currently exists or as it may be modified in the future, 

shall apply to any applicant for admission pursuant to title IV. 


CBO1B.eps
16

Sec. 401. Nonimmigrant Traders and Investors. 

‘‘E’’ nonimmigrant visas are available for treaty traders and investors. A visa is available to an alien who: 

is entitled to enter the United States under and in pursuance of 

the provisions of a treaty of commerce and navigation between the 

United States and the foreign state of which he is a national, and 

the spouse and children of any such alien if accompanying or following to join him: i) solely to carry on substantial trade, including 

trade in services or trade in technology, principally between the 

United States and the foreign state of which he is a national, or 

ii) solely to develop and direct the operations of an enterprise in 

which he has invested . . . a substantial amount of capital[.] 

INA section 101(a)(15)(E). 

Section 401 of the bill provides that nationals of Chile (along 

with spouses and children, if accompanying or following to join), 

may, if otherwise eligible for a visa and admissible into the U.S., 

be considered to be classifiable as ‘‘E’’ nonimmigrants if entering 

solely for a purpose specified in clause (i) or (ii) of INA section 

101(a)(15)(E). H.R. 2739 contains a similar provision for nationals 

of Singapore. 

Sec. 402. Nonimmigrant Professionals; Labor Attestations. 

Section 402 of the bill creates a new nonimmigrant classification—‘‘H1B1’’—at section 101(a)(15)(H)(i)(b1) of the INA. This classification, for nationals of Chile (and Singapore, as provided for in 

H.R. 2739), is generally derived from the ‘‘H1B’’ program, found at 

section 101(a)(15)(H)(i)(b). Already existing and future Executive 

Office for Immigration Review (Immigration Judges and the Board 

of Immigration Appeals) and Federal court precedent regarding the 

H-1B program shall be applicable to identical provisions of the H1B1 program, and shall be applicable to similar provisions where 

appropriate. In deciding whether to grant visas for aliens under the 

H-1B1 visas, State Department consular officers and supervising 

officers of the Department of Homeland Security shall be familiar 

with, and adhere to, this precedent. 

There are four principal differences between the H-1B program 

and the new H-1B1 program. First, the H-1B1 category has its own 

yearly numerical quota—1,400 for Chileans (and 5,400 for Singaporeans, as contained in H.R. 2739). Second, under the H-1B1 program, there is no petition requirement. After the Department of 

Labor approves an employer’s attestation, a State Department consular officer overseas will decide whether to grant visas to alien applicants, dependent in part on whether the prospective job meets 

the standards of a qualifying occupation and whether the alien 

meets the educational standards of a qualifying employee. Third, 

while an alien can be granted H-1B status for a maximum of 6 

years which generally cannot be further extended, an alien will receive H-1B1 status for a 1-year period, which may be extended in 

1 year increments. Fourth, aliens seeking H-1B status do not have 

to prove, as most prospective nonimmigrants do, that they do not 

have an intent to become immigrants (see INA section 214(b)). 

Aliens seeking H-1B1 status will have to prove that they have no 

intent to become immigrants, as befits the purely temporary nature 

of visa provisions created as part of free trade agreements. 

17

H-1B1 visas are available for workers coming temporarily to the 

United States to perform services in a specialty occupation. Such 

an occupation is one that requires ‘‘(A) theoretical and practical application of a body of specialized knowledge; and (B) attainment of 

a bachelor’s or higher degree in the specific speciality (or its equivalent) as a minimum for entry into the occupation in the United 

States.’’ This requirement is to be interpreted identically to the requirement to qualify as a professional under the H-1B category (except as regarding four professions listed in appendix 14.3(D)(2) of 

the U.S.-Chile Free Trade Agreement). Thus, to qualify as a professional for purposes of section 402, a person must be engaged in a 

specialty occupation requiring a theoretical and practical application of a body of highly specialized knowledge and the attainment 

of a bachelor’s degree or higher in the specific specialty (or the 

equivalent of such a degree). 

H-1B1 visas shall authorize admission for 1 year. Such admission 

may be extended at the sole discretion of the Department of Homeland Security, but only in 1 year increments, and only if the alien 

is found to be in compliance with INA section 214(b). After every 

second extension of H-1B1 status, an application for a further extension must be accompanied by a new employer attestation. This 

will have the effect of requiring the employer to update the prevailing wage determination at such time. 

The total number of initial applications for admission under the 

H-1B1 program for Chilean nationals during any fiscal year is 

1,400 (plus accompanying or following to join spouses and children). This will have the effect of reducing the H-1B visa quota in 

two ways. First, the number of aliens who may be issued visas or 

otherwise provided nonimmigrant status in a fiscal year under the 

H-1B program will be reduced by the maximum number of approvals of initial applications for admission permitted under the H-1B1 

program in that fiscal year. However, if at the end of a fiscal year, 

the 1,400 approvals for nationals of Chile (or the 5,400 for nationals of Singapore under H.R. 2739) have not been exhausted, the 

number of H-1B visas available for that fiscal year will be adjusted 

upwards by the number of unused Chile/Singapore visas. These 

newly available H-1B visas may be issued within the first 45 days 

of the next fiscal year to aliens who had applied for such visas during the fiscal year for which the adjustment was made. Second, the 

number of aliens who may be issued visas or otherwise provided 

nonimmigrant status in a fiscal year under the H-1B program will 

be reduced by the number of extensions of H-1B1 status approved 

in that fiscal year to aliens who have previously been granted five 

or more consecutive prior extensions. 

As under the H-1B program, the H-1B1 program’s mechanism for 

protecting American workers is not a lengthy pre-arrival review of 

the availability of suitable American workers (such as the labor 

certification process necessary to obtain most employer-sponsored 

immigrant visas). Instead, an employer files a ‘‘labor condition attestation’’ with the Department of Labor (identical to the labor condition application under the H-1B program) making certain basic 

attestations (promises) and the Department of Labor then investigates complaints alleging noncompliance. 

18

The H-1B1 program contains the four basic attestations of the H1B1 program (found at INA sections 212(n)(1) for the H-1B program and at INA sections 212(t)(1) for the H-1B1 program):

• The employer will pay H-1B1 aliens wages that are the higher of the actual wage level paid by the employer to all other 

individuals with similar experience and qualifications for the 

specific employment in question or the prevailing wage level 

for the occupational classification in the area of employment, 

and the employer will provide working conditions for H-1B1 

aliens that will not adversely affect those of workers similarly employed.

• There is no strike or lockout in the course of a labor dispute 

in the occupational classification at the place of employment.

• At the time of the filing of the application, the employer has 

provided notice of the filing to the bargaining representative 

of the employer’s employees in the occupational classification 

and area for which the H-1B1 aliens are sought, or if there 

is no such bargaining representative, the employer has posted notice through such methods as physical posting in conspicuous locations at the place of employment or electronic 

notification to employees in the relevant occupation classification.

• The attestation will contain a specification of the number of 

aliens sought, the occupational classification in which the 

aliens will be employed, and the wage rate and conditions 

under which they will be employed.

There are two other attestations in the H-1B program that expire 

at the end of fiscal year 2003 that apply to specific employers, generally H-1B dependent employers. Should Congress decide to reauthorize these additional H-1B attestations and their enforcement 

mechanisms, or expand their scope, such as by requiring all employers to meet their terms, Congress can also make these changes 

applicable to the H-1B1 program. This is provided for specifically 

in annex 14.3(D)(5) of the U.S.-Chile Free Trade Agreement (‘‘[A] 

party may require a business person seeking temporary entry [as 

a professional] to comply with procedures applicable to temporary 

entry of professionals, such as an attestation of compliance with 

the Party’s labor and immigration laws.’’) and similarly in the U.S.-

Singapore Free Trade Agreement. More generally, should Congress 

extend or modify any provisions of the H-1B program, it may make 

corresponding modifications to the amendments to the INA made 

by this bill (and H.R. 2739), to the extent consistent with the obligations of the United States under the Agreement, as spelled out 

in side letters sent to the Chilean (and Singaporean) governments 

by Ambassador Zoellick. Thus, even though this implementing legislation does not include all requirements currently present in the 

H-1B visa program, Congress is not precluded from amending the 

INA to add additional requirements to the H1B1 program consistent with the H-1B program, such as the attestations for H-1B 

dependent employers (as mentioned, and found at INA section 

212(n)(1)(E)–(G)) or the self initiated investigations of employer 

compliance (found at INA section 212(n)(2)(G)). 

The enforcement scheme for the H-1B1 program is generally the 

same as that of the H-1B program (found at INA section 212(n)(2) 

19

for the H-1B program and at INA section 212(t)(3) for the H-1B1 

program). Department of Labor investigations as to whether an 

employer has failed to fulfill its promises or has misrepresented 

material facts in its attestation are triggered by complaints filed by 

aggrieved persons or organizations (including bargaining representatives). Investigations are to be conducted where there is reasonable cause to believe that a violation has occurred. 

An employer is subject to penalties for failing to fulfill the attestations—for willfully failing to pay the required wage, for there 

being a strike or lockout, for substantially failing to provide notice 

or provide all required information in an application, and for making a misrepresentation of material fact in an attestation. Penalties 

include administrative remedies (including civil monetary penalties 

of up to $35,000 per violation) that the Department of Labor determines to be appropriate and a bar for at least 1 year on the Department of State or the Department of Homeland Security’s ability to approve petitions or applications filed by the employer for 

alien workers (both immigrant and nonimmigrant) (found at INA 

section 212(n)(2)(C) for the H-1B program and 212(t)(3)(C) for the 

H-1B1 program). In addition, the Department of Labor must order 

an employer to provide H-1B1 nonimmigrants with back pay where 

wages were not paid at the required level, regardless of whether 

other penalties are imposed (found at INA section 212(n)(2)(D) for 

the H-1B program and INA section 212(t)(3)(D) for the H-1B program). 

Also included in the H-1B1 enforcement scheme is 1) the bar on 

retaliation (found at INA sections 212(n)(2)(C)(iv)-(v) for the H-1B 

program and at INA sections 212(t)(3)(C)(iv)-(v) for the H-1B1 program), 2) the ability of the Department of Labor to engage in random investigations in certain circumstances (found at INA section 

212(n)(2)(D) for the H-1B program and at INA section 212(t)(3)(D) 

for the H-1B1 program), and 3) the preservation of any other enforcement authority under the INA (found at INA section 

212(n)(2)(F) for the H-1B program and at INA section 212(t)(3)(F) 

for the H-1B1 program). 

Also included in the H-1B1 program are 1) the prohibition of an 

employer from seeking a penalty against an alien for ceasing employment (found at INA section 212(n)(2)(C)(vi) for the H-1B program and INA section 212(t)(3)(C)(vi) for the H-1B1 program), 2) 

the prohibition of an employer from ‘‘benching’’ an alien (found at 

INA section 212(n)(2)(C)(vii) for the H-1B program and INA section 

212(t)(3)(C)(vii) for the H-1B1 program), 3) the requirement that an 

employer offer to an alien benefits and the eligibility for benefits 

on the same basis and criteria as the employer offers U.S. workers 

(found at INA section 212(n)(2)(C)(viii) for the H-1B program and 

INA section 212(t)(3)(C)(viii) for the H-1B1 program), and 4) the 

special rule for computation of the prevailing wage for educational 

and research institutions (found at INA section 212(p) ). 

Under the H-1B1 program, an employer will have to pay a fee 

in order for an alien to be initially granted H-1B1 status and after 

every second extension of that status. The fee shall be the same as 

the fee an employer must pay when petitioning for an H-1B visa 

(currently $1,000 per alien). However, if no fee is being assessed 

under the H-1B program (the current fee expires at the end of the 

fiscal year), no fee shall be imposed under the H-1B1 program. 

20

Sec. 403 Labor Disputes 

Section 403 of the bill provides that, except when superseded by 

the enhanced labor protections of the H-1B1 program found at 

found at INA section 212(t)(1), an alien who seeks to enter the U.S. 

under and pursuant to the U.S.-Chile Free Trade Agreement (and 

the U.S-Singapore Free Trade Agreement as under H.R. 2739), and 

the spouse and children accompanying and following to join, may 

be denied admission as an ‘‘E’’, ‘‘L’’ or ‘‘H1B1’’ nonimmigrant if 

there is in progress a labor dispute in the occupational classification at the place or intended place of employment, unless the alien 

establishes that the alien’s entry will not affect adversely the settlement of the labor dispute or the employment of any person who 

is involved in the labor dispute. 

Section 404. Conforming Amendments 

Section 404 of the bill makes conforming amendments. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of Rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman):

TARIFF ACT OF 1930

* * * * * * *

TITLE III—SPECIAL PROVISIONS 

Part I—Miscellaneous 

* * * * * * *

SEC. 311. BONDED MANUFACTURING WAREHOUSES. 

All articles manufactured in whole or in part of imported materials, or of materials subject to internal-revenue tax, and intended 

for exportation without being charged with duty, and without having an internal-revenue stamp affixed thereto, shall, under such 

regulations as the Secretary of the Treasury may prescribe, in 

order to be so manufactured and exported, be made and manufactured in bonded warehouses similar to those known and designated 

in Treasury Regulations as bonded warehouses, class six: Provided,

That the manufacturer of such articles shall first give satisfactory 

bonds for the faithful observance of all the provisions of law and 

of such regulations as shall be prescribed by the Secretary of the 

Treasury: Provided further, That the manufacture of distilled spirits from grain, starch, molasses, or sugar, including all dilutions or 

mixtures of them or either of them, shall not be permitted in such 

manufacturing warehouses. 

Whenever goods manufactured in any bonded warehouse established under the provisions of the preceding paragraph shall be exported directly therefrom or shall be duly laden for transportation 

and immediate exportation under the supervision of the proper offiVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00020 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
21

cer who shall be duly designated for that purpose, such goods shall 

be exempt from duty and from the requirements relating to revenue stamps. 

No flour, manufactured in a bonded manufacturing warehouse 

from wheat imported from ninety days after the date of the enactment of this Act, shall be withdrawn from such warehouse for exportation without payment of a duty on such imported wheat equal 

to any reduction in duty which by treaty will apply in respect of 

such flour in the country to which it is to be exported. 

Any materials used in the manufacture of such goods, and any 

packages, coverings, vessels, brands, and labels used in putting up 

the same may, under the regulations of the Secretary of the Treasury, be conveyed without the payment of revenue tax or duty into 

any bonded manufacturing warehouse, and imported goods may, 

under the aforesaid regulations, be transferred without the exaction of duty from any bonded warehouse into any bonded manufacturing warehouse; but this privilege shall not be held to apply to 

implements, machinery, or apparatus to be used in the construction 

or repair of any bonded manufacturing warehouse or for the prosecution of the business carried on therein. 

Articles or materials received into such bonded manufacturing 

warehouse or articles manufactured therefrom may be withdrawn 

or removed therefrom for direct shipment and exportation or for 

transportation and immediate exportation in bond to foreign countries or to the Philippine Islands under the supervision of the officer duly designated therefor by the appropriate customs officer of 

the port, who shall certify to such shipment and exportation, or 

ladening for transportation, as the case may be, describing the articles by their mark or otherwise, the quantity, the date of exportation, and the name of the vessel: Provided, That the by-products 

incident to the processes of manufacture, including waste derived 

from cleaning rice in bonded warehouse under the Act of March 24, 

1874, in said bonded warehouses may be withdrawn for domestic 

consumption on the payment of duty equal to the duty which would 

be assessed and collected by law if such waste or by-products were 

imported from a foreign country: Provided, That all waste material 

may be destroyed under Government supervision. All labor performed and services rendered under these provisions shall be under 

the supervision of a duly designated officer of the customs and at 

the expense of the manufacturer. 

A careful account shall be kept by the appropriate custom officer of all merchandise delivered by him to any bonded manufacturing warehouse, and a sworn monthly return, verified by the customs officers in charge, shall be made by the manufacturer containing a detailed statement of all imported merchandise used by 

him in the manufacture of exported articles. 

Before commencing business the proprietor of any manufacturing warehouse shall file with the Secretary of the Treasury a 

list of all the articles intended to be manufactured in such warehouse, and state the formula of manufacture and the names and 

quantities of the ingredients to be used therein. 

Articles manufactured under these provisions may be withdrawn under such regulations as the Secretary of the Treasury 

may prescribe for transportation and delivery into any bonded 

warehouse for the sole purpose of export therefrom: Provided, That 

22

cigars manufactured in whole of tobacco imported from any one 

country, made and manufactured in such bonded manufacturing 

warehouses, may be withdrawn for home consumption upon the 

payment of the duties on such tobacco in its condition as imported 

under such regulations as the Secretary of the Treasury may prescribe, and the payment of the internal-revenue tax accruing on 

such cigars in their condition as withdrawn, and the boxes or packages containing such cigars shall be stamped to indicate their character, origin of tobacco from which made, and place of manufacture. 

The provisions of section 3433 of the Revised Statutes shall, so 

far as may be practicable, apply to any bonded manufacturing 

warehouse established under this Act and to the merchandise conveyed therein. 

Distilled spirits and wines which are rectified in bonded manufacturing warehouse, class six, and distilled spirits which are reduced in proof and bottled in such warehouses, shall be deemed to 

have been manufactured within the meaning of this section, and 

may be withdrawn as hereinbefore provided, and likewise for shipment in bond to Puerto Rico, subject to the provisions of this section, and under such regulations as the Secretary of the Treasury 

may prescribe, there to be withdrawn for consumption or be 

rewarehoused and subsequently withdrawn for consumption: Provided, That upon withdrawal in Puerto Rico for consumption, the 

duties imposed by the customs laws of the United States shall be 

collected on all imported merchandise (in its condition as imported) 

and imported containers used in the manufacture and putting up 

of such spirits and wines in such warehouses: Provided further,

That no internal-revenue tax shall be imposed on distilled spirits 

and wines rectified in class six warehouses if such distilled spirits 

and wines are exported or shipped in accordance with the provisions of this section, and that no person rectifying distilled spirits 

or wines in such warehouses shall be subject by reason of such rectification to the payment of special tax as a rectifier. 

No article manufactured in a bonded warehouse from materials 

that are goods subject to NAFTA drawback, as defined in section 

203(a) of the North American Free Trade Agreement Implementation Act, may be withdrawn from warehouse for exportation to a 

NAFTA country, as defined in section 2(4) of that Act, without assessment of a duty on the materials in their condition and quantity, and at their weight, at the time of importation into the United 

States. The duty shall be paid before the 61st day after the date 

of exportation, except that upon the presentation, before such 61st 

day, of satisfactory evidence of the amount of any customs duties 

paid to the NAFTA country on the article, the customs duty may 

be waived or reduced (subject to section 508(b)(2)(B)) in an amount 

that does not exceed the lesser of—

(1) the total amount of customs duties paid or owed on the 

materials on importation into the United States, or 

(2) the total amount of customs duties paid on the materials to the NAFTA country. 

If Canada ceases to be a NAFTA country and the suspension of the 

operation of the United States-Canada Free-Trade Agreement 

thereafter terminates, no article manufactured in a bonded warehouse, except to the extent that such article is made from an article that is a drawback eligible good under section 204(a) of the 

23

United States-Canada Free-Trade Agreement Implementation Act 

of 1988, may be withdrawn from such warehouse for exportation to 

Canada during the period such Agreement is in operation without 

payment of a duty on such imported merchandise in its condition, 

and at the rate of duty in effect, at the time of importation.

No article manufactured in a bonded warehouse from materials 

that are goods subject to Chile FTA drawback, as defined in section 

203(a) of the United States-Chile Free Trade Agreement Implementation Act, may be withdrawn from warehouse for exportation to 

Chile without assessment of a duty on the materials in their condition and quantity, and at their weight, at the time of importation 

into the United States. The duty shall be paid before the 61st day 

after the date of exportation, except that the duty may be waived or 

reduced by—(1) 100 percent during the 8-year period beginning on January 1, 2004; 

(2) 75 percent during the 1-year period beginning on January 1, 2012; 

(3) 50 percent during the 1-year period beginning on January 1, 2013; and 

(4) 25 percent during the 1-year period beginning on January 1, 2014.

SEC. 312. BONDED SMELTING AND REFINING WAREHOUSES. 

(a) * * *

(b) The several charges against such bond may be canceled in 

whole or in part— (1) upon the exportation from the bonded warehouses 

which treated the metal-bearing materials, or from any other 

bonded smelting or refining warehouse, of a quantity of the 

same kind of metal contained in any product of smelting or refining of metal-bearing materials equal to the dutiable quantity contained in the imported metal-bearing materials less 

wastage provided for in subsection (c); øexcept that in the case 

of a withdrawal for exportation of such a product to a NAFTA 

country, as defined in section 2(4) of the North American Free 

Trade Agreement Implementation Act, if any of the imported 

metal-bearing materials are goods subject to NAFTA drawback, as defined in section 203(a) of that Act, the duties on the 

materials shall be paid, and the charges against the bond canceled, before the 61st day after the date of exportation; but 

upon the presentation, before such 61st day, of satisfactory evidence of the amount of any customs duties paid to the NAFTA 

country on the product, the duties on the materials may be 

waived or reduced (subject to section 508(b)(2)(B)) in an 

amount that does not exceed the lesser of—

ø(A) the total amount of customs duties owed on the 

materials on importation into the United States, or 

ø(B) the total amount of customs duties paid to the 

NAFTA country on the product, or¿ except that—

(A) in the case of a withdrawal for exportation of such 

a product to a NAFTA country, as defined in section 2(4) 

of the North American Free Trade Agreement Implementation Act, if any of the imported metal-bearing materials are 

goods subject to NAFTA drawback, as defined in section 

203(a) of that Act, the duties on the materials shall be 

24

paid, and the charges against the bond canceled, before the 

61st day after the date of exportation; but upon the presentation, before such 61st day, of satisfactory evidence of the 

amount of any customs duties paid to the NAFTA country 

on the product, the duties on the materials may be waived 

or reduced (subject to section 508(b)(2)(B)) in an amount 

that does not exceed the lesser of— (i) the total amount of customs duties owed on the 

materials on importation into the United States, or 

(ii) the total amount of customs duties paid to the 

NAFTA country on the product, and 

(B) in the case of a withdrawal for exportation of such 

a product to Chile, if any of the imported metal-bearing 

materials are goods subject to Chile FTA drawback, as defined in section 203(a) of the United States-Chile Free 

Trade Agreement Implementation Act, the duties on the 

materials shall be paid, and the charges against the bond 

canceled, before the 61st day after the date of exportation, 

except that the duties may be waived or reduced by— (i) 100 percent during the 8-year period beginning 

on January 1, 2004, 

(ii) 75 percent during the 1-year period beginning 

on January 1, 2012, 

(iii) 50 percent during the 1-year period beginning 

on January 1, 2013, and 

(iv) 25 percent during the 1-year period beginning 

on January 1, 2014, or

* * * * * * *

(4) upon the transfer of the bond charges to a bonded customs warehouse other than a bonded smelting or refining 

warehouse by physical shipment of a quantity of the same kind 

of metal contained in any product of smelting or refining equal 

to the dutiable quantity contained in the imported metal-bearing materials less wastage provided for in subsection (c), and 

upon withdrawal from such other warehouse for exportation or 

domestic consumption the provisions of this section shall apply; 

øexcept that in the case of a withdrawal for exportation of such 

a product to a NAFTA country, as defined in section 2(4) of the 

North American Free Trade Agreement Implementation Act, if 

any of the imported metal-bearing materials are goods subject 

to NAFTA drawback, as defined in section 203(a) of that Act, 

the duties on the materials shall be paid, and the charges 

against the bond canceled, before the 61st day after the date 

of exportation; but upon the presentation, before such 61st day, 

of satisfactory evidence of the amount of any customs duties 

paid to the NAFTA country on the product, the duties on the 

materials may be waived or reduced (subject to section 

508(b)(2)(B)) in an amount that does not exceed the lesser of— ø(A) the total amount of customs duties owed on the 

materials on importation into the United States, or 

ø(B) the total amount of customs duties paid to the 

NAFTA country on the product, or¿ except that— (A) in the case of a withdrawal for exportation of such 

a product to a NAFTA country, as defined in section 2(4) 

of the North American Free Trade Agreement ImplementaVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00024 Fmt 6659 Sfmt 6603 E:\HR\OC\HR224P2.XXX HR224P2
25

tion Act, if any of the imported metal-bearing materials are 

goods subject to NAFTA drawback, as defined in section 

203(a) of that Act, the duties on the materials shall be 

paid, and the charges against the bond canceled, before the 

61st day after the date of exportation; but upon the presentation, before such 61st day, of satisfactory evidence of the 

amount of any customs duties paid to the NAFTA country 

on the product, the duties on the materials may be waived 

or reduced (subject to section 508(b)(2)(B)) in an amount 

that does not exceed the lesser of— (i) the total amount of customs duties owed on the 

materials on importation into the United States, or 

(ii) the total amount of customs duties paid to the 

NAFTA country on the product, and 

(B) in the case of a withdrawal for exportation of such 

a product to Chile, if any of the imported metal-bearing 

materials are goods subject to Chile FTA drawback, as defined in section 203(a) of the United States-Chile Free 

Trade Agreement Implementation Act, the duties on the 

materials shall be paid, and the charges against the bond 

canceled, before the 61st day after the date of exportation, 

except that the duties may be waived or reduced by— (i) 100 percent during the 8-year period beginning 

on January 1, 2004, 

(ii) 75 percent during the 1-year period beginning 

on January 1, 2012, 

(iii) 50 percent during the 1-year period beginning 

on January 1, 2013, and 

(iv) 25 percent during the 1-year period beginning 

on January 1, 2014, or

* * * * * * *

(d) Upon the exportation of a product of smelting or refining 

other than refined metal the bond shall be credited with a quantity 

of metal equivalent to the quantity of metal contained in the product exported less the proportionate part of the deductions allowed 

for losses in determination of the bond charge being cancelled that 

would not ordinarily be sustained in production of the specific product exported as ascertained from time to time by the Secretary of 

the Treasury; øexcept that in the case of a withdrawal for exportation to a NAFTA country, as defined in section 2(4) of the North 

American Free Trade Agreement Implementation Act, if any of the 

imported metal-bearing materials are goods subject to NAFTA 

drawback, as defined in section 203(a) of that Act, charges against 

the bond shall be paid before the 61st day after the date of exportation; but upon the presentation, before such 61st day, of satisfactory evidence of the amount of any customs duties paid to the 

NAFTA country on the product, the bond shall be credited (subject 

to section 508(b)(2)(B)) in an amount not to exceed the lesser of— ø(1) the total amount of customs duties paid or owed on 

the materials on importation into the United States, or 

ø(2) the total amount of customs duties paid to the NAFTA 

country on the product.¿ except that— (1) in the case of a withdrawal for exportation to a NAFTA 

country, as defined in section 2(4) of the North American Free 

Trade Agreement Implementation Act, if any of the imported 

26

metal-bearing materials are goods subject to NAFTA drawback, 

as defined in section 203(a) of that Act, charges against the 

bond shall be paid before the 61st day after the date of exportation; but upon the presentation, before such 61st day, of satisfactory evidence of the amount of any customs duties paid to the 

NAFTA country on the product, the bond shall be credited (subject to section 508(b)(2)(B)) in an amount not to exceed the lesser of— (A) the total amount of customs duties paid or owed on 

the materials on importation into the United States, or 

(B) the total amount of customs duties paid to the 

NAFTA country on the product; and 

(2) in the case of a withdrawal for exportation to Chile, if 

any of the imported metal-bearing materials are goods subject 

to Chile FTA drawback, as defined in section 203(a) of the 

United States-Chile Free Trade Agreement Implementation Act, 

charges against the bond shall be paid before the 61st day after 

the date of exportation, and the bond shall be credited in an 

amount equal to— (A) 100 percent of the total amount of customs duties 

paid or owed on the materials on importation into the 

United States during the 8-year period beginning on January 1, 2004, 

(B) 75 percent of the total amount of customs duties 

paid or owed on the materials on importation into the 

United States during the 1-year period beginning on January 1, 2012, 

(C) 50 percent of the total amount of customs duties 

paid or owed on the materials on importation into the 

United States during the 1-year period beginning on January 1, 2013, and 

(D) 25 percent of the total amount of customs duties 

paid or owed on the materials on importation into the 

United States during the 1-year period beginning on January 1, 2014.

* * * * * * *

SEC. 313. DRAWBACK AND REFUNDS. 

(a) * * *

* * * * * * *

(j) UNUSED MERCHANDISE DRAWBACK.—

(1) * * *

* * * * * * *

(4)(A) Effective upon the entry into force of the North 

American Free Trade Agreement, the exportation to a NAFTA 

country, as defined in section 2(4) of the North American Free 

Trade Agreement Implementation Act, of merchandise that is 

fungible with and substituted for imported merchandise, other 

than merchandise described in paragraphs (1) through (8) of 

section 203(a) of that Act, shall not constitute an exportation 

for purposes of paragraph (2). 

(B) Beginning on January 1, 2015, the exportation to Chile 

of merchandise that is fungible with and substituted for imported merchandise, other than merchandise described in paraVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00026 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
27

graphs (1) through (5) of section 203(a) of the United StatesChile Free Trade Agreement Implementation Act, shall not constitute an exportation for purposes of paragraph (2). The preceding sentence shall not be construed to permit the substitution 

of unused drawback under paragraph (2) of this subsection 

with respect to merchandise described in paragraph (2) of section 203(a) of the United States-Chile Free Trade Agreement 

Implementation Act.

* * * * * * *

ø(n)¿ (n) REFUNDS, WAIVERS, OR REDUCTIONS UNDER CERTAIN

FREE TRADE AGREEMENTS.—(1) For purposes of this subsection and 

subsection (o)—

(A) * * *

(B) the terms ‘‘NAFTA country’’ and ‘‘good subject to 

NAFTA drawback’’ have the same respective meanings that 

are given such terms in sections 2(4) and 203(a) of the NAFTA 

Act; øand¿

(C) a refund, waiver, or reduction of duty under paragraph 

(2) of this subsection or paragraph (1) of subsection (o) is subject to section 508(b)(2)(B)ø.¿; and

(D) the term ‘‘good subject to Chile FTA drawback’’ has the 

meaning given that term in section 203(a) of the United StatesChile Free Trade Agreement Implementation Act. 

* * * * * * *

(4)(A) For purposes of subsections (a), (b), (f), (h), (j)(2), (p), and 

(q), if an article that is exported to Chile is a good subject to Chile 

FTA drawback, no customs duties on the good may be refunded, 

waived, or reduced, except as provided in subparagraph (B). 

(B) The customs duties referred to in subparagraph (A) may be 

refunded, waived, or reduced by—

(i) 100 percent during the 8-year period beginning on January 1, 2004; 

(ii) 75 percent during the 1-year period beginning on January 1, 2012; 

(iii) 50 percent during the 1-year period beginning on January 1, 2013; and 

(iv) 25 percent during the 1-year period beginning on January 1, 2014.

ø(o)¿ (o) SPECIAL RULES FOR CERTAIN VESSELS AND IMPORTED

MATERIALS.—(1) For purposes of subsection (g), if—

(A) * * *

* * * * * * *

(3) For purposes of subsection (g), if—

(A) a vessel is built for the account and ownership of a resident of Chile or the Government of Chile, and 

(B) imported materials that are used in the construction 

and equipment of the vessel are goods subject to Chile FTA 

drawback, as defined in section 203(a) of the United StatesChile Free Trade Agreement Implementation Act, 

no customs duties on such materials may be refunded, waived, or 

reduced, except as provided in paragraph (4). 

(4) The customs duties referred to in paragraph (3) may be refunded, waived or reduced by—

28

(A) 100 percent during the 8-year period beginning on January 1, 2004; 

(B) 75 percent during the 1-year period beginning on January 1, 2012; 

(C) 50 percent during the 1-year period beginning on January 1, 2013; and 

(D) 25 percent during the 1-year period beginning on January 1, 2014.

* * * * * * *

SEC. 508. RECORDKEEPING. 

(a) * * *

(b) øEXPORTATIONS TO FREE TRADE COUNTRIES.—¿ EXPORTATIONS TO NAFTA COUNTRIES.—

(1) * * *

(2) EXPORTS TO NAFTA COUNTRIES.—

(A) * * *

(B) CLAIMS FOR CERTAIN WAIVERS, REDUCTIONS, OR REFUNDS OF DUTIES OR FOR CREDIT AGAINST BONDS.—

(i) IN GENERAL.—Any person that claims with respect to an article—

(I) a waiver or reduction of duty under øthe 

last paragraph of section 311¿ the eleventh paragraph of section 311, section 312(b)(1) or (4), section 562(2), or øthe last proviso to section 3(a)¿

the proviso preceding the last proviso to section 

3(a) of the Foreign Trade Zones Act; 

* * * * * * *

(f) CERTIFICATES OF ORIGIN FOR GOODS EXPORTED UNDER THE

UNITED STATES-CHILE FREE TRADE AGREEMENT.— (1) DEFINITIONS.—In this subsection: 

(A) RECORDS AND SUPPORTING DOCUMENTS.—The term ‘‘records and supporting documents’’ means, with respect to 

an exported good under paragraph (2), records and documents related to the origin of the good, including—

(i) the purchase, cost, and value of, and payment 

for, the good; 

(ii) if applicable, the purchase, cost, and value of, 

and payment for, all materials, including recovered 

goods, used in the production of the good; and 

(iii) if applicable, the production of the good in the 

form in which it was exported. 

(B) CHILE FTA CERTIFICATE OF ORIGIN.—The term 

‘‘Chile FTA Certificate of Origin’’ means the certification, 

established under article 4.13 of the United States-Chile 

Free Trade Agreement, that a good qualifies as an originating good under such Agreement. 

(2) EXPORTS TO CHILE.—Any person who completes and 

issues a Chile FTA Certificate of Origin for a good exported 

from the United States shall make, keep, and, pursuant to rules 

and regulations promulgated by the Secretary of the Treasury, 

render for examination and inspection all records and supporting documents related to the origin of the good (including 

the Certificate or copies thereof). 

29

(3) RETENTION PERIOD.—Records and supporting documents shall be kept by the person who issued a Chile FTA Certificate of Origin for at least 5 years after the date on which the 

certificate was issued. 

(g) PENALTIES.—Any person who fails to retain records and 

supporting documents required by subsection (f) or the regulations 

issued to implement that subsection shall be liable for the greater 

of— (1) a civil penalty not to exceed $10,000; or 

(2) the general record keeping penalty that applies under 

the customs laws of the United States.

* * * * * * *

SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS SERVICE. 

(a) * * *

* * * * * * *

(g) DENIAL OF PREFERENTIAL TARIFF TREATMENT UNDER

UNITED STATES-CHILE FREE TRADE AGREEMENT.—If the Bureau of 

Customs and Border Protection or the Bureau of Immigration and 

Customs Enforcement finds indications of a pattern of conduct by 

an importer of false or unsupported representations that goods qualify under the rules of origin set out in section 202 of the United 

States-Chile Free Trade Agreement Implementation Act, the Bureau 

of Customs and Border Protection, in accordance with regulations 

issued by the Secretary of the Treasury, may deny preferential tariff 

treatment under the United States-Chile Free Trade Agreement to 

entries of identical goods imported by that person until the person 

establishes to the satisfaction of the Bureau of Customs and Border 

Protection that representations of that person are in conformity with 

such section 202.

* * * * * * *

SEC. 520. REFUNDS AND ERRORS. 

(a) * * *

* * * * * * *

ø(d)¿ (d) GOODS QUALIFYING UNDER FREE TRADE AGREEMENT

RULES OF ORIGIN.—Notwithstanding the fact that a valid protest 

was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund 

any excess duties (including any merchandise processing fees) paid 

on a good qualifying under the rules of origin set out in section 202 

of the North American Free Trade Agreement Implementation Act 

or section 202 of the United States-Chile Free Trade Agreement Implementation Act for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 

1 year after the date of importation, files, in accordance with those 

regulations, a claim that includes—

(1) a written declaration that the good qualified under 

øthose¿ the applicable rules at the time of importation; 

(2) copies of all applicable NAFTA Certificates of Origin 

(as defined in section 508(b)(1)), or other certificates of origin, 

as the case may be; and 

* * * * * * *

30

SEC. 562. MANIPULATION IN WAREHOUSE. 

Unless by special authority of the Secretary of the Treasury, 

no merchandise shall be withdrawn from bonded warehouse in less 

quantity than an entire bale, cask, box, or other package; or, if in 

bulk, in the entire quantity imported or in a quantity not less than 

one ton weight. All merchandise so withdrawn shall be withdrawn 

in the original packages in which imported unless, upon the application of the importer, it appears to the appropriate customs officer 

that it is necessary to the safety or preservation of the merchandise 

to repack or transfer the same; except that upon permission therefor being granted by the Secretary of the Treasury, and under customs supervision, at the expense of the proprietor, merchandise 

may be cleaned, sorted, repacked, or otherwise changed in condition, but not manufactured, in bonded warehouses established for 

that purpose and be withdrawn therefrom—

(1) * * *

* * * * * * *

(3) without payment of duties for exportation to any foreign country other than øto a NAFTA country¿ to Chile, to a 

NAFTA country, or to Canada when exports to that country are 

subject to paragraph (4); 

(4) without payment of duties for exportation to Canada (if 

that country ceases to be a NAFTA country and the suspension 

of the operation of the United States-Canada Free-Trade 

Agreement thereafter terminates), but the exemption from the 

payment of duties under this paragraph applies only in the 

case of an exportation during the period such Agreement is in 

operation of merchandise that— (A) * * *

(B) is a drawback eligible good under section 204(a) of 

the United States-Canada Free-Trade Agreement Implementation Act of 1988ø; and¿

(5) without payment of duties for shipment to the Virgin 

Islands, American Samoa, Wake Island, Midway Island, Kingman Reef, Johnston Island or the island of Guamø.¿; and

(6)(A) without payment of duties for exportation to Chile, if 

the merchandise is of a kind described in any of paragraphs (1) 

through (5) of section 203(a) of the United States-Chile Free 

Trade Agreement Implementation Act; and 

(B) for exportation to Chile if the merchandise consists of 

goods subject to Chile FTA drawback, as defined in section 

203(a) of the United States-Chile Free Trade Agreement Implementation Act, except that—

(i) the merchandise may not be withdrawn from warehouse without assessment of a duty on the merchandise in 

its condition and quantity, and at its weight, at the time 

of withdrawal from the warehouse with such additions to, 

or deductions from, the final appraised value as may be 

necessary by reason of a change in condition, and 

(ii) duty shall be paid on the merchandise before the 

61st day after the date of exportation, except that such duties may be waived or reduced by—

(I) 100 percent during the 8-year period beginning 

on January 1, 2004, 

31

(II) 75 percent during the 1-year period beginning 

on January 1, 2012, 

(III) 50 percent during the 1-year period beginning 

on January 1, 2013, and 

(IV) 25 percent during the 1-year period beginning 

on January 1, 2014.

* * * * * * *

SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE. 

(a) * * *

* * * * * * *

(c) MAXIMUM PENALTIES.—

(1) * * *

* * * * * * *

(6) PRIOR DISCLOSURE REGARDING CLAIMS UNDER THE

UNITED STATES-CHILE FREE TRADE AGREEMENT.—An importer 

shall not be subject to penalties under subsection (a) for making 

an incorrect claim that a good qualifies as an originating good 

under section 202 of the United States-Chile Free Trade Agreement Implementation Act if the importer, in accordance with 

regulations issued by the Secretary of the Treasury, voluntarily 

makes a corrected declaration and pays any duties owing.

ø(6)¿ (7) SEIZURE.—If the Secretary has reasonable cause 

to believe that a person has violated the provisions of subsection (a) and that such person is insolvent or beyond the jurisdiction of the United States or that seizure is otherwise essential to protect the revenue of the United States or to prevent the introduction of prohibited or restricted merchandise 

into the customs territory of the United States, then such merchandise may be seized and, upon assessment of a monetary 

penalty, forfeited unless the monetary penalty is paid within 

the time specified by law. Within a reasonable time after any 

such seizure is made, the Secretary shall issue to the person 

concerned a written statement containing the reasons for the 

seizure. After seizure of merchandise under this subsection, 

the Secretary may, in the case of restricted merchandise, and 

shall, in the case of any other merchandise (other than prohibited merchandise), return such merchandise upon the deposit 

of security not to exceed the maximum monetary penalty which 

may be assessed under subsection (c). 

* * * * * * *

(g) FALSE CERTIFICATIONS OF ORIGIN UNDER THE UNITED

STATES-CHILE FREE TRADE AGREEMENT.—

(1) IN GENERAL.—Subject to paragraph (2), it is unlawful 

for any person to certify falsely, by fraud, gross negligence, or 

negligence, in a Chile FTA Certificate of Origin (as defined in 

section 508(f)(1)(B) of this Act that a good exported from the 

United States qualifies as an originating good under the rules 

of origin set out in section 202 of the United States-Chile Free 

Trade Agreement Implementation Act. The procedures and penalties of this section that apply to a violation of subsection (a) 

also apply to a violation of this subsection. 

32

(2) IMMEDIATE AND VOLUNTARY DISCLOSURE OF INCORRECT

INFORMATION.—No penalty shall be imposed under this subsection if, immediately after an exporter or producer that issued 

a Chile FTA Certificate of Origin has reason to believe that 

such certificate contains or is based on incorrect information, 

the exporter or producer voluntarily provides written notice of 

such incorrect information to every person to whom the certificate was issued. 

(3) EXCEPTION.—A person may not be considered to have 

violated paragraph (1) if— (A) the information was correct at the time it was provided in a Chile FTA Certificate of Origin but was later 

rendered incorrect due to a change in circumstances; and 

(B) the person immediately and voluntarily provides 

written notice of the change in circumstances to all persons 

to whom the person provided the certificate.

* * * * * * *

SECTION 3 OF THE ACT OF JUNE 18, 1934

(Commonly known as the ‘‘Foreign Trade Zones Act’’)

SEC. 3. (a) Foreign and domestic merchandise of every description, except such as is prohibited by law, may, without being subject to the customs laws of the United States, except as otherwise 

provided in this Act, be brought into a zone and may be stored, 

sold, exhibited, broken up, repacked, assembled, distributed, sorted, 

graded, cleaned, mixed with foreign or domestic merchandise, or 

otherwise manipulated, or be manufactured except as otherwise 

provided in this Act, and be exported, destroyed, or sent into customs territory of the United States therefrom, in the original package or otherwise; but when foreign merchandise is so sent from a 

zone into customs territory of the United States it shall be subject 

to the laws and regulations of the United States affecting imported 

merchandise: Provided, That whenever the privilege shall be requested and there has been no manipulation or manufacture effecting a change in tariff classification, the appropriate customs officer 

shall take under supervision any lot or part of a lot of foreign merchandise in a zone, cause it to be appraised and taxes determined 

and duties liquidated thereon. Merchandise so taken under supervision may be stored, manipulated, or manufactured under the supervision and regulations prescribed by the Secretary of the Treasury, and whether mixed or manufactured with domestic merchandise or not may, under regulations prescribed by the Secretary of 

the Treasury, be exported or destroyed, or may be sent into customs territory upon the payment of such liquidated duties and determined taxes thereon. If merchandise so taken under supervision 

has been manipulated or manufactured, such duties and taxes 

shall be payable on the quantity of such foreign merchandise used 

in the manipulation or manufacture of the entered article. Allowance shall be made for recoverable and irrecoverable waste; and if 

recoverable waste is sent into customs territory, it shall be dutiable 

and taxable in its condition and quantity and at its weight at the 

time of entry. Where two or more products result from the manipuVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00032 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
33

lation or manufacture of merchandise in a zone the liquidated duties and determined taxes shall be distributed to the several products in accordance with their relative value at the time of separation with due allowance for waste as provided for above: Provided 

further, That subject to such regulations respecting identity and 

the safeguarding of the revenue as the Secretary of the Treasury 

may deem necessary, articles, the growth, product, or manufacture 

of the United States, on which all internal-revenue taxes have been 

paid, if subject thereto, and articles previously imported on which 

duty and/or tax has been paid, or which have been admitted free 

of duty and tax, may be taken into a zone from the customs territory of the United States, placed under the supervision of the appropriate customs officer, and whether or not they have been combined with or made part, while in such zone, of other articles, may 

be brought back thereto free of quotas, duty, or tax: Provided further, That if in the opinion of the Secretary of the Treasury their 

identity has been lost, such articles not entitled to free entry by 

reason of noncompliance with the requirements made hereunder by 

the Secretary of the Treasury shall be treated when they reenter 

customs territory of the United States as foreign merchandise 

under the provisions of the tariff and internal-revenue laws in force 

at that time: Provided further, That under the rules and regulations of the controlling Federal agencies, articles which have been 

taken into a zone from customs territory for the sole purpose of exportation, destruction (except destruction of distilled spirits, wines, 

and fermented malt liquors), or storage shall be considered to be 

exported for the purpose of— (1) * * *

* * * * * * *

Such a transfer may also be considered an exportation for the purposes of other Federal laws insofar as Federal agencies charged 

with the enforcement of those laws deem it advisable. Such articles 

may not be returned to customs territory for domestic consumption 

except where the Foreign-Trade Zones Board deems such return to 

be in the public interest, in which event the articles shall be subject to the provisions of paragraph 1615(f) of the Tariff Act of 1930, 

as amended: Provided further, That no operation involving any foreign or domestic merchandise brought into a zone which operation 

would be subject to any provision or provisions of section 1807, 

chapter 15, chapter 16, chapter 17, chapter 21, chapter 23, chapter 

24, chapter 25, chapter 26, or chapter 32 of the Internal Revenue 

Code if performed in customs territory, or involving the manufacture of any article provided for in paragraph 367 or paragraph 368 

of the Tariff Act of 1930, shall be permitted in a zone except those 

operations (other than rectification of distilled spirits and wines, or 

the manufacture or production of alcoholic products unfit for beverage purposes) which were permissible under this Act prior to 

July 1, 1949: Provided further, That articles produced or manufactured in a zone and exported therefrom shall on subsequent importation into the customs territory of the United States be subject to 

the import laws applicable to like articles manufactured in a foreign country, except that articles produced or manufactured in a 

zone exclusively with the use of domestic merchandise, the identity 

of which has been maintained in accordance with the second proviso of this section, may, on such importation, be entered as AmerVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00033 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
34

ican goods returned: Provided further, That no merchandise that 

consists of goods subject to NAFTA drawback, as defined in section 

203(a) of the North American Free Trade Agreement Implementation Act, that is manufactured or otherwise changed in condition 

shall be exported to a NAFTA country, as defined in section 2(4) 

of that Act, without an assessment of a duty on the merchandise 

in its condition and quantity, and at its weight, at the time of its 

exportation (or if the privilege in the first proviso to this subsection 

was requested, an assessment of a duty on the merchandise in its 

condition and quantity, and at its weight, at the time of its admission into the zone) and the payment of the assessed duty before the 

61st day after the date of exportation of the article, except that 

upon the presentation, before such 61st day, of satisfactory evidence of the amount of any customs duties paid or owed to the 

NAFTA country on the article, the customs duty may be waived or 

reduced (subject to section 508(b)(2)(B) of the Tariff Act of 1930) in 

an amount that does not exceed the lesser of (1) the total amount 

of customs duties paid or owed on the merchandise on importation 

into the United States, or (2) the total amount of customs duties 

paid on the article to the NAFTA country: Provided further, That 

if Canada ceases to be a NAFTA country and the suspension of the 

operation of the United States-Canada Free-Trade Agreement 

thereafter terminates, with the exception of drawback eligible 

goods under section 204(a) of the United States-Canada Free-Trade 

Agreement Implementation Act of 1988, no article manufactured or 

otherwise changed in condition (except a change by cleaning, testing or repacking) shall be exported to Canada during the period 

such Agreement is in operation without the payment of a duty that 

shall be payable on the article in its condition and quantity, and 

at its weight, at the time of its exportation to Canada unless the 

privilege in the first proviso to this subsection was requestedø.¿: 

Provided, further, That no merchandise that consists of goods subject to Chile FTA drawback, as defined in section 203(a) of the 

United States-Chile Free Trade Agreement Implementation Act, that 

is manufactured or otherwise changed in condition shall be exported 

to Chile without an assessment of a duty on the merchandise in its 

condition and quantity, and at its weight, at the time of its exportation (or if the privilege in the first proviso to this subsection was 

requested, an assessment of a duty on the merchandise in its condition and quantity, and at its weight, at the time of its admission 

into the zone) and the payment of the assessed duty before the 61st 

day after the date of exportation of the article, except that the customs duty may be waived or reduced by (1) 100 percent during the 

8-year period beginning on January 1, 2004; (2) 75 percent during 

the 1-year period beginning on January 1, 2012; (3) 50 percent during the 1-year period beginning on January 1, 2013; and (4) 25 percent during the 1-year period beginning on January 1, 2014.

* * * * * * *

35

SECTION 13031 OF THE CONSOLIDATED OMNIBUS 

BUDGET RECONCILIATION ACT OF 1985

SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES. 

(a) * * *

(b) LIMITATIONS ON FEES.—(1) * * *

* * * * * * *

(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.

* * * * * * *

SECTION 202 OF THE TRADE ACT OF 1974

SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY COMMISSION. 

(a) PETITIONS AND ADJUSTMENT PLANS.—

(1) * * *

* * * * * * *

(8) The procedures concerning the release of confidential 

business information set forth in section 332(g) of the Tariff 

Act of 1930 shall apply with respect to information received by 

the Commission in the course of investigations conducted 

under this chapter, part 1 of title III of the North American 

Free Trade Agreement Implementation Act, øand¿ title II of 

the United States-Jordan Free Trade Area Implementation 

Act, and title III of the United States-Chile Free Trade Agreement Implementation Act. The Commission may request that 

parties providing confidential business information furnish 

nonconfidential summaries thereof or, if such parties indicate 

that the information in the submission cannot be summarized, 

the reasons why a summary cannot be provided. If the Commission finds that a request for confidentiality is not warranted and if the party concerned is either unwilling to make 

the information public or to authorize its disclosure in generalized or summarized form, the Commission may disregard the 

submission. 

* * * * * * *

IMMIGRATION AND NATIONALITY ACT 

* * * * * * *

TITLE I—GENERAL 

DEFINITIONS

SECTION 101. (a) As used in this Act—

36

(1) * * *

* * * * * * *

(15) The term ‘‘immigrant’’ means every alien except an alien 

who is within one of the following classes of nonimmigrant aliens—

(A) * * *

* * * * * * *

(H) an alien (i)(b) subject to section 212(j)(2), who is coming temporarily to the United States to perform services (other 

than services described in subclause (a) during the period in 

which such subclause applies and other than services described 

in subclause (ii)(a) or in subparagraph (O) or (P)) in a specialty 

occupation described in section 214(i)(1) or as a fashion model, 

who meets the requirements for the occupation specified in section 214(i)(2) or, in the case of a fashion model, is of distinguished merit and ability, and with respect to whom the Secretary of Labor determines and certifies to the Attorney General that the intending employer has filed with the Secretary 

an application under section ø212(n)(1), or (c)¿ 212(n)(1), or 

(b1) who is entitled to enter the United States under and in 

pursuance of the provisions of an agreement listed in section 

214(g)(8)(A), who is engaged in a specialty occupation described 

in section 214(i)(3), and with respect to whom the Secretary of 

Labor determines and certifies to the Secretary of Homeland Security and the Secretary of State that the intending employer 

has filed with the Secretary of Labor an attestation under section 212(t)(1), or (c) who is coming temporarily to the United 

States to perform services as a registered nurse, who meets the 

qualifications described in section 212(m)(1), and with respect 

to whom the Secretary of Labor determines and certifies to the 

Attorney General that an unexpired attestation is on file and 

in effect under section 212(m)(2) for the facility (as defined in 

section 212(m)(6)) for which the alien will perform the services; 

or (ii)(a) having a residence in a foreign country which he has 

no intention of abandoning who is coming temporarily to the 

United States to perform agricultural labor or services, as defined by the Secretary of Labor in regulations and including 

agricultural labor defined in section 3121(g) of the Internal 

Revenue Code of 1954 and agriculture as defined in section 3(f) 

of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(f)), of 

a temporary or seasonal nature, or (b) having a residence in a 

foreign country which he has no intention of abandoning who 

is coming temporarily to the United States to perform other 

temporary service or labor if unemployed persons capable of 

performing such service or labor cannot be found in this country, but this clause shall not apply to graduates of medical 

schools coming to the United States to perform services as 

members of the medical profession; or (iii) having a residence 

in a foreign country which he has no intention of abandoning 

who is coming temporarily to the United States as a trainee, 

other than to receive graduate medical education or training, 

in a training program that is not designed primarily to provide 

productive employment; and the alien spouse and minor chilVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00036 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
37

dren of any such alien specified in this paragraph if accompanying him or following to join him; 

* * * * * * *

TITLE II—IMMIGRATION 

* * * * * * *

CHAPTER 2—QUALIFICATIONS FOR ADMISSION OF ALIENS; TRAVEL

CONTROL OF CITIZENS AND ALIENS

* * * * * * *

GENERAL CLASSES OF ALIENS INELIGIBLE TO RECEIVE VISAS AND

INELIGIBLE FOR ADMISSION; WAIVERS OF INADMISSIBILITY

SEC. 212. (a)***

* * * * * * *

(p)(1) In computing the prevailing wage level for an occupational classification in an area of employment for purposes of subsections ø(n)(1)(A)(i)(II) and (a)(5)(A)¿ (a)(5)(A), (n)(1)(A)(i)(II), and 

(t)(1)(A)(i)(II) in the case of an employee of—

(A) * * *

* * * * * * *

ø(p)¿ (s) In determining whether an alien described in subsection (a)(4)(C)(i) is inadmissible under subsection (a)(4) or ineligible to receive an immigrant visa or otherwise to adjust to the status of permanent resident by reason of subsection (a)(4), the consular officer or the Attorney General shall not consider any benefits 

the alien may have received that were authorized under section 

501 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1641(c)).

(t)(1) No alien may be admitted or provided status as a nonimmigrant under section 101(a)(15)(H)(i)(b1) in an occupational 

classification unless the employer has filed with the Secretary of 

Labor an attestation stating the following: 

(A) The employer—

(i) is offering and will offer during the period of authorized employment to aliens admitted or provided status 

under section 101(a)(15)(H)(i)(b1) wages that are at least—

(I) the actual wage level paid by the employer to 

all other individuals with similar experience and 

qualifications for the specific employment in question; 

or 

(II) the prevailing wage level for the occupational 

classification in the area of employment, 

whichever is greater, based on the best information available as of the time of filing the attestation; and 

(ii) will provide working conditions for such a nonimmigrant that will not adversely affect the working conditions of workers similarly employed. 

(B) There is not a strike or lockout in the course of a labor 

dispute in the occupational classification at the place of employment. 

(C) The employer, at the time of filing the attestation—

38

(i) has provided notice of the filing under this paragraph to the bargaining representative (if any) of the employer’s employees in the occupational classification and 

area for which aliens are sought; or 

(ii) if there is no such bargaining representative, has 

provided notice of filing in the occupational classification 

through such methods as physical posting in conspicuous 

locations at the place of employment or electronic notification to employees in the occupational classification for 

which nonimmigrants under section 101(a)(15)(H)(i)(b1) 

are sought. 

(D) A specification of the number of workers sought, the occupational classification in which the workers will be employed, 

and wage rate and conditions under which they will be employed. 

(2)(A) The employer shall make available for public examination, within one working day after the date on which an attestation 

under this subsection is filed, at the employer’s principal place of 

business or worksite, a copy of each such attestation (and such accompanying documents as are necessary). 

(B)(i) The Secretary of Labor shall compile, on a current basis, 

a list (by employer and by occupational classification) of the attestations filed under this subsection. Such list shall include, with respect to each attestation, the wage rate, number of aliens sought, period of intended employment, and date of need. 

(ii) The Secretary of Labor shall make such list available for 

public examination in Washington, D.C. 

(C) The Secretary of Labor shall review an attestation filed 

under this subsection only for completeness and obvious inaccuracies. Unless the Secretary of Labor finds that an attestation is incomplete or obviously inaccurate, the Secretary of Labor shall provide the certification described in section 101(a)(15)(H)(i)(b1) within 

7 days of the date of the filing of the attestation. 

(3)(A) The Secretary of Labor shall establish a process for the 

receipt, investigation, and disposition of complaints respecting the 

failure of an employer to meet a condition specified in an attestation 

submitted under this subsection or misrepresentation by the employer of material facts in such an attestation. Complaints may be 

filed by any aggrieved person or organization (including bargaining 

representatives). No investigation or hearing shall be conducted on 

a complaint concerning such a failure or misrepresentation unless 

the complaint was filed not later than 12 months after the date of 

the failure or misrepresentation, respectively. The Secretary of Labor 

shall conduct an investigation under this paragraph if there is reasonable cause to believe that such a failure or misrepresentation has 

occurred. 

(B) Under the process described in subparagraph (A), the Secretary of Labor shall provide, within 30 days after the date a complaint is filed, for a determination as to whether or not a reasonable 

basis exists to make a finding described in subparagraph (C). If the 

Secretary of Labor determines that such a reasonable basis exists, 

the Secretary of Labor shall provide for notice of such determination 

to the interested parties and an opportunity for a hearing on the 

complaint, in accordance with section 556 of title 5, United States 

Code, within 60 days after the date of the determination. If such a 

39

hearing is requested, the Secretary of Labor shall make a finding 

concerning the matter by not later than 60 days after the date of the 

hearing. In the case of similar complaints respecting the same applicant, the Secretary of Labor may consolidate the hearings under 

this subparagraph on such complaints. 

(C)(i) If the Secretary of Labor finds, after notice and opportunity for a hearing, a failure to meet a condition of paragraph 

(1)(B), a substantial failure to meet a condition of paragraph (1)(C) 

or (1)(D), or a misrepresentation of material fact in an attestation—

(I) the Secretary of Labor shall notify the Secretary of State 

and the Secretary of Homeland Security of such finding and 

may, in addition, impose such other administrative remedies 

(including civil monetary penalties in an amount not to exceed 

$1,000 per violation) as the Secretary of Labor determines to be 

appropriate; and 

(II) the Secretary of State or the Secretary of Homeland Security, as appropriate, shall not approve petitions or applications filed with respect to that employer under section 204, 

214(c), or 101(a)(15)(H)(i)(b1) during a period of at least 1 year 

for aliens to be employed by the employer. 

(ii) If the Secretary of Labor finds, after notice and opportunity 

for a hearing, a willful failure to meet a condition of paragraph (1), 

a willful misrepresentation of material fact in an attestation, or a 

violation of clause (iv)—

(I) the Secretary of Labor shall notify the Secretary of State 

and the Secretary of Homeland Security of such finding and 

may, in addition, impose such other administrative remedies 

(including civil monetary penalties in an amount not to exceed 

$5,000 per violation) as the Secretary of Labor determines to be 

appropriate; and 

(II) the Secretary of State or the Secretary of Homeland Security, as appropriate, shall not approve petitions or applications filed with respect to that employer under section 204, 

214(c), or 101(a)(15)(H)(i)(b1) during a period of at least 2 years 

for aliens to be employed by the employer. 

(iii) If the Secretary of Labor finds, after notice and opportunity 

for a hearing, a willful failure to meet a condition of paragraph (1) 

or a willful misrepresentation of material fact in an attestation, in 

the course of which failure or misrepresentation the employer displaced a United States worker employed by the employer within the 

period beginning 90 days before and ending 90 days after the date 

of filing of any visa petition or application supported by the attestation—

(I) the Secretary of Labor shall notify the Secretary of State 

and the Secretary of Homeland Security of such finding and 

may, in addition, impose such other administrative remedies 

(including civil monetary penalties in an amount not to exceed 

$35,000 per violation) as the Secretary of Labor determines to 

be appropriate; and 

(II) the Secretary of State or the Secretary of Homeland Security, as appropriate, shall not approve petitions or applications filed with respect to that employer under section 204, 

214(c), or 101(a)(15)(H)(i)(b1) during a period of at least 3 years 

for aliens to be employed by the employer. 

40

(iv) It is a violation of this clause for an employer who has filed 

an attestation under this subsection to intimidate, threaten, restrain, coerce, blacklist, discharge, or in any other manner discriminate against an employee (which term, for purposes of this clause, 

includes a former employee and an applicant for employment) because the employee has disclosed information to the employer, or to 

any other person, that the employee reasonably believes evidences a 

violation of this subsection, or any rule or regulation pertaining to 

this subsection, or because the employee cooperates or seeks to cooperate in an investigation or other proceeding concerning the employer’s compliance with the requirements of this subsection or any 

rule or regulation pertaining to this subsection. 

(v) The Secretary of Labor and the Secretary of Homeland Security shall devise a process under which a nonimmigrant under section 101(a)(15)(H)(i)(b1) who files a complaint regarding a violation 

of clause (iv) and is otherwise eligible to remain and work in the 

United States may be allowed to seek other appropriate employment 

in the United States for a period not to exceed the maximum period 

of stay authorized for such nonimmigrant classification. 

(vi)(I) It is a violation of this clause for an employer who has 

filed an attestation under this subsection to require a nonimmigrant 

under section 101(a)(15)(H)(i)(b1) to pay a penalty for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer. The Secretary of Labor shall determine whether a required payment is a penalty (and not liquidated 

damages) pursuant to relevant State law. 

(II) If the Secretary of Labor finds, after notice and opportunity 

for a hearing, that an employer has committed a violation of this 

clause, the Secretary of Labor may impose a civil monetary penalty 

of $1,000 for each such violation and issue an administrative order 

requiring the return to the nonimmigrant of any amount paid in 

violation of this clause, or, if the nonimmigrant cannot be located, 

requiring payment of any such amount to the general fund of the 

Treasury. 

(vii)(I) It is a failure to meet a condition of paragraph (1)(A) for 

an employer who has filed an attestation under this subsection and 

who places a nonimmigrant under section 101(a)(15)(H)(i)(b1) designated as a full-time employee in the attestation, after the nonimmigrant has entered into employment with the employer, in nonproductive status due to a decision by the employer (based on factors such as lack of work), or due to the nonimmigrant’s lack of a 

permit or license, to fail to pay the nonimmigrant full-time wages 

in accordance with paragraph (1)(A) for all such nonproductive 

time. 

(II) It is a failure to meet a condition of paragraph (1)(A) for 

an employer who has filed an attestation under this subsection and 

who places a nonimmigrant under section 101(a)(15)(H)(i)(b1) designated as a part-time employee in the attestation, after the nonimmigrant has entered into employment with the employer, in nonproductive status under circumstances described in subclause (I), to 

fail to pay such a nonimmigrant for such hours as are designated 

on the attestation consistent with the rate of pay identified on the 

attestation. 

(III) In the case of a nonimmigrant under section 

101(a)(15)(H)(i)(b1) who has not yet entered into employment with 

41

an employer who has had approved an attestation under this subsection with respect to the nonimmigrant, the provisions of subclauses (I) and (II) shall apply to the employer beginning 30 days 

after the date the nonimmigrant first is admitted into the United 

States, or 60 days after the date the nonimmigrant becomes eligible 

to work for the employer in the case of a nonimmigrant who is 

present in the United States on the date of the approval of the attestation filed with the Secretary of Labor. 

(IV) This clause does not apply to a failure to pay wages to a 

nonimmigrant under section 101(a)(15)(H)(i)(b1) for nonproductive 

time due to non-work-related factors, such as the voluntary request 

of the nonimmigrant for an absence or circumstances rendering the 

nonimmigrant unable to work. 

(V) This clause shall not be construed as prohibiting an employer that is a school or other educational institution from applying to a nonimmigrant under section 101(a)(15)(H)(i)(b1) an established salary practice of the employer, under which the employer 

pays to nonimmigrants under section 101(a)(15)(H)(i)(b1) and 

United States workers in the same occupational classification an 

annual salary in disbursements over fewer than 12 months, if— (aa) the nonimmigrant agrees to the compressed annual 

salary payments prior to the commencement of the employment; 

and 

(bb) the application of the salary practice to the nonimmigrant does not otherwise cause the nonimmigrant to violate any condition of the nonimmigrant’s authorization under 

this Act to remain in the United States. 

(VI) This clause shall not be construed as superseding clause 

(viii). 

(viii) It is a failure to meet a condition of paragraph (1)(A) for 

an employer who has filed an attestation under this subsection to 

fail to offer to a nonimmigrant under section 101(a)(15)(H)(i)(b1), 

during the nonimmigrant’s period of authorized employment, benefits and eligibility for benefits (including the opportunity to participate in health, life, disability, and other insurance plans; the opportunity to participate in retirement and savings plans; and cash bonuses and non-cash compensation, such as stock options (whether or 

not based on performance)) on the same basis, and in accordance 

with the same criteria, as the employer offers to United States workers. 

(D) If the Secretary of Labor finds, after notice and opportunity 

for a hearing, that an employer has not paid wages at the wage 

level specified in the attestation and required under paragraph (1), 

the Secretary of Labor shall order the employer to provide for payment of such amounts of back pay as may be required to comply 

with the requirements of paragraph (1), whether or not a penalty 

under subparagraph (C) has been imposed. 

(E) The Secretary of Labor may, on a case-by-case basis, subject 

an employer to random investigations for a period of up to 5 years, 

beginning on the date on which the employer is found by the Secretary of Labor to have committed a willful failure to meet a condition of paragraph (1) or to have made a willful misrepresentation 

of material fact in an attestation. The authority of the Secretary of 

Labor under this subparagraph shall not be construed to be subject 

to, or limited by, the requirements of subparagraph (A). 

42

(F) Nothing in this subsection shall be construed as superseding 

or preempting any other enforcement-related authority under this 

Act (such as the authorities under section 274B), or any other Act. 

(4) For purposes of this subsection: 

(A) The term ‘‘area of employment’’ means the area within 

normal commuting distance of the worksite or physical location 

where the work of the nonimmigrant under section 

101(a)(15)(H)(i)(b1) is or will be performed. If such worksite or 

location is within a Metropolitan Statistical Area, any place 

within such area is deemed to be within the area of employment. 

(B) In the case of an attestation with respect to one or more 

nonimmigrants under section 101(a)(15)(H)(i)(b1) by an employer, the employer is considered to ‘‘displace’’ a United States 

worker from a job if the employer lays off the worker from a job 

that is essentially the equivalent of the job for which the nonimmigrant or nonimmigrants is or are sought. A job shall not 

be considered to be essentially equivalent of another job unless 

it involves essentially the same responsibilities, was held by a 

United States worker with substantially equivalent qualifications and experience, and is located in the same area of employment as the other job. 

(C)(i) The term ‘‘lays off’’, with respect to a worker— (I) means to cause the worker’s loss of employment, 

other than through a discharge for inadequate performance, violation of workplace rules, cause, voluntary departure, voluntary retirement, or the expiration of a grant or 

contract; but 

(II) does not include any situation in which the worker 

is offered, as an alternative to such loss of employment, a 

similar employment opportunity with the same employer at 

equivalent or higher compensation and benefits than the 

position from which the employee was discharged, regardless of whether or not the employee accepts the offer. 

(ii) Nothing in this subparagraph is intended to limit an 

employee’s rights under a collective bargaining agreement or 

other employment contract. 

(D) The term ‘‘United States worker’’ means an employee 

who—

(i) is a citizen or national of the United States; or 

(ii) is an alien who is lawfully admitted for permanent 

residence, is admitted as a refugee under section 207 of this 

title, is granted asylum under section 208, or is an immigrant otherwise authorized, by this Act or by the Secretary 

of Homeland Security, to be employed.

* * * * * * *

ADMISSION OF NONIMMIGRANTS

SEC. 214. (a)***

(b) Every alien ø(other than a nonimmigrant described in subparagraph (H)(i), (L), or (V) of section 101(a)(15))¿ (other than a 

nonimmigrant described in subparagraph (L) or (V) of section 

101(a)(15), and other than a nonimmigrant described in any provision of section 101(a)(15)(H)(i) except subclause (b1) of such section)

43

shall be presumed to be an immigrant until he establishes to the 

satisfaction of the consular officer, at the time of application for a 

visa, and the immigration officers, at the time of application for admission, that he is entitled to a nonimmigrant status under section 

101(a)(15). An alien who is an officer or employee of any foreign 

government or of any international organization entitled to enjoy 

privileges, exemptions, and immunities under the International Organizations Immunities Act, or an alien who is the attendant, servant, employee, or member of the immediate family of any such 

alien shall not be entitled to apply for or receive an immigrant 

visa, or to enter the United States as an immigrant unless he executes a written waiver in the same form and substance as is prescribed by section 247(b). 

(c)(1) The question of importing any alien as a nonimmigrant 

under øsection 101(a)(15)(H), (L), (O), or (P)(i)¿ subparagraph (H), 

(L), (O), or (P)(i) of section 101(a)(15) (excluding nonimmigrants 

under section 101(a)(15)(H)(i)(b1)) in any specific case or specific 

cases shall be determined by the Attorney General, after consultation with appropriate agencies of the Government, upon petition of 

the importing employer. Such petition shall be made and approved 

before the visa is granted. The petition shall be in such form and 

contain such information as the Attorney General shall prescribe. 

The approval of such a petition shall not, of itself, be construed as 

establishing that the alien is a nonimmigrant. For purposes of this 

subsection with respect to nonimmigrants described in section 

101(a)(15)(H)(ii)(a), the term ‘‘appropriate agencies of Government’’

means the Department of Labor and includes the Department of 

Agriculture. The provisions of section 218 shall apply to the question of importing any alien as a nonimmigrant under section 

101(a)(15)(H)(ii)(a). 

* * * * * * *

(11)(A) Subject to subparagraph (B), the Secretary of Homeland 

Security or the Secretary of State, as appropriate, shall impose a fee 

on an employer who has filed an attestation described in section 

212(t)—

(i) in order that an alien may be initially granted nonimmigrant status described in section 101(a)(15)(H)(i)(b1); or 

(ii) in order to satisfy the requirement of the second sentence of subsection (g)(8)(C) for an alien having such status to 

obtain certain extensions of stay. 

(B) The amount of the fee shall be the same as the amount imposed by the Secretary of Homeland Security under paragraph (9), 

except that if such paragraph does not authorize such Secretary to 

impose any fee, no fee shall be imposed under this paragraph. 

(C) Fees collected under this paragraph shall be deposited in 

the Treasury in accordance with section 286(s).

* * * * * * *

(g)(1)***

* * * * * * *

(8)(A) The agreement referred to in section 101(a)(15)(H)(i)(b1) 

is the United States-Chile Free Trade Agreement. 

44

(B)(i) The Secretary of Homeland Security shall establish annual numerical limitations on approvals of initial applications by 

aliens for admission under section 101(a)(15)(H)(i)(b1). 

(ii) The annual numerical limitations described in clause (i) 

shall not exceed 1,400 for nationals of Chile for any fiscal year. For 

purposes of this clause, the term ‘‘national’’ has the meaning given 

such term in article 14.9 of the United States-Chile Free Trade 

Agreement. 

(iii) The annual numerical limitations described in clause (i) 

shall only apply to principal aliens and not to the spouses or children of such aliens. 

(iv) The annual numerical limitation described in paragraph 

(1)(A) is reduced by the amount of the annual numerical limitations 

established under clause (i). However, if a numerical limitation established under clause (i) has not been exhausted at the end of a 

given fiscal year, the Secretary of Homeland Security shall adjust 

upwards the numerical limitation in paragraph (1)(A) for that fiscal 

year by the amount remaining in the numerical limitation under 

clause (i). Visas under section 101(a)(15)(H)(i)(b) may be issued pursuant to such adjustment within the first 45 days of the next fiscal 

year to aliens who had applied for such visas during the fiscal year 

for which the adjustment was made. 

(C) The period of authorized admission as a nonimmigrant 

under section 101(a)(15)(H)(i)(b1) shall be 1 year, and may be extended, but only in 1-year increments. After every second extension, 

the next following extension shall not be granted unless the Secretary of Labor had determined and certified to the Secretary of 

Homeland Security and the Secretary of State that the intending 

employer has filed with the Secretary of Labor an attestation under 

section 212(t)(1) for the purpose of permitting the nonimmigrant to 

obtain such extension. 

(D) The numerical limitation described in paragraph (1)(A) for 

a fiscal year shall be reduced by one for each alien granted an extension under subparagraph (C) during such year who has obtained 

5 or more consecutive prior extensions.

(h) The fact that an alien is the beneficiary of an application 

for a preference status filed under section 204 or has otherwise 

sought permanent residence in the United States shall not constitute evidence of an intention to abandon a foreign residence for 

purposes of obtaining a visa as a nonimmigrant described in subparagraph ø(H)(i)¿ (H)(i)(b) or (c), (L), or (V) of section 101(a)(15) 

or otherwise obtaining or maintaining the status of a nonimmigrant described in such subparagraph, if the alien had obtained a change of status under section 248 to a classification as 

such a nonimmigrant before the alien’s most recent departure from 

the United States. 

(i)(1) øFor purposes¿ Except as provided in paragraph (3), for 

purposes of section 101(a)(15)(H)(i)(b) and paragraph (2), the term ‘‘specialty occupation’’ means an occupation that requires— (A) * * *

* * * * * * *

(3) For purposes of section 101(a)(15)(H)(i)(b1), the term ‘‘specialty occupation’’ means an occupation that requires— (A) theoretical and practical application of a body of specialized knowledge; and 

45

(B) attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into 

the occupation in the United States.

(j)(1) Notwithstanding any other provision of this Act, an alien 

who is a citizen of Canada or Mexico who seeks to enter the United 

States under and pursuant to the provisions of Section B, Section 

C, or Section D of Annex 1603 of the North American Free Trade 

Agreement, shall not be classified as a nonimmigrant under such 

provisions if there is in progress a strike or lockout in the course 

of a labor dispute in the occupational classification at the place or 

intended place of employment, unless such alien establishes, pursuant to regulations promulgated by the Attorney General, that the 

alien’s entry will not affect adversely the settlement of the strike 

or lockout or the employment of any person who is involved in the 

strike or lockout. Notice of a determination under this øsubsection¿

paragraph shall be given as may be required by paragraph 3 of article 1603 of such Agreement. For purposes of this øsubsection¿

paragraph, the term ‘‘citizen of Mexico’’ means ‘‘citizen’’ as defined 

in Annex 1608 of such Agreement. 

(2) Notwithstanding any other provision of this Act except section 212(t)(1), and subject to regulations promulgated by the Secretary of Homeland Security, an alien who seeks to enter the United 

States under and pursuant to the provisions of an agreement listed 

in subsection (g)(8)(A), and the spouse and children of such an alien 

if accompanying or following to join the alien, may be denied admission as a nonimmigrant under subparagraph (E), (L), or 

(H)(i)(b1) of section 101(a)(15) if there is in progress a labor dispute 

in the occupational classification at the place or intended place of 

employment, unless such alien establishes, pursuant to regulations 

promulgated by the Secretary of Homeland Security after consultation with the Secretary of Labor, that the alien’s entry will not affect 

adversely the settlement of the labor dispute or the employment of 

any person who is involved in the labor dispute. Notice of a determination under this paragraph shall be given as may be required 

by such agreement.

* * * * * * *

CHAPTER 9—MISCELLANEOUS

* * * * * * *

DISPOSITION OF MONEYS COLLECTED UNDER THE PROVISIONS OF THIS

TITLE

SEC. 286. (a)***

* * * * * * *

(s) H–1B NONIMMIGRANT PETITIONER ACCOUNT.—

(1) IN GENERAL.—There is established in the general fund 

of the Treasury a separate account, which shall be known as 

the ‘‘H–1B Nonimmigrant Petitioner Account’’. Notwithstanding any other section of this title, there shall be deposited 

as offsetting receipts into the account all fees collected under 

øsection 214(c)(9).¿ paragraphs (9) and (11) of section 214(c).

* * * * * * *

46

AGENCY CORRESPONDENCE


Letter1A.eps
47


Letter1B.eps
48


Letter1C.eps
49


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MARKUP TRANSCRIPT

BUSINESS MEETING 

WEDNESDAY, JULY 16, 2003

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:04 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr., [Chairman of the Committee] presiding. 

Chairman SENSENBRENNER. The Committee will come to order. A 

working quorum is present. 

Pursuant to notice, I now call up H.R. 2738, the implementing 

legislation for the U.S.-Chile Free Trade Agreement, and move its 

favorable recommendation to the House. This legislation was introduced by the majority leader, by request of the Administration, as 

provided by the Trade Promotion Authority law. It makes necessary changes in U.S. law to ensure compliance with the U.S.-

Chile Free Trade Agreement. 

Last week, the Committee considered draft implementing legislation for this agreement and recommended changes to provisions 

within this Committee’s jurisdiction. The underlying agreement 

contains several provisions within the jurisdiction of this Committee. However, only those pertaining to the immigration law require accompanying implementing legislation. 

Thus, our consideration of the draft implementing legislation last 

week was confined to those provisions. The changes we recommended to those provisions have now been incorporated in the 

introduced legislation that is before us today, and they have greatly 

improved the product. Under the Trade Promotion Authority law, 

no amendments to this introduced legislation are in order. 

In addition, Members should keep in mind that the legislation 

has been referred to us only for consideration of those provisions 

that fall under our jurisdiction. 

Without objection the bill will be considered as read. 

[The bill, H.R. 2738, follows:]

52

1

I

108TH CONGRESS

1ST SESSION H. R. 2738

To implement the United States-Chile Free Trade Agreement.

IN THE HOUSE OF REPRESENTATIVES

JULY 15, 2003

Mr. DELAY (for himself and Mr. RANGEL) (both by request) introduced the

following bill; which was referred to the Committee on Ways and Means,

and in addition to the Committee on the Judiciary, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To implement the United States-Chile Free Trade

Agreement.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘United States-Chile Free Trade Agreement Implementa6 tion Act’’.

7 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

Sec. 2. Purposes.

Sec. 3. Definitions.


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TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING

TO, THE AGREEMENT

Sec. 101. Approval and entry into force of the agreement.

Sec. 102. Relationship of the agreement to United States and State law.

Sec. 103. Consultation and layover provisions for, and effective date of, proclaimed actions.

Sec. 104. Implementing actions in anticipation of entry into force and initial

regulations.

Sec. 105. Administration of dispute settlement proceedings.

Sec. 106. Arbitration of claims.

Sec. 107. Effective dates; effect of termination.

TITLE II—CUSTOMS PROVISIONS

Sec. 201. Tariff modifications.

Sec. 202. Rules of origin.

Sec. 203. Drawback.

Sec. 204. Customs user fees.

Sec. 205. Disclosure of incorrect information; denial of preferential tariff treatment; false certificates of origin.

Sec. 206. Reliquidation of entries.

Sec. 207. Recordkeeping requirements.

Sec. 208. Enforcement of textile and apparel rules of origin.

Sec. 209. Conforming amendments.

Sec. 210. Regulations.

TITLE III—RELIEF FROM IMPORTS

Sec. 301. Definitions.

Subtitle A—Relief From Imports Benefiting From the Agreement

Sec. 311. Commencing of action for relief.

Sec. 312. Commission action on petition.

Sec. 313. Provision of relief.

Sec. 314. Termination of relief authority.

Sec. 315. Compensation authority.

Sec. 316. Confidential business information.

Subtitle B—Textile and Apparel Safeguard Measures

Sec. 321. Commencement of action for relief.

Sec. 322. Determination and provision of relief.

Sec. 323. Period of relief.

Sec. 324. Articles exempt from relief.

Sec. 325. Rate after termination of import relief.

Sec. 326. Termination of relief authority.

Sec. 327. Compensation authority.

Sec. 328. Business confidential information.

TITLE IV—TEMPORARY ENTRY OF BUSINESS PERSONS

Sec. 401. Nonimmigrant traders and investors.

Sec. 402. Nonimmigrant professionals; labor attestation.

Sec. 403. Labor disputes.

Sec. 404. Conforming amendments.


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1 SEC. 2. PURPOSES.

2 The purposes of this Act are—

3 (1) to approve and implement the Free Trade

4 Agreement between the United States and the Re5 public of Chile entered into under the authority of

6 section 2103(b) of the Bipartisan Trade Promotion

7 Authority Act of 2002;

8 (2) to strengthen and develop economic rela9 tions between the United States and Chile for their

10 mutual benefit;

11 (3) to establish free trade between the two na12 tions through the reduction and elimination of bar13 riers to trade in goods and services and to invest14 ment; and

15 (4) to lay the foundation for further coopera16 tion to expand and enhance the benefits of such

17 Agreement.

18 SEC. 3. DEFINITIONS.

19 In this Act:

20 (1) AGREEMENT.—The term ‘‘Agreement’’

21 means the United States-Chile Free Trade Agree22 ment approved by the Congress under section

23 101(a)(1).

24 (2) HTS.—The term ‘‘HTS’’ means the Har25 monized Tariff Schedule of the United States.


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1 (3) TEXTILE OR APPAREL GOOD.—The term

2 ‘‘textile or apparel good’’ means a good listed in the

3 Annex to the Agreement on Textiles and Clothing

4 referred to in section 101(d)(4) of the Uruguay

5 Round Agreements Act (19 U.S.C. 3511(d)(4)).

6 TITLE I—APPROVAL OF, AND

7 GENERAL PROVISIONS RE8 LATING TO, THE AGREEMENT

9 SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE

10 AGREEMENT.

11 (a) APPROVAL OF AGREEMENT AND STATEMENT OF

12 ADMINISTRATIVE ACTION.—Pursuant to section 2105 of

13 the Bipartisan Trade Promotion Authority Act of 2002

14 (19 U.S.C. 3805) and section 151 of the Trade Act of

15 1974 (19 U.S.C. 2191), the Congress approves—

16 (1) the United States-Chile Free Trade Agree17 ment entered into on June 6, 2003, with the Gov18 ernment of Chile and submitted to the Congress on

19 July 15, 2003; and

20 (2) the statement of administrative action pro21 posed to implement the Agreement that was sub22 mitted to the Congress on July 15, 2003.

23 (b) CONDITIONS FOR ENTRY INTO FORCE OF THE

24 AGREEMENT.—At such time as the President determines

25 that Chile has taken measures necessary to bring it into


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1 compliance with the provisions of the Agreement that take

2 effect on the date on which the Agreement enters into

3 force, the President is authorized to exchange notes with

4 the Government of Chile providing for the entry into force,

5 on or after January 1, 2004, of the Agreement for the

6 United States.

7 SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED

8 STATES AND STATE LAW.

9 (a) RELATIONSHIP TO UNITED STATES LAW.—

10 (1) UNITED STATES LAW TO PREVAIL IN CON11 FLICT.—No provision of the Agreement, nor the ap12 plication of any such provision to any person or cir13 cumstance, which is inconsistent with any law of the

14 United States shall have effect.

15 (2) CONSTRUCTION.—Nothing in this Act shall

16 be construed—

17 (A) to amend or modify any law of the

18 United States, or

19 (B) to limit any authority conferred under

20 any law of the United States,

21 unless specifically provided for in this Act.

22 (b) RELATIONSHIP OF AGREEMENT TO STATE

23 LAW.—

24 (1) LEGAL CHALLENGE.—No State law, or the

25 application thereof, may be declared invalid as to


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1 any person or circumstance on the ground that the

2 provision or application is inconsistent with the

3 Agreement, except in an action brought by the

4 United States for the purpose of declaring such law

5 or application invalid.

6 (2) DEFINITION OF STATE LAW.—For purposes

7 of this subsection, the term ‘‘State law’’ includes—

8 (A) any law of a political subdivision of a

9 State; and

10 (B) any State law regulating or taxing the

11 business of insurance.

12 (c) EFFECT OF AGREEMENT WITH RESPECT TO PRI13 VATE REMEDIES.—No person other than the United

14 States—

15 (1) shall have any cause of action or defense

16 under the Agreement or by virtue of Congressional

17 approval thereof; or

18 (2) may challenge, in any action brought under

19 any provision of law, any action or inaction by any

20 department, agency, or other instrumentality of the

21 United States, any State, or any political subdivision

22 of a State on the ground that such action or inaction

23 is inconsistent with the Agreement.


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1 SEC. 103. CONSULTATION AND LAYOVER PROVISIONS FOR,

2 AND EFFECTIVE DATE OF, PROCLAIMED AC3 TIONS.

4 (a) CONSULTATION AND LAYOVER REQUIRE5 MENTS.—If a provision of this Act provides that the imple6 mentation of an action by the President by proclamation

7 is subject to the consultation and layover requirements of

8 this section, such action may be proclaimed only if—

9 (1) the President has obtained advice regarding

10 the proposed action from—

11 (A) the appropriate advisory committees

12 established under section 135 of the Trade Act

13 of 1974 (19 U.S.C. 2155); and

14 (B) the United States International Trade

15 Commission;

16 (2) the President has submitted a report to the

17 Committee on Ways and Means of the House of

18 Representatives and the Committee on Finance of

19 the Senate that sets forth—

20 (A) the action proposed to be proclaimed

21 and the reasons therefor; and

22 (B) the advice obtained under paragraph

23 (1);

24 (3) a period of 60 calendar days, beginning on

25 the first day on which the requirements set forth in


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1 paragraphs (1) and (2) have been met has expired;

2 and

3 (4) the President has consulted with such Com4 mittees regarding the proposed action during the pe5 riod referred to in paragraph (3).

6 (b) EFFECTIVE DATE OF CERTAIN PROCLAIMED AC7 TIONS.—Any action proclaimed by the President under the

8 authority of this Act that is not subject to the consultation

9 and layover provisions under subsection (a) may not take

10 effect before the 15th day after the date on which the text

11 of the proclamation is published in the Federal Register.

12 SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF

13 ENTRY INTO FORCE AND INITIAL REGULA14 TIONS.

15 (a) IMPLEMENTING ACTIONS.—

16 (1) PROCLAMATION AUTHORITY.—After the

17 date of enactment of this Act—

18 (A) the President may proclaim such ac19 tions, and

20 (B) other appropriate officers of the

21 United States Government may issue such reg22 ulations,

23 as may be necessary to ensure that any provision of

24 this Act, or amendment made by this Act, that takes

25 effect on the date the Agreement enters into force


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1 is appropriately implemented on such date, but no

2 such proclamation or regulation may have an effec3 tive date earlier than the date of entry into force.

4 (2) WAIVER OF 15-DAY RESTRICTION.—The 15-

5 day restriction contained in section 103(b) on the

6 taking effect of proclaimed actions is waived to the

7 extent that the application of such restriction would

8 prevent the taking effect on the date the Agreement

9 enters into force of any action proclaimed under this

10 section.

11 (b) INITIAL REGULATIONS.—Initial regulations nec12 essary or appropriate to carry out the actions required by

13 or authorized under this Act or proposed in the statement

14 of administrative action referred to in section 101(a)(2)

15 to implement the Agreement shall, to the maximum extent

16 feasible, be issued within 1 year after the date of entry

17 into force of the Agreement. In the case of any imple18 menting action that takes effect on a date after the date

19 of entry into force of the Agreement, initial regulations

20 to carry out that action shall, to the maximum extent fea21 sible, be issued within 1 year after such effective date.–

22 SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PRO23 CEEDINGS.

24 (a) ESTABLISHMENT OR DESIGNATION OF OFFICE.—

25 The President is authorized to establish or designate withVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00060 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 in the Department of Commerce an office that shall be

2 responsible for providing administrative assistance to pan3 els established under chapter 22 of the Agreement. The

4 office may not be considered to be an agency for purposes

5 of section 552 of title 5, United States Code.

6 (b) AUTHORIZATION OF APPROPRIATIONS.—There

7 are authorized to be appropriated for each fiscal year after

8 fiscal year 2003 to the Department of Commerce such

9 sums as may be necessary for the establishment and oper10 ations of the office under subsection (a) and for the pay11 ment of the United States share of the expenses of panels

12 established under chapter 22 of the Agreement.

13 SEC. 106. ARBITRATION OF CLAIMS.

14 (a) SUBMISSION OF CERTAIN CLAIMS.—The United

15 States is authorized to resolve any claim against the

16 United States covered by article 10.15(1)(a)(i)(C) or

17 10.15(1)(b)(i)(C) of the Agreement, pursuant to the In18 vestor-State Dispute Settlement procedures set forth in

19 section B of chapter 10 of the Agreement.

20 (b) CONTRACT CLAUSES.—All contracts executed by

21 any agency of the United States on or after the date of

22 entry into force of the Agreement shall contain a clause

23 specifying the law that will apply to resolve any breach

24 of contract claim.


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1 SEC. 107. EFFECTIVE DATES; EFFECT OF TERMINATION.

2 (a) EFFECTIVE DATES.—Except as provided in sub3 section (b), the provisions of this Act and the amendments

4 made by this Act take effect on the date the Agreement

5 enters into force.

6 (b) EXCEPTIONS.—Sections 1 through 3 and this

7 title take effect on the date of the enactment of this Act.

8 (c) TERMINATION OF THE AGREEMENT.—On the

9 date on which the Agreement ceases to be in force, the

10 provisions of this Act (other than this subsection) and the

11 amendments made by this Act shall cease to be effective.

12 TITLE II—CUSTOMS PROVISIONS

13 SEC. 201. TARIFF MODIFICATIONS.

14 (a) TARIFF MODIFICATIONS PROVIDED FOR IN THE

15 AGREEMENT.—

16 (1) PROCLAMATION AUTHORITY.—The Presi17 dent may proclaim—

18 (A) such modifications or continuation of

19 any duty,

20 (B) such continuation of duty-free or ex21 cise treatment, or

22 (C) such additional duties,

23 as the President determines to be necessary or ap24 propriate to carry out or apply articles 3.3, 3.7, 3.9,

25 article 3.20 (8), (9), (10), and (11), and Annex 3.3

26 of the Agreement.


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1 (2) EFFECT ON CHILEAN GSP STATUS.—Not2 withstanding section 502(a)(1) of the Trade Act of

3 1974 (19 U.S.C. 2462(a)(1)), the President shall

4 terminate the designation of Chile as a beneficiary

5 developing country for purposes of title V of the

6 Trade Act of 1974 on the date of entry into force

7 of the Agreement.

8 (b) OTHER TARIFF MODIFICATIONS.—Subject to the

9 consultation and layover provisions of section 103(a), the

10 President may proclaim—

11 (1) such modifications or continuation of any

12 duty,

13 (2) such modifications as the United States

14 may agree to with Chile regarding the staging of any

15 duty treatment set forth in Annex 3.3 of the Agree16 ment,

17 (3) such continuation of duty-free or excise

18 treatment, or

19 (4) such additional duties,

20 as the President determines to be necessary or appropriate

21 to maintain the general level of reciprocal and mutually

22 advantageous concessions with respect to Chile provided

23 for by the Agreement.

24 (c) ADDITIONAL TARIFFS ON AGRICULTURAL SAFE25 GUARD GOODS.—


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1 (1) IN GENERAL.—In addition to any duty pro2 claimed under subsection (a) or (b), and subject to

3 paragraphs (3) through (5), the Secretary of the

4 Treasury shall assess a duty, in the amount pre5 scribed under paragraph (2), on an agricultural safe6 guard good if the Secretary of the Treasury deter7 mines that the unit import price of the good when

8 it enters the United States, determined on an

9 F.O.B. basis, is less than the trigger price indicated

10 for that good in Annex 3.18 of the Agreement or

11 any amendment thereto.

12 (2) CALCULATION OF ADDITIONAL DUTY.—The

13 amount of the additional duty assessed under this

14 subsection shall be determined as follows:

15 (A) If the difference between the unit im16 port price and the trigger price is less than, or

17 equal to, 10 percent of the trigger price, no ad18 ditional duty shall be imposed.

19 (B) If the difference between the unit im20 port price and the trigger price is greater than

21 10 percent, but less than or equal to 40 per22 cent, of the trigger price, the additional duty

23 shall be equal to 30 percent of the difference

24 between the preferential tariff rate and the col25 umn 1 general rate of duty imposed under the


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1 HTS on like articles at the time the additional

2 duty is imposed.

3 (C) If the difference between the unit im4 port price and the trigger price is greater than

5 40 percent, but less than or equal to 60 per6 cent, of the trigger price, the additional duty

7 shall be equal to 50 percent of the difference

8 between the preferential tariff rate and the col9 umn 1 general rate of duty imposed under the

10 HTS on like articles at the time the additional

11 duty is imposed.

12 (D) If the difference between the unit im13 port price and the trigger price is greater than

14 60 percent, but less than or equal to 75 per15 cent, of the trigger price, the additional duty

16 shall be equal to 70 percent of the difference

17 between the preferential tariff rate and the col18 umn 1 general rate of duty imposed under the

19 HTS on like articles at the time the additional

20 duty is imposed.

21 (E) If the difference between the unit im22 port price and the trigger price is greater than

23 75 percent of the trigger price, the additional

24 duty shall be equal to 100 percent of the dif25 ference between the preferential tariff rate and


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1 the column 1 general rate of duty imposed

2 under the HTS on like articles at the time the

3 additional duty is imposed.

4 (3) EXCEPTIONS.—No additional duty under

5 this subsection shall be assessed on an agricultural

6 safeguard good if, at the time of entry, the good is

7 subject to import relief under—

8 (A) subtitle A of title III of this Act; or

9 (B) chapter 1 of title II of the Trade Act

10 of 1974 (19 U.S.C. 2251 et seq.).

11 (4) TERMINATION.—This subsection shall cease

12 to apply on the date that is 12 years after the date

13 on which the Agreement enters into force.

14 (5) TARIFF-RATE QUOTAS.—If an agricultural

15 safeguard good is subject to a tariff-rate quota, and

16 the in-quota duty rate for the good proclaimed pur17 suant to subsection (a) or (b) is zero, any additional

18 duty assessed under this subsection shall be applied

19 only to over-quota imports of the good.

20 (6) NOTICE.—Not later than 60 days after the

21 Secretary of the Treasury first assesses additional

22 duties on an agricultural safeguard good under this

23 subsection, the Secretary shall notify the Govern24 ment of Chile in writing of such action and shall


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1 provide to the Government of Chile data supporting

2 the assessment of additional duties.

3 (7) MODIFICATION OF TRIGGER PRICES.—Not

4 later than 60 calendar days before agreeing with the

5 Government of Chile pursuant to article 3.18(2)(b)

6 of the Agreement on a modification to a trigger

7 price for a good listed in Annex 3.18 of the Agree8 ment, the President shall notify the Committees on

9 Ways and Means and Agriculture of the House of

10 Representatives and the Committees on Finance and

11 Agriculture of the Senate of the proposed modifica12 tion and the reasons therefor.

13 (8) DEFINITIONS.—In this subsection:

14 (A) AGRICULTURAL SAFEGUARD GOOD.—

15 The term ‘‘agricultural safeguard good’’ means

16 a good—

17 (i) that qualifies as an originating

18 good under section 202;

19 (ii) that is included in the United

20 States Agricultural Safeguard Product List

21 set forth in Annex 3.18 of the Agreement;

22 and

23 (iii) for which a claim for preferential

24 tariff treatment under the Agreement has

25 been made.


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1 (B) F.O.B.—The term ‘‘F.O.B.’’ means

2 free on board, regardless of the mode of trans3 portation, at the point of direct shipment by the

4 seller to the buyer.

5 (C) UNIT IMPORT PRICE.—The term ‘‘unit

6 import price’’ means the price expressed in dol7 lars per kilogram.

8 (d) CONVERSION TO AD VALOREM RATES.—For pur9 poses of subsections (a) and (b), with respect to any good

10 for which the base rate in the Schedule of the United

11 States to Annex 3.3 of the Agreement is a specific or com12 pound rate of duty, the President may substitute for the

13 base rate an ad valorem rate that the President deter14 mines to be equivalent to the base rate.

15 SEC. 202. RULES OF ORIGIN.

16 (a) ORIGINATING GOODS.—

17 (1) IN GENERAL.—For purposes of this Act

18 and for purposes of implementing the tariff treat19 ment provided for under the Agreement, except as

20 otherwise provided in this section, a good is an origi21 nating good if—

22 (A) the good is wholly obtained or pro23 duced entirely in the territory of Chile, the

24 United States, or both;

25 (B) the good—


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1 (i) is produced entirely in the territory

2 of Chile, the United States, or both, and

3 (I) each of the nonoriginating

4 materials used in the production of

5 the good undergoes an applicable

6 change in tariff classification specified

7 in Annex 4.1 of the Agreement, or

8 (II) the good otherwise satisfies

9 any applicable regional value-content

10 or other requirements specified in

11 Annex 4.1 of the Agreement; and

12 (ii) satisfies all other applicable re13 quirements of this section; or

14 (C) the good is produced entirely in the

15 territory of Chile, the United States, or both,

16 exclusively from materials described in subpara17 graph (A) or (B).

18 (2) SIMPLE COMBINATION OR MERE DILU19 TION.—A good shall not be considered to be an orig20 inating good and a material shall not be considered

21 to be an originating material by virtue of having

22 undergone—

23 (A) simple combining or packaging oper24 ations; or


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1 (B) mere dilution with water or another

2 substance that does not materially alter the

3 characteristics of the good or material.

4 (b) DE MINIMIS AMOUNTS OF NONORIGINATING MA5 TERIALS.—

6 (1) IN GENERAL.—Except as provided in para7 graphs (2) and (3), a good that does not undergo a

8 change in tariff classification pursuant to Annex 4.1

9 of the Agreement is an originating good if—

10 (A) the value of all nonoriginating mate11 rials that are used in the production of the good

12 and do not undergo the applicable change in

13 tariff classification does not exceed 10 percent

14 of the adjusted value of the good;

15 (B) the value of such nonoriginating mate16 rials is included in the value of nonoriginating

17 materials for any applicable regional value-con18 tent requirement; and

19 (C) the good meets all other applicable re20 quirements of this section.

21 (2) EXCEPTIONS.—Paragraph (1) does not

22 apply to the following:

23 (A) A nonoriginating material provided for

24 in chapter 4 of the HTS, or a nonoriginating

25 dairy preparation containing over 10 percent by


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1 weight of milk solids provided for in subheading

2 1901.90 or 2106.90 of the HTS, that is used

3 in the production of a good provided for in

4 chapter 4 of the HTS.

5 (B) A nonoriginating material provided for

6 in chapter 4 of the HTS, or nonoriginating

7 dairy preparations containing over 10 percent

8 by weight of milk solids provided for in sub9 heading 1901.90 of the HTS, that are used in

10 the production of the following goods:

11 (i) Infant preparations containing

12 over 10 percent in weight of milk solids

13 provided for in subheading 1901.10 of the

14 HTS.

15 (ii) Mixes and doughs, containing over

16 25 percent by weight of butterfat, not put

17 up for retail sale, provided for in sub18 heading 1901.20 of the HTS.

19 (iii) Dairy preparations containing

20 over 10 percent by weight of milk solids

21 provided for in subheading 1901.90 or

22 2106.90 of the HTS.

23 (iv) Goods provided for in heading

24 2105 of the HTS.


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1 (v) Beverages containing milk pro2 vided for in subheading 2202.90 of the

3 HTS.

4 (vi) Animal feeds containing over 10

5 percent by weight of milk solids provided

6 for in subheading 2309.90 of the HTS.

7 (C) A nonoriginating material provided for

8 in heading 0805 of the HTS, or any of sub9 headings 2009.11.00 through 2009.39 of the

10 HTS, that is used in the production of a good

11 provided for in any of subheadings 2009.11.00

12 through 2009.39 of the HTS, or in fruit or veg13 etable juice of any single fruit or vegetable, for14 tified with minerals or vitamins, concentrated

15 or unconcentrated, provided for in subheading

16 2106.90 or 2202.90 of the HTS.

17 (D) A nonoriginating material provided for

18 in chapter 15 of the HTS that is used in the

19 production of a good provided for in any of

20 headings 1501.00.00 through 1508, 1512,

21 1514, and 1515 of the HTS.

22 (E) A nonoriginating material provided for

23 in heading 1701 of the HTS that is used in the

24 production of a good provided for in any of

25 headings 1701 through 1703 of the HTS.


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1 (F) A nonoriginating material provided for

2 in chapter 17 of the HTS or in heading

3 1805.00.00 of the HTS that is used in the pro4 duction of a good provided for in subheading

5 1806.10 of the HTS.

6 (G) A nonoriginating material provided for

7 in any of headings 2203 through 2208 of the

8 HTS that is used in the production of a good

9 provided for in heading 2207 or 2208 of the

10 HTS.

11 (H) A nonoriginating material used in the

12 production of a good provided for in any of

13 chapters 1 through 21 of the HTS, unless the

14 nonoriginating material is provided for in a dif15 ferent subheading than the good for which ori16 gin is being determined under this section.

17 (3) GOODS PROVIDED FOR IN CHAPTERS 50

18 THROUGH 63 OF THE HTS.—

19 (A) IN GENERAL.—Except as provided in

20 subparagraph (B), a good provided for in any

21 of chapters 50 through 63 of the HTS that is

22 not an originating good because certain fibers

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1 cable change in tariff classification set out in

2 Annex 4.1 of the Agreement, shall be consid3 ered to be an originating good if the total

4 weight of all such fibers or yarns in that com5 ponent is not more than 7 percent of the total

6 weight of that component.

7 (B) CERTAIN TEXTILE OR APPAREL

8 GOODS.—A textile or apparel good containing

9 elastomeric yarns in the component of the good

10 that determines the tariff classification of the

11 good shall be considered to be an originating

12 good only if such yarns are wholly formed in

13 the territory of Chile or the United States.

14 (c) ACCUMULATION.—

15 (1) ORIGINATING GOODS INCORPORATED IN

16 GOODS OF OTHER COUNTRY.—Originating goods or

17 materials of Chile or the United States that are in18 corporated into a good in the territory of the other

19 country shall be considered to originate in the terri20 tory of the other country.

21 (2) MULTIPLE PROCEDURES.—A good that is

22 produced in the territory of Chile, the United States,

23 or both, by 1 or more producers, is an originating

24 good if the good satisfies the requirements of subVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00074 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 section (a) and all other applicable requirements of

2 this section.

3 (d) REGIONAL VALUE-CONTENT.—

4 (1) IN GENERAL.—For purposes of subsection

5 (a)(2), the regional value-content of a good referred

6 to in Annex 4.1 of the Agreement shall be cal7 culated, at the choice of the person claiming pref8 erential tariff treatment for the good, on the basis

9 of the build-down method described in paragraph (2)

10 or the build-up method described in paragraph (3),

11 unless otherwise provided in Annex 4.1 of the Agree12 ment.

13 (2) BUILD-DOWN METHOD.—

14 (A) IN GENERAL.—The regional value-con15 tent of a good may be calculated on the basis

16 of the following build-down method:

RVC =

AV - VNM

× 100

AV

17 (B) DEFINITIONS.—For purposes of sub18 paragraph (A):

19 (i) The term ‘‘RVC’’ means the re20 gional value-content, expressed as a per21 centage.

22 (ii) The term ‘‘AV’’ means the ad23 justed value.


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1 (iii) The term ‘‘VNM’’ means the

2 value of nonoriginating materials used by

3 the producer in the production of the good.

4 (3) BUILD-UP METHOD.—

5 (A) IN GENERAL.—The regional value-con6 tent of a good may be calculated on the basis

7 of the following build-up method:

RVC =

VOM

× 100

AV

8 (B) DEFINITIONS.—For purposes of sub9 paragraph (A):

10 (i) The term ‘‘RVC’’ means the re11 gional value-content, expressed as a per12 centage.

13 (ii) The term ‘‘AV’’ means the ad14 justed value.

15 (iii) The term ‘‘VOM’’ means the

16 value of originating materials used by the

17 producer in the production of the good.

18 (e) VALUE OF MATERIALS.—

19 (1) IN GENERAL.—For purposes of calculating

20 the regional value-content of a good under sub21 section (d), and for purposes of applying the de

22 minimis rules under subsection (b), the value of a

23 material is—


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1 (A) in the case of a material that is im2 ported by the producer of the good, the ad3 justed value of the material with respect to that

4 importation;

5 (B) in the case of a material acquired in

6 the territory in which the good is produced, ex7 cept for a material to which subparagraph (C)

8 applies, the producer’s price actually paid or

9 payable for the material;

10 (C) in the case of a material provided to

11 the producer without charge, or at a price re12 flecting a discount or similar reduction, the sum

13 of—

14 (i) all expenses incurred in the

15 growth, production, or manufacture of the

16 material, including general expenses; and

17 (ii) an amount for profit; or

18 (D) in the case of a material that is self19 produced, the sum of—

20 (i) all expenses incurred in the pro21 duction of the material, including general

22 expenses; and

23 (ii) an amount for profit.

24 (2) FURTHER ADJUSTMENTS TO THE VALUE OF

25 MATERIALS.—


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1 (A) ORIGINATING MATERIALS.—The fol2 lowing expenses, if not included in the value of

3 an originating material calculated under para4 graph (1), may be added to the value of the

5 originating material:

6 (i) The costs of freight, insurance,

7 packing, and all other costs incurred in

8 transporting the material to the location of

9 the producer.

10 (ii) Duties, taxes, and customs broker11 age fees on the material paid in the terri12 tory of Chile, the United States, or both,

13 other than duties and taxes that are

14 waived, refunded, refundable, or otherwise

15 recoverable, including credit against duty

16 or tax paid or payable.

17 (iii) The cost of waste and spoilage re18 sulting from the use of the material in the

19 production of the good, less the value of

20 renewable scrap or byproduct.

21 (B) NONORIGINATING MATERIALS.—The

22 following expenses, if included in the value of a

23 nonoriginating material calculated under para24 graph (1), may be deducted from the value of

25 the nonoriginating material:


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1 (i) The costs of freight, insurance,

2 packing, and all other costs incurred in

3 transporting the material to the location of

4 the producer.

5 (ii) Duties, taxes, and customs broker6 age fees on the material paid in the terri7 tory of Chile, the United States, or both,

8 other than duties and taxes that are

9 waived, refunded, refundable, or otherwise

10 recoverable, including credit against duty

11 or tax paid or payable.

12 (iii) The cost of waste and spoilage re13 sulting from the use of the material in the

14 production of the good, less the value of

15 renewable scrap or byproducts.

16 (iv) The cost of originating materials

17 used in the production of the nonorigi18 nating material in the territory of Chile or

19 the United States.

20 (f) ACCESSORIES, SPARE PARTS, OR TOOLS.—Acces21 sories, spare parts, or tools delivered with a good that

22 form part of the good’s standard accessories, spare parts,

23 or tools shall be regarded as a material used in the produc24 tion of the good, if—


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1 (1) the accessories, spare parts, or tools are

2 classified with and not invoiced separately from the

3 good; and

4 (2) the quantities and value of the accessories,

5 spare parts, or tools are customary for the good.

6 (g) FUNGIBLE GOODS AND MATERIALS.—

7 (1) IN GENERAL.—

8 (A) CLAIM FOR PREFERENTIAL TREAT9 MENT.—A person claiming preferential tariff

10 treatment for a good may claim that a fungible

11 good or material is originating either based on

12 the physical segregation of each fungible good

13 or material or by using an inventory manage14 ment method.

15 (B) INVENTORY MANAGEMENT METHOD.—

16 In this subsection, the term ‘‘inventory manage17 ment method’’ means—

18 (i) averaging;

19 (ii) ‘‘last-in, first-out’’;

20 (iii)‘‘first-in, first-out’’; or

21 (iv) any other method—

22 (I) recognized in the generally

23 accepted accounting principles of the

24 country in which the production is


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1 performed (whether Chile or the

2 United States); or

3 (II) otherwise accepted by that

4 country.

5 (2) ELECTION OF INVENTORY METHOD.—A

6 person selecting an inventory management method

7 under paragraph (1) for particular fungible goods or

8 materials shall continue to use that method for those

9 goods or materials throughout the fiscal year of that

10 person.

11 (h) PACKAGING MATERIALS AND CONTAINERS FOR

12 RETAIL SALE.—Packaging materials and containers in

13 which a good is packaged for retail sale, if classified with

14 the good, shall be disregarded in determining whether all

15 nonoriginating materials used in the production of the

16 good undergo the applicable change in tariff classification

17 set out in Annex 4.1 of the Agreement, and, if the good

18 is subject to a regional value-content requirement, the

19 value of such packaging materials and containers shall be

20 taken into account as originating or nonoriginating mate21 rials, as the case may be, in calculating the regional value22 content of the good.

23 (i) PACKING MATERIALS AND CONTAINERS FOR

24 SHIPMENT.—Packing materials and containers for ship25 ment shall be disregarded in determining whether—


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1 (1) the nonoriginating materials used in the

2 production of the good undergo an applicable change

3 in tariff classification set out in Annex 4.1 of the

4 Agreement; and

5 (2) the good satisfies a regional value-content

6 requirement.

7 (j) INDIRECT MATERIALS.—An indirect material

8 shall be considered to be an originating material without

9 regard to where it is produced.

10 (k) TRANSIT AND TRANSSHIPMENT.—A good that

11 has undergone production necessary to qualify as an origi12 nating good under subsection (a) shall not be considered

13 to be an originating good if, subsequent to that produc14 tion, the good undergoes further production or any other

15 operation outside the territory of Chile or the United

16 States, other than unloading, reloading, or any other proc17 ess necessary to preserve the good in good condition or

18 to transport the good to the territory of Chile or the

19 United States.

20 (l) TEXTILE AND APPAREL GOODS CLASSIFIABLE AS

21 GOODS PUT UP IN SETS.—Notwithstanding the rules set

22 forth in Annex 4.1 of the Agreement, textile and apparel

23 goods classifiable as goods put up in sets for retail sale

24 as provided for in General Rule of Interpretation 3 of the

25 Harmonized System shall not be considered to be origiVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00082 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 nating goods unless each of the goods in the set is an origi2 nating good or the total value of the nonoriginating goods

3 in the set does not exceed 10 percent of the value of the

4 set determined for purposes of assessing customs duties.

5 (m) APPLICATION AND INTERPRETATION.—In this

6 section:

7 (1) The basis for any tariff classification is the

8 HTS.

9 (2) Any cost or value referred to in this section

10 shall be recorded and maintained in accordance with

11 the generally accepted accounting principles applica12 ble in the territory of the country in which the good

13 is produced (whether Chile or the United States).

14 (n) DEFINITIONS.—In this section:

15 (1) ADJUSTED VALUE.—The term ‘‘adjusted

16 value’’ means the value determined in accordance

17 with articles 1 through 8, article 15, and the cor18 responding interpretive notes of the Agreement on

19 Implementation of Article VII of the General Agree20 ment on Tariffs and Trade 1994 referred to in sec21 tion 101(d)(8) of the Uruguay Round Agreements

22 Act, except that such value may be adjusted to ex23 clude any costs, charges, or expenses incurred for

24 transportation, insurance, and related services inci25 dent to the international shipment of the merchanVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00083 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 dise from the country of exportation to the place of

2 importation.

3 (2) FUNGIBLE GOODS OR FUNGIBLE MATE4 RIALS.—The terms ‘‘fungible goods’’ and ‘‘fungible

5 materials’’ mean goods or materials, as the case may

6 be, that are interchangeable for commercial purposes

7 and the properties of which are essentially identical.

8 (3) GENERALLY ACCEPTED ACCOUNTING PRIN9 CIPLES.—The term ‘‘generally accepted accounting

10 principles’’ means the principles, rules, and proce11 dures, including both broad and specific guidelines,

12 that define the accounting practices accepted in the

13 territory of Chile or the United States, as the case

14 may be.

15 (4) GOODS WHOLLY OBTAINED OR PRODUCED

16 ENTIRELY IN THE TERRITORY OF CHILE, THE

17 UNITED STATES, OR BOTH.—The term ‘‘goods whol18 ly obtained or produced entirely in the territory of

19 Chile, the United States, or both’’ means—

20 (A) mineral goods extracted in the terri21 tory of Chile, the United States, or both;

22 (B) vegetable goods, as such goods are de23 fined in the Harmonized System, harvested in

24 the territory of Chile, the United States, or

25 both;


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1 (C) live animals born and raised in the ter2 ritory of Chile, the United States, or both;

3 (D) goods obtained from hunting, trap4 ping, or fishing in the territory of Chile, the

5 United States, or both;

6 (E) goods (fish, shellfish, and other marine

7 life) taken from the sea by vessels registered or

8 recorded with Chile or the United States and

9 flying the flag of that country;

10 (F) goods produced on board factory ships

11 from the goods referred to in subparagraph

12 (E), if such factory ships are registered or re13 corded with Chile or the United States and fly

14 the flag of that country;

15 (G) goods taken by Chile or the United

16 States or a person of Chile or the United States

17 from the seabed or beneath the seabed outside

18 territorial waters, if Chile or the United States

19 has rights to exploit such seabed;

20 (H) goods taken from outer space, if the

21 goods are obtained by Chile or the United

22 States or a person of Chile or the United States

23 and not processed in the territory of a country

24 other than Chile or the United States;

25 (I) waste and scrap derived from—


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1 (i) production in the territory of Chile,

2 the United States, or both; or

3 (ii) used goods collected in the terri4 tory of Chile, the United States, or both,

5 if such goods are fit only for the recovery

6 of raw materials;

7 (J) recovered goods derived in the territory

8 of Chile or the United States from used goods,

9 and used in the territory of that country in the

10 production of remanufactured goods; and

11 (K) goods produced in the territory of

12 Chile, the United States, or both, exclusively—

13 (i) from goods referred to in any of

14 subparagraphs (A) through (I), or

15 (ii) from the derivatives of goods re16 ferred to in clause (i),

17 at any stage of production.

18 (5) HARMONIZED SYSTEM.—The term ‘‘Har19 monized System’’ means the Harmonized Com20 modity Description and Coding System.

21 (6) INDIRECT MATERIAL.—The term ‘‘indirect

22 material’’ means a good used in the production, test23 ing, or inspection of a good but not physically incor24 porated into the good, or a good used in the mainteVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00086 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 nance of buildings or the operation of equipment as2 sociated with the production of a good, including—

3 (A) fuel and energy;

4 (B) tools, dies, and molds;

5 (C) spare parts and materials used in the

6 maintenance of equipment or buildings;

7 (D) lubricants, greases, compounding ma8 terials, and other materials used in production

9 or used to operate equipment or buildings;

10 (E) gloves, glasses, footwear, clothing,

11 safety equipment, and supplies;

12 (F) equipment, devices, and supplies used

13 for testing or inspecting the good;

14 (G) catalysts and solvents; and

15 (H) any other goods that are not incor16 porated into the good but the use of which in

17 the production of the good can reasonably be

18 demonstrated to be a part of that production.

19 (7) MATERIAL.—The term ‘‘material’’ means a

20 good that is used in the production of another good,

21 including a part, ingredient, or indirect material.

22 (8) MATERIAL THAT IS SELF-PRODUCED.—The

23 term ‘‘material that is self-produced’’ means a mate24 rial that is an originating good produced by a proVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00087 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 ducer of a good and used in the production of that

2 good.

3 (9) NONORIGINATING GOOD OR NONORIGI4 NATING MATERIAL.—The terms ‘‘nonoriginating

5 good’’ and ‘‘nonoriginating material’’ mean a good

6 or material, as the case may be, that does not qual7 ify as an originating good under this section.

8 (10) PACKING MATERIALS AND CONTAINERS

9 FOR SHIPMENT.—The term ‘‘packing materials and

10 containers for shipment’’ means the goods used to

11 protect a good during its transportation, and does

12 not include the packaging materials and containers

13 in which a good is packaged for retail sale.

14 (11) PREFERENTIAL TARIFF TREATMENT.—

15 The term ‘‘preferential tariff treatment’’ means the

16 customs duty rate that is applicable to an origi17 nating good pursuant to chapter 3 of the Agree18 ment.

19 (12) PRODUCER.—The term ‘‘producer’’ means

20 a person who engages in the production of a good

21 in the territory of Chile or the United States.

22 (13) PRODUCTION.—The term ‘‘production’’

23 means growing, mining, harvesting, fishing, raising,

24 trapping, hunting, manufacturing, processing, as25 sembling, or disassembling a good.


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1 (14) RECOVERED GOODS.—

2 (A) IN GENERAL.—The term ‘‘recovered

3 goods’’ means materials in the form of indi4 vidual parts that are the result of—

5 (i) the complete disassembly of used

6 goods into individual parts; and

7 (ii) the cleaning, inspecting, testing,

8 or other processing of those parts as nec9 essary for improvement to sound working

10 condition by one or more of the processes

11 described in subparagraph (B), in order

12 for such parts to be assembled with other

13 parts, including other parts that have un14 dergone the processes described in this

15 paragraph, in the production of a remanu16 factured good.

17 (B) PROCESSES.—The processes referred

18 to in subparagraph (A)(ii) are welding, flame

19 spraying, surface machining, knurling, plating,

20 sleeving, and rewinding.

21 (15) REMANUFACTURED GOOD.—The term ‘‘re22 manufactured good’’ means an industrial good as23 sembled in the territory of Chile or the United

24 States, that is listed in Annex 4.18 of the Agree25 ment, and—


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1 (A) is entirely or partially comprised of re2 covered goods;

3 (B) has the same life expectancy and

4 meets the same performance standards as a

5 new good; and

6 (C) enjoys the same factory warranty as

7 such a new good.

8 (o) PRESIDENTIAL PROCLAMATION AUTHORITY.—

9 (1) IN GENERAL.—The President is authorized

10 to proclaim, as part of the HTS—

11 (A) the provisions set out in Annex 4.1 of

12 the Agreement; and

13 (B) any additional subordinate category

14 necessary to carry out this title consistent with

15 the Agreement.

16 (2) MODIFICATIONS.—

17 (A) IN GENERAL.—Subject to the consulta18 tion and layover provisions of section 103(a),

19 the President may proclaim modifications to the

20 provisions proclaimed under the authority of

21 paragraph (1)(A), other than provisions of

22 chapters 50 through 63 of the HTS, as in23 cluded in Annex 4.1 of the Agreement.

24 (B) ADDITIONAL PROCLAMATIONS.—Not25 withstanding subparagraph (A), and subject to


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1 the consultation and layover provisions of sec2 tion 103(a), the President may proclaim—

3 (i) modifications to the provisions pro4 claimed under the authority of paragraph

5 (1)(A) that are necessary to implement an

6 agreement with Chile pursuant to article

7 3.20(5) of the Agreement; and

8 (ii) before the 1st anniversary of the

9 date of the enactment of this Act, modi10 fications to correct any typographical, cler11 ical, or other nonsubstantive technical

12 error regarding the provisions of chapters

13 50 through 63 of the HTS, as included in

14 Annex 4.1 of the Agreement.

15 SEC. 203. DRAWBACK.

16 (a) DEFINITION OF A GOOD SUBJECT TO CHILE FTA

17 DRAWBACK.—For purposes of this Act and the amend18 ments made by subsection (b), the term ‘‘good subject to

19 Chile FTA drawback’’ means any imported good other

20 than the following:

21 (1) A good entered under bond for transpor22 tation and exportation to Chile.

23 (2)(A) A good exported to Chile in the same

24 condition as when imported into the United States.

25 (B) For purposes of subparagraph (A)—


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1 (i) processes such as testing, cleaning, re2 packing, inspecting, sorting, or marking a good,

3 or preserving it in its same condition, shall not

4 be considered to change the condition of the

5 good; and

6 (ii) if a good described in subparagraph

7 (A) is commingled with fungible goods and ex8 ported in the same condition, the origin of the

9 good for the purposes of subsection (j)(1) of

10 section 313 of the Tariff Act of 1930 (19

11 U.S.C. 1313(j)(1)) may be determined on the

12 basis of the inventory methods provided for in

13 the regulations implementing this title.

14 (3) A good—

15 (A) that is—

16 (i) deemed to be exported from the

17 United States;

18 (ii) used as a material in the produc19 tion of another good that is deemed to be

20 exported to Chile; or

21 (iii) substituted for by a good of the

22 same kind and quality that is used as a

23 material in the production of another good

24 that is deemed to be exported to Chile; and

25 (B) that is delivered—


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1 (i) to a duty-free shop;

2 (ii) for ship’s stores or supplies for a

3 ship or aircraft; or

4 (iii) for use in a project undertaken

5 jointly by the United States and Chile and

6 destined to become the property of the

7 United States.

8 (4) A good exported to Chile for which a refund

9 of customs duties is granted by reason of—

10 (A) the failure of the good to conform to

11 sample or specification; or

12 (B) the shipment of the good without the

13 consent of the consignee.

14 (5) A good that qualifies under the rules of ori15 gin set out in section 202 that is—

16 (A) exported to Chile;

17 (B) used as a material in the production of

18 another good that is exported to Chile; or

19 (C) substituted for by a good of the same

20 kind and quality that is used as a material in

21 the production of another good that is exported

22 to Chile.

23 (b) CONSEQUENTIAL AMENDMENTS.—

24 (1) BONDED MANUFACTURING WAREHOUSES.—

25 Section 311 of the Tariff Act of 1930 (19 U.S.C.


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•HR 2738 IH

1 1311) is amended by adding at the end the following

2 new paragraph:

3 ‘‘No article manufactured in a bonded warehouse

4 from materials that are goods subject to Chile FTA draw5 back, as defined in section 203(a) of the United States6 Chile Free Trade Agreement Implementation Act, may be

7 withdrawn from warehouse for exportation to Chile with8 out assessment of a duty on the materials in their condi9 tion and quantity, and at their weight, at the time of im10 portation into the United States. The duty shall be paid

11 before the 61st day after the date of exportation, except

12 that the duty may be waived or reduced by—

13 ‘‘(1) 100 percent during the 8-year period be14 ginning on January 1, 2004;

15 ‘‘(2) 75 percent during the 1-year period begin16 ning on January 1, 2012;

17 ‘‘(3) 50 percent during the 1-year period begin18 ning on January 1, 2013; and

19 ‘‘(4) 25 percent during the 1-year period begin20 ning on January 1, 2014.’’.

21 (2) BONDED SMELTING AND REFINING WARE22 HOUSES.—Section 312 of the Tariff Act of 1930 (19

23 U.S.C. 1312) is amended—

24 (A) in paragraph (1) of subsection (b), by

25 striking ‘‘except that’’ and all that follows


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1 through subparagraph (B) and inserting the

2 following: ‘‘except that—

3 ‘‘(A) in the case of a withdrawal for expor4 tation of such a product to a NAFTA country,

5 as defined in section 2(4) of the North Amer6 ican Free Trade Agreement Implementation

7 Act, if any of the imported metal-bearing mate8 rials are goods subject to NAFTA drawback, as

9 defined in section 203(a) of that Act, the duties

10 on the materials shall be paid, and the charges

11 against the bond canceled, before the 61st day

12 after the date of exportation; but upon the pres13 entation, before such 61st day, of satisfactory

14 evidence of the amount of any customs duties

15 paid to the NAFTA country on the product, the

16 duties on the materials may be waived or re17 duced (subject to section 508(b)(2)(B)) in an

18 amount that does not exceed the lesser of—

19 ‘‘(i) the total amount of customs du20 ties owed on the materials on importation

21 into the United States, or

22 ‘‘(ii) the total amount of customs du23 ties paid to the NAFTA country on the

24 product, and


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1 ‘‘(B) in the case of a withdrawal for expor2 tation of such a product to Chile, if any of the

3 imported metal-bearing materials are goods

4 subject to Chile FTA drawback, as defined in

5 section 203(a) of the United States-Chile Free

6 Trade Agreement Implementation Act, the du7 ties on the materials shall be paid, and the

8 charges against the bond canceled, before the

9 61st day after the date of exportation, except

10 that the duties may be waived or reduced by—

11 ‘‘(i) 100 percent during the 8-year pe12 riod beginning on January 1, 2004,

13 ‘‘(ii) 75 percent during the 1-year pe14 riod beginning on January 1, 2012,

15 ‘‘(iii) 50 percent during the 1-year pe16 riod beginning on January 1, 2013, and

17 ‘‘(iv) 25 percent during the 1-year pe18 riod beginning on January 1, 2014, or’’;

19 (B) in paragraph (4) of subsection (b), by

20 striking ‘‘except that’’ and all that follows

21 through subparagraph (B) and inserting the

22 following: ‘‘except that—

23 ‘‘(A) in the case of a withdrawal for expor24 tation of such a product to a NAFTA country,

25 as defined in section 2(4) of the North AmerVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00096 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 ican Free Trade Agreement Implementation

2 Act, if any of the imported metal-bearing mate3 rials are goods subject to NAFTA drawback, as

4 defined in section 203(a) of that Act, the duties

5 on the materials shall be paid, and the charges

6 against the bond canceled, before the 61st day

7 after the date of exportation; but upon the pres8 entation, before such 61st day, of satisfactory

9 evidence of the amount of any customs duties

10 paid to the NAFTA country on the product, the

11 duties on the materials may be waived or re12 duced (subject to section 508(b)(2)(B)) in an

13 amount that does not exceed the lesser of—

14 ‘‘(i) the total amount of customs du15 ties owed on the materials on importation

16 into the United States, or

17 ‘‘(ii) the total amount of customs du18 ties paid to the NAFTA country on the

19 product, and

20 ‘‘(B) in the case of a withdrawal for expor21 tation of such a product to Chile, if any of the

22 imported metal-bearing materials are goods

23 subject to Chile FTA drawback, as defined in

24 section 203(a) of the United States-Chile Free

25 Trade Agreement Implementation Act, the duVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00097 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 ties on the materials shall be paid, and the

2 charges against the bond canceled, before the

3 61st day after the date of exportation, except

4 that the duties may be waived or reduced by—

5 ‘‘(i) 100 percent during the 8-year pe6 riod beginning on January 1, 2004,

7 ‘‘(ii) 75 percent during the 1-year pe8 riod beginning on January 1, 2012,

9 ‘‘(iii) 50 percent during the 1-year pe10 riod beginning on January 1, 2013, and

11 ‘‘(iv) 25 percent during the 1-year pe12 riod beginning on January 1, 2014, or’’;

13 and

14 (C) in subsection (d), in the matter pre15 ceding paragraph (1), by striking ‘‘except that’’

16 and all that follows through the end of para17 graph (2) and inserting the following: ‘‘except

18 that—

19 ‘‘(1) in the case of a withdrawal for exportation

20 to a NAFTA country, as defined in section 2(4) of

21 the North American Free Trade Agreement Imple22 mentation Act, if any of the imported metal-bearing

23 materials are goods subject to NAFTA drawback, as

24 defined in section 203(a) of that Act, charges

25 against the bond shall be paid before the 61st day


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1 after the date of exportation; but upon the presen2 tation, before such 61st day, of satisfactory evidence

3 of the amount of any customs duties paid to the

4 NAFTA country on the product, the bond shall be

5 credited (subject to section 508(b)(2)(B)) in an

6 amount not to exceed the lesser of—

7 ‘‘(A) the total amount of customs duties

8 paid or owed on the materials on importation

9 into the United States, or

10 ‘‘(B) the total amount of customs duties

11 paid to the NAFTA country on the product;

12 and

13 ‘‘(2) in the case of a withdrawal for exportation

14 to Chile, if any of the imported metal-bearing mate15 rials are goods subject to Chile FTA drawback, as

16 defined in section 203(a) of the United States-Chile

17 Free Trade Agreement Implementation Act, charges

18 against the bond shall be paid before the 61st day

19 after the date of exportation, and the bond shall be

20 credited in an amount equal to—

21 ‘‘(A) 100 percent of the total amount of

22 customs duties paid or owed on the materials

23 on importation into the United States during

24 the 8-year period beginning on January 1,

25 2004,


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1 ‘‘(B) 75 percent of the total amount of

2 customs duties paid or owed on the materials

3 on importation into the United States during

4 the 1-year period beginning on January 1,

5 2012,

6 ‘‘(C) 50 percent of the total amount of

7 customs duties paid or owed on the materials

8 on importation into the United States during

9 the 1-year period beginning on January 1,

10 2013, and

11 ‘‘(D) 25 percent of the total amount of

12 customs duties paid or owed on the materials

13 on importation into the United States during

14 the 1-year period beginning on January 1,

15 2014.’’.

16 (3) DRAWBACK.—Section 313 of the Tariff Act

17 of 1930 (19 U.S.C. 1313) is amended—

18 (A) in paragraph (4) of subsection (j)—

19 (i) by striking ‘‘(4)’’ and inserting

20 ‘‘(4)(A)’’; and

21 (ii) by adding at the end the following

22 new subparagraph:

23 ‘‘(B) Beginning on January 1, 2015, the expor24 tation to Chile of merchandise that is fungible with

25 and substituted for imported merchandise, other


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1 than merchandise described in paragraphs (1)

2 through (5) of section 203(a) of the United States3 Chile Free Trade Agreement Implementation Act,

4 shall not constitute an exportation for purposes of

5 paragraph (2). The preceding sentence shall not be

6 construed to permit the substitution of unused draw7 back under paragraph (2) of this subsection with re8 spect to merchandise described in paragraph (2) of

9 section 203(a) of the United States-Chile Free

10 Trade Agreement Implementation Act.’’;

11 (B) in subsection (n)—

12 (i) by striking ‘‘(n)’’ and inserting the

13 following:

14 ‘‘(n) REFUNDS, WAIVERS, OR REDUCTIONS UNDER

15 CERTAIN FREE TRADE AGREEMENTS.—’’;

16 (ii) in paragraph (1)—

17 (I) by striking ‘‘; and’’ at the end

18 of subparagraph (B);

19 (II) by striking the period at the

20 end of subparagraph (C) and insert21 ing ‘‘; and’’; and

22 (III) by adding at the end the

23 following new subparagraph:

24 ‘‘(D) the term ‘good subject to Chile FTA

25 drawback’ has the meaning given that term in secVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00101 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 tion 203(a) of the United States-Chile Free Trade

2 Agreement Implementation Act.’’; and

3 (iii) by adding the following new para4 graph at the end:

5 ‘‘(4)(A) For purposes of subsections (a), (b), (f), (h),

6 (j)(2), (p), and (q), if an article that is exported to Chile

7 is a good subject to Chile FTA drawback, no customs du8 ties on the good may be refunded, waived, or reduced, ex9 cept as provided in subparagraph (B).

10 ‘‘(B) The customs duties referred to in subparagraph

11 (A) may be refunded, waived, or reduced by—

12 ‘‘(i) 100 percent during the 8-year period begin13 ning on January 1, 2004;

14 ‘‘(ii) 75 percent during the 1-year period begin15 ning on January 1, 2012;

16 ‘‘(iii) 50 percent during the 1-year period begin17 ning on January 1, 2013; and

18 ‘‘(iv) 25 percent during the 1-year period begin19 ning on January 1, 2014.’’; and

20 (C) in subsection (o)—

21 (i) by striking ‘‘(o)’’ and inserting the

22 following:

23 ‘‘(o) SPECIAL RULES FOR CERTAIN VESSELS AND

24 IMPORTED MATERIALS.—’’; and


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1 (ii) by adding at the end the following

2 new paragraphs:

3 ‘‘(3) For purposes of subsection (g), if—

4 ‘‘(A) a vessel is built for the account and own5 ership of a resident of Chile or the Government of

6 Chile, and

7 ‘‘(B) imported materials that are used in the

8 construction and equipment of the vessel are goods

9 subject to Chile FTA drawback, as defined in sec10 tion 203(a) of the United States-Chile Free Trade

11 Agreement Implementation Act,

12 no customs duties on such materials may be refunded,

13 waived, or reduced, except as provided in paragraph (4).

14 ‘‘(4) The customs duties referred to in paragraph (3)

15 may be refunded, waived or reduced by—

16 ‘‘(A) 100 percent during the 8-year period be17 ginning on January 1, 2004;

18 ‘‘(B) 75 percent during the 1-year period begin19 ning on January 1, 2012;

20 ‘‘(C) 50 percent during the 1-year period begin21 ning on January 1, 2013; and

22 ‘‘(D) 25 percent during the 1-year period begin23 ning on January 1, 2014.’’.


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1 (4) MANIPULATION IN WAREHOUSE.—Section

2 562 of the Tariff Act of 1930 (19 U.S.C. 1562) is

3 amended—

4 (A) in paragraph (3), by striking ‘‘to a

5 NAFTA country’’ and inserting ‘‘to Chile, to a

6 NAFTA country,’’;

7 (B) by striking ‘‘; and’’ at the end of para8 graph (4)(B);

9 (C) by striking the period at the end of

10 paragraph (5) and inserting ‘‘; and’’; and

11 (D) by inserting after paragraph (5) the

12 following:

13 ‘‘(6)(A) without payment of duties for expor14 tation to Chile, if the merchandise is of a kind de15 scribed in any of paragraphs (1) through (5) of sec16 tion 203(a) of the United States-Chile Free Trade

17 Agreement Implementation Act; and

18 ‘‘(B) for exportation to Chile if the merchandise

19 consists of goods subject to Chile FTA drawback, as

20 defined in section 203(a) of the United States-Chile

21 Free Trade Agreement Implementation Act, except

22 that—

23 ‘‘(i) the merchandise may not be with24 drawn from warehouse without assessment of a

25 duty on the merchandise in its condition and


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1 quantity, and at its weight, at the time of with2 drawal from the warehouse with such additions

3 to, or deductions from, the final appraised value

4 as may be necessary by reason of a change in

5 condition, and

6 ‘‘(ii) duty shall be paid on the merchandise

7 before the 61st day after the date of expor8 tation, except that such duties may be waived

9 or reduced by—

10 ‘‘(I) 100 percent during the 8-year pe11 riod beginning on January 1, 2004,

12 ‘‘(II) 75 percent during the 1-year pe13 riod beginning on January 1, 2012,

14 ‘‘(III) 50 percent during the 1-year

15 period beginning on January 1, 2013, and

16 ‘‘(IV) 25 percent during the 1-year

17 period beginning on January 1, 2014.’’.

18 (5) FOREIGN TRADE ZONES.—Section 3(a) of

19 the Act of June 18, 1934 (commonly known as the

20 ‘‘Foreign Trade Zones Act’’; 19 U.S.C. 81c(a)) is

21 amended by striking the end period and inserting

22 the following: ‘‘: Provided further, That no merchan23 dise that consists of goods subject to Chile FTA

24 drawback, as defined in section 203(a) of the United

25 States-Chile Free Trade Agreement Implementation


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1 Act, that is manufactured or otherwise changed in

2 condition shall be exported to Chile without an as3 sessment of a duty on the merchandise in its condi4 tion and quantity, and at its weight, at the time of

5 its exportation (or if the privilege in the first proviso

6 to this subsection was requested, an assessment of

7 a duty on the merchandise in its condition and

8 quantity, and at its weight, at the time of its admis9 sion into the zone) and the payment of the assessed

10 duty before the 61st day after the date of expor11 tation of the article, except that the customs duty

12 may be waived or reduced by (1) 100 percent during

13 the 8-year period beginning on January 1, 2004; (2)

14 75 percent during the 1-year period beginning on

15 January 1, 2012; (3) 50 percent during the 1-year

16 period beginning on January 1, 2013; and (4) 25

17 percent during the 1-year period beginning on Janu18 ary 1, 2014.’’.

19 (c) INAPPLICABILITY TO COUNTERVAILING AND

20 ANTIDUMPING DUTIES.—Nothing in this section or the

21 amendments made by this section shall be considered to

22 authorize the refund, waiver, or reduction of counter23 vailing duties or antidumping duties imposed on an im24 ported good.


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1 SEC. 204. CUSTOMS USER FEES.

2 Section 13031(b) of the Consolidated Omnibus Budg3 et Reconciliation Act of 1985 (19 U.S.C. 58c(b)) is

4 amended by inserting after paragraph (11) the following:

5 ‘‘(12) No fee may be charged under subsection (a)

6 (9) or (10) with respect to goods that qualify as origi7 nating goods under section 202 of the United States-Chile

8 Free Trade Agreement Implementation Act. Any service

9 for which an exemption from such fee is provided by rea10 son of this paragraph may not be funded with money con11 tained in the Customs User Fee Account.’’.

12 SEC. 205. DISCLOSURE OF INCORRECT INFORMATION; DE13 NIAL OF PREFERENTIAL TARIFF TREAT14 MENT; FALSE CERTIFICATES OF ORIGIN.

15 (a) DISCLOSURE OF INCORRECT INFORMATION.—

16 Section 592 of the Tariff Act of 1930 (19 U.S.C. 1592)

17 is amended—

18 (1) in subsection (c)—

19 (A) by redesignating paragraph (6) as

20 paragraph (7); and

21 (B) by inserting after paragraph (5) the

22 following new paragraph:

23 ‘‘(6) PRIOR DISCLOSURE REGARDING CLAIMS

24 UNDER THE UNITED STATES-CHILE FREE TRADE

25 AGREEMENT.—An importer shall not be subject to

26 penalties under subsection (a) for making an incorVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00107 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

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1 rect claim that a good qualifies as an originating

2 good under section 202 of the United States-Chile

3 Free Trade Agreement Implementation Act if the

4 importer, in accordance with regulations issued by

5 the Secretary of the Treasury, voluntarily makes a

6 corrected declaration and pays any duties owing.’’;

7 and

8 (2) by adding at the end the following new sub9 section:

10 ‘‘(g) FALSE CERTIFICATIONS OF ORIGIN UNDER THE

11 UNITED STATES-CHILE FREE TRADE AGREEMENT.—

12 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

13 it is unlawful for any person to certify falsely, by

14 fraud, gross negligence, or negligence, in a Chile

15 FTA Certificate of Origin (as defined in section

16 508(f)(1)(B) of this Act that a good exported from

17 the United States qualifies as an originating good

18 under the rules of origin set out in section 202 of

19 the United States-Chile Free Trade Agreement Im20 plementation Act. The procedures and penalties of

21 this section that apply to a violation of subsection

22 (a) also apply to a violation of this subsection.

23 ‘‘(2) IMMEDIATE AND VOLUNTARY DISCLOSURE

24 OF INCORRECT INFORMATION.—No penalty shall be

25 imposed under this subsection if, immediately after


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1 an exporter or producer that issued a Chile FTA

2 Certificate of Origin has reason to believe that such

3 certificate contains or is based on incorrect informa4 tion, the exporter or producer voluntarily provides

5 written notice of such incorrect information to every

6 person to whom the certificate was issued.

7 ‘‘(3) EXCEPTION.—A person may not be consid8 ered to have violated paragraph (1) if—

9 ‘‘(A) the information was correct at the

10 time it was provided in a Chile FTA Certificate

11 of Origin but was later rendered incorrect due

12 to a change in circumstances; and

13 ‘‘(B) the person immediately and volun14 tarily provides written notice of the change in

15 circumstances to all persons to whom the per16 son provided the certificate.’’.

17 (b) DENIAL OF PREFERENTIAL TARIFF TREAT18 MENT.—Section 514 of the Tariff Act of 1930 (19 U.S.C.

19 1514) is amended by adding at the end the following new

20 subsection:

21 ‘‘(g) DENIAL OF PREFERENTIAL TARIFF TREAT22 MENT UNDER UNITED STATES-CHILE FREE TRADE

23 AGREEMENT.—If the Bureau of Customs and Border Pro24 tection or the Bureau of Immigration and Customs En25 forcement finds indications of a pattern of conduct by an


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1 importer of false or unsupported representations that

2 goods qualify under the rules of origin set out in section

3 202 of the United States-Chile Free Trade Agreement Im4 plementation Act, the Bureau of Customs and Border Pro5 tection, in accordance with regulations issued by the Sec6 retary of the Treasury, may deny preferential tariff treat7 ment under the United States-Chile Free Trade Agree8 ment to entries of identical goods imported by that person

9 until the person establishes to the satisfaction of the Bu10 reau of Customs and Border Protection that representa11 tions of that person are in conformity with such section

12 202.’’.

13 SEC. 206. RELIQUIDATION OF ENTRIES.

14 Subsection (d) of section 520 of the Tariff Act of

15 1930 (19 U.S.C. 1520(d)) is amended—

16 (1) by striking ‘‘(d)’’ and inserting the fol17 lowing:

18 ‘‘(d) GOODS QUALIFYING UNDER FREE TRADE

19 AGREEMENT RULES OF ORIGIN.—’’;

20 (2) in the matter preceding paragraph (1), by

21 inserting ‘‘or section 202 of the United States-Chile

22 Free Trade Agreement Implementation Act’’ after

23 ‘‘Act’’;

24 (3) in paragraph (1), by striking ‘‘those’’ and

25 inserting ‘‘the applicable’’; and


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1 (4) in paragraph (2), by inserting before the

2 semicolon ‘‘, or other certificates of origin, as the

3 case may be’’.

4 SEC. 207. RECORDKEEPING REQUIREMENTS.

5 Section 508 of the Tariff Act of 1930 (19 U.S.C.

6 1508) is amended—

7 (1) by striking the heading of subsection (b)

8 and inserting the following: ‘‘EXPORTATIONS TO

9 NAFTA COUNTRIES.—’’; and

10 (2) by adding at the end the following:

11 ‘‘(f) CERTIFICATES OF ORIGIN FOR GOODS EX12 PORTED UNDER THE UNITED STATES-CHILE FREE

13 TRADE AGREEMENT.—

14 ‘‘(1) DEFINITIONS.—In this subsection:

15 ‘‘(A) RECORDS AND SUPPORTING DOCU16 MENTS.—The term ‘records and supporting

17 documents’ means, with respect to an exported

18 good under paragraph (2), records and docu19 ments related to the origin of the good,

20 including—

21 ‘‘(i) the purchase, cost, and value of,

22 and payment for, the good;

23 ‘‘(ii) if applicable, the purchase, cost,

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1 rials, including recovered goods, used in

2 the production of the good; and

3 ‘‘(iii) if applicable, the production of

4 the good in the form in which it was ex5 ported.

6 ‘‘(B) CHILE FTA CERTIFICATE OF ORI7 GIN.—The term ‘Chile FTA Certificate of Ori8 gin’ means the certification, established under

9 article 4.13 of the United States-Chile Free

10 Trade Agreement, that a good qualifies as an

11 originating good under such Agreement.

12 ‘‘(2) EXPORTS TO CHILE.—Any person who

13 completes and issues a Chile FTA Certificate of Ori14 gin for a good exported from the United States shall

15 make, keep, and, pursuant to rules and regulations

16 promulgated by the Secretary of the Treasury,

17 render for examination and inspection all records

18 and supporting documents related to the origin of

19 the good (including the Certificate or copies thereof).

20 ‘‘(3) RETENTION PERIOD.—Records and sup21 porting documents shall be kept by the person who

22 issued a Chile FTA Certificate of Origin for at least

23 5 years after the date on which the certificate was

24 issued.


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1 ‘‘(g) PENALTIES.—Any person who fails to retain

2 records and supporting documents required by subsection

3 (f) or the regulations issued to implement that subsection

4 shall be liable for the greater of—

5 ‘‘(1) a civil penalty not to exceed $10,000; or

6 ‘‘(2) the general record keeping penalty that ap7 plies under the customs laws of the United States.’’.

8 SEC. 208. ENFORCEMENT OF TEXTILE AND APPAREL RULES

9 OF ORIGIN.

10 (a) ACTION DURING VERIFICATION.—If the Sec11 retary of the Treasury requests the Government of Chile

12 to conduct a verification pursuant to article 3.21 of the

13 Agreement for purposes of determining that—

14 (1) an exporter or producer in Chile is com15 plying with applicable customs laws, regulations, and

16 procedures regarding trade in textile and apparel

17 goods, or

18 (2) claims that textile or apparel goods exported

19 or produced by such exporter or producer—

20 (A) qualify as originating goods under sec21 tion 202 of this Act, or

22 (B) are goods of Chile,

23 are accurate,


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1 the President may direct the Secretary to take appropriate

2 action described in subsection (b) while the verification is

3 being conducted.

4 (b) APPROPRIATE ACTION DESCRIBED.—Appropriate

5 action under subsection (a) includes—

6 (1) suspension of liquidation of entries of textile

7 and apparel goods exported or produced by the per8 son that is the subject of the verification, in a case

9 in which the request for verification was based on a

10 reasonable suspicion of unlawful activity related to

11 such goods; and

12 (2) publication of the name of the person that

13 is the subject of the verification.

14 (c) ACTION WHEN INFORMATION IS INSUFFI15 CIENT.—If the Secretary of the Treasury determines that

16 the information obtained within 12 months after making

17 a request for a verification under subsection (a) is insuffi18 cient to make a determination under subsection (a), the

19 President may direct the Secretary to take appropriate ac20 tion described in subsection (d) until such time as the Sec21 retary receives information sufficient to make a deter22 mination under subsection (a) or until such earlier date

23 as the President may direct.

24 (d) APPROPRIATE ACTION DESCRIBED.—Appro25 priate action under subsection (c) includes—


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1 (1) publication of the identity of the person

2 that is the subject of the verification;

3 (2) denial of preferential tariff treatment under

4 the Agreement to any textile or apparel goods ex5 ported or produced by the person that is the subject

6 of the verification; and

7 (3) denial of entry into the United States of

8 any textile or apparel goods exported or produced by

9 the person that is the subject of the verification.

10 SEC. 209. CONFORMING AMENDMENTS.

11 Section 508(b)(2)(B)(i)(I) of the Tariff Act of 1930

12 (19 U.S.C. 1508(b)(2)(B)(i)(I)) is amended—

13 (1) by striking ‘‘the last paragraph of section

14 311’’ and inserting ‘‘the eleventh paragraph of sec15 tion 311’’; and

16 (2) by striking ‘‘the last proviso to section

17 3(a)’’ and inserting ‘‘the proviso preceding the last

18 proviso to section 3(a)’’.

19 SEC. 210. REGULATIONS.

20 The Secretary of the Treasury shall prescribe such

21 regulations as may be necessary to carry out—

22 (1) subsections (a) through (n) of section 202,

23 and sections 203 and 204;

24 (2) amendments made by the sections referred

25 to in paragraph (1); and


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1 (3) proclamations issued under section 202(o).

2 TITLE III—RELIEF FROM

3 IMPORTS

4 SEC. 301. DEFINITIONS.

5 In this title:

6 (1) COMMISSION.—The term ‘‘Commission’’

7 means the United States International Trade Com8 mission.

9 (2) CHILEAN ARTICLE.—The term ‘‘Chilean ar10 ticle’’ means an article that qualifies as an origi11 nating good under section 202(a) of this Act.

12 (3) CHILEAN TEXTILE OR APPAREL ARTICLE.—

13 The term ‘‘Chilean textile or apparel article’’ means

14 an article—

15 (A) that is listed in the Annex to the

16 Agreement on Textiles and Clothing referred to

17 in section 101(d)(4) of the Uruguay Round

18 Agreements Act (19 U.S.C. 3511(d)(4)); and

19 (B) that is a Chilean article.

20 Subtitle A—Relief From Imports

21 Benefiting From the Agreement

22 SEC. 311. COMMENCING OF ACTION FOR RELIEF.

23 (a) FILING OF PETITION.—A petition requesting ac24 tion under this subtitle for the purpose of adjusting to

25 the obligations of the United States under the Agreement


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1 may be filed with the Commission by an entity, including

2 a trade association, firm, certified or recognized union, or

3 group of workers, that is representative of an industry.

4 The Commission shall transmit a copy of any petition filed

5 under this subsection to the United States Trade Rep6 resentative.

7 (b) INVESTIGATION AND DETERMINATION.—Upon

8 the filing of a petition under subsection (a), the Commis9 sion, unless subsection (d) applies, shall promptly initiate

10 an investigation to determine whether, as a result of the

11 reduction or elimination of a duty provided for under the

12 Agreement, a Chilean article is being imported into the

13 United States in such increased quantities, in absolute

14 terms or relative to domestic production, and under such

15 conditions that imports of the Chilean article constitute

16 a substantial cause of serious injury or threat thereof to

17 the domestic industry producing an article that is like, or

18 directly competitive with, the imported article.

19 (c) APPLICABLE PROVISIONS.—The following provi20 sions of section 202 of the Trade Act of 1974 (19 U.S.C.

21 2252) apply with respect to any investigation initiated

22 under subsection (b):

23 (1) Paragraphs (1)(B) and (3) of subsection

24 (b).

25 (2) Subsection (c).


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1 (3) Subsection (i).

2 (d) ARTICLES EXEMPT FROM INVESTIGATION.—No

3 investigation may be initiated under this section with re4 spect to any Chilean article if, after the date that the

5 Agreement enters into force, import relief has been pro6 vided with respect to that Chilean article under this sub7 title, or if, at the time the petition is filed, the article is

8 subject to import relief under chapter 1 of title II of the

9 Trade Act of 1974.

10 SEC. 312. COMMISSION ACTION ON PETITION.

11 (a) DETERMINATION.—Not later than 120 days after

12 the date on which an investigation is initiated under sec13 tion 311(b) with respect to a petition, the Commission

14 shall make the determination required under that section.

15 (b) APPLICABLE PROVISIONS.—For purposes of this

16 subtitle, the provisions of paragraphs (1), (2), and (3) of

17 section 330(d) of the Tariff Act of 1930 (19 U.S.C.

18 1330(d) (1), (2), and (3)) shall be applied with respect

19 to determinations and findings made under this section

20 as if such determinations and findings were made under

21 section 202 of the Trade Act of 1974 (19 U.S.C. 2252).

22 (c) ADDITIONAL FINDING AND RECOMMENDATION IF

23 DETERMINATION AFFIRMATIVE.—If the determination

24 made by the Commission under subsection (a) with respect

25 to imports of an article is affirmative, or if the President


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1 may consider a determination of the Commission to be an

2 affirmative determination as provided for under paragraph

3 (1) of section 330(d) of the Tariff Act of 1930 (19 U.S.C.

4 1330(d)), the Commission shall find, and recommend to

5 the President in the report required under subsection (d),

6 the amount of import relief that is necessary to remedy

7 or prevent the injury found by the Commission in the de8 termination and to facilitate the efforts of the domestic

9 industry to make a positive adjustment to import competi10 tion. The import relief recommended by the Commission

11 under this subsection shall be limited to the relief de12 scribed in section 313(c). Only those members of the Com13 mission who voted in the affirmative under subsection (a)

14 are eligible to vote on the proposed action to remedy or

15 prevent the injury found by the Commission. Members of

16 the Commission who did not vote in the affirmative may

17 submit, in the report required under subsection (d), sepa18 rate views regarding what action, if any, should be taken

19 to remedy or prevent the injury.

20 (d) REPORT TO PRESIDENT.—Not later than the

21 date that is 30 days after the date on which a determina22 tion is made under subsection (a) with respect to an inves23 tigation, the Commission shall submit to the President a

24 report that includes—


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1 (1) the determination made under subsection

2 (a) and an explanation of the basis for the deter3 mination;

4 (2) if the determination under subsection (a) is

5 affirmative, any findings and recommendations for

6 import relief made under subsection (c) and an ex7 planation of the basis for each recommendation; and

8 (3) any dissenting or separate views by mem9 bers of the Commission regarding the determination

10 and recommendation referred to in paragraphs (1)

11 and (2).

12 (e) PUBLIC NOTICE.—Upon submitting a report to

13 the President under subsection (d), the Commission shall

14 promptly make public such report (with the exception of

15 information which the Commission determines to be con16 fidential) and shall cause a summary thereof to be pub17 lished in the Federal Register.

18 SEC. 313. PROVISION OF RELIEF.

19 (a) IN GENERAL.—Not later than the date that is

20 30 days after the date on which the President receives the

21 report of the Commission in which the Commission’s de22 termination under section 312(a) is affirmative, or which

23 contains a determination under section 312(a) that the

24 President considers to be affirmative under paragraph (1)

25 of section 330(d) of the Tariff Act of 1930 (19 U.S.C.


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1 1330(d)(1), the President, subject to subsection (b), shall

2 provide relief from imports of the article that is the subject

3 of such determination to the extent that the President de4 termines necessary to remedy or prevent the injury found

5 by the Commission and to facilitate the efforts of the do6 mestic industry to make a positive adjustment to import

7 competition.

8 (b) EXCEPTION.—The President is not required to

9 provide import relief under this section if the President

10 determines that the provision of the import relief will not

11 provide greater economic and social benefits than costs.

12 (c) NATURE OF RELIEF.—

13 (1) IN GENERAL.—The import relief that the

14 President is authorized to provide under this section

15 with respect to imports of an article is as follows:

16 (A) The suspension of any further reduc17 tion provided for under Annex 3.3 of the Agree18 ment in the duty imposed on such article.

19 (B) An increase in the rate of duty im20 posed on such article to a level that does not

21 exceed the lesser of—

22 (i) the column 1 general rate of duty

23 imposed under the HTS on like articles at

24 the time the import relief is provided; or


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1 (ii) the column 1 general rate of duty

2 imposed under the HTS on like articles on

3 the day before the date on which the

4 Agreement enters into force.

5 (2) PROGRESSIVE LIBERALIZATION.—If the pe6 riod for which import relief is provided under this

7 section is greater than 1 year, the President shall

8 provide for the progressive liberalization (described

9 in article 8.2(2) of the Agreement) of such relief at

10 regular intervals during the period of its application.

11 (d) PERIOD OF RELIEF.—

12 (1) IN GENERAL.—Subject to paragraph (2),

13 the import relief that the President is authorized to

14 provide under this section, including any extensions

15 thereof, may not, in the aggregate, exceed 3 years.

16 (2) EXTENSION.—

17 (A) IN GENERAL.—If the initial period for

18 any import relief provided under this section is

19 less than 3 years, the President, after receiving

20 an affirmative determination from the Commis21 sion under subparagraph (B), may extend the

22 effective period of any import relief provided

23 under this section, subject to the limitation

24 under paragraph (1), if the President deter25 mines that—


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1 (i) the import relief continues to be

2 necessary to remedy or prevent serious in3 jury and to facilitate adjustment; and

4 (ii) there is evidence that the industry

5 is making a positive adjustment to import

6 competition.

7 (B) ACTION BY COMMISSION.—(i) Upon a

8 petition on behalf of the industry concerned,

9 filed with the Commission not earlier than the

10 date which is 9 months, and not later than the

11 date which is 6 months, before the date on

12 which any action taken under subsection (a) is

13 to terminate, the Commission shall conduct an

14 investigation to determine whether action under

15 this section continues to be necessary to remedy

16 or prevent serious injury and whether there is

17 evidence that the industry is making a positive

18 adjustment to import competition.

19 (ii) The Commission shall publish notice of

20 the commencement of any proceeding under

21 this subparagraph in the Federal Register and

22 shall, within a reasonable time thereafter, hold

23 a public hearing at which the Commission shall

24 afford interested parties and consumers an op25 portunity to be present, to present evidence,


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1 and to respond to the presentations of other

2 parties and consumers, and otherwise to be

3 heard.

4 (iii) The Commission shall transmit to the

5 President a report on its investigation and de6 termination under this subparagraph not later

7 than 60 days before the action under subsection

8 (a) is to terminate, unless the President speci9 fies a different date.

10 (e) RATE AFTER TERMINATION OF IMPORT RE11 LIEF.—When import relief under this section is termi12 nated with respect to an article—

13 (1) the rate of duty on that article after such

14 termination and on or before December 31 of the

15 year in which such termination occurs shall be the

16 rate that, according to the Schedule of the United

17 States in Annex 3.3 of the Agreement for the staged

18 elimination of the tariff, would have been in effect

19 1 year after the provision of relief under subsection

20 (a); and

21 (2) the rate of duty for that article after De22 cember 31 of the year in which termination occurs

23 shall be, at the discretion of the President, either—


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1 (A) the applicable rate of duty for that ar2 ticle set out in the Schedule of the United

3 States in Annex 3.3 of the Agreement; or

4 (B) the rate of duty resulting from the

5 elimination of the tariff in equal annual stages

6 ending on the date set out in the United States

7 Schedule in Annex 3.3 of the Agreement for the

8 elimination of the tariff.

9 (f) ARTICLES EXEMPT FROM RELIEF.—No import

10 relief may be provided under this section on any article

11 subject to import relief under chapter 1 of title II of the

12 Trade Act of 1974.

13 SEC. 314. TERMINATION OF RELIEF AUTHORITY.

14 (a) GENERAL RULE.—No import relief may be pro15 vided under this subtitle after the date that is 10 years

16 after the date on which the Agreement enters into force.

17 (b) EXCEPTION.—If an article for which relief is pro18 vided under this subtitle is an article for which the period

19 for tariff elimination, set out in the Schedule of the United

20 States to Annex 3.3 of the Agreement, is 12 years, no

21 relief under this subtitle may be provided for that article

22 after the date that is 12 years after the date on which

23 the Agreement enters into force.


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1 SEC. 315. COMPENSATION AUTHORITY.

2 For purposes of section 123 of the Trade Act of 1974

3 (19 U.S.C. 2133), any import relief provided by the Presi4 dent under section 313 shall be treated as action taken

5 under chapter 1 of title II of such Act.

6 SEC. 316. CONFIDENTIAL BUSINESS INFORMATION.

7 Section 202 (a)(8) of the Trade Act of 1974 (19

8 U.S.C. 2252(a)(8)) is amended in the first sentence—

9 (1) by striking ‘‘and’’; and

10 (2) by inserting before the period at the end ‘‘,

11 and title III of the United States-Chile Free Trade

12 Agreement Implementation Act’’.

13 Subtitle B—Textile and Apparel

14 Safeguard Measures

15 SEC. 321. COMMENCEMENT OF ACTION FOR RELIEF.

16 (a) IN GENERAL.—A request under this subtitle for

17 the purpose of adjusting to the obligations of the United

18 States under the Agreement may be filed with the Presi19 dent by an interested party. Upon the filing of a request,

20 the President shall review the request to determine, from

21 information presented in the request, whether to com22 mence consideration of the request.

23 (b) PUBLICATION OF REQUEST.—If the President de24 termines that the request under subsection (a) provides

25 the information necessary for the request to be considered,

26 the President shall cause to be published in the Federal


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1 Register a notice of commencement of consideration of the

2 request, and notice seeking public comments regarding the

3 request. The notice shall include the request and the dates

4 by which comments and rebuttals must be received.

5 SEC. 322. DETERMINATION AND PROVISION OF RELIEF.

6 (a) DETERMINATION.—

7 (1) IN GENERAL.—If a positive determination is

8 made under section 321(b), the President shall de9 termine whether, as a result of the elimination of a

10 duty under the Agreement, a Chilean textile or ap11 parel article is being imported into the United States

12 in such increased quantities, in absolute terms or

13 relative to the domestic market for that article, and

14 under such conditions as to cause serious damage,

15 or actual threat thereof, to a domestic industry pro16 ducing an article that is like, or directly competitive

17 with, the imported article.

18 (2) SERIOUS DAMAGE.—In making a deter19 mination under paragraph (1), the President—

20 (A) shall examine the effect of increased

21 imports on the domestic industry, as reflected

22 in changes in such relevant economic factors as

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1 ployment, domestic prices, profits, and invest2 ment, none of which is necessarily decisive; and

3 (B) shall not consider changes in tech4 nology or consumer preference as factors sup5 porting a determination of serious damage or

6 actual threat thereof.

7 (b) PROVISION OF RELIEF.—

8 (1) IN GENERAL.—If a determination under

9 subsection (a) is affirmative, the President may pro10 vide relief from imports of the article that is the

11 subject of such determination, as provided in para12 graph (2), to the extent that the President deter13 mines necessary to remedy or prevent the serious

14 damage and to facilitate adjustment by the domestic

15 industry.

16 (2) NATURE OF RELIEF.—The relief that the

17 President is authorized to provide under this sub18 section with respect to imports of an article is an in19 crease in the rate of duty imposed on the article to

20 a level that does not exceed the lesser of—

21 (A) the column 1 general rate of duty im22 posed under the HTS on like articles at the

23 time the import relief is provided; or

24 (B) the column 1 general rate of duty im25 posed under the HTS on like articles on the


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1 day before the date on which the Agreement en2 ters into force.

3 SEC. 323. PERIOD OF RELIEF.

4 (a) IN GENERAL.—The import relief that the Presi5 dent is authorized to provide under section 322, including

6 any extensions thereof, may not, in the aggregate, exceed

7 3 years.

8 (b) EXTENSION.—If the initial period for any import

9 relief provided under this section is less than 3 years, the

10 President may extend the effective period of any import

11 relief provided under this section, subject to the limitation

12 set forth in subsection (a), if the President determines

13 that—

14 (1) the import relief continues to be necessary

15 to remedy or prevent serious damage and to facili16 tate adjustment; and

17 (2) there is evidence that the industry is mak18 ing a positive adjustment to import competition.

19 SEC. 324. ARTICLES EXEMPT FROM RELIEF.

20 The President may not provide import relief under

21 this subtitle with respect to any article if import relief pre22 viously has been provided under this subtitle with respect

23 to that article.


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1 SEC. 325. RATE AFTER TERMINATION OF IMPORT RELIEF.

2 When import relief under this subtitle is terminated

3 with respect to an article, the rate of duty on that article

4 shall be duty-free.

5 SEC. 326. TERMINATION OF RELIEF AUTHORITY.

6 No import relief may be provided under this subtitle

7 with respect to any article after the date that is 8 years

8 after the date on which duties on the article are eliminated

9 pursuant to the Agreement.

10 SEC. 327. COMPENSATION AUTHORITY.

11 For purposes of section 123 of the Trade Act of 1974

12 (19 U.S.C. 2133), any import relief provided by the Presi13 dent under this subtitle shall be treated as action taken

14 under chapter 1 of title II of that Act.

15 SEC. 328. BUSINESS CONFIDENTIAL INFORMATION.

16 The President may not release information which the

17 President considers to be confidential business informa18 tion unless the party submitting the confidential business

19 information had notice, at the time of submission, that

20 such information would be released by the President, or

21 such party subsequently consents to the release of the in22 formation. To the extent business confidential information

23 is provided, a nonconfidential version of the information

24 shall also be provided, in which the business confidential

25 information is summarized or, if necessary, deleted.


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1 TITLE IV—TEMPORARY ENTRY

2 OF BUSINESS PERSONS.

3 SEC. 401. NONIMMIGRANT TRADERS AND INVESTORS.

4 Upon a basis of reciprocity secured by the Agree5 ment, an alien who is a national of Chile (and any spouse

6 or child (as defined in section 101(b)(1) of the Immigra7 tion and Nationality Act (8 U.S.C. 1101(b)(1)) of such

8 alien, if accompanying or following to join the alien) may,

9 if otherwise eligible for a visa and if otherwise admissible

10 into the United States under the Immigration and Nation11 ality Act (8 U.S.C. 1101 et seq.), be considered to be clas12 sifiable as a nonimmigrant under section 101(a)(15)(E)

13 of such Act (8 U.S.C. 1101(a)(15)(E)) if entering solely

14 for a purpose specified in clause (i) or (ii) of such section

15 101(a)(15)(E). For purposes of this section, the term ‘‘na16 tional’’ has the meaning given such term in article 14.9

17 of the Agreement.

18 SEC. 402. NONIMMIGRANT PROFESSIONALS; LABOR ATTES19 TATIONS.

20 (a) NONIMMIGRANT PROFESSIONALS.—

21 (1) DEFINITIONS.—Section 101(a)(15)(H)(i)(b)

22 of the Immigration and Nationality Act (8 U.S.C.

23 1101(a)(15)(H)(i)(b)) is amended by striking

24 ‘‘212(n)(1), or (c)’’ and inserting ‘‘212(n)(1), or

25 (b1) who is entitled to enter the United States under


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1 and in pursuance of the provisions of an agreement

2 listed in section 214(g)(8)(A), who is engaged in a

3 specialty occupation described in section 214(i)(3),

4 and with respect to whom the Secretary of Labor de5 termines and certifies to the Secretary of Homeland

6 Security and the Secretary of State that the intend7 ing employer has filed with the Secretary of Labor

8 an attestation under section 212(t)(1), or (c)’’.

9 (2) ADMISSION OF NONIMMIGRANTS.—Section

10 214 of the Immigration and Nationality Act (8

11 U.S.C. 1184) is amended—

12 (A) in subsection (i)—

13 (i) in paragraph (1), by striking ‘‘For

14 purposes’’ and inserting ‘‘Except as pro15 vided in paragraph (3), for purposes’’; and

16 (ii) by adding at the end the fol17 lowing:

18 ‘‘(3) For purposes of section 101(a)(15)(H)(i)(b1),

19 the term ‘specialty occupation’ means an occupation that

20 requires—

21 ‘‘(A) theoretical and practical application of a

22 body of specialized knowledge; and

23 ‘‘(B) attainment of a bachelor’s or higher de24 gree in the specific specialty (or its equivalent) as a


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1 minimum for entry into the occupation in the United

2 States.’’; and

3 (B) in subsection (g), by adding at the end

4 the following:

5 ‘‘(8)(A) The agreement referred to in section

6 101(a)(15)(H)(i)(b1) is the United States-Chile Free

7 Trade Agreement.

8 ‘‘(B)(i) The Secretary of Homeland Security shall es9 tablish annual numerical limitations on approvals of initial

10 applications by aliens for admission under section

11 101(a)(15)(H)(i)(b1).

12 ‘‘(ii) The annual numerical limitations described in

13 clause (i) shall not exceed 1,400 for nationals of Chile for

14 any fiscal year. For purposes of this clause, the term ‘na15 tional’ has the meaning given such term in article 14.9

16 of the United States-Chile Free Trade Agreement.

17 ‘‘(iii) The annual numerical limitations described in

18 clause (i) shall only apply to principal aliens and not to

19 the spouses or children of such aliens.

20 ‘‘(iv) The annual numerical limitation described in

21 paragraph (1)(A) is reduced by the amount of the annual

22 numerical limitations established under clause (i). How23 ever, if a numerical limitation established under clause (i)

24 has not been exhausted at the end of a given fiscal year,

25 the Secretary of Homeland Security shall adjust upwards


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1 the numerical limitation in paragraph (1)(A) for that fis2 cal year by the amount remaining in the numerical limita3 tion under clause (i). Visas under section

4 101(a)(15)(H)(i)(b) may be issued pursuant to such ad5 justment within the first 45 days of the next fiscal year

6 to aliens who had applied for such visas during the fiscal

7 year for which the adjustment was made.

8 ‘‘(C) The period of authorized admission as a non9 immigrant under section 101(a)(15)(H)(i)(b1) shall be 1

10 year, and may be extended, but only in 1-year increments.

11 After every second extension, the next following extension

12 shall not be granted unless the Secretary of Labor had

13 determined and certified to the Secretary of Homeland Se14 curity and the Secretary of State that the intending em15 ployer has filed with the Secretary of Labor an attestation

16 under section 212(t)(1) for the purpose of permitting the

17 nonimmigrant to obtain such extension.

18 ‘‘(D) The numerical limitation described in para19 graph (1)(A) for a fiscal year shall be reduced by one for

20 each alien granted an extension under subparagraph (C)

21 during such year who has obtained 5 or more consecutive

22 prior extensions.’’.

23 (b) LABOR ATTESTATIONS.—Section 212 of the Im24 migration and Nationality Act (8 U.S.C. 1182) is

25 amended—


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1 (1) by redesignating the subsection (p) added

2 by section 1505(f) of Public Law 106–386 (114

3 Stat. 1526) as subsection (s); and

4 (2) by adding at the end the following:

5 ‘‘(t)(1) No alien may be admitted or provided status

6 as a nonimmigrant under section 101(a)(15)(H)(i)(b1) in

7 an occupational classification unless the employer has filed

8 with the Secretary of Labor an attestation stating the fol9 lowing:

10 ‘‘(A) The employer—

11 ‘‘(i) is offering and will offer during the

12 period of authorized employment to aliens ad13 mitted or provided status under section

14 101(a)(15)(H)(i)(b1) wages that are at least—

15 ‘‘(I) the actual wage level paid by the

16 employer to all other individuals with simi17 lar experience and qualifications for the

18 specific employment in question; or

19 ‘‘(II) the prevailing wage level for the

20 occupational classification in the area of

21 employment,

22 whichever is greater, based on the best informa23 tion available as of the time of filing the attes24 tation; and


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1 ‘‘(ii) will provide working conditions for

2 such a nonimmigrant that will not adversely af3 fect the working conditions of workers similarly

4 employed.

5 ‘‘(B) There is not a strike or lockout in the

6 course of a labor dispute in the occupational classi7 fication at the place of employment.

8 ‘‘(C) The employer, at the time of filing the

9 attestation—

10 ‘‘(i) has provided notice of the filing under

11 this paragraph to the bargaining representative

12 (if any) of the employer’s employees in the oc13 cupational classification and area for which

14 aliens are sought; or

15 ‘‘(ii) if there is no such bargaining rep16 resentative, has provided notice of filing in the

17 occupational classification through such meth18 ods as physical posting in conspicuous locations

19 at the place of employment or electronic notifi20 cation to employees in the occupational classi21 fication for which nonimmigrants under section

22 101(a)(15)(H)(i)(b1) are sought.

23 ‘‘(D) A specification of the number of workers

24 sought, the occupational classification in which the


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1 workers will be employed, and wage rate and condi2 tions under which they will be employed.

3 ‘‘(2)(A) The employer shall make available for public

4 examination, within one working day after the date on

5 which an attestation under this subsection is filed, at the

6 employer’s principal place of business or worksite, a copy

7 of each such attestation (and such accompanying docu8 ments as are necessary).

9 ‘‘(B)(i) The Secretary of Labor shall compile, on a

10 current basis, a list (by employer and by occupational clas11 sification) of the attestations filed under this subsection.

12 Such list shall include, with respect to each attestation,

13 the wage rate, number of aliens sought, period of intended

14 employment, and date of need.

15 ‘‘(ii) The Secretary of Labor shall make such list

16 available for public examination in Washington, D.C.

17 ‘‘(C) The Secretary of Labor shall review an attesta18 tion filed under this subsection only for completeness and

19 obvious inaccuracies. Unless the Secretary of Labor finds

20 that an attestation is incomplete or obviously inaccurate,

21 the Secretary of Labor shall provide the certification de22 scribed in section 101(a)(15)(H)(i)(b1) within 7 days of

23 the date of the filing of the attestation.

24 ‘‘(3)(A) The Secretary of Labor shall establish a

25 process for the receipt, investigation, and disposition of


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1 complaints respecting the failure of an employer to meet

2 a condition specified in an attestation submitted under

3 this subsection or misrepresentation by the employer of

4 material facts in such an attestation. Complaints may be

5 filed by any aggrieved person or organization (including

6 bargaining representatives). No investigation or hearing

7 shall be conducted on a complaint concerning such a fail8 ure or misrepresentation unless the complaint was filed

9 not later than 12 months after the date of the failure or

10 misrepresentation, respectively. The Secretary of Labor

11 shall conduct an investigation under this paragraph if

12 there is reasonable cause to believe that such a failure or

13 misrepresentation has occurred.

14 ‘‘(B) Under the process described in subparagraph

15 (A), the Secretary of Labor shall provide, within 30 days

16 after the date a complaint is filed, for a determination as

17 to whether or not a reasonable basis exists to make a find18 ing described in subparagraph (C). If the Secretary of

19 Labor determines that such a reasonable basis exists, the

20 Secretary of Labor shall provide for notice of such deter21 mination to the interested parties and an opportunity for

22 a hearing on the complaint, in accordance with section 556

23 of title 5, United States Code, within 60 days after the

24 date of the determination. If such a hearing is requested,

25 the Secretary of Labor shall make a finding concerning


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1 the matter by not later than 60 days after the date of

2 the hearing. In the case of similar complaints respecting

3 the same applicant, the Secretary of Labor may consoli4 date the hearings under this subparagraph on such com5 plaints.

6 ‘‘(C)(i) If the Secretary of Labor finds, after notice

7 and opportunity for a hearing, a failure to meet a condi8 tion of paragraph (1)(B), a substantial failure to meet a

9 condition of paragraph (1)(C) or (1)(D), or a misrepresen10 tation of material fact in an attestation—

11 ‘‘(I) the Secretary of Labor shall notify the Sec12 retary of State and the Secretary of Homeland Secu13 rity of such finding and may, in addition, impose

14 such other administrative remedies (including civil

15 monetary penalties in an amount not to exceed

16 $1,000 per violation) as the Secretary of Labor de17 termines to be appropriate; and

18 ‘‘(II) the Secretary of State or the Secretary of

19 Homeland Security, as appropriate, shall not ap20 prove petitions or applications filed with respect to

21 that employer under section 204, 214(c), or

22 101(a)(15)(H)(i)(b1) during a period of at least 1

23 year for aliens to be employed by the employer.

24 ‘‘(ii) If the Secretary of Labor finds, after notice and

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1 tion of paragraph (1), a willful misrepresentation of mate2 rial fact in an attestation, or a violation of clause (iv)—

3 ‘‘(I) the Secretary of Labor shall notify the Sec4 retary of State and the Secretary of Homeland Secu5 rity of such finding and may, in addition, impose

6 such other administrative remedies (including civil

7 monetary penalties in an amount not to exceed

8 $5,000 per violation) as the Secretary of Labor de9 termines to be appropriate; and

10 ‘‘(II) the Secretary of State or the Secretary of

11 Homeland Security, as appropriate, shall not ap12 prove petitions or applications filed with respect to

13 that employer under section 204, 214(c), or

14 101(a)(15)(H)(i)(b1) during a period of at least 2

15 years for aliens to be employed by the employer.

16 ‘‘(iii) If the Secretary of Labor finds, after notice and

17 opportunity for a hearing, a willful failure to meet a condi18 tion of paragraph (1) or a willful misrepresentation of ma19 terial fact in an attestation, in the course of which failure

20 or misrepresentation the employer displaced a United

21 States worker employed by the employer within the period

22 beginning 90 days before and ending 90 days after the

23 date of filing of any visa petition or application supported

24 by the attestation—


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1 ‘‘(I) the Secretary of Labor shall notify the Sec2 retary of State and the Secretary of Homeland Secu3 rity of such finding and may, in addition, impose

4 such other administrative remedies (including civil

5 monetary penalties in an amount not to exceed

6 $35,000 per violation) as the Secretary of Labor de7 termines to be appropriate; and

8 ‘‘(II) the Secretary of State or the Secretary of

9 Homeland Security, as appropriate, shall not ap10 prove petitions or applications filed with respect to

11 that employer under section 204, 214(c), or

12 101(a)(15)(H)(i)(b1) during a period of at least 3

13 years for aliens to be employed by the employer.

14 ‘‘(iv) It is a violation of this clause for an employer

15 who has filed an attestation under this subsection to in16 timidate, threaten, restrain, coerce, blacklist, discharge, or

17 in any other manner discriminate against an employee

18 (which term, for purposes of this clause, includes a former

19 employee and an applicant for employment) because the

20 employee has disclosed information to the employer, or to

21 any other person, that the employee reasonably believes

22 evidences a violation of this subsection, or any rule or reg23 ulation pertaining to this subsection, or because the em24 ployee cooperates or seeks to cooperate in an investigation

25 or other proceeding concerning the employer’s compliance


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1 with the requirements of this subsection or any rule or

2 regulation pertaining to this subsection.

3 ‘‘(v) The Secretary of Labor and the Secretary of

4 Homeland Security shall devise a process under which a

5 nonimmigrant under section 101(a)(15)(H)(i)(b1) who

6 files a complaint regarding a violation of clause (iv) and

7 is otherwise eligible to remain and work in the United

8 States may be allowed to seek other appropriate employ9 ment in the United States for a period not to exceed the

10 maximum period of stay authorized for such non11 immigrant classification.

12 ‘‘(vi)(I) It is a violation of this clause for an employer

13 who has filed an attestation under this subsection to re14 quire a nonimmigrant under section 101(a)(15)(H)(i)(b1)

15 to pay a penalty for ceasing employment with the employer

16 prior to a date agreed to by the nonimmigrant and the

17 employer. The Secretary of Labor shall determine whether

18 a required payment is a penalty (and not liquidated dam19 ages) pursuant to relevant State law.

20 ‘‘(II) If the Secretary of Labor finds, after notice and

21 opportunity for a hearing, that an employer has committed

22 a violation of this clause, the Secretary of Labor may im23 pose a civil monetary penalty of $1,000 for each such vio24 lation and issue an administrative order requiring the re25 turn to the nonimmigrant of any amount paid in violation


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1 of this clause, or, if the nonimmigrant cannot be located,

2 requiring payment of any such amount to the general fund

3 of the Treasury.

4 ‘‘(vii)(I) It is a failure to meet a condition of para5 graph (1)(A) for an employer who has filed an attestation

6 under this subsection and who places a nonimmigrant

7 under section 101(a)(15)(H)(i)(b1) designated as a full8 time employee in the attestation, after the nonimmigrant

9 has entered into employment with the employer, in non10 productive status due to a decision by the employer (based

11 on factors such as lack of work), or due to the non12 immigrant’s lack of a permit or license, to fail to pay the

13 nonimmigrant full-time wages in accordance with para14 graph (1)(A) for all such nonproductive time.

15 ‘‘(II) It is a failure to meet a condition of paragraph

16 (1)(A) for an employer who has filed an attestation under

17 this subsection and who places a nonimmigrant under sec18 tion 101(a)(15)(H)(i)(b1) designated as a part-time em19 ployee in the attestation, after the nonimmigrant has en20 tered into employment with the employer, in nonproduc21 tive status under circumstances described in subclause (I),

22 to fail to pay such a nonimmigrant for such hours as are

23 designated on the attestation consistent with the rate of

24 pay identified on the attestation.


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1 ‘‘(III) In the case of a nonimmigrant under section

2 101(a)(15)(H)(i)(b1) who has not yet entered into employ3 ment with an employer who has had approved an attesta4 tion under this subsection with respect to the non5 immigrant, the provisions of subclauses (I) and (II) shall

6 apply to the employer beginning 30 days after the date

7 the nonimmigrant first is admitted into the United States,

8 or 60 days after the date the nonimmigrant becomes eligi9 ble to work for the employer in the case of a nonimmigrant

10 who is present in the United States on the date of the

11 approval of the attestation filed with the Secretary of

12 Labor.

13 ‘‘(IV) This clause does not apply to a failure to pay

14 wages to a nonimmigrant under section

15 101(a)(15)(H)(i)(b1) for nonproductive time due to non16 work-related factors, such as the voluntary request of the

17 nonimmigrant for an absence or circumstances rendering

18 the nonimmigrant unable to work.

19 ‘‘(V) This clause shall not be construed as prohibiting

20 an employer that is a school or other educational institu21 tion from applying to a nonimmigrant under section

22 101(a)(15)(H)(i)(b1) an established salary practice of the

23 employer, under which the employer pays to non24 immigrants under section 101(a)(15)(H)(i)(b1) and

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1 tion an annual salary in disbursements over fewer than

2 12 months, if—

3 ‘‘(aa) the nonimmigrant agrees to the com4 pressed annual salary payments prior to the com5 mencement of the employment; and

6 ‘‘(bb) the application of the salary practice to

7 the nonimmigrant does not otherwise cause the non8 immigrant to violate any condition of the non9 immigrant’s authorization under this Act to remain

10 in the United States.

11 ‘‘(VI) This clause shall not be construed as super12 seding clause (viii).

13 ‘‘(viii) It is a failure to meet a condition of paragraph

14 (1)(A) for an employer who has filed an attestation under

15 this subsection to fail to offer to a nonimmigrant under

16 section 101(a)(15)(H)(i)(b1), during the nonimmigrant’s

17 period of authorized employment, benefits and eligibility

18 for benefits (including the opportunity to participate in

19 health, life, disability, and other insurance plans; the op20 portunity to participate in retirement and savings plans;

21 and cash bonuses and non-cash compensation, such as

22 stock options (whether or not based on performance)) on

23 the same basis, and in accordance with the same criteria,

24 as the employer offers to United States workers.


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1 ‘‘(D) If the Secretary of Labor finds, after notice and

2 opportunity for a hearing, that an employer has not paid

3 wages at the wage level specified in the attestation and

4 required under paragraph (1), the Secretary of Labor

5 shall order the employer to provide for payment of such

6 amounts of back pay as may be required to comply with

7 the requirements of paragraph (1), whether or not a pen8 alty under subparagraph (C) has been imposed.

9 ‘‘(E) The Secretary of Labor may, on a case-by-case

10 basis, subject an employer to random investigations for

11 a period of up to 5 years, beginning on the date on which

12 the employer is found by the Secretary of Labor to have

13 committed a willful failure to meet a condition of para14 graph (1) or to have made a willful misrepresentation of

15 material fact in an attestation. The authority of the Sec16 retary of Labor under this subparagraph shall not be con17 strued to be subject to, or limited by, the requirements

18 of subparagraph (A).

19 ‘‘(F) Nothing in this subsection shall be construed

20 as superseding or preempting any other enforcement-re21 lated authority under this Act (such as the authorities

22 under section 274B), or any other Act.

23 ‘‘(4) For purposes of this subsection:

24 ‘‘(A) The term ‘area of employment’ means the

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1 site or physical location where the work of the non2 immigrant under section 101(a)(15)(H)(i)(b1) is or

3 will be performed. If such worksite or location is

4 within a Metropolitan Statistical Area, any place

5 within such area is deemed to be within the area of

6 employment.

7 ‘‘(B) In the case of an attestation with respect

8 to one or more nonimmigrants under section

9 101(a)(15)(H)(i)(b1) by an employer, the employer

10 is considered to ‘displace’ a United States worker

11 from a job if the employer lays off the worker from

12 a job that is essentially the equivalent of the job for

13 which the nonimmigrant or nonimmigrants is or are

14 sought. A job shall not be considered to be essen15 tially equivalent of another job unless it involves es16 sentially the same responsibilities, was held by a

17 United States worker with substantially equivalent

18 qualifications and experience, and is located in the

19 same area of employment as the other job.

20 ‘‘(C)(i) The term ‘lays off’, with respect to a

21 worker—

22 ‘‘(I) means to cause the worker’s loss of

23 employment, other than through a discharge for

24 inadequate performance, violation of workplace

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1 tirement, or the expiration of a grant or con2 tract; but

3 ‘‘(II) does not include any situation in

4 which the worker is offered, as an alternative to

5 such loss of employment, a similar employment

6 opportunity with the same employer at equiva7 lent or higher compensation and benefits than

8 the position from which the employee was dis9 charged, regardless of whether or not the em10 ployee accepts the offer.

11 ‘‘(ii) Nothing in this subparagraph is intended

12 to limit an employee’s rights under a collective bar13 gaining agreement or other employment contract.

14 ‘‘(D) The term ‘United States worker’ means

15 an employee who—

16 ‘‘(i) is a citizen or national of the United

17 States; or

18 ‘‘(ii) is an alien who is lawfully admitted

19 for permanent residence, is admitted as a ref20 ugee under section 207 of this title, is granted

21 asylum under section 208, or is an immigrant

22 otherwise authorized, by this Act or by the Sec23 retary of Homeland Security, to be employed.’’.

24 (c) SPECIAL RULE FOR COMPUTATION OF PRE25 VAILING WAGE.—Section 212(p)(1) of the Immigration


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1 and Nationality Act (8 U.S.C. 1182(p)(1)) is amended by

2 striking ‘‘(n)(1)(A)(i)(II) and (a)(5)(A)’’ and inserting

3 ‘‘(a)(5)(A), (n)(1)(A)(i)(II), and (t)(1)(A)(i)(II)’’.

4 (d) FEE.—

5 (1) IN GENERAL.—Section 214(c) of the Immi6 gration and Nationality Act (8 U.S.C. 1184(c)) is

7 amended by adding at the end the following:

8 ‘‘(11)(A) Subject to subparagraph (B), the Secretary

9 of Homeland Security or the Secretary of State, as appro10 priate, shall impose a fee on an employer who has filed

11 an attestation described in section 212(t)—

12 ‘‘(i) in order that an alien may be initially

13 granted nonimmigrant status described in section

14 101(a)(15)(H)(i)(b1); or

15 ‘‘(ii) in order to satisfy the requirement of the

16 second sentence of subsection (g)(8)(C) for an alien

17 having such status to obtain certain extensions of

18 stay.

19 ‘‘(B) The amount of the fee shall be the same as the

20 amount imposed by the Secretary of Homeland Security

21 under paragraph (9), except that if such paragraph does

22 not authorize such Secretary to impose any fee, no fee

23 shall be imposed under this paragraph.


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1 ‘‘(C) Fees collected under this paragraph shall be de2 posited in the Treasury in accordance with section

3 286(s).’’.

4 (2) USE OF FEE.—Section 286(s)(1) of the Im5 migration and Nationality Act (8 U.S.C. 1356(s)(1))

6 is amended by striking ‘‘section 214(c)(9).’’ and in7 serting ‘‘paragraphs (9) and (11) of section

8 214(c).’’.

9 SEC. 403. LABOR DISPUTES.

10 Section 214(j) of the Immigration and Nationality

11 Act (8 U.S.C. 1184(j)) is amended—

12 (1) by striking ‘‘(j)’’ and inserting ‘‘(j)(1)’’;

13 (2) by striking ‘‘this subsection’’ each place

14 such term appears and inserting ‘‘this paragraph’’;

15 and

16 (3) by adding at the end the following:

17 ‘‘(2) Notwithstanding any other provision of this Act

18 except section 212(t)(1), and subject to regulations pro19 mulgated by the Secretary of Homeland Security, an alien

20 who seeks to enter the United States under and pursuant

21 to the provisions of an agreement listed in subsection

22 (g)(8)(A), and the spouse and children of such an alien

23 if accompanying or following to join the alien, may be de24 nied admission as a nonimmigrant under subparagraph

25 (E), (L), or (H)(i)(b1) of section 101(a)(15) if there is


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1 in progress a labor dispute in the occupational classifica2 tion at the place or intended place of employment, unless

3 such alien establishes, pursuant to regulations promul4 gated by the Secretary of Homeland Security after con5 sultation with the Secretary of Labor, that the alien’s

6 entry will not affect adversely the settlement of the labor

7 dispute or the employment of any person who is involved

8 in the labor dispute. Notice of a determination under this

9 paragraph shall be given as may be required by such

10 agreement.’’.

11 SEC. 404. CONFORMING AMENDMENTS.

12 Section 214 of the Immigration and Nationality Act

13 (8 U.S.C. 1184) is amended—

14 (1) in subsection (b), by striking ‘‘(other than

15 a nonimmigrant described in subparagraph (H)(i),

16 (L), or (V) of section 101(a)(15))’’ and inserting

17 ‘‘(other than a nonimmigrant described in subpara18 graph (L) or (V) of section 101(a)(15), and other

19 than a nonimmigrant described in any provision of

20 section 101(a)(15)(H)(i) except subclause (b1) of

21 such section)’’;

22 (2) in subsection (c)(1), by striking ‘‘section

23 101(a)(15)(H), (L), (O), or (P)(i)’’ and inserting

24 ‘‘subparagraph (H), (L), (O), or (P)(i) of section


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1 101(a)(15) (excluding nonimmigrants under section

2 101(a)(15)(H)(i)(b1))’’; and

3 (3) in subsection (h), by striking ‘‘(H)(i)’’ and

4 inserting ‘‘(H)(i)(b) or (c)’’.

Æ


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Chairman SENSENBRENNER. And without objection, the transcript 

of the mock markup that was held on this legislation last week will 

be included in the record following opening statements by myself 

and whoever the Democratic designated hitter is. 

I think that we thoroughly explained all of this last week, and 

I am just going to ask unanimous consent that my opening statement be placed in the record at this point. 

[The prepared statement of Mr. Sensenbrenner follows:]

PREPARED STATEMENT OF THE HONORABLE F. JAMES SENSENBRENNER, JR., A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

H.R. 2738, the ‘‘U.S.-Chile Free Trade Agreement Implementation Act,’’ and H.R. 

2739, the ‘‘U.S.-Singapore Free Trade Agreement Implementation Act’’ were referred 

to the Judiciary Committee for consideration of provisions that fall within the Committee’s jurisdiction. 

As we were all reminded last week, Trade Promotion Authority (TPA) requires the 

Administration to actively consult with Congress when initiating, negotiating, and 

implementing trade agreements. TPA also provides that legislation to implement 

free trade agreements may not be amended by committees of jurisdiction and may 

only receive an up or down vote on the floor of the House. 

The U.S.-Chile and U.S.-Singapore Free Trade Agreements contain several issues 

within the purview of this Committee. Both agreements contain competition clauses 

that ensure antitrust laws are applied in a neutral, transparent, nondiscriminatory 

manner while safeguarding basic procedural rights. The agreements also contain robust intellectual property protections, requiring the governments of Chile and 

Singapore to take affirmative steps to eradicate the piracy of trademarks, patents, 

satellite television signals, and other forms of intellectual property. 

While the antitrust and intellectual property provisions within these agreements 

are critical, they do not require any substantive changes to U.S. law. As a result, 

our consideration of H.R. 2738 and H.R. 2739 must be confined to Title IV of each 

bill, which pertains to ‘‘Temporary Entry of Business Persons.’’

I have long expressed concern about substantive changes to U.S. law contained 

in free trade agreements. Before passage of Trade Promotion Authority, immigration 

provisions were included in earlier free trade agreements such as NAFTA, without 

any consultation with this Committee. This practice unfortunately created precedent 

for subsequent trade agreements, such as those we consider today, and immigration 

provisions were included in the Chile and Singapore Free Trade Agreements before 

passage of TPA last year. 

At last week’s mock markup, Members of this Committee spoke with a united bipartisan voice that immigration provisions in future free trade agreements will not 

receive the support of this Committee. In addition, the implementing legislation we 

consider today contains a number of modifications recommended by the Committee 

at last week’s mock markup. 

While the draft implementing legislation created a separate visa category for 

skilled workers from Chile and Singapore, the bills we consider today amend the 

Immigration and Nationality Act to ensure that these visas—6,800 in total—are deducted from the national H-1B cap when they are issued or when a Chilean or 

Singaporean citizen is granted an extension after five or more consecutive prior extensions. 

In addition, the implementing legislation now provides that after every second extension of H-1B1 status for a citizen of Chile or Singapore, an application for a further extension must be accompanied by a new employer attestation. This will have 

the effect of requiring the employer to update the prevailing wage determination at 

such time. 

Moreover, the legislation provides that an employer will have to pay a fee in order 

for an alien to be initially granted H-1B1 status and after every second extension 

of that status. The fee shall be the same as the fee an employer must pay when 

petitioning for an H-1B visa. However, if no fee is being assessed under the H-1B 

program, no fee shall be imposed under the H-1B1 program. 

Finally, the legislation now clarifies that an employer generally cannot sponsor 

an alien for an E, L, or H-1B1 visa if there is any labor dispute occurring in the 

occupational classification at the place of employment, regardless of whether the 

labor dispute is classified as a strike or lockout. In this regard, the implementing 

language provides greater worker protections than those contained in the current 

H-1B program. 

154

The legislation we consider today is a considerable improvement over the draft 

implementing legislation we considered last week. The Committee’s bipartisan commitment to ensuring that our recommendations were incorporated into these bills 

reaffirms the constitutional prerogative of Congress and this Committee’s commitment to ensuring that future free trade agreements are not used to substantively 

alter United States immigration law. It is my hope and expectation that our actions 

over the last week will not go unnoticed by this and future Administrations. 

These implementing bills as the result of extensive negotiation and cooperation 

between the USTR and Members of this Committee, both majority and minority. 

They represent true bipartisan compromise. Several concerns of the minority were 

addressed and are represented in the legislation before us. In recognition of the diligent work by the Committee and the USTR to improve the implementing legislation, 

and in light of the fact that our limited jurisdictional referral requires the Committee to consider only provisions within our jurisdiction, I would urge all members 

who support our work on the immigration sections in Title IV of both bills to support reporting this legislation today. For members who do not support portions of 

the implementing legislation outside of this Committee’s jurisdiction or the underlying trade agreements themselves, I encourage you to vote to report the legislation 

and then submit supplemental views to the committee report outlining your position 

on the broader implementing legislation. 

I now recognize the Ranking Member for his remarks.

Chairman SENSENBRENNER. Without objection, all opening statements will be placed in the record at this point. 

[The prepared statement of Ms. Jackson Lee follows:]

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TEXAS

I have serious reservations about the actions the U.S. Trade Representative 

(USTR) has taken with respect to the temporary entry provisions in the Chile and 

Singapore Free Trade Agreements. In my opinion, they have overstepped their 

bounds and usurped this Committee’s jurisdiction. The negotiating objectives that 

Congress laid out for USTR in the Trade Act of 2002 (TPA) do not include even one 

word on temporary entry. There is no specific authority in TPA to negotiate new 

visa categories or impose new requirements on our temporary entry system, yet that 

is exactly what USTR has done in the Chile and Singapore FTAs. 

The Singapore and Chile FTAs create a new visa classification for the temporary 

admission of nonimmigrant professionals that is similar in many respects to the existing H-1B nonimmigrant classification. The new nonimmigrant visa classification, 

however, would differ from the existing H-1B program in significant ways. 

Both agreements include caps on the number of professionals that can be granted 

entry each year (1,400 for Chile and 5,400 for Singapore). 

The provisions for the new nonimmigrant visa permit an unlimited number of extensions in 1-year increments. This makes it possible to transform a temporary 

entry program into a permanent program. In effect, employers would have the 

power to keep permanent workers in a temporary legal status. In contrast, under 

the H-1B program, workers are granted a three-year visa that can be renewed only 

once. 

The Labor Certification Attestation (LCA) is one of the few safeguards we have 

in our H-1B system for ensuring that employers do not abuse temporary workers 

to undermine the domestic labor market. The implementing legislation contains 

some, but not all, of the LCA requirements that apply in our H-1B programs. 

The implementing legislation completely omits the category of H-1B dependent 

employers and the additional LCA requirements that apply to them. H-1B dependent employers are required to attest that new entrants will not displace U.S. workers and demonstrate that they have tried to recruit U.S. workers. The implementing 

legislation should have a similar provision. 

In addition, the H-1B program authorizes the Secretary of Labor to initiate her 

own investigations and enforcement proceedings based on credible information that 

an employer is violating the rules of the H-1B program. No such authority is granted in the administration of the Chile and Singapore visa programs. 

The Singapore and Chile FTAs require permanent changes to our immigration 

system, but for now these changes are limited to two countries. Unfortunately, we 

may see these programs expanded to dozens of additional countries in future free 

trade agreements. The administration is currently negotiating additional FTAs with 

Australia, Morocco, five countries in Southern Africa, five countries in Central 

America, and the 34 countries of the Western Hemisphere. 

155

Immigration policy is a sensitive, political matter. Changes in immigration policy 

have traditionally been the result of intense, open negotiations between workers, 

employers, immigration advocates, and Members of Congress. These issues simply 

do not belong in fast-tracked trade agreements negotiated by executive agencies.

Chairman SENSENBRENNER. Without objection, the previous 

question is ordered, since a reporting quorum is not present. 

[Intervening business.] 

Chairman SENSENBRENNER. Because a reporting quorum is 

present, the unfinished business is the motion to report favorably 

the bill H.R. 2738, the implementing legislation for the U.S.-Chile 

Free Trade Agreement on which the previous question has been ordered. 

Ms. JACKSON LEE. Mr. Chairman? 

Chairman SENSENBRENNER. The previous question has been ordered. No debate is in order. 

Those in favor will say aye. 

Opposed, no. 

The ayes appear to have it, the ayes have it, and the motion to 

report favorably is agreed to. And all Members will be given 2 

days, as provided by House rules, in which to submit additional 

dissenting supplemental or minority views. 

MOCK MARKUP TRANSCRIPT

BUSINESS MEETING 

THURSDAY, JULY 10, 2003

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:49 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr., [Chairman of the Committee] presiding. 

Chairman SENSENBRENNER. The Committee will be in order. A 

working quorum is present. 

The next item on the agenda for consideration is the draft implementing legislation for the U.S.-Chile Free Trade Agreement, 

which was signed by the President on June 6, 2003. This draft legislation was provided to the Committee by the U.S. Trade Representative and makes changes to U.S. law to ensure compliance 

with the agreement. 

Under the Trade Promotion Authority law, Congress cannot 

amend either trade agreements or implementing legislation after 

their formal introduction. The U.S.-Chile legislation will be introduced next week, and today’s markup will be to recommend 

changes to provisions in a draft bill that are within the jurisdiction 

of the Committee. 

While the underlying agreement contains several provisions 

within the jurisdiction of this Committee, only those pertaining to 

immigration law require accompanying implementing legislation. 

Thus, our markup today will be confined to these provisions. 

At the conclusion of today’s session, these recommendations will 

be forwarded to the Administration. While the Administration will 

weigh recommendations made by the Committee, it is not required 

to accept them. And with that in mind, I now move that the ComVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00155 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
156

mittee approve the U.S.-Chile draft implementing legislation and 

forward it to the United States Trade Representative. 

Without objection, the draft implementing legislation will be considered as read and opening for amendment at any time. 

[The legislation follows:]

157

1

Draft Implementing Legislation for the United States-Chile Free

Trade Agreement

1 TITLE IV—TEMPORARY ENTRY

2 OF BUSINESS PERSONS.

3 SEC. 401. NONIMMIGRANT TRADERS AND INVESTORS.

4 Upon a basis of reciprocity secured by the Agree5 ment, an alien who is a national of Chile (and any spouse

6 or child (as defined in section 101(b)(1) of the Immigra7 tion and Nationality Act (8 U.S.C. 1101(b)(1)) of such

8 alien, if accompanying or following to join the alien) may,

9 if otherwise eligible for a visa and if otherwise admissible

10 into the United States under the Immigration and Nation11 ality Act (8 U.S.C. 1101 et seq.), be considered to be clas12 sifiable as a nonimmigrant under section 101(a)(15)(E)

13 of such Act (8 U.S.C. 1101(a)(15)(E)) if entering solely

14 for a purpose specified in clause (i) or (ii) of such section

15 101(a)(15)(E). For purposes of this section, the term ‘‘na16 tional’’ has the meaning given such term in article 14.9

17 of the Agreement.

18 SEC. 402. NONIMMIGRANT PROFESSIONALS; LABOR ATTES19 TATIONS.

20 (a) NONIMMIGRANT PROFESSIONALS.—


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2

1 (1) DEFINITIONS.—Section 101(a)(15) of the

2 Immigration and Nationality Act (8 U.S.C.

3 1101(a)(15)) is amended—

4 (A) by striking ‘‘or’’ at the end of subpara5 graph (U);

6 (B) by striking the period at the end of

7 subparagraph (V) and inserting ‘‘; or’’; and

8 (C) by adding at the end the following:

9 ‘‘(W)(i) subject to section 212(t), an alien—

10 ‘‘(I) who is entitled to enter the United

11 States under and in pursuance of the provisions

12 of an agreement listed in section 214(g)(8)(A);

13 ‘‘(II) who is engaged in a specialty occupa14 tion requiring—

15 ‘‘(aa) theoretical and practical appli16 cation of a body of specialized knowledge;

17 and

18 ‘‘(bb) attainment of a bachelor’s or

19 higher degree in the specific specialty (or

20 the equivalent of such a degree) as a min21 imum for entry into the occupation in the

22 United States; and

23 ‘‘(III) with respect to whom the Secretary

24 of Labor determines and certifies to the Sec25 retary of Homeland Security and the Secretary


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3

1 of State that the intending employer has filed

2 with the Secretary of Labor an attestation

3 under section 212(t)(1); and

4 ‘‘(ii) the alien spouse and children (as defined

5 in subsection (b)(1)) of an alien described in clause

6 (i), if accompanying or following to join such alien.’’.

7 (2) ADMISSION OF NONIMMIGRANTS.—Section

8 214(g) of the Immigration and Nationality Act (8

9 U.S.C. 1184(g)) is amended by adding at the end

10 the following:

11 ‘‘(8)(A) The agreement referred to in section

12 101(a)(15)(W)(i)(I) is the United States-Chile Free Trade

13 Agreement.

14 ‘‘(B) The Secretary of Homeland Security shall es15 tablish annual numerical limits on approvals of initial ap16 plications by aliens for admission under section

17 101(a)(15)(W)(i), which shall not exceed 1,400 for nation18 als of Chile. For purposes of this subparagraph, the term

19 ‘national’ has the meaning given such term in article 14.9

20 of the United States-Chile Free Trade Agreement.

21 ‘‘(C) The period of authorized admission as a non22 immigrant under section 101(a)(15)(W) shall be 1 year,

23 and may be extended, but only in 1-year increments.’’.


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4

1 (b) LABOR ATTESTATIONS.—Section 212 of the Im2 migration and Nationality Act (8 U.S.C. 1182) is

3 amended—

4 (1) by redesignating the subsection (p) added

5 by section 1505(f) of Public Law 106–386 (114

6 Stat. 1526) as subsection (s); and

7 (2) by adding at the end the following:

8 ‘‘(t)(1) No alien may be admitted or provided status

9 as a nonimmigrant under section 101(a)(15)(W) in an oc10 cupational classification unless the employer has filed with

11 the Secretary of Labor an attestation stating the fol12 lowing:

13 ‘‘(A) The employer—

14 ‘‘(i) is offering and will offer during the

15 period of authorized employment to aliens ad16 mitted or provided status under section

17 101(a)(15)(W) wages that are at least—

18 ‘‘(I) the actual wage level paid by the

19 employer to all other individuals with simi20 lar experience and qualifications for the

21 specific employment in question; or

22 ‘‘(II) the prevailing wage level for the

23 occupational classification in the area of

24 employment,


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5

1 whichever is greater, based on the best informa2 tion available as of the time of filing the attes3 tation; and

4 ‘‘(ii) will provide working conditions for

5 such a nonimmigrant that will not adversely af6 fect the working conditions of workers similarly

7 employed.

8 ‘‘(B) There is not a strike or lockout in the

9 course of a labor dispute in the occupational classi10 fication at the place of employment.

11 ‘‘(C) The employer, at the time of filing the

12 attestation—

13 ‘‘(i) has provided notice of the filing under

14 this paragraph to the bargaining representative

15 (if any) of the employer’s employees in the oc16 cupational classification and area for which

17 aliens are sought; or

18 ‘‘(ii) if there is no such bargaining rep19 resentative, has provided notice of filing in the

20 occupational classification through such meth21 ods as physical posting in conspicuous locations

22 at the place of employment or electronic notifi23 cation to employees in the occupational classi24 fication for which nonimmigrants under section

25 101(a)(15)(W) are sought.


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6

1 ‘‘(D) A specification of the number of workers

2 sought, the occupational classification in which the

3 workers will be employed, and wage rate and condi4 tions under which they will be employed.

5 ‘‘(2)(A) The employer shall make available for public

6 examination, within one working day after the date on

7 which an attestation under this subsection is filed, at the

8 employer’s principal place of business or worksite, a copy

9 of each such attestation (and such accompanying docu10 ments as are necessary).

11 ‘‘(B)(i) The Secretary of Labor shall compile, on a

12 current basis, a list (by employer and by occupational clas13 sification) of the attestations filed under this subsection.

14 Such list shall include, with respect to each attestation,

15 the wage rate, number of aliens sought, period of intended

16 employment, and date of need.

17 ‘‘(ii) The Secretary of Labor shall make such list

18 available for public examination in Washington, D.C.

19 ‘‘(C) The Secretary of Labor shall review an attesta20 tion filed under this subsection only for completeness and

21 obvious inaccuracies. Unless the Secretary of Labor finds

22 that an attestation is incomplete or obviously inaccurate,

23 the Secretary of Labor shall provide the certification de24 scribed in section 101(a)(15)(W)(i)(III) within 7 days of

25 the date of the filing of the attestation.


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7

1 ‘‘(3)(A) The Secretary of Labor shall establish a

2 process for the receipt, investigation, and disposition of

3 complaints respecting the failure of an employer to meet

4 a condition specified in an attestation submitted under

5 this subsection or misrepresentation by the employer of

6 material facts in such an attestation. Complaints may be

7 filed by any aggrieved person or organization (including

8 bargaining representatives). No investigation or hearing

9 shall be conducted on a complaint concerning such a fail10 ure or misrepresentation unless the complaint was filed

11 not later than 12 months after the date of the failure or

12 misrepresentation, respectively. The Secretary of Labor

13 shall conduct an investigation under this paragraph if

14 there is reasonable cause to believe that such a failure or

15 misrepresentation has occurred.

16 ‘‘(B) Under the process described in subparagraph

17 (A), the Secretary of Labor shall provide, within 30 days

18 after the date a complaint is filed, for a determination as

19 to whether or not a reasonable basis exists to make a find20 ing described in subparagraph (C). If the Secretary of

21 Labor determines that such a reasonable basis exists, the

22 Secretary of Labor shall provide for notice of such deter23 mination to the interested parties and an opportunity for

24 a hearing on the complaint, in accordance with section 556

25 of title 5, United States Code, within 60 days after the


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8

1 date of the determination. If such a hearing is requested,

2 the Secretary of Labor shall make a finding concerning

3 the matter by not later than 60 days after the date of

4 the hearing. In the case of similar complaints respecting

5 the same applicant, the Secretary of Labor may consoli6 date the hearings under this subparagraph on such com7 plaints.

8 ‘‘(C)(i) If the Secretary of Labor finds, after notice

9 and opportunity for a hearing, a failure to meet a condi10 tion of paragraph (1)(B), a substantial failure to meet a

11 condition of paragraph (1)(C) or (1)(D), or a misrepresen12 tation of material fact in an attestation—

13 ‘‘(I) the Secretary of Labor shall notify the Sec14 retary of State and the Secretary of Homeland Secu15 rity of such finding and may, in addition, impose

16 such other administrative remedies (including civil

17 monetary penalties in an amount not to exceed

18 $1,000 per violation) as the Secretary of Labor de19 termines to be appropriate; and

20 ‘‘(II) the Secretary of State or the Secretary of

21 Homeland Security, as appropriate, shall not ap22 prove petitions or applications filed with respect to

23 that employer under section 204, 214(c), or

24 101(a)(15)(W) during a period of at least 1 year for

25 aliens to be employed by the employer.


D2738.AAI
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9

1 ‘‘(ii) If the Secretary of Labor finds, after notice and

2 opportunity for a hearing, a willful failure to meet a condi3 tion of paragraph (1), a willful misrepresentation of mate4 rial fact in an attestation, or a violation of clause (iv)—

5 ‘‘(I) the Secretary of Labor shall notify Sec6 retary of State and the Secretary of Homeland Secu7 rity of such finding and may, in addition, impose

8 such other administrative remedies (including civil

9 monetary penalties in an amount not to exceed

10 $5,000 per violation) as the Secretary of Labor de11 termines to be appropriate; and

12 ‘‘(II) the Secretary of State or the Secretary of

13 Homeland Security, as appropriate, shall not ap14 prove petitions or applications filed with respect to

15 that employer under section 204, 214(c), or

16 101(a)(15)(W) during a period of at least 2 years

17 for aliens to be employed by the employer.

18 ‘‘(iii) If the Secretary of Labor finds, after notice and

19 opportunity for a hearing, a willful failure to meet a condi20 tion of paragraph (1) or a willful misrepresentation of ma21 terial fact in an attestation, in the course of which failure

22 or misrepresentation the employer displaced a United

23 States worker employed by the employer within the period

24 beginning 90 days before and ending 90 days after the


D2738.AAJ
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10

1 date of filing of any visa petition or application supported

2 by the attestation—

3 ‘‘(I) the Secretary of Labor shall notify Sec4 retary of State and the Secretary of Homeland Secu5 rity of such finding and may, in addition, impose

6 such other administrative remedies (including civil

7 monetary penalties in an amount not to exceed

8 $35,000 per violation) as the Secretary of Labor de9 termines to be appropriate; and

10 ‘‘(II) the Secretary of State or the Secretary of

11 Homeland Security as appropriate shall not approve

12 petitions or applications filed with respect to that

13 employer under section 204, 214(c), or

14 101(a)(15)(W) during a period of at least 3 years

15 for aliens to be employed by the employer.

16 ‘‘(iv) It is a violation of this clause for an employer

17 who has filed an attestation under this subsection to in18 timidate, threaten, restrain, coerce, blacklist, discharge, or

19 in any other manner discriminate against an employee

20 (which term, for purposes of this clause, includes a former

21 employee and an applicant for employment) because the

22 employee has disclosed information to the employer, or to

23 any other person, that the employee reasonably believes

24 evidences a violation of this subsection, or any rule or reg25 ulation pertaining to this subsection, or because the emVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00166 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

D2738.AAK
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11

1 ployee cooperates or seeks to cooperate in an investigation

2 or other proceeding concerning the employer’s compliance

3 with the requirements of this subsection or any rule or

4 regulation pertaining to this subsection.

5 ‘‘(v) The Secretary of Labor and the Secretary of

6 Homeland Security shall devise a process under which a

7 nonimmigrant under section 101(a)(15)(W) who files a

8 complaint regarding a violation of clause (iv) and is other9 wise eligible to remain and work in the United States may

10 be allowed to seek other appropriate employment in the

11 United States for a period not to exceed the maximum

12 period of stay authorized for such nonimmigrant classi13 fication.

14 ‘‘(vi)(I) It is a violation of this clause for an employer

15 who has filed an attestation under this subsection to re16 quire a nonimmigrant under section 101(a)(15)(W) to pay

17 a penalty for ceasing employment with the employer prior

18 to a date agreed to by the nonimmigrant and the em19 ployer. The Secretary of Labor shall determine whether

20 a required payment is a penalty (and not liquidated dam21 ages) pursuant to relevant State law.

22 ‘‘(II) If the Secretary of Labor finds, after notice and

23 opportunity for a hearing, that an employer has committed

24 a violation of this clause, the Secretary of Labor may im25 pose a civil monetary penalty of $1,000 for each such vioVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00167 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

D2738.AAL
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12

1 lation and issue an administrative order requiring the re2 turn to the nonimmigrant of any amount paid in violation

3 of this clause, or, if the nonimmigrant cannot be located,

4 requiring payment of any such amount to the general fund

5 of the Treasury.

6 ‘‘(vii)(I) It is a failure to meet a condition of para7 graph (1)(A) for an employer who has filed an attestation

8 under this subsection and who places a nonimmigrant

9 under section 101(a)(15)(W) designated as a full-time em10 ployee in the attestation, after the nonimmigrant has en11 tered into employment with the employer, in nonproduc12 tive status due to a decision by the employer (based on

13 factors such as lack of work), or due to the non14 immigrant’s lack of a permit or license, to fail to pay the

15 nonimmigrant full-time wages in accordance with para16 graph (1)(A) for all such nonproductive time.

17 ‘‘(II) It is a failure to meet a condition of paragraph

18 (1)(A) for an employer who has filed an attestation under

19 this subsection and who places a nonimmigrant under sec20 tion 101(a)(15)(W) designated as a part-time employee in

21 the attestation, after the nonimmigrant has entered into

22 employment with the employer, in nonproductive status

23 under circumstances described in subclause (I), to fail to

24 pay such a nonimmigrant for such hours as are designated


D2738.AAM
169

13

1 on the attestation consistent with the rate of pay identified

2 on the attestation.

3 ‘‘(III) In the case of a nonimmigrant under section

4 101(a)(15)(W) who has not yet entered into employment

5 with an employer who has had approved an attestation

6 under this subsection with respect to the nonimmigrant,

7 the provisions of subclauses (I) and (II) shall apply to the

8 employer beginning 30 days after the date the non9 immigrant first is admitted into the United States, or 60

10 days after the date the nonimmigrant becomes eligible to

11 work for the employer in the case of a nonimmigrant who

12 is present in the United States on the date of the approval

13 of the attestation filed with the Secretary of Labor.

14 ‘‘(IV) This clause does not apply to a failure to pay

15 wages to a nonimmigrant under section 101(a)(15)(W) for

16 nonproductive time due to non-work-related factors, such

17 as the voluntary request of the nonimmigrant for an ab18 sence or circumstances rendering the nonimmigrant un19 able to work.

20 ‘‘(V) This clause shall not be construed as prohibiting

21 an employer that is a school or other educational institu22 tion from applying to a nonimmigrant under section

23 101(a)(15)(W) an established salary practice of the em24 ployer, under which the employer pays to nonimmigrants

25 under section 101(a)(15)(W) and United States workers


D2738.AAN
170

14

1 in the same occupational classification an annual salary

2 in disbursements over fewer than 12 months, if—

3 ‘‘(aa) the nonimmigrant agrees to the com4 pressed annual salary payments prior to the com5 mencement of the employment; and

6 ‘‘(bb) the application of the salary practice to

7 the nonimmigrant does not otherwise cause the non8 immigrant to violate any condition of the non9 immigrant’s authorization under this Act to remain

10 in the United States.

11 ‘‘(VI) This clause shall not be construed as super12 seding clause (viii).

13 ‘‘(viii) It is a failure to meet a condition of paragraph

14 (1)(A) for an employer who has filed an attestation under

15 this subsection to fail to offer to a nonimmigrant under

16 section 101(a)(15)(W), during the nonimmigrant’s period

17 of authorized employment, benefits and eligibility for bene18 fits (including the opportunity to participate in health, life,

19 disability, and other insurance plans; the opportunity to

20 participate in retirement and savings plans; and cash bo21 nuses and non-cash compensation, such as stock options

22 (whether or not based on performance)) on the same basis,

23 and in accordance with the same criteria, as the employer

24 offers to United States workers.


D2738.AAO
171

15

1 ‘‘(D) If the Secretary of Labor finds, after notice and

2 opportunity for a hearing, that an employer has not paid

3 wages at the wage level specified in the attestation and

4 required under paragraph (1), the Secretary of Labor

5 shall order the employer to provide for payment of such

6 amounts of back pay as may be required to comply with

7 the requirements of paragraph (1), whether or not a pen8 alty under subparagraph (C) has been imposed.

9 ‘‘(E) The Secretary of Labor may, on a case-by-case

10 basis, subject an employer to random investigations for

11 a period of up to 5 years, beginning on the date on which

12 the employer is found by the Secretary of Labor to have

13 committed a willful failure to meet a condition of para14 graph (1) or to have made a willful misrepresentation of

15 material fact in an attestation. The authority of the Sec16 retary of Labor under this subparagraph shall not be con17 strued to be subject to, or limited by, the requirements

18 of subparagraph (A).

19 ‘‘(F) Nothing in this subsection shall be construed

20 as superseding or preempting any other enforcement-re21 lated authority under this Act (such as the authorities

22 under section 274B), or any other Act.

23 ‘‘(4) For purposes of this subsection:

24 ‘‘(A) The term ‘area of employment’ means the

25 area within normal commuting distance of the workVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00171 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

D2738.AAP
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16

1 site or physical location where the work of the non2 immigrant under section 101(a)(15)(W) is or will be

3 performed. If such worksite or location is within a

4 Metropolitan Statistical Area, any place within such

5 area is deemed to be within the area of employment.

6 ‘‘(B) In the case of an attestation with respect

7 to one or more nonimmigrants under section

8 101(a)(15)(W) by an employer, the employer is con9 sidered to ‘displace’ a United States worker from a

10 job if the employer lays off the worker from a job

11 that is essentially the equivalent of the job for which

12 the nonimmigrant or nonimmigrants is or are

13 sought. A job shall not be considered to be essen14 tially equivalent of another job unless it involves es15 sentially the same responsibilities, was held by a

16 United States worker with substantially equivalent

17 qualifications and experience, and is located in the

18 same area of employment as the other job.

19 ‘‘(C)(i) The term ‘lays off’, with respect to a

20 worker—

21 ‘‘(I) means to cause the worker’s loss of

22 employment, other than through a discharge for

23 inadequate performance, violation of workplace

24 rules, cause, voluntary departure, voluntary reVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00172 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2

D2738.AAQ
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17

1 tirement, or the expiration of a grant or con2 tract; but

3 ‘‘(II) does not include any situation in

4 which the worker is offered, as an alternative to

5 such loss of employment, a similar employment

6 opportunity with the same employer at equiva7 lent or higher compensation and benefits than

8 the position from which the employee was dis9 charged, regardless of whether or not the em10 ployee accepts the offer.

11 ‘‘(ii) Nothing in this subparagraph is intended

12 to limit an employee’s rights under a collective bar13 gaining agreement or other employment contract.

14 ‘‘(D) The term ‘United States worker’ means

15 an employee who—

16 ‘‘(i) is a citizen or national of the United

17 States; or

18 ‘‘(ii) is an alien who is lawfully admitted

19 for permanent residence, is admitted as a ref20 ugee under section 207 of this title, is granted

21 asylum under section 208, or is an immigrant

22 otherwise authorized, by this Act or by the Sec23 retary of Homeland Security, to be employed.’’.

24 (c) SPECIAL RULE FOR COMPUTATION OF PRE25 VAILING WAGE.—Section 212(p)(1) of the Immigration


D2738.AAR
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18

1 and Nationality Act (8 U.S.C. 1182(p)(1)) is amended by

2 striking ‘‘(n)(1)(A)(i)(II) and (a)(5)(A)’’ and inserting

3 ‘‘(a)(5)(A), (n)(1)(A)(i)(II), and (t)(1)(A)(i)(II)’’.

4 SEC. 403. LABOR DISPUTES.

5 Section 214(j) of the Immigration and Nationality

6 Act (8 U.S.C. 1184(j)) is amended—

7 (1) by striking ‘‘(j)’’ and inserting ‘‘(j)(1)’’;

8 (2) by striking ‘‘this subsection’’ each place

9 such term appears and inserting ‘‘this paragraph’’;

10 and

11 (3) by adding at the end the following:

12 ‘‘(2) Notwithstanding any other provision of this Act

13 except section 212(t)(1)(B), and subject to regulations

14 promulgated by the Secretary of Homeland Security, an

15 alien who seeks to enter the United States under and pur16 suant to the provisions of an agreement listed in sub17 section (g)(8)(A), and the spouse and children of such an

18 alien if accompanying or following to join the alien, shall

19 not be classified as a nonimmigrant under subparagraph

20 (E), (L), or (W) of section 101(a)(15) if there is in

21 progress a strike or lockout in the course of a labor dis22 pute in the occupational classification at the place or in23 tended place of employment, unless such alien establishes,

24 pursuant to regulations promulgated by the Secretary of

25 Homeland Security after consultation with the Secretary


D2738.AAS
175

19

1 of Labor, that the alien’s entry will not affect adversely

2 the settlement of the strike or lockout or the employment

3 of any person who is involved in the strike or lockout. No4 tice of a determination under this paragraph shall be given

5 as may be required by such agreement.’’.


D2738.AAT
176

Chairman SENSENBRENNER. And the Chair recognizes himself to 

strike the last word. 

The entire issue of trade agreements has been a matter of great 

controversy in the Congress, and the Trade Promotion Authority or 

fast-track legislation passed the House by one vote last year, and 

the conference report was adopted by three votes last year. And basically what it does is make non-amendable trade agreements that 

have been negotiated and signed by the President and thus subject 

to an up-or-down vote by the Congress. 

What the TPA law did do, however, is to require extensive consultation by the U.S. Trade Representative to Congress and congressional Committees relative to issues within each of the congressional Committee’s jurisdiction. The Ranking Member Mr. Conyers 

and I, immediately following the enactment of the trade promotion 

authority, sent a letter to Ambassador Zoellick, the U.S. Trade 

Representative, asking for that consultation. 

At the time TPA was enacted into law, a lot of the negotiations 

in both of these trade agreements had been well underway and tentative agreements had been reached between the United States, on 

the one hand, and either Chile or Singapore, on the other hand, including agreements pertaining to increased immigration quotas 

and various types of immigration visas. 

I expressed both in writing and verbally my concerns to Mr. 

Zoellick on these areas as well as my hope that trade agreements 

would not derogate U.S. antitrust law or U.S. intellectual property 

protection law. And I can say that in these latter two areas, the 

trade agreement reflects the concerns that I have expressed to Mr. 

Zoellick, and they also do not require any implementing legislation. 

So both the IP protection issues as well as the antitrust and competition issues are not before the Committee, and the agreement 

does not derogate our national law in either of these respects. 

However, with respect to the immigration provision, the draft implementing legislation creates a new W non-immigrant professional 

worker visa category for nationals of Chile and Singapore. And 

what this does is that it increases the total number of aliens who 

would be admitted into the United States by 5,400 in the case of 

Singapore and 1,400 in the case of Chile. 

It is my concern that immigration policy really does not belong 

in any trade promotion authority bill or any free trade agreement. 

And as a result, there will be an amendment that will be offered 

shortly that will basically not authorize the new W non-immigrant 

professional worker visa category that is contained in the draft implementing legislation and require that the number of people who 

are eligible for these visas be deducted from the national H-1B visa 

cap. Thus, the amendment will create a new category of H-1B visas 

to effect the temporary entry provisions in the free trade agreements without increasing the total number of temporary entries 

that are allowed into the United States. 

I would also point out that the H-1B visa category requires certain labor certifications as well as a $1,000 fee. So there will be no 

distinction between how applicants from Singapore and Chile will 

be treated versus applicants for this type of visa category from 

other countries. 

I think that this is a good amendment, but I am also concerned 

that there not be future changes in the basic immigration law conVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00176 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
177

tained in future trade agreements. Article I, section 8 of the Constitution makes immigration and naturalization law an exclusive 

enumerated power of the Congress, and we intend to follow the 

Constitution and not to delegate this authority to the executive 

branch of Government. 

I intend to send a letter to Ambassador Zoellick, which I will invite Mr. Conyers to co-sign with me, stating our strong opposition 

to any type of changes in the immigration law in any future free 

trade agreements that will be put in the Committee report when 

we formally mark up the introduced legislation next week, as well 

as any response that Ambassador Zoellick cares to give to us. 

There will also be some rather strong report language that says 

that changes in immigration law are off the table as far as this 

Committee is concerned in future free trade agreements. 

With that, I will be happy to yield to the gentleman from Michigan, Mr. Conyers, for whatever remarks he chooses to make. 

Mr. CONYERS. Thank you, Chairman Sensenbrenner. 

I come to the markup this morning in extreme agreement with 

you, as contrasted with 24 hours ago, for example. So here we meet 

in amity and peace and accord. And so I have nothing to add except 

the comment that the Judiciary portion is to me very well crafted. 

The bigger problem is with trade agreements in general. I am part 

of that group that they just go through by one or two or three 

votes. I was one of those that was trying to let it not get through. 

The problem, the bigger problem is that with these trade agreements increasingly—and this was true in the previous Administration, maybe not to the same extent it looks like it’s going to develop 

now. But we are opening the gates to workers coming in to whom 

the standard of living that we enjoy is so different from theirs that 

it increases our unemployment. The other problem is that we have 

companies taking jobs and industry out at the same time—all of 

this under the rubric of free trade. Isn’t globalization wonderful. 

Well. And the only—the small thing I would like to do with the immigration portion that is before the Committee today is that we 

have a little amendment on line 23 at page 3 that says you can’t 

stay forever in this country once you come in without the numbers 

being counted against the cap of the country from which the immigrant comes. Not unreasonable. I mean, otherwise, we’re driving a 

huge hole into the whole concept of immigration because here you 

just come in and that’s it, you stay. Frequently you become a citizen or you become lost in the 275 million others. 

And so I’m happy to join with our Chairman and all of us in today’s markup. 

Chairman SENSENBRENNER. The gentleman from Texas, Mr. 

Smith. 

Mr. SMITH. Mr. Chairman, I move to strike the last word. 

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. SMITH. Mr. Chairman, thank you. 

I do want to point out that in both of these two trade agreements 

there are some good provisions, particularly those that have strong 

intellectual property protections, and we ought not overlook the 

fact that this is good for American industry, good for American 

high-tech companies to have these strong intellectual property protections in these two trade agreements. And in regard to those inVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00177 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
178

tellectual property protections, I think they do set a good precedent 

that we hope to establish in future trade agreements as well. 

Mr. Chairman, like you, I share your concerns about the immigration provisions in both these trade agreements, and I think that 

you have done as much as humanly possible to try to correct the 

problems with the immigration provisions. We are no longer going 

to have an indefinite category of a new visa. That is being corrected 

by the amendment. Hopefully in the future we will be able to send 

a message to the trade reps that we do not want a trade negotiator 

or the Administration establishing immigration policy, which is 

clearly the prerogative of the U.S. Congress. And I am glad that 

we have bipartisan agreement on that. 

Also, Mr. Chairman, I just want to point out that I’m not aware 

of any trade agreement in the last 12 years or so that has had 

these type of immigration provisions in it. So I’m glad that we can 

get back in the future to having trade agreements without immigration provisions and leaving those determinations, again, to be 

made by Congress. 

Mr. Chairman, I just want to say I appreciate very much all that 

you’ve done to negotiate with the—with Ambassador Zoellick and 

others to try to work out, as I say, the best compromise that I 

think is possible and that will establish a good precedent in the future for not having others determine what the immigration policy 

of the United States is. 

I will yield back. 

Chairman SENSENBRENNER. The gentleman from California, Mr. 

Berman. 

Mr. BERMAN. Well, thank you, Mr. Chairman. 

First, I want to echo the comments of our Ranking Member and 

Mr. Smith in praising you for, I think, standing up both for the jurisdiction of the Committee and for the powers of Congress in this 

context. I agree very much with—every once in a while, for reasons 

I’m never quite sure of, I find myself agreeing with Mr. Smith, the 

former Chairman of the Immigration Subcommittee, on these 

issues. And this is one of those times. 

The fact is, although in all fairness we can’t blame the Trade 

Representative this time for initiating something new, because I 

believe NAFTA and some of our other earlier agreements also had 

some immigration provisions in them which were not separately 

enacted by Congress but just stuck into the implementing legislation. But, Mr. Chairman, I was wondering if it would be possible, 

since this is a mockup and not a markup, and since what we do 

here are simply in the form of recommendations to the Trade Representative for the legislation that they will be presenting next 

week, which will come up at an up-or-down vote, to ask a representative of that office just to clarify a few of the questions that 

have gone on in the discussions so that there’s no doubt that when 

they prepare this legislation, we are all—we have a shared understanding of what that implementing legislation will look like before 

it’s too late and it can no longer be amended. 

So could I—only because this is not a regular——

Chairman SENSENBRENNER. Can we find out for the record if a 

USTR representative would like—since this is a mock markup—ordinarily we do not allow witnesses at a markup. But would a repVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00178 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
179

resentative of the USTR mind answering questions of Members of 

the Committee? 

Mr. BERMAN. In the spirit of the compromise which you have 

been—— Mr. CONYERS. A few friendly questions. 

[Pause.] 

Mr. BERMAN. I don’t know if ‘‘mind’’ should be the standard. 

Mr. Chairman, in the meantime, while they are making up their 

mind—— Chairman SENSENBRENNER. I see them nodding yes. 

Mr. BERMAN. Oh, okay. 

Chairman SENSENBRENNER. Could whomever wants to answer 

the questions sit at the witness table? Please identify yourselves 

for the record and I’ll swear you in. 

Mr. SHIGETOMI. Mr. Chairman, my name is Kent Shigetomi—— Chairman SENSENBRENNER. Could you press the mike button, 

please. 

Mr. SHIGETOMI. Mr. Chairman, my name is Kent Shigetomi. I’m 

from the Office of the U.S. Trade Representative. 

Chairman SENSENBRENNER. Is there anybody else with the USTR 

that will be testifying? 

Mr. POSNER. Mr. Chairman, my name is Ted Posner. I’m with 

the Office of General Counsel at the Office of the U.S. Trade Representative. 

Chairman SENSENBRENNER. Would both of you please stand and 

raise your right hands? 

[Witnesses sworn.] 

Chairman SENSENBRENNER. Let the record indicate that both 

witnesses answered in the affirmative. Mr. Berman, you have some 

questions. 

Mr. BERMAN. Yes, Mr. Chairman. As I understand it, Mr. King 

will be—I don’t know if it’s a manager’s amendment or it’s an 

amendment by Mr. King, but there will be an amendment, a mock 

amendment to this mocked-up bill being offered later. And my 

questions pertain to some of the fundamental issues that that 

amendment, I understand, will be trying to deal with. 

As I understand it, the W visas that were proposed in the proposed legislation will now become part of the H-1B—they’ll be H1B visas. Am I—is that correct? 

Mr. POSNER. Congressman, I should preface my response by saying I have not seen the text, but in concept, my understanding is 

that is what is intended. 

Mr. BERMAN. And does that mean that the fees that now apply 

to the H-1B program will apply to each of these individual visas 

as well? 

Mr. POSNER. That is my understanding. 

Mr. BERMAN. Okay. And that the fees collected, those fees will 

be allocated the way the H-1B visa’s fees are now allocated? 

Mr. POSNER. That is also my understanding. 

Mr. BERMAN. Okay. Secondly, the H-1B program has provisions 

with respect to replacing workers in a time of strike or lockout. 

And the H-1B law requires petitioning employers to attest that 

there is not a strike or lockout in the occupational classification 

that the visa holder will fill. Will that language now apply to these 

visas as well? 

180

Mr. POSNER. My understanding is that the employer, the intended employer, will make an attestation including elements substantively identical, including the item you just described, the no 

strike or lockout attestation. 

Mr. BERMAN. Say that one more time. 

Mr. POSNER. My understanding is that the substantive elements 

of the attestation that the employer will make will be the same as 

the H-1B attestation items, including the no strike or lockout attestation. 

Mr. BERMAN. Okay. Then on the issue of the renewals and the—

in effect, these visas—let’s just—it’s 5,000 for Singapore? 

Mr. SHIGETOMI. Five thousand four hundred for Singapore, 1,400 

for Chile. 

Mr. BERMAN. Five thousand one hundred——

Mr. SHIGETOMI. Five thousand four hundred——

Mr. BERMAN. Five thousand four hundred for Singapore, 

5,100——

Mr. SHIGETOMI. One thousand four hundred for Chile. 

Mr. BERMAN. And to the extent those visas are allotted in any 

given year, they will come off the H-1B overall cap for that year? 

They will come out of that cap? 

Mr. POSNER. That’s my understanding. 

Mr. BERMAN. Okay. And then the issue of the renewals, those 

visas as to Singapore and Chile, unlike the H-1B visas, as I understand the negotiated agreement, they are permitted an infinite 

number of annual visa renewals. Is that—not infinite. As long as 

the person and the—is it the employer who keeps petitioning for 

the annual renewal, or is it the visa holder who petitions for the 

renewal? 

Mr. SHIGETOMI. Congressman, I should preface my remarks by 

saying I haven’t seen the actual text of the amendment. 

Mr. BERMAN. Conceptually. We’re talking——

Mr. SHIGETOMI. One difference I would point out is that under 

the implementation of the entry for Singaporeans and Chileans, 

there would be no petition. In fact, petitions are not permitted 

under the terms of the—of both free trade agreements. 

Mr. BERMAN. There would be an attestation, but not a petition. 

Mr. SHIGETOMI. That’s correct. 

Mr. BERMAN. All right. But the granting of the visa would come 

out of the H-1B cap? 

Mr. SHIGETOMI. That’s correct. 

Mr. BERMAN. All right. Now the question of the renewal of the 

visa. Somebody has to initiate that renewal. Who is it, the employer or the employee? 

Mr. SHIGETOMI. Well, there are certain elements that fall to the 

responsibility of the alien and certain that fall to the responsibility 

of the employer. Only the employer can make the attestation, and 

it’s my understanding that the attestation would be—a new attestation would be required after 3 years. 

Mr. BERMAN. That’s under H-1B? 

Mr. SHIGETOMI. And under the operation of this proposed program. 

Mr. BERMAN. But I understand that the agreement that was negotiated allows an annual renewal——

181

Mr. SHIGETOMI. Oh, I’m sorry, sir. That was for the attestation 

of compliance with U.S. labor laws. 

Mr. BERMAN. I am not——

Mr. SHIGETOMI. For the period that the alien is in the United 

States, there is nothing in the text of the agreement that mandates 

a specific time. It was our understanding that the program would 

operate in a manner similar to the NAFTA TN professional system 

under which an alien is permitted an initial stay of 1 year and 

then an extension granted in 1-year increments thereafter. 

Mr. BERMAN. I think the thing the Committee should be aware 

of is that under the H-1B program you’re entitled to 3 years——

Mr. SHIGETOMI. For an initial stay. 

Mr. BERMAN. For an initial stay, and one renewal, for a maximum of 6 years under the H-1B status. Here, you—the plan is to 

have annual renewals with no limit for this non-immigrant temporary visa program. It could be—it could be perpetual. Is that 

right? 

Mr. SHIGETOMI. Again, I should preface my remarks by saying I 

haven’t seen the text of the amendment, but any alien who seeks 

entry under this category would still be required to comply or 

meet—overcome the presumptions of an immigrant intent that are 

established in another section of the Immigration and Nationality 

Act. So all of the exclusions, the rights, or privileges that apply to 

non-immigrants would also apply to aliens. 

Mr. BERMAN. My only point is, were this Committee to adopt an 

amendment that said—it gets complicated. The way it works under 

the H-1B program is you have an annual cap of a hundred—what 

is it now?—190——

Mr. SHIGETOMI. Five thousand. 

Mr. BERMAN. A hundred ninety-five thousand. The renewals 

don’t count against the cap. If there were a provision that said renewals after 6 years for these sub-quotas inside the cap for Singapore and Chile, if the renewals were to count against the H-1B cap 

after 6 years, would that in any way violate the provisions of this 

agreement? It would not? 

Mr. SHIGETOMI. Congressman, that would create a problem. 

Mr. BERMAN. Why? 

Mr. SHIGETOMI. Under both agreements there is language—I’ll 

just read it to you. This is from the Singaporean text under Appendix 11A.3: ‘‘Beginning on the date of entry into force of this agreement, the United States shall annually approve as many as 5,400 

initial applications of businesspersons.’’ And then in paragraph 2, 

subparagraph (a), ‘‘The United States shall not take into account: 

(a), the renewal of a period of temporary entry.’’

Mr. BERMAN. I’m aware of that. But if the amendment were simply to say that after 6 years the renewal of a period of temporary 

entry would count—would count—6 consecutive years, would count 

against the H-1B cap, that is not a prevention of renewals. It 

doesn’t violate the agreement. It simply says in the seventh year 

it——

Mr. SHIGETOMI. It would count against——

Mr. BERMAN. It would count against the overall H-1B cap. It 

wouldn’t in any way violate the agreement. It would simply limit 

the other visas that could be granted under H-1B. 

182

Mr. SHIGETOMI. I think I understand your point now. So you’re 

saying that in the—after the 6-year period, in the seventh year 

that extension would count against the H-1B cap and not against 

the separate cap established. 

Mr. BERMAN. That’s right. 

Mr. SHIGETOMI. I’m not an attorney, sir, but that would not seem 

to be in conflict with the terms of the free trade agreement. 

Mr. BERMAN. All right. Then are we——

Chairman SENSENBRENNER. The gentleman from Iowa would like 

to offer an amendment now. Do you have an amendment at the 

desk? 

Ms. JACKSON LEE. Excuse me. Are we allowed to have opening 

remarks or what? 

Chairman SENSENBRENNER. Wait a minute. 

Mr. KING. Mr. Chairman, I have an amendment, an amendment 

at the desk. 

Chairman SENSENBRENNER. The clerk will report the amendment. 

The CLERK. Amendment to the draft implementing legislation for 

the United States-Chile Free Trade Agreement, offered by Mr. 

King. Page 2——

Chairman SENSENBRENNER. Without objection, the amendment is 

considered as read. 

[The amendment follows:]


A2738A.eps
183

Chairman SENSENBRENNER. The gentleman from Iowa will be 

recognized for 5 minutes to explain his amendment. 

Mr. KING. Thank you, Mr. Chairman, and ladies and gentlemen 

of the Committee, much of this amendment has been discussed. I’d 

like to preface my remarks on the amendment with a philosophy 

on immigration, which is I believe the United States of America 

needs to continue to develop an immigration policy that’s designed 

to enhance the economic, the social, and the cultural well-being of 

the United States of America. That should be our endeavor here in 

this Committee and in this Congress, and, in fact, we have a constitutional authority and a constitutional obligation to provide that 

policy to the Administration rather than have the Administration 

provide the policy to Congress for our ratification. And I am a 

strong supporter of free trade and a strong supporter of trade promotion authority, although I do not believe that it was the intent 

of Congress to consider trade and immigration as part of those negotiations, and that’s the effort here in this Committee, is to help 

the Administration have some guidance on limitation of what you 

might be negotiating with free trade. 

This amendment then before us today takes the new W category 

for immigration that’s been negotiated, particularly this first 

amendment with the Chile agreement, and rolls that new category 

of the W into a new subcategory under H-1B called H-1B2. And it 

just simply limits the number under the cap, the existing cap of 

195,000 that’s there for H-1B, and it will statutorily roll back to 

65,000 sometime later this fall. 

So it is exactly as described by the Committee and announced by 

the Chairman, and I’d point out also that the H-1B program is one 

of the best programs that we have with—immigration program because it is designed to go out and identify highly skilled, highly talented people who can come into this economy and make a positive 

contribution right away. I believe it has some flaws in it that at 

some point we will need to address in another bill on another issue 

down the road a few months. But what’s in front of us today is this 

amendment that simply rolls the W category underneath the H-1B, 

sets up a new subcategory of H-1B2, and that I think is the intent 

of this Committee, and I’m asking——

Mr. NADLER. Would the gentleman yield for a question? 

Mr. KING.—for your support on this amendment. I will yield. 

Mr. NADLER. I really don’t understand what you’re trying to do. 

How does that differ from what the Chairman outlined in the 

Chairman’s amendment? 

Mr. KING. I’m not aware there was a Chairman’s amendment before us, but it’s consistent——

Mr. NADLER. Never mind. Thank you. 

Mr. KING. You’re welcome. 

That would conclude my remarks, and I’d yield back. 

Mr. CONYERS. Mr. Chairman? 

Chairman SENSENBRENNER. I am going to recognize myself for 5 

minutes at this point. 

I support the King amendment, and I think the important thing 

to note in the King amendment is that the new visas that have 

been negotiated as a part of both the Singapore and the Chile Free 

Trade Agreement will not result in an increase in the total number 

of visas that will be allowed on a worldwide basis, meaning that 

184

the 5,400 for Singapore and the 1,400 for Chile will come under the 

existing H-1B cap, be subject to the same fee, which is $1,000 for 

applications, and will also be subject to the labor attestation provisions and the anti-strike and lockout provisions that are contained 

in H-1B. 

So what this amendment does is decouple immigration policy 

from free trade policy. I don’t think it ever should have been 

merged. It was merged in the past. I think that we’re decoupling 

this in the future. And I intend to support this amendment. 

I also intend to support an amendment that will shortly be offered by Mr. Conyers to make sure that renewals go against the 

worldwide cap on H-1B visa, and according to the testimony of the 

USTR representative, the Conyers amendment will not conflict 

with either the Chile or the Singapore Free Trade Agreement. 

With that, I yield back the balance of my time, and for what purpose does the gentleman from Michigan seek recognition? 

Mr. CONYERS. Mr. Chairman, I have that amendment. 

Chairman SENSENBRENNER. The clerk will report the amendment. 

Mr. CONYERS. It’s the Conyers-Berman amendment now. 

Mr. GOODLATTE. Point of order, Mr. Chairman. Is that an amendment to this amendment? 

Chairman SENSENBRENNER. Yes, it is. 

The CLERK. Mr. Chairman, I don’t have a copy. 

Chairman SENSENBRENNER. Would the——

The CLERK. Amendment to the draft implementing legislation for 

the United States-Chile——

Mr. CONYERS. No, that’s not the right one. 

The CLERK. Amendment to draft implementing legislation for the 

United States-Chile Free Trade Agreement, offered by Mr. Conyers. 

Page 3, line 23, strike the quotation——

Chairman SENSENBRENNER. Without objection, the amendment is 

considered as read. 

[The amendment follows:]

185

Chairman SENSENBRENNER. And the gentleman from Michigan is 

recognized for 5 minutes. 

Mr. CONYERS. Thank you. Mr. Chairman and Members of the 

Committee, after talking this over with the Chairman, Howard 

Berman, and Perry Applebaum, what are we trying to do with the 

amendment to the amendment, the King amendment, which I support? Well, it’s because we’ve supported in the past H-1B extensions and renewals, but we always know at the end of the day that 

the stay of the aliens would be temporary and would be subject to 

a cap. That protection is not contained in the bill as it’s currently 

written, and so all we do is make that important. And all of you 

who are concerned about the labor, domestic labor aspects, this 

would be very important. 

It’s a kind of a loophole in the bill that we’re correcting because, 

as currently written, individuals could come into and remain indefinitely and not count against any subsequent overall annual cap 

once they’re given entry. So we fixed the problem by providing that 

any extensions beyond 6 years count against the H-1B cap in that 

year. And we think that’s very fair, and I would yield to the gentleman from California. 

Mr. BERMAN. I thank the gentleman for yielding, and I think he 

just expressed it exactly the way it is. This is consistent with the 

whole premise of the H-1B program, which is to have an annual 


A2738B.eps
186

cap that allows people to stay here for 6 years, and by this amendment it will be consistent with it and won’t violate the underlying 

agreement reached between the two countries, or the three countries in this case. I support it. 

Mr. WATT. Mr. Chairman, might I make a parliamentary inquiry? 

Chairman SENSENBRENNER. State your inquiry. 

Mr. WATT. I’m a little confused about what it is we’re marking 

up. Are we marking up the King amendment as the underlying bill, 

the thing that was given out yesterday? Is Mr. Conyers’ an amendment to King’s? 

Chairman SENSENBRENNER. Okay. The answer to the gentleman’s parliamentary inquiry is the base bill is the draft implementing legislation, which was given to the Members yesterday. 

That. 

Mr. WATT. All right. 

Chairman SENSENBRENNER. Mr. King has an amendment to the 

draft implementing legislation. Mr. Conyers’ amendment is an 

amendment to the King amendment. 

Mr. WATT. All right. May I make a further—I think I understand 

substantively what we’re doing. I just—— Chairman SENSENBRENNER. The questions will be put as follows: 

the adoption of the Conyers amendment to the King amendment, 

the adoption of the King amendment, presumably as amended, 

then the draft implementing legislation. The immigration provisions of it are open to further amendment, and then we would 

make a recommendation to the USTR to make these changes in his 

draft implementing legislation. And then we will be back here next 

week to deal with the actual formal markup. 

Mr. WATT. Thank you, Mr. Chairman. 

Chairman SENSENBRENNER. Okay. The question—— Mr. GOODLATTE. Mr. Chairman? 

Chairman SENSENBRENNER. For what—the gentleman from Virginia, Mr. Goodlatte. 

Mr. GOODLATTE. Move to strike the last word. 

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

I first want to comment you for making the best of a very difficult situation, and I want to thank the them from Michigan, the 

gentleman from Iowa, and others who’ve worked in a bipartisan 

way to try to resolve this problem. 

The real problem here is not what I consider to be bad immigration policy. It is bad immigration policy. The real problem here is— as the gentleman from California has noted, this is a mock markup, and what we’re trying to do is to avoid making a mockery of 

the jurisdiction of the United States Congress that we’ve inherited. 

And I also want to make it very clear to our friends from the 

U.S. Trade Representative’s office that I know that this is something that’s been going on for a long time, and I don’t hold them, 

those here today, personally accountable for this. But I hope they 

can see from what we’ve been put through in the last few days and 

the Chairman’s been put through for the last few months that this 

is a major, major insult to the United States Congress. That is exactly what we’re confronting here. This has no business being in 

187

trade agreements of the past, certainly not in this one, and quite 

frankly, all we’re able to do today is try to patch together a bad 

situation and then send it down to the Trade Representative, hope 

that’s the understanding that he reached with the Chairman, and 

that it’ll come back in that form when we get it back from the 

USTR next week. 

So we’ll have to see what we get from them and reserve judgment on that before we make any final decision on how to proceed. 

And all of that’s a shame because these are good free trade agreements. As the gentleman from Texas noted, there are good provisions in here promoting trade in a whole host of areas between 

countries in which we have a great deal of interest in increasing 

exports and allowing our American consumers to have choice of 

new goods from these countries. 

But to add this to the process is very, very problematic, and 

I——

Mr. BERMAN. Would the gentleman yield? 

Mr. GOODLATTE. I will yield in just a minute. I would hope that 

the Chairman’s assurance that his discussions with the U.S. Trade 

Representative will lead to this not occurring again in the future, 

will be very strongly and carefully heeded. And I would like to ask 

the USTR representatives what their understanding is of future 

trade negotiations that the USTR may be presently involved in or 

intending to be involved in in the future with regard to changing 

U.S. immigration policy. 

Mr. SHIGETOMI. Congressman Goodlatte, my experiences here for 

the last 2 days have made it perfectly clear what the views of this 

Committee are in this particular aspect of trade negotiation. 

Mr. GOODLATTE. You don’t need to tell me what the views of the 

Committee are. I want to know what the views of the U.S. Trade 

Representative are on this issue. 

Mr. SHIGETOMI. Congressman, I am not in a position to address 

the views of my agency with regard to the other trade negotiations 

that we’re undertaking. 

Mr. GOODLATTE. Well, I would hope that you would convey to the 

Representative that before I cast my vote on these agreements, 

which I’ve already stated have much merit—as the Chairman of 

the Agriculture Committee, I’ve looked at the provisions related to 

agricultural trade, and while there is not unanimity of support for 

them, there’s a great deal of comfort in the United States on these 

being well negotiated in that regard. But prior to that, I hope to 

receive that assurance from the U.S. Trade Representative that 

we’re not going to see this in future trade agreements. 

Mr. NADLER. Would the gentleman yield? 

Mr. GOODLATTE. I would be happy to yield to the gentleman from 

New York. 

Mr. NADLER. Thank you. I just wanted to say that I would hope 

the U.S. Trade Representative would take from this little colloquy 

the fact that if there are such provisions in this trade agreement 

when it finally comes down to us or in future trade agreements, 

you run a real risk of not having the trade agreement agreed to 

because an immigration provision is a real—and after this Committee has made its opinion clear, a studied and deliberate insult 

to the Congress, which many people who might support those trade 

agreements on the merits would not stand for. 

188

I’ll yield back. 

Mr. BERMAN. Would the gentleman yield? 

Mr. GOODLATTE. The gentleman from California—— Mr. BERMAN. I ask unanimous consent for the gentleman to have 

one additional minute. 

Chairman SENSENBRENNER. Without objection. 

Mr. BERMAN. Thank you. I thank the gentleman for yielding. 

Let’s just clarify one point. First, just as a preface, it is not this 

Trade Representative who started the insults. 

Mr. GOODLATTE. I—reclaiming my time, I fully agree with that 

and thought I had indicated that. 

Mr. BERMAN. Oh, okay. But what I would—to look at this as 

half-full rather than half-empty, this is the first time this Committee has pushed back. And as I understand it—and let’s just 

clarify that. As to these two agreements, my understanding is that 

it is subject to technical corrections and those kinds of things that 

frequently come up after an amendment’s adopted. It is my understanding that it is the intention of the Trade Representative in proposing the implementing legislation which we will be seeing next 

year to reflect the—next week, I mean, the agreements that you 

have already discussed and that are reflected in the King amendment, now amended, soon to be hopefully amended by the Conyers 

amendment. 

Mr. CONYERS. Mr. Chairman, could the gentleman from Virginia 

get 30 seconds additional? 

Chairman SENSENBRENNER. Without objection. 

Mr. CONYERS. I’d like to scare these two guys a little bit more 

during that time. [Laughter.] 

Mr. CONYERS. They’re such fine fellows. Obviously some of these 

questions may be slightly below their pay grade. But here’s the 

problem, men, is that these are relatively small trade agreements, 

Chile and so forth. But we know that around the corner entire continents may be involved in massive situations like the one before 

us. And this would have incredible implications in terms of our immigration law, and that’s the point. 

So, so nice of you being here. 

Mr. WATT. Mr. Chairman? 

Chairman SENSENBRENNER. The gentleman from California 

wants a direct answer to the question that he asked, which we’ll 

put on the record. 

Mr. POSNER. Right. Thank you, Mr. Chairman. With respect to 

recommendations by the Committee that the USTR can agree to, 

there are certain provisions, including the provisions of the King 

amendment, that were discussed among staff of the Committee and 

staff of USTR, which it is my understanding we are prepared to 

agree to. The provisions of the Conyers amendment to the King 

amendment is not one that we have discussed, and so I’m not prepared at this time to say one way or the other whether the agency 

would be prepared to accept it. 

Mr. CONYERS. Bring out the leg irons, then. That’s it. [Laughter.] 

Mr. GOODLATTE. Would the gentleman yield? 

Mr. BERMAN. Well, it’s your time, but I’d just like—but as—I’d 

just like the record to show that as to the—what we have described 

as the Conyers amendment—you’ll be able to analyze it—I think 

we’ve had a statement from the office, from your office, that that 

189

does not violate the underlying agreements, that its impact is on 

the overall H-1B quota, cap in the seventh year. 

Mr. POSNER. If I could just make one point of clarification on 

that. It is correct to the extent that it doesn’t draw down the agreement-specific cap, it is not a violation of the agreement. If you had 

a particular factual situation in a given year where you were not 

able to renew a Singaporean or a Chilean citizen’s stay under this 

W category because the H-1B cap had already been exhausted, in 

that particular—in that particular factual scenario, I can’t say definitively that we would not in that case be violating the agreement. 

What I’m saying—what we intended to say previously is that 

nothing about the amendment appears to us per se to violate provision of the agreement to the extent that you’re not drawing down 

the 5,400 or 1,400 cap. So if I could just have that clarification on 

the record. 

Ms. LOFGREN. Mr. Chairman? 

Chairman SENSENBRENNER. I believe the time of the gentleman 

from Virginia has expired. 

Ms. LOFGREN. Mr. Chairman? 

Chairman SENSENBRENNER. The gentlewoman from California, 

Ms. Lofgren. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

First, I would like unanimous consent to make a part of the 

record several letters that were exchanged between Congressman 

Boucher and myself and the USTR relative to the IT provisions. It’s 

not before us today, but I’d just like to make that—— Chairman SENSENBRENNER. If the gentlewoman from California 

would yield, this is a mock markup. 

Ms. LOFGREN. I understand. 

Chairman SENSENBRENNER. We will not be filing a Committee 

report following this markup. This is kind of advice to the USTR 

on what to put in the bill that we’ll be marking up next week. 

Ms. LOFGREN. So I’ll save these for next week. 

Chairman SENSENBRENNER. And I think the proper time—you 

know, if you want this to be preserved and read forever and 

ever——

Ms. LOFGREN. That’s my goal. 

Chairman SENSENBRENNER.—is to ask UC next week, and I have 

no objection to doing that. 

Ms. LOFGREN. I will do that, then. 

On the issue before us——

Mr. BERMAN. Would the gentlelady just yield on this first point 

first? 

Ms. LOFGREN. Yes. 

Mr. BERMAN. Would it then be appropriate to say that we want 

to—some of us on the Committee want to congratulate the Representative for the intellectual property provisions? Is this the appropriate time? 

Ms. LOFGREN. No. That will be next week. 

Mr. BERMAN. Next week I will——

Ms. LOFGREN. Reclaiming my time, I want to talk about—I voted 

against the fast-track bill last year because I was afraid that this 

would happen, and I was right. You know, the Ways and Means 

Committee doesn’t know anything about matters within our jurisVerDate Jan 31 2003 19:43 Jul 22, 2003 Jkt 088455 PO 00000 Frm 00189 Fmt 6659 Sfmt 6601 E:\HR\OC\HR224P2.XXX HR224P2
190

diction. And I was focusing on antitrust, but the—I’ll just say that 

the drafting of these immigration provisions is defective in my 

judgment. They’re poorly drafted. They’re not well thought out. 

And because the numbers are small, it’s not going to prevent us 

from passing these agreements. But if this a template for the future, you’re not going to have any trade agreements, because we 

know that there are many—there are many in the labor community 

who oppose these free trade agreements. There are many people 

who are very concerned about immigration. You’re not going to 

have any free trade agreements if you don’t stop doing this. And 

I think it’s important that you understand that. 

What I object—and I’ve spent a lot of time on immigration. I 

used to teach immigration law. I’ve been on the Immigration Subcommittee for many years. What we’re going to end up doing is 

skewing a program that is supposed to bring the brightest people 

in the world to the United States to help our country. And what 

we’ve said is now, you know, 10,000 of those people must come 

from two little countries. Well, maybe we don’t have Ph.D.s in astrophysics from Chile and Singapore. So you’re really messing up 

a program that should charge the economy. 

If we do this down the road with whole continents, you’re going 

to seriously disrupt the technology economy of the United States, 

and I think that’s a big problem. 

So I would just hope that we—out of this public session we can 

have a sit-down with people who work on this stuff with the USTR 

and make sure that you don’t continue to cause problems for our 

country by faulty and defective drafting of these agreements. 

I understand that we will have a proposal—it’s an up-and-down 

vote on the trade agreement, but I think you’re in very—you may 

lose this even with these amendments that are being proposed. 

And I think, you know, this isn’t the first time. When I went to do 

some reforms on the H-1B program, I found out—I mean, I was 

stunned—that the WTO got there first and that we were constrained on what we could do in reforming the H-1B program. 

There are still some things that I think we need to do on the H1B program that I wanted to do when we last touched the agreement in terms of protections for employees and the like. 

I think that the—what you’ve done on this agreement, I’m sure 

with the best intentions in the world, has even caused problems in 

that arena. 

So I would just like to counsel the USTR, number one, not to be 

negotiating matters that are really within the purview of this Committee, and certainly not to do so without a full communication, not 

just with the Chairman and Ranking Member, but with the Members of the Committee who in many cases have spent several decades working on these issues and actually know quite a bit about—

I don’t want to just say myself, but Mr. Berman and Ms. Jackson 

Lee and others on the other side of the aisle who actually know 

something about this more than you do, because you’ve made a 

mess of this, I must say. 

And I yield back my time. 

Chairman SENSENBRENNER. The gentleman from Indiana, Mr. 

Hostettler. 

Mr. HOSTETTLER. Mr. Chairman, I ask to strike the last word. 

191

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. HOSTETTLER. Mr. Chairman, I want to commend Mr. Conyers and Mr. King for their amendments, and I support them. And 

I want to also commend the representatives here today from the 

U.S. Trade Representative and your willingness to help us in this 

process. It’s very encouraging that—you did not have to testify. You 

did not have to answer our questions on the record. But you chose 

to, and that’s very helpful and we want to thank you for that. 

Mr. Chairman, I want to commend you and the gentleman from 

Virginia and the gentleman from Texas as well as the gentleman 

from Iowa and the gentleman from Michigan for jealously guarding 

the prerogatives not only of this Committee but of this Congress in 

our constitutional obligations. You are in a sense, this Committee 

is in a sense today attempting to put the genie back in the bottle, 

because, as has been pointed out several times today, this U.S. 

Trade Representative was simply working from a template of previously agreed-to agreements, not only between the United States 

and other countries but of this United States Congress. And so I 

don’t hold these folks at any fault because they did it before, we 

did it before—I guess I should say that Congress did it before, and 

so they were simply working on that assumption that it would be 

okay to continue this. 

But just as this Committee is jealously guarding our constitutional prerogatives with regard to article I, section 8, when it says, 

‘‘Congress shall have power to establish a uniform rule of naturalization,’’ I would hope that at some time in the future that the 

entire Congress would once again re-establish our primacy when it 

comes to trade agreements in general, because in the same Constitution, in the same section of that Constitution, article I, section 

8, it says that ‘‘Congress shall have power to regulate commerce 

with foreign nations.’’ We are delegating that power to the executive branch with every 

single trade agreement that we do. Every time we pass what has 

previously been referred to as fast-track, now as trade promotion 

authority, we are essentially ceding them the legislative authority 

to fashion law for this country, and then they are granting us the 

law that we pass—I should say trade promotion authority grants 

us essentially a veto authority, turning the constitutional prerogatives and obligations on their head. They fashioned the law. They 

fashioned the policy. And all we get to do, because, as we said earlier, this is a mockup and not a markup, we basically get an upor-down vote in the House of Representatives. So we can either 

veto the bill or we can—we can essentially put the bill into law, 

even though the President has to sign our piece of legislation afterwards. 

And so I would hope that in our discussion today that we go from 

this point and as a Committee we maybe make the case to the rest 

of the Congress that we are trying to do our part with regard to 

immigration law, antitrust law, intellectual property law, and that 

maybe the rest of the Congress should do our job into making the 

case that maybe Congress is capable of regulating commerce with 

foreign nations since the Framers of the Congress—Framers of the 

Constitution gave us that obligation over 200 years ago. 

And I yield back the balance of my time. 

192

Ms. JACKSON LEE. Mr. Chairman? 

Chairman SENSENBRENNER. The gentlewoman from Texas, Ms. 

Jackson Lee. 

Ms. JACKSON LEE. Mr. Chairman, thank you very much. I want 

to add my appreciation to the Chairman and the Ranking Member 

for demanding jurisdiction on this question or oversight over this 

trade deal that has become a legislative initiative. And I’d like to 

emphasize that the agreements that we are looking at are simply 

that. They are deals. And when you’re in negotiations, two nations 

are dealing—dealing on matters of who can benefit the most or, as 

they say, it’s a lot of horse trading. And I think it’s very difficult 

to horse trade on a very technical area of the law and area of responsibility of the Congress such as immigration. 

And I want to cite to you gentlemen—and I assume that there 

is a record—that one of the difficulties we have or that I have with 

this process and with the fact that immigration policies are included in a trade deal is that we have throngs of individuals who 

are in line to access legalization, who are proceeding through a 

process to achieve legal status and permanent status. These are 

temporary statuses. And they’re waiting years and years because 

of backlog to be able to enter into this country or to be able to 

achieve either legal permanent resident status or citizenship. 

And then we have an additional burden that I believe this Committee and this Congress has abdicated its responsibility, and that 

is, of course, to deal with the throngs of others who are in this 

country that may have entered illegally, but many of us know are 

working, paying taxes, and we should develop policies to allow 

them to earn access to legalization. That is certainly an issue beyond the jurisdiction—not the jurisdiction but the discussion today. 

But I raise it only because I’m concerned about this temporary 

status that goes on and on and on, and as I recall—and I’d appreciate it if the witnesses could listen while I’m speaking. I listened 

to the inquiry being made by Congressman Berman, and I’m not 

clear on the answer. It goes to the amendment that is before us, 

and that is the temporary annual renewal of the visas that would 

be allowed. I think you said 5,000 from Singapore and 1,400 from 

Chile. And my question is: Are we still at that point where they 

are annually renewed, even with this amendment? I didn’t understand. This means that these are 1-year visas, if I understand 

them, and they’re temporary, but they are renewed every year and 

there’s no—there’s no ending time. Is that correct? 

Mr. SHIGETOMI. Congresswoman, my understanding is that each 

extension would be granted in 1-year increments. 

Ms. JACKSON LEE. Right. 

Mr. SHIGETOMI. By virtue of its inclusion as a—by virtue of its 

classification as a non-immigrant, these aliens would be subject to 

the same grounds of exclusions, rights, responsibilities, and privileges as all other classes of non-immigrants. As a result, they are 

held to the same standard as any other non-immigrant. 

Ms. JACKSON LEE. And I appreciate that you are not well versed 

in immigration law, and I appreciate your attempting to answer 

the question. What I am suggesting is, are you—I understand criteria and standards, but am I to understand that the provision suggests that you can renew and renew and renew and renew, as long 

193

as you meet the standards, but it could be 12 years and you could 

still be here on that visa? Is that my understanding? 

Mr. SHIGETOMI. That’s theoretically possible, yes. 

Ms. JACKSON LEE. Then what I would say to my colleagues, I 

find that totally unacceptable. And because I juxtapose it against 

our responsibilities with respect to immigration policies, immigration—or applicants for immigration status, and also the H-1Bs, as 

I understand the present structure, is you have a 3-year and then 

you have a renewal. And as my colleague said from California, 

those were based upon a certain expertise that you brought. 

I am making no speculation of the expertise in Chile or Singapore. I am sure there are an enormous number of individuals who 

qualify for H-1B, but they’re not coming in under H-1B. 

So I would simply say that I have a—I take great umbrage with 

the process. I, too, celebrate my vote in opposition to the free trade 

act, the speed trade act, because I believe it’s very important that 

these issues not be unaddressed. 

I would also ask you to take back a message that they have 

made a large mistake in adding this to the trade legislation. 

I’d ask for an additional 1 minute. 

Chairman SENSENBRENNER. Without objection. 

Ms. JACKSON LEE. And I believe that we can move further, if you 

will, with the understanding that there is great difficulty in this 

process. When we hear—when Members hear that you have a perpetual 1-year renewal, regardless of whether or not they meet criteria, it certainly begs the question of the difficulties we have. I’ll 

do that in just a second. 

I would like to also suggest to my colleagues that I will have an 

amendment that I hope to gain support, even though one suggests 

that it might be in, and that is the distribution of the user fees. 

I think it’ll be very helpful to give instruction on the user fees that 

may be offered in terms of the immigration process. I hope to offer 

it in a moment. I’d be happy to yield to the distinguished 

gentlelady. 

Ms. LOFGREN. If I—and I thank the gentlelady for yielding. I just 

think it’s a huge mistake to have a temporary visa that theoretically could go on for 25 years. I mean—or 50 years. You know, we 

have a temporary visa program. It serves a purpose. But it’s limited. And if somebody’s going to come here and live for 20 years, 

they should meet the labor certification standard, they should 

apply just like any other immigrant. This is a huge problem. It’s 

fraught with abuse. The potential for abuse of individuals is huge. 

And I just think it’s a huge mistake. And if you bring this to the 

floor without changing that, I mean, I think you risk having this 

thing come down. 

Chairman SENSENBRENNER. The time of the gentlewoman has expired. 

Mr. COBLE. Mr. Chairman? 

Chairman SENSENBRENNER. The gentleman from North Carolina, 

Mr. Coble. 

Mr. COBLE. Mr. Chairman, move to strike the last word. 

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

194

Mr. COBLE. Mr. Chairman, I realize that the King and the Conyers amendment are before us, but you’ve been very generous procedurally. I’d like to make a general comment or two. 

First of all, I want to associate with the remarks made by Mr. 

Berman and Mr. Smith regarding the intellectual property feature. 

I’m pleased that that received a good amount of attention in this 

bill. 

When the appropriate time comes, Mr. Chairman, to send this 

bill to the floor, I will vote to send it to the floor because I think 

it deserves full floor attention. 

I am concerned, however, that most of these—well, strike that. 

Many of these—some of these trade amendments initiated by Democrat administrations as well as Republican administrations 

strongly emphasize free trade, but fair trade oftentimes is conspicuously missing. And I hope that’s not the case with this bill. I’ll dig 

into that more in more detail. But when fairness is omitted in the 

scenario, it oftentimes works to the detriment of U.S. manufacturers. I’m talking textiles, furniture, et cetera. 

But I repeat, Mr. Chairman, when the appropriate day comes to 

send it to the floor, I will vote to send it to the floor. I don’t know 

how I’ll do at that point, but it’s good to have you all—— Ms. JACKSON LEE. Would the gentleman yield? 

Mr. COBLE. I will yield. 

Ms. JACKSON LEE. I thank the gentleman very much. You were 

mentioning intellectual property, but I wanted to finish on a point 

that somewhat ties to the comment of intellectual property, just to 

explain why I have such difficulty in this perpetual visa, Mr. Coble, 

is that we’re having difficulty in even getting research scientists for 

some of our institutions of higher learning and research institutions to be able to get visas to come into the country post-9/11. 

We’re also having difficulty, coming from Texas—and I know others who have medical centers such as the Texas Medical Center— where patients who are attempting to come in for unique and particular services at our medical facilities, who typically have been 

able, or previously to 9/11 been able to achieve visas are not able 

to get them, some to the extent where we’re hearing indications 

that patients have died waiting for a visa to come into this country 

for legitimate medical treatment. 

Mr. COBLE. Ms. Jackson Lee, if you would suspend, I need to 

make another point. 

Ms. JACKSON LEE. I’d be happy to suspend. 

Mr. COBLE. If you want to wrap up quickly. 

Ms. JACKSON LEE. All right. I would beg you to take this message back that what you do when you put a perpetual visa alongside of individuals who have decided needs and then Americans 

who have decided needs for them to be here, it makes it a very difficult mountain to climb. And I think these provisions should not 

be in there, and I think there should be some modification. 

I yield back to the gentleman. 

Mr. COBLE. Let me reclaim my time. I just want to reiterate 

what’s already been suggested from both sides of the aisle. This is 

a bad precedent to lump—and I’m not blaming you gentlemen—to 

lump immigration matters into a trade bill. And I hope that can 

be avoided subsequently. 

And I yield back, Mr. Chairman. 

195

Chairman SENSENBRENNER. The question—or the gentleman 

from California has a modification he wishes to propose to the Conyers amendment. 

Mr. BERMAN. Thank you, Mr. Chairman. I guess I’d ask unanimous consent that the—that on line 4 of the Conyers amendment, 

the number 6 be replaced by the following: 5 or more. 

Chairman SENSENBRENNER. Without objection, the modification 

is agreed to. The question is—— Mr. WATT. Mr. Chairman? 

Chairman SENSENBRENNER. The gentleman from North Carolina, 

Mr. Watt. 

Mr. WATT. Move to strike the last word. 

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. WATT. I will try not to take the 5 minutes because it’s quite 

obvious the Chairman doesn’t want to hear me since he passed on 

me several times trying to get recognition. But I wanted to make 

a couple of comments. 

Number one, to seize the historic opportunity to be on the same 

side of an issue with Mr. Hostettler, which doesn’t happen very 

often. 

Number two, to say that I generally agree with most of the comments that have been made about the substance of what’s being 

done here. 

But, number three, to—and I’m the last person that ought to be 

trying to defend the U.S. Trade Representative’s office—to make it 

clear that this is a logical result when you support fast-track legislation. 

I mean, I—you know, it’s like these people have done something 

outrageous. This is like what you get when you pass a law and you 

leave the details to be written by the regulators. This is what you 

get when you pass fast-track, and then they take the authority that 

they’ve been given under fast-track and come back to you, and then 

you say, well, I’m praising you for what I agree with, which is the 

intellectual property part of it, because I consider that trade, yet 

I’m absolutely condemning you for the other parts of it that I don’t 

agree with. 

There is no way you’re going to be able to get off of that slippery 

slope. And so the problem from my opinion all along with Democratic administrations and Republican administrations is that this 

is our authority as a Congress. And we shouldn’t be delegating it 

under fast-track to the Administration. And if we do delegate it, 

then I think you’re going to get exactly the same result in the future that you got this time. I mean, this is just—these people are 

just doing the job you told them to do. They’re going and negotiating an agreement, and I’m even surprised that we’re back here 

a week early to even get consultation on it as opposed to being here 

next week with the agreement already done and saying either vote 

it up or down, which has been historically the precedent that’s been 

followed. 

So this righteous indignation that we’re expressing up here is a 

little misplaced, in my opinion. Although I agree with the content 

of the righteous indignation, I just take issue with our right to be 

righteously indignant in this circumstance. 

Mr. BERMAN. Would the gentleman yield? 

196

Mr. WATT. I’d be happy to yield. 

Mr. BERMAN. One could be righteously indignant about delegating our jurisdiction and not care too much about delegating the 

Ways and Means jurisdiction. 

Mr. WATT. Yes, and that’s exactly what I’m saying, is once you 

get—there’s somewhere along the spectrum, and you are on a very 

slippery slope, and I don’t think you can say to the Trade Representative, okay, you’ve got to do only what’s in the—because, I 

mean, we don’t even know what’s in that Committee’s jurisdiction 

over—versus our Committee’s jurisdiction versus Commerce Committee’s jurisdiction. We’ve been arguing about that for years and 

years and can’t even resolve it among ourselves. How are we going 

to expect the Administration to resolve it? 

Ms. LOFGREN. Would the gentleman yield? 

Mr. WATT. And I’m not—I mean, this is not about the substance 

of this conversation. It’s about me watching this on television, 

which the Chairman wants me to do rather than participate in it, 

and just giving you my observations as a casual observed. 

I’ll yield to the gentlelady. 

Ms. LOFGREN. Thank you, and—— Chairman SENSENBRENNER. Without objection, the gentleman 

from North Carolina will be given 5 additional minutes. 

Mr. WATT. I don’t care for 5 additional minutes. 

Ms. LOFGREN. I do. 

Mr. WATT. I’ll take 1 additional minute, and I’ll yield it to Ms. 

Lofgren. 

Ms. LOFGREN. I would just like to say, you know, the idea of fasttrack is not antithetical to me. I mean, I do understand that the 

Trade Representative needs to be able to make a deal and that you 

can’t then come to Congress and have 435 people micromanage 

every line. 

I mean, the problem I have with what’s happened here is that 

the Ways and Means Committee was supposed to be consulted. I 

don’t know if they were. I presume and hope that they were under 

the fast-track. But there was no consultation with me about the 

issues under the jurisdiction of this Committee. And I don’t know 

what communication occurred with the senior Members of the 

Committee, but I will say the result is inept. And it reflects the fact 

that there was no consultation with people who knew something 

about this, and that’s the problem. 

And I think if we move forward with these deals, you guys better 

deal with the people who are in charge of these substantive law 

areas, or you’re not going to have any deals. 

Mr. WATT. Reclaiming my time long enough to say that I definitely agree with the gentlelady from California that this is inept. 

But I’ve also agreed that most of the other parts of the agreements 

that you’ve come back with in the other Committees’ jurisdiction 

have been inept, too. 

So we can’t do this on the basis of what we consider inept. We 

gave these people this authority, and they’ve taken it, and now 

I’m——

Ms. JACKSON LEE. Would the gentleman yield? 

Mr. WATT. I don’t want any more time because I don’t want to 

offend the Chairman. I’m going to yield back. 

Mr. CHABOT. Mr. Chairman? 

197

Chairman SENSENBRENNER. The gentleman from North Carolina 

never offends the Chairman. 

Let me say that we’ve got this one to do, which is the Chile one. 

We’ve also got the Singapore one to do. And I would encourage the 

Members to be succinct in their comments on this and not repetitious. 

The gentleman from Ohio. 

Mr. CHABOT. Thank you, Mr. Chairman. I’ll be very brief and 

won’t take up the 5 minutes. But there’s been a—I think this has 

been a beneficial and instructive and helpful discussion here this 

morning. There have been a number of shots taken at fast-track or 

trade promotion authority or whatever one wants to call it, and I 

think it’s important to again at least point out that the reason that 

I think the majority—it was only by one—in the Congress voted for 

this legislation is because many of us believe that it’s—these agreements will be mutually beneficial to both the United States and 

some other country or group of countries that will ultimately create 

more jobs in this country, will improve the standard of living in 

this country, will enable the American public to buy more affordable products, that other countries’ standard of living will increase 

as well as they’re able to have jobs and those folks then will buy 

products from our country, and that creates jobs here. 

And so I think the Congress was appropriate—or taking appropriate action in passing that, but I think this has been a very good 

discussion this morning. I thank the gentlemen here for their candor, and I yield back the balance of my time. 

Ms. JACKSON LEE. Mr. Chabot, would you yield for a moment? 

Mr. CHABOT. I’m going to yield back my time because the Chairman wants to get this—— Chairman SENSENBRENNER. The question is on agreeing to the 

Conyers-Berman amendment as modified to the King amendment. 

Those in favor will say aye? Opposed, no? 

The ayes appear to have it. The ayes have it, and the ConyersBerman amendment is modified as agreed to. 

The question now is on the King amendment as amended by the 

Conyers-Berman amendment. Those in favor say aye? Opposed, no? 

The ayes appear to have it. The ayes have it, and the amendment as amended is agreed to. 

Are there further amendments to the draft implementing legislation? 

Ms. JACKSON LEE. Mr. Chairman? 

Chairman SENSENBRENNER. The gentlewoman from Texas. 

Ms. JACKSON LEE. Thank you. I have an amendment that I 

would like to pursue with the Trade Representative this coming 

week as we move toward the formal markup. I will not—I’d like to 

bring it up at this point to describe it, Mr. Chairman. I’m going to 

ask to withdraw it if you can——

Chairman SENSENBRENNER. The clerk will report the amendment. 

Mr. GOODLATTE. Mr. Chairman, I reserve a point of order. 

Chairman SENSENBRENNER. A point of order is reserved. The 

clerk will report the amendment. 

The CLERK. Amendment to draft implementing legislation, offered by Ms. Jackson Lee of Texas. Add at the end the following——

198

Ms. JACKSON LEE. I ask that the amendment be considered as 

read. 

Chairman SENSENBRENNER. Without objection, so ordered. 

[The amendment follows:]

199 H.L.C.

AMENDMENT TO H.R.

OFFERED BY MS. JACKSON-LEE OF TEXAS

(Amendment to Draft Implementing Legislation for the United

States-Chile Free Trade Agreement)

Add at the end the following new section:

1 SEC. ll. USE OF NEW FEES.

2 Any new fees generated by virtue of the enactment

3 of this title shall be placed into a fund that shall be used

4 as follows:

5 (1) 4 percent shall be used for the processing

6 of visas for nonimmigrant status under section

7 101(a)(15)(W) of the Immigration and Nationality

8 Act.

9 (2) The remainder shall be used as additional

10 resources for accelerating the processing by consular

11 officers of other nonimmigrant visa applications.


A2738.AAB
200

Chairman SENSENBRENNER. And the gentlewoman from Texas is 

recognized for 5 minutes. 

Ms. JACKSON LEE. Since I do not understand fully the King 

amendment, I am going to at this time withdraw this amendment 

so that I can understand the revenue stream that the King amendment and the Conyers amendment have actually now produced. 

Chairman SENSENBRENNER. Will the gentlewoman yield? 

Ms. JACKSON LEE. I’d be happy to yield. 

Chairman SENSENBRENNER. The issue of what happens to the 

fees that are generated for H-1B applications is not a part of the 

free trade agreement, and I assume that the gentleman from Virginia will insist on his point of order and that the Chair will say 

that he’s prepared to sustain——

Ms. JACKSON LEE. I have already indicated—if I could reclaim 

my time——

Chairman SENSENBRENNER. However—however, the Chair is intending to deal with the entire issue of the H-1B visa cap and the 

H-1B visa law after we return from the August recess, and the 

proper time to deal with the allocation of fees would be at that 

time. 

Ms. JACKSON LEE. Excuse me. Let me just say, Mr. Chairman, 

that I would be happy to work with this Committee on that issue, 

and I hope that any review of the H-1B fees because of all of our 

interest will be an inclusive process. But I still desire—as I said, 

I was going to withdraw this amendment because I wanted to 

make the point that I do think it is important to utilize some of 

the resources to help in the backlog as this is indicated for some 

of the consular offices, and then also to help with the processing 

of these particularly expansive visas. 

But I hope that we can have an opportunity to discuss this, and 

I hope that this coming week I’d like to discuss it with you as—

I’m talking about the gentlemen here, your office or representative 

thereof, so I can understand the implications of the King and Conyers amendment as to whether or not they impact that. 

I’d be happy to yield to the gentlelady from California. 

Ms. LOFGREN. I realize we’re speaking on the point of order. The 

fees do expire this fall, and I am just hopeful that as we move forward—I was—that the Chairman will consider—many of us have 

discussing the GAO report that basically describes the training programs in less than glorious terms, and that we might pursue the 

math and scholarship program that was discussed in 1998 that 

would actually yield a greater level of Ph.D. among Americans. And 

I——

Chairman SENSENBRENNER. If the gentlewoman——

Ms. JACKSON LEE. Reclaiming my time——

Chairman SENSENBRENNER.—from Texas would yield again, 

that’s, you know, one of the things that we have to do when we 

deal with the H-1B visa program. I certainly think that the fees 

have not been spent in as proper a manner as they could be. I certainly would not want to take money away from training American 

students to do these high-tech jobs in order to hire more consular 

officials overseas. I think that we would like to get Americans to 

take these jobs rather than issue more H-1B visas for aliens to 

take these jobs. 

201

But certainly the allocation of the funds needs to be better monitored and fine-tuned, and we will have an opportunity to do that 

in September. 

Ms. JACKSON LEE. Well, reclaiming my time, I’m not ruling out 

any use of the H-1B fees that would enhance the opportunities for 

training Americans. If the Chairman will recollect, Mr. Smith and 

myself, in fact, drafted legislation that was rejected by this Committee that had to do with enhancing training in H-1B for Americans. So I’m not someone who has not done that. 

I hope this process will be inclusive, that all of us will have 

input. I still think it’s important to provide resources that are 

needed for processing visa applications, and we can look at other 

alternatives. But I at this time offer to withdraw the amendment, 

and if I could inquire of Mister—I’m sorry. Please forgive me. 

Mr. SHIGETOMI. Shigetomi. 

Ms. JACKSON LEE. Atomi, is that correct? 

Mr. SHIGETOMI. Shigetomi. 

Ms. JACKSON LEE. Shigetomi. Thank you very much, sir. The opportunity to meet with some representative this week in my office 

on this issue. 

Chairman SENSENBRENNER. The amendment is withdrawn. 

Ms. JACKSON LEE. I’m sorry. I didn’t get his—is that—can 

we——

Mr. SHIGETOMI. That’s fine, yes. 

Ms. JACKSON LEE. Thank you very much. 

Thank you, Mr. Chairman. I ask unanimous consent to withdraw 

the amendment. 

Chairman SENSENBRENNER. The amendment is withdrawn. 

Are there further amendments? If there are no further amendments, the question is on agreeing to the draft legislation that has 

been put before. Those in favor will say aye? Opposed, no? 

The ayes appear to have it. The ayes have it, and the draft legislation as amended is sent back to the USTR for a redo job. 

Without objection, this staff is directed to make technical and 

conforming changes. 

(203)

1See: Kleindienst v. Mandel, 408 U.S. 753, 766 (1972) and Boutilier v. INS, 387 U.S. 118, 123 

(1967) 2Galvan v. Press, 347 U.S. 522,531(1954) 3 Although the amount of the fee was specified, the implementing legislation fails to include 

the requirement in INA section 212(n)(2)(C)(vi)(II) that forbids the employer from requiring the 

employee to pay the fee. 

MINORITY VIEWS

We write these views to explain that, as a general proposition we 

oppose efforts by the Administration to distort our immigration 

laws by offering new visa categories to specific nations as a bargaining chip in trade negotiations. This should not have been done 

as part of the North American Free Trade Agreement and it should 

not have been done as part of the Chile Free Trade Agreement. 

We would note that Article I, section 8, clause 4 of the Constitution provides that Congress shall have the power to ‘‘establish an 

uniform Rule of Naturalization.’’ The Supreme Court has long 

found that this provision of the Constitution grants Congress plenary power over immigration policy.1 Moreover, the Court has 

found that ‘‘the formulation of policies [pertaining to the entry of 

aliens and their right to remain here] is entrusted exclusively to 

Congress has become firmly imbedded in the legislative and judicial tissues of our body politics as any aspect of our government.’’2

Nonetheless the Administration has negotiated a new visa program 

in the U.S.-Chile FTA; usurping Congress’ clear constitutional role 

in creating immigration law. 

Having stated that, we do appreciate the efforts of the Majority 

to work with us in improving the implementing language with regard to immigration as best we could, given the unfortunate constraints of the underlying agreement. For example, the initial draft 

of the legislation we received contained several major loopholes and 

flaws. It would have created 1,400 new visas for persons to come 

into this country from Chile. There was no requirement that employers pay any fees when such temporary workers were brought 

in. There was no requirement that employers certify that they were 

unable to find American workers before they hired these foreign 

workers. And there was no real limitation on the ability of these 

individuals to stay in this country indefinitely. 

Many of these problems were mitigated as a result of this Committee’s input in the process. We enacted language which would insure that several H-1b requirements apply to these new visas.3 We 

also enacted a requirement that the new visas not go beyond the 

current H-1b limits. 

We would note that we have a significant remaining concern that 

the Administration was unwilling to include in the text of the implementing legislation. First and foremost, the Chile implementing 

bill provides no overall limitation on how many times professional 

visas can be renewed. While the implementing language included 

the Conyers/Berman language insuring that renewals beyond 6 

204

4The implementing language also omits H-1b dependent requirement in 212(n)(2)(E) that the 

H-1b dependent employer not place the H-1b worker with a third employer that is displacing 

U.S. workers. 

years count against the overall H-1b cap, it does not include language present in the current H-1b provisions that limits authorized 

admission to 6 years. Thus, it is possible that employers could 

renew their employees’ visas each and every year under the Chile 

agreement, with no limits, while also bringing in new entrants to 

fill up the annual numerical limit for new visas. This would rob the 

program of its supposedly temporary nature and harm American 

workers. 

In addition we are concerned that the implementing legislation 

does not contain all of the Labor Condition Application requirements that apply in the current H-1b programs. Most importantly, 

the implementing legislation completely omits the category of H-1b 

dependent employers present in existing law that requires employers to demonstrate that they have tried to recruit U.S. workers and 

attest that new entrants will not displace U.S. workers.4 In addition, the implementing legislation does not grant the authority 

given to Secretary of Labor in the H-1b to initiate her own investigations based on credible information that the employer is violating the rules of employment of the H-1b program. USTR has argued that these provisions expire in October 1, 2003 and that 

should Congress extend or modify provisions of the H-1b program, 

it may make corresponding modifications to the amendments to the 

INA made by the implementing bill. However, omission of these 

important worker protections sets a dangerous precedent for inclusion in future agreements. 

Finally, we strongly object to any notion that the U.S.-Chile Free 

Trade Agreement will be used as a model for future FTAs. We have 

been informed by the Majority that the Administration will not 

seek immigration in future possible free trade agreements, such as 

the Central American Free Trade Agreement, and this is spelled 

out in the letter from Chairman Sensenbrenner and Ranking Member Conyers to Ambassador Zoellick. It is critical that the administration interpret the inherent problems in the new visa program 

not as a precedent for future agreements, but rather as a sign that 

immigration has no place in trade agreements.

JOHN CONYERS, JR. 

JERROLD NADLER. 

ROBERT C. SCOTT. 

SHEILA JACKSON LEE. 

MARTIN T. MEEHAN. 

WILLIAM D. DELAHUNT. 

TAMMY BALDWIN. 

LINDA T. SA ́ NCHEZ.

Æ