Calendar No. 404

104TH CONGRESS

2D SESSION H. R. 3074

[Report No. 104–270]

AN ACT

To amend the United States-Israel Free Trade

Gaza Strip or a qualifying industrial zone.with respect to articles of the West Bank orPresident with additional proclamation authorityArea Implementation Act of 1985 to provide the

MAY 13, 1996

Reported with an amendment and an amendment to the

title
II

Calendar No. 404

104TH CONGRESS

2D SESSION H. R. 3074

[Report No. 104–270]

IN THE SENATE OF THE UNITED STATES

APRIL 17, 1996

Received; read twice and referred to the Committee on Finance

MAY 13, 1996

Reported by Mr. ROTH, with an amendment and an amendment to the title

[Strike out all after the enacting clause and insert the part printed in italic]

AN ACT

To amend the United States-Israel Free Trade Area Implementation Act of 1985 to provide the President with

additional proclamation authority with respect to articles

of the West Bank or Gaza Strip or a qualifying industrial zone.

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

3 SECTION 1. ADDITIONAL PROCLAMATION AUTHORITY.

4 The United States-Israel Free Trade Area Implemen5 tation Act of 1985 (19 U.S.C. 2112 note) is amended by

6 adding at the end the following new section:
2

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1 ‘‘SEC. 9. ADDITIONAL PROCLAMATION AUTHORITY.

2 ‘‘(a) ELIMINATION OR MODIFICATIONS OF DUTIES.—

3 The President is authorized to proclaim elimination or

4 modification of any existing duty as the President deter5 mines is necessary to exempt any article from duty if—

6 ‘‘(1) that article is wholly the growth, product,

7 or manufacture of the West Bank, the Gaza Strip,

8 or a qualifying industrial zone or is a new or dif9 ferent article of commerce that has been grown, pro10 duced, or manufactured in the West Bank, the Gaza

11 Strip, or a qualifying industrial zone;

12 ‘‘(2) that article is imported directly from the

13 West Bank, the Gaza Strip, Israel, or a qualifying

14 industrial zone; and

15 ‘‘(3) the sum of—

16 ‘‘(A) the cost or value of the materials pro17 duced in the West Bank, the Gaza Strip, Israel,

18 or a qualifying industrial zone, plus

19 ‘‘(B) the direct costs of processing oper20 ations performed in the West Bank, the Gaza

21 Strip, Israel, or a qualifying industrial zone,

22 is not less than 35 percent of the appraised value of

23 the product at the time it is entered into the United

24 States.

25 For purposes of determining the 35 percent content re26 quirement contained in paragraph (3), the cost or value
3

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1 of materials which are used in the production of an article

2 in the West Bank, the Gaza Strip, or a qualifying indus3 trial zone, and are the products of the United States, may

4 be counted in an amount up to 15 percent of the appraised

5 value of the article.

6 ‘‘(b) APPLICABILITY OF CERTAIN PROVISIONS OF

7 THE AGREEMENT.—

8 ‘‘(1) NONQUALIFYING OPERATIONS.—No article

9 shall be considered a new or different article of com10 merce under this section, and no material shall be

11 included for purposes of determining the 35 percent

12 requirement of subsection (a)(3), by virtue of having

13 merely undergone—

14 ‘‘(A) simple combining or packaging oper15 ations, or

16 ‘‘(B) mere dilution with water or with an17 other substance that does not materially alter

18 the characteristics of the article or material.

19 ‘‘(2) REQUIREMENTS FOR NEW OR DIFFERENT

20 ARTICLE OF COMMERCE.—For purposes of sub21 section (a)(1), an article is a ‘new or different article

22 of commerce’ if it is substantially transformed into

23 an article having a new name, character, or use.

24 ‘‘(3) COST OR VALUE OF MATERIALS.—(A) For

25 purposes of this section, the cost or value of mate-
4

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1 rials produced in the West Bank, the Gaza Strip, or

2 a qualifying industrial zone includes—

3 ‘‘(i) the manufacturer’s actual cost for the

4 materials;

5 ‘‘(ii) when not included in the manufactur6 er’s actual cost for the materials, the freight,

7 insurance, packing, and all other costs incurred

8 in transporting the materials to the manufac9 turer’s plant;

10 ‘‘(iii) the actual cost of waste or spoilage,

11 less the value of recoverable scrap; and

12 ‘‘(iv) taxes or duties imposed on the mate13 rials by the West Bank, the Gaza Strip, or a

14 qualifying industrial zone, if such taxes or du15 ties are not remitted on exportation.

16 ‘‘(B) If a material is provided to the manufac17 turer without charge, or at less than fair market

18 value, its cost or value shall be determined by com19 puting the sum of—

20 ‘‘(i) all expenses incurred in the growth,

21 production, or manufacture of the material, in22 cluding general expenses;

23 ‘‘(ii) an amount for profit; and
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1 ‘‘(iii) freight, insurance, packing, and all

2 other costs incurred in transporting the mate3 rial to the manufacturer’s plant.

4 If the information necessary to compute the cost or

5 value of a material is not available, the Customs

6 Service may ascertain or estimate the value thereof

7 using all reasonable methods.

8 ‘‘(4) DIRECT COSTS OF PROCESSING OPER9 ATIONS.—(A) For purposes of this section, the ‘di10 rect costs of processing operations performed in the

11 West Bank, Gaza Strip, or a qualifying industrial

12 zone’ with respect to an article are those costs either

13 directly incurred in, or which can be reasonably allo14 cated to, the growth, production, manufacture, or

15 assembly, of that article. Such costs include, but are

16 not limited to, the following to the extent that they

17 are includible in the appraised value of articles im18 ported into the United States:

19 ‘‘(i) All actual labor costs involved in the

20 growth, production, manufacture, or assembly

21 of the article, including fringe benefits, on-the22 job training, and costs of engineering, super23 visory, quality control, and similar personnel.
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1 ‘‘(ii) Dies, molds, tooling, and depreciation

2 on machinery and equipment which are alloca3 ble to the article.

4 ‘‘(iii) Research, development, design, engi5 neering, and blueprint costs insofar as they are

6 allocable to the article.

7 ‘‘(iv) Costs of inspecting and testing the

8 article.

9 ‘‘(B) Those items that are not included as di10 rect costs of processing operations with respect to an

11 article are those which are not directly attributable

12 to the article or are not costs of manufacturing the

13 article. Such items include, but are not limited to—

14 ‘‘(i) profit; and

15 ‘‘(ii) general expenses of doing business

16 which are either not allocable to the article or

17 are not related to the growth, production, man18 ufacture, or assembly of the article, such as ad19 ministrative salaries, casualty and liability in20 surance, advertising, and salesmen’s salaries,

21 commissions, or expenses.

22 ‘‘(5) IMPORTED DIRECTLY.—For purposes of

23 this section—

24 ‘‘(A) articles are ‘imported directly’ if—
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1 ‘‘(i) the articles are shipped directly

2 from the West Bank, the Gaza Strip, a

3 qualifying industrial zone, or Israel into

4 the United States without passing through

5 the territory of any intermediate country;

6 or

7 ‘‘(ii) if shipment is through the terri8 tory of an intermediate country, the arti9 cles in the shipment do not enter into the

10 commerce of any intermediate country and

11 the invoices, bills of lading, and other ship12 ping documents specify the United States

13 as the final destination; or

14 ‘‘(B) if articles are shipped through an in15 termediate country and the invoices and other

16 documents do not specify the United States as

17 the final destination, then the articles in the

18 shipment, upon arrival in the United States, are

19 imported directly only if they—

20 ‘‘(i) remain under the control of the

21 customs authority in an intermediate coun22 try;

23 ‘‘(ii) do not enter into the commerce

24 of an intermediate country except for the

25 purpose of a sale other than at retail, but
8

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1 only if the articles are imported as a result

2 of the original commercial transactions be3 tween the importer and the producer or

4 the producer’s sales agent; and

5 ‘‘(iii) have not been subjected to oper6 ations other than loading, unloading, or

7 other activities necessary to preserve the

8 article in good condition.

9 ‘‘(6) DOCUMENTATION REQUIRED.—An article

10 is eligible for the duty exemption under this section

11 only if—

12 ‘‘(A) the importer certifies that the article

13 meets the conditions for the duty exemption;

14 and

15 ‘‘(B) when requested by the Customs Serv16 ice, the importer, manufacturer, or exporter

17 submits a declaration setting forth all pertinent

18 information with respect to the article, includ19 ing the following:

20 ‘‘(i) A description of the article, quan21 tity, numbers, and marks of packages, in22 voice numbers, and bills of lading.

23 ‘‘(ii) A description of the operations

24 performed in the production of the article

25 in the West Bank, the Gaza Strip, a quali-
9

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1 fying industrial zone, or Israel and identi2 fication of the direct costs of processing

3 operations.

4 ‘‘(iii) A description of any materials

5 used in production of the article which are

6 wholly the growth, product, or manufac7 ture of the West Bank, the Gaza Strip, a

8 qualifying industrial zone, Israel or United

9 States, and a statement as to the cost or

10 value of such materials.

11 ‘‘(iv) A description of the operations

12 performed on, and a statement as to the

13 origin and cost or value of, any foreign

14 materials used in the article which are

15 claimed to have been sufficiently processed

16 in the West Bank, the Gaza Strip, a quali17 fying industrial zone, or Israel so as to be

18 materials produced in the West Bank, the

19 Gaza Strip, a qualifying industrial zone, or

20 Israel.

21 ‘‘(v) A description of the origin and

22 cost or value of any foreign materials used

23 in the article which have not been substan24 tially transformed in the West Bank, the

25 Gaza Strip, or a qualifying industrial zone.
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1 ‘‘(c) SHIPMENT OF ARTICLES OF ISRAEL THROUGH

2 WEST BANK OR GAZA STRIP.—The President is author3 ized to proclaim that articles of Israel may be treated as

4 though they were articles directly shipped from Israel for

5 the purposes of the Agreement even if shipped to the Unit6 ed States from the West Bank, the Gaza Strip, or a quali7 fying industrial zone, if the articles otherwise meet the re8 quirements of the Agreement.

9 ‘‘(d) TREATMENT OF COST OR VALUE OF MATE10 RIALS.—The President is authorized to proclaim that the

11 cost or value of materials produced in the West Bank, the

12 Gaza Strip, or a qualifying industrial zone may be in13 cluded in the cost or value of materials produced in Israel

14 under section 1(c)(i) of Annex 3 of the Agreement, and

15 the direct costs of processing operations performed in the

16 West Bank, the Gaza Strip, or a qualifying industrial zone

17 may be included in the direct costs of processing oper18 ations performed in Israel under section 1(c)(ii) of Annex

19 3 of the Agreement.

20 ‘‘(e) QUALIFYING INDUSTRIAL ZONE DEFINED.—

21 For purposes of this section, a ‘qualifying industrial zone’

22 means any area that—

23 ‘‘(1) encompasses portions of the territory of Is24 rael and Jordan or Israel and Egypt;
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1 ‘‘(2) has been designated by local authorities as

2 an enclave where merchandise may enter without

3 payment of duty or excise taxes; and

4 ‘‘(3) has been specified by the President as a

5 qualifying industrial zone.’’.

6 SECTION 1. TABLE OF CONTENTS.

7 The table of contents is as follows:

Sec. 1. Table of contents.

TITLE I—EXTENSION OF FREE TRADE TO WEST BANK AND GAZA

Sec. 101. Additional proclamation authority.

TITLE II—APPROVAL AND IMPLEMENTATION OF OECD

SHIPBUILDING AGREEMENT

Subtitle A—General Provisions

Sec. 201. Short title.

Sec. 202. Approval of the Shipbuilding Agreement.

Sec. 203. Injurious pricing and countermeasures relating to shipbuilding.

Sec. 204. Enforcement of countermeasures.

Sec. 205. Judicial review in injurious pricing and countermeasure proceedings.

Subtitle B—Other Provisions

Sec. 211. Equipment and repair of vessels.

Sec. 212. Effect of agreement with respect to private remedies.

Sec. 213. Implementing regulations.

Sec. 214. Amendments to the Merchant Marine Act, 1936.

Subtitle C—Effective Date

Sec. 221. Effective date.

TITLE III—GENERALIZED SYSTEM OF PREFERENCES

Sec. 301. Short title.

Sec. 302. Generalized system of preferences.

Sec. 303. Effective date.

Sec. 304. Conforming amendments.

TITLE IV—REVENUE OFFSETS

Sec. 400. Amendment of 1986 Code.

Subtitle A—Foreign Trust Tax Compliance

Sec. 401. Improved information reporting on foreign trusts.
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Sec. 402. Comparable penalties for failure to file return relating to transfers to

foreign entities.

Sec. 403. Modifications of rules relating to foreign trusts having one or more

United States beneficiaries.

Sec. 404. Foreign persons not to be treated as owners under grantor trust rules.

Sec. 405. Information reporting regarding foreign gifts.

Sec. 406. Modification of rules relating to foreign trusts which are not grantor

trusts.

Sec. 407. Residence of trusts, etc.

Subtitle B—International Shipping Income Disclosure

Sec. 411. Penalties for failure to disclose position that certain international shipping income is not includible in gross income.

1 TITLE I—EXTENSION OF FREE

2 TRADE TO WEST BANK AND

3 GAZA

4 SEC. 101. ADDITIONAL PROCLAMATION AUTHORITY.

5 The United States-Israel Free Trade Area Implemen6 tation Act of 1985 (19 U.S.C. 2112 note) is amended by

7 adding at the end the following new section:

8 ‘‘SEC. 9. ADDITIONAL PROCLAMATION AUTHORITY.

9 ‘‘(a) ELIMINATION OR MODIFICATIONS OF DUTIES.—

10 The President is authorized to proclaim elimination or

11 modification of any existing duty as the President deter12 mines is necessary to exempt any article from duty if—

13 ‘‘(1) that article is wholly the growth, product,

14 or manufacture of the West Bank, the Gaza Strip, or

15 a qualifying industrial zone or is a new or different

16 article of commerce that has been grown, produced, or

17 manufactured in the West Bank, the Gaza Strip, or

18 a qualifying industrial zone;
13

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1 ‘‘(2) that article is imported directly from the

2 West Bank, the Gaza Strip, Israel, or a qualifying in3 dustrial zone; and

4 ‘‘(3) the sum of—

5 ‘‘(A) the cost or value of the materials pro6 duced in the West Bank, the Gaza Strip, Israel,

7 or a qualifying industrial zone, plus

8 ‘‘(B) the direct costs of processing oper9 ations performed in the West Bank, the Gaza

10 Strip, Israel, or a qualifying industrial zone,

11 is not less than 35 percent of the appraised value of

12 the product at the time it is entered into the United

13 States.

14 For purposes of determining the 35 percent content require15 ment contained in paragraph (3), the cost or value of mate16 rials which are used in the production of an article in the

17 West Bank, the Gaza Strip, or a qualifying industrial zone,

18 and are the products of the United States, may be counted

19 in an amount up to 15 percent of the appraised value of

20 the article.

21 ‘‘(b) APPLICABILITY OF CERTAIN PROVISIONS OF THE

22 AGREEMENT.—

23 ‘‘(1) NONQUALIFYING OPERATIONS.—No article

24 shall be considered a new or different article of com25 merce under this section, and no material shall be in-
14

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1 cluded for purposes of determining the 35 percent re2 quirement of subsection (a)(3), by virtue of having

3 merely undergone—

4 ‘‘(A) simple combining or packaging oper5 ations, or

6 ‘‘(B) mere dilution with water or with an7 other substance that does not materially alter the

8 characteristics of the article or material.

9 ‘‘(2) REQUIREMENTS FOR NEW OR DIFFERENT

10 ARTICLE OF COMMERCE.—For purposes of subsection

11 (a)(1), an article is a ‘new or different article of com12 merce’ if it is substantially transformed into an arti13 cle having a new name, character, or use.

14 ‘‘(3) COST OR VALUE OF MATERIALS.—(A) For

15 purposes of this section, the cost or value of materials

16 produced in the West Bank, the Gaza Strip, or a

17 qualifying industrial zone includes—

18 ‘‘(i) the manufacturer’s actual cost for the

19 materials;

20 ‘‘(ii) when not included in the manufactur21 er’s actual cost for the materials, the freight, in22 surance, packing, and all other costs incurred in

23 transporting the materials to the manufacturer’s

24 plant;
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1 ‘‘(iii) the actual cost of waste or spoilage,

2 less the value of recoverable scrap; and

3 ‘‘(iv) taxes or duties imposed on the mate4 rials by the West Bank, the Gaza Strip, or a

5 qualifying industrial zone, if such taxes or duties

6 are not remitted on exportation.

7 ‘‘(B) If a material is provided to the manufac8 turer without charge, or at less than fair market

9 value, its cost or value shall be determined by com10 puting the sum of—

11 ‘‘(i) all expenses incurred in the growth,

12 production, or manufacture of the material, in13 cluding general expenses;

14 ‘‘(ii) an amount for profit; and

15 ‘‘(iii) freight, insurance, packing, and all

16 other costs incurred in transporting the material

17 to the manufacturer’s plant.

18 If the information necessary to compute the cost or

19 value of a material is not available, the Customs

20 Service may ascertain or estimate the value thereof

21 using all reasonable methods.

22 ‘‘(4) DIRECT COSTS OF PROCESSING OPER23 ATIONS.—(A) For purposes of this section, the ‘direct

24 costs of processing operations performed in the West

25 Bank, Gaza Strip, or a qualifying industrial zone’
16

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1 with respect to an article are those costs either di2 rectly incurred in, or which can be reasonably allo3 cated to, the growth, production, manufacture, or as4 sembly, of that article. Such costs include, but are not

5 limited to, the following to the extent that they are in6 cludible in the appraised value of articles imported

7 into the United States:

8 ‘‘(i) All actual labor costs involved in the

9 growth, production, manufacture, or assembly of

10 the article, including fringe benefits, on-the-job

11 training, and costs of engineering, supervisory,

12 quality control, and similar personnel.

13 ‘‘(ii) Dies, molds, tooling, and depreciation

14 on machinery and equipment which are allocable

15 to the article.

16 ‘‘(iii) Research, development, design, engi17 neering, and blueprint costs insofar as they are

18 allocable to the article.

19 ‘‘(iv) Costs of inspecting and testing the ar20 ticle.

21 ‘‘(B) Those items that are not included as direct

22 costs of processing operations with respect to an arti23 cle are those which are not directly attributable to the

24 article or are not costs of manufacturing the article.

25 Such items include, but are not limited to—
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1 ‘‘(i) profit; and

2 ‘‘(ii) general expenses of doing business

3 which are either not allocable to the article or

4 are not related to the growth, production, manu5 facture, or assembly of the article, such as ad6 ministrative salaries, casualty and liability in7 surance, advertising, and salesmen’s salaries,

8 commissions, or expenses.

9 ‘‘(5) IMPORTED DIRECTLY.—For purposes of this

10 section—

11 ‘‘(A) articles are ‘imported directly’ if—

12 ‘‘(i) the articles are shipped directly

13 from the West Bank, the Gaza Strip, a

14 qualifying industrial zone, or Israel into the

15 United States without passing through the

16 territory of any intermediate country; or

17 ‘‘(ii) if shipment is through the terri18 tory of an intermediate country, the articles

19 in the shipment do not enter into the com20 merce of any intermediate country and the

21 invoices, bills of lading, and other shipping

22 documents specify the United States as the

23 final destination; or

24 ‘‘(B) if articles are shipped through an in25 termediate country and the invoices and other
18

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1 documents do not specify the United States as

2 the final destination, then the articles in the

3 shipment, upon arrival in the United States, are

4 imported directly only if they—

5 ‘‘(i) remain under the control of the

6 customs authority in an intermediate coun7 try;

8 ‘‘(ii) do not enter into the commerce of

9 an intermediate country except for the pur10 pose of a sale other than at retail, but only

11 if the articles are imported as a result of the

12 original commercial transactions between

13 the importer and the producer or the pro14 ducer’s sales agent; and

15 ‘‘(iii) have not been subjected to oper16 ations other than loading, unloading, or

17 other activities necessary to preserve the ar18 ticle in good condition.

19 ‘‘(6) DOCUMENTATION REQUIRED.—An article is

20 eligible for the duty exemption under this section only

21 if—

22 ‘‘(A) the importer certifies that the article

23 meets the conditions for the duty exemption; and

24 ‘‘(B) when requested by the Customs Serv25 ice, the importer, manufacturer, or exporter sub-
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1 mits a declaration setting forth all pertinent in2 formation with respect to the article, including

3 the following:

4 ‘‘(i) A description of the article, quan5 tity, numbers, and marks of packages, in6 voice numbers, and bills of lading.

7 ‘‘(ii) A description of the operations

8 performed in the production of the article in

9 the West Bank, the Gaza Strip, a qualifying

10 industrial zone, or Israel and identification

11 of the direct costs of processing operations.

12 ‘‘(iii) A description of any materials

13 used in production of the article which are

14 wholly the growth, product, or manufacture

15 of the West Bank, the Gaza Strip, a quali16 fying industrial zone, Israel or United

17 States, and a statement as to the cost or

18 value of such materials.

19 ‘‘(iv) A description of the operations

20 performed on, and a statement as to the ori21 gin and cost or value of, any foreign mate22 rials used in the article which are claimed

23 to have been sufficiently processed in the

24 West Bank, the Gaza Strip, a qualifying in25 dustrial zone, or Israel so as to be materials
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1 produced in the West Bank, the Gaza Strip,

2 a qualifying industrial zone, or Israel.

3 ‘‘(v) A description of the origin and

4 cost or value of any foreign materials used

5 in the article which have not been substan6 tially transformed in the West Bank, the

7 Gaza Strip, or a qualifying industrial zone.

8 ‘‘(c) SHIPMENT OF ARTICLES OF ISRAEL THROUGH

9 WEST BANK OR GAZA STRIP.—The President is authorized

10 to proclaim that articles of Israel may be treated as though

11 they were articles directly shipped from Israel for the pur12 poses of the Agreement even if shipped to the United States

13 from the West Bank, the Gaza Strip, or a qualifying indus14 trial zone, if the articles otherwise meet the requirements

15 of the Agreement.

16 ‘‘(d) TREATMENT OF COST OR VALUE OF MATE17 RIALS.—The President is authorized to proclaim that the

18 cost or value of materials produced in the West Bank, the

19 Gaza Strip, or a qualifying industrial zone may be in20 cluded in the cost or value of materials produced in Israel

21 under section 1(c)(i) of Annex 3 of the Agreement, and the

22 direct costs of processing operations performed in the West

23 Bank, the Gaza Strip, or a qualifying industrial zone may

24 be included in the direct costs of processing operations per-
21

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1 formed in Israel under section 1(c)(ii) of Annex 3 of the

2 Agreement.

3 ‘‘(e) QUALIFYING INDUSTRIAL ZONE DEFINED.—For

4 purposes of this section, a ‘qualifying industrial zone’

5 means any area that—

6 ‘‘(1) encompasses portions of the territory of Is7 rael and Jordan or Israel and Egypt;

8 ‘‘(2) has been designated by local authorities as

9 an enclave where merchandise may enter without

10 payment of duty or excise taxes; and

11 ‘‘(3) has been specified by the President as a

12 qualifying industrial zone.’’.

13 TITLE II—APPROVAL AND IMPLE14 MENTATION OF OECD SHIP15 BUILDING AGREEMENT

16 Subtitle A—General Provisions

17 SEC. 201. SHORT TITLE.

18 This title may be cited as the ‘‘OECD Shipbuilding

19 Agreement Act’’.

20 SEC. 202. APPROVAL OF THE SHIPBUILDING AGREEMENT.

21 The Congress approves The Agreement Respecting Nor22 mal Competitive Conditions in the Commercial Shipbuild23 ing and Repair Industry (hereafter in this title referred to

24 as the ‘‘Shipbuilding Agreement’’), a reciprocal trade agree25 ment which resulted from negotiations under the auspices
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1 of the Organization for Economic Cooperation and Develop2 ment, and was entered into on December 21, 1994.

3 SEC. 203. INJURIOUS PRICING AND COUNTERMEASURES

4 RELATING TO SHIPBUILDING.

5 The Tariff Act of 1930 is amended by adding at the

6 end the following new title:

7 ‘‘TITLE VIII—INJURIOUS PRIC8 ING AND COUNTERMEASURES

9 RELATING TO SHIPBUILDING

‘‘Subtitle A—Imposition of Injurious Pricing Charge and Countermeasures

‘‘Sec. 801. Injurious pricing charge.

‘‘Sec. 802. Procedures for initiating an injurious pricing investigation.

‘‘Sec. 803. Preliminary determinations.

‘‘Sec. 804. Termination or suspension of investigation.

‘‘Sec. 805. Final determinations.

‘‘Sec. 806. Imposition and collection of injurious pricing charge.

‘‘Sec. 807. Imposition of countermeasures.

‘‘Sec. 808. Injurious pricing petitions by third countries.

‘‘Subtitle B—Special Rules

‘‘Sec. 821. Export price.

‘‘Sec. 822. Normal value.

‘‘Sec. 823. Currency conversion.

‘‘Subtitle C—Procedures

‘‘Sec. 841. Hearings.

‘‘Sec. 842. Determinations on the basis of the facts available.

‘‘Sec. 843. Access to information.

‘‘Sec. 844. Conduct of investigations.

‘‘Sec. 845. Administrative action following shipbuilding agreement panel reports.

‘‘Subtitle D—Definitions

‘‘Sec. 861. Definitions.
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1 ‘‘Subtitle A—Imposition of Injuri2 ous Pricing Charge and Coun3 termeasures

4 ‘‘SEC. 801. INJURIOUS PRICING CHARGE.

5 ‘‘(a) BASIS FOR CHARGE.—If—

6 ‘‘(1) the administering authority determines that

7 a foreign vessel has been sold directly or indirectly to

8 one or more United States buyers at less than its fair

9 value, and

10 ‘‘(2) the Commission determines that—

11 ‘‘(A) an industry in the United States—

12 ‘‘(i) is or has been materially injured,

13 or

14 ‘‘(ii) is threatened with material in15 jury, or

16 ‘‘(B) the establishment of an industry in the

17 United States is or has been materially retarded,

18 by reason of the sale of such vessel, then there shall

19 be imposed upon the foreign producer of the subject

20 vessel an injurious pricing charge, in an amount

21 equal to the amount by which the normal value ex22 ceeds the export price for the vessel. For purposes of

23 this subsection and section 805(b)(1), a reference to

24 the sale of a foreign vessel includes the creation or

25 transfer of an ownership interest in the vessel, except
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1 for an ownership interest created or acquired solely

2 for the purpose of providing security for a normal

3 commercial loan.

4 ‘‘(b) FOREIGN VESSELS NOT MERCHANDISE.—No for5 eign vessel may be considered to be, or to be part of, a class

6 or kind of merchandise for purposes of subtitle B of title

7 VII.

8 ‘‘SEC. 802. PROCEDURES FOR INITIATING AN INJURIOUS

9 PRICING INVESTIGATION.

10 ‘‘(a) INITIATION BY ADMINISTERING AUTHORITY.—

11 ‘‘(1) GENERAL RULE.—Except in the case in

12 which subsection (d)(6) applies, an injurious pricing

13 investigation shall be initiated whenever the admin14 istering authority determines, from information

15 available to it, that a formal investigation is war16 ranted into the question of whether the elements nec17 essary for the imposition of a charge under section

18 801(a) exist, and whether a producer described in sec19 tion 861(17)(C) would meet the criteria of subsection

20 (b)(1)(B) for a petitioner.

21 ‘‘(2) TIME FOR INITIATION BY ADMINISTERING

22 AUTHORITY.—An investigation may only be initiated

23 under paragraph (1) within 6 months after the time

24 the administering authority first knew or should have

25 known of the sale of the vessel. Any period during
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1 which an investigation is initiated and pending as

2 described in subsection (d)(6)(A) shall not be included

3 in calculating that 6-month period.

4 ‘‘(b) INITIATION BY PETITION.—

5 ‘‘(1) PETITION REQUIREMENTS.—

6 ‘‘(A) IN GENERAL.—Except in a case in

7 which subsection (d)(6) applies, an injurious

8 pricing proceeding shall be initiated whenever

9 an interested party, as defined in subparagraph

10 (C), (D), (E), or (F) of section 861(17), files a

11 petition with the administering authority, on be12 half of an industry, which alleges the elements

13 necessary for the imposition of an injurious pric14 ing charge under section 801(a) and the elements

15 required under subparagraph (B), (C), (D), or

16 (E) of this paragraph, and which is accom17 panied by information reasonably available to

18 the petitioner supporting those allegations and

19 identifying the transaction concerned.

20 ‘‘(B) PETITIONERS DESCRIBED IN SECTION

21 861(17)(C).—

22 ‘‘(i) IN GENERAL.—If the petitioner is

23 a producer described in section 861(17)(C),

24 and—
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1 ‘‘(I) if the vessel was sold through

2 a broad multiple bid, the petition shall

3 include information indicating that

4 the petitioner was invited to tender a

5 bid on the contract at issue, the peti6 tioner actually did so, and the bid of

7 the petitioner substantially met the de8 livery date and technical requirements

9 of the bid,

10 ‘‘(II) if the vessel was sold through

11 any bidding process other than a broad

12 multiple bid and the petitioner was in13 vited to tender a bid on the contract at

14 issue, the petition shall include infor15 mation indicating that the petitioner

16 actually did so and the bid of the peti17 tioner substantially met the delivery

18 date and technical requirements of the

19 bid, or

20 ‘‘(III) except in a case in which

21 the vessel was sold through a broad

22 multiple bid, if there is no invitation

23 to tender a bid, the petition shall in24 clude information indicating that the

25 petitioner was capable of building the
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1 vessel concerned and, if the petitioner

2 knew or should have known of the pro3 posed purchase, it made demonstrable

4 efforts to conclude a sale with the Unit5 ed States buyer consistent with the de6 livery date and technical requirements

7 of the buyer.

8 ‘‘(ii) REBUTTABLE PRESUMPTION RE9 GARDING KNOWLEDGE OF PROPOSED PUR10 CHASE.—For purposes of clause (i)(III),

11 there is a rebuttable presumption that the

12 petitioner knew or should have known of the

13 proposed purchase if it is demonstrated

14 that—

15 ‘‘(I) the majority of the producers

16 in the industry have made efforts with

17 the United States buyer to conclude a

18 sale of the subject vessel, or

19 ‘‘(II) general information on the

20 sale was available from brokers, fin21 anciers, classification societies,

22 charterers, trade associations, or other

23 entities normally involved in ship24 building transactions with whom the
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1 petitioner had regular contacts or deal2 ings.

3 ‘‘(C) PETITIONERS DESCRIBED IN SECTION

4 861(17)(D).—If the petitioner is an interested

5 party described in section 861(17)(D), the peti6 tion shall include information indicating that

7 members of the union or group of workers de8 scribed in that section are employed by a pro9 ducer that meets the requirements of subpara10 graph (B) of this paragraph.

11 ‘‘(D) PETITIONERS DESCRIBED IN SECTION

12 861(17)(E).—If the petitioner is an interested

13 party described in section 861(17)(E), the peti14 tion shall include information indicating that a

15 member of the association described in that sec16 tion is a producer that meets the requirements of

17 subparagraph (B) of this paragraph.

18 ‘‘(E) PETITIONERS DESCRIBED IN SECTION

19 861(17)(F).—If the petitioner is an interested

20 party described in section 861(17)(F), the peti21 tion shall include information indicating that a

22 member of the association described in that sec23 tion meets the requirements of subparagraph (C)

24 or (D) of this paragraph.
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1 ‘‘(F) AMENDMENTS.—The petition may be

2 amended at such time, and upon such condi3 tions, as the administering authority and the

4 Commission may permit.

5 ‘‘(2) SIMULTANEOUS FILING WITH COMMIS6 SION.—The petitioner shall file a copy of the petition

7 with the Commission on the same day as it is filed

8 with the administering authority.

9 ‘‘(3) DEADLINE FOR FILING PETITION.—

10 ‘‘(A) DEADLINE.—(i) A petitioner to which

11 paragraph (1)(B)(i) (I) or (II) applies shall file

12 the petition no later than the earlier of—

13 ‘‘(I) 6 months after the time that the

14 petitioner first knew or should have known

15 of the sale of the subject vessel, or

16 ‘‘(II) 6 months after delivery of the

17 subject vessel.

18 ‘‘(ii) A petitioner to which paragraph

19 (1)(B)(i)(III) applies shall—

20 ‘‘(I) file the petition no later than the

21 earlier of 9 months after the time that the

22 petitioner first knew or should have known

23 of the sale of the subject vessel, or 6 months

24 after delivery of the subject vessel, and
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1 ‘‘(II) submit to the administering au2 thority a notice of intent to file a petition

3 no later than 6 months after the time that

4 the petitioner first knew or should have

5 known of the sale (unless the petition itself

6 is filed within that 6-month period).

7 ‘‘(B) PRESUMPTION OF KNOWLEDGE.—For

8 purposes of this paragraph, if the existence of the

9 sale, together with general information concern10 ing the vessel, is published in the international

11 trade press, there is a rebuttable presumption

12 that the petitioner knew or should have known of

13 the sale of the vessel from the date of that publi14 cation.

15 ‘‘(c) ACTIONS BEFORE INITIATING INVESTIGATIONS.—

16 ‘‘(1) NOTIFICATION OF GOVERNMENTS.—Before

17 initiating an investigation under either subsection (a)

18 or (b), the administering authority shall notify the

19 government of the exporting country of the investiga20 tion. In the case of the initiation of an investigation

21 under subsection (b), such notification shall include a

22 public version of the petition.

23 ‘‘(2) ACCEPTANCE OF COMMUNICATIONS.—The

24 administering authority shall not accept any unsolic25 ited oral or written communication from any person
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1 other than an interested party described in section

2 861(17) (C), (D), (E), or (F) before the administering

3 authority makes its decision whether to initiate an

4 investigation pursuant to a petition, except for in5 quiries regarding the status of the administering

6 authority’s consideration of the petition or a request

7 for consultation by the government of the exporting

8 country.

9 ‘‘(3) NONDISCLOSURE OF CERTAIN INFORMA10 TION.—The administering authority and the Commis11 sion shall not disclose information with regard to any

12 draft petition submitted for review and comment be13 fore it is filed under subsection (b)(1).

14 ‘‘(d) PETITION DETERMINATION.—

15 ‘‘(1) TIME FOR INITIAL DETERMINATION.—

16 ‘‘(A) IN GENERAL.—Within 45 days after

17 the date on which a petition is filed under sub18 section (b), the administering authority shall,

19 after examining, on the basis of sources readily

20 available to the administering authority, the ac21 curacy and adequacy of the evidence provided in

22 the petition, determine whether the petition—

23 ‘‘(i) alleges the elements necessary for

24 the imposition of an injurious pricing

25 charge under section 801(a) and the ele-
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1 ments required under subsection (b)(1) (B),

2 (C), (D), or (E), and contains information

3 reasonably available to the petitioner sup4 porting the allegations; and

5 ‘‘(ii) determine if the petition has been

6 filed by or on behalf of the industry.

7 ‘‘(B) CALCULATION OF 45-DAY PERIOD.—

8 Any period in which paragraph (6)(A) applies

9 shall not be included in calculating the 45-day

10 period described in subparagraph (A).

11 ‘‘(2) AFFIRMATIVE DETERMINATIONS.—If the de12 terminations under clauses (i) and (ii) of paragraph

13 (1)(A) are affirmative, the administering authority

14 shall initiate an investigation to determine whether

15 the vessel was sold at less than fair value, unless

16 paragraph (6) applies.

17 ‘‘(3) NEGATIVE DETERMINATIONS.—If—

18 ‘‘(A) the determination under clause (i) or

19 (ii) of paragraph (1)(A) is negative, or

20 ‘‘(B) paragraph (6)(B) applies,

21 the administering authority shall dismiss the petition,

22 terminate the proceeding, and notify the petitioner in

23 writing of the reasons for the determination.

24 ‘‘(4) DETERMINATION OF INDUSTRY SUPPORT.—
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1 ‘‘(A) GENERAL RULE.—For purposes of this

2 subsection, the administering authority shall de3 termine that the petition has been filed by or on

4 behalf of the domestic industry, if—

5 ‘‘(i) the domestic producers or workers

6 who support the petition collectively account

7 for at least 25 percent of the total capacity

8 of domestic producers capable of producing

9 a like vessel, and

10 ‘‘(ii) the domestic producers or workers

11 who support the petition collectively account

12 for more than 50 percent of the total capac13 ity to produce a like vessel of that portion

14 of the domestic industry expressing support

15 for or opposition to the petition.

16 ‘‘(B) CERTAIN POSITIONS DISREGARDED.—

17 In determining industry support under subpara18 graph (A), the administering authority shall dis19 regard the position of domestic producers who

20 oppose the petition, if such producers are related

21 to the foreign producer or United States buyer of

22 the subject vessel, or the domestic producer is it23 self the United States buyer, unless such domestic

24 producers demonstrate that their interests as do-
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1 mestic producers would be adversely affected by

2 the imposition of an injurious pricing charge.

3 ‘‘(C) POLLING THE INDUSTRY.—If the peti4 tion does not establish support of domestic pro5 ducers or workers accounting for more than 50

6 percent of the total capacity to produce a like

7 vessel—

8 ‘‘(i) the administering authority shall

9 poll the industry or rely on other informa10 tion in order to determine if there is sup11 port for the petition as required by sub12 paragraph (A), or

13 ‘‘(ii) if there is a large number of pro14 ducers in the industry, the administering

15 authority may determine industry support

16 for the petition by using any statistically

17 valid sampling method to poll the industry.

18 ‘‘(D) COMMENTS BY INTERESTED PAR19 TIES.—Before the administering authority makes

20 a determination with respect to initiating an in21 vestigation, any person who would qualify as an

22 interested party under section 861(17) if an in23 vestigation were initiated, may submit comments

24 or information on the issue of industry support.

25 After the administering authority makes a deter-
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1 mination with respect to initiating an investiga2 tion, the determination regarding industry sup3 port shall not be reconsidered.

4 ‘‘(5) DEFINITION OF DOMESTIC PRODUCERS OR

5 WORKERS.—For purposes of this subsection, the term

6 ‘domestic producers or workers’ means interested par7 ties as defined in section 861(17) (C), (D), (E), or

8 (F).

9 ‘‘(6) PROCEEDINGS BY WTO MEMBERS.—The ad10 ministering authority shall not initiate an investiga11 tion under this section if, with respect to the vessel

12 sale at issue, an antidumping proceeding conducted

13 by a WTO member who is not a Shipbuilding Agree14 ment Party—

15 ‘‘(A) has been initiated and has been pend16 ing for not more than one year, or

17 ‘‘(B) has been completed and resulted in the

18 imposition of antidumping measures or a nega19 tive determination with respect to whether the

20 sale was at less than fair value or with respect

21 to injury.

22 ‘‘(e) NOTIFICATION TO COMMISSION OF DETERMINA23 TION.—The administering authority shall—
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1 ‘‘(1) notify the Commission immediately of any

2 determination it makes under subsection (a) or (d),

3 and

4 ‘‘(2) if the determination is affirmative, make

5 available to the Commission such information as it

6 may have relating to the matter under investigation,

7 under such procedures as the administering authority

8 and the Commission may establish to prevent disclo9 sure, other than with the consent of the party provid10 ing it or under protective order, of any information

11 to which confidential treatment has been given by the

12 administering authority.

13 ‘‘SEC. 803. PRELIMINARY DETERMINATIONS.

14 ‘‘(a) DETERMINATION BY COMMISSION OF REASON15 ABLE INDICATION OF INJURY.—

16 ‘‘(1) GENERAL RULE.—Except in the case of a

17 petition dismissed by the administering authority

18 under section 802(d)(3), the Commission, within the

19 time specified in paragraph (2), shall determine,

20 based on the information available to it at the time

21 of the determination, whether there is a reasonable in22 dication that—

23 ‘‘(A) an industry in the United States—

24 ‘‘(i) is or has been materially injured,

25 or
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1 ‘‘(ii) is threatened with material in2 jury, or

3 ‘‘(B) the establishment of an industry in the

4 United States is or has been materially retarded,

5 by reason of the sale of the subject vessel. If the Com6 mission makes a negative determination under this

7 paragraph, the investigation shall be terminated.

8 ‘‘(2) TIME FOR COMMISSION DETERMINATION.—

9 The Commission shall make the determination de10 scribed in paragraph (1) within 90 days after the

11 date on which the petition is filed or, in the case of

12 an investigation initiated under section 802(a), with13 in 90 days after the date on which the Commission

14 receives notice from the administering authority that

15 the investigation has been initiated under such sec16 tion.

17 ‘‘(b) PRELIMINARY DETERMINATION BY ADMINISTER18 ING AUTHORITY.—

19 ‘‘(1) PERIOD OF INJURIOUS PRICING INVESTIGA20 TION.—

21 ‘‘(A) IN GENERAL.—The administering au22 thority shall make a determination, based upon

23 the information available to it at the time of the

24 determination, of whether there is a reasonable
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1 basis to believe or suspect that the subject vessel

2 was sold at less than fair value.

3 ‘‘(B) COST DATA USED FOR NORMAL

4 VALUE.—If cost data is required to determine

5 normal value on the basis of a sale of a foreign

6 like vessel that has not been delivered on or be7 fore the date on which the administering author8 ity initiates the investigation, the administering

9 authority shall make its determination within

10 160 days after the date of delivery of the foreign

11 like vessel.

12 ‘‘(C) NORMAL VALUE BASED ON CON13 STRUCTED VALUE.—If normal value is to be de14 termined on the basis of constructed value, the

15 administering authority shall make its deter16 mination within 160 days after the date of deliv17 ery of the subject vessel.

18 ‘‘(D) OTHER CASES.—In cases in which

19 subparagraph (B) or (C) does not apply, the ad20 ministering authority shall make its determina21 tion within 160 days after the date on which the

22 administering authority initiates the investiga23 tion under section 802.

24 ‘‘(E) AFFIRMATIVE DETERMINATION BY

25 COMMISSION REQUIRED.—In no event shall the
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1 administering authority make its determination

2 before an affirmative determination is made by

3 the Commission under subsection (a).

4 ‘‘(2) DE MINIMIS INJURIOUS PRICING MARGIN.—

5 In making a determination under this subsection, the

6 administering authority shall disregard any injurious

7 pricing margin that is de minimis. For purposes of

8 the preceding sentence, an injurious pricing margin

9 is de minimis if the administering authority deter10 mines that the injurious pricing margin is less than

11 2 percent of the export price.

12 ‘‘(c) EXTENSION OF PERIOD IN EXTRAORDINARILY

13 COMPLICATED CASES OR FOR GOOD CAUSE.—

14 ‘‘(1) IN GENERAL.—If—

15 ‘‘(A) the administering authority concludes

16 that the parties concerned are cooperating and

17 determines that—

18 ‘‘(i) the case is extraordinarily com19 plicated by reason of—

20 ‘‘(I) the novelty of the issues pre21 sented, or

22 ‘‘(II) the nature and extent of the

23 information required, and

24 ‘‘(ii) additional time is necessary to

25 make the preliminary determination, or
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1 ‘‘(B) a party to the investigation requests

2 an extension and demonstrates good cause for the

3 extension,

4 then the administering authority may postpone the

5 time for making its preliminary determination.

6 ‘‘(2) LENGTH OF POSTPONEMENT.—The prelimi7 nary determination may be postponed under para8 graph (1)(A) or (B) until not later than the 190th

9 day after—

10 ‘‘(A) the date of delivery of the foreign like

11 vessel, if subsection (b)(1)(B) applies,

12 ‘‘(B) the date of delivery of the subject ves13 sel, if subsection (b)(1)(C) applies, or

14 ‘‘(C) the date on which the administering

15 authority initiates an investigation under sec16 tion 802, in a case in which subsection (b)(1)(D)

17 applies.

18 ‘‘(3) NOTICE OF POSTPONEMENT.—The admin19 istering authority shall notify the parties to the inves20 tigation, not later than 20 days before the date on

21 which the preliminary determination would otherwise

22 be required under subsection (b)(1), if it intends to

23 postpone making the preliminary determination

24 under paragraph (1). The notification shall include

25 an explanation of the reasons for the postponement,
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1 and notice of the postponement shall be published in

2 the Federal Register.

3 ‘‘(d) EFFECT OF DETERMINATION BY THE ADMIN4 ISTERING AUTHORITY.—If the preliminary determination

5 of the administering authority under subsection (b) is af6 firmative, the administering authority shall—

7 ‘‘(1) determine an estimated injurious pricing

8 margin, and

9 ‘‘(2) make available to the Commission all infor10 mation upon which its determination was based and

11 which the Commission considers relevant to its injury

12 determination, under such procedures as the admin13 istering authority and the Commission may establish

14 to prevent disclosure, other than with the consent of

15 the party providing it or under protective order, of

16 any information to which confidential treatment has

17 been given by the administering authority.

18 ‘‘(e) NOTICE OF DETERMINATION.—Whenever the

19 Commission or the administering authority makes a deter20 mination under this section, the Commission or the admin21 istering authority, as the case may be, shall notify the peti22 tioner, and other parties to the investigation, and the Com23 mission or the administering authority (whichever is ap24 propriate) of its determination. The administering author25 ity shall include with such notification the facts and conclu-
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1 sions on which its determination is based. Not later than

2 5 days after the date on which the determination is required

3 to be made under subsection (a)(2), the Commission shall

4 transmit to the administering authority the facts and con5 clusions on which its determination is based.

6 ‘‘SEC. 804. TERMINATION OR SUSPENSION OF INVESTIGA7 TION.

8 ‘‘(a) TERMINATION OF INVESTIGATION UPON WITH9 DRAWAL OF PETITION.—

10 ‘‘(1) IN GENERAL.—Except as provided in para11 graph (2), an investigation under this subtitle may be

12 terminated by either the administering authority or

13 the Commission, after notice to all parties to the in14 vestigation, upon withdrawal of the petition by the

15 petitioner.

16 ‘‘(2) LIMITATION ON TERMINATION BY COMMIS17 SION.—The Commission may not terminate an inves18 tigation under paragraph (1) before a preliminary

19 determination is made by the administering author20 ity under section 803(b).

21 ‘‘(b) TERMINATION OF INVESTIGATIONS INITIATED BY

22 ADMINISTERING AUTHORITY.—The administering author23 ity may terminate any investigation initiated by the ad24 ministering authority under section 802(a) after providing

25 notice of such termination to all parties to the investigation.
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1 ‘‘(c) ALTERNATE EQUIVALENT REMEDY.—The criteria

2 set forth in subparagraphs (A) through (D) of section

3 806(e)(1) shall apply to any agreement that forms the basis

4 for termination of an investigation under subsection (a) or

5 (b).

6 ‘‘(d) PROCEEDINGS BY WTO MEMBERS.—

7 ‘‘(1) SUSPENSION OF INVESTIGATION.—The ad8 ministering authority and the Commission shall sus9 pend an investigation under this section if a WTO

10 member that is not a Shipbuilding Agreement Party

11 initiates an antidumping proceeding described in sec12 tion 861(30)(A) with respect to the sale of the subject

13 vessel.

14 ‘‘(2) TERMINATION OF INVESTIGATION.—If an

15 antidumping proceeding described in paragraph (1)

16 is concluded by—

17 ‘‘(A) the imposition of antidumping meas18 ures, or

19 ‘‘(B) a negative determination with respect

20 to whether the sale is at less than fair value or

21 with respect to injury,

22 the administering authority and the Commission

23 shall terminate the investigation under this section.

24 ‘‘(3) CONTINUATION OF INVESTIGATION.—(A) If

25 such a proceeding—
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1 ‘‘(i) is concluded by a result other than a

2 result described in paragraph (2), or

3 ‘‘(ii) is not concluded within one year from

4 the date of the initiation of the proceeding,

5 then the administering authority and the Commission

6 shall terminate the suspension and continue the inves7 tigation. The period in which the investigation was

8 suspended shall not be included in calculating dead9 lines applicable with respect to the investigation.

10 ‘‘(B) Notwithstanding subparagraph (A)(ii), if

11 the proceeding is concluded by a result described in

12 paragraph (2)(A), the administering authority and

13 the Commission shall terminate the investigation

14 under this section.

15 ‘‘SEC. 805. FINAL DETERMINATIONS.

16 ‘‘(a) DETERMINATIONS BY ADMINISTERING AUTHOR17 ITY.—

18 ‘‘(1) IN GENERAL.—Within 75 days after the

19 date of its preliminary determination under section

20 803(b), the administering authority shall make a

21 final determination of whether the vessel which is the

22 subject of the investigation has been sold in the Unit23 ed States at less than its fair value.

24 ‘‘(2) EXTENSION OF PERIOD FOR DETERMINA25 TION.—
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1 ‘‘(A) GENERAL RULE.—The administering

2 authority may postpone making the final deter3 mination under paragraph (1) until not later

4 than 290 days after—

5 ‘‘(i) the date of delivery of the foreign

6 like vessel, in an investigation to which sec7 tion 803(b)(1)(B) applies,

8 ‘‘(ii) the date of delivery of the subject

9 vessel, in an investigation to which section

10 803(b)(1)(C) applies, or

11 ‘‘(iii) the date on which the admin12 istering authority initiates the investigation

13 under section 802, in an investigation to

14 which section 803(b)(1)(D) applies.

15 ‘‘(B) REQUEST REQUIRED.—The admin16 istering authority may apply subparagraph (A)

17 if a request in writing is made by—

18 ‘‘(i) the producer of the subject vessel,

19 in a proceeding in which the preliminary

20 determination by the administering author21 ity under section 803(b) was affirmative, or

22 ‘‘(ii) the petitioner, in a proceeding in

23 which the preliminary determination by the

24 administering authority under section

25 803(b) was negative.
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1 ‘‘(3) DE MINIMIS INJURIOUS PRICING MARGIN.—

2 In making a determination under this subsection, the

3 administering authority shall disregard any injurious

4 pricing margin that is de minimis as defined in sec5 tion 803(b)(2).

6 ‘‘(b) FINAL DETERMINATION BY COMMISSION.—

7 ‘‘(1) IN GENERAL.—The Commission shall make

8 a final determination of whether—

9 ‘‘(A) an industry in the United States—

10 ‘‘(i) is or has been materially injured,

11 or

12 ‘‘(ii) is threatened with material in13 jury, or

14 ‘‘(B) the establishment of an industry in the

15 United States is or has been materially retarded,

16 by reason of the sale of the vessel with respect to

17 which the administering authority has made an af18 firmative determination under subsection (a)(1).

19 ‘‘(2) PERIOD FOR INJURY DETERMINATION FOL20 LOWING AFFIRMATIVE PRELIMINARY DETERMINATION

21 BY ADMINISTERING AUTHORITY.—If the preliminary

22 determination by the administering authority under

23 section 803(b) is affirmative, then the Commission

24 shall make the determination required by paragraph

25 (1) before the later of—
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1 ‘‘(A) the 120th day after the day on which

2 the administering authority makes its affirma3 tive preliminary determination under section

4 803(b), or

5 ‘‘(B) the 45th day after the day on which

6 the administering authority makes its affirma7 tive final determination under subsection (a).

8 ‘‘(3) PERIOD FOR INJURY DETERMINATION FOL9 LOWING NEGATIVE PRELIMINARY DETERMINATION BY

10 ADMINISTERING AUTHORITY.—If the preliminary de11 termination by the administering authority under

12 section 803(b) is negative, and its final determination

13 under subsection (a) is affirmative, then the final de14 termination by the Commission under this subsection

15 shall be made within 75 days after the date of that

16 affirmative final determination.

17 ‘‘(c) EFFECT OF FINAL DETERMINATIONS.—

18 ‘‘(1) EFFECT OF AFFIRMATIVE DETERMINATION

19 BY THE ADMINISTERING AUTHORITY.—If the deter20 mination of the administering authority under sub21 section (a) is affirmative, then the administering au22 thority shall—

23 ‘‘(A) make available to the Commission all

24 information upon which such determination was

25 based and which the Commission considers rel-
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1 evant to its determination, under such proce2 dures as the administering authority and the

3 Commission may establish to prevent disclosure,

4 other than with the consent of the party provid5 ing it or under protective order, of any informa6 tion as to which confidential treatment has been

7 given by the administering authority, and

8 ‘‘(B) calculate an injurious pricing charge

9 in an amount equal to the amount by which the

10 normal value exceeds the export price of the sub11 ject vessel.

12 ‘‘(2) ISSUANCE OF ORDER; EFFECT OF NEGATIVE

13 DETERMINATION.—If the determinations of the ad14 ministering authority and the Commission under sub15 sections (a)(1) and (b)(1) are affirmative, then the

16 administering authority shall issue an injurious pric17 ing order under section 806. If either of such deter18 minations is negative, the investigation shall be ter19 minated upon the publication of notice of that nega20 tive determination.

21 ‘‘(d) PUBLICATION OF NOTICE OF DETERMINATIONS.—

22 Whenever the administering authority or the Commission

23 makes a determination under this section, it shall notify

24 the petitioner, other parties to the investigation, and the

25 other agency of its determination and of the facts and con-
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1 clusions of law upon which the determination is based, and

2 it shall publish notice of its determination in the Federal

3 Register.

4 ‘‘(e) CORRECTION OF MINISTERIAL ERRORS.—The ad5 ministering authority shall establish procedures for the cor6 rection of ministerial errors in final determinations within

7 a reasonable time after the determinations are issued under

8 this section. Such procedures shall ensure opportunity for

9 interested parties to present their views regarding any such

10 errors. As used in this subsection, the term ‘ministerial

11 error’ includes errors in addition, subtraction, or other

12 arithmetic function, clerical errors resulting from inac13 curate copying, duplication, or the like, and any other type

14 of unintentional error which the administering authority

15 considers ministerial.

16 ‘‘SEC. 806. IMPOSITION AND COLLECTION OF INJURIOUS

17 PRICING CHARGE.

18 ‘‘(a) IN GENERAL.—Within 7 days after being notified

19 by the Commission of an affirmative determination under

20 section 805(b), the administering authority shall publish an

21 order imposing an injurious pricing charge on the foreign

22 producer of the subject vessel which—

23 ‘‘(1) directs the foreign producer of the subject

24 vessel to pay to the Secretary of the Treasury, or the

25 designee of the Secretary, within 180 days from the
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1 date of publication of the order, an injurious pricing

2 charge in an amount equal to the amount by which

3 the normal value exceeds the export price of the sub4 ject vessel,

5 ‘‘(2) includes the identity and location of the for6 eign producer and a description of the subject vessel,

7 in such detail as the administering authority deems

8 necessary, and

9 ‘‘(3) informs the foreign producer that—

10 ‘‘(A) failure to pay the injurious pricing

11 charge in a timely fashion may result in the im12 position of countermeasures with respect to that

13 producer under section 807,

14 ‘‘(B) payment made after the deadline de15 scribed in paragraph (1) shall be subject to inter16 est charges at the Commercial Interest Reference

17 Rate (CIRR), and

18 ‘‘(C) the foreign producer may request an

19 extension of the due date for payment under sub20 section (b).

21 ‘‘(b) EXTENSION OF DUE DATE FOR PAYMENT IN EX22 TRAORDINARY CIRCUMSTANCES.—

23 ‘‘(1) EXTENSION.—Upon request, the administer24 ing authority may amend the order under subsection

25 (a) to set a due date for payment or payments later
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1 than the date that is 180 days from the date of publi2 cation of the order, if the administering authority de3 termines that full payment in 180 days would render

4 the producer insolvent or would be incompatible with

5 a judicially supervised reorganization. When an ex6 tended payment schedule provides for a series of par7 tial payments, the administering authority shall

8 specify the circumstances under which default on one

9 or more payments will result in the imposition of

10 countermeasures.

11 ‘‘(2) INTEREST CHARGES.—If a request is grant12 ed under paragraph (1), payments made after the

13 date that is 180 days from the publication of the

14 order shall be subject to interest charges at the CIRR.

15 ‘‘(c) NOTIFICATION OF ORDER.—The administering

16 authority shall deliver a copy of the order requesting pay17 ment to the foreign producer of the subject vessel and to

18 an appropriate representative of the government of the ex19 porting country.

20 ‘‘(d) REVOCATION OF ORDER.—The administering au21 thority—

22 ‘‘(1) may revoke an injurious pricing order if the

23 administering authority determines that producers

24 accounting for substantially all of the capacity to
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1 produce a domestic like vessel have expressed a lack

2 of interest in the order, and

3 ‘‘(2) shall revoke an injurious pricing order—

4 ‘‘(A) if the sale of the vessel that was the

5 subject of the injurious pricing determination is

6 voided,

7 ‘‘(B) if the injurious pricing charge is paid

8 in full, including any interest accrued for late

9 payment,

10 ‘‘(C) upon full implementation of an alter11 native equivalent remedy described in subsection

12 (e), or

13 ‘‘(D) if, with respect to the vessel sale that

14 was at issue in the investigation that resulted in

15 the injurious pricing order, an antidumping

16 proceeding conducted by a WTO member who is

17 not a Shipbuilding Agreement Party has been

18 completed and resulted in the imposition of anti19 dumping measures.

20 ‘‘(e) ALTERNATIVE EQUIVALENT REMEDY.—

21 ‘‘(1) AGREEMENT FOR ALTERNATE REMEDY.—

22 The administering authority may suspend an injuri23 ous pricing order if the administering authority en24 ters into an agreement with the foreign producer sub-
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1 ject to the order on an alternative equivalent remedy,

2 that the administering authority determines—

3 ‘‘(A) is at least as effective a remedy as the

4 injurious pricing charge,

5 ‘‘(B) is in the public interest,

6 ‘‘(C) can be effectively monitored and en7 forced, and

8 ‘‘(D) is otherwise consistent with the domes9 tic law and international obligations of the

10 United States.

11 ‘‘(2) PRIOR CONSULTATIONS AND SUBMISSION OF

12 COMMENTS.—Before entering into an agreement

13 under paragraph (1), the administering authority

14 shall consult with the industry, and provide for the

15 submission of comments by interested parties, with re16 spect to the agreement.

17 ‘‘(3) MATERIAL VIOLATIONS OF AGREEMENT.—If

18 the injurious pricing order has been suspended under

19 paragraph (1), and the administering authority de20 termines that the foreign producer concerned has ma21 terially violated the terms of the agreement under

22 paragraph (1), the administering authority shall ter23 minate the suspension.

24 ‘‘SEC. 807. IMPOSITION OF COUNTERMEASURES.

25 ‘‘(a) GENERAL RULE.—
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1 ‘‘(1) ISSUANCE OF ORDER IMPOSING COUNTER2 MEASURES.—Unless an injurious pricing order is re3 voked or suspended under section 806 (d) or (e), the

4 administering authority shall issue an order impos5 ing countermeasures.

6 ‘‘(2) CONTENTS OF ORDER.—The countermeasure

7 order shall—

8 ‘‘(A) state that, as provided in section 468,

9 a permit to lade or unlade passengers or mer10 chandise may not be issued with respect to ves11 sels contracted to be built by the foreign producer

12 of the vessel with respect to which an injurious

13 pricing order was issued under section 806, and

14 ‘‘(B) specify the scope and duration of the

15 prohibition on the issuance of a permit to lade

16 or unlade passengers or merchandise.

17 ‘‘(b) NOTICE OF INTENT TO IMPOSE COUNTER18 MEASURES.—

19 ‘‘(1) GENERAL RULE.—The administering au20 thority shall issue a notice of intent to impose coun21 termeasures not later than 30 days before the expira22 tion of the time for payment specified in the injurious

23 pricing order (or extended payment provided for

24 under section 806(b)), and shall publish the notice in
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1 the Federal Register within 7 days after issuing the

2 notice.

3 ‘‘(2) ELEMENTS OF THE NOTICE OF INTENT.—

4 The notice of intent shall contain at least the follow5 ing elements:

6 ‘‘(A) SCOPE.—A permit to lade or unlade

7 passengers or merchandise may not be issued

8 with respect to any vessel—

9 ‘‘(i) built by the foreign producer sub10 ject to the proposed countermeasures, and

11 ‘‘(ii) with respect to which the material

12 terms of sale are established within a period

13 of 4 consecutive years beginning on the date

14 that is 30 days after publication in the Fed15 eral Register of the notice of intent de16 scribed in paragraph (1).

17 ‘‘(B) DURATION.—For each vessel described

18 in subparagraph (A), a permit to lade or unlade

19 passengers or merchandise may not be issued for

20 a period of 4 years after the date of delivery of

21 the vessel.

22 ‘‘(c) DETERMINATION TO IMPOSE COUNTERMEASURES;

23 ORDER.—

24 ‘‘(1) GENERAL RULE.—The administering au25 thority shall, within the time specified in paragraph
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1 (2), issue a determination and order imposing coun2 termeasures.

3 ‘‘(2) TIME FOR DETERMINATION.—The deter4 mination shall be issued within 90 days after the date

5 on which the notice of intent to impose counter6 measures under subsection (b) is published in the

7 Federal Register. The administering authority shall

8 publish the determination, and the order described in

9 paragraph (4), in the Federal Register within 7 days

10 after issuing the final determination, and shall pro11 vide a copy of the determination and order to the

12 Customs Service.

13 ‘‘(3) CONTENT OF THE DETERMINATION.—In the

14 determination imposing countermeasures, the admin15 istering authority shall determine whether, in light of

16 all of the circumstances, an interested party has dem17 onstrated that the scope or duration of the counter18 measures described in subsection (b)(2) should be nar19 rower or shorter than the scope or duration set forth

20 in the notice of intent to impose countermeasures.

21 ‘‘(4) ORDER.—At the same time it issues its de22 termination, the administering authority shall issue

23 an order imposing countermeasures, consistent with

24 its determination under paragraph (1).
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1 ‘‘(d) ADMINISTRATIVE REVIEW OF DETERMINATION TO

2 IMPOSE COUNTERMEASURES.—

3 ‘‘(1) REQUEST FOR REVIEW.—Each year, in the

4 anniversary month of the issuance of the order impos5 ing countermeasures under subsection (c), the admin6 istering authority shall publish in the Federal Reg7 ister a notice providing that interested parties may

8 request—

9 ‘‘(A) a review of the scope or duration of the

10 countermeasures determined under subsection

11 (c)(3), and

12 ‘‘(B) a hearing in connection with such a

13 review.

14 ‘‘(2) REVIEW.—If a proper request has been re15 ceived under paragraph (1), the administering au16 thority shall—

17 ‘‘(A) publish notice of initiation of a review

18 in the Federal Register not later than 15 days

19 after the end of the anniversary month of the is20 suance of the order imposing countermeasures,

21 and

22 ‘‘(B) review and determine whether the re23 questing party has demonstrated that the scope

24 or duration of the countermeasures is excessive

25 in light of all of the circumstances.
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1 ‘‘(3) TIME FOR REVIEW.—The administering au2 thority shall make its determination under paragraph

3 (2)(B) within 90 days after the date on which the no4 tice of initiation of the review is published. If the de5 termination under paragraph (2)(B) is affirmative,

6 the administering authority shall amend the order ac7 cordingly. The administering authority shall prompt8 ly publish the determination and any amendment to

9 the order in the Federal Register, and shall provide

10 a copy of any amended order to the Customs Service.

11 In extraordinary circumstances, the administering

12 authority may extend the time for its determination

13 under paragraph (2)(B) to not later than 150 days

14 after the date on which the notice of initiation of the

15 review is published.

16 ‘‘(e) EXTENSION OF COUNTERMEASURES.—

17 ‘‘(1) REQUEST FOR EXTENSION.—Within the

18 time described in paragraph (2), an interested party

19 may file with the administering authority a request

20 that the scope or duration of countermeasures be ex21 tended.

22 ‘‘(2) DEADLINE FOR REQUEST FOR EXTEN23 SION.—

24 ‘‘(A) REQUEST FOR EXTENSION BEYOND 4

25 YEARS.—If the request seeks an extension that
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1 would cause the scope or duration of counter2 measures to exceed 4 years, including any prior

3 extensions, the request for extension under para4 graph (1) shall be filed not earlier than the date

5 that is 15 months, and not later than the date

6 that is 12 months, before the date that marks the

7 end of the period that specifies the vessels that

8 fall within the scope of the order by virtue of the

9 establishment of material terms of sale within

10 that period.

11 ‘‘(B) OTHER REQUESTS.—If the request

12 seeks an extension under paragraph (1) other

13 than one described in subparagraph (A), the re14 quest shall be filed not earlier than the date that

15 is 6 months, and not later than a date that is

16 3 months, before the date that marks the end of

17 the period referred to in subparagraph (A).

18 ‘‘(3) DETERMINATION.—

19 ‘‘(A) NOTICE OF REQUEST FOR EXTEN20 SION.—If a proper request has been received

21 under paragraph (1), the administering author22 ity shall publish notice of initiation of an exten23 sion proceeding in the Federal Register not later

24 than 15 days after the applicable deadline in

25 paragraph (2) for requesting the extension.
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1 ‘‘(B) PROCEDURES.—

2 ‘‘(i) REQUESTS FOR EXTENSION BE3 YOND 4 YEARS.—If paragraph (2)(A) ap4 plies to the request, the administering au5 thority shall consult with the Trade Rep6 resentative under paragraph (4).

7 ‘‘(ii) OTHER REQUESTS.—If para8 graph (2)(B) applies to the request, the ad9 ministering authority shall determine, with10 in 90 days after the date on which the no11 tice of initiation of the proceeding is pub12 lished, whether the requesting party has

13 demonstrated that the scope or duration of

14 the countermeasures is inadequate in light

15 of all of the circumstances. If the admin16 istering authority determines that an exten17 sion is warranted, it shall amend the coun18 termeasure order accordingly. The admin19 istering authority shall promptly publish

20 the determination and any amendment to

21 the order in the Federal Register, and shall

22 provide a copy of any amended order to the

23 Customs Service.

24 ‘‘(4) CONSULTATION WITH TRADE REPRESENTA25 TIVE.—If paragraph (3)(B)(i) applies, the admin-
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1 istering authority shall consult with the Trade Rep2 resentative concerning whether it would be appro3 priate to request establishment of a dispute settlement

4 panel under the Shipbuilding Agreement for the pur5 pose of seeking authorization to extend the scope or

6 duration of countermeasures for a period in excess of

7 4 years.

8 ‘‘(5) DECISION NOT TO REQUEST PANEL.—If,

9 based on consultations under paragraph (4), the

10 Trade Representative decides not to request establish11 ment of a panel, the Trade Representative shall in12 form the party requesting the extension of the counter13 measures of the reasons for its decision in writing.

14 The decision shall not be subject to judicial review.

15 ‘‘(6) PANEL PROCEEDINGS.—If, based on con16 sultations under paragraph (4), the Trade Represent17 ative requests the establishment of a panel under the

18 Shipbuilding Agreement to authorize an extension of

19 the period of countermeasures, and the panel author20 izes such an extension, the administering authority

21 shall promptly amend the countermeasure order. The

22 administering authority shall publish notice of the

23 amendment in the Federal Register.

24 ‘‘(f) LIST OF VESSELS SUBJECT TO COUNTER25 MEASURES.—
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1 ‘‘(1) GENERAL RULE.—At least once during each

2 12-month period beginning on the anniversary date of

3 a determination to impose countermeasures under

4 this section, the administering authority shall publish

5 in the Federal Register a list of all delivered vessels

6 subject to countermeasures under the determination.

7 ‘‘(2) CONTENT OF LIST.—The list under para8 graph (1) shall include the following information for

9 each vessel, to the extent the information is available:

10 ‘‘(A) The name and general description of

11 the vessel.

12 ‘‘(B) The vessel identification number.

13 ‘‘(C) The shipyard where the vessel was con14 structed.

15 ‘‘(D) The last-known registry of the vessel.

16 ‘‘(E) The name and address of the last17 known owner of the vessel.

18 ‘‘(F) The delivery date of the vessel.

19 ‘‘(G) The remaining duration of counter20 measures on the vessel.

21 ‘‘(H) Any other identifying information

22 available.

23 ‘‘(3) AMENDMENT OF LIST.—-The administering

24 authority may amend the list from time to time to re25 flect new information that comes to its attention and
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1 shall publish any amendments in the Federal Reg2 ister.

3 ‘‘(4) SERVICE OF LIST AND AMENDMENTS.—

4 ‘‘(A) SERVICE OF LIST.—The administering

5 authority shall serve a copy of the list described

6 in paragraph (1) on—

7 ‘‘(i) the petitioner under section

8 802(b),

9 ‘‘(ii) the United States Customs Serv10 ice,

11 ‘‘(iii) the Secretariat of the Organiza12 tion for Economic Cooperation and Devel13 opment,

14 ‘‘(iv) the owners of vessels on the list,

15 ‘‘(v) the shipyards on the list, and

16 ‘‘(vi) the government of the country in

17 which a shipyard on the list is located.

18 ‘‘(B) SERVICE OF AMENDMENTS.—The ad19 ministering authority shall serve a copy of any

20 amendments to the list under paragraph (3) or

21 subsection (g)(3) on—

22 ‘‘(i) the parties listed in clauses (i),

23 (ii), and (iii) of subparagraph (A), and
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1 ‘‘(ii) if the amendment affects their in2 terests, the parties listed in clauses (iv), (v),

3 and (vi) of subparagraph (A).

4 ‘‘(g) ADMINISTRATIVE REVIEW OF LIST OF VESSELS

5 SUBJECT TO COUNTERMEASURES.—

6 ‘‘(1) REQUEST FOR REVIEW.—

7 ‘‘(A) IN GENERAL.—An interested party

8 may request in writing a review of the list de9 scribed in subsection (f)(1), including any

10 amendments thereto, to determine whether—

11 ‘‘(i) a vessel included in the list does

12 not fall within the scope of the applicable

13 countermeasure order and should be deleted,

14 or

15 ‘‘(ii) a vessel not included in the list

16 falls within the scope of the applicable coun17 termeasure order and should be added.

18 ‘‘(B) TIME FOR MAKING REQUEST.—Any re19 quest seeking a determination described in sub20 paragraph (A)(i) shall be made within 90 days

21 after the date of publication of the applicable

22 list.

23 ‘‘(2) REVIEW.—If a proper request for review has

24 been received, the administering authority shall—
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1 ‘‘(A) publish notice of initiation of a review

2 in the Federal Register—

3 ‘‘(i) not later than 15 days after the re4 quest is received, or

5 ‘‘(ii) if the request seeks a determina6 tion described in paragraph (1)(A)(i), not

7 later than 15 days after the deadline de8 scribed in paragraph (1)(B), and

9 ‘‘(B) review and determine whether the re10 questing party has demonstrated that—

11 ‘‘(i) a vessel included in the list does

12 not qualify for such inclusion, or

13 ‘‘(ii) a vessel not included in the list

14 qualifies for inclusion.

15 ‘‘(3) TIME FOR DETERMINATION.—The admin16 istering authority shall make its determination under

17 paragraph (2)(B) within 90 days after the date on

18 which the notice of initiation of such review is pub19 lished. If the administering authority determines that

20 a vessel should be added or deleted from the list, the

21 administering authority shall amend the list accord22 ingly. The administering authority shall promptly

23 publish in the Federal Register the determination and

24 any such amendment to the list.
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1 ‘‘(h) EXPIRATION OF COUNTERMEASURES.—Upon ex2 piration of a countermeasure order imposed under this sec3 tion, the administering authority shall promptly publish a

4 notice of the expiration in the Federal Register.

5 ‘‘(i) SUSPENSION OR TERMINATION OF PROCEEDINGS

6 OR COUNTERMEASURES; TEMPORARY REDUCTION OF

7 COUNTERMEASURES.—

8 ‘‘(1) IF INJURIOUS PRICING ORDER REVOKED OR

9 SUSPENDED.—If an injurious pricing order has been

10 revoked or suspended under section 806(d) or (e), the

11 administering authority shall, as appropriate, sus12 pend or terminate proceedings under this section with

13 respect to that order, or suspend or revoke a counter14 measure order issued with respect to that injurious

15 pricing order.

16 ‘‘(2) IF PAYMENT DATE AMENDED.—

17 ‘‘(A) SUSPENSION OR MODIFICATION OF

18 DEADLINE.—Subject to subparagraph (C), if the

19 payment date under an injurious pricing order

20 is amended under section 845, the administering

21 authority shall, as appropriate, suspend proceed22 ings or modify deadlines under this section, or

23 suspend or amend a countermeasure order issued

24 with respect to that injurious pricing order.
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1 ‘‘(B) DATE FOR APPLICATION OF COUNTER2 MEASURE.—In taking action under subpara3 graph (A), the administering authority shall en4 sure that countermeasures are not applied before

5 the date that is 30 days after publication in the

6 Federal Register of the amended payment date.

7 ‘‘(C) REINSTITUTION OF PROCEEDINGS.—

8 If—

9 ‘‘(i) a countermeasure order is issued

10 under subsection (c) before an amendment

11 is made under section 845 to the payment

12 date of the injurious pricing order to which

13 the countermeasure order applies, and

14 ‘‘(ii) the administering authority de15 termines that the period of time between the

16 original payment date and the amended

17 payment date is significant for purposes of

18 determining the appropriate scope or dura19 tion of countermeasures,

20 the administering authority may, in lieu of act21 ing under subparagraph (A), reinstitute proceed22 ings under subsection (c) for purposes of issuing

23 a new determination under that subsection.
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1 ‘‘(j) COMMENT AND HEARING.—In the course of any

2 proceeding under subsection (c), (d), (e), or (g), the admin3 istering authority—

4 ‘‘(1) shall solicit comments from interested par5 ties, and

6 ‘‘(2)(A) in a proceeding under subsection (c), (d),

7 or (e), upon the request of an interested party, shall

8 hold a hearing in accordance with section 841(b) in

9 connection with that proceeding, or

10 ‘‘(B) in a proceeding under subsection (g), upon

11 the request of an interested party, may hold a hearing

12 in accordance with section 841(b) in connection with

13 that proceeding.

14 ‘‘SEC. 808. INJURIOUS PRICING PETITIONS BY THIRD COUN15 TRIES.

16 ‘‘(a) FILING OF PETITION.—The government of a

17 Shipbuilding Agreement Party may file with the Trade

18 Representative a petition requesting that an investigation

19 be conducted to determine if—

20 ‘‘(1) a vessel from another Shipbuilding Agree21 ment Party has been sold directly or indirectly to one

22 or more United States buyers at less than fair value,

23 and
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1 ‘‘(2) an industry, in the petitioning country,

2 producing or capable of producing a like vessel is ma3 terially injured by reason of such sale.

4 ‘‘(b) INITIATION.—The Trade Representative, after

5 consultation with the administering authority and the

6 Commission and obtaining the approval of the Parties

7 Group under the Shipbuilding Agreement, shall determine

8 whether to initiate an investigation described in subsection

9 (a).

10 ‘‘(c) DETERMINATIONS.—Upon initiation of an inves11 tigation under subsection (a), the Trade Representative

12 shall request the following determinations be made in ac13 cordance with substantive and procedural requirements

14 specified by the Trade Representative, notwithstanding any

15 other provision of this title:

16 ‘‘(1) SALE AT LESS THAN FAIR VALUE.—The ad17 ministering authority shall determine whether the

18 subject vessel has been sold at less than fair value.

19 ‘‘(2) INJURY TO INDUSTRY.—The Commission

20 shall determine whether an industry in the petition21 ing country is or has been materially injured by rea22 son of the sale of the subject vessel in the United

23 States.

24 ‘‘(d) PUBLIC COMMENT.—An opportunity for public

25 comment shall be provided, as appropriate—
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1 ‘‘(1) by the Trade Representative, in making the

2 determinations required by subsection (b), and

3 ‘‘(2) by the administering authority and the

4 Commission, in making the determinations required

5 by subsection (c).

6 ‘‘(e) ISSUANCE OF ORDER.—If the administering au7 thority makes an affirmative determination under para8 graph (1) of subsection (c), and the Commission makes an

9 affirmative determination under paragraph (2) of sub10 section (c), the administering authority shall—

11 ‘‘(1) order an injurious pricing charge in accord12 ance with section 806, and

13 ‘‘(2) make such determinations and take such

14 other actions as are required by sections 806 and 807,

15 as if affirmative determinations had been made under

16 subsections (a) and (b) of section 805.

17 ‘‘(f) REVIEWS OF DETERMINATIONS.—For purposes of

18 review under section 516B, if an order is issued under sub19 section (e)—

20 ‘‘(1) the final determinations of the administer21 ing authority and the Commission under subsection

22 (c) shall be treated as final determinations made

23 under section 805, and

24 ‘‘(2) determinations of the administering author25 ity under subsection (e)(2) shall be treated as deter-
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1 minations made under section 806 or 807, as the case

2 may be.

3 ‘‘(g) ACCESS TO INFORMATION.—Section 843 shall

4 apply to investigations under this section, to the extent

5 specified by the Trade Representative, after consultation

6 with the administering authority and the Commission.

7 ‘‘Subtitle B—Special Rules

8 ‘‘SEC. 821. EXPORT PRICE.

9 ‘‘(a) EXPORT PRICE.—For purposes of this title, the

10 term ‘export price’ means the price at which the subject ves11 sel is first sold (or agreed to be sold) by or for the account

12 of the foreign producer of the subject vessel to an unaffili13 ated United States buyer. The term ‘sold (or agreed to be

14 sold) by or for the account of the foreign producer’ includes

15 any transfer of an ownership interest, including by way

16 of lease or long-term bareboat charter, in conjunction with

17 the original transfer from the producer, either directly or

18 indirectly, to a United States buyer.

19 ‘‘(b) ADJUSTMENTS TO EXPORT PRICE.—The price

20 used to establish export price shall be—

21 ‘‘(1) increased by the amount of any import du22 ties imposed by the country of exportation which have

23 been rebated, or which have not been collected, by rea24 son of the exportation of the subject vessel, and

25 ‘‘(2) reduced by—
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1 ‘‘(A) the amount, if any, included in such

2 price, attributable to any additional costs,

3 charges, or expenses which are incident to bring4 ing the subject vessel from the shipyard in the ex5 porting country to the place of delivery,

6 ‘‘(B) the amount, if included in such price,

7 of any export tax, duty, or other charge imposed

8 by the exporting country on the exportation of

9 the subject vessel, and

10 ‘‘(C) all other expenses incidental to placing

11 the vessel in condition for delivery to the buyer.

12 ‘‘SEC. 822. NORMAL VALUE.

13 ‘‘(a) DETERMINATION.—In determining under this

14 title whether a subject vessel has been sold at less than fair

15 value, a fair comparison shall be made between the export

16 price and normal value of the subject vessel. In order to

17 achieve a fair comparison with the export price, normal

18 value shall be determined as follows:

19 ‘‘(1) DETERMINATION OF NORMAL VALUE.—

20 ‘‘(A) IN GENERAL.—The normal value of the

21 subject vessel shall be the price described in sub22 paragraph (B), at a time reasonably correspond23 ing to the time of the sale used to determine the

24 export price under section 821(a).
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1 ‘‘(B) PRICE.—The price referred to in sub2 paragraph (A) is—

3 ‘‘(i) the price at which a foreign like

4 vessel is first sold in the exporting country,

5 in the ordinary course of trade and, to the

6 extent practicable, at the same level of

7 trade, or

8 ‘‘(ii) in a case to which subparagraph

9 (C) applies, the price at which a foreign

10 like vessel is so sold for consumption in a

11 country other than the exporting country or

12 the United States, if—

13 ‘‘(I) such price is representative,

14 and

15 ‘‘(II) the administering authority

16 does not determine that the particular

17 market situation in such other country

18 prevents a proper comparison with the

19 export price.

20 ‘‘(C) THIRD COUNTRY SALES.—This sub21 paragraph applies when—

22 ‘‘(i) a foreign like vessel is not sold in

23 the exporting country as described in sub24 paragraph (B)(i), or
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1 ‘‘(ii) the particular market situation

2 in the exporting country does not permit a

3 proper comparison with the export price.

4 ‘‘(D) CONTEMPORANEOUS SALE.—For pur5 poses of subparagraph (A), ‘a time reasonably

6 corresponding to the time of the sale’ means

7 within 3 months before or after the sale of the

8 subject vessel or, in the absence of such sales,

9 such longer period as the administering author10 ity determines would be appropriate.

11 ‘‘(2) FICTITIOUS MARKETS.—No pretended sale,

12 and no sale intended to establish a fictitious market,

13 shall be taken into account in determining normal

14 value.

15 ‘‘(3) USE OF CONSTRUCTED VALUE.—If the ad16 ministering authority determines that the normal

17 value of the subject vessel cannot be determined under

18 paragraph (1)(B) or (1)(C), then the normal value of

19 the subject vessel shall be the constructed value of that

20 vessel, as determined under subsection (e).

21 ‘‘(4) INDIRECT SALES.—If a foreign like vessel is

22 sold through an affiliated party, the price at which

23 the foreign like vessel is sold by such affiliated party

24 may be used in determining normal value.
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1 ‘‘(5) ADJUSTMENTS.—The price described in

2 paragraph (1)(B) shall be—

3 ‘‘(A) reduced by—

4 ‘‘(i) the amount, if any, included in

5 the price described in paragraph (1)(B), at6 tributable to any costs, charges, and ex7 penses incident to bringing the foreign like

8 vessel from the shipyard to the place of de9 livery to the purchaser,

10 ‘‘(ii) the amount of any taxes imposed

11 directly upon the foreign like vessel or com12 ponents thereof which have been rebated, or

13 which have not been collected, on the subject

14 vessel, but only to the extent that such taxes

15 are added to or included in the price of the

16 foreign like vessel, and

17 ‘‘(iii) the amount of all other expenses

18 incidental to placing the foreign like vessel

19 in condition for delivery to the buyer, and

20 ‘‘(B) increased or decreased by the amount

21 of any difference (or lack thereof) between the ex22 port price and the price described in paragraph

23 (1)(B) (other than a difference for which allow24 ance is otherwise provided under this section)

25 that is established to the satisfaction of the ad-
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1 ministering authority to be wholly or partly due

2 to—

3 ‘‘(i) physical differences between the

4 subject vessel and the vessel used in deter5 mining normal value, or

6 ‘‘(ii) other differences in the cir7 cumstances of sale.

8 ‘‘(6) ADJUSTMENTS FOR LEVEL OF TRADE.—The

9 price described in paragraph (1)(B) shall also be in10 creased or decreased to make due allowance for any

11 difference (or lack thereof) between the export price

12 and the price described in paragraph (1)(B) (other

13 than a difference for which allowance is otherwise

14 made under this section) that is shown to be wholly

15 or partly due to a difference in level of trade between

16 the export price and normal value, if the difference in

17 level of trade—

18 ‘‘(A) involves the performance of different

19 selling activities, and

20 ‘‘(B) is demonstrated to affect price com21 parability, based on a pattern of consistent price

22 differences between sales at different levels of

23 trade in the country in which normal value is

24 determined.
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1 In a case described in the preceding sentence, the

2 amount of the adjustment shall be based on the price

3 differences between the two levels of trade in the coun4 try in which normal value is determined.

5 ‘‘(7) ADJUSTMENTS TO CONSTRUCTED VALUE.—

6 Constructed value as determined under subsection (e)

7 may be adjusted, as appropriate, pursuant to this

8 subsection.

9 ‘‘(b) SALES AT LESS THAN COST OF PRODUCTION.—

10 ‘‘(1) DETERMINATION; SALES DISREGARDED.—

11 Whenever the administering authority has reasonable

12 grounds to believe or suspect that the sale of the for13 eign like vessel under consideration for the determina14 tion of normal value has been made at a price which

15 represents less than the cost of production of the for16 eign like vessel, the administering authority shall de17 termine whether, in fact, such sale was made at less

18 than the cost of production. If the administering au19 thority determines that the sale was made at less than

20 the cost of production and was not at a price which

21 permits recovery of all costs within 5 years, such sale

22 may be disregarded in the determination of normal

23 value. Whenever such a sale is disregarded, normal

24 value shall be based on another sale of a foreign like

25 vessel in the ordinary course of trade. If no sales
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1 made in the ordinary course of trade remain, the nor2 mal value shall be based on the constructed value of

3 the subject vessel.

4 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—For

5 purposes of this subsection:

6 ‘‘(A) REASONABLE GROUNDS TO BELIEVE

7 OR SUSPECT.—There are reasonable grounds to

8 believe or suspect that the sale of a foreign like

9 vessel was made at a price that is less than the

10 cost of production of the vessel, if an interested

11 party described in subparagraph (C), (D), (E),

12 or (F) of section 861(17) provides information,

13 based upon observed prices or constructed prices

14 or costs, that the sale of the foreign like vessel

15 under consideration for the determination of nor16 mal value has been made at a price which rep17 resents less than the cost of production of the ves18 sel.

19 ‘‘(B) RECOVERY OF COSTS.—If the price is

20 below the cost of production at the time of sale

21 but is above the weighted average cost of produc22 tion for the period of investigation, such price

23 shall be considered to provide for recovery of

24 costs within 5 years.
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1 ‘‘(3) CALCULATION OF COST OF PRODUCTION.—

2 For purposes of this section, the cost of production

3 shall be an amount equal to the sum of—

4 ‘‘(A) the cost of materials and of fabrication

5 or other processing of any kind employed in pro6 ducing the foreign like vessel, during a period

7 which would ordinarily permit the production of

8 that vessel in the ordinary course of business,

9 and

10 ‘‘(B) an amount for selling, general, and

11 administrative expenses based on actual data

12 pertaining to the production and sale of the for13 eign like vessel by the producer in question.

14 For purposes of subparagraph (A), if the normal

15 value is based on the price of the foreign like vessel

16 sold in a country other than the exporting country,

17 the cost of materials shall be determined without re18 gard to any internal tax in the exporting country im19 posed on such materials or on their disposition which

20 are remitted or refunded upon exportation.

21 ‘‘(c) NONMARKET ECONOMY COUNTRIES.—

22 ‘‘(1) IN GENERAL.—If—

23 ‘‘(A) the subject vessel is produced in a non24 market economy country, and
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1 ‘‘(B) the administering authority finds that

2 available information does not permit the nor3 mal value of the subject vessel to be determined

4 under subsection (a),

5 the administering authority shall determine the nor6 mal value of the subject vessel on the basis of the value

7 of the factors of production utilized in producing the

8 vessel and to which shall be added an amount for gen9 eral expenses and profit plus the cost of expenses inci10 dental to placing the vessel in a condition for delivery

11 to the buyer. Except as provided in paragraph (2),

12 the valuation of the factors of production shall be

13 based on the best available information regarding the

14 values of such factors in a market economy country

15 or countries considered to be appropriate by the ad16 ministering authority.

17 ‘‘(2) EXCEPTION.—If the administering author18 ity finds that the available information is inadequate

19 for purposes of determining the normal value of the

20 subject vessel under paragraph (1), the administering

21 authority shall determine the normal value on the

22 basis of the price at which a vessel that is—

23 ‘‘(A) comparable to the subject vessel, and

24 ‘‘(B) produced in one or more market econ25 omy countries that are at a level of economic de-
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1 velopment comparable to that of the nonmarket

2 economy country,

3 is sold in other countries, including the United

4 States.

5 ‘‘(3) FACTORS OF PRODUCTION.—For purposes of

6 paragraph (1), the factors of production utilized in

7 producing the vessel include, but are not limited to—

8 ‘‘(A) hours of labor required,

9 ‘‘(B) quantities of raw materials employed,

10 ‘‘(C) amounts of energy and other utilities

11 consumed, and

12 ‘‘(D) representative capital cost, including

13 depreciation.

14 ‘‘(4) VALUATION OF FACTORS OF PRODUCTION.—

15 The administering authority, in valuing factors of

16 production under paragraph (1), shall utilize, to the

17 extent possible, the prices or costs of factors of produc18 tion in one or more market economy countries that

19 are—

20 ‘‘(A) at a level of economic development

21 comparable to that of the nonmarket economy

22 country, and

23 ‘‘(B) significant producers of comparable

24 vessels.
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1 ‘‘(d) SPECIAL RULE FOR CERTAIN MULTINATIONAL

2 CORPORATIONS.—Whenever, in the course of an investiga3 tion under this title, the administering authority deter4 mines that—

5 ‘‘(1) the subject vessel was produced in facilities

6 which are owned or controlled, directly or indirectly,

7 by a person, firm, or corporation which also owns or

8 controls, directly or indirectly, other facilities for the

9 production of a foreign like vessel which are located

10 in another country or countries,

11 ‘‘(2) subsection (a)(1)(C) applies, and

12 ‘‘(3) the normal value of a foreign like vessel pro13 duced in one or more of the facilities outside the ex14 porting country is higher than the normal value of

15 the foreign like vessel produced in the facilities located

16 in the exporting country,

17 the administering authority shall determine the normal

18 value of the subject vessel by reference to the normal value

19 at which a foreign like vessel is sold from one or more facili20 ties outside the exporting country. The administering au21 thority, in making any determination under this sub22 section, shall make adjustments for the difference between

23 the costs of production (including taxes, labor, materials,

24 and overhead) of the foreign like vessel produced in facilities

25 outside the exporting country and costs of production of the
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1 foreign like vessel produced in facilities in the exporting

2 country, if such differences are demonstrated to its satisfac3 tion.

4 ‘‘(e) CONSTRUCTED VALUE.—

5 ‘‘(1) IN GENERAL.—For purposes of this title, the

6 constructed value of a subject vessel shall be an

7 amount equal to the sum of—

8 ‘‘(A) the cost of materials and fabrication or

9 other processing of any kind employed in pro10 ducing the subject vessel, during a period which

11 would ordinarily permit the production of the

12 vessel in the ordinary course of business, and

13 ‘‘(B)(i) the actual amounts incurred and re14 alized by the foreign producer of the subject ves15 sel for selling, general, and administrative ex16 penses, and for profits, in connection with the

17 production and sale of a foreign like vessel, in

18 the ordinary course of trade, in the domestic

19 market of the country of origin of the subject ves20 sel, or

21 ‘‘(ii) if actual data are not available with

22 respect to the amounts described in clause (i),

23 then—

24 ‘‘(I) the actual amounts incurred and

25 realized by the foreign producer of the sub-
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1 ject vessel for selling, general, and adminis2 trative expenses, and for profits, in connec3 tion with the production and sale of the

4 same general category of vessel in the do5 mestic market of the country of origin of the

6 subject vessel,

7 ‘‘(II) the weighted average of the actual

8 amounts incurred and realized by producers

9 in the country of origin of the subject vessel

10 (other than the producer of the subject ves11 sel) for selling, general, and administrative

12 expenses, and for profits, in connection with

13 the production and sale of a foreign like

14 vessel, in the ordinary course of trade, in

15 the domestic market, or

16 ‘‘(III) if data are not available under

17 subclause (I) or (II), the amounts incurred

18 and realized for selling, general, and ad19 ministrative expenses, and for profits, based

20 on any other reasonable method, except that

21 the amount allowed for profit may not ex22 ceed the amount normally realized by for23 eign producers (other than the producer of

24 the subject vessel) in connection with the

25 sale of vessels in the same general category
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1 of vessel as the subject vessel in the domestic

2 market of the country of origin of the sub3 ject vessel.

4 For purposes of this paragraph, the profit shall be

5 based on the average profit realized over a reasonable

6 period of time before and after the sale of the subject

7 vessel and shall reflect a reasonable profit at the time

8 of such sale. For purposes of the preceding sentence,

9 a ‘reasonable period of time’ shall not, except where

10 otherwise appropriate, exceed 6 months before, or 6

11 months after, the sale of the subject vessel. In calculat12 ing profit under this paragraph, any distortion which

13 would result in other than a profit which is reason14 able at the time of the sale shall be eliminated.

15 ‘‘(2) COSTS AND PROFITS BASED ON OTHER REA16 SONABLE METHODS.—When costs and profits are de17 termined under paragraph (1)(B)(ii)(III), such deter18 mination shall, except where otherwise appropriate,

19 be based on appropriate export sales by the producer

20 of the subject vessel or, absent such sales, to export

21 sales by other producers of a foreign like vessel or the

22 same general category of vessel as the subject vessel in

23 the country of origin of the subject vessel.

24 ‘‘(3) COSTS OF MATERIALS.—For purposes of

25 paragraph (1)(A), the cost of materials shall be deter-
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1 mined without regard to any internal tax in the ex2 porting country imposed on such materials or their

3 disposition which are remitted or refunded upon ex4 portation of the subject vessel produced from such ma5 terials.

6 ‘‘(f) SPECIAL RULES FOR CALCULATION OF COST OF

7 PRODUCTION AND FOR CALCULATION OF CONSTRUCTED

8 VALUE.—For purposes of subsections (b) and (e)—

9 ‘‘(1) COSTS.—

10 ‘‘(A) IN GENERAL.—Costs shall normally be

11 calculated based on the records of the foreign

12 producer of the subject vessel, if such records are

13 kept in accordance with the generally accepted

14 accounting principles of the exporting country

15 and reasonably reflect the costs associated with

16 the production and sale of the vessel. The admin17 istering authority shall consider all available

18 evidence on the proper allocation of costs, includ19 ing that which is made available by the foreign

20 producer on a timely basis, if such allocations

21 have been historically used by the foreign pro22 ducer, in particular for establishing appropriate

23 amortization and depreciation periods, and al24 lowances for capital expenditures and other de25 velopment costs.
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1 ‘‘(B) NONRECURRING COSTS.—Costs shall be

2 adjusted appropriately for those nonrecurring

3 costs that benefit current or future production, or

4 both.

5 ‘‘(C) STARTUP COSTS.—

6 ‘‘(i) IN GENERAL.—Costs shall be ad7 justed appropriately for circumstances in

8 which costs incurred during the time period

9 covered by the investigation are affected by

10 startup operations.

11 ‘‘(ii) STARTUP OPERATIONS.—Adjust12 ments shall be made for startup operations

13 only where—

14 ‘‘(I) a producer is using new pro15 duction facilities or producing a new

16 type of vessel that requires substantial

17 additional investment, and

18 ‘‘(II) production levels are limited

19 by technical factors associated with the

20 initial phase of commercial produc21 tion.

22 For purposes of subclause (II), the initial

23 phase of commercial production ends at the

24 end of the startup period. In determining

25 whether commercial production levels have
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1 been achieved, the administering authority

2 shall consider factors unrelated to startup

3 operations that might affect the volume of

4 production processed, such as demand,

5 seasonality, or business cycles.

6 ‘‘(iii) ADJUSTMENT FOR STARTUP OP7 ERATIONS.—The adjustment for startup op8 erations shall be made by substituting the

9 unit production costs incurred with respect

10 to the vessel at the end of the startup period

11 for the unit production costs incurred dur12 ing the startup period. If the startup period

13 extends beyond the period of the investiga14 tion under this title, the administering au15 thority shall use the most recent cost of pro16 duction data that it reasonably can obtain,

17 analyze, and verify without delaying the

18 timely completion of the investigation.

19 For purposes of this subparagraph, the startup

20 period ends at the point at which the level of

21 commercial production that is characteristic of

22 the vessel, the producer, or the industry is

23 achieved.

24 ‘‘(D) COSTS DUE TO EXTRAORDINARY CIR25 CUMSTANCES NOT INCLUDED.—Costs shall not
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1 include actual costs which are due to extraor2 dinary circumstances (including, but not limited

3 to, labor disputes, fire, and natural disasters)

4 and which are significantly over the cost in5 crease which the shipbuilder could have reason6 ably anticipated and taken into account at the

7 time of sale.

8 ‘‘(2) TRANSACTIONS DISREGARDED.—A trans9 action directly or indirectly between affiliated persons

10 may be disregarded if, in the case of any element of

11 value required to be considered, the amount represent12 ing that element does not fairly reflect the amount

13 usually reflected in sales of a like vessel in the market

14 under consideration. If a transaction is disregarded

15 under the preceding sentence and no other trans16 actions are available for consideration, the determina17 tion of the amount shall be based on the information

18 available as to what the amount would have been if

19 the transaction had occurred between persons who are

20 not affiliated.

21 ‘‘(3) MAJOR INPUT RULE.—If, in the case of a

22 transaction between affiliated persons involving the

23 production by one of such persons of a major input

24 to the subject vessel, the administering authority has

25 reasonable grounds to believe or suspect that an
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1 amount represented as the value of such input is less

2 than the cost of production of such input, then the ad3 ministering authority may determine the value of the

4 major input on the basis of the information available

5 regarding such cost of production, if such cost is

6 greater than the amount that would be determined for

7 such input under paragraph (2).

8 ‘‘SEC. 823. CURRENCY CONVERSION.

9 ‘‘(a) IN GENERAL.—In an injurious pricing proceed10 ing under this title, the administering authority shall con11 vert foreign currencies into United States dollars using the

12 exchange rate in effect on the date of sale of the subject ves13 sel, except that if it is established that a currency trans14 action on forward markets is directly linked to a sale under

15 consideration, the exchange rate specified with respect to

16 such foreign currency in the forward sale agreement shall

17 be used to convert the foreign currency.

18 ‘‘(b) DATE OF SALE.—For purposes of this section,

19 ‘date of sale’ means the date of the contract of sale or, where

20 appropriate, the date on which the material terms of sale

21 are otherwise established. If the material terms of sale are

22 significantly changed after such date, the date of sale is the

23 date of such change. In the case of such a change in the

24 date of sale, the administering authority shall make appro25 priate adjustments to take into account any unreasonable
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1 effect on the injurious pricing margin due only to fluctua2 tions in the exchange rate between the original date of sale

3 and the new date of sale.

4 ‘‘Subtitle C—Procedures

5 ‘‘SEC. 841. HEARINGS.

6 ‘‘(a) UPON REQUEST.—The administering authority

7 and the Commission shall each hold a hearing in the course

8 of an investigation under this title, upon the request of any

9 party to the investigation, before making a final determina10 tion under section 805.

11 ‘‘(b) PROCEDURES.—Any hearing required or per12 mitted under this title shall be conducted after notice pub13 lished in the Federal Register, and a transcript of the hear14 ing shall be prepared and made available to the public. The

15 hearing shall not be subject to the provisions of subchapter

16 II of chapter 5 of title 5, United States Code, or to section

17 702 of such title.

18 ‘‘SEC. 842. DETERMINATIONS ON THE BASIS OF THE FACTS

19 AVAILABLE.

20 ‘‘(a) IN GENERAL.—If—

21 ‘‘(1) necessary information is not available on

22 the record, or

23 ‘‘(2) an interested party or any other person—
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1 ‘‘(A) withholds information that has been

2 requested by the administering authority or the

3 Commission under this title,

4 ‘‘(B) fails to provide such information by

5 the deadlines for the submission of the informa6 tion or in the form and manner requested, sub7 ject to subsections (b)(1) and (d) of section 844,

8 ‘‘(C) significantly impedes a proceeding

9 under this title, or

10 ‘‘(D) provides such information but the in11 formation cannot be verified as provided in sec12 tion 844(g),

13 the administering authority and the Commission

14 shall, subject to section 844(c), use the facts otherwise

15 available in reaching the applicable determination

16 under this title.

17 ‘‘(b) ADVERSE INFERENCES.—If the administering au18 thority or the Commission (as the case may be) finds that

19 an interested party has failed to cooperate by not acting

20 to the best of its ability to comply with a request for infor21 mation from the administering authority or the Commis22 sion, the administering authority or the Commission (as

23 the case may be), in reaching the applicable determination

24 under this title, may use an inference that is adverse to

25 the interests of that party in selecting from among the facts
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1 otherwise available. Such adverse inference may include re2 liance on information derived from—

3 ‘‘(1) the petition, or

4 ‘‘(2) any other information placed on the record.

5 ‘‘(c) CORROBORATION OF SECONDARY INFORMA6 TION.—When the administering authority or the Commis7 sion relies on secondary information rather than on infor8 mation obtained in the course of an investigation under this

9 title, the administering authority and the Commission, as

10 the case may be, shall, to the extent practicable, corroborate

11 that information from independent sources that are reason12 ably at their disposal.

13 ‘‘SEC. 843. ACCESS TO INFORMATION.

14 ‘‘(a) INFORMATION GENERALLY MADE AVAILABLE.—

15 ‘‘(1) PROGRESS OF INVESTIGATION REPORTS.—

16 The administering authority and the Commission

17 shall, from time to time upon request, inform the par18 ties to an investigation under this title of the progress

19 of that investigation.

20 ‘‘(2) EX PARTE MEETINGS.—The administering

21 authority and the Commission shall maintain a

22 record of any ex parte meeting between—

23 ‘‘(A) interested parties or other persons pro24 viding factual information in connection with a

25 proceeding under this title, and
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1 ‘‘(B) the person charged with making the

2 determination, or any person charged with mak3 ing a final recommendation to that person, in

4 connection with that proceeding,

5 if information relating to that proceeding was pre6 sented or discussed at such meeting. The record of

7 such an ex parte meeting shall include the identity of

8 the persons present at the meeting, the date, time, and

9 place of the meeting, and a summary of the matters

10 discussed or submitted. The record of the ex parte

11 meeting shall be included in the record of the proceed12 ing.

13 ‘‘(3) SUMMARIES; NONPROPRIETARY SUBMIS14 SIONS.—The administering authority and the Com15 mission shall disclose—

16 ‘‘(A) any proprietary information received

17 in the course of a proceeding under this title if

18 it is disclosed in a form which cannot be associ19 ated with, or otherwise be used to identify, oper20 ations of a particular person, and

21 ‘‘(B) any information submitted in connec22 tion with a proceeding which is not designated

23 as proprietary by the person submitting it.

24 ‘‘(4) MAINTENANCE OF PUBLIC RECORD.—The

25 administering authority and the Commission shall
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1 maintain and make available for public inspection

2 and copying a record of all information which is ob3 tained by the administering authority or the Commis4 sion, as the case may be, in a proceeding under this

5 title to the extent that public disclosure of the infor6 mation is not prohibited under this chapter or exempt

7 from disclosure under section 552 of title 5, United

8 States Code.

9 ‘‘(b) PROPRIETARY INFORMATION.—

10 ‘‘(1) PROPRIETARY STATUS MAINTAINED.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 subsection (a)(4) and subsection (c), information

13 submitted to the administering authority or the

14 Commission which is designated as proprietary

15 by the person submitting the information shall

16 not be disclosed to any person without the con17 sent of the person submitting the information,

18 other than—

19 ‘‘(i) to an officer or employee of the ad20 ministering authority or the Commission

21 who is directly concerned with carrying out

22 the investigation in connection with which

23 the information is submitted or any other

24 proceeding under this title covering the

25 same subject vessel, or
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1 ‘‘(ii) to an officer or employee of the

2 United States Customs Service who is di3 rectly involved in conducting an investiga4 tion regarding fraud under this title.

5 ‘‘(B) ADDITIONAL REQUIREMENTS.—The

6 administering authority and the Commission

7 shall require that information for which propri8 etary treatment is requested be accompanied

9 by—

10 ‘‘(i) either—

11 ‘‘(I) a nonproprietary summary

12 in sufficient detail to permit a reason13 able understanding of the substance of

14 the information submitted in con15 fidence, or

16 ‘‘(II) a statement that the infor17 mation is not susceptible to summary,

18 accompanied by a statement of the rea19 sons in support of the contention, and

20 ‘‘(ii) either—

21 ‘‘(I) a statement which permits

22 the administering authority or the

23 Commission to release under adminis24 trative protective order, in accordance
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1 with subsection (c), the information

2 submitted in confidence, or

3 ‘‘(II) a statement to the admin4 istering authority or the Commission

5 that the business proprietary informa6 tion is of a type that should not be re7 leased under administrative protective

8 order.

9 ‘‘(2) UNWARRANTED DESIGNATION.—If the ad10 ministering authority or the Commission determines,

11 on the basis of the nature and extent of the informa12 tion or its availability from public sources, that des13 ignation of any information as proprietary is unwar14 ranted, then it shall notify the person who submitted

15 it and ask for an explanation of the reasons for the

16 designation. Unless that person persuades the admin17 istering authority or the Commission that the des18 ignation is warranted, or withdraws the designation,

19 the administering authority or the Commission, as

20 the case may be, shall return it to the party submit21 ting it. In a case in which the administering author22 ity or the Commission returns the information to the

23 person submitting it, the person may thereafter sub24 mit other material concerning the subject matter of

25 the returned information if the submission is made
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1 within the time otherwise provided for submitting

2 such material.

3 ‘‘(c) LIMITED DISCLOSURE OF CERTAIN PROPRIETARY

4 INFORMATION UNDER PROTECTIVE ORDER.—

5 ‘‘(1) DISCLOSURE BY ADMINISTERING AUTHOR6 ITY OR COMMISSION.—

7 ‘‘(A) IN GENERAL.—Upon receipt of an ap8 plication (before or after receipt of the informa9 tion requested) which describes in general terms

10 the information requested and sets forth the rea11 sons for the request, the administering authority

12 or the Commission shall make all business pro13 prietary information presented to, or obtained by

14 it, during a proceeding under this title (except

15 privileged information, classified information,

16 and specific information of a type for which

17 there is a clear and compelling need to withhold

18 from disclosure) available to all interested par19 ties who are parties to the proceeding under a

20 protective order described in subparagraph (B),

21 regardless of when the information is submitted

22 during the proceeding. Customer names (other

23 than the name of the United States buyer of the

24 subject vessel) obtained during any investigation

25 which requires a determination under section
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1 805(b) may not be disclosed by the administering

2 authority under protective order until either an

3 order is published under section 806(a) as a re4 sult of the investigation or the investigation is

5 suspended or terminated. The Commission may

6 delay disclosure of customer names (other than

7 the name of the United States buyer of the sub8 ject vessel) under protective order during any

9 such investigation until a reasonable time before

10 any hearing provided under section 841 is held.

11 ‘‘(B) PROTECTIVE ORDER.—The protective

12 order under which information is made available

13 shall contain such requirements as the admin14 istering authority or the Commission may deter15 mine by regulation to be appropriate. The ad16 ministering authority and the Commission shall

17 provide by regulation for such sanctions as the

18 administering authority and the Commission de19 termine to be appropriate, including disbarment

20 from practice before the agency.

21 ‘‘(C) TIME LIMITATIONS ON DETERMINA22 TIONS.—The administering authority or the

23 Commission, as the case may be, shall determine

24 whether to make information available under

25 this paragraph—
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1 ‘‘(i) not later than 14 days (7 days if

2 the submission pertains to a proceeding

3 under section 803(a)) after the date on

4 which the information is submitted, or

5 ‘‘(ii) if—

6 ‘‘(I) the person that submitted the

7 information raises objection to its re8 lease, or

9 ‘‘(II) the information is unusually

10 voluminous or complex,

11 not later than 30 days (10 days if the sub12 mission pertains to a proceeding under sec13 tion 803(a)) after the date on which the in14 formation is submitted.

15 ‘‘(D) AVAILABILITY AFTER DETERMINA16 TION.—If the determination under subparagraph

17 (C) is affirmative, then—

18 ‘‘(i) the business proprietary informa19 tion submitted to the administering author20 ity or the Commission on or before the date

21 of the determination shall be made avail22 able, subject to the terms and conditions of

23 the protective order, on such date, and

24 ‘‘(ii) the business proprietary informa25 tion submitted to the administering author-
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1 ity or the Commission after the date of the

2 determination shall be served as required by

3 subsection (d).

4 ‘‘(E) FAILURE TO DISCLOSE.—If a person

5 submitting information to the administering au6 thority refuses to disclose business proprietary

7 information which the administering authority

8 determines should be released under a protective

9 order described in subparagraph (B), the admin10 istering authority shall return the information,

11 and any nonconfidential summary thereof, to the

12 person submitting the information and summary

13 and shall not consider either.

14 ‘‘(2) DISCLOSURE UNDER COURT ORDER.—If the

15 administering authority or the Commission denies a

16 request for information under paragraph (1), then

17 application may be made to the United States Court

18 of International Trade for an order directing the ad19 ministering authority or the Commission, as the case

20 may be, to make the information available. After no21 tification of all parties to the investigation and after

22 an opportunity for a hearing on the record, the court

23 may issue an order, under such conditions as the

24 court deems appropriate, which shall not have the ef25 fect of stopping or suspending the investigation, di-
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1 recting the administering authority or the Commis2 sion to make all or a portion of the requested infor3 mation described in the preceding sentence available

4 under a protective order and setting forth sanctions

5 for violation of such order if the court finds that,

6 under the standards applicable in proceedings of the

7 court, such an order is warranted, and that—

8 ‘‘(A) the administering authority or the

9 Commission has denied access to the information

10 under subsection (b)(1),

11 ‘‘(B) the person on whose behalf the infor12 mation is requested is an interested party who is

13 a party to the investigation in connection with

14 which the information was obtained or devel15 oped, and

16 ‘‘(C) the party which submitted the infor17 mation to which the request relates has been no18 tified, in advance of the hearing, of the request

19 made under this section and of its right to ap20 pear and be heard.

21 ‘‘(d) SERVICE.—Any party submitting written infor22 mation, including business proprietary information, to the

23 administering authority or the Commission during a pro24 ceeding shall, at the same time, serve the information upon

25 all interested parties who are parties to the proceeding, if
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1 the information is covered by a protective order. The ad2 ministering authority or the Commission shall not accept

3 any such information that is not accompanied by a certifi4 cate of service and a copy of the protective order version

5 of the document containing the information. Business pro6 prietary information shall only be served upon interested

7 parties who are parties to the proceeding that are subject

8 to protective order, except that a nonconfidential summary

9 thereof shall be served upon all other interested parties who

10 are parties to the proceeding.

11 ‘‘(e) INFORMATION RELATING TO VIOLATIONS OF PRO12 TECTIVE ORDERS AND SANCTIONS.—The administering au13 thority and the Commission may withhold from disclosure

14 any correspondence, private letters of reprimand, settlement

15 agreements, and documents and files compiled in relation

16 to investigations and actions involving a violation or pos17 sible violation of a protective order issued under subsection

18 (c), and such information shall be treated as information

19 described in section 552(b)(3) of title 5, United States Code.

20 ‘‘(f) OPPORTUNITY FOR COMMENT BY VESSEL BUY21 ERS.—The administering authority and the Commission

22 shall provide an opportunity for buyers of subject vessels

23 to submit relevant information to the administering author24 ity concerning a sale at less than fair value or counter-
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1 measures, and to the Commission concerning material in2 jury by reason of the sale of a vessel at less than fair value.

3 ‘‘(g) PUBLICATION OF DETERMINATIONS; REQUIRE4 MENTS FOR FINAL DETERMINATIONS.—

5 ‘‘(1) IN GENERAL.—Whenever the administering

6 authority makes a determination under section 802

7 whether to initiate an investigation, or the admin8 istering authority or the Commission makes a pre9 liminary determination under section 803, a final de10 termination under section 805, a determination under

11 subsection (b), (c), (d), (e)(3)(B)(ii), (g), or (i) of sec12 tion 807, or a determination to suspend an investiga13 tion under this title, the administering authority or

14 the Commission, as the case may be, shall publish the

15 facts and conclusions supporting that determination,

16 and shall publish notice of that determination in the

17 Federal Register.

18 ‘‘(2) CONTENTS OF NOTICE OR DETERMINA19 TION.—The notice or determination published under

20 paragraph (1) shall include, to the extent applica21 ble—

22 ‘‘(A) in the case of a determination of the

23 administering authority—
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1 ‘‘(i) the names of the United States

2 buyer and the foreign producer, and the

3 country of origin of the subject vessel,

4 ‘‘(ii) a description sufficient to identify

5 the subject vessel (including type, purpose,

6 and size),

7 ‘‘(iii) with respect to an injurious

8 pricing charge, the injurious pricing mar9 gin established and a full explanation of the

10 methodology used in establishing such mar11 gin,

12 ‘‘(iv) with respect to countermeasures,

13 the scope and duration of countermeasures

14 and, if applicable, any changes thereto, and

15 ‘‘(v) the primary reasons for the deter16 mination, and

17 ‘‘(B) in the case of a determination of the

18 Commission—

19 ‘‘(i) considerations relevant to the de20 termination of injury, and

21 ‘‘(ii) the primary reasons for the deter22 mination.

23 ‘‘(3) ADDITIONAL REQUIREMENTS FOR FINAL DE24 TERMINATIONS.—In addition to the requirements set

25 forth in paragraph (2)—
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1 ‘‘(A) the administering authority shall in2 clude in a final determination under section 805

3 or 807(c) an explanation of the basis for its de4 termination that addresses relevant arguments,

5 made by interested parties who are parties to the

6 investigation, concerning the establishment of the

7 injurious pricing charge with respect to which

8 the determination is made, and

9 ‘‘(B) the Commission shall include in a

10 final determination of injury an explanation of

11 the basis for its determination that addresses rel12 evant arguments that are made by interested

13 parties who are parties to the investigation con14 cerning the effects and impact on the industry of

15 the sale of the subject vessel.

16 ‘‘SEC. 844. CONDUCT OF INVESTIGATIONS.

17 ‘‘(a) CERTIFICATION OF SUBMISSIONS.—Any person

18 providing factual information to the administering author19 ity or the Commission in connection with a proceeding

20 under this title on behalf of the petitioner or any other in21 terested party shall certify that such information is accu22 rate and complete to the best of that person’s knowledge.

23 ‘‘(b) DIFFICULTIES IN MEETING REQUIREMENTS.—

24 ‘‘(1) NOTIFICATION BY INTERESTED PARTY.—If

25 an interested party, promptly after receiving a re-
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1 quest from the administering authority or the Com2 mission for information, notifies the administering

3 authority or the Commission (as the case may be)

4 that such party is unable to submit the information

5 requested in the requested form and manner, together

6 with a full explanation and suggested alternative

7 forms in which such party is able to submit the infor8 mation, the administering authority or the Commis9 sion (as the case may be) shall consider the ability of

10 the interested party to submit the information in the

11 requested form and manner and may modify such re12 quirements to the extent necessary to avoid imposing

13 an unreasonable burden on that party.

14 ‘‘(2) ASSISTANCE TO INTERESTED PARTIES.—

15 The administering authority and the Commission

16 shall take into account any difficulties experienced by

17 interested parties, particularly small companies, in

18 supplying information requested by the administering

19 authority or the Commission in connection with in20 vestigations under this title, and shall provide to such

21 interested parties any assistance that is practicable in

22 supplying such information.

23 ‘‘(c) DEFICIENT SUBMISSIONS.—If the administering

24 authority or the Commission determines that a response to

25 a request for information under this title does not comply
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1 with the request, the administering authority or the Com2 mission (as the case may be) shall promptly inform the per3 son submitting the response of the nature of the deficiency

4 and shall, to the extent practicable, provide that person with

5 an opportunity to remedy or explain the deficiency in light

6 of the time limits established for the completion of investiga7 tions or reviews under this title. If that person submits fur8 ther information in response to such deficiency and either—

9 ‘‘(1) the administering authority or the Commis10 sion (as the case may be) finds that such response is

11 not satisfactory, or

12 ‘‘(2) such response is not submitted within the

13 applicable time limits,

14 then the administering authority or the Commission (as the

15 case may be) may, subject to subsection (d), disregard all

16 or part of the original and subsequent responses.

17 ‘‘(d) USE OF CERTAIN INFORMATION.—In reaching a

18 determination under section 803, 805, or 807, the admin19 istering authority and the Commission shall not decline to

20 consider information that is submitted by an interested

21 party and is necessary to the determination but does not

22 meet all the applicable requirements established by the ad23 ministering authority or the Commission if—

24 ‘‘(1) the information is submitted by the deadline

25 established for its submission,
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1 ‘‘(2) the information can be verified,

2 ‘‘(3) the information is not so incomplete that it

3 cannot serve as a reliable basis for reaching the appli4 cable determination,

5 ‘‘(4) the interested party has demonstrated that

6 it acted to the best of its ability in providing the in7 formation and meeting the requirements established

8 by the administering authority or the Commission

9 with respect to the information, and

10 ‘‘(5) the information can be used without undue

11 difficulties.

12 ‘‘(e) NONACCEPTANCE OF SUBMISSIONS.—If the ad13 ministering authority or the Commission declines to accept

14 into the record any information submitted in an investiga15 tion under this title, it shall, to the extent practicable, pro16 vide to the person submitting the information a written ex17 planation of the reasons for not accepting the information.

18 ‘‘(f) PUBLIC COMMENT ON INFORMATION.—Informa19 tion that is submitted on a timely basis to the administer20 ing authority or the Commission during the course of a pro21 ceeding under this title shall be subject to comment by other

22 parties to the proceeding within such reasonable time as

23 the administering authority or the Commission shall pro24 vide. The administering authority and the Commission, be25 fore making a final determination under section 805 or 807,
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1 shall cease collecting information and shall provide the par2 ties with a final opportunity to comment on the informa3 tion obtained by the administering authority or the Com4 mission (as the case may be) upon which the parties have

5 not previously had an opportunity to comment. Comments

6 containing new factual information shall be disregarded.

7 ‘‘(g) VERIFICATION.—The administering authority

8 shall verify all information relied upon in making a final

9 determination under section 805.

10 ‘‘SEC. 845. ADMINISTRATIVE ACTION FOLLOWING SHIP11 BUILDING AGREEMENT PANEL REPORTS.

12 ‘‘(a) ACTION BY UNITED STATES INTERNATIONAL

13 TRADE COMMISSION.—

14 ‘‘(1) ADVISORY REPORT.—If a dispute settlement

15 panel under the Shipbuilding Agreement finds in a

16 report that an action by the Commission in connec17 tion with a particular proceeding under this title is

18 not in conformity with the obligations of the United

19 States under the Shipbuilding Agreement, the Trade

20 Representative may request the Commission to issue

21 an advisory report on whether this title permits the

22 Commission to take steps in connection with the par23 ticular proceeding that would render its action not

24 inconsistent with the findings of the panel concerning

25 those obligations. The Trade Representative shall no-
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1 tify the Committee on Ways and Means of the House

2 of Representatives and the Committee on Finance of

3 the Senate of such request.

4 ‘‘(2) TIME LIMITS FOR REPORT.—The Commis5 sion shall transmit its report under paragraph (1) to

6 the Trade Representative within 30 calendar days

7 after the Trade Representative requests the report.

8 ‘‘(3) CONSULTATIONS ON REQUEST FOR COMMIS9 SION DETERMINATION.—If a majority of the Commis10 sioners issues an affirmative report under paragraph

11 (1), the Trade Representatives shall consult with the

12 congressional committees listed in paragraph (1) con13 cerning the matter.

14 ‘‘(4) COMMISSION DETERMINATION.—Notwith15 standing any other provision of this title, if a major16 ity of the Commissioners issues an affirmative report

17 under paragraph (1), the Commission, upon the writ18 ten request of the Trade Representative, shall issue a

19 determination in connection with the particular pro20 ceeding that would render the Commission’s action

21 described in paragraph (1) not inconsistent with the

22 findings of the panel. The Commission shall issue its

23 determination not later than 120 calendar days after

24 the request from the Trade Representative is made.
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1 ‘‘(5) CONSULTATIONS ON IMPLEMENTATION OF

2 COMMISSION DETERMINATION.—The Trade Represent3 ative shall consult with the congressional committees

4 listed in paragraph (1) before the Commission’s deter5 mination under paragraph (4) is implemented.

6 ‘‘(6) REVOCATION OF ORDER.—If, by virtue of

7 the Commission’s determination under paragraph (4),

8 an injurious pricing order is no longer supported by

9 an affirmative Commission determination under this

10 title, the Trade Representative may, after consulting

11 with the congressional committees under paragraph

12 (5), direct the administering authority to revoke the

13 injurious pricing order.

14 ‘‘(b) ACTION BY ADMINISTERING AUTHORITY.—

15 ‘‘(1) CONSULTATIONS WITH ADMINISTERING AU16 THORITY AND CONGRESSIONAL COMMITTEES.—

17 Promptly after a report or other determination by a

18 dispute settlement panel under the Shipbuilding

19 Agreement is issued that contains findings that—

20 ‘‘(A) an action by the administering au21 thority in a proceeding under this title is not in

22 conformity with the obligations of the United

23 States under the Shipbuilding Agreement,
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1 ‘‘(B) the due date for payment of an injuri2 ous pricing charge contained in an order issued

3 under section 806 should be amended,

4 ‘‘(C) countermeasures provided for in an

5 order issued under section 807 should be provi6 sionally suspended or reduced pending the final

7 decision of the panel, or

8 ‘‘(D) the scope or duration of counter9 measures imposed under section 807 should be

10 narrowed or shortened,

11 the Trade Representative shall consult with the ad12 ministering authority and the congressional commit13 tees listed in subsection (a)(1) on the matter.

14 ‘‘(2) DETERMINATION BY ADMINISTERING AU15 THORITY.—Notwithstanding any other provision of

16 this title, the administering authority shall, in re17 sponse to a written request from the Trade Represent18 ative, issue a determination, or an amendment to or

19 suspension of an injurious pricing or countermeasure

20 order, as the case may be, in connection with the par21 ticular proceeding that would render the administer22 ing authority’s action described in paragraph (1) not

23 inconsistent with the findings of the panel.
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1 ‘‘(3) TIME LIMITS FOR DETERMINATIONS.—The

2 administering authority shall issue its determination,

3 amendment, or suspension under paragraph (2)—

4 ‘‘(A) with respect to a matter described in

5 subparagraph (A) of paragraph (1), within 180

6 calendar days after the request from the Trade

7 Representative is made, and

8 ‘‘(B) with respect to a matter described in

9 subparagraph (B), (C), or (D) of paragraph (1),

10 within 15 calendar days after the request from

11 the Trade Representative is made.

12 ‘‘(4) CONSULTATIONS BEFORE IMPLEMENTA13 TION.—Before the administering authority imple14 ments any determination, amendment, or suspension

15 under paragraph (2), the Trade Representative shall

16 consult with the administering authority and the con17 gressional committees listed in subsection (a)(1) with

18 respect to such determination, amendment, or suspen19 sion.

20 ‘‘(5) IMPLEMENTATION OF DETERMINATION.—

21 The Trade Representative may, after consulting with

22 the administering authority and the congressional

23 committees under paragraph (4), direct the admin24 istering authority to implement, in whole or in part,

25 the determination, amendment, or suspension made
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1 under paragraph (2). The administering authority

2 shall publish notice of such implementation in the

3 Federal Register.

4 ‘‘(c) OPPORTUNITY FOR COMMENT BY INTERESTED

5 PARTIES.—Before issuing a determination, amendment, or

6 suspension, the administering authority, in a matter de7 scribed in subsection (b)(1)(A), or the Commission, in a

8 matter described in subsection (a)(1), as the case may be,

9 shall provide interested parties with an opportunity to sub10 mit written comments and, in appropriate cases, may hold

11 a hearing, with respect to the determination.

12 ‘‘Subtitle D—Definitions

13 ‘‘SEC. 861. DEFINITIONS.

14 ‘‘For purposes of this title:

15 ‘‘(1) ADMINISTERING AUTHORITY.—The term

16 ‘administering authority’ means the Secretary of

17 Commerce, or any other officer of the United States

18 to whom the responsibility for carrying out the duties

19 of the administering authority under this title are

20 transferred by law.

21 ‘‘(2) COMMISSION.—The term ‘Commission’

22 means the United States International Trade Com23 mission.

24 ‘‘(3) COUNTRY.—The term ‘country’ means a for25 eign country, a political subdivision, dependent terri-
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1 tory, or possession of a foreign country and, except as

2 provided in paragraph (16)(E)(iii), may not include

3 an association of 2 or more foreign countries, politi4 cal subdivisions, dependent territories, or possessions

5 of countries into a customs union outside the United

6 States.

7 ‘‘(4) INDUSTRY.—

8 ‘‘(A) IN GENERAL.—Except as used in sec9 tion 808, the term ‘industry’ means the produc10 ers as a whole of a domestic like vessel, or those

11 producers whose collective capability to produce

12 a domestic like vessel constitutes a major propor13 tion of the total domestic capability to produce

14 a domestic like vessel.

15 ‘‘(B) PRODUCER.—A ‘producer’ of a domes16 tic like vessel includes an entity that is produc17 ing the domestic like vessel and an entity with

18 the capability to produce the domestic like vessel.

19 ‘‘(C) CAPABILITY TO PRODUCE A DOMESTIC

20 LIKE VESSEL.—A producer has the ‘capability to

21 produce a domestic like vessel’ if it is capable of

22 producing a domestic like vessel with its present

23 facilities or could adapt its facilities in a timely

24 manner to produce a domestic like vessel.
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1 ‘‘(D) RELATED PARTIES.—(i) In an inves2 tigation under this title, if a producer of a do3 mestic like vessel and the foreign producer, seller

4 (other than the foreign producer), or United

5 States buyer of the subject vessel are related par6 ties, or if a producer of a domestic like vessel is

7 also a United States buyer of the subject vessel,

8 the domestic producer may, in appropriate cir9 cumstances, be excluded from the industry.

10 ‘‘(ii) For purposes of clause (i), a domestic

11 producer and the foreign producer, seller, or

12 United States buyer shall be considered to be re13 lated parties, if—

14 ‘‘(I) the domestic producer directly or

15 indirectly controls the foreign producer, sell16 er, or United States buyer,

17 ‘‘(II) the foreign producer, seller, or

18 United States buyer directly or indirectly

19 controls the domestic producer,

20 ‘‘(III) a third party directly or indi21 rectly controls the domestic producer and

22 the foreign producer, seller, or United States

23 buyer, or

24 ‘‘(IV) the domestic producer and the

25 foreign producer, seller, or United States
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1 buyer directly or indirectly control a third

2 party and there is reason to believe that the

3 relationship causes the domestic producer to

4 act differently than a nonrelated producer.

5 For purposes of this subparagraph, a party shall

6 be considered to directly or indirectly control an7 other party if the party is legally or operation8 ally in a position to exercise restraint or direc9 tion over the other party.

10 ‘‘(E) PRODUCT LINES.—In an investigation

11 under this title, the effect of the sale of the subject

12 vessel shall be assessed in relation to the United

13 States production (or production capability) of a

14 domestic like vessel if available data permit the

15 separate identification of production (or produc16 tion capability) in terms of such criteria as the

17 production process or the producer’s profits. If

18 the domestic production (or production capabil19 ity) of a domestic like vessel has no separate

20 identity in terms of such criteria, then the effect

21 of the sale of the subject vessel shall be assessed

22 by the examination of the production (or produc23 tion capability) of the narrowest group or range

24 of vessels, which includes a domestic like vessel,
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1 for which the necessary information can be pro2 vided.

3 ‘‘(5) BUYER.—The term ‘buyer’ means any per4 son who acquires an ownership interest in a vessel,

5 including by way of lease or long-term bareboat char6 ter, in conjunction with the original transfer from the

7 producer, either directly or indirectly, including an

8 individual or company which owns or controls a

9 buyer. There may be more than one buyer of any one

10 vessel.

11 ‘‘(6) UNITED STATES BUYER.—The term ‘United

12 States buyer’ means a buyer that is any of the follow13 ing:

14 ‘‘(A) A United States citizen.

15 ‘‘(B) A juridical entity, including any cor16 poration, company, association, or other organi17 zation, that is legally constituted under the laws

18 and regulations of the United States or a politi19 cal subdivision thereof, regardless of whether the

20 entity is organized for pecuniary gain, privately

21 or government owned, or organized with limited

22 or unlimited liability.

23 ‘‘(C) A juridical entity that is owned or

24 controlled by nationals or entities described in
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1 subparagraphs (A) and (B). For the purposes of

2 this subparagraph—

3 ‘‘(i) the term ‘own’ means having more

4 than a 50 percent interest, and

5 ‘‘(ii) the term ‘control’ means the ac6 tual ability to have substantial influence on

7 corporate behavior, and control is presumed

8 to exist where there is at least a 25 percent

9 interest.

10 If ownership of a company is established under

11 clause (i), other control is presumed not to exist

12 unless it is otherwise established.

13 ‘‘(7) OWNERSHIP INTEREST.—An ‘ownership in14 terest’ in a vessel includes any contractual or propri15 etary interest which allows the beneficiary or bene16 ficiaries of such interest to take advantage of the oper17 ation of the vessel in a manner substantially com18 parable to the way in which an owner may benefit

19 from the operation of the vessel. In determining

20 whether such substantial comparability exists, the ad21 ministering authority shall consider—

22 ‘‘(A) the terms and circumstances of the

23 transaction which conveys the interest,

24 ‘‘(B) commercial practice within the indus25 try,
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1 ‘‘(C) whether the vessel subject to the trans2 action is integrated into the operations of the

3 beneficiary or beneficiaries, and

4 ‘‘(D) whether in practice there is a likeli5 hood that the beneficiary or beneficiaries of such

6 interests will take advantage of and the risk for

7 the operation of the vessel for a significant part

8 of the life-time of the vessel.

9 ‘‘(8) VESSEL.—

10 ‘‘(A) IN GENERAL.—Except as otherwise

11 specifically provided under international agree12 ments, the term ‘vessel’ means—

13 ‘‘(i) a self-propelled seagoing vessel of

14 100 gross tons or more used for transpor15 tation of goods or persons or for perform16 ance of a specialized service (including, but

17 not limited to, ice breakers and dredgers),

18 and

19 ‘‘(ii) a tug of 365 kilowatts or more,

20 that is produced in a Shipbuilding Agreement

21 Party or a country that is not a Shipbuilding

22 Agreement Party and not a WTO member.

23 ‘‘(B) EXCLUSIONS.—The term ‘vessel’ does

24 not include—
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1 ‘‘(i) any fishing vessel destined for the

2 fishing fleet of the country in which the ves3 sel is built,

4 ‘‘(ii) any military vessel, and

5 ‘‘(iii) any vessel sold before the date

6 that the Shipbuilding Agreement enters into

7 force with respect to the United States, ex8 cept that any vessel sold after December 21,

9 1994, for delivery more than 5 years after

10 the date of the contract of sale shall be a

11 ‘vessel’ for purposes of this title unless the

12 shipbuilder demonstrates to the administer13 ing authority that the extended delivery

14 date was for normal commercial reasons

15 and not to avoid applicability of this title.

16 ‘‘(C) SELF-PROPELLED SEAGOING VES17 SEL.—A vessel is ‘self-propelled seagoing’ if its

18 permanent propulsion and steering provide it all

19 the characteristics of self-navigability in the high

20 seas.

21 ‘‘(D) MILITARY VESSEL.—A ‘military ves22 sel’ is a vessel which, according to its basic struc23 tural characteristics and ability, is intended to

24 be used exclusively for military purposes.
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1 ‘‘(9) LIKE VESSEL.—The term ‘like vessel’ means

2 a vessel of the same type, same purpose, and approxi3 mate size as the subject vessel and possessing charac4 teristics closely resembling those of the subject vessel.

5 ‘‘(10) DOMESTIC LIKE VESSEL.—The term ‘do6 mestic like vessel’ means a like vessel produced in the

7 United States.

8 ‘‘(11) FOREIGN LIKE VESSEL.—Except as used

9 in section 822(e)(1)(B)(ii)(II), the term ‘foreign like

10 vessel’ means a like vessel produced by the foreign

11 producer of the subject vessel for sale in the producer’s

12 domestic market or in a third country.

13 ‘‘(12) SAME GENERAL CATEGORY OF VESSEL.—

14 The term ‘same general category of vessel’ means a

15 vessel of the same type and purpose as the subject ves16 sel, but of a significantly different size.

17 ‘‘(13) SUBJECT VESSEL.—The term ‘subject ves18 sel’ means a vessel subject to investigation under sec19 tion 801 or 808.

20 ‘‘(14) FOREIGN PRODUCER.—The term ‘foreign

21 producer’ means the producer or producers of the sub22 ject vessel.

23 ‘‘(15) EXPORTING COUNTRY.—The term ‘export24 ing country’ means the country in which the subject

25 vessel was built.
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1 ‘‘(16) MATERIAL INJURY.—

2 ‘‘(A) IN GENERAL.—The term ‘material in3 jury’ means harm which is not inconsequential,

4 immaterial, or unimportant.

5 ‘‘(B) SALE AND CONSEQUENT IMPACT.—In

6 making determinations under sections 803(a)

7 and 805(b), the Commission in each case—

8 ‘‘(i) shall consider—

9 ‘‘(I) the sale of the subject vessel,

10 ‘‘(II) the effect of the sale of the

11 subject vessel on prices in the United

12 States for a domestic like vessel, and

13 ‘‘(III) the impact of the sale of the

14 subject vessel on domestic producers of

15 a domestic like vessel, but only in the

16 context of production operations within

17 the United States, and

18 ‘‘(ii) may consider such other economic

19 factors as are relevant to the determination

20 regarding whether there is or has been ma21 terial injury by reason of the sale of the

22 subject vessel.

23 In the notification required under section 805(d),

24 the Commission shall explain its analysis of each

25 factor considered under clause (i), and identify
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1 each factor considered under clause (ii) and ex2 plain in full its relevance to the determination.

3 ‘‘(C) EVALUATION OF RELEVANT FAC4 TORS.—For purposes of subparagraph (B)—

5 ‘‘(i) SALE OF THE SUBJECT VESSEL.—

6 In evaluating the sale of the subject vessel,

7 the Commission shall consider whether the

8 sale, either in absolute terms or relative to

9 production or demand in the United States,

10 in terms of either volume or value, is or has

11 been significant.

12 ‘‘(ii) PRICE.—In evaluating the effect

13 of the sale of the subject vessel on prices, the

14 Commission shall consider whether—

15 ‘‘(I) there has been significant

16 price underselling of the subject vessel

17 as compared with the price of a domes18 tic like vessel, and

19 ‘‘(II) the effect of the sale of the

20 subject vessel otherwise depresses or has

21 depressed prices to a significant degree

22 or prevents or has prevented price in23 creases, which otherwise would have oc24 curred, to a significant degree.
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1 ‘‘(iii) IMPACT ON AFFECTED DOMESTIC

2 INDUSTRY.—In examining the impact re3 quired to be considered under subparagraph

4 (B)(i)(III), the Commission shall evaluate

5 all relevant economic factors which have a

6 bearing on the state of the industry in the

7 United States, including, but not limited

8 to—

9 ‘‘(I) actual and potential decline

10 in output, sales, market share, profits,

11 productivity, return on investments,

12 and utilization of capacity,

13 ‘‘(II) factors affecting domestic

14 prices, including with regard to sales,

15 ‘‘(III) actual and potential nega16 tive effects on cash flow, employment,

17 wages, growth, ability to raise capital,

18 and investment,

19 ‘‘(IV) actual and potential nega20 tive effects on the existing development

21 and production efforts of the domestic

22 industry, including efforts to develop a

23 derivative or more advanced version of

24 a domestic like vessel, and
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1 ‘‘(V) the magnitude of the injuri2 ous pricing margin.

3 The Commission shall evaluate all relevant

4 economic factors described in this clause

5 within the context of the business cycle and

6 conditions of competition that are distinc7 tive to the affected industry.

8 ‘‘(D) STANDARD FOR DETERMINATION.—

9 The presence or absence of any factor which the

10 Commission is required to evaluate under sub11 paragraph (C) shall not necessarily give decisive

12 guidance with respect to the determination by

13 the Commission of material injury.

14 ‘‘(E) THREAT OF MATERIAL INJURY.—

15 ‘‘(i) IN GENERAL.—In determining

16 whether an industry in the United States is

17 threatened with material injury by reason

18 of the sale of the subject vessel, the Commis19 sion shall consider, among other relevant

20 economic factors—

21 ‘‘(I) any existing unused produc22 tion capacity or imminent, substantial

23 increase in production capacity in the

24 exporting country indicating the likeli25 hood of substantially increased sales of
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1 a foreign like vessel to United States

2 buyers, taking into account the avail3 ability of other export markets to ab4 sorb any additional exports,

5 ‘‘(II) whether the sale of a foreign

6 like vessel or other factors indicate the

7 likelihood of significant additional

8 sales to United States buyers,

9 ‘‘(III) whether sale of the subject

10 vessel or sale of a foreign like vessel by

11 the foreign producer are at prices that

12 are likely to have a significant depress13 ing or suppressing effect on domestic

14 prices, and are likely to increase de15 mand for further sales,

16 ‘‘(IV) the potential for product17 shifting if production facilities in the

18 exporting country, which can presently

19 be used to produce a foreign like vessel

20 or could be adapted in a timely man21 ner to produce a foreign like vessel, are

22 currently being used to produce other

23 types of vessels,

24 ‘‘(V) the actual and potential neg25 ative effects on the existing develop-
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1 ment and production efforts of the do2 mestic industry, including efforts to

3 develop a derivative or more advanced

4 version of a domestic like vessel, and

5 ‘‘(VI) any other demonstrable ad6 verse trends that indicate the prob7 ability that there is likely to be mate8 rial injury by reason of the sale of the

9 subject vessel.

10 ‘‘(ii) BASIS FOR DETERMINATION.—

11 The Commission shall consider the factors

12 set forth in clause (i) as a whole. The pres13 ence or absence of any factor which the

14 Commission is required to consider under

15 clause (i) shall not necessarily give decisive

16 guidance with respect to the determination.

17 Such a determination may not be made on

18 the basis of mere conjecture or supposition.

19 ‘‘(iii) EFFECT OF INJURIOUS PRICING

20 IN THIRD-COUNTRY MARKETS.—

21 ‘‘(I) IN GENERAL.—The Commis22 sion shall consider whether injurious

23 pricing in the markets of foreign coun24 tries (as evidenced by injurious pricing

25 findings or injurious pricing remedies
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1 of other Shipbuilding Agreement Par2 ties, or antidumping determinations of,

3 or measures imposed by, other coun4 tries, against a like vessel produced by

5 the producer under investigation) sug6 gests a threat of material injury to the

7 domestic industry. In the course of its

8 investigation, the Commission shall re9 quest information from the foreign pro10 ducer or United States buyer concern11 ing this issue.

12 ‘‘(II) EUROPEAN COMMUNITIES.—

13 For purposes of this clause, the Euro14 pean Communities as a whole shall be

15 treated as a single foreign country.

16 ‘‘(F) CUMULATION FOR DETERMINING MA17 TERIAL INJURY.—

18 ‘‘(i) IN GENERAL.—For purposes of

19 clauses (i) and (ii) of subparagraph (C),

20 and subject to clause (ii) of this subpara21 graph, the Commission shall cumulatively

22 assess the effects of sales of foreign like ves23 sels from all foreign producers with respect

24 to which—
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1 ‘‘(I) petitions were filed under sec2 tion 802(b) on the same day,

3 ‘‘(II) investigations were initiated

4 under section 802(a) on the same day,

5 or

6 ‘‘(III) petitions were filed under

7 section 802(b) and investigations were

8 initiated under section 802(a) on the

9 same day,

10 if, with respect to such vessels, the foreign

11 producers compete with each other and with

12 producers of a domestic like vessel in the

13 United States market.

14 ‘‘(ii) EXCEPTIONS.—The Commission

15 shall not cumulatively assess the effects of

16 sales under clause (i)—

17 ‘‘(I) with respect to which the ad18 ministering authority has made a pre19 liminary negative determination, un20 less the administering authority subse21 quently made a final affirmative deter22 mination with respect to those sales be23 fore the Commission’s final determina24 tion is made, or
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1 ‘‘(II) from any producer with re2 spect to which the investigation has

3 been terminated.

4 ‘‘(iii) RECORDS IN FINAL INVESTIGA5 TIONS.—In each final determination in

6 which it cumulatively assesses the effects of

7 sales under clause (i), the Commission may

8 make its determinations based on the record

9 compiled in the first investigation in which

10 it makes a final determination, except that

11 when the administering authority issues its

12 final determination in a subsequently com13 pleted investigation, the Commission shall

14 permit the parties in the subsequent inves15 tigation to submit comments concerning the

16 significance of the administering authority’s

17 final determination, and shall include such

18 comments and the administering authority’s

19 final determination in the record for the

20 subsequent investigation.

21 ‘‘(G) CUMULATION FOR DETERMINING

22 THREAT OF MATERIAL INJURY.—To the extent

23 practicable and subject to subparagraph (F)(ii),

24 for purposes of clause (i) (II) and (III) of sub25 paragraph (E), the Commission may cumula-
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1 tively assess the effects of sales of like vessels from

2 all countries with respect to which—

3 ‘‘(i) petitions were filed under section

4 802(b) on the same day,

5 ‘‘(ii) investigations were initiated

6 under section 802(a) on the same day, or

7 ‘‘(iii) petitions were filed under section

8 802(b) and investigations were initiated

9 under section 802(a) on the same day,

10 if, with respect to such vessels, the foreign pro11 ducers compete with each other and with produc12 ers of a domestic like vessel in the United States

13 market.

14 ‘‘(17) INTERESTED PARTY.—The term ‘interested

15 party’ means, in a proceeding under this title—

16 ‘‘(A)(i) the foreign producer, seller (other

17 than the foreign producer), and the United

18 States buyer of the subject vessel, or

19 ‘‘(ii) a trade or business association a ma20 jority of the members of which are the foreign

21 producer, seller, or United States buyer of the

22 subject vessel,

23 ‘‘(B) the government of the country in

24 which the subject vessel is produced or manufac25 tured,
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1 ‘‘(C) a producer that is a member of an in2 dustry,

3 ‘‘(D) a certified union or recognized union

4 or group of workers which is representative of an

5 industry,

6 ‘‘(E) a trade or business association a ma7 jority of whose members are producers in an in8 dustry,

9 ‘‘(F) an association, a majority of whose

10 members is composed of interested parties de11 scribed in subparagraph (C), (D), or (E), and

12 ‘‘(G) for purposes of section 807, a pur13 chaser who, after the effective date of an order is14 sued under that section, entered into a contract

15 of sale with the foreign producer that is subject

16 to the order.

17 ‘‘(18) AFFIRMATIVE DETERMINATIONS BY DI18 VIDED COMMISSION.—If the Commissioners voting on

19 a determination by the Commission are evenly di20 vided as to whether the determination should be af21 firmative or negative, the Commission shall be deemed

22 to have made an affirmative determination. For the

23 purpose of applying this paragraph when the issue

24 before the Commission is to determine whether there

25 is or has been—
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1 ‘‘(A) material injury to an industry in the

2 United States,

3 ‘‘(B) threat of material injury to such an

4 industry, or

5 ‘‘(C) material retardation of the establish6 ment of an industry in the United States,

7 by reason of the sale of the subject vessel, an affirma8 tive vote on any of the issues shall be treated as a vote

9 that the determination should be affirmative.

10 ‘‘(19) ORDINARY COURSE OF TRADE.—The term

11 ‘ordinary course of trade’ means the conditions and

12 practices which, for a reasonable time before the sale

13 of the subject vessel, have been normal in the ship14 building industry with respect to a like vessel. The

15 administering authority shall consider the following

16 sales and transactions, among others, to be outside the

17 ordinary course of trade:

18 ‘‘(A) Sales disregarded under section

19 822(b)(1).

20 ‘‘(B) Transactions disregarded under sec21 tion 822(f)(2).

22 ‘‘(20) NONMARKET ECONOMY COUNTRY.—

23 ‘‘(A) IN GENERAL.—The term ‘nonmarket

24 economy country’ means any foreign country

25 that the administering authority determines does
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1 not operate on market principles of cost or pric2 ing structures, so that sales of vessels in such

3 country do not reflect the fair value of the vessels.

4 ‘‘(B) FACTORS TO BE CONSIDERED.—In

5 making determinations under subparagraph (A)

6 the administering authority shall take into ac7 count—

8 ‘‘(i) the extent to which the currency of

9 the foreign country is convertible into the

10 currency of other countries,

11 ‘‘(ii) the extent to which wage rates in

12 the foreign country are determined by free

13 bargaining between labor and management,

14 ‘‘(iii) the extent to which joint ventures

15 or other investments by firms of other for16 eign countries are permitted in the foreign

17 country,

18 ‘‘(iv) the extent of government owner19 ship or control of the means of production,

20 ‘‘(v) the extent of government control

21 over the allocation of resources and over the

22 price and output decisions of enterprises,

23 and

24 ‘‘(vi) such other factors as the admin25 istering authority considers appropriate.
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1 ‘‘(C) DETERMINATION IN EFFECT.—

2 ‘‘(i) Any determination that a foreign

3 country is a nonmarket economy country

4 shall remain in effect until revoked by the

5 administering authority.

6 ‘‘(ii) The administering authority may

7 make a determination under subparagraph

8 (A) with respect to any foreign country at

9 any time.

10 ‘‘(D) DETERMINATIONS NOT IN ISSUE.—

11 Notwithstanding any other provision of law, any

12 determination made by the administering au13 thority under subparagraph (A) shall not be sub14 ject to judicial review in any investigation con15 ducted under subtitle A.

16 ‘‘(21) SHIPBUILDING AGREEMENT.—The term

17 ‘Shipbuilding Agreement’ means The Agreement Re18 specting Normal Competitive Conditions in the Com19 mercial Shipbuilding and Repair Industry, resulting

20 from negotiations under the auspices of the Organiza21 tion for Economic Cooperation and Development, and

22 entered into on December 21, 1994.

23 ‘‘(22) SHIPBUILDING AGREEMENT PARTY.—The

24 term ‘Shipbuilding Agreement Party’ means a state

25 or separate customs territory that is a Party to the
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1 Shipbuilding Agreement, and with respect to which

2 the United States applies the Shipbuilding Agree3 ment.

4 ‘‘(23) WTO AGREEMENT.—The term ‘WTO

5 Agreement’ means the Agreement defined in section

6 2(9) of the Uruguay Round Agreements Act.

7 ‘‘(24) WTO MEMBER.—The term ‘WTO member’

8 means a state, or separate customs territory (within

9 the meaning of Article XII of the WTO Agreement),

10 with respect to which the United States applies the

11 WTO Agreement.

12 ‘‘(25) TRADE REPRESENTATIVE.—The term

13 ‘Trade Representative’ means the United States Trade

14 Representative.

15 ‘‘(26) AFFILIATED PERSONS.—The following per16 sons shall be considered to be ‘affiliated’ or ‘affiliated

17 persons’:

18 ‘‘(A) Members of a family, including broth19 ers and sisters (whether by the whole or half

20 blood), spouse, ancestors, and lineal descendants.

21 ‘‘(B) Any officer or director of an organiza22 tion and such organization.

23 ‘‘(C) Partners.

24 ‘‘(D) Employer and employee.
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1 ‘‘(E) Any person directly or indirectly own2 ing, controlling, or holding with power to vote,

3 5 percent or more of the outstanding voting stock

4 or shares of any organization, and such organi5 zation.

6 ‘‘(F) Two or more persons directly or indi7 rectly controlling, controlled by, or under com8 mon control with, any person.

9 ‘‘(G) Any person who controls any other

10 person, and such other person.

11 For purposes of this paragraph, a person shall be con12 sidered to control another person if the person is le13 gally or operationally in a position to exercise re14 straint or direction over the other person.

15 ‘‘(27) INJURIOUS PRICING.—The term ‘injurious

16 pricing’ refers to the sale of a vessel at less than fair

17 value.

18 ‘‘(28) INJURIOUS PRICING MARGIN.—

19 ‘‘(A) IN GENERAL.—The term ‘injurious

20 pricing margin’ means the amount by which the

21 normal value exceeds the export price of the sub22 ject vessel.

23 ‘‘(B) MAGNITUDE OF THE INJURIOUS PRIC24 ING MARGIN.—The magnitude of the injurious
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1 pricing margin used by the Commission shall

2 be—

3 ‘‘(i) in making a preliminary deter4 mination under section 803(a) in an inves5 tigation (including any investigation in

6 which the Commission cumulatively assesses

7 the effect of sales under paragraph

8 (16)(F)(i)), the injurious pricing margin or

9 margins published by the administering au10 thority in its notice of initiation of the in11 vestigation; and

12 ‘‘(ii) in making a final determination

13 under section 805(b), the injurious pricing

14 margin or margins most recently published

15 by the administering authority before the

16 closing of the Commission’s administrative

17 record.

18 ‘‘(29) COMMERCIAL INTEREST REFERENCE

19 RATE.—The term ‘Commercial Interest Reference

20 Rate’ or ‘CIRR’ means an interest rate that the ad21 ministering authority determines to be consistent with

22 Annex III, and appendices and notes thereto, of the

23 Understanding on Export Credits for Ships, resulting

24 from negotiations under the auspices of the Organiza-
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1 tion for Economic Cooperation, and entered into on

2 December 21, 1994.

3 ‘‘(30) ANTIDUMPING.—

4 ‘‘(A) WTO MEMBERS.—In the case of a

5 WTO member, the term ‘antidumping’ refers to

6 action taken pursuant to the Agreement on Im7 plementation of Article VI of the General Agree8 ment on Tariffs and Trade 1994.

9 ‘‘(B) OTHER CASES.—In the case of any

10 country that is not a WTO member, the term

11 ‘antidumping’ refers to action taken by the coun12 try against the sale of a vessel at less than fair

13 value that is comparable to action described in

14 subparagraph (A).

15 ‘‘(31) BROAD MULTIPLE BID.—The term ‘broad

16 multiple bid’ means a bid in which the proposed

17 buyer extends an invitation to bid to at least all the

18 producers in the industry known by the buyer to be

19 capable of building the subject vessel.’’.

20 SEC. 204. ENFORCEMENT OF COUNTERMEASURES.

21 Part II of title IV of the Tariff Act of 1930 is amended

22 by adding at the end the following:
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1 ‘‘SEC. 468. SHIPBUILDING AGREEMENT COUNTER2 MEASURES.

3 ‘‘(a) IN GENERAL.—Notwithstanding any other provi4 sion of law, upon receiving from the Secretary of Commerce

5 a list of vessels subject to countermeasures under section

6 807, the Customs Service shall deny any request for a per7 mit to lade or unlade passengers, merchandise, or baggage

8 from or onto those vessels so listed.

9 ‘‘(b) EXCEPTIONS.—Subsection (a) shall not be applied

10 to deny a permit for the following:

11 ‘‘(1) To unlade any United States citizen or per12 manent legal resident alien from a vessel included in

13 the list described in subsection (a), or to unlade any

14 refugee or any alien who would otherwise be eligible

15 to apply for asylum and withholding of deportation

16 under the Immigration and Nationality Act.

17 ‘‘(2) To lade or unlade any crewmember of such

18 vessel.

19 ‘‘(3) To lade or unlade coal and other fuel sup20 plies (for the operation of the listed vessel), ships’

21 stores, sea stores, and the legitimate equipment of

22 such vessel.

23 ‘‘(4) To lade or unlade supplies for the use or

24 sale on such vessel.

25 ‘‘(5) To lade or unlade such other merchandise,

26 baggage, or passenger as the Customs Service shall de-
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1 termine necessary to protect the immediate health,

2 safety, or welfare of a human being.

3 ‘‘(c) CORRECTION OF MINISTERIAL OR CLERICAL ER4 RORS.—

5 ‘‘(1) PETITION FOR CORRECTION.—If the master

6 of any vessel whose application for a permit to lade

7 or unlade has been denied under this section believes

8 that such denial resulted from a ministerial or cleri9 cal error, not amounting to a mistake of law, commit10 ted by any Customs officer, the master may petition

11 the Customs Service for correction of such error, as

12 provided by regulation.

13 ‘‘(2) INAPPLICABILITY OF SECTIONS 514 AND

14 520.—Notwithstanding paragraph (1), imposition of

15 countermeasures under this section shall not be

16 deemed an exclusion or other protestable decision

17 under section 514, and shall not be subject to correc18 tion under section 520.

19 ‘‘(3) PETITIONS SEEKING ADMINISTRATIVE RE20 VIEW.—Any petition seeking administrative review of

21 any matter regarding the Secretary of Commerce’s de22 cision to list a vessel under section 807 must be

23 brought under that section.
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1 ‘‘(d) PENALTIES.—In addition to any other provision

2 of law, the Customs Service may impose a civil penalty of

3 not to exceed $10,000 against the master of any vessel—

4 ‘‘(1) who submits false information in requesting

5 any permit to lade or unlade; or

6 ‘‘(2) who attempts to, or actually does, lade or

7 unlade in violation of any denial of such permit

8 under this section.’’.

9 SEC. 205. JUDICIAL REVIEW IN INJURIOUS PRICING AND

10 COUNTERMEASURE PROCEEDINGS.

11 (a) JUDICIAL REVIEW.—Part III of title IV of the Tar12 iff Act of 1930 is amended by inserting after section 516A

13 the following:

14 ‘‘SEC. 516B. JUDICIAL REVIEW IN INJURIOUS PRICING AND

15 COUNTERMEASURE PROCEEDINGS.

16 ‘‘(a) REVIEW OF DETERMINATION.—

17 ‘‘(1) IN GENERAL.—Within 30 days after the

18 date of publication in the Federal Register of—

19 ‘‘(A)(i) a determination by the administer20 ing authority under section 802(c) not to initiate

21 an investigation,

22 ‘‘(ii) a negative determination by the Com23 mission under section 803(a) as to whether there

24 is or has been reasonable indication of material
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1 injury, threat of material injury, or material re2 tardation,

3 ‘‘(iii) a determination by the administering

4 authority to suspend or revoke an injurious pric5 ing order under section 806 (d) or (e),

6 ‘‘(iv) a determination by the administering

7 authority under section 807(c),

8 ‘‘(v) a determination by the administering

9 authority in a review under section 807(d),

10 ‘‘(vi) a determination by the administering

11 authority concerning whether to extend the scope

12 or duration of a countermeasure order under sec13 tion 807(e)(3)(B)(ii),

14 ‘‘(vii) a determination by the administering

15 authority to amend a countermeasure order

16 under section 807(e)(6),

17 ‘‘(viii) a determination by the administer18 ing authority in a review under section 807(g),

19 ‘‘(ix) a determination by the administering

20 authority under section 807(i) to terminate pro21 ceedings, or to amend or revoke a counter22 measure order,

23 ‘‘(x) a determination by the administering

24 authority under section 845(b), with respect to a
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1 matter described in paragraph (1)(D) of that

2 section, or

3 ‘‘(B)(i) an injurious pricing order based on

4 a determination described in subparagraph (A)

5 of paragraph (2),

6 ‘‘(ii) notice of a determination described in

7 subparagraph (B) of paragraph (2),

8 ‘‘(iii) notice of implementation of a deter9 mination described in subparagraph (C) of para10 graph (2), or

11 ‘‘(iv) notice of revocation of an injurious

12 pricing order based on a determination described

13 in subparagraph (D) of paragraph (2),

14 an interested party who is a party to the proceeding

15 in connection with which the matter arises may com16 mence an action in the United States Court of Inter17 national Trade by filing concurrently a summons and

18 complaint, each with the content and in the form,

19 manner, and style prescribed by the rules of that

20 court, contesting any factual findings or legal conclu21 sions upon which the determination is based.

22 ‘‘(2) REVIEWABLE DETERMINATIONS.—The deter23 minations referred to in paragraph (1)(B) are—

24 ‘‘(A) a final affirmative determination by

25 the administering authority or by the Commis-
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1 sion under section 805, including any negative

2 part of such a determination (other than a part

3 referred to in subparagraph (B)),

4 ‘‘(B) a final negative determination by the

5 administering authority or the Commission

6 under section 805,

7 ‘‘(C) a determination by the administering

8 authority under section 845(b), with respect to a

9 matter described in paragraph (1)(A) of that sec10 tion, and

11 ‘‘(D) a determination by the Commission

12 under section 845(a) that results in the revoca13 tion of an injurious pricing order.

14 ‘‘(3) EXCEPTION.—Notwithstanding the 30-day

15 limitation imposed by paragraph (1) with regard to

16 an order described in paragraph (1)(B)(i), a final af17 firmative determination by the administering author18 ity under section 805 may be contested by commenc19 ing an action, in accordance with the provisions of

20 paragraph (1), within 30 days after the date of publi21 cation in the Federal Register of a final negative de22 termination by the Commission under section 805.

23 ‘‘(4) PROCEDURES AND FEES.—The procedures

24 and fees set forth in chapter 169 of title 28, United

25 States Code, apply to an action under this section.
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1 ‘‘(b) STANDARDS OF REVIEW.—

2 ‘‘(1) REMEDY.—The court shall hold unlawful

3 any determination, finding, or conclusion found—

4 ‘‘(A) in an action brought under subpara5 graph (A) of subsection (a)(1), to be arbitrary,

6 capricious, an abuse of discretion, or otherwise

7 not in accordance with law, or

8 ‘‘(B) in an action brought under subpara9 graph (B) of subsection (a)(1), to be unsupported

10 by substantial evidence on the record, or other11 wise not in accordance with law.

12 ‘‘(2) RECORD FOR REVIEW.—

13 ‘‘(A) IN GENERAL.—For purposes of this

14 subsection, the record, unless otherwise stipulated

15 by the parties, shall consist of—

16 ‘‘(i) a copy of all information pre17 sented to or obtained by the administering

18 authority or the Commission during the

19 course of the administrative proceeding, in20 cluding all governmental memoranda per21 taining to the case and the record of ex

22 parte meetings required to be kept by sec23 tion 843(a)(2); and

24 ‘‘(ii) a copy of the determination, all

25 transcripts or records of conferences or hear-
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1 ings, and all notices published in the Fed2 eral Register.

3 ‘‘(B) CONFIDENTIAL OR PRIVILEGED MATE4 RIAL.—The confidential or privileged status ac5 corded to any documents, comments, or informa6 tion shall be preserved in any action under this

7 section. Notwithstanding the preceding sentence,

8 the court may examine, in camera, the confiden9 tial or privileged material, and may disclose

10 such material under such terms and conditions

11 as it may order.

12 ‘‘(c) STANDING.—Any interested party who was a

13 party to the proceeding under title VIII shall have the right

14 to appear and be heard as a party in interest before the

15 United States Court of International Trade in an action

16 under this section. The party filing the action shall notify

17 all such interested parties of the filing of an action under

18 this section, in the form, manner, and within the time pre19 scribed by rules of the court.

20 ‘‘(d) DEFINITIONS.—For purposes of this section:

21 ‘‘(1) ADMINISTERING AUTHORITY.—The term

22 ‘administering authority’ has the meaning given that

23 term in section 861(1).
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1 ‘‘(2) COMMISSION.—The term ‘Commission’

2 means the United States International Trade Com3 mission.

4 ‘‘(3) INTERESTED PARTY.—The term ‘interested

5 party’ means any person described in section

6 861(17).’’.

7 (b) CONFORMING AMENDMENTS.—

8 (1) JURISDICTION OF THE COURT.—Section

9 1581(c) of title 28, United States Code, is amended by

10 inserting ‘‘or 516B’’ after ‘‘section 516A’’.

11 (2) RELIEF.—Section 2643 of title 28, United

12 States Code, is amended—

13 (A) in subsection (c)(1) by striking ‘‘and

14 (5)’’ and inserting ‘‘(5), and (6)’’; and

15 (B) in subsection (c) by adding at the end

16 the following new paragraph:

17 ‘‘(6) In any civil action under section 516B of the Tar18 iff Act of 1930, the Court of International Trade may not

19 issue injunctions or any other form of equitable relief, ex20 cept with regard to implementation of a countermeasure

21 order under section 468 of that Act, upon a proper showing

22 that such relief is warranted.’’.
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1 Subtitle B—Other Provisions

2 SEC. 211. EQUIPMENT AND REPAIR OF VESSELS.

3 Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466),

4 is amended by adding at the end the following new sub5 section:

6 ‘‘(i) The duty imposed by subsection (a) shall not

7 apply with respect to activities occurring in a Shipbuilding

8 Agreement Party, as defined in section 861(22), with re9 spect to—

10 ‘‘(1) self-propelled seagoing vessels of 100 gross

11 tons or more that are used for transportation of goods

12 or persons or for performance of a specialized service

13 (including, but not limited to, ice breakers and

14 dredges), and

15 ‘‘(2) tugs of 365 kilowatts or more.

16 A vessel shall be considered ‘self-propelled seagoing’ if its

17 permanent propulsion and steering provide it all the char18 acteristics of self-navigability in the high seas.’’.

19 SEC. 212. EFFECT OF AGREEMENT WITH RESPECT TO PRI20 VATE REMEDIES.

21 No person other than the United States—

22 (1) shall have any cause of action or defense

23 under the Shipbuilding Agreement or by virtue of

24 congressional approval of the agreement, or
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1 (2) may challenge, in any action brought under

2 any provision of law, any action or inaction by any

3 department, agency, or other instrumentality of the

4 United States, the District of Columbia, any State,

5 any political subdivision of a State, or any territory

6 or possession of the United States on the ground that

7 such action or inaction is inconsistent with such

8 agreement.

9 SEC. 213. IMPLEMENTING REGULATIONS.

10 After the date of the enactment of this title, the heads

11 of agencies with functions under this title and the amend12 ments made by this title may issue such regulations as may

13 be necessary to ensure that this title is appropriately imple14 mented on the date the Shipbuilding Agreement enters into

15 force with respect to the United States.

16 SEC. 214. AMENDMENTS TO THE MERCHANT MARINE ACT,

17 1936.

18 The Merchant Marine Act, 1936, is amended as fol19 lows:

20 (1) Section 511(a)(2) (46 App. U.S.C.

21 1161(a)(2)) is amended by inserting after ‘‘1939,’’ the

22 following: ‘‘or, if the vessel is a Shipbuilding Agree23 ment vessel, constructed in a Shipbuilding Agreement

24 Party, but only with regard to moneys deposited, on

25 or after the date on which the Shipbuilding Trade
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1 Agreement Act takes effect, into a construction reserve

2 fund established under subsection (b)’’.

3 (2) Section 601(a) (46 App. U.S.C. 1171(a)) is

4 amended by striking ‘‘, and that such vessel or vessels

5 were built in the United States, or have been docu6 mented under the laws of the United States not later

7 than February 1, 1928, or actually ordered and under

8 construction for the account of citizens of the United

9 States prior to such date;’’ and inserting ‘‘and that

10 such vessel or vessels were built in the United States,

11 or, if the vessel or vessels are Shipbuilding Agreement

12 vessels, in a Shipbuilding Agreement Party;’’.

13 (3) Section 606(6) (46 App. U.S.C. 1176(6)) is

14 amended by inserting ‘‘or, if the vessel is a Shipbuild15 ing Agreement vessel, in a Shipbuilding Agreement

16 Party or in the United States,’’ before ‘‘, except in an

17 emergency.’’.

18 (4) Section 607 (46 App. U.S.C. 1177) is amend19 ed as follows:

20 (A) Subsection (a) is amended by inserting

21 ‘‘or, if the vessel is a Shipbuilding Agreement

22 vessel, in a Shipbuilding Agreement Party,’’

23 after ‘‘built in the United States’’.

24 (B) Subsection (k) is amended as follows:
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1 (i) Paragraph (1) is amended by strik2 ing subparagraph (A) and inserting the fol3 lowing:

4 ‘‘(A)(i) constructed in the United States

5 and, if reconstructed, reconstructed in the United

6 States or in a Shipbuilding Agreement Party, or

7 ‘‘(ii) that is a Shipbuilding Agreement ves8 sel and is constructed in a Shipbuilding Agree9 ment Party and, if reconstructed, is recon10 structed in a Shipbuilding Agreement Party or

11 in the United States,’’.

12 (ii) Paragraph (2)(A) is amended to

13 read as follows:

14 ‘‘(A)(i) constructed in the United States

15 and, if reconstructed, reconstructed in the United

16 States or in a Shipbuilding Agreement Party, or

17 ‘‘(ii) that is a Shipbuilding Agreement ves18 sel and is constructed in a Shipbuilding Agree19 ment Party and, if reconstructed, is recon20 structed in a Shipbuilding Agreement Party or

21 in the United States, but only with regard to

22 moneys deposited into the fund on or after the

23 date on which the Shipbuilding Trade Agreement

24 Act takes effect.’’.
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1 (5) Section 610 (46 App. U.S.C. 1180) is amend2 ed by striking ‘‘shall be built in a domestic yard or

3 shall have been documented under the laws of the

4 United States not later than February 1, 1928, or ac5 tually ordered and under construction for the account

6 of citizens of the United States prior to such date,’’

7 and inserting ‘‘shall be built in the United States or,

8 if the vessel is a Shipbuilding Agreement vessel, in a

9 Shipbuilding Agreement Party,’’.

10 (6) Section 901(b)(1) (46 App. U.S.C.

11 1241(b)(1)) is amended by striking the third sentence

12 and inserting the following:

13 ‘‘For purposes of this section, the term ‘privately owned

14 United States-flag commercial vessels’ shall be deemed to

15 include—

16 ‘‘(A) any privately owned United States-flag

17 commercial vessel constructed in the United States,

18 and if rebuilt, rebuilt in the United States or in a

19 Shipbuilding Agreement Party on or after the date on

20 which the Shipbuilding Trade Agreement Act takes ef21 fect, and

22 ‘‘(B) any privately owned vessel constructed in a

23 Shipbuilding Agreement Party on or after the date on

24 which the Shipbuilding Trade Agreement Act takes ef25 fect, and if rebuilt, rebuilt in a Shipbuilding Agree-
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1 ment Party or in the United States, that is docu2 mented pursuant to chapter 121 of title 46, United

3 States Code.

4 The term ‘privately owned United States-flag commercial

5 vessels’ shall also be deemed to include any cargo vessel that

6 so qualified pursuant to section 615 of this Act or this para7 graph before the date on which the Shipbuilding Trade

8 Agreement Act takes effect. The term ‘privately owned Unit9 ed States-flag commercial vessels’ shall not be deemed to in10 clude any liquid bulk cargo vessel that does not meet the

11 requirements of section 3703a of title 46, United States

12 Code.’’.

13 (7) Section 905 (46 App. U.S.C. 1244) is amend14 ed by adding at the end the following:

15 ‘‘(h) The term ‘Shipbuilding Agreement’ means the

16 Agreement Respecting Normal Competitive Conditions in

17 the Commercial Shipbuilding and Repair Industry, which

18 resulted from negotiations under the auspices of the Organi19 zation for Economic Cooperation and Development, and

20 was entered into on December 21, 1994.

21 ‘‘(i) The term ‘Shipbuilding Agreement Party’ means

22 a state or separate customs territory that is a Party to the

23 Shipbuilding Agreement, and with respect to which the

24 United States applies the Shipbuilding Agreement.
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1 ‘‘(j) The term ‘Shipbuilding Agreement vessel’ means

2 a vessel to which the Secretary determines Article 2.1 of

3 the Shipbuilding Agreement applies.

4 ‘‘(k) The term ‘Export Credit Understanding’ means

5 the Understanding on Export Credits for Ships which re6 sulted from negotiations under the auspices of the Organiza7 tion for Economic Cooperation and Development and was

8 entered into on December 21, 1994.

9 ‘‘(l) The term ‘Export Credit Understanding vessel’

10 means a vessel to which the Secretary determines the Export

11 Credit Understanding applies.’’.

12 (8) Section 1104A (46 App. U.S.C. 1274) is

13 amended as follows:

14 (A) Paragraph (5) of subsection (b) is

15 amended to read as follows:

16 ‘‘(5) shall bear interest (exclusive of charges for

17 the guarantee and service charges, if any) at rates not

18 to exceed such percent per annum on the unpaid

19 principal as the Secretary determines to be reason20 able, taking into account the range of interest rates

21 prevailing in the private market for similar loans

22 and the risks assumed by the Secretary, except that,

23 with respect to Export Credit Understanding vessels,

24 and Shipbuilding Agreement vessels, the obligations

25 shall bear interest at a rate the Secretary determines
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1 to be consistent with obligations of the United States

2 under the Export Credit Understanding or the Ship3 building Agreement, as the case may be;’’.

4 (B) Subsection (i) is amended to read as

5 follows:

6 ‘‘(i)(1) Except as provided in paragraph (2), the Sec7 retary may not, with respect to—

8 ‘‘(A) the general 75 percent or less limitation

9 contained in subsection (b)(2),

‘‘(B) the 871 10 ⁄2 percent or less limitation con11 tained in the 1st, 2nd, 4th, or 5th proviso to sub12 section (b)(2) or in section 1112(b), or

13 ‘‘(C) the 80 percent or less limitation in the 3rd

14 proviso to such subsection,

15 establish by rule, regulation, or procedure any percentage

16 within any such limitation that is, or is intended to be,

17 applied uniformly to all guarantees or commitments to

18 guarantee made under this section that are subject to the

19 limitation.

20 ‘‘(2) With respect to Export Credit Understanding ves21 sels and Shipbuilding Agreement vessels, the Secretary may

22 establish by rule, regulation, or procedure a uniform per23 centage that the Secretary determines to be consistent with

24 obligations of the United States under the Export Credit
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1 Understanding or the Shipbuilding Agreement, as the case

2 may be.’’.

3 (C) Section 1104B(b) (46 App. U.S.C.

4 1274a(b)) is amended by striking the period at

5 the end and inserting the following:

6 ‘‘, except that, with respect to Export Credit Understanding

7 vessels and Shipbuilding Agreement vessels, the Secretary

8 may establish by rule, regulation, or procedure a uniform

9 percentage that the Secretary determines to be consistent

10 with obligations of the United States under the Export

11 Credit Understanding or the Shipbuilding Agreement, as

12 the case may be.’’.

13 Subtitle C—Effective Date

14 SEC. 221. EFFECTIVE DATE.

15 This title and the amendments made by this title take

16 effect on the date that the Shipbuilding Agreement enters

17 into force with respect to the United States.

18 TITLE III—GENERALIZED

19 SYSTEM OF PREFERENCES

20 SEC. 301. SHORT TITLE.

21 This title may be cited as the ‘‘GSP Renewal Act of

22 1996’’.

23 SEC. 302. GENERALIZED SYSTEM OF PREFERENCES.

24 (a) IN GENERAL.—Title V of the Trade Act of 1974

25 is amended to read as follows:
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1 ‘‘TITLE V—GENERALIZED

2 SYSTEM OF PREFERENCES

3 ‘‘SEC. 501. AUTHORITY TO EXTEND PREFERENCES.

4 ‘‘The President may provide duty-free treatment for

5 any eligible article from any beneficiary developing country

6 in accordance with the provisions of this title. In taking

7 any such action, the President shall have due regard for—

8 ‘‘(1) the effect such action will have on further9 ing the economic development of developing countries

10 through the expansion of their exports;

11 ‘‘(2) the extent to which other major developed

12 countries are undertaking a comparable effort to as13 sist developing countries by granting generalized pref14 erences with respect to imports of products of such

15 countries;

16 ‘‘(3) the anticipated impact of such action on

17 United States producers of like or directly competitive

18 products; and

19 ‘‘(4) the extent of the beneficiary developing

20 country’s competitiveness with respect to eligible arti21 cles.

22 ‘‘SEC. 502. DESIGNATION OF BENEFICIARY DEVELOPING

23 COUNTRIES.

24 ‘‘(a) AUTHORITY TO DESIGNATE COUNTRIES.—
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1 ‘‘(1) BENEFICIARY DEVELOPING COUNTRIES.—

2 The President is authorized to designate countries as

3 beneficiary developing countries for purposes of this

4 title.

5 ‘‘(2) LEAST-DEVELOPED BENEFICIARY DEVELOP6 ING COUNTRIES.—The President is authorized to des7 ignate any beneficiary developing country as a least8 developed beneficiary developing country for purposes

9 of this title, based on the considerations in section 501

10 and subsection (c) of this section.

11 ‘‘(b) COUNTRIES INELIGIBLE FOR DESIGNATION.—

12 ‘‘(1) SPECIFIC COUNTRIES.—The following coun13 tries may not be designated as beneficiary developing

14 countries for purposes of this title:

15 ‘‘(A) Australia.

16 ‘‘(B) Canada.

17 ‘‘(C) European Union member states.

18 ‘‘(D) Iceland.

19 ‘‘(E) Japan.

20 ‘‘(F) Monaco.

21 ‘‘(G) New Zealand.

22 ‘‘(H) Norway.

23 ‘‘(I) Switzerland.

24 ‘‘(2) OTHER BASES FOR INELIGIBILITY.—The

25 President shall not designate any country a bene-
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1 ficiary developing country under this title if any of

2 the following applies:

3 ‘‘(A) Such country is a Communist country,

4 unless—

5 ‘‘(i) the products of such country re6 ceive nondiscriminatory treatment,

7 ‘‘(ii) such country is a WTO Member

8 (as such term is defined in section 2(10) of

9 the Uruguay Round Agreements Act) (19

10 U.S.C. 3501(10)) and a member of the

11 International Monetary Fund, and

12 ‘‘(iii) such country is not dominated or

13 controlled by international communism.

14 ‘‘(B) Such country is a party to an ar15 rangement of countries and participates in any

16 action pursuant to such arrangement, the effect

17 of which is—

18 ‘‘(i) to withhold supplies of vital com19 modity resources from international trade

20 or to raise the price of such commodities to

21 an unreasonable level, and

22 ‘‘(ii) to cause serious disruption of the

23 world economy.

24 ‘‘(C) Such country affords preferential

25 treatment to the products of a developed country,
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1 other than the United States, which has, or is

2 likely to have, a significant adverse effect on

3 United States commerce.

4 ‘‘(D)(i) Such country—

5 ‘‘(I) has nationalized, expropriated, or

6 otherwise seized ownership or control of

7 property, including patents, trademarks, or

8 copyrights, owned by a United States citi9 zen or by a corporation, partnership, or as10 sociation which is 50 percent or more bene11 ficially owned by United States citizens,

12 ‘‘(II) has taken steps to repudiate or

13 nullify an existing contract or agreement

14 with a United States citizen or a corpora15 tion, partnership, or association which is 50

16 percent or more beneficially owned by Unit17 ed States citizens, the effect of which is to

18 nationalize, expropriate, or otherwise seize

19 ownership or control of property, including

20 patents, trademarks, or copyrights, so

21 owned, or

22 ‘‘(III) has imposed or enforced taxes or

23 other exactions, restrictive maintenance or

24 operational conditions, or other measures

25 with respect to property, including patents,
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1 trademarks, or copyrights, so owned, the ef2 fect of which is to nationalize, expropriate,

3 or otherwise seize ownership or control of

4 such property,

5 unless clause (ii) applies.

6 ‘‘(ii) This clause applies if the President de7 termines that—

8 ‘‘(I) prompt, adequate, and effective

9 compensation has been or is being made to

10 the citizen, corporation, partnership, or as11 sociation referred to in clause (i),

12 ‘‘(II) good faith negotiations to provide

13 prompt, adequate, and effective compensa14 tion under the applicable provisions of

15 international law are in progress, or the

16 country described in clause (i) is otherwise

17 taking steps to discharge its obligations

18 under international law with respect to

19 such citizen, corporation, partnership, or

20 association, or

21 ‘‘(III) a dispute involving such citizen,

22 corporation, partnership, or association

23 over compensation for such a seizure has

24 been submitted to arbitration under the pro25 visions of the Convention for the Settlement
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1 of Investment Disputes, or in another mutu2 ally agreed upon forum,

3 and the President promptly furnishes a copy of

4 such determination to the Senate and House of

5 Representatives.

6 ‘‘(E) Such country fails to act in good faith

7 in recognizing as binding or in enforcing arbi8 tral awards in favor of United States citizens or

9 a corporation, partnership, or association which

10 is 50 percent or more beneficially owned by

11 United States citizens, which have been made by

12 arbitrators appointed for each case or by perma13 nent arbitral bodies to which the parties involved

14 have submitted their dispute.

15 ‘‘(F) Such country aids or abets, by grant16 ing sanctuary from prosecution to, any individ17 ual or group which has committed an act of

18 international terrorism.

19 ‘‘(G) Such country has not taken or is not

20 taking steps to afford internationally recognized

21 worker rights to workers in the country (includ22 ing any designated zone in that country).

23 Subparagraphs (D), (E), (F), and (G) shall not pre24 vent the designation of any country as a beneficiary

25 developing country under this title if the President
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1 determines that such designation will be in the na2 tional economic interest of the United States and re3 ports such determination to the Congress with the rea4 sons therefor.

5 ‘‘(c) FACTORS AFFECTING COUNTRY DESIGNATION.—

6 In determining whether to designate any country as a bene7 ficiary developing country under this title, the President

8 shall take into account—

9 ‘‘(1) an expression by such country of its desire

10 to be so designated;

11 ‘‘(2) the level of economic development of such

12 country, including its per capita gross national prod13 uct, the living standards of its inhabitants, and any

14 other economic factors which the President deems ap15 propriate;

16 ‘‘(3) whether or not other major developed coun17 tries are extending generalized preferential tariff

18 treatment to such country;

19 ‘‘(4) the extent to which such country has as20 sured the United States that it will provide equitable

21 and reasonable access to the markets and basic com22 modity resources of such country and the extent to

23 which such country has assured the United States

24 that it will refrain from engaging in unreasonable ex25 port practices;
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1 ‘‘(5) the extent to which such country is provid2 ing adequate and effective protection of intellectual

3 property rights;

4 ‘‘(6) the extent to which such country has taken

5 action to—

6 ‘‘(A) reduce trade distorting investment

7 practices and policies (including export perform8 ance requirements); and

9 ‘‘(B) reduce or eliminate barriers to trade

10 in services; and

11 ‘‘(7) whether or not such country has taken or is

12 taking steps to afford to workers in that country (in13 cluding any designated zone in that country) inter14 nationally recognized worker rights.

15 ‘‘(d) WITHDRAWAL, SUSPENSION, OR LIMITATION OF

16 COUNTRY DESIGNATION.—

17 ‘‘(1) IN GENERAL.—The President may with18 draw, suspend, or limit the application of the duty19 free treatment accorded under this title with respect

20 to any country. In taking any action under this sub21 section, the President shall consider the factors set

22 forth in section 501 and subsection (c) of this section.

23 ‘‘(2) CHANGED CIRCUMSTANCES.—The President

24 shall, after complying with the requirements of sub25 section (f)(2), withdraw or suspend the designation of
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1 any country as a beneficiary developing country if,

2 after such designation, the President determines that

3 as the result of changed circumstances such country

4 would be barred from designation as a beneficiary de5 veloping country under subsection (b)(2). Such coun6 try shall cease to be a beneficiary developing country

7 on the day on which the President issues an Executive

8 order or Presidential proclamation revoking the des9 ignation of such country under this title.

10 ‘‘(3) ADVICE TO CONGRESS.—The President

11 shall, as necessary, advise the Congress on the appli12 cation of section 501 and subsection (c) of this sec13 tion, and the actions the President has taken to with14 draw, to suspend, or to limit the application of duty15 free treatment with respect to any country which has

16 failed to adequately take the actions described in sub17 section (c).

18 ‘‘(e) MANDATORY GRADUATION OF BENEFICIARY DE19 VELOPING COUNTRIES.—If the President determines that a

20 beneficiary developing country has become a ‘high income’

21 country, as defined by the official statistics of the Inter22 national Bank for Reconstruction and Development, then

23 the President shall terminate the designation of such coun24 try as a beneficiary developing country for purposes of this
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1 title, effective on January 1 of the second year following

2 the year in which such determination is made.

3 ‘‘(f) CONGRESSIONAL NOTIFICATION.—

4 ‘‘(1) NOTIFICATION OF DESIGNATION.—

5 ‘‘(A) IN GENERAL.—Before the President

6 designates any country as a beneficiary develop7 ing country under this title, the President shall

8 notify the Congress of the President’s intention to

9 make such designation, together with the consid10 erations entering into such decision.

11 ‘‘(B) DESIGNATION AS LEAST-DEVELOPED

12 BENEFICIARY DEVELOPING COUNTRY.—At least

13 60 days before the President designates any

14 country as a least-developed beneficiary develop15 ing country, the President shall notify the Con16 gress of the President’s intention to make such

17 designation.

18 ‘‘(2) NOTIFICATION OF TERMINATION.—If the

19 President has designated any country as a beneficiary

20 developing country under this title, the President

21 shall not terminate such designation unless, at least

22 60 days before such termination, the President has

23 notified the Congress and has notified such country of

24 the President’s intention to terminate such designa-
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1 tion, together with the considerations entering into

2 such decision.

3 ‘‘SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.

4 ‘‘(a) ELIGIBLE ARTICLES.—

5 ‘‘(1) DESIGNATION.—

6 ‘‘(A) IN GENERAL.—Except as provided in

7 subsection (b), the President is authorized to des8 ignate articles as eligible articles from all bene9 ficiary developing countries for purposes of this

10 title by Executive order or Presidential procla11 mation after receiving the advice of the Inter12 national Trade Commission in accordance with

13 subsection (e).

14 ‘‘(B) LEAST-DEVELOPED BENEFICIARY DE15 VELOPING COUNTRIES.—Except for articles de16 scribed in subparagraphs (A), (B), and (E) of

17 subsection (b)(1) and articles described in para18 graphs (2) and (3) of subsection (b), the Presi19 dent may, in carrying out section 502(d)(1) and

20 subsection (c)(1) of this section, designate articles

21 as eligible articles only for countries designated

22 as least-developed beneficiary developing coun23 tries under section 502(a)(2) if, after receiving

24 the advice of the International Trade Commis25 sion in accordance with subsection (e) of this sec-
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1 tion, the President determines that such articles

2 are not import-sensitive in the context of imports

3 from least-developed beneficiary developing coun4 tries.

5 ‘‘(C) THREE-YEAR RULE.—If, after receiv6 ing the advice of the International Trade Com7 mission under subsection (e), an article has been

8 formally considered for designation as an eligible

9 article under this title and denied such designa10 tion, such article may not be reconsidered for

11 such designation for a period of 3 years after

12 such denial.

13 ‘‘(2) RULE OF ORIGIN.—

14 ‘‘(A) GENERAL RULE.—The duty-free treat15 ment provided under this title shall apply to any

16 eligible article which is the growth, product, or

17 manufacture of a beneficiary developing country

18 if—

19 ‘‘(i) that article is imported directly

20 from a beneficiary developing country into

21 the customs territory of the United States;

22 and

23 ‘‘(ii) the sum of—

24 ‘‘(I) the cost or value of the mate25 rials produced in the beneficiary devel-
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1 oping country or any two or more such

2 countries that are members of the same

3 association of countries and are treated

4 as one country under section 507(2),

5 plus

6 ‘‘(II) the direct costs of processing

7 operations performed in such bene8 ficiary developing country or such

9 member countries,

10 is not less than 35 percent of the appraised

11 value of such article at the time it is en12 tered.

13 ‘‘(B) EXCLUSIONS.—An article shall not be

14 treated as the growth, product, or manufacture of

15 a beneficiary developing country by virtue of

16 having merely undergone—

17 ‘‘(i) simple combining or packaging

18 operations, or

19 ‘‘(ii) mere dilution with water or mere

20 dilution with another substance that does

21 not materially alter the characteristics of

22 the article.

23 ‘‘(3) REGULATIONS.—The Secretary of the Treas24 ury, after consulting with the United States Trade

25 Representative, shall prescribe such regulations as
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1 may be necessary to carry out paragraph (2), includ2 ing, but not limited to, regulations providing that,

3 in order to be eligible for duty-free treatment under

4 this title, an article—

5 ‘‘(A) must be wholly the growth, product, or

6 manufacture of a beneficiary developing country,

7 or

8 ‘‘(B) must be a new or different article of

9 commerce which has been grown, produced, or

10 manufactured in the beneficiary developing

11 country.

12 ‘‘(b) ARTICLES THAT MAY NOT BE DESIGNATED AS

13 ELIGIBLE ARTICLES.—

14 ‘‘(1) IMPORT SENSITIVE ARTICLES.—The Presi15 dent may not designate any article as an eligible ar16 ticle under subsection (a) if such article is within one

17 of the following categories of import-sensitive articles:

18 ‘‘(A) Textile and apparel articles which

19 were not eligible articles for purposes of this title

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

21 on such date.

22 ‘‘(B) Watches, except those watches entered

23 after June 30, 1989, that the President specifi24 cally determines, after public notice and com25 ment, will not cause material injury to watch or
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1 watch band, strap, or bracelet manufacturing

2 and assembly operations in the United States or

3 the United States insular possessions.

4 ‘‘(C) Import-sensitive electronic articles.

5 ‘‘(D) Import-sensitive steel articles.

6 ‘‘(E) Footwear, handbags, luggage, flat

7 goods, work gloves, and leather wearing apparel

8 which were not eligible articles for purposes of

9 this title on January 1, 1995, as this title was

10 in effect on such date.

11 ‘‘(F) Import-sensitive semimanufactured

12 and manufactured glass products.

13 ‘‘(G) Any other articles which the President

14 determines to be import-sensitive in the context

15 of the Generalized System of Preferences.

16 ‘‘(2) ARTICLES AGAINST WHICH OTHER ACTIONS

17 TAKEN.—An article shall not be an eligible article for

18 purposes of this title for any period during which

19 such article is the subject of any action proclaimed

20 pursuant to section 203 of this Act (19 U.S.C. 2253)

21 or section 232 or 351 of the Trade Expansion Act of

22 1962 (19 U.S.C. 1862, 1981).

23 ‘‘(3) AGRICULTURAL PRODUCTS.—No quantity of

24 an agricultural product subject to a tariff-rate quota
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1 that exceeds the in-quota quantity shall be eligible for

2 duty-free treatment under this title.

3 ‘‘(c) WITHDRAWAL, SUSPENSION, OR LIMITATION OF

4 DUTY-FREE TREATMENT; COMPETITIVE NEED LIMITA5 TION.—

6 ‘‘(1) IN GENERAL.—The President may with7 draw, suspend, or limit the application of the duty8 free treatment accorded under this title with respect

9 to any article, except that no rate of duty may be es10 tablished with respect to any article pursuant to this

11 subsection other than the rate which would apply but

12 for this title. In taking any action under this sub13 section, the President shall consider the factors set

14 forth in sections 501 and 502(c).

15 ‘‘(2) COMPETITIVE NEED LIMITATION.—

16 ‘‘(A) BASIS FOR WITHDRAWAL OF DUTY17 FREE TREATMENT.—

18 ‘‘(i) IN GENERAL.—Except as provided

19 in clause (ii) and subject to subsection (d),

20 whenever the President determines that a

21 beneficiary developing country has exported

22 (directly or indirectly) to the United States

23 during any calendar year beginning after

24 December 31, 1995—
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1 ‘‘(I) a quantity of an eligible arti2 cle having an appraised value in excess

3 of the applicable amount for the cal4 endar year, or

5 ‘‘(II) a quantity of an eligible ar6 ticle equal to or exceeding 50 percent of

7 the appraised value of the total im8 ports of that article into the United

9 States during any calendar year,

10 the President shall, not later than July 1 of

11 the next calendar year, terminate the duty12 free treatment for that article from that

13 beneficiary developing country.

14 ‘‘(ii) ANNUAL ADJUSTMENT OF APPLI15 CABLE AMOUNT.—For purposes of applying

16 clause (i), the applicable amount is—

17 ‘‘(I) for 1996, $75,000,000, and

18 ‘‘(II) for each calendar year there19 after, an amount equal to the applica20 ble amount in effect for the preceding

21 calendar year plus $5,000,000.

22 ‘‘(B) COUNTRY DEFINED.—For purposes of

23 this paragraph, the term ‘country’ does not in24 clude an association of countries which is treated

25 as one country under section 507(2), but does in-
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1 clude a country which is a member of any such

2 association.

3 ‘‘(C) REDESIGNATIONS.—A country which

4 is no longer treated as a beneficiary developing

5 country with respect to an eligible article by rea6 son of subparagraph (A) may, subject to the con7 siderations set forth in sections 501 and 502, be

8 redesignated a beneficiary developing country

9 with respect to such article if imports of such ar10 ticle from such country did not exceed the limita11 tions in subparagraph (A) during the preceding

12 calendar year.

13 ‘‘(D) LEAST-DEVELOPED BENEFICIARY DE14 VELOPING COUNTRIES.—Subparagraph (A) shall

15 not apply to any least-developed beneficiary de16 veloping country.

17 ‘‘(E) ARTICLES NOT PRODUCED IN THE

18 UNITED STATES EXCLUDED.—Subparagraph

19 (A)(i)(II) shall not apply with respect to any eli20 gible article if a like or directly competitive arti21 cle was not produced in the United States on

22 January 1, 1995.

23 ‘‘(F) DE MINIMIS WAIVERS.—

24 ‘‘(i) IN GENERAL.—The President may

25 disregard subparagraph (A)(i)(II) with re-
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1 spect to any eligible article from any bene2 ficiary developing country if the aggregate

3 appraised value of the imports of such arti4 cle into the United States during the pre5 ceding calendar year does not exceed the ap6 plicable amount for such preceding calendar

7 year.

8 ‘‘(ii) APPLICABLE AMOUNT.—For pur9 poses of applying clause (i), the applicable

10 amount is—

11 ‘‘(I) for calendar year 1996,

12 $13,000,000, and

13 ‘‘(II) for each calendar year there14 after, an amount equal to the applica15 ble amount in effect for the preceding

16 calendar year plus $500,000.

17 ‘‘(d) WAIVER OF COMPETITIVE NEED LIMITATION.—

18 ‘‘(1) IN GENERAL.—The President may waive the

19 application of subsection (c)(2) with respect to any el20 igible article of any beneficiary developing country if,

21 before July 1 of the calendar year beginning after the

22 calendar year for which a determination described in

23 subsection (c)(2)(A) was made with respect to such el24 igible article, the President—
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1 ‘‘(A) receives the advice of the International

2 Trade Commission under section 332 of the Tar3 iff Act of 1930 on whether any industry in the

4 United States is likely to be adversely affected by

5 such waiver,

6 ‘‘(B) determines, based on the consider7 ations described in sections 501 and 502(c) and

8 the advice described in subparagraph (A), that

9 such waiver is in the national economic interest

10 of the United States, and

11 ‘‘(C) publishes the determination described

12 in subparagraph (B) in the Federal Register.

13 ‘‘(2) CONSIDERATIONS BY THE PRESIDENT.—In

14 making any determination under paragraph (1), the

15 President shall give great weight to—

16 ‘‘(A) the extent to which the beneficiary de17 veloping country has assured the United States

18 that such country will provide equitable and rea19 sonable access to the markets and basic commod20 ity resources of such country, and

21 ‘‘(B) the extent to which such country pro22 vides adequate and effective protection of intellec23 tual property rights.

24 ‘‘(3) OTHER BASES FOR WAIVER.—The President

25 may waive the application of subsection (c)(2) if, be-
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1 fore July 1 of the calendar year beginning after the

2 calendar year for which a determination described in

3 subsection (c)(2) was made with respect to a bene4 ficiary developing country, the President determines

5 that—

6 ‘‘(A) there has been a historical preferential

7 trade relationship between the United States and

8 such country,

9 ‘‘(B) there is a treaty or trade agreement in

10 force covering economic relations between such

11 country and the United States, and

12 ‘‘(C) such country does not discriminate

13 against, or impose unjustifiable or unreasonable

14 barriers to, United States commerce,

15 and the President publishes that determination in the

16 Federal Register.

17 ‘‘(4) LIMITATIONS ON WAIVERS.—

18 ‘‘(A) IN GENERAL.—The President may not

19 exercise the waiver authority under this sub20 section with respect to a quantity of an eligible

21 article entered during any calendar year begin22 ning after 1995, the aggregate appraised value of

23 which equals or exceeds 30 percent of the aggre24 gate appraised value of all articles that entered
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1 duty-free under this title during the preceding

2 calendar year.

3 ‘‘(B) OTHER WAIVER LIMITS.—The Presi4 dent may not exercise the waiver authority pro5 vided under this subsection with respect to a

6 quantity of an eligible article entered during any

7 calendar year beginning after 1995, the aggre8 gate appraised value of which exceeds 15 percent

9 of the aggregate appraised value of all articles

10 that have entered duty-free under this title dur11 ing the preceding calendar year from those bene12 ficiary developing countries which for the preced13 ing calendar year—

14 ‘‘(i) had a per capita gross national

15 product (calculated on the basis of the best

16 available information, including that of the

17 International Bank for Reconstruction and

18 Development) of $5,000 or more; or

19 ‘‘(ii) had exported (either directly or

20 indirectly) to the United States a quantity

21 of articles that was duty-free under this title

22 that had an aggregate appraised value of

23 more than 10 percent of the aggregate ap24 praised value of all articles that entered

25 duty-free under this title during that year.
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1 ‘‘(C) CALCULATION OF LIMITATIONS.—There

2 shall be counted against the limitations imposed

3 under subparagraphs (A) and (B) for any cal4 endar year only that value of any eligible article

5 of any country that—

6 ‘‘(i) entered duty-free under this title

7 during such calendar year; and

8 ‘‘(ii) is in excess of the value of that

9 article that would have been so entered dur10 ing such calendar year if the limitations

11 under subsection (c)(2)(A) applied.

12 ‘‘(5) EFFECTIVE PERIOD OF WAIVER.—Any

13 waiver granted under this subsection shall remain in

14 effect until the President determines that such waiver

15 is no longer warranted due to changed circumstances.

16 ‘‘(e) INTERNATIONAL TRADE COMMISSION ADVICE.—

17 Before designating articles as eligible articles under sub18 section (a)(1), the President shall publish and furnish the

19 International Trade Commission with lists of articles which

20 may be considered for designation as eligible articles for

21 purposes of this title. The provisions of sections 131, 132,

22 133, and 134 shall be complied with as though action under

23 section 501 and this section were action under section 123

24 to carry out a trade agreement entered into under section

25 123.
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1 ‘‘(f) SPECIAL RULE CONCERNING PUERTO RICO.—No

2 action under this title may affect any tariff duty imposed

3 by the Legislature of Puerto Rico pursuant to section 319

4 of the Tariff Act of 1930 on coffee imported into Puerto

5 Rico.

6 ‘‘SEC. 504. REVIEW AND REPORT TO CONGRESS.

7 ‘‘The President shall submit an annual report to the

8 Congress on the status of internationally recognized worker

9 rights within each beneficiary developing country.

10 ‘‘SEC. 505. DATE OF TERMINATION.

11 ‘‘No duty-free treatment provided under this title shall

12 remain in effect after May 12, 1997.

13 ‘‘SEC. 506. AGRICULTURAL EXPORTS OF BENEFICIARY DE14 VELOPING COUNTRIES.

15 ‘‘The appropriate agencies of the United States shall

16 assist beneficiary developing countries to develop and im17 plement measures designed to assure that the agricultural

18 sectors of their economies are not directed to export markets

19 to the detriment of the production of foodstuffs for their citi20 zenry.

21 ‘‘SEC. 507. DEFINITIONS.

22 ‘‘For purposes of this title:

23 ‘‘(1) BENEFICIARY DEVELOPING COUNTRY.—The

24 term ‘beneficiary developing country’ means any

25 country with respect to which there is in effect an Ex-
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1 ecutive order or Presidential proclamation by the

2 President designating such country as a beneficiary

3 developing country for purposes of this title.

4 ‘‘(2) COUNTRY.—The term ‘country’ means any

5 foreign country or territory, including any overseas

6 dependent territory or possession of a foreign country,

7 or the Trust Territory of the Pacific Islands. In the

8 case of an association of countries which is a free

9 trade area or customs union, or which is contributing

10 to comprehensive regional economic integration

11 among its members through appropriate means, in12 cluding, but not limited to, the reduction of duties,

13 the President may by Executive order or Presidential

14 proclamation provide that all members of such asso15 ciation other than members which are barred from

16 designation under section 502(b) shall be treated as

17 one country for purposes of this title.

18 ‘‘(3) ENTERED.—The term ‘entered’ means en19 tered, or withdrawn from warehouse for consumption,

20 in the customs territory of the United States.

21 ‘‘(4) INTERNATIONALLY RECOGNIZED WORKER

22 RIGHTS.—The term ‘internationally recognized work23 er rights’ includes—

24 ‘‘(A) the right of association;
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1 ‘‘(B) the right to organize and bargain col2 lectively;

3 ‘‘(C) a prohibition on the use of any form

4 of forced or compulsory labor;

5 ‘‘(D) a minimum age for the employment of

6 children; and

7 ‘‘(E) acceptable conditions of work with re8 spect to minimum wages, hours of work, and oc9 cupational safety and health.

10 ‘‘(5) LEAST-DEVELOPED BENEFICIARY DEVELOP11 ING COUNTRY.—The term ‘least-developed beneficiary

12 developing country’ means a beneficiary developing

13 country that is designated as a least-developed bene14 ficiary developing country under section 502(a)(2).’’.

15 (b) TABLE OF CONTENTS.—The items relating to title

16 V in the table of contents of the Trade Act of 1974 are

17 amended to read as follows:

‘‘TITLE V—GENERALIZED SYSTEM OF PREFERENCES

‘‘Sec. 501. Authority to extend preferences.

‘‘Sec. 502. Designation of beneficiary developing countries.

‘‘Sec. 503. Designation of eligible articles.

‘‘Sec. 504. Review and report to Congress.

‘‘Sec. 505. Date of termination.

‘‘Sec. 506. Agricultural exports of beneficiary developing countries.

‘‘Sec. 507. Definitions.’’.

18 SEC. 303. EFFECTIVE DATE.

19 (a) IN GENERAL.—The amendments made by this title

20 apply to articles entered on or after October 1, 1996.

21 (b) RETROACTIVE APPLICATION.—
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1 (1) GENERAL RULE.—Notwithstanding section

2 514 of the Tariff Act of 1930 or any other provision

3 of law and subject to subsection (c)—

4 (A) any article that was entered—

5 (i) after July 31, 1995, and

6 (ii) before January 1, 1996, and

7 to which duty-free treatment under title V of the

8 Trade Act of 1974 would have applied if the

9 entry had been made on July 31, 1995, shall be

10 liquidated or reliquidated as free of duty, and

11 the Secretary of the Treasury shall refund any

12 duty paid with respect to such entry, and

13 (B) any article that was entered—

14 (i) after December 31, 1995, and

15 (ii) before October 1, 1996, and

16 to which duty-free treatment under title V of the

17 Trade Act of 1974 (as amended by this title)

18 would have applied if the entry had been made

19 on or after October 1, 1996, shall be liquidated

20 or reliquidated as free of duty, and the Secretary

21 of the Treasury shall refund any duty paid with

22 respect to such entry.

23 (2) LIMITATION ON REFUNDS.—No refund shall

24 be made pursuant to this subsection before October 1,

25 1996.
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1 (3) ENTRY.—As used in this subsection, the term

2 ‘‘entry’’ includes a withdrawal from warehouse for

3 consumption.

4 (c) REQUESTS.—Liquidation or reliquidation may be

5 made under subsection (b) with respect to an entry only

6 if a request therefor is filed with the Customs Service, with7 in 180 days after the date of the enactment of this Act, that

8 contains sufficient information to enable the Customs Serv9 ice—

10 (1) to locate the entry; or

11 (2) to reconstruct the entry if it cannot be lo12 cated.

13 SEC. 304. CONFORMING AMENDMENTS.

14 (a) TRADE LAWS.—

15 (1) Section 1211(b) of the Omnibus Trade and

16 Competitiveness Act of 1988 (19 U.S.C. 3011(b)) is

17 amended—

18 (A) in paragraph (1), by striking ‘‘(19

19 U.S.C. 2463(a), 2464(c)(3))’’ and inserting ‘‘(as

20 in effect on July 31, 1995)’’; and

21 (B) in paragraph (2), by striking ‘‘(19

22 U.S.C. 2464(c)(1))’’ and inserting the following:

23 ‘‘(as in effect on July 31, 1995)’’.
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1 (2) Section 203(c)(7) of the Andean Trade Pref2 erence Act (19 U.S.C. 3202(c)(7)) is amended by

3 striking ‘‘502(a)(4)’’ and inserting ‘‘507(4)’’.

4 (3) Section 212(b)(7) of the Caribbean Basin

5 Economic Recovery Act (19 U.S.C. 2702(b)(7)) is

6 amended by striking ‘‘502(a)(4)’’ and inserting

7 ‘‘507(4)’’.

8 (4) General note 3(a)(iv)(C) of the Harmonized

9 Tariff Schedule of the United States is amended by

10 striking ‘‘sections 503(b) and 504(c)’’ and inserting

11 ‘‘subsections (a), (c), and (d) of section 503’’.

12 (5) Section 201(a)(2) of the North American

13 Free Trade Agreement Implementation Act (19 U.S.C.

14 3331(a)(2)) is amended by striking ‘‘502(a)(2) of the

15 Trade Act of 1974 (19 U.S.C. 2462(a)(2))’’ and in16 serting ‘‘502(f)(2) of the Trade Act of 1974’’.

17 (6) Section 131 of the Uruguay Round Agree18 ments Act (19 U.S.C. 3551) is amended in subsections

19 (a) and (b)(1) by striking ‘‘502(a)(4)’’ and inserting

20 ‘‘507(4)’’.

21 (b) OTHER LAWS.—

22 (1) Section 871(f)(2)(B) of the Internal Revenue

23 Code of 1986 is amended by striking ‘‘within the

24 meaning of section 502’’ and inserting ‘‘under title

25 V’’.
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1 (2) Section 2202(8) of the Export Enhancement

2 Act of 1988 (15 U.S.C. 4711(8)) is amended by strik3 ing ‘‘502(a)(4)’’ and inserting ‘‘507(4)’’.

4 (3) Section 231A(a) of the Foreign Assistance

5 Act of 1961 (22 U.S.C. 2191a(a)) is amended—

6 (A) in paragraph (1) by striking ‘‘502(a)(4)

7 of the Trade Act of 1974 (19 U.S.C. 2462(a)(4))’’

8 and inserting ‘‘507(4) of the Trade Act of 1974’’;

9 (B) in paragraph (2) by striking ‘‘505(c) of

10 the Trade Act of 1974 (19 U.S.C. 2465(c))’’ and

11 inserting ‘‘504 of the Trade Act of 1974’’; and

12 (C) in paragraph (4) by striking

13 ‘‘502(a)(4)’’ and inserting ‘‘507(4)’’.

14 (4) Section 1621(a)(1) of the International Fi15 nancial Institutions Act (22 U.S.C. 262p–4p(a)(1)) is

16 amended by striking ‘‘502(a)(4)’’ and inserting

17 ‘‘507(4)’’.

18 (5) Section 103B of the Agricultural Act of 1949

19 (7 U.S.C. 1444–2) is amended in subsections

20 (a)(5)(F) (v) and (n)(1)(C) by striking ‘‘503(d) of the

21 Trade Act of 1974 (19 U.S.C. 2463(d))’’ and inserting

22 ‘‘503(b)(3) of the Trade Act of 1974’’.
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1 TITLE IV—REVENUE OFFSETS

2 SEC. 400. AMENDMENT OF 1986 CODE.

3 Except as otherwise expressly provided, whenever in

4 this title an amendment or repeal is expressed in terms of

5 an amendment to, or repeal of, a section or other provision,

6 the reference shall be considered to be made to a section or

7 other provision of the Internal Revenue Code of 1986.

8 Subtitle A—Foreign Trust Tax

9 Compliance

10 SEC. 401. IMPROVED INFORMATION REPORTING ON FOR11 EIGN TRUSTS.

12 (a) IN GENERAL.—Section 6048 (relating to returns

13 as to certain foreign trusts) is amended to read as follows:

14 ‘‘SEC. 6048. INFORMATION WITH RESPECT TO CERTAIN FOR15 EIGN TRUSTS.

16 ‘‘(a) NOTICE OF CERTAIN EVENTS.—

17 ‘‘(1) GENERAL RULE.—On or before the 90th day

18 (or such later day as the Secretary may prescribe)

19 after any reportable event, the responsible party shall

20 provide written notice of such event to the Secretary

21 in accordance with paragraph (2).

22 ‘‘(2) CONTENTS OF NOTICE.—The notice required

23 by paragraph (1) shall contain such information as

24 the Secretary may prescribe, including—
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1 ‘‘(A) the amount of money or other property

2 (if any) transferred to the trust in connection

3 with the reportable event, and

4 ‘‘(B) the identity of the trust and of each

5 trustee and beneficiary (or class of beneficiaries)

6 of the trust.

7 ‘‘(3) REPORTABLE EVENT.—For purposes of this

8 subsection—

9 ‘‘(A) IN GENERAL.—The term ‘reportable

10 event’ means—

11 ‘‘(i) the creation of any foreign trust

12 by a United States person,

13 ‘‘(ii) the transfer of any money or

14 property (directly or indirectly) to a foreign

15 trust by a United States person, including

16 a transfer by reason of death, and

17 ‘‘(iii) the death of a citizen or resident

18 of the United States if—

19 ‘‘(I) the decedent was treated as

20 the owner of any portion of a foreign

21 trust under the rules of subpart E of

22 part I of subchapter J of chapter 1, or

23 ‘‘(II) any portion of a foreign

24 trust was included in the gross estate

25 of the decedent.
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1 ‘‘(B) EXCEPTIONS.—

2 ‘‘(i) FAIR MARKET VALUE SALES.—

3 Subparagraph (A)(ii) shall not apply to

4 any transfer of property to a trust in ex5 change for consideration of at least the fair

6 market value of the transferred property.

7 For purposes of the preceding sentence, con8 sideration other than cash shall be taken

9 into account at its fair market value and

10 the rules of section 679(a)(3) shall apply.

11 ‘‘(ii) DEFERRED COMPENSATION AND

12 CHARITABLE TRUSTS.—Subparagraph (A)

13 shall not apply with respect to a trust

14 which is—

15 ‘‘(I) described in section 402(b),

16 404(a)(4), or 404A, or

17 ‘‘(II) determined by the Secretary

18 to be described in section 501(c)(3).

19 ‘‘(4) RESPONSIBLE PARTY.—For purposes of this

20 subsection, the term ‘responsible party’ means—

21 ‘‘(A) the grantor in the case of the creation

22 of an inter vivos trust,

23 ‘‘(B) the transferor in the case of a report24 able event described in paragraph (3)(A)(ii)

25 other than a transfer by reason of death, and
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1 ‘‘(C) the executor of the decedent’s estate in

2 any other case.

3 ‘‘(b) UNITED STATES GRANTOR OF FOREIGN TRUST.—

4 ‘‘(1) IN GENERAL.—If, at any time during any

5 taxable year of a United States person, such person

6 is treated as the owner of any portion of a foreign

7 trust under the rules of subpart E of part I of sub8 chapter J of chapter 1, such person shall be respon9 sible to ensure that—

10 ‘‘(A) such trust makes a return for such

11 year which sets forth a full and complete ac12 counting of all trust activities and operations for

13 the year, the name of the United States agent for

14 such trust, and such other information as the

15 Secretary may prescribe, and

16 ‘‘(B) such trust furnishes such information

17 as the Secretary may prescribe to each United

18 States person (i) who is treated as the owner of

19 any portion of such trust or (ii) who receives

20 (directly or indirectly) any distribution from the

21 trust.

22 ‘‘(2) TRUSTS NOT HAVING UNITED STATES

23 AGENT.—

24 ‘‘(A) IN GENERAL.—If the rules of this

25 paragraph apply to any foreign trust, the deter-
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1 mination of amounts required to be taken into

2 account with respect to such trust by a United

3 States person under the rules of subpart E of

4 part I of subchapter J of chapter 1 shall be de5 termined by the Secretary.

6 ‘‘(B) UNITED STATES AGENT REQUIRED.—

7 The rules of this paragraph shall apply to any

8 foreign trust to which paragraph (1) applies un9 less such trust agrees (in such manner, subject to

10 such conditions, and at such time as the Sec11 retary shall prescribe) to authorize a United

12 States person to act as such trust’s limited agent

13 solely for purposes of applying sections 7602,

14 7603, and 7604 with respect to—

15 ‘‘(i) any request by the Secretary to ex16 amine records or produce testimony related

17 to the proper treatment of amounts required

18 to be taken into account under the rules re19 ferred to in subparagraph (A), or

20 ‘‘(ii) any summons by the Secretary

21 for such records or testimony.

22 The appearance of persons or production of

23 records by reason of a United States person

24 being such an agent shall not subject such per25 sons or records to legal process for any purpose
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1 other than determining the correct treatment

2 under this title of the amounts required to be

3 taken into account under the rules referred to in

4 subparagraph (A). A foreign trust which ap5 points an agent described in this subparagraph

6 shall not be considered to have an office or a per7 manent establishment in the United States, or

8 to be engaged in a trade or business in the Unit9 ed States, solely because of the activities of such

10 agent pursuant to this subsection.

11 ‘‘(C) OTHER RULES TO APPLY.—Rules simi12 lar to the rules of paragraphs (2) and (4) of sec13 tion 6038A(e) shall apply for purposes of this

14 paragraph.

15 ‘‘(c) REPORTING BY UNITED STATES BENEFICIARIES

16 OF FOREIGN TRUSTS.—

17 ‘‘(1) IN GENERAL.—If any United States person

18 receives (directly or indirectly) during any taxable

19 year of such person any distribution from a foreign

20 trust, such person shall make a return with respect to

21 such trust for such year which includes—

22 ‘‘(A) the name of such trust,

23 ‘‘(B) the aggregate amount of the distribu24 tions so received from such trust during such

25 taxable year, and
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1 ‘‘(C) such other information as the Sec2 retary may prescribe.

3 ‘‘(2) INCLUSION IN INCOME IF RECORDS NOT

4 PROVIDED.—

5 ‘‘(A) IN GENERAL.—If adequate records are

6 not provided to the Secretary to determine the

7 proper treatment of any distribution from a for8 eign trust, such distribution shall be treated as

9 an accumulation distribution includible in the

10 gross income of the distributee under chapter 1.

11 To the extent provided in regulations, the preced12 ing sentence shall not apply if the foreign trust

13 elects to be subject to rules similar to the rules

14 of subsection (b)(2)(B).

15 ‘‘(B) APPLICATION OF ACCUMULATION DIS16 TRIBUTION RULES.—For purposes of applying

17 section 668 in a case to which subparagraph (A)

18 applies, the applicable number of years for purposes of section 668(a) shall be 1 19 ⁄2 of the number

20 of years the trust has been in existence.

21 ‘‘(d) SPECIAL RULES.—

22 ‘‘(1) DETERMINATION OF WHETHER UNITED

23 STATES PERSON MAKES TRANSFER OR RECEIVES DIS24 TRIBUTION.—For purposes of this section, in deter25 mining whether a United States person makes a
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1 transfer to, or receives a distribution from, a foreign

2 trust, the fact that a portion of such trust is treated

3 as owned by another person under the rules of sub4 part E of part I of subchapter J of chapter 1 shall

5 be disregarded.

6 ‘‘(2) DOMESTIC TRUSTS WITH FOREIGN ACTIVI7 TIES.—To the extent provided in regulations, a trust

8 which is a United States person shall be treated as

9 a foreign trust for purposes of this section and section

10 6677 if such trust has substantial activities, or holds

11 substantial property, outside the United States.

12 ‘‘(3) TIME AND MANNER OF FILING INFORMA13 TION.—Any notice or return required under this sec14 tion shall be made at such time and in such manner

15 as the Secretary shall prescribe.

16 ‘‘(4) MODIFICATION OF RETURN REQUIRE17 MENTS.—The Secretary is authorized to suspend or

18 modify any requirement of this section if the Sec19 retary determines that the United States has no sig20 nificant tax interest in obtaining the required infor21 mation.’’.

22 (b) INCREASED PENALTIES.—Section 6677 (relating to

23 failure to file information returns with respect to certain

24 foreign trusts) is amended to read as follows:
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1 ‘‘SEC. 6677. FAILURE TO FILE INFORMATION WITH RESPECT

2 TO CERTAIN FOREIGN TRUSTS.

3 ‘‘(a) CIVIL PENALTY.—In addition to any criminal

4 penalty provided by law, if any notice or return required

5 to be filed by section 6048—

6 ‘‘(1) is not filed on or before the time provided

7 in such section, or

8 ‘‘(2) does not include all the information re9 quired pursuant to such section or includes incorrect

10 information,

11 the person required to file such notice or return shall pay

12 a penalty equal to 35 percent of the gross reportable

13 amount. If any failure described in the preceding sentence

14 continues for more than 90 days after the day on which

15 the Secretary mails notice of such failure to the person re16 quired to pay such penalty, such person shall pay a penalty

17 (in addition to the amount determined under the preceding

18 sentence) of $10,000 for each 30-day period (or fraction

19 thereof) during which such failure continues after the expi20 ration of such 90-day period. In no event shall the penalty

21 under this subsection with respect to any failure exceed the

22 gross reportable amount.

23 ‘‘(b) SPECIAL RULES FOR RETURNS UNDER SECTION

24 6048(b).—In the case of a return required under section

25 6048(b)—
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1 ‘‘(1) the United States person referred to in such

2 section shall be liable for the penalty imposed by sub3 section (a), and

4 ‘‘(2) subsection (a) shall be applied by substitut5 ing ‘5 percent’ for ‘35 percent’.

6 ‘‘(c) GROSS REPORTABLE AMOUNT.—For purposes of

7 subsection (a), the term ‘gross reportable amount’ means—

8 ‘‘(1) the gross value of the property involved in

9 the event (determined as of the date of the event) in

10 the case of a failure relating to section 6048(a),

11 ‘‘(2) the gross value of the portion of the trust’s

12 assets at the close of the year treated as owned by the

13 United States person in the case of a failure relating

14 to section 6048(b)(1), and

15 ‘‘(3) the gross amount of the distributions in the

16 case of a failure relating to section 6048(c).

17 ‘‘(d) REASONABLE CAUSE EXCEPTION.—No penalty

18 shall be imposed by this section on any failure which is

19 shown to be due to reasonable cause and not due to willful

20 neglect. The fact that a foreign jurisdiction would impose

21 a civil or criminal penalty on the taxpayer (or any other

22 person) for disclosing the required information is not rea23 sonable cause.

24 ‘‘(e) DEFICIENCY PROCEDURES NOT TO APPLY.—Sub25 chapter B of chapter 63 (relating to deficiency procedures
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1 for income, estate, gift, and certain excise taxes) shall not

2 apply in respect of the assessment or collection of any pen3 alty imposed by subsection (a).’’.

4 (c) CONFORMING AMENDMENTS.—

5 (1) Paragraph (2) of section 6724(d) is amended

6 by striking ‘‘or’’ at the end of subparagraph (S), by

7 striking the period at the end of subparagraph (T)

8 and inserting ‘‘, or’’, and by inserting after subpara9 graph (T) the following new subparagraph:

10 ‘‘(U) section 6048(b)(1)(B) (relating to for11 eign trust reporting requirements).’’.

12 (2) The table of sections for subpart B of part

13 III of subchapter A of chapter 61 is amended by strik14 ing the item relating to section 6048 and inserting

15 the following new item:

‘‘Sec. 6048. Information with respect to certain foreign trusts.’’.

16 (3) The table of sections for part I of subchapter

17 B of chapter 68 is amended by striking the item relat18 ing to section 6677 and inserting the following new

19 item:

‘‘Sec. 6677. Failure to file information with respect to certain foreign trusts.’’.

20 (d) EFFECTIVE DATES.—

21 (1) REPORTABLE EVENTS.—To the extent related

22 to subsection (a) of section 6048 of the Internal Reve23 nue Code of 1986, as amended by this section, the
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1 amendments made by this section shall apply to re2 portable events (as defined in such section 6048) oc3 curring after the date of the enactment of this Act.

4 (2) GRANTOR TRUST REPORTING.—To the extent

5 related to subsection (b) of such section 6048, the

6 amendments made by this section shall apply to tax7 able years of United States persons beginning after

8 December 31, 1995.

9 (3) REPORTING BY UNITED STATES BENE10 FICIARIES.—To the extent related to subsection (c) of

11 such section 6048, the amendments made by this sec12 tion shall apply to distributions received after the

13 date of the enactment of this Act.

14 SEC. 402. COMPARABLE PENALTIES FOR FAILURE TO FILE

15 RETURN RELATING TO TRANSFERS TO FOR16 EIGN ENTITIES.

17 (a) IN GENERAL.—Section 1494 is amended by adding

18 at the end the following new subsection:

19 ‘‘(c) PENALTY.—In the case of any failure to file a re20 turn required by the Secretary with respect to any transfer

21 described in section 1491, the person required to file such

22 return shall be liable for the penalties provided in section

23 6677 in the same manner as if such failure were a failure

24 to file a notice under section 6048(a).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by sub2 section (a) shall apply to transfers after the date of the en3 actment of this Act.

4 SEC. 403. MODIFICATIONS OF RULES RELATING TO FOR5 EIGN TRUSTS HAVING ONE OR MORE UNITED

6 STATES BENEFICIARIES.

7 (a) TREATMENT OF TRUST OBLIGATIONS, ETC.—

8 (1) Paragraph (2) of section 679(a) is amended

9 by striking subparagraph (B) and inserting the fol10 lowing:

11 ‘‘(B) TRANSFERS AT FAIR MARKET

12 VALUE.—To any transfer of property to a trust

13 in exchange for consideration of at least the fair

14 market value of the transferred property. For

15 purposes of the preceding sentence, consideration

16 other than cash shall be taken into account at its

17 fair market value.’’.

18 (2) Subsection (a) of section 679 (relating to for19 eign trusts having one or more United States bene20 ficiaries) is amended by adding at the end the follow21 ing new paragraph:

22 ‘‘(3) CERTAIN OBLIGATIONS NOT TAKEN INTO AC23 COUNT UNDER FAIR MARKET VALUE EXCEPTION.—

24 ‘‘(A) IN GENERAL.—In determining whether

25 paragraph (2)(B) applies to any transfer by a
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1 person described in clause (ii) or (iii) of sub2 paragraph (C), there shall not be taken into ac3 count—

4 ‘‘(i) except as provided in regulations,

5 any obligation of a person described in sub6 paragraph (C), and

7 ‘‘(ii) to the extent provided in regula8 tions, any obligation which is guaranteed

9 by a person described in subparagraph (C).

10 ‘‘(B) TREATMENT OF PRINCIPAL PAYMENTS

11 ON OBLIGATION.—Principal payments by the

12 trust on any obligation referred to in subpara13 graph (A) shall be taken into account on and

14 after the date of the payment in determining the

15 portion of the trust attributable to the property

16 transferred.

17 ‘‘(C) PERSONS DESCRIBED.—The persons

18 described in this subparagraph are—

19 ‘‘(i) the trust,

20 ‘‘(ii) any grantor or beneficiary of the

21 trust, and

22 ‘‘(iii) any person who is related (with23 in the meaning of section 643(i)(2)(B)) to

24 any grantor or beneficiary of the trust.’’.
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1 (b) EXEMPTION OF TRANSFERS TO CHARITABLE

2 TRUSTS.—Subsection (a) of section 679 is amended by

3 striking ‘‘section 404(a)(4) or 404A’’ and inserting ‘‘section

4 6048(a)(3)(B)(ii)’’.

5 (c) OTHER MODIFICATIONS.—Subsection (a) of section

6 679 is amended by adding at the end the following new

7 paragraphs:

8 ‘‘(4) SPECIAL RULES APPLICABLE TO FOREIGN

9 GRANTOR WHO LATER BECOMES A UNITED STATES

10 PERSON.—

11 ‘‘(A) IN GENERAL.—If a nonresident alien

12 individual has a residency starting date within

13 5 years after directly or indirectly transferring

14 property to a foreign trust, this section and sec15 tion 6048 shall be applied as if such individual

16 transferred to such trust on the residency start17 ing date an amount equal to the portion of such

18 trust attributable to the property transferred by

19 such individual to such trust in such transfer.

20 ‘‘(B) TREATMENT OF UNDISTRIBUTED IN21 COME.—For purposes of this section, undistrib22 uted net income for periods before such individ23 ual’s residency starting date shall be taken into

24 account in determining the portion of the trust

25 which is attributable to property transferred by
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1 such individual to such trust but shall not other2 wise be taken into account.

3 ‘‘(C) RESIDENCY STARTING DATE.—For

4 purposes of this paragraph, an individual’s resi5 dency starting date is the residency starting date

6 determined under section 7701(b)(2)(A).

7 ‘‘(5) OUTBOUND TRUST MIGRATIONS.—If—

8 ‘‘(A) an individual who is a citizen or resi9 dent of the United States transferred property to

10 a trust which was not a foreign trust, and

11 ‘‘(B) such trust becomes a foreign trust

12 while such individual is alive,

13 then this section and section 6048 shall be applied as

14 if such individual transferred to such trust on the

15 date such trust becomes a foreign trust an amount

16 equal to the portion of such trust attributable to the

17 property previously transferred by such individual to

18 such trust. A rule similar to the rule of paragraph

19 (4)(B) shall apply for purposes of this paragraph.’’.

20 (d) MODIFICATIONS RELATING TO WHETHER TRUST

21 HAS UNITED STATES BENEFICIARIES.—Subsection (c) of

22 section 679 is amended by adding at the end the following

23 new paragraph:

24 ‘‘(3) CERTAIN UNITED STATES BENEFICIARIES

25 DISREGARDED.—A beneficiary shall not be treated as
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1 a United States person in applying this section with

2 respect to any transfer of property to foreign trust if

3 such beneficiary first became a United States person

4 more than 5 years after the date of such transfer.’’.

5 (e) TECHNICAL AMENDMENT.—Subparagraph (A) of

6 section 679(c)(2) is amended to read as follows:

7 ‘‘(A) in the case of a foreign corporation,

8 such corporation is a controlled foreign corpora9 tion (as defined in section 957(a)),’’.

10 (f) REGULATIONS.—Section 679 is amended by adding

11 at the end the following new subsection:

12 ‘‘(d) REGULATIONS.—The Secretary shall prescribe

13 such regulations as may be necessary or appropriate to

14 carry out the purposes of this section.’’.

15 (g) EFFECTIVE DATE.—The amendments made by this

16 section shall apply to transfers of property after February

17 6, 1995.

18 SEC. 404. FOREIGN PERSONS NOT TO BE TREATED AS OWN19 ERS UNDER GRANTOR TRUST RULES.

20 (a) GENERAL RULE.—

21 (1) Subsection (f) of section 672 (relating to spe22 cial rule where grantor is foreign person) is amended

23 to read as follows:

24 ‘‘(f) SUBPART NOT TO RESULT IN FOREIGN OWNER25 SHIP.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding any other

2 provision of this subpart, this subpart shall apply

3 only to the extent such application results in an

4 amount (if any) being currently taken into account

5 (directly or through 1 or more entities) under this

6 chapter in computing the income of a citizen or resi7 dent of the United States or a domestic corporation.

8 ‘‘(2) EXCEPTIONS.—

9 ‘‘(A) CERTAIN REVOCABLE AND IRREV10 OCABLE TRUSTS.—Paragraph (1) shall not

11 apply to any portion of a trust if—

12 ‘‘(i) the power to revest absolutely in

13 the grantor title to the trust property to

14 which such portion is attributable is exer15 cisable solely by the grantor without the ap16 proval or consent of any other person or

17 with the consent of a related or subordinate

18 party who is subservient to the grantor, or

19 ‘‘(ii) the only amounts distributable

20 from such portion (whether income or cor21 pus) during the lifetime of the grantor are

22 amounts distributable to the grantor or the

23 spouse of the grantor.

24 ‘‘(B) COMPENSATORY TRUSTS.—Except as

25 provided in regulations, paragraph (1) shall not
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1 apply to any portion of a trust distributions

2 from which are taxable as compensation for serv3 ices rendered.

4 ‘‘(3) SPECIAL RULES.—Except as otherwise pro5 vided in regulations prescribed by the Secretary—

6 ‘‘(A) a controlled foreign corporation (as de7 fined in section 957) shall be treated as a domes8 tic corporation for purposes of paragraph (1),

9 and

10 ‘‘(B) paragraph (1) shall not apply for pur11 poses of applying section 1296.

12 ‘‘(4) RECHARACTERIZATION OF PURPORTED

13 GIFTS.—In the case of any transfer directly or indi14 rectly from a partnership or foreign corporation

15 which the transferee treats as a gift or bequest, the

16 Secretary may recharacterize such transfer in such

17 circumstances as the Secretary determines to be ap18 propriate to prevent the avoidance of the purposes of

19 this subsection.

20 ‘‘(5) SPECIAL RULE WHERE GRANTOR IS FOR21 EIGN PERSON.—If—

22 ‘‘(A) but for this subsection, a foreign per23 son would be treated as the owner of any portion

24 of a trust, and
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1 ‘‘(B) such trust has a beneficiary who is a

2 United States person,

3 such beneficiary shall be treated as the grantor of

4 such portion to the extent such beneficiary or any

5 member of such beneficiary’s family (within the

6 meaning of section 267(c)(4)) has made (directly or

7 indirectly) transfers of property (other than in a sale

8 for full and adequate consideration) to such foreign

9 person. For purposes of the preceding sentence, any

10 gift shall not be taken into account to the extent such

11 gift would be excluded from taxable gifts under section

12 2503(b).

13 ‘‘(6) REGULATIONS.—The Secretary shall pre14 scribe such regulations as may be necessary or appro15 priate to carry out the purposes of this subsection, in16 cluding regulations providing that paragraph (1)

17 shall not apply in appropriate cases.’’.

18 (2) The last sentence of subsection (c) of section

19 672 of such Code is amended by inserting ‘‘subsection

20 (f) and’’ before ‘‘sections 674’’.

21 (b) CREDIT FOR CERTAIN TAXES.—

22 (1) Paragraph (2) of section 665(d) is amended

23 by adding at the end the following new sentence:

24 ‘‘Under rules or regulations prescribed by the Sec25 retary, in the case of any foreign trust of which the
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1 settlor or another person would be treated as owner

2 of any portion of the trust under subpart E but for

3 section 672(f), the term ‘taxes imposed on the trust’

4 includes the allocable amount of any income, war

5 profits, and excess profits taxes imposed by any for6 eign country or possession of the United States on the

7 settlor or such other person in respect of trust in8 come.’’.

9 (2) Paragraph (5) of section 901(b) is amended

10 by adding at the end the following new sentence:

11 ‘‘Under rules or regulations prescribed by the Sec12 retary, in the case of any foreign trust of which the

13 settlor or another person would be treated as owner

14 of any portion of the trust under subpart E but for

15 section 672(f), the allocable amount of any income,

16 war profits, and excess profits taxes imposed by any

17 foreign country or possession of the United States on

18 the settlor or such other person in respect of trust in19 come.’’.

20 (c) DISTRIBUTIONS BY CERTAIN FOREIGN TRUSTS

21 THROUGH NOMINEES.—

22 (1) Section 643 is amended by adding at the end

23 the following new subsection:

24 ‘‘(h) DISTRIBUTIONS BY CERTAIN FOREIGN TRUSTS

25 THROUGH NOMINEES.—For purposes of this part, any
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1 amount paid to a United States person which is derived

2 directly or indirectly from a foreign trust of which the

3 payor is not the grantor shall be deemed in the year of pay4 ment to have been directly paid by the foreign trust to such

5 United States person.’’.

6 (2) Section 665 is amended by striking sub7 section (c).

8 (d) EFFECTIVE DATE.—

9 (1) IN GENERAL.—Except as provided by para10 graph (2), the amendments made by this section shall

11 take effect on the date of the enactment of this Act.

12 (2) EXCEPTION FOR CERTAIN TRUSTS.—The

13 amendments made by this section shall not apply to

14 any trust—

15 (A) which is treated as owned by the grant16 or under section 676 or 677 (other than sub17 section (a)(3) thereof) of the Internal Revenue

18 Code of 1986, and

19 (B) which is in existence on September 19,

20 1995.

21 The preceding sentence shall not apply to the portion

22 of any such trust attributable to any transfer to such

23 trust after September 19, 1995.

24 (e) TRANSITIONAL RULE.—If—
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1 (1) by reason of the amendments made by this

2 section, any person other than a United States person

3 ceases to be treated as the owner of a portion of a do4 mestic trust, and

5 (2) before January 1, 1997, such trust becomes

6 a foreign trust, or the assets of such trust are trans7 ferred to a foreign trust,

8 no tax shall be imposed by section 1491 of the Internal Rev9 enue Code of 1986 by reason of such trust becoming a for10 eign trust or the assets of such trust being transferred to

11 a foreign trust.

12 SEC. 405. INFORMATION REPORTING REGARDING FOREIGN

13 GIFTS.

14 (a) IN GENERAL.—Subpart A of part III of subchapter

15 A of chapter 61 is amended by inserting after section 6039E

16 the following new section:

17 ‘‘SEC. 6039F. NOTICE OF LARGE GIFTS RECEIVED FROM

18 FOREIGN PERSONS.

19 ‘‘(a) IN GENERAL.—If the value of the aggregate for20 eign gifts received by a United States person (other than

21 an organization described in section 501(c) and exempt

22 from tax under section 501(a)) during any taxable year ex23 ceeds $10,000, such United States person shall furnish (at

24 such time and in such manner as the Secretary shall pre-
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1 scribe) such information as the Secretary may prescribe re2 garding each foreign gift received during such year.

3 ‘‘(b) FOREIGN GIFT.—For purposes of this section, the

4 term ‘foreign gift’ means any amount received from a per5 son other than a United States person which the recipient

6 treats as a gift or bequest. Such term shall not include any

7 qualified transfer (within the meaning of section

8 2503(e)(2)) or any distribution properly disclosed in a re9 turn under section 6048(c).

10 ‘‘(c) PENALTY FOR FAILURE TO FILE INFORMATION.—

11 ‘‘(1) IN GENERAL.—If a United States person

12 fails to furnish the information required by subsection

13 (a) with respect to any foreign gift within the time

14 prescribed therefor (including extensions)—

15 ‘‘(A) the tax consequences of the receipt of

16 such gift shall be determined by the Secretary,

17 and

18 ‘‘(B) such United States person shall pay

19 (upon notice and demand by the Secretary and

20 in the same manner as tax) an amount equal to

21 5 percent of the amount of such foreign gift for

22 each month for which the failure continues (not

23 to exceed 25 percent of such amount in the aggre24 gate).
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1 ‘‘(2) REASONABLE CAUSE EXCEPTION.—Para2 graph (1) shall not apply to any failure to report a

3 foreign gift if the United States person shows that the

4 failure is due to reasonable cause and not due to will5 ful neglect.

6 ‘‘(d) COST-OF-LIVING ADJUSTMENT.—In the case of

7 any taxable year beginning after December 31, 1996, the

8 $10,000 amount under subsection (a) shall be increased by

9 an amount equal to the product of such amount and the

10 cost-of-living adjustment for such taxable year under section

11 1(f)(3), except that subparagraph (B) thereof shall be ap12 plied by substituting ‘1995’ for ‘1992’.

13 ‘‘(e) REGULATIONS.—The Secretary shall prescribe

14 such regulations as may be necessary or appropriate to

15 carry out the purposes of this section.’’.

16 (b) CLERICAL AMENDMENT.—The table of sections for

17 such subpart is amended by inserting after the item relating

18 to section 6039E the following new item:

‘‘Sec. 6039F. Notice of large gifts received from foreign persons.’’.

19 (c) EFFECTIVE DATE.—The amendments made by this

20 section shall apply to amounts received after the date of

21 the enactment of this Act in taxable years ending after such

22 date.
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1 SEC. 406. MODIFICATION OF RULES RELATING TO FOREIGN

2 TRUSTS WHICH ARE NOT GRANTOR TRUSTS.

3 (a) MODIFICATION OF INTEREST CHARGE ON ACCUMU4 LATION DISTRIBUTIONS.—Subsection (a) of section 668 (re5 lating to interest charge on accumulation distributions from

6 foreign trusts) is amended to read as follows:

7 ‘‘(a) GENERAL RULE.—For purposes of the tax deter8 mined under section 667(a)—

9 ‘‘(1) INTEREST DETERMINED USING UNDERPAY10 MENT RATES.—The interest charge determined under

11 this section with respect to any distribution is the

12 amount of interest which would be determined on the

13 partial tax computed under section 667(b) for the pe14 riod described in paragraph (2) using the rates and

15 the method under section 6621 applicable to under16 payments of tax.

17 ‘‘(2) PERIOD.—For purposes of paragraph (1),

18 the period described in this paragraph is the period

19 which begins on the date which is the applicable num20 ber of years before the date of the distribution and

21 which ends on the date of the distribution.

22 ‘‘(3) APPLICABLE NUMBER OF YEARS.—For pur23 poses of paragraph (2)—

24 ‘‘(A) IN GENERAL.—The applicable number

25 of years with respect to a distribution is the

26 number determined by dividing—
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1 ‘‘(i) the sum of the products described

2 in subparagraph (B) with respect to each

3 undistributed income year, by

4 ‘‘(ii) the aggregate undistributed net

5 income.

6 The quotient determined under the preceding

7 sentence shall be rounded under procedures pre8 scribed by the Secretary.

9 ‘‘(B) PRODUCT DESCRIBED.—For purposes

10 of subparagraph (A), the product described in

11 this subparagraph with respect to any undistrib12 uted income year is the product of—

13 ‘‘(i) the undistributed net income for

14 such year, and

15 ‘‘(ii) the sum of the number of taxable

16 years between such year and the taxable

17 year of the distribution (counting in each

18 case the undistributed income year but not

19 counting the taxable year of the distribu20 tion).

21 ‘‘(4) UNDISTRIBUTED INCOME YEAR.—For pur22 poses of this subsection, the term ‘undistributed in23 come year’ means any prior taxable year of the trust

24 for which there is undistributed net income, other

25 than a taxable year during all of which the bene-
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1 ficiary receiving the distribution was not a citizen or

2 resident of the United States.

3 ‘‘(5) DETERMINATION OF UNDISTRIBUTED NET

4 INCOME.—Notwithstanding section 666, for purposes

5 of this subsection, an accumulation distribution from

6 the trust shall be treated as reducing proportionately

7 the undistributed net income for undistributed income

8 years.

9 ‘‘(6) PERIODS BEFORE 1996.—Interest for the

10 portion of the period described in paragraph (2)

11 which occurs before January 1, 1996, shall be deter12 mined—

13 ‘‘(A) by using an interest rate of 6 percent,

14 and

15 ‘‘(B) without compounding until January

16 1, 1996.’’.

17 (b) ABUSIVE TRANSACTIONS.—Section 643(a) is

18 amended by inserting after paragraph (6) the following new

19 paragraph:

20 ‘‘(7) ABUSIVE TRANSACTIONS.—The Secretary

21 shall prescribe such regulations as may be necessary

22 or appropriate to carry out the purposes of this part,

23 including regulations to prevent avoidance of such

24 purposes.’’.

25 (c) TREATMENT OF LOANS FROM TRUSTS.—
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1 (1) IN GENERAL.—Section 643 (relating to defi2 nitions applicable to subparts A, B, C, and D) is

3 amended by adding at the end the following new sub4 section:

5 ‘‘(i) LOANS FROM FOREIGN TRUSTS.—For purposes of

6 subparts B, C, and D—

7 ‘‘(1) GENERAL RULE.—Except as provided in

8 regulations, if a foreign trust makes a loan of cash or

9 marketable securities directly or indirectly to—

10 ‘‘(A) any grantor or beneficiary of such

11 trust who is a United States person, or

12 ‘‘(B) any United States person not de13 scribed in subparagraph (A) who is related to

14 such grantor or beneficiary,

15 the amount of such loan shall be treated as a distribu16 tion by such trust to such grantor or beneficiary (as

17 the case may be).

18 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—For

19 purposes of this subsection—

20 ‘‘(A) CASH.—The term ‘cash’ includes for21 eign currencies and cash equivalents.

22 ‘‘(B) RELATED PERSON.—

23 ‘‘(i) IN GENERAL.—A person is related

24 to another person if the relationship between

25 such persons would result in a disallowance
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1 of losses under section 267 or 707(b). In ap2 plying section 267 for purposes of the pre3 ceding sentence, section 267(c)(4) shall be

4 applied as if the family of an individual

5 includes the spouses of the members of the

6 family.

7 ‘‘(ii) ALLOCATION.—If any person de8 scribed in paragraph (1)(B) is related to

9 more than one person, the grantor or bene10 ficiary to whom the treatment under this

11 subsection applies shall be determined under

12 regulations prescribed by the Secretary.

13 ‘‘(C) EXCLUSION OF TAX-EXEMPTS.—The

14 term ‘United States person’ does not include any

15 entity exempt from tax under this chapter.

16 ‘‘(D) TRUST NOT TREATED AS SIMPLE

17 TRUST.—Any trust which is treated under this

18 subsection as making a distribution shall be

19 treated as not described in section 651.

20 ‘‘(3) SUBSEQUENT TRANSACTIONS REGARDING

21 LOAN PRINCIPAL.—If any loan is taken into account

22 under paragraph (1), any subsequent transaction be23 tween the trust and the original borrower regarding

24 the principal of the loan (by way of complete or par25 tial repayment, satisfaction, cancellation, discharge,
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1 or otherwise) shall be disregarded for purposes of this

2 title.’’.

3 (2) TECHNICAL AMENDMENT.—Paragraph (8) of

4 section 7872(f) is amended by inserting ‘‘, 643(i),’’ be5 fore ‘‘or 1274’’ each place it appears.

6 (d) EFFECTIVE DATES.—

7 (1) INTEREST CHARGE.—The amendment made

8 by subsection (a) shall apply to distributions after the

9 date of the enactment of this Act.

10 (2) ABUSIVE TRANSACTIONS.—The amendment

11 made by subsection (b) shall take effect on the date of

12 the enactment of this Act.

13 (3) LOANS FROM TRUSTS.—The amendment

14 made by subsection (c) shall apply to loans of cash

15 or marketable securities made after September 19,

16 1995.

17 SEC. 407. RESIDENCE OF TRUSTS, ETC.

18 (a) TREATMENT AS UNITED STATES PERSON.—

19 (1) IN GENERAL.—Paragraph (30) of section

20 7701(a) is amended by striking ‘‘and’’ at the end of

21 subparagraph (C) and by striking subparagraph (D)

22 and by inserting the following new subparagraphs:

23 ‘‘(D) any estate (other than a foreign estate,

24 within the meaning of paragraph (31)), and

25 ‘‘(E) any trust if—
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1 ‘‘(i) a court within the United States

2 is able to exercise primary supervision over

3 the administration of the trust, and

4 ‘‘(ii) one or more United States fidu5 ciaries have the authority to control all sub6 stantial decisions of the trust.’’.

7 (2) CONFORMING AMENDMENT.—Paragraph (31)

8 of section 7701(a) is amended to read as follows:

9 ‘‘(31) FOREIGN ESTATE OR TRUST.—

10 ‘‘(A) FOREIGN ESTATE.—The term ‘foreign

11 estate’ means an estate the income of which, from

12 sources without the United States which is not

13 effectively connected with the conduct of a trade

14 or business within the United States, is not in15 cludible in gross income under subtitle A.

16 ‘‘(B) FOREIGN TRUST.—The term ‘foreign

17 trust’ means any trust other than a trust de18 scribed in subparagraph (E) of paragraph

19 (30).’’.

20 (3) EFFECTIVE DATE.—The amendments made

21 by this subsection shall apply—

22 (A) to taxable years beginning after Decem23 ber 31, 1996, or
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1 (B) at the election of the trustee of a trust,

2 to taxable years ending after the date of the en3 actment of this Act.

4 Such an election, once made, shall be irrevocable.

5 (b) DOMESTIC TRUSTS WHICH BECOME FOREIGN

6 TRUSTS.—

7 (1) IN GENERAL.—Section 1491 (relating to im8 position of tax on transfers to avoid income tax) is

9 amended by adding at the end the following new flush

10 sentence:

11 ‘‘If a trust which is not a foreign trust becomes a foreign

12 trust, such trust shall be treated for purposes of this section

13 as having transferred, immediately before becoming a for14 eign trust, all of its assets to a foreign trust.’’.

15 (2) EFFECTIVE DATE.—The amendment made by

16 this subsection shall take effect on the date of the en17 actment of this Act.

18 Subtitle B—International Shipping

19 Income Disclosure

20 SEC. 411. PENALTIES FOR FAILURE TO DISCLOSE POSITION

21 THAT CERTAIN INTERNATIONAL SHIPPING

22 INCOME IS NOT INCLUDIBLE IN GROSS IN23 COME.

24 (a) IN GENERAL.—Section 883 is amended by adding

25 at the end the following new subsection:
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1 ‘‘(d) PENALTIES FOR FAILURE TO DISCLOSE POSITION

2 THAT CERTAIN INTERNATIONAL SHIPPING INCOME IS NOT

3 INCLUDIBLE IN GROSS INCOME.—

4 ‘‘(1) IN GENERAL.—A taxpayer who, with re5 spect to any tax imposed by this title, takes the posi6 tion that any of its gross income derived from the

7 international operation of a ship or ships is not in8 cludible in gross income by reason of subsection (a)(1)

9 or section 872(b)(1) (or by reason of any applicable

10 treaty) shall be entitled to such treatment only if such

11 position is disclosed (in such manner as the Secretary

12 may prescribe) on the return of tax for such tax (or

13 any statement attached to such return).

14 ‘‘(2) ADDITIONAL PENALTIES FOR FAILING TO

15 DISCLOSE POSITION.—If a taxpayer fails to meet the

16 requirement of paragraph (1) with respect to any tax17 able year—

18 ‘‘(A) the amount of the income from the

19 international operation of a ship or ships—

20 ‘‘(i) which is from sources without the

21 United States, and

22 ‘‘(ii) which is attributable to a fixed

23 place of business in the United States,
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1 shall be treated for purposes of this title as effec2 tively connected with the conduct of a trade or

3 business within the United States, and

4 ‘‘(B) no deductions or credits shall be al5 lowed which are attributable to income from the

6 international operation of a ship or ships.

7 ‘‘(3) REASONABLE CAUSE EXCEPTION.—This

8 subsection shall not apply to a failure to disclose a

9 position if it is shown that such failure is due to rea10 sonable cause and not due to willful neglect.’’

11 (b) CONFORMING AMENDMENTS.—

12 (1) Paragraph (1) of section 872(b) is amended

13 by striking ‘‘Gross income’’ and inserting ‘‘Except as

14 provided in section 883(d), gross income’’.

15 (2) Paragraph (1) of section 883(a) is amended

16 by striking ‘‘Gross income’’ and inserting ‘‘Except as

17 provided in subsection (d), gross income’’.

18 (c) EFFECTIVE DATE.—

19 (1) IN GENERAL.—The amendments made by

20 this section shall apply to taxable years beginning

21 after the later of—

22 (A) December 31, 1996, or

23 (B) the date that the Shipbuilding Agree24 ment enters into force with respect to the United

25 States.
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1 (2) COORDINATION WITH TREATIES.—The

2 amendments made by this section shall not apply in

3 any case where their application would be contrary

4 to any treaty obligation of the United States.

5 (d) INFORMATION TO BE PROVIDED BY CUSTOMS

6 SERVICE.—The United States Custom Service shall provide

7 the Secretary of the Treasury or his delegate with such in8 formation as may be specified by such Secretary in order

9 to enable such Secretary to determine whether ships which

10 are not registered in the United States are engaged in

11 transportation to or from the United States.

Amend the title so as to read: ‘‘An Act to amend the

United States-Israel Free Trade Area Implementation

Act of 1985 to provide the President with additional

proclamation authority with respect to articles of the

West Bank or Gaza Strip or a qualifying industrial zone,

to approve and implement the OECD Shipbuilding

Agreement, to reauthorize the Generalized System of

Preferences, and for other purposes.’’.