44564 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

[FR Doc. E6–12659 Filed 8–4–06; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Bureau of Customs and Border 

Protection 

DEPARTMENT OF THE TREASURY 

19 CFR Parts 10, 163 and 178 

[CBP Dec. 06–21] 

RIN 1505–AB37 

Implementation of the Andean Trade 

Promotion and Drug Eradication Act 

AGENCY: Customs and Border Protection, 

Department of Homeland Security; 

Department of the Treasury. 

ACTION: Final rule. 

SUMMARY: This document adopts as a 

final rule, with some changes, interim 

amendments to the Customs and Border 

Protection (CBP) Regulations which 

were published in the Federal Register 

on March 25, 2003, as T.D. 03–16, to 

implement the trade benefit provisions 

for Andean countries contained in Title 

XXXI of the Trade Act of 2002. The 

trade benefits under Title XXXI, also 

referred to as the Andean Trade 

Promotion and Drug Eradication Act 

(the ATPDEA), apply to Andean 

countries specifically designated by the 

President for ATPDEA purposes. The 

ATPDEA trade benefits involve the 

entry of specific apparel and other 

textile articles free of duty and free of 

any quantitative restrictions, 

limitations, or consultation levels; the 

extension of duty-free treatment to 

specified non-textile articles normally 

excluded from duty-free treatment 

under the Andean Trade Preference Act 

(ATPA) program if the President finds 

those articles to be not import-sensitive 

in the context of the ATPDEA; and the 

entry of certain imports of tuna free of 

duty and free of any quantitative 

restrictions. The regulatory amendments 

adopted as a final rule in this document 

reflect and clarify the statutory 

standards for the trade benefits under 

the ATPDEA and also include specific 

documentary, procedural and other 

related requirements that must be met in 

order to obtain those benefits. 

DATES: This final rule is effective on 

September 6, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Operational issues regarding textiles: 

Robert Abels, Office of Field Operations 

(202–344–1959). 

Other operational issues: Lori 

Whitehurst, Office of Field Operations 

(202–344–2722). Legal issues: Cynthia 

Reese, Office of Regulations and Rulings 

(202–572–8812). 

SUPPLEMENTARY INFORMATION: 

Background 

Andean Trade Promotion and Drug 

Eradication Act 

On August 6, 2002, the President 

signed into law the Trade Act of 2002 

(the ‘‘Act’’), Public Law 107–210, 116 

Stat. 933. Title XXXI of the Act concerns 

trade benefits for Andean countries, is 

referred to in the Act as the ‘‘Andean 

Trade Promotion and Drug Eradication 

Act’’ (the ‘‘ATPDEA’’), and consists of 

sections 3101 through 3108. This 

document specifically concerns the 

trade benefit provisions of section 3103 

of the Act which is headed ‘‘articles 

eligible for preferential treatment.’’

Subsection (a) of section 3103 of the 

Act amends section 204 of the Andean 

Trade Preference Act (the ATPA, 

codified at 19 U.S.C. 3201–3206). The 

ATPA is a duty preference program that 

applies to exports from those Andean 

region countries that have been 

designated by the President as program 

beneficiaries. The origin and related 

rules for eligibility for duty-free 

treatment under the ATPA are similar to 

those under the older Caribbean Basin 

Economic Recovery Act (the CBERA, 

also referred to as the Caribbean Basin 

Initiative, or CBI statute, codified at 19 

U.S.C. 2701–2707). As in the case of the 

CBI, all articles are eligible for duty-free 

treatment under the ATPA (that is, they 

do not have to be specially designated 

as eligible by the President) except those 

articles that are specifically excluded 

under the statute. 

The changes to section 204 of the 

ATPA made by subsection (a) of section 

3103 of the Act involve the following: 

(1) The removal of section 204(c) which 

provided for the application of reduced 

duty rates (rather than duty-free 

treatment) for certain handbags, luggage, 

flat goods, work gloves, and leather 

wearing apparel, with a consequential 

redesignation of subsections (d) through 

(g) as (c) through (f), respectively; and 

(2) a revision of section 204(b). Prior to 

the amendment effected by subsection 

(a) of section 3103 of the Act, section 

204(b) of the ATPA was headed 

‘‘exceptions to duty-free treatment’’ and 

consisted only of a list of eight specific 

products or groups of products excluded 

from ATPA duty-free treatment. 

As a result of the amendment made by 

subsection (a) of section 3103 of the Act, 

section 204(b) of the ATPA now is 

headed ‘‘exceptions and special rules’’

and consists of six principal paragraphs. 

These six paragraphs are discussed 

below. 

Paragraphs (1) and (2): Articles That Are 

Not Import-Sensitive and Excluded 

Articles 

Paragraph (1) of amended section 

204(b) is headed ‘‘certain articles that 

are not import-sensitive’’ and provides 

that the President may proclaim dutyfree treatment under the ATPA for any 

article described in subparagraph (A), 

(B), (C), or (D) that is the growth, 

product, or manufacture of an ATPDEA 

beneficiary country, that is imported 

directly into the customs territory of the 

United States from an ATPDEA 

beneficiary country, and that meets the 

requirements of section 204, if the 

President determines that the article is 

not import-sensitive in the context of 

imports from ATPDEA beneficiary 

countries. Subparagraphs (A), (B), (C), 

and (D) cover, respectively: 

1. Footwear not designated at the time 

of the effective date of the ATPA (that 

is, December 4, 1991) as eligible articles 

for the purpose of the Generalized 

System of Preferences (the GSP, Title V 

of the Trade Act of 1974, codified at 19 

U.S.C. 2461–2467); 

2. Petroleum, or any product derived 

from petroleum, provided for in 

headings 2709 and 2710 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS); 

3. Watches and watch parts (including 

cases, bracelets, and straps), of whatever 

type including, but not limited to, 

mechanical, quartz digital or quartz 

analog, if those watches or watch parts 

contain any material which is the 

product of any country with respect to 

which HTSUS column 2 rates of duty 

apply; and 

4. Handbags, luggage, flat goods, work 

gloves, and leather wearing apparel that 

were not designated on August 5, 1983, 

as eligible articles for purposes of the 

GSP. 

Paragraph (2) of amended section 

204(b) is headed ‘‘exclusions’’ and 

provides that, subject to paragraph (3), 

duty-free treatment under the ATPA 

may not be extended to the following: 

1. Textile and apparel articles which 

were not eligible articles for purposes of 

the ATPA on January 1, 1994, as the 

ATPA was in effect on that date; 

2. Rum and tafia classified in 

subheading 2208.40 of the HTSUS; 

3. Sugars, syrups, and sugarcontaining products subject to overquota duty rates under applicable tariffrate quotas; and 

4. Tuna prepared or preserved in any 

manner in airtight containers, except as 

provided in paragraph (4). 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44565 

The effect of paragraphs (1) and (2) is 

to divide the former section 204(b) list 

of eight types of products excluded from 

ATPA duty-free treatment into two 

groups of four each. The four types of 

products covered by paragraph (1) 

would no longer be excluded from 

ATPA duty-free treatment but rather 

would be eligible for that treatment, 

provided that the President makes the 

appropriate negative import sensitivity 

determination. For these products 

(which include the handbags, luggage, 

flat goods, work gloves, and leather 

wearing apparel to which reduced duty 

rates previously applied under removed 

section 204(c)), the country of origin 

and value-content and related 

requirements under section 204(a) of the 

ATPA and the regulations thereunder 

would apply. The four types of products 

covered by paragraph (2) would remain 

as exclusions from duty-free treatment 

except as otherwise provided in 

paragraph (3) in the case of certain 

apparel and textile articles and 

paragraph (4) in the case of certain tuna 

products, and the exclusion in the case 

of sugar and sugar products has been 

reworded to refer to tariff-rate quota 

applicability rather than HTSUS 

classification. Paragraphs (3) through (6) 

of amended section 204(b), as discussed 

below, are entirely new provisions. 

Paragraph (3): Preferential Treatment of 

Textile Articles 

Paragraph (3) of amended section 

204(b) is headed ‘‘apparel articles and 

certain textile articles.’’ Paragraph (3)(A) 

provides that apparel articles that are 

imported directly into the customs 

territory of the United States from an 

ATPDEA beneficiary country shall enter 

the United States free of duty and free 

of any quantitative restrictions, 

limitations, or consultation levels, but 

only if those articles are described in 

subparagraph (B), which states that the 

apparel articles referred to in 

subparagraph (A) are the following: 

1. Apparel articles sewn or otherwise 

assembled in one or more ATPDEA 

beneficiary countries, or the United 

States, or both, exclusively from any one 

or any combination of the following 

[clause (i)]: 

a. Fabrics or fabric components 

wholly formed, or components knit-toshape, in the United States, from yarns 

wholly formed in the United States or 

one or more ATPDEA beneficiary 

countries (including fabrics not formed 

from yarns, if those fabrics are 

classifiable under heading 5602 or 5603 

of the HTSUS and are formed in the 

United States). Apparel articles shall 

qualify under this subclause only if all 

dyeing, printing, and finishing of the 

fabrics from which the articles are 

assembled, if the fabrics are knit fabrics, 

is carried out in the United States. 

Apparel articles shall qualify under this 

subclause only if all dyeing, printing, 

and finishing of the fabrics from which 

the articles are assembled, if the fabrics 

are woven fabrics, is carried out in the 

United States [subclause (I)]; 

b. Fabrics or fabric components 

formed or components knit-to-shape, in 

one or more ATPDEA beneficiary 

countries, from yarns wholly formed in 

one or more ATPDEA beneficiary 

countries, if those fabrics (including 

fabrics not formed from yarns, if those 

fabrics are classifiable under heading 

5602 or 5603 of the HTSUS and are 

formed in one or more ATPDEA 

beneficiary countries) or components 

are in chief value of llama, alpaca, or 

vicun ̃ a [subclause (II)]; 

c. Fabrics or yarns, to the extent that 

apparel articles of those fabrics or yarns 

would be eligible for preferential 

treatment, without regard to the source 

of the fabrics or yarns, under Annex 401 

of the North American Free Trade 

Agreement (NAFTA) [subclause (III)]; 

and 

d. Fabrics or yarns, to the extent that 

the President has determined that the 

fabrics or yarns cannot be supplied by 

the domestic industry in commercial 

quantities in a timely manner and has 

proclaimed the treatment provided 

under clause (i)(III) [clause (ii)]; 

2. Apparel articles sewn or otherwise 

assembled in one or more ATPDEA 

beneficiary countries from fabrics or 

from fabric components formed or from 

components knit-to-shape in one or 

more ATPDEA beneficiary countries 

from yarns wholly formed in the United 

States or one or more ATPDEA 

beneficiary countries (including fabrics 

not formed from yarns, if those fabrics 

are classifiable under heading 5602 or 

5603 of the HTSUS and are formed in 

one or more ATPDEA beneficiary 

countries), whether or not the apparel 

articles are also made from any of the 

fabrics, fabric components formed, or 

components knit-to-shape described in 

clause (i) (unless the apparel articles are 

made exclusively from any of the 

fabrics, fabric components formed, or 

components knit-to-shape described in 

clause (i)). For these articles, 

preferential treatment starts on October 

1, 2002, and extends for each of the four 

succeeding 1-year periods, subject to the 

application of annual quantitative limits 

expressed in square meter equivalents 

and with an equal percentage increase 

in the limit for each succeeding year 

[clause (iii)]; 

3. A handloomed, handmade, or 

folklore textile or apparel article of an 

ATPDEA beneficiary country that the 

President and representatives of the 

ATPDEA beneficiary country concerned 

mutually agree upon as being a 

handloomed, handmade, or folklore 

good of a kind described in section 

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

of Annex 300–B of the NAFTA and that 

is certified as such by the competent 

authority of the beneficiary country 

[clause (iv)]; and 

4. Brassieres classifiable under 

subheading 6212.10 of the HTSUS, if 

both cut and sewn or otherwise 

assembled in the United States, or one 

or more ATPDEA beneficiary countries, 

or both, but excluding articles entered 

under clause (i), (ii), (iii), or (iv) [clause 

(v)(I)]. However, during each of four 1- 

year periods starting on October 1, 2003, 

the articles in question are eligible for 

preferential treatment under paragraph 

(3) only if the aggregate cost of fabrics 

(exclusive of all findings and trimmings) 

formed in the United States that are 

used in the production of all such 

articles of a producer or an entity 

controlling production that are entered 

and eligible under clause (v)(I) during 

the preceding 1-year period is at least 75 

percent of the aggregate declared 

customs value of the fabric (exclusive of 

all findings and trimmings) contained in 

all such articles of that producer or 

entity that are entered and eligible 

under clause (v)(I) during the preceding 

1-year period [clause (v)(II)]; the 75 

percent standard rises to 85 percent for 

a producer or entity controlling 

production whose articles are found by 

Customs and Border Protection (CBP) to 

have not met the clause (v)(II) 75 

percent standard in the preceding year 

[clause (v)(III)]. 

In addition to the articles described 

above, paragraph (3)(B) provides for 

preferential treatment of the following 

non-apparel textile articles: 

1. Textile luggage assembled in an 

ATPDEA beneficiary country from 

fabric wholly formed and cut in the 

United States, from yarns wholly 

formed in the United States, that is 

entered under subheading 9802.00.80 of 

the HTSUS [clause (vii)(I)]; and 

2. Textile luggage assembled from 

fabric cut in an ATPDEA beneficiary 

country from fabric wholly formed in 

the United States from yarns wholly 

formed in the United States [clause 

(vii)(II)]. 

Clause (vi) under paragraph (3) sets 

forth special rules that apply for 

purposes of determining the eligibility 

of articles for preferential treatment 

under paragraph (3). These special rules 

are as follows: 

1. Clause (vi)(I) sets forth a rule 

regarding the treatment of findings and 


cprice-sewell on PROD1PC66 with RULES
44566 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

trimmings. It provides that an article 

otherwise eligible for preferential 

treatment under paragraph (3) will not 

be ineligible for that treatment because 

the article contains findings or 

trimmings of foreign origin, if those 

findings and trimmings do not exceed 

25 percent of the cost of the components 

of the assembled product. This 

provision specifies the following as 

examples of findings and trimmings: 

sewing thread, hooks and eyes, snaps, 

buttons, ‘‘bow buds,’’ decorative lace 

trim, elastic strips, zippers (including 

zipper tapes), and labels. 

2. Clause (vi)(II) sets forth a rule 

regarding the treatment of specific 

interlinings, that is, a chest type plate, 

‘‘hymo’’ piece, or ‘‘sleeve header,’’ of 

woven or weft-inserted warp knit 

construction and of coarse animal hair 

or man-made filaments. Under this rule, 

an article otherwise eligible for 

preferential treatment under paragraph 

(3) will not be ineligible for that 

treatment because the article contains 

interlinings of foreign origin, if the 

value of those interlinings (and any 

findings and trimmings) does not 

exceed 25 percent of the cost of the 

components of the assembled article. 

This provision also provides for the 

termination of this treatment of 

interlinings if the President makes a 

determination that United States 

manufacturers are producing those 

interlinings in the United States in 

commercial quantities. 

3. Clause (vi)(III) sets forth a de 

minimis rule which provides that an 

article that would otherwise be 

ineligible for preferential treatment 

under paragraph (3) because the article 

contains yarns not wholly formed in the 

United States or in one or more 

ATPDEA beneficiary countries will not 

be ineligible for that treatment if the 

total weight of all those yarns is not 

more than 7 percent of the total weight 

of the good. 

4. Finally, clause (vi)(IV) sets forth a 

special origin rule that provides that an 

article otherwise eligible for preferential 

treatment under clause (i) or clause (iii) 

will not be ineligible for that treatment 

because the article contains nylon 

filament yarn (other than elastomeric 

yarn) that is classifiable under 

subheading 5402.10.30, 5402.10.60, 

5402.31.30, 5402.31.60, 5402.32.30, 

5402.32.60, 5402.41.10, 5402.41.90, 

5402.51.00, or 5402.61.00 of the HTSUS 

from a country that is a party to an 

agreement with the United States 

establishing a free trade area, which 

entered into force before January 1, 

1995. 

Paragraph (4): Preferential Treatment of 

Tuna 

Paragraph (4) of amended section 

204(b) concerns the preferential 

treatment of tuna. Paragraph (4)(A) 

provides for the entry in the United 

States, free of duty and free of any 

quantitative restrictions, of tuna that is 

harvested by United States vessels or 

ATPDEA beneficiary country vessels, 

that is prepared or preserved in any 

manner, in an ATPDEA beneficiary 

country, in foil or other flexible airtight 

containers weighing with their contents 

not more than 6.8 kilograms each, and 

that is imported directly into the 

customs territory of the United States 

from an ATPDEA beneficiary country. 

Paragraph (4)(B)(i) has been amended by 

the Miscellaneous Trade and Technical 

Corrections Act of 2004 to define a 

‘‘United States vessel’’ for purposes of 

paragraph (4)(A) as a vessel having a 

certificate of documentation with a 

fishery endorsement under chapter 121 

of title 46 of the United States Code 

[paragraph (4)(B)(i)(I)] or in the case of 

a vessel without a fishery endorsement, 

a vessel that is documented under the 

laws of the United States and for which 

a license has been issued pursuant to 

section 9 of the South Pacific Tuna Act 

of 1988 [paragraph (4)(B)(i)(II)]. 

Paragraph (4)(B)(ii) defines an 

‘‘ATPDEA vessel’’ for purposes of 

paragraph (4)(A) as a vessel (1) which is 

registered or recorded in an ATPDEA 

beneficiary country, (2) which sails 

under the flag of an ATPDEA 

beneficiary country, (3) which is at least 

75 percent owned by nationals of an 

ATPDEA beneficiary country or by a 

company having its principal place of 

business in an ATPDEA beneficiary 

country, of which the manager or 

managers, chairman of the board of 

directors or of the supervisory board, 

and the majority of the members of 

those boards are nationals of an 

ATPDEA beneficiary country and of 

which, in the case of a company, at least 

50 percent of the capital is owned by an 

ATPDEA beneficiary country or by 

public bodies or nationals of an 

ATPDEA beneficiary country, (4) of 

which the master and officers are 

nationals of an ATPDEA beneficiary 

country, and (5) of which at least 75 

percent of the crew are nationals of an 

ATPDEA beneficiary country. 

Paragraph (5): Customs Procedures 

Paragraph (5) of amended section 

204(b) is entitled ‘‘Customs procedures’’

and sets forth regulatory standards for 

purposes of preferential treatment under 

paragraph (1), (3), or (4). It includes 

provisions relating to import 

procedures, prescribes a specific factual 

determination that the President must 

make regarding the implementation of 

certain procedures and requirements by 

each ATPDEA beneficiary country, and 

sets forth the responsibility of CBP 

regarding the study of, and reporting to 

Congress on, cooperative and other 

actions taken by each ATPDEA 

beneficiary country to prevent 

transshipment and circumvention in the 

case of textile and apparel goods. The 

specific provisions under paragraph (5) 

that require regulatory treatment in this 

document are the following: 

1. Paragraph (5)(A)(i) provides that 

any importer that claims preferential 

treatment under paragraph (1), (3), or (4) 

must comply with customs procedures 

similar in all material respects to the 

requirements of Article 502(1) of the 

NAFTA as implemented pursuant to 

United States law, in accordance with 

regulations promulgated by the 

Secretary of the Treasury. The NAFTA 

provision referred to in paragraph 

(5)(A)(i) concerns the use of a Certificate 

of Origin and specifically requires that 

the importer (1) make a written 

declaration, based on a valid Certificate 

of Origin, that the imported good 

qualifies as an originating good, (2) have 

the Certificate in its possession at the 

time the declaration is made, (3) provide 

the Certificate to CBP on request, and (4) 

promptly make a corrected declaration 

and pay any duties owing where the 

importer has reason to believe that a 

Certificate on which a declaration was 

based contains information that is not 

correct. 

2. Paragraph (5)(B) provides that the 

Certificate of Origin that otherwise 

would be required pursuant to the 

provisions of paragraph (5)(A)(i) will 

not be required in the case of an article 

imported under paragraph (1), (3), or (4) 

if that Certificate of Origin would not be 

required under Article 503 of the 

NAFTA (as implemented pursuant to 

United States law), if the article were 

imported from Mexico. Article 503 of 

the NAFTA sets forth, with one general 

exception, three specific circumstances 

in which a NAFTA country may not 

require a Certificate of Origin. 

Paragraph (6): Definitions 

Paragraph (6) of amended section 

204(b) sets forth a number of definitions 

that apply for purposes of section 

204(b). These definitions include, in 

paragraph (6)(B), a definition of 

‘‘ATPDEA beneficiary country’’ as any 

‘‘beneficiary country,’’ as defined in 

section 203(a)(1) of the ATPA, which 

the President designates as an ATPDEA 

beneficiary country, taking into account 

the criteria contained in sections 203(c) 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44567 

and (d) and other appropriate criteria, 

including those specified under new 

paragraph (6)(B) of amended section 

204(b). 

On October 31, 2002, the President 

signed Proclamation 7616 (published in 

the Federal Register at 67 FR 67283 on 

November 5, 2002) to implement the 

new trade benefit provisions of section 

3103 of the Act. The Annex to that 

Proclamation set forth a number of 

modifications to the HTSUS to 

accommodate the ATPDEA program, 

and those HTSUS changes were also the 

subject of a technical corrections 

document prepared by the Office of the 

United States Trade Representative and 

published in the Federal Register (67 

FR 79954) on December 31, 2002. 

Interim Regulatory Amendments in T.D. 

03–16 

On March 25, 2003, CBP published in 

the Federal Register (68 FR 14478) as 

T.D. 03–16 (corrected at 68 FR 67338 on 

December 1, 2003), an interim rule 

document setting forth amendments to 

the CBP Regulations that implement the 

trade benefit provisions for Andean 

countries. The regulatory changes in 

T.D. 03–16 implemented the new trade 

benefit provisions and conformed the 

ATPA implementing regulations to 

those statutory changes and involved, 

among other things, the following: (1) 

The addition of §§ 10.241 through 

10.248 to implement those apparel and 

other textile article preferential 

treatment provisions within paragraphs 

(3), (5) and (6) of amended section 

204(b) of the ATPA statute that relate to 

U.S. import procedures; (2) the addition 

of §§ 10.251 through 10.257 to 

implement those non-textile preferential 

treatment provisions within paragraphs 

(1), (4), (5) and (6) of amended section 

204(b) of the ATPA statute that relate to 

U.S. import procedures; (3) the removal 

of the reference to § 10.208 in the 

introductory text of § 10.202; (4) the 

revision of § 10.201 to reflect the 

removal of that reduced-duty provision 

and to refer to §§ 10.241–10.248 and 

10.251–10.257; (5) the amendment of 

paragraph (b) of § 10.202 to recast the 

list of articles excluded from the ATPA 

to reflect the terms of paragraph (2) of 

amended section 204(b); and (6) the 

amendment of Part 163 of the CBP 

Regulations (19 CFR Part 163) by adding 

to the list of entry records in the 

Appendix (the interim ‘‘(a)(1)(A) list’’) 

references to the ATPDEA Textile 

Certificate of Origin prescribed under 

§ 10.246, the ATPDEA Declaration of 

Compliance for brassieres prescribed 

under § 10.248, and the ATPDEA 

Certificate of Origin for tuna and other 

non-textile articles prescribed under 

§ 10.256. For a complete section-bysection discussion of each regulatory 

change, see T.D. 03–16. Please note that 

on December 1, 2003, two correction 

documents pertaining to T.D. 03–16 

were published in the Federal Register 

(68 FR 67338). 

Although the interim regulatory 

amendments were promulgated without 

prior public notice and comment 

procedures and took effect on March 25, 

2003, T.D. 03–16 nevertheless provided 

for the submission of public comments 

which would be considered before 

adoption of the interim regulations as a 

final rule. The prescribed public 

comment period closed on May 27, 

2003. A discussion of the comments 

received by CBP is set forth below. 

Discussion of Comments 

A total of 6 commenters responded to 

the solicitation of public comments in 

the March 25, 2003, interim rule 

document referred to above. All of the 

comments received involved the 

regulatory provisions for the preferential 

treatment of apparel and other textile 

articles. 

Finishing Processes 

Comment 

One commenter agrees with the 

decision to have a single provision in 

the regulations, § 10.243(b), address 

dyeing and finishing requirements 

contained in the ATPDEA. Further, the 

commenter agrees that ‘‘the restrictions 

(requiring the operations be performed 

in the United States) only apply to the 

dyeing, printing, and finishing of knit or 

woven U.S. fabrics, or the U.S. fabric 

components formed from those fabrics, 

of garments described only in 

§ 10.243(a)(1) or (a)(2).’’ Based on the 

language in the provision, the 

commenter also believes that U.S. knitto-shape components are not subject to 

the dyeing, printing, and finishing 

restriction which is consistent with 

CBP’s position that knit-to-shape 

components are not fabrics. 

The commenter disagrees, however, 

with CBP’s conclusion that U.S. knit or 

woven fabrics or fabric components 

made from such U.S. fabrics that are 

used in apparel provided for in 

§ 10.243(a)(7) are also subject to the 

requirement that the knit or woven 

fabric, or components made from such 

fabric be dyed, printed or finished in the 

United States. The commenter believes 

‘‘that such U.S. fabrics or components, 

used in conjunction with (a)(7) DO NOT 

face a dyeing, printing and finishing 

restriction.’’ The commenter believes 

CBP has misread the statute and reached 

an erroneous conclusion. 

In making the argument that CBP has 

misread the statute, the commenter 

refers to a ‘‘hybrid provision’’ in the 

statute, cites to the language in 

§ 204(b)(3)(B)(iii)(I), and states the 

provision ‘‘permits the inclusion of 

‘fabrics, fabric components formed, or 

components knit to shape described in 

clause (i).’ ’’ The commenter maintains 

that the requirement in subclause (i)(I) 

that U.S. knit or woven fabric and fabric 

components from such fabric be dyed, 

printed, or finished in the United States 

applies only with regard to apparel 

articles qualifying under subclause (i)(I). 

The commenter argues that the dyeing, 

printing, and finishing requirement does 

not apply to U.S. knit and woven fabric 

or fabric components when these inputs 

are used in apparel which qualifies for 

preferential treatment under another 

provision of the ATPDEA, namely 

apparel described in § 10.243(a)(7). 

The commenter points to ‘‘common 

commercial practice’’ to argue that this 

dyeing, printing, and finishing 

requirement would not apply to U.S. 

inputs when used in conjunction with 

regional inputs as ‘‘the dyeing, printing, 

and finishing operations all need to 

occur in the same location to ensure 

consistency for all the components of 

the garment.’’ The commenter argues 

that CBP’s interpretation which applies 

the dyeing, printing and finishing 

requirement to knit and woven U.S. 

fabric and fabric components will result 

in apparel companies choosing not to 

buy U.S. inputs for hybrid U.S./regional 

garments. 

CBP’s Response 

The commenter is correct that CBP 

does not view the dyeing, printing, and 

finishing requirement to extend to knitto-shape components as such 

components are not considered ‘‘fabric’’

but are components created directly 

from yarn. CBP disagrees with the 

commenter’s reading of the statute to 

limit the dyeing, printing, and finishing 

requirement contained in subclause 

(i)(I) to apparel articles qualifying for 

preferential treatment under that 

subclause only. CBP views the dyeing, 

printing, and finishing requirement 

contained in subclause (i)(I) as part of 

the description of the fabric, and fabric 

components formed from such fabric, 

provided for under that subclause. 

Consequently, the language in subclause 

(iii)(I) which allows for the use of 

fabrics, fabric components formed, or 

components knit-to-shape described in 

clause (i) is interpreted by CBP to 

include the dyeing, printing, and 

finishing requirement contained in 

subclause (i)(I) with regard to fabrics or 

fabric components wholly formed from 


cprice-sewell on PROD1PC66 with RULES
44568 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

fabric which are described in that 

subclause. In the Conference Report to 

the Trade Act of 2002, Report No. 107–

624, at page 251, it is clearly stated with 

regard to the dyeing, finishing and 

printing requirement: ‘‘Apparel made of 

U.S. knit or woven fabric assembled in 

an Andean beneficiary country qualifies 

for benefits only if the U.S. knit or 

woven fabric is dyed and finished in the 

United States.’’ CBP’s interpretation of 

the dyeing, printing and finishing 

requirement as part of the descriptive of 

the ‘‘inputs’’ provided for in subclause 

(i)(I) carries out the intent of Congress 

to ensure that U.S.-formed fabric and 

fabric components are finished in the 

United States. To interpret the 

provision, as suggested by the 

commenter (to apply the requirement 

only in the case when all the fabric and 

fabric components in an apparel article 

are wholly formed in the United States 

of yarns wholly formed in the United 

States or one or more ATPDEA 

beneficiary countries) would mean that 

the introduction of any other fabric or 

fabric component within the apparel 

article (provided the fabric or fabric 

component is described within one of 

the other provisions of the ATPDEA) 

would negate the requirement regarding 

U.S. finishing so specifically stated by 

Congress in this Act and obstruct their 

intent as stated in the Conference Report 

previously cited. 

As to the commenter’s argument that 

‘‘common commercial practice’’ dictates 

that the requirement to dye, print, and 

finish U.S.-formed fabric (and fabric 

components from such fabric) in the 

United States does not apply when U.S. 

‘‘inputs’’ are combined with regional 

fabrics, we disagree. We agree that 

normally fabric for apparel production 

is dyed by lot and a manufacturer wants 

to use fabric from the same dye lot in 

the production of an apparel article, 

assuming the apparel article is 

constructed of one fabric. However, if 

fabrics from the United States and the 

region are being combined in the 

production of apparel, it is likely the 

fabrics will not be exactly the same. 

Dyes, inks and finishes will affect 

different fabrics of different 

constructions and different fiber 

compositions differently. Therefore, 

CBP rejects the proposition that 

‘‘common commercial practice’’ dictates 

an interpretation of the dyeing, printing, 

and finishing requirement for U.S.- 

formed fabric which is contrary to the 

stated intent of Congress. 

Comment 

A commenter noted that the interim 

regulations do not provide a definition 

of the terms ‘‘dyeing,’’ ‘‘printing,’’ and 

‘‘finishing.’’ The commenter would like 

CBP to publish definitions of these 

terms so as to clarify the requirements 

with regard to these processes. 

CBP’s Response 

As technological advances may occur 

with regard to dyeing, printing and 

finishing processes, CBP will not 

attempt to provide a finite definition of 

these terms because the definition may 

not encompass such unforeseen 

advances. It is prudent to rely on the 

common and commercial meanings of 

these terms which may change over 

time with scientific and technological 

advances. Questions of whether a 

particular process constitutes a dyeing, 

printing, or finishing process will 

continue to be addressed on a case-bycase basis. 

Interlinings 

Comment 

There is no clear translation into 

Spanish of the terms ‘‘chest type plate,’’

‘‘hymo piece,’’ and ‘‘sleeve header.’’

Assistance in this regard is requested. In 

addition, the same commenter requests 

that CBP not object to the use of other 

interlinings originating in third 

countries since the type of products 

exported by Peru use a minimum 

amount of such interlinings. Finally, the 

commenter asks if the use of interlinings 

originating in a country other than the 

United States or a beneficiary country 

and that is not one of the three types 

mentioned above, will preclude 

preferential treatment under the 

ATPDEA even though such interlinings, 

along with other accessories, represent 

less than 25% of the cost of the garment. 

CBP’s Response 

CBP does not have the authority to 

allow the use of foreign (third country) 

interlinings beyond the three named 

and described in the ATPDEA. The use 

of other foreign interlinings in apparel 

articles, regardless of the amount, will 

preclude preferential treatment under 

the ATPDEA. 

With regard to the lack of a clear 

translation into Spanish for the terms 

‘‘chest type plate,’’ ‘‘hymo piece,’’ and 

‘‘sleeve header,’’ CBP is able to offer 

some descriptive information about 

these interlinings, which are used in the 

production of suit and suit-type jackets, 

which may be helpful when translated 

into Spanish. 

A ‘‘sleeve header,’’ which may also be 

referred to as a ‘‘sleevehead interlining,’’

is an interlining piece sewn between the 

shell fabric and lining fabric along the 

outside shoulder seam where the sleeve 

joins the body of the garment. This 

interlining provides fullness along the 

seam and enhances the appearance of a 

jacket at the point where the sleeve 

meets the shoulder. See Headquarters 

Ruling Letter (HQ) 559552, dated 

February 14, 1996, and HQ 966510, 

dated August 27, 2003. 

A ‘‘chest type plate’’ may also be 

referred to as a ‘‘chest piece.’’ This 

interlining piece is placed in the chest 

area of a jacket for strength and shape. 

It serves to stabilize the jacket, 

enhancing its appearance. See HQ 

966510; http://www.actk.nl/; and 

http://www.resil.com/dictionary. 

The term ‘‘hymo’’ is defined as 

‘‘Fabric of mohair and linen, used in 

tailoring to reinforce body of a coat.’’

See A Dictionary of Costume and 

Fashion, Historic and Modern, by Mary 

Brooks Picken, at 181 (Dover 

Publications, Inc., 1985). Similarly, from 

Fairchild’s Dictionary of Textiles, edited 

by Dr. Isabel B. Wingate, at 289, ‘‘hymo’’

is defined as ‘‘A fabric made of mohair 

and linen. Used in tailoring to reinforce 

the body section of a coat.’’ (Fairchild 

Publications, Inc., 1970). Based on these 

definitions, a ‘‘hymo piece’’ may be 

considered a type of ‘‘chest piece’’ or 

‘‘chest type plate.’’ The distinction 

between these two types of interlinings 

is that the ‘‘hymo piece’’ is constructed 

specifically of fabric of mohair and 

linen. 

Short Supply 

Comment 

With regard to the designation of 

additional short supply fabrics and 

yarns, the commenter asks what criteria 

will be used by the President to 

determine that a fabric or yarn is scarce 

in the U.S. market, and when such 

determinations will be published in the 

Federal Register. 

CBP’s Response 

Congress authorized the President to 

proclaim additional fabrics and yarns as 

eligible for preferential treatment under 

clause (i)(III) of section 3103(b)(3)(B) of 

the ATPDEA. This authority, provided 

in section 3103(b)(3)(B)(ii), has been 

delegated to the Committee for the 

Implementation of Textile Agreements 

(CITA). See ‘‘Notice of Redelegation of 

Authority and Further Assignment of 

Functions’’ which was published on 

December 2, 2002 (67 FR 71606). 

Questions regarding designations of 

fabrics or yarns as commercially 

unavailable, such as the criteria for 

making such determinations and the 

procedures involved, should be directed 

to the Chairman, Committee for the 

Implementation of Textile Agreements, 

Room H3100, U.S. Department of 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44569 

Commerce, 14th and Constitution 

Avenue, NW., Washington, DC 20230. 

Information on ‘‘commercial 

availability’’ requests under the 

ATPDEA may be found at the Web site 

for the Office of Textiles and Apparel, 

Department of Commerce, at http:// 

www.otexa.ita.doc.gov. 

Comment 

A commenter notes with appreciation 

a Textile Book Transmittal (TBT) 

publication by CBP (which is available 

on the CBP Web site), TBT–03–013 ‘‘List 

of Short Supply Fabrics for Trade 

Agreements,’’ and the use of the term 

‘‘short supply’’ by CBP; the commenter 

believes CBP’s use of the term ‘‘reflects 

both an accurate description of this 

provision and the way the trade views 

this process.’’ However, the commenter 

takes issue with the language included 

in the TBT describing the general 

treatment for apparel produced from 

short supply fabrics or yarns designated 

by the Committee for the 

Implementation of Textile Agreements 

(CITA). The language at issue indicates 

that apparel incorporating short supply 

fabrics designated by CITA must use 

fabrics wholly formed in the United 

States from yarns wholly formed in the 

United States for all other fabric 

components in the garment for which 

the short supply fabric is not used. 

The commenter cites to the language 

in the Conference Report for the Trade 

Act of 2002 (H. Rept 107–624) which 

clarifies congressional intent regarding 

the treatment of short supply inputs in 

apparel qualifying for preferential 

treatment under the trade program. The 

commenter refers to this report language 

to assert that when the short supply 

fabric determines the essential character 

of an apparel article, the remaining 

fabrics used in the apparel article may 

originate from anywhere; and, when the 

short supply fabric does not impart the 

essential character of an apparel article, 

it will not disqualify the apparel article 

from qualifying for preferential 

treatment under the ATPDEA. The use 

of the same short supply provision in 

the AGOA and CBTPA leads the 

commenter to conclude that designated 

short supply fabrics and yarns should be 

extended the same treatment, i.e., 

consideration of only the fabric or yarn 

that determines the essential character 

of the apparel article. 

The commenter notes that the interim 

regulations on the ATPDEA are silent on 

how CBP ‘‘expects to treat garments 

entered claiming a short supply fabric or 

yarn designated by CITA.’’

CBP’s Response 

In Section 3103(b)(3)(B)(ii) of the 

ATPDEA, the President is authorized to 

designate additional fabrics and yarns as 

in ‘‘short supply’’ and thus allowable in 

the construction of apparel articles 

under the ATPDEA regardless of the 

origin of the fabrics or yarns. This 

authority to designate additional fabrics 

and yarns has been delegated to CITA 

pursuant to Executive Order No. 13277 

(67 FR 70305) and the United States 

Trade Representative’s Notice of 

Redelegation of Authority and Further 

Assignment of Functions (67 FR 71606). 

The tariff provision which 

implements this provision of the 

ATPDEA is subheading 9821.11.10, 

HTSUS, which provides for: ‘‘Apparel 

articles sewn or otherwise assembled in 

one or more such countries, or the 

United States, or both, exclusively from 

any of the following: Fabrics or yarns 

designated by the appropriate U.S. 

government authority in the Federal 

Register as fabrics or yarns that cannot 

be supplied by the domestic industry in 

commercial quantities in a timely 

manner, under any terms as such 

authority may provide.’’

The interim regulations were silent on 

how CBP will treat apparel articles 

under § 10.243(a)(1)(iv) of the 

regulations which pertains to apparel 

articles provided for in subheading 

9821.11.10, HTSUS, because the 

authority to designate the fabrics or 

yarns allowed under this provision and 

the authority to designate any terms or 

requirements to be applied to the 

allowance of these fabrics or yarns in 

eligible apparel resides with CITA, 

pursuant to the language of the tariff. 

CBP will follow the language of the 

designation notices issued by CITA 

(which will appear in the Federal 

Register) in applying this provision to 

apparel articles as CITA is the 

designated U.S. government authority to 

make such determinations. 

Comment 

A commenter objects to the exclusion 

of brassieres from eligibility for 

preferential treatment under 

§ 10.243(a)(1)(iii). The commenter 

claims that in the CBTPA changes 

contained in section 3107 of the Trade 

Act of 2002 and provisions of the 

ATPDEA, Congress included language 

that specifically envisions brassieres 

being imported under the respective 

short supply provisions in each of those 

two trade preference programs. This 

statutory language stands in sharp 

contrast to CBP’s view that brassieres 

are not eligible for short supply 

treatment in those trade programs. 

CBP’s Response 

The commenter argues that in both 

CBTPA and ATPDEA legislative 

changes made by Congress, specifically 

listing exceptions for certain provisions, 

Congress clearly envisioned brassieres 

being imported under these respective 

provisions, including the short supply 

provisions. In CBP’s opinion, the 

specific exception language added to 

both the ATPDEA in section 

3103(b)(3)(B)(v)(I) and the CBTPA in 

section 3107(a)(5)(iv) does not indicate 

that brasseries should therefore, be 

eligible under any or all of these 

excepted provisions. This clarifying 

language merely states that in 

determining eligibility requirements 

under the cited provisions, any 

brassieres classified in one of the 

exceptions would not be included in 

determining the eligibility under section 

3103(b)(3)(B)(v)(I) and section 

3107(a)(5)(iv). In fact, one of the 

exceptions listed in both section 

3103(b)(3)(B)(v)(I) of the ATPDEA and 

section 3107(a)(5)(iv) of the CBTPA is a 

provision covering ‘‘Handloomed, 

Handmade, and Folklore Articles’’. CBP 

is not aware of any brassieres that could 

be claimed under this provision and yet 

this is one of the exceptions listed. CBP 

believes that the Congress did not 

intend the listing of these exceptions to 

mean that brassieres would be 

classifiable in all these provisions. 

Brassieres 

Comment 

A commenter is concerned that 

§ 10.243(b)(2) requires brassieres to be 

produced and entered during the same 

year in order to qualify for inclusion in 

the calculations of a year’s shipments in 

order to determine eligibility of 

brassieres for preferential treatment in 

the following year. The commenter 

points to Example 6 in the interim 

regulations as illustrating this point. 

The commenter strongly disagrees with 

requiring brassieres to be produced and 

entered in the same year for the purpose 

of determining eligibility and asserts 

that the language adopted by Congress 

in drafting this provision of the 

ATPDEA requires that the calculation to 

determine eligibility be performed on 

brassieres ‘‘ ‘that are entered and eligible 

during the preceding 1-year period,’

regardless of when those actual 

brassieres are produced.’’

CBP’s Response 

The commenter has misread Example 

6 in the interim regulations. A proper 

reading of the example reveals that it 

actually supports the view of the 

commenter that in determining the 


cprice-sewell on PROD1PC66 with RULES
44570 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

brassieres to be included in calculating 

the aggregate value of the fabric formed 

in the United States which is present in 

brassieres in a 1-year period (October 1 

to September 30) for the purpose of 

determining eligibility of brassieres for 

preferential treatment under this 

provision of the ATPDEA in the 

subsequent 1-year period, one includes 

brassieres which are entered and 

eligible during the preceding 1-year 

period and the year of production is not 

a determinative factor. In Example 6, 

brassieres not meeting the minimum 75 

percent fabric standard are shipped to 

the United States in February. A second 

shipment of brassieres, meeting the 75 

percent fabric standard and actually 

exceeding the 85 percent standard, is 

shipped in June. If these two shipments 

are entered in the same 1-year period 

year, the aggregate value would meet the 

75 percent standard. However, the 

February shipment is entered for 

consumption on March 1 of the same 

calendar year; the June shipment is not 

entered for consumption until 

November 1 of that calendar year. 

Although entered for consumption in 

the same calendar year, these shipments 

were entered for consumption in 

different eligibility years which run 

from October 1 to September 30. 

Therefore, a valid declaration of 

compliance cannot be prepared for the 

shipment entered in March as it failed 

to meet the 75 percent standard; 

however, a valid declaration may be 

prepared for the shipment entered in 

November since it exceeded the 85 

percent standard which would be 

applicable for brassieres entered in that 

year because of the failure to meet the 

75 percent standard in the preceding 

year. The year of production of the 

brassieres is not a consideration in the 

example. 

Scope of the Term ‘‘Elastic Strips’’

Comment 

Three commenters submitted 

observations concerning the scope of the 

term ‘‘elastic strips’’ in the list of 

examples of ‘‘findings and trimmings’’

set forth in § 10.243(c)(1)(A). [The 

ATPDEA includes a special rule that 

permits the use of foreign findings and 

trimmings in producing eligible textile 

and apparel articles, provided the value 

of those findings and trimmings does 

not exceed 25% of the cost of the 

components of the assembled article.] 

The commenters noted that the term 

‘‘elastic strips’’ is not defined in the 

interim regulations and therefore the 

regulations provide manufacturers and 

importers little guidance regarding the 

scope of the term. All three commenters 

urged CBP to narrowly construe the 

term so that it excludes most, if not all, 

narrow elastic fabrics. The commenters 

made the following specific points in 

support of their position: 

1. The exception for foreign findings 

and trimmings under the ATPDEA ‘‘was 

necessarily intended to be of a 

restrictive nature, as the intent of the 

statute was to ensure that all fabric 

components be formed [in the] U.S. or 

ATPDEA region.’’

2. If the exception for foreign ‘‘elastic 

strips’’ is interpreted as including 

narrow elastic fabrics, an entire segment 

of the U.S. textile industry (the weavers 

and knitters of narrow elastic fabric) 

will be adversely affected as it will 

receive absolutely no benefit from the 

fabric origin requirements of the 

ATPDEA. In passing this statute, 

Congress did not intend to exclude from 

its benefits all U.S. producers of narrow 

elastic fabrics. 

3. In the textile industry, the word 

‘‘strip’’ is used to describe cut (slit) 

pieces of flat rubber or other elastic 

material of a rubber-like consistency 

throughout. Narrow elastic fabrics that 

are essential components are not 

normally considered elastic strips. 

4. CBP rulings support the view that 

most fabric components ‘‘that serve a 

purpose’’ are not findings. See HQ 

559522 dated February 14, 1996. In 

addition, CBP rulings have generally not 

considered fabric components to be 

trimmings. 

5. It is noted that the ATPDEA did not 

replicate language in the Caribbean 

Basin Trade Partnership Act (CBTPA) 

limiting ‘‘elastic strips’’ in the findings 

and trimmings exception to elastic 

strips of less than one-inch in width and 

used in the production of brassieres. By 

omitting this language in the ATPDEA, 

Congress intended to exclude elastic 

fabric brassiere straps from the findings 

and trimmings exception. This is 

consistent with the belief that Congress 

intended to exclude from the findings 

and trimmings exception fabric 

components, such as waistbands, leg 

gatherings and brassiere straps, that are 

essential to the garment and are not 

primarily decorative. 

CBP’s Response 

Section 10.243(c)(1)(A) essentially 

repeats the language found in the statute 

(amended section 402(b)(B)(vi)(I) of the 

ATPA) relating to the exception for 

findings and trimmings and the 

examples set forth therein. Therefore, 

CBP acknowledges that the regulation 

provides no guidance as to what is 

meant by ‘‘elastic strips’’ in the findings 

and trimmings rule. However, as further 

explained below, CBP believes that, 

generally speaking, determinations 

regarding the scope of that term should 

be made on a case-by-case basis through 

the CBP rulings process. 

CBP agrees with the assertion by one 

commenter that the exception for 

foreign findings and trimmings in the 

ATPDEA was necessarily intended to be 

of a restrictive nature. With few 

exceptions, the preferential treatment 

accorded to textile and apparel articles 

under the ATPDEA, like the treatment 

accorded to similar articles under the 

AGOA and CBTPA, is based upon the 

requirement that all fabric components 

be formed in the United States or the 

ATPDEA region. Therefore, CBP 

believes that the scope of the term 

‘‘findings and trimmings’’ should be 

limited to the specific items set forth as 

examples in the statute as well as items 

that are closely analogous to the cited 

examples. 

In response to the argument that 

Congress did not intend to exclude an 

entire segment of the U.S. textile 

industry (producers of narrow elastic 

fabric) from benefiting from the 

ATPDEA, CBP notes that it attempts to 

discern Congressional intent from the 

specific wording in the statute as well 

as the legislative history. In regard to the 

use of the term ‘‘elastic strips’’ in the 

ATPDEA, the statute’s legislative history 

sheds no light on how the term should 

be defined. However, as one commenter 

pointed out, Congress did not include 

language limiting the scope of the term 

‘‘elastic strips’’ in the ‘‘findings and 

trimmings’’ rule to elastic strips that are 

‘‘each less than 1 inch in width and 

used in the production of brassieres,’’ as 

it did in the AGOA and CBTPA statutes. 

One seemingly inescapable 

conclusion that can be drawn from the 

above omission in the ATPDEA is that 

Congress did not intend that the term 

‘‘elastic strips’’ would be subject to the 

‘‘less than 1 inch in width’’ brassiere 

strip limitation. Therefore, in future 

considerations of whether particular 

items qualify as ‘‘elastic strips’’ under 

the ‘‘findings and trimmings’’ exception 

in the ATPDEA, CBP will not disqualify 

an item solely because it is an inch or 

more in width and used in the 

production of garments other than 

brassieres. 

However, CBP agrees with the 

assertion by one commenter that, by 

failing to limit the term ‘‘elastic strips’’

in the ATPDEA to certain narrow elastic 

brassiere strips, Congress intended to 

exclude elastic fabric brassiere straps 

from being considered findings and 

trimmings under this statute. HQ 

562018 dated March 22, 2002, 

concerned whether the use of foreignorigin 1⁄2 inch wide polyurethane strips 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44571 

in the construction of brassieres would 

disqualify the brassieres from receiving 

preferential treatment under the CBTPA. 

CBP concluded initially that the 

polyurethane strips are outside the 

scope of the exception for ‘‘elastic 

strips’’ because the language limiting 

that exception to certain narrow elastic 

strips used in the production of 

brassieres related only to elastic fabric 

strips. CBP then determined in HQ 

562018 that the polyurethane strip is 

not a ‘‘finding or trimming’’ inasmuch 

as it is not a ‘‘supplementary element 

used to construct the garment, but, 

rather, is a brassiere strap, a major 

component of the brassiere.’’ Because 

the polyurethane strip was neither a 

textile component nor a ‘‘finding or 

trimming,’’ CBP concluded that the 

strip’s presence in the brassiere would 

not preclude the article from receiving 

preferential treatment under the CBTPA. 

Consistent with HQ 562018, CBP 

believes that brassiere straps, whether 

made of fabric or a non-textile material, 

do not qualify as ‘‘findings or 

trimmings’’ for purposes of the 

ATPDEA. 

Concerning whether the term ‘‘elastic 

strips’’ should be construed as 

encompassing narrow elastic fabrics or 

only non-textile rubber strips, or both, it 

is noted that in rulings interpreting 

‘‘elastic strips’’ as that term appears in 

the AGOA and CBTPA, CBP determined 

that the term encompassed only 

‘‘narrow elastic fabric less than one inch 

in width used in the production of 

brassieres.’’ (Emphasis added.) See, for 

example, HQs 965909 dated January 7, 

2003, 562018 dated July 10, 2001, and 

966495 dated July 3, 2003. However, the 

basis for this conclusion was a 

statement in the legislative history of 

the CBTPA indicating that that program 

was to be administered in a manner 

consistent with the ‘‘Special Access 

Program’’ (SAP). A directive issued in 

connection with the SAP stated that 

‘‘the foreign origin exception for elastic 

strips is clarified as limited to narrow 

elastic fabric less than one inch in width 

used in the production of brassieres 

only.’’ (Emphasis added.) As previously 

indicated, the term ‘‘elastic strips’’ in 

the ATPDEA ‘‘findings and trimmings’’

rule is not limited to strips less than 1 

inch in width used in the production of 

brassieres. Moreover, there is no similar 

reference in the ATPDEA’s legislative 

history to the SAP. As a result, CBP 

concludes that the above rulings relating 

to the AGOA and CBTPA are not 

controlling with respect to this issue 

and that ‘‘elastic strips’’ in the ATPDEA 

should not be construed as 

encompassing only narrow elastic fabric 

strips. 

By the same token, CBP cannot agree 

with the contention that the term 

‘‘elastic strips’’ should be construed as 

encompassing only non-textile (e.g., 

rubber) strips as CBP is not aware of any 

evidence indicating that Congress 

intended such a construction. Rather, 

CBP believes that, in determining 

whether certain items qualify as ‘‘elastic 

strips’’ under the ATPDEA, 

consideration should be given to items 

consisting of elastic fabric material as 

well as items consisting of non-textile 

elastic material. 

CBP also does not agree with the 

argument that elastic fabric strips used 

in waistbands and leg gatherings are 

automatically excluded from the 

‘‘findings and trimmings’’ exception 

under the ATPDEA. Previous CBP 

rulings on the scope of the ‘‘findings 

and trimmings’’ exception under other 

preference programs and provisions 

have defined ‘‘findings’’ as ‘‘sewing 

essentials used in textile goods’’ and 

‘‘trimmings’’ as ‘‘decoration or 

ornamental parts.’’ Rubber tape used to 

provide secure fittings in the leg and 

arm openings of garments, such as 

bathing suits, underwear and 

sweatpants, have been held to qualify as 

‘‘findings’’ under the CBTPA and 

subheading 9802.00.90, HTSUS. See 

HQs 966239 dated May 16, 2003, 

966317 dated June 9, 2003, and 561868 

dated July 10, 2001. By analogy, elastic 

fabric strips serving the same functions 

would also qualify as findings under the 

ATPDEA. Whether elastic fabric strip 

used in waistbands would also qualify 

as findings will be determined pursuant 

to the CBP rulings process. 

Comment 

A commenter commends CBP for the 

inclusion in § 10.243(b)(2) of language 

‘‘that clarifies that a series of postassembly finishing operations will not 

disqualify a garment entered under 

specific provisions.’’

CBP’s Response 

CBP appreciates the comment. 

Certificate of Origin 

Comment 

A commenter believes the Certificate 

of Origin may be further simplified into 

one form to serve the AGOA, the CBTPA 

and the ATPDEA as the requirements 

for all three programs are the same. The 

commenter also requests that ‘‘available 

upon request’’ be permitted with regard 

to information requested on the 

certificate for thread, fabric and yarn 

names and addresses. 

CBP’s Response 

We would certainly be open to any 

suggestions concerning the 

simplification of the certificate of origin. 

However, developing one form to 

accommodate AGOA, CBTPA and 

ATPDEA would make the form more 

complex, especially for the exporter or 

producer who is required to complete 

the form and is responsible for ensuring 

that the information is accurate. A 

combining of the form could include 

groupings or requirements that would 

be in place for AGOA, e.g. knit to shape 

with 50 percent by more of weight of 

fine wool that do not exist for CBTPA 

or ATPDEA. 

However with regard to the 

commenter’s second point, CBP will not 

accept ‘‘available upon request’’ where 

information is needed on the name and 

address of the yarn, fabric and thread 

suppliers. The certificate of origin is not 

a document that is required for entry 

purposes. The importer must have it in 

their possession when making the 

claim. When CBP requests the certificate 

of origin all information must be on that 

form to assist CBP in confirming the 

accuracy of the claim. CBP does not 

want to make a second request to see 

what should have been available when 

a request was made to see the certificate 

of origin on the first request. 

Comment 

A commenter inquired about 

reproduction of the Certificates of 

Origin shown in the Federal Register 

notice. 

CBP’s Response 

The Textile Certificate of Origin 

shown in the interim regulations is 

shown to illustrate the format in which 

the information should be presented; it 

is not a form. This format may be 

reproduced locally. 

Handloomed, Hand-Made and Folklore 

Articles 

Comment 

A commenter raises questions with 

regard to the provision of the ATPDEA 

which provides for handloomed, handmade, and folklore articles. Specifically, 

the commenter wants to know how and 

when certification of such goods will be 

effectuated, particularly in light of the 

fact that Peru already has a system in 

place for the authorization of export 

invoices under the ‘‘Administrative 

Agreement of Authorization and 

Certification of Textile Products’’ which 

includes handloomed, hand-made and 

folklore articles. The commenter 

inquires as to whether a separate 

certification is necessary when there 


cprice-sewell on PROD1PC66 with RULES
44572 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

already is a certification process in 

place and whether textile articles other 

than garments, such as pillows, carpets, 

covers, and tablecloths will also enjoy 

preferential treatment. 

CBP’s Response 

CBP does not have the authority to 

answer these questions concerning the 

administration of the ‘‘Handloomed, 

Handmade, and Folklore Articles’’

provisions under the ATPDEA. These 

authorities and functions, which were 

granted to the President under the 

ATPDEA, were delegated in an 

Executive Order 13277 to USTR, 

including the authority to redelegate 

these authorities and functions. In a 

notice published in the Federal Register 

on Monday, December 2, 2002, such 

authorities and functions were assigned 

to the Secretary of State, the Secretary 

of the Treasury, the Secretary of Labor, 

the Secretary of Commerce, and the 

United States Trade Representative 

Office. The responsibility to administer 

this provision lies with the Committee 

for the Implementation of Textile 

Agreements (CITA). It is suggested that 

you contact them directly by writing to 

the Chairman, Committee for the 

Implementation of Textile Agreements, 

U.S. Department of Commerce, ITA/TD/ 

OTEXA, Room H–3100, 14th and 

Constitution Avenue, NW., Washington, 

DC 20230. 

Changes to the Regulations 

While there are no changes to the 

interim regulations made in connection 

with the public comments, CBP in this 

final rule document has made a number 

of other changes to the interim 

regulatory texts for editorial and 

clarification purposes. These changes 

are as follows: 

1. In § 10.242, CBP has determined 

that the definition of ‘‘foreign’’ as set 

forth in the interim regulations could 

cause some confusion and might lead to 

anomalous and unintended results in 

certain circumstances. That definition 

(which has relevance only in the context 

of the findings and trimmings and 

interlinings provisions of § 10.243(c)) in 

the interim texts simply read ‘‘of a 

country other than the United States or 

an ATPDEA beneficiary country.’’

However, because the various textile 

and apparel articles to which 

preferential treatment applies are 

described in § 10.243(a) with reference 

to specific production processes in the 

case of yarns, fabrics and components 

that must take place in the United States 

or in an ATPDEA beneficiary country or 

both, more is required than that the yarn 

or fabric or component be ‘‘of’’ (that is, 

have its origin in) the United States or 

an ATPDEA beneficiary country. For 

example, § 10.243(a)(1) refers to articles 

‘‘assembled’’ in one or more ATPDEA 

beneficiary countries from ‘‘fabric 

wholly formed and cut’’ in the United 

States from ‘‘yarns wholly formed’’ in 

the United States. A fabric that was 

wholly formed in the United States but 

from yarns formed outside the United 

States would not meet the § 10.243(a)(1) 

standard and also would not be 

considered ‘‘foreign’’ under the interim 

definition because it is ‘‘of’’ (that is, it 

has its origin in) the United States by 

virtue of its having been formed in the 

United States. Therefore, that fabric 

could not be present in the article under 

the findings or trimmings or interlinings 

rule exception; consequently, even if all 

of the other fabric in the article was 

wholly formed and cut in the United 

States from yarns wholly formed in the 

United States and the article was 

assembled in an ATPDEA beneficiary 

country, the assembled article would 

not qualify for preferential treatment. 

On the other hand, a fabric formed 

outside the United States or the 

ATPDEA region, if used as a finding or 

trimming or interlining within the 25 

percent limit, would not disqualify the 

article. Thus, under the interim 

definition of ‘‘foreign,’’ U.S. and 

ATPDEA beneficiary country textile 

materials could be at a disadvantage visa-vis materials from outside the United 

States and the ATPDEA region, contrary 

to the overall thrust of the ATPDEA 

program as discussed in the comment 

discussion set forth above in this 

document. CBP believes that the interim 

definition was appropriate in the case of 

non-textile findings and trimmings. 

However, in the case of textile findings 

and trimmings and interlinings the 

concept of ‘‘foreign’’ logically only has 

relevance in the context of an exception 

to the production standards that apply 

to articles eligible for preferential 

treatment. Accordingly, the definition of 

‘‘foreign’’ has been replaced by a 

definition of ‘‘foreign origin’’ to address 

these concerns. 

2. In § 10.242, CBP has added a new 

definition for the term ‘‘self start edge’’

and modified the definition of ‘‘knit-toshape components’’ by adding the 

phrase ‘‘that is, the shape or form of the 

component as it is used in the apparel 

article, containing at least one self start 

edge’’ after the words ‘‘specific shape.’’

3. In § 10.243(b)(1)(i), CBP has added 

the words ‘‘or in one or more ATPDEA 

beneficiary countries, as described in 

paragraph (a)(1)(i) of this section’’ after 

the phrase ‘‘from yarns wholly formed 

in the United States’’. This change is 

being made because of the inadvertent 

omission of this statutory language in 

section 3103(b)(3)(B)(i)(I) of the 

ATPDEA which limits the dyeing, 

printing, and finishing requirement to 

certain fabrics. 

4. With reference to the findings, 

trimmings and interlinings provisions 

under § 10.243(c)(1)(ii), CBP has used an 

f.o.b. port of exportation basis for 

determining the ‘‘cost’’ of the 

components and the ‘‘value’’ of the 

findings and trimmings and interlinings. 

However, CBP now believes that the use 

of an ex-factory standard in lieu of the 

f.o.b. port of exportation standard would 

be more accurate because it eliminates 

transportation costs from the 

comparison between the ‘‘value’’ of 

foreign findings and trimmings and/or 

foreign interlinings and the ‘‘cost’’ of the 

components of the assembled article. 

Therefore, CBP has revised 

§ 10.243(c)(1)(ii) in this final rule to 

incorporate an ex-factory standard in 

lieu of the f.o.b. port of exportation 

standard. 

5. With regard to who may sign the 

textile Certificate of Origin, §§ 10.244(a), 

10.244(c)(12), 10.246(b)(2), and 10.254 

refer to the exporter (and the exporter’s 

authorized agent in the latter two 

provisions), but none of these 

provisions mentions the producer in 

this specific context. CBP has 

determined that the producer or the 

producer’s authorized agent having 

knowledge of the relevant facts should 

be permitted to sign the Certificate of 

Origin in addition to the exporter or the 

exporter’s authorized agent. The 

producer clearly is in the best position 

to attest to the accuracy of the 

information set forth in the Certificate. 

Therefore, §§ 10.244(a), 10.244(c)(12), 

10.246(b)(2), 10.254, and 10.256(b)(2) 

have been changed to provide that the 

Certificate of Origin must be signed by 

the exporter or producer or by the 

exporter’s or producer’s authorized 

agent having knowledge of the relevant 

facts. CBP notes that this change is 

consistent with changes to the 

implementing regulations under the 

Caribbean Basin Trade Partnership Act 

(CBTPA) and the African Growth and 

Opportunity Act (AGOA) relating to the 

textile Certificate of Origin and thus 

brings uniformity to the three programs 

in this regard. 

6. In § 10.248(b)(2)(ii), Example 5 has 

been changed to clarify that elastic 

strips used as brassiere straps are not 

considered findings or trimmings. 

7. In § 10.248(c)(3)(i), CBP has 

amended blocks 4–6 of the declaration 

of compliance for brassieres by adding 

exclusion language regarding findings 

and trimmings after each reference to 

fabric(s) for purposes of calculating 

whether the minimum 75 or 85 percent 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44573 

standard was met. This change is being 

made because of the inadvertent 

omission of this language in the interim 

rule. 

8. In addition to those changes 

already noted above, references to the 

U.S. Customs Service within the 

regulatory text in §§ 10.244, 10.245, 

10.246, 10.247 and 10.248 have been 

changed to CBP. 

9. In § 10.252, the definition of the 

term ‘‘United States vessel’’ has been 

amended to reflect a change made by 

the Miscellaneous Trade and Technical 

Corrections Act of 2004 (MTTCA). The 

MTTCA added to the definition of a 

‘‘United States vessel’’ to include the 

case of a vessel without a fishery 

endorsement that is documented under 

the laws of the United States and for 

which a license has been issued 

pursuant to section 9 of the South 

Pacific Tuna Act of 1988. Accordingly, 

in § 10.252, the definition of the term 

‘‘United States vessel’’ has been 

amended by adding the phrase ‘‘or in 

the case of a vessel without a fishery 

endorsement, a vessel that is 

documented under the laws of the 

United States and for which a license 

has been issued pursuant to section 9 of 

the South Pacific Tuna Act of 1988’’ at 

the end of the sentence. 

Conclusion 

Based on the analysis of comments 

and the discussion above regarding 

CBP’s further consideration of the 

interim rule, CBP is adopting as final 

some of the interim regulations 

published in T.D. 03–16 and amending 

certain of those interim provisions. 

Concerning §§ 10.241 through 10.248 

(provisions concerning textile articles), 

the following sections have been 

amended: 

1. In § 10.242, the definition of 

‘‘foreign’’ has been replaced by a 

definition of ‘‘foreign origin’’; a new 

definition for the term ‘‘self start edge’’

has been added; and the definition of 

‘‘knit-to-shape components’’ has been 

amended; 

2. § 10.243(b)(1)(i) is revised by 

adding the words ‘‘or in one or more 

ATPDEA beneficiary countries, as 

described in paragraph (a)(1)(i) of this 

section’’ after the phrase ‘‘from yarns 

wholly formed in the United States’’; 

2. § 10.243(c)(1)(ii) is revised to 

incorporate an ex-factory standard in 

lieu of the f.o.b. port of exportation 

standard; 

3. §§ 10.244(a), 10.244(c)(12), and 

10.246(b)(2) have been changed to 

provide that the Certificate of Origin 

must be signed by the exporter or 

producer or by the exporter’s or 

producer’s authorized agent having 

knowledge of the relevant facts; 

4. In § 10.248(b)(2)(ii), Example 5 has 

been changed to clarify that the scope of 

findings and trimmings with regard to 

elastic strips does not include elastic 

strips used as brassiere straps; 

5. In § 10.248(c)(3)(ii), blocks 4–6 of 

the declaration of compliance for 

brassieres have been amended by 

adding exclusion language regarding 

findings and trimmings after each 

reference to fabric(s); and 

6. §§ 10.244, 10.245, 10.246, 10.247 

and 10.248 have been amended to 

change U.S. Customs Service to CBP. 

Except as discussed above, interim 

§§ 10.241 through 10.248 are adopted as 

final. In view of the multiple changes 

throughout the textile and apparel 

regulatory provisions contained in 

§§ 10.241 through 10.248, those 

provisions are set forth in their entirety 

in this final rule document. 

Concerning §§ 10.251 through 10.257 

(provisions concerning non-textile 

articles), the following sections have 

been amended: 

1. In § 10.252, the definition of the 

term ‘‘United States vessel’’ has been 

amended; and 

2. §§ 10.254 and 10.256(b)(2) have 

been changed to provide that the 

Certificate of Origin must be signed by 

the exporter or producer or by the 

exporter’s or producer’s authorized 

agent having knowledge of the relevant 

facts; 

Except as discussed above, interim 

§§ 10.251 through 10.257 as published 

in T.D. 03–16 are adopted as final. 

In addition, the following interim 

provisions published in T.D. 03–16 are 

adopted as final without change: 

1. Interim §§ 10.201 and 10.202; and 

2. The interim amendments to the 

Appendix to part 163. 

Signing Authority 

The amendments set forth in this 

document are being issued in 

accordance with § 0.1(a)(1) of the CBP 

Regulations (19 CFR 0.1(a)(1)) 

pertaining to the authority of the 

Secretary of the Treasury (or his/her 

delegate) to approve regulations relating 

to certain CBP revenue functions. 

Executive Order 12866 

This document does not meet the 

criteria for a ‘‘significant regulatory 

action’’ as specified in E.O. 12866. 

Regulatory Flexibility Act 

The regulations to implement the 

trade benefit provisions for Andean 

countries were previously published as 

interim regulations and provide trade 

benefits to the importing public. 

Pursuant to the provisions of 5 U.S.C. 

553(b)(B), CBP issued the regulations as 

interim rules because it had determined 

that prior public notice and comment 

procedures on these regulations were 

unnecessary and contrary to the public 

interest. Because no notice of proposed 

rulemaking was required, the provisions 

of the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) do not apply. 

Accordingly, this final rule is not 

subject to the regulatory analysis or 

other requirements of 5 U.S.C. 603 and 

604. 

Paperwork Reduction Act 

The collection of information 

contained in this final rule has been 

reviewed and approved by the Office of 

Management and Budget in accordance 

with the requirements of the Paperwork 

Reduction Act (44 U.S.C. 3507) under 

control number 1651–0091. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless the 

collection of information displays a 

valid control number assigned by OMB. 

The collection of information in these 

final regulations is in §§ 10.244, 10.245, 

10.246, 10.248, 10.254, 10.255, and 

10.256. This information conforms to 

requirements in 19 U.S.C. 3203 and is 

used by CBP to determine whether 

textile and apparel articles and other 

products imported from designated 

beneficiary countries are entitled to 

preferential treatment under the Andean 

Trade Promotion and Drug Eradication 

Act. The likely respondents are business 

organizations including importers, 

exporters, and manufacturers. 

The estimated average annual burden 

associated with the collection of 

information in this final rule is 4 hours 

per respondent or recordkeeper. 

Comments concerning the accuracy of 

this burden estimate and suggestions for 

reducing this burden should be directed 

to Customs and Border Protection, 

Information Services Group, Office of 

Finance, 1300 Pennsylvania Avenue, 

NW., Washington, DC 20229, and the 

Office of Management and Budget, 

Attention: Desk Officer of the 

Department of the Treasury, Office of 

Information and Regulatory Affairs, 

Washington, DC 20503. 

Part 178 of the regulations (19 CFR 

part 178), containing the list of 

approved information collections, is 

revised to reflect this additional 

information collection. 

List of Subjects 

19 CFR Part 10 

Andean Trade Preference, Assembly, 

Bonds, Customs duties and inspection, 


cprice-sewell on PROD1PC66 with RULES
44574 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

Exports, Imports, Preference programs, 

Reporting and recordkeeping 

requirements, Trade agreements. 

19 CFR Part 163 

Administrative practice and 

procedure, Customs duties and 

inspection, Imports, Reporting and 

recordkeeping requirements. 

19 CFR Part 178 

Administrative practice and 

procedure, Collections of information, 

Imports, Paperwork requirements, 

Reporting and recordkeeping 

requirements. 

Amendments to the Regulations 

■ Accordingly, the interim rule 

amending parts 10 and 163, Customs 

and Border Protection Regulations (19 

CFR parts 10 and 163), which was 

published at 68 FR 14478–14500 on 

March 25, 2003, and corrected at 68 FR 

67338 on December 1, 2003, is adopted 

as a final rule with the following 

changes. 

PART 10—ARTICLES CONDITIONALLY 

FREE, SUBJECT TO A REDUCED 

RATE, ETC. 

■ 1. The general authority citation for 

part 10 and the specific authority 

citation for §§ 10.241 through 10.248 

and §§ 10.251 through 258 continue to 

read, as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i), Harmonized Tariff Schedule of the 

United States (HTSUS)), 1321, 1481, 1484, 

1498, 1508, 1623, 1624, 3314; 

* * * * * 

Sections 10.241 through 10.248 and 

§§ 10.251 through 10.257 also issued under 

19 U.S.C. 3203. 

■ 2. Sections 10.241 through 10.248 are 

revised to read as follows: 

§ 10.241 Applicability. 

Title XXXI of Public Law 107–210 

(116 Stat. 933), entitled the Andean 

Trade Promotion and Drug Eradication 

Act (ATPDEA), amended sections 202, 

203, 204, and 208 of the Andean Trade 

Preference Act (the ATPA, 19 U.S.C. 

3201–3206) to authorize the President to 

extend additional trade benefits to 

countries that are designated as 

beneficiary countries under the ATPA. 

Section 204(b)(3) of the ATPA (19 

U.S.C. 3203(b)(3)) provides for the 

preferential treatment of certain apparel 

and other textile articles from those 

ATPA beneficiary countries which the 

President designates as ATPDEA 

beneficiary countries. The provisions of 

§§ 10.241 through 10.248 of this part set 

forth the legal requirements and 

procedures that apply for purposes of 

obtaining preferential treatment 

pursuant to ATPA section 204(b)(3) and 

Subchapter XXI, Chapter 98, HTSUS. 

§ 10.242 Definitions. 

When used in §§ 10.241 through 

10.248, the following terms have the 

meanings indicated: 

Apparel articles. ‘‘Apparel articles’’

means goods classifiable in Chapters 61 

and 62 and headings 6501, 6502, 6503, 

and 6504 and subheadings 6406.99.15 

and 6505.90 of the HTSUS. 

Assembled or sewn or otherwise 

assembled in one or more ATPDEA 

beneficiary countries. ‘‘Assembled’’ and 

‘‘sewn or otherwise assembled’’ when 

used in the context of production of an 

apparel or other textile article in one or 

more ATPDEA beneficiary countries has 

reference to a joining together of two or 

more components that occurred in one 

or more ATPDEA beneficiary countries, 

whether or not a prior joining operation 

was performed on the article or any of 

its components in the United States. 

ATPA. ‘‘ATPA’’ means the Andean 

Trade Preference Act, 19 U.S.C. 3201–

3206. 

ATPDEA beneficiary country. 

‘‘ATPDEA beneficiary country’’ means a 

‘‘beneficiary country’’ as defined in 

§ 10.202(a) for purposes of the ATPA 

which the President also has designated 

as a beneficiary country for purposes of 

preferential treatment of apparel and 

other textile articles under 19 U.S.C. 

3203(b)(3) and which has been the 

subject of a determination by the 

President or his designee, published in 

the Federal Register, that the 

beneficiary country has satisfied the 

requirements of 19 U.S.C. 

3203(b)(5)(A)(ii). 

Chief value. ‘‘Chief value’’ when used 

with reference to llama, alpaca, and 

vicun ̃ a means that the value of those 

materials exceeds the value of any other 

single textile material in the fabric or 

component under consideration, with 

the value in each case determined by 

application of the principles set forth in 

§ 10.243(c)(1)(ii). 

Cut in one or more ATPDEA 

beneficiary countries. ‘‘Cut’’ when used 

in the context of production of textile 

luggage in one or more ATPDEA 

beneficiary countries means that all 

fabric components used in the assembly 

of the article were cut from fabric in one 

or more ATPDEA beneficiary countries, 

or were cut from fabric in the United 

States and used in a partial assembly 

operation in the United States prior to 

cutting of fabric and assembly of the 

article in one or more ATPDEA 

beneficiary countries, or both. 

Foreign origin. ‘‘Foreign origin’’

means, in the case of a finding or 

trimming of non-textile materials, that 

the finding or trimming is a product of 

a country other than the United States 

or a ATPDEA beneficiary country and, 

in the case of a finding, trimming, or 

interlining of textile materials, that the 

finding, trimming, or interlining does 

not meet all of the U.S. and ATPDEA 

beneficiary country production 

requirements for yarns, fabrics, and/or 

components specified under § 10.243(a) 

for the article in which it is 

incorporated. 

HTSUS. ‘‘HTSUS’’means the 

Harmonized Tariff Schedule of the 

United States. 

Knit-to-Shape Components. ‘‘Knit-toshape,’’ when used with reference to 

textile components, means components 

that are knitted or crocheted from a yarn 

directly to a specific shape, that is, the 

shape or form of the component as it is 

used in the apparel article, containing at 

least one self-start edge. Minor cutting 

or trimming will not affect the 

determination of whether a component 

is ‘‘knit-to-shape.’’

Luggage. ‘‘Luggage’’ means travel 

goods (such as trunks, hand trunks, 

lockers, valises, satchels, suitcases, 

wardrobe cases, overnight bags, pullman 

bags, gladstone bags, traveling bags, 

knapsacks, kitbags, haversacks, duffle 

bags, and like articles designed to 

contain clothing or other personal 

effects during travel) and brief cases, 

portfolios, school bags, photographic 

equipment bags, golf bags, camera cases, 

binocular cases, gun cases, occupational 

luggage cases (for example, physicians’

cases, sample cases), and like containers 

and cases designed to be carried with 

the person. The term ‘‘luggage’’ does not 

include handbags (that is, pocketbooks, 

purses, shoulder bags, clutch bags, and 

all similar articles, by whatever name 

known, customarily carried by women 

or girls). The term ‘‘luggage’’ also does 

not include flat goods (that is, small 

flatware designed to be carried on the 

person, such as banknote cases, bill 

cases, billfolds, bill purses, bill rolls, 

card cases, change cases, cigarette cases, 

coin purses, coin holders, compacts, 

currency cases, key cases, letter cases, 

license cases, money cases, pass cases, 

passport cases, powder cases, spectacle 

cases, stamp cases, vanity cases, tobacco 

pouches, and similar articles). 

NAFTA. ‘‘NAFTA’’ means the North 

American Free Trade Agreement 

entered into by the United States, 

Canada, and Mexico on December 17, 

1992. 

Preferential treatment. ‘‘Preferential 

treatment’’ means entry, or withdrawal 

from warehouse for consumption, in the 

customs territory of the United States 

free of duty and free of any quantitative 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44575 

restrictions, limitations, or consultation 

levels as provided in 19 U.S.C. 

3203(b)(3). 

Self-start edge. ‘‘Self-start edge’’ when 

used with reference to knit-to-shape 

components means a finished edge 

which is finished as the component 

comes off the knitting machine. Several 

components with finished edges may be 

linked by yarn or thread as they are 

produced from the knitting machine. 

Wholly formed fabric components. 

‘‘Wholly formed,’’ when used with 

reference to fabric components, means 

that all of the production processes, 

starting with the production of wholly 

formed fabric and ending with a 

component that is ready for 

incorporation into an apparel article, 

took place in a single country. 

Wholly formed fabrics. ‘‘Wholly 

formed,’’ when used with reference to 

fabric(s), means that all of the 

production processes, starting with 

polymers, fibers, filaments, textile 

strips, yarns, twine, cordage, rope, or 

strips of fabric and ending with a fabric 

by a weaving, knitting, needling, tufting, 

felting, entangling or other process, took 

place in a single country. 

Wholly formed yarns. ‘‘Wholly 

formed,’’ when used with reference to 

yarns, means that all of the production 

processes, starting with the extrusion of 

filament, strip, film, or sheet and 

including drawing to fully orient a 

filament or slitting a film or sheet into 

strip, or the spinning of all fibers into 

yarn, or both, and ending with a yarn or 

plied yarn, took place in the United 

States or in one or more ATPDEA 

beneficiary countries. 

§ 10.243 Articles eligible for preferential 

treatment. 

(a) General. Subject to paragraphs (b) 

and (c) of this section, preferential 

treatment applies to the following 

apparel and other textile articles that are 

imported directly into the customs 

territory of the United States from an 

ATPDEA beneficiary country: 

(1) Apparel articles sewn or otherwise 

assembled in one or more ATPDEA 

beneficiary countries, or in the United 

States, or in both, exclusively from any 

one of the following: 

(i) Fabrics or fabric components 

wholly formed, or components knit-toshape, in the United States, from yarns 

wholly formed in the United States or 

in one or more ATPDEA beneficiary 

countries (including fabrics not formed 

from yarns, if those fabrics are 

classifiable under heading 5602 or 5603 

of the HTSUS and are formed in the 

United States), provided that, if the 

apparel article is assembled from 

knitted or crocheted or woven wholly 

formed fabrics or from knitted or 

crocheted or woven wholly formed 

fabric components produced from 

fabric, all dyeing, printing, and finishing 

of that knitted or crocheted or woven 

fabric or component was carried out in 

the United States; 

(ii) Fabrics or fabric components 

formed, or components knit-to-shape, in 

one or more ATPDEA beneficiary 

countries from yarns wholly formed in 

one or more ATPDEA beneficiary 

countries, if those fabrics (including 

fabrics not formed from yarns, if those 

fabrics are classifiable under heading 

5602 or 5603 of the HTSUS and are 

formed in one or more ATPDEA 

beneficiary countries) or components 

are in chief value of llama, alpaca, and/ 

or vicun ̃ a; 

(iii) Fabrics or yarns, provided that 

apparel articles (except articles 

classifiable under subheading 6212.10 

of the HTSUS) of those fabrics or yarns 

would be considered an originating 

good under General Note 12(t), HTSUS, 

if the apparel articles had been imported 

directly from Canada or Mexico; or 

(iv) Fabrics or yarns that the President 

or his designee has designated in the 

Federal Register as fabrics or yarns that 

cannot be supplied by the domestic 

industry in commercial quantities in a 

timely manner; 

(2) Apparel articles sewn or otherwise 

assembled in one or more ATPDEA 

beneficiary countries, or in the United 

States, or in both, exclusively from a 

combination of fabrics, fabric 

components, knit-to-shape components 

or yarns described in two or more of 

paragraphs (a)(1)(i) through (a)(1)(iv) of 

this section; 

(3) A handloomed, handmade, or 

folklore apparel or other textile article of 

an ATPDEA beneficiary country that the 

President or his designee and 

representatives of the ATPDEA 

beneficiary country mutually agree is a 

handloomed, handmade, or folklore 

article and that is certified as a 

handloomed, handmade, or folklore 

article by the competent authority of the 

ATPDEA beneficiary country; 

(4) Brassieres classifiable under 

subheading 6212.10 of the HTSUS, if 

both cut and sewn or otherwise 

assembled in the United States, or in 

one or more ATPDEA beneficiary 

countries, or in both, other than articles 

entered as articles described in 

paragraphs (a)(1) through (a)(3) and 

(a)(7) of this section, and provided that 

any applicable additional requirements 

set forth in § 10.248 are met; 

(5) Textile luggage assembled in an 

ATPDEA beneficiary country from 

fabric wholly formed and cut in the 

United States, from yarns wholly 

formed in the United States, that is 

entered under subheading 9802.00.80 of 

the HTSUS; 

(6) Textile luggage assembled in one 

or more ATPDEA beneficiary countries 

from fabric cut in one or more ATPDEA 

beneficiary countries from fabric wholly 

formed in the United States from yarns 

wholly formed in the United States; and 

(7) Apparel articles sewn or otherwise 

assembled in one or more ATPDEA 

beneficiary countries from fabrics or 

from fabric components formed, or from 

components knit-to-shape, in one or 

more ATPDEA beneficiary countries 

from yarns wholly formed in the United 

States or in one or more ATPDEA 

beneficiary countries (including fabrics 

not formed from yarns, if those fabrics 

are classifiable under heading 5602 or 

5603 of the HTSUS and are formed in 

one or more ATPDEA beneficiary 

countries), including apparel articles 

sewn or otherwise assembled in part but 

not exclusively from any of the fabrics, 

fabric components formed, or 

components knit-to-shape described in 

paragraph (a)(1) of this section. 

(b) Dyeing, printing, finishing and 

other operations—(1) Dyeing, printing 

and finishing operations. Dyeing, 

printing, and finishing operations may 

be performed on any yarn, fabric, or 

knit-to-shape or other component used 

in the production of any article 

described under paragraph (a) of this 

section without affecting the eligibility 

of the article for preferential treatment, 

provided that the operation is 

performed in the United States or in an 

ATPDEA beneficiary country and not in 

any other country and subject to the 

following additional conditions: 

(i) In the case of an article described 

in paragraph (a)(1), (a)(2), or (a)(7) of 

this section that contains a knitted or 

crocheted or woven fabric, or a knitted 

or crocheted or woven fabric component 

produced from fabric, that was wholly 

formed in the United States from yarns 

wholly formed in the United States or 

in one or more ATPDEA beneficiary 

countries, as described in paragraph 

(a)(1)(i) of this section, any dyeing, 

printing, or finishing of that knitted or 

crocheted or woven fabric or component 

must have been carried out in the 

United States; and 

(ii) In the case of assembled luggage 

described in paragraph (a)(5) of this 

section, an operation may be performed 

in an ATPDEA beneficiary country only 

if that operation is incidental to the 

assembly process within the meaning of 

§ 10.16. 

(2) Other operations. An article 

described under paragraph (a) of this 

section that is otherwise eligible for 

preferential treatment will not be 


cprice-sewell on PROD1PC66 with RULES
44576 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

disqualified from receiving that 

treatment by virtue of having undergone 

one or more operations such as 

embroidering, stone-washing, enzymewashing, acid washing, perma-pressing, 

oven-baking, bleaching, garment-dyeing 

or screen printing, provided that the 

operation is performed in the United 

States or in an ATPDEA beneficiary 

country and not in any other country. 

However, in the case of assembled 

luggage described in paragraph (a)(5) of 

this section, an operation may be 

performed in an ATPDEA beneficiary 

country without affecting the eligibility 

of the article for preferential treatment 

only if it is incidental to the assembly 

process within the meaning of § 10.16. 

(c) Special rules for certain 

component materials—(1) Foreign 

findings, trimmings, interlinings, and 

yarns—(i) General. An article otherwise 

described under paragraph (a) of this 

section will not be ineligible for the 

preferential treatment referred to in 

§ 10.241 because the article contains: 

(A) Findings and trimmings of foreign 

origin, if the value of those findings and 

trimmings does not exceed 25 percent of 

the cost of the components of the 

assembled article. For purposes of this 

section ‘‘findings and trimmings’’

include, but are not limited to, sewing 

thread, hooks and eyes, snaps, buttons, 

‘‘bow buds,’’ decorative lace trim, 

elastic strips, zippers (including zipper 

tapes), and labels; 

(B) Interlinings of foreign origin, if the 

value of those interlinings does not 

exceed 25 percent of the cost of the 

components of the assembled article. 

For purposes of this section 

‘‘interlinings’’ include only a chest type 

plate, a ‘‘hymo’’ piece, or ‘‘sleeve 

header,’’ of woven or weft-inserted warp 

knit construction and of coarse animal 

hair or man-made filaments; 

(C) Any combination of findings and 

trimmings of foreign origin and 

interlinings of foreign origin, if the total 

value of those findings and trimmings 

and interlinings does not exceed 25 

percent of the cost of the components of 

the assembled article; or 

(D) Yarns not wholly formed in the 

United States or in one or more 

ATPDEA beneficiary countries if the 

total weight of all those yarns is not 

more than 7 percent of the total weight 

of the article. 

(ii) ‘‘Cost’’ and ‘‘value’’ defined. The 

‘‘cost’’ of components and the ‘‘value’’

of findings and trimmings or 

interlinings referred to in paragraph 

(c)(1)(i) of this section means: 

(A) The ex-factory price of the 

components, findings and trimmings, or 

interlinings as set out in the invoice or 

other commercial documents, or, if the 

price is other than ex-factory, the price 

as set out in the invoice or other 

commercial documents adjusted to 

arrive at an ex-factory price; or 

(B) If the price cannot be determined 

under paragraph (c)(1)(ii)(A) of this 

section or if CBP finds that price to be 

unreasonable, all reasonable expenses 

incurred in the growth, production, 

manufacture, or other processing of the 

components, findings and trimmings, or 

interlinings, including the cost or value 

of materials and general expenses, plus 

a reasonable amount for profit. 

(iii) Treatment of yarns as findings or 

trimmings. If any yarns not wholly 

formed in the United States or one or 

more ATPDEA beneficiary countries are 

used in an article as a finding or 

trimming described in paragraph 

(c)(1)(i)(A) of this section, the yarns will 

be considered to be a finding or 

trimming for purposes of paragraph 

(c)(1)(i) of this section. 

(2) Special rule for nylon filament 

yarn. An article otherwise described 

under paragraph (a)(1)(i) through (iii), 

(a)(2), or (a)(7) of this section will not be 

ineligible for the preferential treatment 

referred to in § 10.241 because the 

article contains nylon filament yarn 

(other than elastomeric yarn) that is 

classifiable in subheading 5402.10.30, 

5402.10.60, 5402.31.30, 5402.31.60, 

5402.32.30, 5402.32.60, 5402.41.10, 

5402.41.90, 5402.51.00, or 5402.61.00 of 

the HTSUS and that is entered free of 

duty from Canada, Mexico, or Israel. 

(d) Imported directly defined. For 

purposes of paragraph (a) of this section, 

the words ‘‘imported directly’’ mean: 

(1) Direct shipment from any 

ATPDEA beneficiary country to the 

United States without passing through 

the territory of any country that is not 

an ATPDEA beneficiary country; 

(2) If the shipment is from any 

ATPDEA beneficiary country to the 

United States through the territory of 

any country that is not an ATPDEA 

beneficiary country, the articles in the 

shipment do not enter into the 

commerce of any country that is not an 

ATPDEA beneficiary country while en 

route to the United States and the 

invoices, bills of lading, and other 

shipping documents show the United 

States as the final destination; or 

(3) If the shipment is from any 

ATPDEA beneficiary country to the 

United States through the territory of 

any country that is not an ATPDEA 

beneficiary country, and the invoices 

and other documents do not show the 

United States as the final destination, 

the articles in the shipment upon arrival 

in the United States are imported 

directly only if they: 

(i) Remained under the control of the 

customs authority of the intermediate 

country; 

(ii) Did not enter into the commerce 

of the intermediate country except for 

the purpose of sale other than at retail, 

and the port director is satisfied that the 

importation results from the original 

commercial transaction between the 

importer and the producer or the 

producer’s sales agent; and 

(iii) Were not subjected to operations 

other than loading or unloading, and 

other activities necessary to preserve the 

articles in good condition. 

§ 10.244 Certificate of Origin. 

(a) General. A Certificate of Origin 

must be employed to certify that an 

apparel or other textile article being 

exported from an ATPDEA beneficiary 

country to the United States qualifies for 

the preferential treatment referred to in 

§ 10.241. The Certificate of Origin must 

be prepared in the ATPDEA beneficiary 

country by the producer or exporter or 

by the producer’s or exporter’s 

authorized agent in the format specified 

in paragraph (b) of this section. If the 

person preparing the Certificate of 

Origin is not the producer of the article, 

the person may complete and sign a 

Certificate of Origin on the basis of: 

(1) The person’s reasonable reliance 

on the producer’s written representation 

that the article qualifies for preferential 

treatment; or 

(2) A completed and signed Certificate 

of Origin for the article voluntarily 

provided to the person by the producer. 

(b) Form of Certificate. The Certificate 

of Origin referred to in paragraph (a) of 

this section must be in the following 

format: 

ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT TEXTILE CERTIFICATE OF ORIGIN

1. Exporter Name & Address: 

2. Producer Name & Address: 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44577 

ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT TEXTILE CERTIFICATE OF ORIGIN—Continued 

3. Importer Name & Address: 

4. Description of Article: 

5. Preference Group: 

Group .. Each Description Below Is Only a Summary of the Cited CFR Provision. 19 CFR 

A .......... Apparel assembled from U.S. formed, dyed, printed and finished fabrics or fabric components, or U.S. 

formed knit-to-shape components from U.S. or Andean yarns.

10.243(a)(1)(i). 

B .......... Apparel assembled from Andean chief value llama, alpaca or vicun ̃ a fabrics, fabric components, or knit-toshape components, from Andean yarns.10.243(a)(1)(ii). 

C .......... Apparel assembled from fabrics or yarns considered as being in short supply in the NAFTA ........................... 10.243(a)(1)(iii). 

D .......... Apparel assembled from fabrics or yarns designated as not available in commercial quantities in the United 

States.

10.243(a)(1)(iv). 

E .......... Apparel assembled from a combination of two or more yarns, fabrics, fabric components, or knit-to-shape 

components described in preference groups A though D.

10.243(a)(2). 

F .......... Handloomed, handmade, or folklore textile and apparel goods ............................................................................. 10.243(a)(3). 

G .......... Brassieres assembled in the U.S. and/or one or more Andean beneficiary countries ........................................... 10.243(a)(4). 

H .......... Textile luggage assembled from U.S. formed fabrics from U.S. yarns .................................................................... 10.243(a)(5)&(6). 

I ........... Apparel assembled from Andean formed fabrics, fabric components, or knit-to-shape components from U.S. 

or Andean yarns, whether or not also assembled, in part, from yarns, fabrics and fabric components described in preference groups A through D.

10.243(a)(7). 

6. U.S./Andean Fabric Producer Name & Address: 

7. U.S./Andean Yarn Producer Name & Address: 

8. Handloomed, Handmade, or Folklore Article: 

9. Name of Short Supply Fabric or Yarn: 

I certify that the information on this document is complete and accurate and I assume the responsibility for proving such representations. 

I understand that I am liable for any false statements or material omissions made on or in connection with this document. I agree to 

maintain, and present upon request, documentation necessary to support this certificate. 

10. Authorized Signature: 

11. Company: 

12. Name: (Print or Type) 

13. Title: 

14. Date: (DD/MM/YY) 

15. Blanket Period: 

From: 

To: 

16. Telephone: 

Facsimile: 

(c) Preparation of Certificate. The 

following rules will apply for purposes 

of completing the Certificate of Origin 

set forth in paragraph (b) of this section: 

(1) Blocks 1 through 5 pertain only to 

the final article exported to the United 

States for which preferential treatment 

may be claimed; 

(2) Block 1 should state the legal 

name and address (including country) of 

the exporter; 

(3) Block 2 should state the legal 

name and address (including country) of 

the producer. If there is more than one 

producer, attach a list stating the legal 

name and address (including country) of 

all additional producers. If this 

information is confidential, it is 

acceptable to state ‘‘available to 

Customs and Border Protection (CBP) 

upon request’’ in block 2. If the 

producer and the exporter are the same, 

state ‘‘same’’ in block 2; 

(4) Block 3 should state the legal 

name and address (including country) of 

the importer; 

(5) Block 4 should provide a full 

description of each article. The 

description should be sufficient to relate 

it to the invoice description and to the 

description of the article in the 

international Harmonized System. 

Include the invoice number as shown 

on the commercial invoice or, if the 

invoice number is not known, include 

another unique reference number such 

as the shipping order number; 

(6) In block 5, insert the letter that 

designates the preference group which 

applies to the article according to the 

description contained in the CFR 

provision cited on the Certificate for 

that group; 

(7) Blocks 6 through 9 must be 

completed only when the block in 

question calls for information that is 

relevant to the preference group 

identified in block 5; 

(8) Block 6 should state the legal 

name and address (including country) of 

the fabric producer; 


cprice-sewell on PROD1PC66 with RULES
44578 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

(9) Block 7 should state the legal 

name and address (including country) of 

the yarn producer; 

(10) Block 8 should state the name of 

the folklore article or should state that 

the article is handloomed or handmade 

of handloomed fabric; 

(11) Block 9 should be completed if 

the article described in block 4 

incorporates a fabric or yarn described 

in preference group C or D and should 

state the name of the fabric or yarn that 

has been considered as being in short 

supply in the NAFTA or that has been 

designated as not available in 

commercial quantities in the United 

States. Block 9 also should be 

completed if preference group E or I 

applies to the article described in block 

4 and the article incorporates a fabric or 

yarn described in preference group C or 

D; 

(12) Block 10 must contain the 

signature of the producer or exporter or 

the producer’s or exporter’s authorized 

agent having knowledge of the relevant 

facts; 

(13) Block 14 should reflect the date 

on which the Certificate was completed 

and signed; 

(14) Block 15 should be completed if 

the Certificate is intended to cover 

multiple shipments of identical articles 

as described in block 4 that are 

imported into the United States during 

a specified period of up to one year (see 

§ 10.246(b)(4)(ii)). The ‘‘from’’ date is 

the date on which the Certificate 

became applicable to the article covered 

by the blanket Certificate (this date may 

be prior to the date reflected in block 

14). The ‘‘to’’ date is the date on which 

the blanket period expires; and 

(15) The Certificate may be printed 

and reproduced locally. If more space is 

needed to complete the Certificate, 

attach a continuation sheet. 

§ 10.245 Filing of claim for preferential 

treatment. 

(a) Declaration. In connection with a 

claim for preferential treatment for an 

apparel or other textile article described 

in § 10.243, the importer must make a 

written declaration that the article 

qualifies for that treatment. The 

inclusion on the entry summary, or 

equivalent documentation, of the 

subheading within Chapter 98 of the 

HTSUS under which the article is 

classified will constitute the written 

declaration. Except in any of the 

circumstances described in 

§ 10.246(d)(1), the declaration required 

under this paragraph must be based on 

a Certificate of Origin that has been 

completed and properly executed in 

accordance with § 10.244, that covers 

the article being imported, and that is in 

the possession of the importer. 

(b) Corrected declaration. If, after 

making the declaration required under 

paragraph (a) of this section, the 

importer has reason to believe that a 

Certificate of Origin on which a 

declaration was based contains 

information that is not correct, the 

importer must within 30 calendar days 

after the date of discovery of the error 

make a corrected declaration and pay 

any duties that may be due. A corrected 

declaration will be effected by 

submission of a letter or other written 

statement to the CBP port where the 

declaration was originally filed. 

§ 10.246 Maintenance of records and 

submission of Certificate by importer. 

(a) Maintenance of records. Each 

importer claiming preferential treatment 

for an article under § 10.245 must 

maintain in the United States, in 

accordance with the provisions of part 

163 of this chapter, all records relating 

to the importation of the article. Those 

records must include a copy of the 

Certificate of Origin referred to in 

§ 10.245(a) and any other relevant 

documents or other records as specified 

in § 163.1(a) of this chapter. 

(b) Submission of Certificate. An 

importer who claims preferential 

treatment on an apparel or other textile 

article under § 10.245(a) must provide, 

at the request of the port director, a copy 

of the Certificate of Origin pertaining to 

the article. A Certificate of Origin 

submitted to CBP under this paragraph: 

(1) Must be in writing or must be 

transmitted electronically through any 

electronic data interchange system 

authorized by CBP for that purpose; 

(2) If in writing, must be signed by the 

producer or exporter or the producer’s 

or exporter’s authorized agent having 

knowledge of the relevant facts; 

(3) Must be completed either in the 

English language or in the language of 

the country from which the article is 

exported. If the Certificate is completed 

in a language other than English, the 

importer must provide to CBP upon 

request a written English translation of 

the Certificate; and 

(4) May be applicable to: 

(i) A single importation of an article 

into the United States, including a 

single shipment that results in the filing 

of one or more entries and a series of 

shipments that results in the filing of 

one entry; or 

(ii) Multiple importations of identical 

articles into the United States that occur 

within a specified blanket period, not to 

exceed 12 months, set out in the 

Certificate by the exporter. For purposes 

of this paragraph and § 10.244(c)(14), 

‘‘identical articles’’ means articles that 

are the same in all material respects, 

including physical characteristics, 

quality, and reputation. 

(c) Correction and nonacceptance of 

Certificate. If the port director 

determines that a Certificate of Origin is 

illegible or defective or has not been 

completed in accordance with 

paragraph (b) of this section, the 

importer will be given a period of not 

less than five working days to submit a 

corrected Certificate. A Certificate will 

not be accepted in connection with 

subsequent importations during a 

period referred to in paragraph (b)(4)(ii) 

of this section if the port director 

determined that a previously imported 

identical article covered by the 

Certificate did not qualify for 

preferential treatment. 

(d) Certificate not required—(1) 

General. Except as otherwise provided 

in paragraph (d)(2) of this section, an 

importer is not required to have a 

Certificate of Origin in his possession 

for: 

(i) An importation of an article for 

which the port director has in writing 

waived the requirement for a Certificate 

of Origin because the port director is 

otherwise satisfied that the article 

qualifies for preferential treatment; 

(ii) A non-commercial importation of 

an article; or 

(iii) A commercial importation of an 

article whose value does not exceed 

US$2,500, provided that, unless waived 

by the port director, the producer, 

exporter, importer or authorized agent 

includes on, or attaches to, the invoice 

or other document accompanying the 

shipment the following signed 

statement: 

I hereby certify that the article covered by 

this shipment qualifies for preferential 

treatment under the ATPDEA. 

Check One: 

( ) Producer 

( ) Exporter 

( ) Importer 

( ) Agent 

lllllllllllllllllllll

Name 

lllllllllllllllllllll

Title 

lllllllllllllllllllll

Address 

lllllllllllllllllllll

Signature and Date 

(2) Exception. If the port director 

determines that an importation 

described in paragraph (d)(1) of this 

section forms part of a series of 

importations that may reasonably be 

considered to have been undertaken or 

arranged for the purpose of avoiding a 

Certificate of Origin requirement under 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44579 

§§ 10.244 through 10.246, the port 

director will notify the importer in 

writing that for that importation the 

importer must have in his possession a 

valid Certificate of Origin to support the 

claim for preferential treatment. The 

importer will have 30 calendar days 

from the date of the written notice to 

obtain a valid Certificate of Origin, and 

a failure to timely obtain the Certificate 

of Origin will result in denial of the 

claim for preferential treatment. For 

purposes of this paragraph, a ‘‘series of 

importations’’ means two or more 

entries covering articles arriving on the 

same day from the same exporter and 

consigned to the same person. 

§ 10.247 Verification and justification of 

claim for preferential treatment. 

(a) Verification by CBP. A claim for 

preferential treatment made under 

§ 10.245, including any statements or 

other information contained on a 

Certificate of Origin submitted to CBP 

under § 10.246, will be subject to 

whatever verification the port director 

deems necessary. In the event that the 

port director for any reason is prevented 

from verifying the claim, the port 

director may deny the claim for 

preferential treatment. A verification of 

a claim for preferential treatment may 

involve, but need not be limited to, a 

review of: 

(1) All records required to be made, 

kept, and made available to CBP by the 

importer or any other person under part 

163 of this chapter; 

(2) Documentation and other 

information regarding the country of 

origin of an article and its constituent 

materials, including, but not limited to, 

production records, information relating 

to the place of production, the number 

and identification of the types of 

machinery used in production, and the 

number of workers employed in 

production; and 

(3) Evidence to document the use of 

U.S. or ATPDEA beneficiary country 

materials in the production of the article 

in question, such as purchase orders, 

invoices, bills of lading and other 

shipping documents, and customs 

import and clearance documents. 

(b) Importer requirements. In order to 

make a claim for preferential treatment 

under § 10.245, the importer: 

(1) Must have records that explain 

how the importer came to the 

conclusion that the apparel or other 

textile article qualifies for preferential 

treatment. Those records must include 

documents that support a claim that the 

article in question qualifies for 

preferential treatment because it is 

specifically described in one of the 

provisions under § 10.243(a). If the 

importer is claiming that the article 

incorporates fabric or yarn that was 

wholly formed in the United States or 

in an ATPDEA beneficiary country, the 

importer must have records that identify 

the producer of the fabric or yarn. A 

properly completed Certificate of Origin 

in the form set forth in § 10.244(b) is a 

record that would serve these purposes; 

(2) Must establish and implement 

internal controls which provide for the 

periodic review of the accuracy of the 

Certificates of Origin or other records 

referred to in paragraph (b)(1) of this 

section; 

(3) Must have shipping papers that 

show how the article moved from the 

ATPDEA beneficiary country to the 

United States. If the imported article 

was shipped through a country other 

than an ATPDEA beneficiary country 

and the invoices and other documents 

from the ATPDEA beneficiary country 

do not show the United States as the 

final destination, the importer also must 

have documentation that demonstrates 

that the conditions set forth in 

§ 10.243(d)(3)(i) through (iii) were met; 

and 

(4) Must be prepared to explain, upon 

request from CBP, how the records and 

internal controls referred to in 

paragraphs (b)(1) through (b)(3) of this 

section justify the importer’s claim for 

preferential treatment. 

§ 10.248 Additional requirements for 

preferential treatment of brassieres. 

(a) Definitions. When used in this 

section, the following terms have the 

meanings indicated: 

(1) Producer. ‘‘Producer’’ means an 

individual, corporation, partnership, 

association, or other entity or group that 

exercises direct, daily operational 

control over the production process in 

an ATPDEA beneficiary country. 

(2) Entity controlling production. 

‘‘Entity controlling production’’ means 

an individual, corporation, partnership, 

association, or other entity or group that 

is not a producer and that controls the 

production process in an ATPDEA 

beneficiary country through a 

contractual relationship or other 

indirect means. 

(3) Fabrics formed in the United 

States. ‘‘Fabrics formed in the United 

States’’ means fabrics that were 

produced by a weaving, knitting, 

needling, tufting, felting, entangling or 

other fabric-making process performed 

in the United States. 

(4) Cost. ‘‘Cost’’ when used with 

reference to fabrics formed in the United 

States means: 

(i) The price of the fabrics when last 

purchased, f.o.b. port of exportation, as 

set out in the invoice or other 

commercial documents, or, if the price 

is other than f.o.b. port of exportation: 

(A) The price as set out in the invoice 

or other commercial documents 

adjusted to arrive at an f.o.b. port of 

exportation price; or 

(B) If no exportation to an ATPDEA 

beneficiary country is involved, the 

price as set out in the invoice or other 

commercial documents, less the freight, 

insurance, packing, and other costs 

incurred in transporting the fabrics to 

the place of production if included in 

that price; or 

(ii) If the price cannot be determined 

under paragraph (a)(4)(i) of this section 

or if CBP finds that price to be 

unreasonable, all reasonable expenses 

incurred in the growth, production, 

manufacture, or other processing of the 

fabrics, including the cost or value of 

materials (which includes the cost of 

non-recoverable scrap generated in 

forming the fabrics) and general 

expenses, plus a reasonable amount for 

profit, and the freight, insurance, 

packing, and other costs, if any, 

incurred in transporting the fabrics to 

the port of exportation. 

(5) Declared customs value. ‘‘Declared 

customs value’’ when used with 

reference to fabric contained in an 

article means the sum of: 

(i) The cost of fabrics formed in the 

United States that the producer or entity 

controlling production can verify; and 

(ii) The cost of all other fabric 

contained in the article, exclusive of all 

findings and trimmings, determined as 

follows: 

(A) In the case of fabric purchased by 

the producer or entity controlling 

production, the f.o.b. port of exportation 

price of the fabric as set out in the 

invoice or other commercial documents, 

or, if the price is other than f.o.b. port 

of exportation: 

(1) The price as set out in the invoice 

or other commercial documents 

adjusted to arrive at an f.o.b. port of 

exportation price, plus expenses for 

embroidering and dyeing, printing, and 

finishing operations applied to the 

fabric if not included in that price; or 

(2) If no exportation to an ATPDEA 

beneficiary country is involved, the 

price as set out in the invoice or other 

commercial documents, plus expenses 

for embroidering and dyeing, printing, 

and finishing operations applied to the 

fabric if not included in that price, but 

less the freight, insurance, packing, and 

other costs incurred in transporting the 

fabric to the place of production if 

included in that price; 

(B) In the case of fabric for which the 

cost cannot be determined under 

paragraph (a)(5)(ii)(A) of this section or 

if CBP finds that cost to be 


cprice-sewell on PROD1PC66 with RULES
44580 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

unreasonable, all reasonable expenses 

incurred in the growth, production, or 

manufacture of the fabric, including the 

cost or value of materials (which 

includes the cost of non-recoverable 

scrap generated in the growth, 

production, or manufacture of the 

fabric), general expenses and 

embroidering and dyeing, printing, and 

finishing expenses, plus a reasonable 

amount for profit, and the freight, 

insurance, packing, and other costs, if 

any, incurred in transporting the fabric 

to the port of exportation; 

(C) In the case of fabric components 

purchased by the producer or entity 

controlling production, the f.o.b. port of 

exportation price of those fabric 

components as set out in the invoice or 

other commercial documents, less the 

cost or value of any non-textile 

materials, and less expenses for cutting 

or other processing to create the fabric 

components other than knitting to 

shape, that the producer or entity 

controlling production can verify, or, if 

the price is other than f.o.b. port of 

exportation: 

(1) The price as set out in the invoice 

or other commercial documents 

adjusted to arrive at an f.o.b. port of 

exportation price, less the cost or value 

of any non-textile materials, and less 

expenses for cutting or other processing 

to create the fabric components other 

than knitting to shape, that the producer 

or entity controlling production can 

verify; or 

(2) If no exportation to an ATPDEA 

beneficiary country is involved, the 

price as set out in the invoice or other 

commercial documents, less the cost or 

value of any non-textile materials, and 

less expenses for cutting or other 

processing to create the fabric 

components other than knitting to 

shape, that the producer or entity 

controlling production can verify, and 

less the freight, insurance, packing, and 

other costs incurred in transporting the 

fabric components to the place of 

production if included in that price; and 

(D) In the case of fabric components 

for which a fabric cost cannot be 

determined under paragraph (a)(5)(ii)(C) 

of this section or if CBP finds that cost 

to be unreasonable: All reasonable 

expenses incurred in the growth, 

production, or manufacture of the fabric 

components, including the cost or value 

of materials (which does not include the 

cost of recoverable scrap generated in 

the growth, production, or manufacture 

of the fabric components) and general 

expenses, but excluding the cost or 

value of any non-textile materials, and 

excluding expenses for cutting or other 

processing to create the fabric 

components other than knitting to 

shape, that the producer or entity 

controlling production can verify, plus 

a reasonable amount for profit, and the 

freight, insurance, packing, and other 

costs, if any, incurred in transporting 

the fabric components to the port of 

exportation. 

(6) Year. ‘‘Year’’ means a 12-month 

period beginning on October 1 and 

ending on September 30 but does not 

include any 12-month period that began 

prior to October 1, 2002. 

(7) Entered. ‘‘Entered’’ means entered, 

or withdrawn from warehouse for 

consumption, in the customs territory of 

the United States. 

(b) Limitations on preferential 

treatment—(1) General. During the year 

that begins on October 1, 2003, and 

during any subsequent year, articles of 

a producer or an entity controlling 

production that conform to the 

production standards set forth in 

§ 10.243(a)(4) will be eligible for 

preferential treatment only if: 

(i) The aggregate cost of fabrics 

(exclusive of all findings and trimmings) 

formed in the United States that were 

used in the production of all of those 

articles of that producer or that entity 

controlling production that are entered 

as articles described in § 10.243(a)(4) 

during the immediately preceding year 

was at least 75 percent of the aggregate 

declared customs value of the fabric 

(exclusive of all findings and trimmings) 

contained in all of those articles of that 

producer or that entity controlling 

production that are entered as articles 

described in § 10.243(a)(4) during that 

year; or 

(ii) In a case in which the 75 percent 

requirement set forth in paragraph 

(b)(1)(i) of this section was not met 

during a year and therefore those 

articles of that producer or that entity 

controlling production were not eligible 

for preferential treatment during the 

following year, the aggregate cost of 

fabrics (exclusive of all findings and 

trimmings) formed in the United States 

that were used in the production of all 

of those articles of that producer or that 

entity controlling production that 

conform to the production standards set 

forth in § 10.243(a)(4) and that were 

entered during the immediately 

preceding year was at least 85 percent 

of the aggregate declared customs value 

of the fabric (exclusive of all findings 

and trimmings) contained in all of those 

articles of that producer or that entity 

controlling production that conform to 

the production standards set forth in 

§ 10.243(a)(4) and that were entered 

during that year; and 

(iii) In conjunction with the filing of 

the claim for preferential treatment 

under § 10.245, the importer records on 

the entry summary or warehouse 

withdrawal for consumption (CBP Form 

7501, column 34), or its electronic 

equivalent, the distinct and unique 

identifier assigned by CBP to the 

applicable documentation prescribed 

under paragraph (c) of this section. 

(2) Rules of application—(i) General. 

For purposes of paragraphs (b)(1)(i) and 

(b)(1)(ii) of this section and for purposes 

of preparing and filing the 

documentation prescribed in paragraph 

(c) of this section, the following rules 

will apply: 

(A) The articles in question must have 

been produced in the manner specified 

in § 10.243(a)(4) and the articles in 

question must be entered within the 

same year; 

(B) Articles that are exported to 

countries other than the United States 

and are never entered are not to be 

considered in determining compliance 

with the 75 or 85 percent standard 

specified in paragraph (b)(1)(i) or 

paragraph (b)(1)(ii) of this section; 

(C) Articles that are entered under an 

HTSUS subheading other than the 

HTSUS subheading which pertains to 

articles described in § 10.243(a)(4) are 

not to be considered in determining 

compliance with the 75 percent 

standard specified in paragraph (b)(1)(i) 

of this section; 

(D) For purposes of determining 

compliance with the 85 percent 

standard specified in paragraph (b)(1)(ii) 

of this section, all articles that conform 

to the production standards set forth in 

§ 10.243(a)(4) must be considered, 

regardless of the HTSUS subheading 

under which they were entered; 

(E) Fabric components and fabrics 

that constitute findings or trimmings are 

not to be considered in determining 

compliance with the 75 or 85 percent 

standard specified in paragraph (b)(1)(i) 

or paragraph (b)(1)(ii) of this section; 

(F) Beginning October 1, 2003, in 

order for articles to be eligible for 

preferential treatment in a given year, a 

producer of, or entity controlling 

production of, those articles must have 

met the 75 percent standard specified in 

paragraph (b)(1)(i) of this section during 

the immediately preceding year. If 

articles of a producer or entity 

controlling production fail to meet the 

75 percent standard specified in 

paragraph (b)(1)(i) of this section during 

a year, articles of that producer or entity 

controlling production: 

(1) Will not be eligible for preferential 

treatment during the following year; 

(2) Will remain ineligible for 

preferential treatment until the year that 

follows a year in which articles of that 

producer or entity controlling 

production met the 85 percent standard 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44581 

specified in paragraph (b)(1)(ii) of this 

section; and 

(3) After the 85 percent standard 

specified in paragraph (b)(1)(ii) of this 

section has been met, will again be 

subject to the 75 percent standard 

specified in paragraph (b)(1)(i) of this 

section during the following year for 

purposes of determining eligibility for 

preferential treatment in the next year. 

(G) A new producer or new entity 

controlling production, that is, a 

producer or entity controlling 

production who did not produce or 

control production of articles that were 

entered as articles described in 

§ 10.243(a)(4) during the immediately 

preceding year, must first establish 

compliance with the 85 percent 

standard specified in paragraph (b)(1)(ii) 

of this section as a prerequisite to 

preparation of the declaration of 

compliance referred to in paragraph (c) 

of this section; 

(H) A declaration of compliance 

prepared by a producer or by an entity 

controlling production must cover all 

production of that producer or all 

production that the entity controls for 

the year in question; 

(I) A producer would not prepare a 

declaration of compliance if all of its 

production is covered by a declaration 

of compliance prepared by an entity 

controlling production; 

(J) In the case of a producer, the 75 or 

85 percent standard specified in 

paragraph (b)(1)(i) or paragraph (b)(1)(ii) 

of this section and the declaration of 

compliance procedure under paragraph 

(c) of this section apply to all articles of 

that producer for the year in question, 

even if some but not all of that 

production is also covered by a 

declaration of compliance prepared by 

an entity controlling production; 

(K) The U.S. importer does not have 

to be the producer or the entity 

controlling production who prepared 

the declaration of compliance; and 

(L) The exclusion references regarding 

findings and trimmings in paragraph 

(b)(1)(i) and paragraph (b)(1)(ii) of this 

section apply to all findings and 

trimmings, whether or not they are of 

foreign origin. 

(ii) Examples. The following 

examples will illustrate application of 

the principles set forth in paragraph 

(b)(2)(i) of this section. 

Example 1. An ATPDEA beneficiary 

country producer of articles that meet the 

production standards specified in 

§ 10.243(a)(4) in the first year sends 50 

percent of that production to ATPDEA region 

markets and the other 50 percent to the U.S. 

market; the cost of the fabrics formed in the 

United States equals 100 percent of the value 

of all of the fabric in the articles sent to the 

ATPDEA region and 60 percent of the value 

of all of the fabric in the articles sent to the 

United States. Although the cost of fabrics 

formed in the United States is more than 75 

percent of the value of all of the fabric used 

in all of the articles produced, this producer 

could not prepare a valid declaration of 

compliance because the articles sent to the 

United States did not meet the minimum 75 

percent standard. 

Example 2. A producer sends to the United 

States in the first year three shipments of 

articles that meet the description in 

§ 10.243(a)(4); one of those shipments is 

entered under the HTSUS subheading that 

covers articles described in § 10.243(a)(4), the 

second shipment is entered under the 

HTSUS subheading that covers articles 

described in § 10.243(a)(7), and the third 

shipment is entered under subheading 

9802.00.80, HTSUS. In determining whether 

the minimum 75 percent standard has been 

met in the first year for purposes of entry of 

articles under the HTSUS subheading that 

covers articles described in § 10.243(a)(4) 

during the following (that is, second) year, 

consideration must be restricted to the 

articles in the first shipment and therefore 

must not include the articles in the second 

and third shipments. 

Example 3. A producer in the second year 

begins production of articles that conform to 

the production standards specified in 

§ 10.243(a)(4); some of those articles are 

entered in that year under HTSUS 

subheading 6212.10 and others under HTSUS 

subheading 9802.00.80 but none are entered 

in that year under the HTSUS subheading 

which pertains to articles described in 

§ 10.243(a)(4) because the 75 percent 

standard had not been met in the preceding 

(that is, first) year. In this case the 85 percent 

standard applies, and all of the articles that 

were entered under the various HTSUS 

provisions in the second year must be taken 

into account in determining whether that 85 

percent standard has been met. If the 85 

percent was met in the aggregate for all of the 

articles entered in the second year, in the 

next (that is, third) year articles of that 

producer may receive preferential treatment 

under the HTSUS subheading which pertains 

to articles described in § 10.243(a)(4). 

Example 4. An entity controlling 

production of articles that meet the 

description in § 10.243(a)(4) buys for the 

U.S., Canadian and Mexican markets; the 

articles in each case are first sent to the 

United States where they are entered for 

consumption and then placed in a 

commercial warehouse from which they are 

shipped to various stores in the United 

States, Canada and Mexico. Notwithstanding 

the fact that some of the articles ultimately 

ended up in Canada or Mexico, a declaration 

of compliance prepared by the entity 

controlling production must cover all of the 

articles rather than only those that remained 

in the United States because all of those 

articles had been entered for consumption. 

Example 5. Fabric is cut and sewn in the 

United States with other U.S. materials to 

form cups which are joined together to form 

brassiere front subassemblies in the United 

States, and those front subassemblies are 

then placed in a warehouse in the United 

States where they are held until the following 

year; during that following year all of the 

front subassemblies are shipped to an 

ATPDEA beneficiary country where they are 

assembled with elastic strips for use as 

brassiere straps and labels produced in an 

Asian country and other fabrics, components 

or materials produced in the ATPDEA 

beneficiary country to form articles that meet 

the production standards specified in 

§ 10.243(a)(4) and that are then shipped to 

the United States and entered during that 

same year. In determining whether the 

entered articles meet the minimum 75 or 85 

percent standard, the fabric in the labels is 

to be disregarded entirely because the labels 

constitute findings or trimmings for purposes 

of this section, and all of the fabric in the 

front subassemblies is countable because it 

was all formed in the United States and used 

in the production of articles that were 

entered in the same year. 

Example 6. An ATPDEA beneficiary 

country producer’s entire production of 

articles that meet the description in 

§ 10.243(a)(4) is sent to a U.S. importer in 

two separate shipments, one in February and 

the other in June of the same calendar year; 

the articles shipped in February do not meet 

the minimum 75 percent standard, the 

articles shipped in June exceed the 85 

percent standard, and the articles in the two 

shipments, taken together, do meet the 75 

percent standard; the articles covered by the 

February shipment are entered for 

consumption on March 1 of that calendar 

year, and the articles covered by the June 

shipment are placed in a CBP bonded 

warehouse upon arrival and are subsequently 

withdrawn from warehouse for consumption 

on November 1 of that calendar year. The 

ATPDEA beneficiary country producer may 

not prepare a valid declaration of compliance 

covering the articles in the first shipment 

because those articles did not meet the 

minimum 75 percent standard and because 

those articles cannot be included with the 

articles of the second shipment on the same 

declaration of compliance since they were 

entered in a different year. However, the 

ATPDEA beneficiary country producer may 

prepare a valid declaration of compliance 

covering the articles in the second shipment 

because those articles did meet the requisite 

85 percent standard which would apply for 

purposes of entry of articles in the following 

year. 

Example 7. A producer in the second year 

begins production of articles exclusively for 

the U.S. market that meet the production 

standards specified in § 10.243(a)(4), but the 

entered articles do not meet the requisite 85 

percent standard until the third year. The 

producer’s articles may not receive 

preferential treatment during the second year 

because there was no production (and thus 

there were no entered articles) in the 

immediately preceding (that is, first) year on 

which to assess compliance with the 75 

percent standard. The producer’s articles also 

may not receive preferential treatment during 

the third year because the 85 percent 

standard was not met in the immediately 

preceding (that is, second) year. However, the 

producer’s articles are eligible for preferential 

treatment during the fourth year based on 


cprice-sewell on PROD1PC66 with RULES
44582 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

compliance with the 85 percent standard in 

the immediately preceding (that is, third) 

year. 

Example 8. An entity controlling 

production (Entity A) uses five ATPDEA 

beneficiary country producers (Producers 1–

5), all of which produce only articles that 

meet the description in § 10.243(a)(4); 

Producers 1–4 send all of their production to 

the United States and Producer 5 sends 10 

percent of its production to the United States 

and the rest to Europe; Producers 1–3 and 

Producer 5 produce only pursuant to 

contracts with Entity A, but Producer 4 also 

operates independently of Entity A by 

producing for several U.S. importers, one of 

which is an entity controlling production 

(Entity B) that also controls all of the 

production of articles of one other producer 

(Producer 6) which sends all of its 

production to the United States. A 

declaration of compliance prepared by Entity 

A must cover all of the articles of Producers 

1–3 and the 10 percent of articles of Producer 

5 that are sent to the United States and that 

portion of the articles of Producer 4 that are 

produced pursuant to the contract with 

Entity A, because Entity A controls the 

production of those articles. There is no need 

for Producers 1–3 and Producer 5 to prepare 

a declaration of compliance because they 

have no production that is not covered by a 

declaration of compliance prepared by an 

entity controlling production. A declaration 

of compliance prepared by Producer 4 would 

cover all of its production, that is, articles 

produced for Entity A, articles produced for 

Entity B, and articles produced 

independently for other U.S. importers; a 

declaration of compliance prepared by Entity 

B must cover that portion of the production 

of Producer 4 that it controls as well as all 

of the production of Producer 6 because 

Entity B also controls all of the production 

of Producer 6. Producer 6 would not prepare 

a declaration of compliance because all of its 

production is covered by the declaration of 

compliance prepared by Entity B. 

(c) Documentation—(1) Initial 

declaration of compliance. In order for 

an importer to comply with the 

requirement set forth in paragraph 

(b)(1)(iii) of this section, the producer or 

the entity controlling production must 

have filed with CBP, in accordance with 

paragraph (c)(4) of this section, a 

declaration of compliance with the 

applicable 75 or 85 percent requirement 

prescribed in paragraph (b)(1)(i) or 

(b)(1)(ii) of this section. After filing of 

the declaration of compliance has been 

completed, CBP will advise the 

producer or the entity controlling 

production of the distinct and unique 

identifier assigned to that declaration. 

The producer or the entity controlling 

production will then be responsible for 

advising each appropriate U.S. importer 

of that distinct and unique identifier for 

purposes of recording that identifier on 

the entry summary or warehouse 

withdrawal. In order to provide 

sufficient time for advising the U.S. 

importer of that distinct and unique 

identifier prior to the arrival of the 

articles in the United States, the 

producer or the entity controlling 

production should file the declaration of 

compliance with CBP at least 10 

calendar days prior to the date of the 

first shipment of the articles to the 

United States. 

(2) Amended declaration of 

compliance. If the information on the 

declaration of compliance referred to in 

paragraph (c)(1) of this section is based 

on an estimate because final year-end 

information was not available at that 

time and the final data differs from the 

estimate, or if the producer or the entity 

controlling production has reason to 

believe for any other reason that the 

declaration of compliance that was filed 

contained erroneous information, 

within 30 calendar days after the final 

year-end information becomes available 

or within 30 calendar days after the date 

of discovery of the error: 

(i) The producer or the entity 

controlling production must file with 

the CBP office identified in paragraph 

(c)(4) of this section an amended 

declaration of compliance containing 

that final year-end information or other 

corrected information; or 

(ii) If that final year-end information 

or other corrected information 

demonstrates noncompliance with the 

applicable 75 or 85 percent requirement, 

the producer or the entity controlling 

production must in writing advise both 

the CBP office identified in paragraph 

(c)(4) of this section and each 

appropriate U.S. importer of that fact. 

(3) Form and preparation of 

declaration of compliance—(i) Form. 

The declaration of compliance referred 

to in paragraph (c)(1) of this section may 

be printed and reproduced locally and 

must be in the following format: 

ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT DECLARATION OF COMPLIANCE FOR BRASSIERES

[19 CFR 10.243(a)(4) and 10.248] 

1. Year beginning date: October 1, llllllllllll Official U.S. CBP Use Only 

Year ending date: September 30, llllllllllll Assigned number: llllllllllll 

Assignment date:llllllllllll 

2. Identity of preparer (producer or entity controlling production): 

Full name and address: Telephone number: llllllllllll 

Facsimile number: llllllllllll 

Importer identification number:llllll 

3. If the preparer is an entity controlling production, provide the following for each producer: 

Full name and address: llllllllllll Telephone number: llllllllllll 

Facsimile number: llllllllllll 

4. Aggregate cost of fabrics (exclusive of all findings and trimmings) formed in the United States that were used in the production of brassieres 

that were entered during the year: 

llllllllllll 

5. Aggregate declared customs value of the fabric (exclusive of all findings and trimmings) contained in brassieres that were entered during the 

year: 

llllllllllll 

6. I declare that the aggregate cost of fabric (exclusive of all findings and trimmings) formed in the United States was at least 75 percent (or 85 

percent, if applicable under 19 CFR 10.248(b)(1)(ii)) of the aggregate declared customs value of the fabric contained in brassieres entered 

during the year. 

7. Authorized signature:llllllllllll 8. Name and title (print or type):llllllllllll 

Date: 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 44583 

(ii) Preparation. The following rules 

will apply for purposes of completing 

the declaration of compliance set forth 

in paragraph (c)(3)(i) of this section: 

(A) In block 1, fill in the year 

commencing October 1 and ending 

September 30 of the calendar year 

during which the applicable 75 or 85 

percent standard specified in paragraph 

(b)(1)(i) or paragraph (b)(1)(ii) of this 

section was met; 

(B) Block 2 should state the legal 

name and address (including country) of 

the preparer and should also include the 

preparer’s importer identification 

number (see § 24.5 of this chapter), if 

the preparer has one; 

(C) Block 3 should state the legal 

name and address (including country) of 

the ATPDEA beneficiary country 

producer if that producer is not already 

identified in block 2. If there is more 

than one producer, attach a list stating 

the legal name and address (including 

country) of all additional producers; 

(D) Blocks 4 and 5 apply only to 

articles that were entered during the 

year identified in block 1; and 

(E) In block 7, the signature must be 

that of an authorized officer, employee, 

agent or other person having knowledge 

of the relevant facts and the date must 

be the date on which the declaration of 

compliance was completed and signed. 

(4) Filing of declaration of 

compliance. The declaration of 

compliance referred to in paragraph 

(c)(1) of this section: 

(i) Must be completed either in the 

English language or in the language of 

the country in which the articles 

covered by the declaration were 

produced. If the declaration is 

completed in a language other than 

English, the producer or the entity 

controlling production must provide to 

CBP upon request a written English 

translation of the declaration; and 

(ii) Must be filed with the New York 

Strategic Trade Center, Customs and 

Border Protection, 1 Penn Plaza, New 

York, New York 10119. 

(d) Verification of declaration of 

compliance—(1) Verification procedure. 

A declaration of compliance filed under 

this section will be subject to whatever 

verification CBP deems necessary. In the 

event that CBP for any reason is 

prevented from verifying the statements 

made on a declaration of compliance, 

CBP may deny any claim for preferential 

treatment made under § 10.245 that is 

based on that declaration. A verification 

of a declaration of compliance may 

involve, but need not be limited to, a 

review of: 

(i) All records required to be made, 

kept, and made available to CBP by the 

importer, the producer, the entity 

controlling production, or any other 

person under part 163 of this chapter; 

(ii) Documentation and other 

information regarding all articles that 

meet the production standards specified 

in § 10.243(a)(4) that were exported to 

the United States and that were entered 

during the year in question, whether or 

not a claim for preferential treatment 

was made under § 10.245. Those records 

and other information include, but are 

not limited to, work orders and other 

production records, purchase orders, 

invoices, bills of lading and other 

shipping documents; 

(iii) Evidence to document the cost of 

fabrics formed in the United States that 

were used in the production of the 

articles in question, such as purchase 

orders, invoices, bills of lading and 

other shipping documents, and customs 

import and clearance documents, work 

orders and other production records, 

and inventory control records; 

(iv) Evidence to document the cost or 

value of all fabric other than fabrics 

formed in the United States that were 

used in the production of the articles in 

question, such as purchase orders, 

invoices, bills of lading and other 

shipping documents, and customs 

import and clearance documents, work 

orders and other production records, 

and inventory control records; and 

(v) Accounting books and documents 

to verify the records and information 

referred to in paragraphs (d)(1)(ii) 

through (d)(1)(iv) of this section. The 

verification of purchase orders, invoices 

and bills of lading will be accomplished 

through the review of a distinct audit 

trail. The audit trail documents must 

consist of a cash disbursement or 

purchase journal or equivalent records 

to establish the purchase of the fabric. 

The headings in each of these journals 

or other records must contain the date, 

vendor name, and amount paid for the 

fabric. The verification of production 

records and work orders will be 

accomplished through analysis of the 

inventory records of the producer or 

entity controlling production. The 

inventory records must reflect the 

production of the finished article which 

must be referenced to the original 

purchase order or lot number covering 

the fabric used in production. In the 

inventory production records, the 

inventory should show the opening 

balance of the inventory plus the 

purchases made during the accounting 

period and the inventory closing 

balance. 

(2) Notice of determination. If, based 

on a verification of a declaration of 

compliance filed under this section, 

CBP determines that the applicable 75 

or 85 percent standard specified in 

paragraph (b)(1)(i) or paragraph (b)(1)(ii) 

of this section was not met, CBP will 

publish a notice of that determination in 

the Federal Register. 

■ 3. Section 10.252 is amended by 

revising the definition of the term 

‘‘United States vessel’’ to read as 

follows: 

§ 10.252 Definitions. 

* * * * * 

United States vessel. ‘‘United States 

vessel’’ means either: a vessel having a 

certificate of documentation with a 

fishery endorsement under chapter 121 

of title 46 of the United States Code; or 

a vessel that is documented under the 

laws of the United States and for which 

a license has been issued pursuant to 

section 9 of the South Pacific Tuna Act 

of 1988. 

■ 4. Section 10.254 is revised to read as 

follows: 

§ 10.254 Certificate of Origin. 

A Certificate of Origin as specified in 

§ 10.256 must be employed to certify 

that an article described in § 10.253(a) 

being exported from an ATPDEA 

beneficiary country to the United States 

qualifies for the preferential treatment 

referred to in § 10.251. The Certificate of 

Origin must be prepared in the ATPDEA 

beneficiary country by the producer or 

exporter or by the producer’s or 

exporter’s authorized agent. If the 

person preparing the Certificate of 

Origin is not the producer of the article, 

the person may complete and sign a 

Certificate on the basis of: 

(a) The person’s reasonable reliance 

on the producer’s written representation 

that the article qualifies for preferential 

treatment; or 

(b) A completed and signed Certificate 

of Origin for the article voluntarily 

provided to the person by the producer. 

■ 5. Paragraph (b)(2) of § 10.256 is 

revised to read as follows: 

§ 10.256 Maintenance of records and 

submission of Certificate by importer. 

* * * * * 

(b) * * * 

(2) Must be signed by the producer or 

exporter or by the producer’s or 

exporter’s authorized agent having 

knowledge of the relevant facts; 

* * * * * 

PART 178—APPROVAL OF 

INFORMATION COLLECTION 

REQUIREMENTS 

■ 1. The authority citation for part 178 

continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 

U.S.C. 3501 et seq. 


cprice-sewell on PROD1PC66 with RULES
44584 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Rules and Regulations 

■ 2. Section 178.2 is amended by adding 

a new listing in the table in appropriate 

numerical order to read as follows: 

19 CFR section Description OMB 

control No. 

* * * * * * * 

§§ 10.244, 10.245, 10.246, 10.248, 10.254, 10.255, 

and 10.256.

Claim for duty-free entry entry of eligible articles under the Andean 

Trade Promotion and Drug Eradication Act.

1651–0091 

* * * * * * * 

Jayson P. Ahern, 

Acting Commissioner, Bureau of Customs and 

Border Protection. 

Approved: August 2, 2006. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury. 

[FR Doc. 06–6741 Filed 8–4–06; 8:45 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 208 

RIN 1510–AB07 

Management of Federal Agency 

Disbursements 

AGENCY: Financial Management Service, 

Fiscal Service, Treasury. 

ACTION: Interim final rule with request 

for comment. 

SUMMARY: The Financial Management 

Service (FMS) is publishing an interim 

final rule amending 31 CFR part 208 

(part 208) to facilitate the delivery of 

Federal payments to victims of disasters 

and emergencies. Part 208 implements 

the provisions of 31 U.S.C. 3332, which 

generally requires that Federal 

payments be made by electronic funds 

transfer (EFT). Under 31 U.S.C. 3332, 

the Secretary of the Treasury (Secretary) 

must ensure that any individual 

required to receive a Federal payment 

by EFT have access to an account at a 

financial institution at a reasonable cost 

and with certain consumer protections. 

This amendment implements 31 U.S.C. 

3332 by providing that the Department 

of the Treasury may establish and 

administer accounts for disaster victims 

in order to allow for the delivery of 

Federal payments by EFT. We are 

proceeding with this amendment in the 

form of an interim final rule that is 

effective without delay. 

DATES: This interim final rule is 

effective August 7, 2006. Comments on 

the interim final rule are due on or 

before September 6, 2006. 

ADDRESSES: This rule is available on the 

Financial Management Service’s Web 

site at the following address: http:// 

www.fms.treas.gov/eft. You may also 

inspect and copy this rule at: Treasury 

Department Library, Freedom of 

Information Act (FOIA) Collection, 

Room 1428, Main Treasury Building, 

1500 Pennsylvania Avenue, NW., 

Washington, DC 20220. Before visiting, 

you must call (202) 622–0990 for an 

appointment. You may submit 

comments on the rule by going to the 

Government-wide rulemaking Web site, 

http://www.regulations.gov, and 

following the instructions for sending 

your comments electronically. 

Alternatively, you may email your 

comments to FMS at 

208comments@fms.treas.gov. You may 

also mail your comments to: Sally 

Phillips, Director, EFT Strategy 

Division, Financial Management 

Service, 401 14th Street, SW., Room 

420, Washington, DC 20227. Comments 

received may be made publicly 

available. 

FOR FURTHER INFORMATION CONTACT: 

Sally Phillips, Director, EFT Strategy 

Division, at (202) 874–7106 or 

sally.phillips@fms.treas.gov; or Natalie 

H. Diana, Senior Counsel, at (202) 874–

6680 or natalie.diana@fms.treas.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Treasury is amending part 208 in 

order to facilitate the delivery of Federal 

benefit and assistance payments to 

victims of emergencies and disasters. 

During the aftermath of Hurricane 

Katrina in 2005, many individuals who 

had been displaced from their homes 

were in immediate need of financial 

assistance. Treasury worked with 

Federal agencies to develop ways to 

provide Hurricane Katrina evacuees 

with fast, convenient, and secure access 

to assistance and benefit payments. 

Mindful of the possibility that a future 

emergency or disaster could disrupt the 

delivery of Federal payments through 

conventional methods such as direct 

deposit and check, we are amending 

part 208 to provide for the 

establishment of accounts at a financial 

institution for disaster or emergency 

victims in order to allow for the delivery 

by EFT of Federal payments. 

Authority and Purpose 

31 U.S.C. 3332 generally requires that 

all non-tax Federal payments be made 

by EFT, unless waived by the Secretary. 

The Secretary must ensure that 

individuals required to receive Federal 

payments electronically have access to 

an account at a financial institution at 

a reasonable cost and with the same 

consumer protections as other 

accountholders. See 31 U.S.C. 3332(f), 

(i)(2). 

Part 208 implements the requirements 

of 31 U.S.C. 3332. Part 208 sets forth 

requirements for accounts to which 

Federal payments may be sent by EFT; 

provides that any individual who 

receives a Federal benefit, wage, salary, 

or retirement payment is eligible to 

open an Electronic Transfer Account 

(ETA) at a financial institution that 

offers such accounts; and establishes the 

responsibilities of Federal agencies and 

recipients under the regulation. Part 208 

also sets forth a number of waivers to 

the general requirement that Federal 

payments be delivered by EFT. Thus, 

part 208 contemplates that an 

individual entitled to a Federal payment 

either has access to a bank account to 

which the payment can be delivered 

electronically, or that the individual can 

receive and make use of a check 

payment. 

In the extraordinary circumstances of 

a disaster or emergency, however, many 

individuals may not have access to their 

bank accounts and may not be able to 

readily establish new bank accounts. 

Such individuals would have no way to 

receive an electronic Federal assistance 

or benefit payment. Moreover, as 

Hurricane Katrina illustrated, in disaster 

or emergency situations, the postal 

delivery of checks may be delayed or 

disrupted at the very time when the 

expeditious delivery of Federal 

assistance and benefit payments is 


cprice-sewell on PROD1PC66 with RULES