[Federal Register Volume 72, Number 101 (Friday, May 25, 2007)]
[Rules and Regulations]
[Pages 29247-29250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-2587]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 10

[CBP Dec. 07-26; USCBP-2006-0012]
RIN 1505-AB64


Dominican Republic--Central America--United States Free Trade 
Agreement

AGENCIES: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with some changes, 
interim amendments to title 19 of the Code of Federal Regulations 
(``CFR'') which were published in the Federal Register on March 7, 
2006, as CBP Dec. 06-06 to set forth the conditions and requirements 
that apply for purposes of submitting requests to U.S. Customs and 
Border Protection for refunds of any excess customs duties paid with 
respect to entries of textile or apparel goods entitled to retroactive 
application of preferential tariff treatment under the Dominican 
Republic--Central America--United States Free Trade Agreement.

EFFECTIVE DATE: Final rule effective May 25, 2007.

FOR FURTHER INFORMATION CONTACT: Operational aspects: Robert Abels, 
Textile Operations, Office of International Trade, (202) 344-1959. 
Legal aspects: Cynthia Reese, Tariff Classification and Marking Branch, 
Office of International Trade, (202) 572-8812.

SUPPLEMENTARY INFORMATION:

Background

    The Dominican Republic--Central America--United States Free Trade 
Agreement (``CAFTA-DR'' or ``Agreement'') was entered into by the 
governments of Costa Rica, the Dominican Republic, El Salvador, 
Guatemala, Honduras, Nicaragua, and the United States on August 5, 
2004. The CAFTA-DR was approved by the U.S. Congress with the enactment 
on August 2, 2005, of the Dominican Republic-Central America-United 
States Free Trade Agreement Implementation Act (the ``Act''), Public 
Law 109-53, 119 Stat. 462 (19 U.S.C. 4001 et seq.).
    Section 205 of the Act (19 U.S.C. 4034), as recently amended by 
section 1634(d) of the Pension Protection Act of 2006 (Pub. L. 109-
280), implements Article 3.20 of the CAFTA-DR by providing for the 
retroactive application of the preferential tariff provisions of the 
Agreement with respect to certain entries of qualifying textile or 
apparel goods of eligible CAFTA-DR countries. Specifically, section 
205(a) provides that, notwithstanding 19 U.S.C. 1514 or any other 
provision of law, an entry of a textile or apparel good will be 
liquidated or reliquidated at the applicable rate of duty for that good 
set out in Annex 3.3 of the Agreement, and the Secretary of the 
Treasury will refund any excess customs duties paid with respect to 
that entry, if it meets four conditions: (1) The textile or apparel 
good must be of a CAFTA-DR country that the United States Trade 
Representative has designated as an eligible country for purposes of 
section 205; (2) The good would have qualified as an originating good 
under section 203 of the Act if the good had been entered after the 
date of entry into force of the Agreement for that country; (3) The 
entry was made on or after January 1, 2004, and before the date of the 
entry into force of the Agreement with respect to that country or any 
other CAFTA-DR country; and (4) Customs duties were paid in excess of 
the applicable rate of duty for that good set out in Annex 3.3 of the 
Agreement.
    Section 205(b) of the Act provides that the United States Trade 
Representative will determine which CAFTA-DR countries are eligible 
countries for purposes of this section and will publish a list of those 
countries in the Federal Register.
    Section 205(c) of the Act provides that liquidation or 
reliquidation may be made under section 205(a) with respect to an entry 
of a textile or apparel good only if a request for such liquidation or 
reliquidation is filed with CBP, within such period as CBP shall 
establish by regulation in consultation with the Secretary of the 
Treasury, that contains sufficient information to enable CBP: (1) To 
locate the entry or to reconstruct the entry if it cannot be located; 
and (2) to determine that the good satisfies the conditions set out in 
section 205(a).
    Section 205(d) states that, as used in section 205, the term 
``entry'' includes a withdrawal from warehouse for consumption.
    On March 7, 2006, U.S. Customs and Border Protection (``CBP'') 
published in the Federal Register (71 FR 11304) as CBP Dec. 06-06 an 
interim rule that amended the CBP regulations by adding a new subpart J 
to Part 10 and new section 10.699 to set forth the conditions and 
requirements that apply for purposes of requesting refunds pursuant to 
section 205 of the Act. Pursuant to section 205(c) of the Act, the 
interim amendments included a provision establishing the time period 
within which requests for refunds of any excess customs duties paid 
with respect to entries of textile or apparel goods of an eligible 
CAFTA-DR country must be submitted to CBP. The interim rule provided 
that requests for refunds must be filed with CBP by the later of 
December 31, 2006, or the date that is 90 days after the entry into 
force of the Agreement with respect to that country.
    The interim rule also noted that section 10.699 provides that any 
refund of excess customs duties made pursuant to that section will be 
accompanied by interest from the date of the affected entry.
    Although the interim regulatory amendments were promulgated without

[[Page 29248]]

prior public notice and comment procedures and took effect on March 7, 
2006, CBP Dec. 06-06 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 8, 
2006.

Discussion of Comments

    Two commenters responded to the solicitation of comments on the 
interim regulations set forth in CBP Dec. 06-06. The comments are 
discussed below.
    Comment
    Both commenters urged that CBP modify the deadline for the 
submission of requests for refunds of any excess customs duties paid 
with respect to entries of textile or apparel goods of an eligible 
CAFTA-DR country. One commenter recommended that the deadline be 
changed to the later of December 31, 2006, or the date that is 180 days 
after the entry into force of the Agreement with respect to that 
country. According to this commenter, 180 days is more appropriate than 
the 90 days specified in the interim rule as the former period mirrors 
the deadline for filing a protest under 19 U.S.C. 1514(c)(3). In 
addition, the commenter stated that a 180-day period would be fairer to 
importers of goods from CAFTA-DR countries that may not accede to the 
Agreement until after December 31, 2006.
    The second commenter stated that the deadline should be the later 
of December 31, 2006, or the date that is 90 days after the entry into 
force of the Agreement of the ``last CAFTA-DR country.'' This commenter 
advised that extending the deadline in this manner addresses a 
potential situation in which a good of a CAFTA-DR country for which the 
Agreement has entered into force is made from inputs (e.g., fabric) 
from a second CAFTA-DR country for which the Agreement has not entered 
into force at the time that the refund period for the good expires. 
According to the commenter, without the suggested modification in the 
deadline, the inputs from the second CAFTA-DR country would appear to 
be disregarded in determining whether the good qualifies as originating 
and thus eligible for a refund of any excess duties paid.
    CBP's Response
    CBP agrees with the second commenter's suggested modification. As 
indicated in the background portion of this final rule, section 1634(d) 
of the Pension Protection Act of 2006 recently amended the Act. That 
amendment added to section 205(a)(2) the words ``or any other CAFTA-DR 
country'' immediately following the words ``with respect to that 
country''. (See the third condition for goods to qualify for a refund 
of duty under section 205(a), as stated in the background section 
above.) CBP believes that the words ``that country or any other CAFTA-
DR country'' as used in the Act are intended to mean ``the last CAFTA-
DR country.'' In conformance with this amendment to the Act, CBP, in 
consultation with the Department of the Treasury, has determined that 
the period within which refund requests must be filed, as set forth in 
Sec.  10.699(c), should be modified to permit such requests for goods 
of an eligible CAFTA-DR country to be filed within 90 days after the 
date of the entry into force of the Agreement for the last CAFTA-DR 
country. This modification has the effect of extending the period 
within which refund requests must be submitted to CBP for goods of all 
but the last CAFTA-DR country. Section 10.699(c) has been amended in 
this final rule document to reflect the above modification, which 
addresses the potential problem identified by the second commenter. 
Section 10.699(d) has also been amended to add a definition of ``last 
CAFTA-DR country'' to clarify that this term means, ``of Costa Rica, 
the Dominican Republic, El Salvador, Guatemala, Honduras, and 
Nicaragua, the last country for which the Agreement enters into 
force.''
    CBP submits that the first commenter's suggested modification 
(substituting 180 days for 90 days) is unnecessary in view of the 
modification of the deadline for the submission of refund requests 
effected by the amendment to 10.699(c) discussed above. CBP believes 
that the revised period within which requests for refunds must be 
submitted to CBP affords entities ample time to prepare and submit such 
requests. This is especially true considering that the importing public 
has had since March 7, 2006 (the date of publication of CBP Dec. 06-06 
in the Federal Register) to ascertain which entries of textile or 
apparel goods from CAFTA-DR countries may be eligible for refunds of 
any excess customs duties paid, and to prepare requests for refunds 
with respect to those entries.

Comment

    A commenter requested that CBP issue a clarification regarding when 
``* * * companies are able to submit refund requests when the CAFTA-DR 
has not yet entered into force for a country that is the source of an 
input used in an originating good that is eligible for refunds.'' The 
commenter's understanding is that a refund request may be submitted in 
such a situation only after the Agreement has entered into force with 
respect to the CAFTA-DR country that is the source of the input.

CBP's Response

    The answer to this commenter's question depends on whether the good 
(of an eligible CAFTA-DR country for which the Agreement has entered 
into force) would in fact have qualified as an originating good if the 
good had been entered after the date of entry into force of the 
Agreement for that country. An input (used in the production of the 
good) sourced from a CAFTA-DR country for which the Agreement has not 
yet entered into force may affect the determination of whether the good 
would have qualified as originating under the applicable CAFTA-DR rules 
of origin. If the good would have qualified as originating without 
taking into account the input, then a request for a refund of any 
excess duties paid may be submitted to CBP after the date of entry into 
force of the Agreement for the country in which the good (not the 
input) was produced but not later than 90 days after the Agreement 
enters into force for the last CAFTA-DR country. However, if the good 
would qualify as originating only if that input qualifies as 
originating, then a refund request may be submitted to CBP only after 
the Agreement enters into force for the CAFTA-DR country that is the 
source of the input (but not later than 90 days after the date of the 
entry into force of the Agreement for the last CAFTA-DR country).
    In regard to goods made from inputs sourced from countries for 
which the Agreement has not yet entered into force, importers (or other 
entities that may submit refund requests) are advised to prepare such 
requests in advance and to submit them to CBP after the Agreement 
enters into force for all the CAFTA-DR countries that contributed 
toward the production that qualifies the goods as originating.

Comment

    A commenter urged CBP to provide examples of the type of 
information that would be considered satisfactory to enable CBP to 
locate the entry or to reconstruct the entry that is the subject of a 
refund request. The commenter stated the current language in Sec.  
10.699(c), requiring a refund request to include ``sufficient 
information'' to enable CBP to locate or reconstruct an entry, is 
overly broad and fails to provide the trade community with a reasonable 
indication of the type of information that must be submitted.

[[Page 29249]]

CBP's Response

    To enable CBP to locate or reconstruct an entry, the refund request 
should include a copy of the entry summary if at all possible. If a 
copy of the entry summary is unavailable, however, other information 
may be submitted for purposes of enabling CBP to reconstruct the entry 
from its automated commercial system. Such information would include 
the entry number, entry date, importer number, manufacturer 
identification code (MID), and the goods' country of origin. Refund 
requests should clearly specify the goods (by line item) covered by an 
entry for which refunds are being sought. If only a portion of a line 
item is encompassed by a refund request, the quantity in dozens should 
be indicated.

Additional Changes to the Regulations

    In addition to the regulatory changes identified and discussed 
above in connection with the discussion of public comments received in 
response to CBP Dec. 06-06, the final rulemaking text set forth below 
incorporates the following additional changes, which CBP believes are 
necessary either to conform Sec.  10.699 to the recent amendment to 
section 205(a)(2) of the Act made by section 1634(d) of the Pension 
Protection Act of 2006 or as a result of further internal review of the 
interim regulatory text:
    1. The Sec.  10.699 heading has been revised to correct errors in 
capitalization and punctuation;
    2. In Sec.  10.699(a), the second sentence has been revised to add 
the words ``, as amended by section 1634(d) of the Pension Protection 
Act of 2006 (Pub. L. 109-280)'' to the end of the sentence;
    3. In Sec.  10.699(a), the third sentence has been revised to add 
the words ``, as amended,'' immediately following the words ``the 
Act''; and
    4. In Sec.  10.699(b), the introductory text has been revised to 
remove the words ``that country'' and add, in their place, the words 
``the last CAFTA-DR country''.

Conclusion

    Accordingly, based on the analysis of the comments received and the 
recent legislative change, CBP has determined to adopt the interim 
regulations published as CBP Dec. 06-06 as a final rule with certain 
amendments as discussed above and as set forth below.

Inapplicability of Delayed Effective Date Requirement

    Under the Administrative Procedure Act (``APA'') (5 U.S.C. 553), 
agencies generally are required to publish final amendments at least 30 
days prior to their effective date. However, sections 553(d)(1) and 
(d)(3) of the APA exempt agencies from the requirement of publishing 
notice of final rules at least 30 days prior to their effective date 
when a substantive rule grants or recognizes an exemption or relieves a 
restriction and when the agency finds that good cause exists for not 
meeting the advance publication requirement. As discussed previously, 
the changes to the interim regulations made by this final rule 
document, which conform to a recent amendment to the Act, seek to 
ensure that retroactive preferential tariff treatment under the 
Agreement is accorded to qualifying textile or apparel goods made in an 
eligible CAFTA-DR country from inputs from one or more other eligible 
CAFTA-DR countries. For this reason, CBP has determined that these 
regulations relieve restrictions and that good cause exists for 
dispensing with a delayed effective date.

Executive Order 12866

    CBP has determined that this document is not a regulation or rule 
subject to the provisions of Executive Order 12866 of September 30, 
1993 (58 FR 51735, October 1993), because it pertains to a foreign 
affairs function of the United States and implements certain 
preferential tariff treatment provisions of an international agreement 
and, therefore, is specifically exempted by section 3(d)(2) of 
Executive Order 12866.

Regulatory Flexibility Act

    CBP Dec. 06-06 was issued as an interim rule rather than as a 
notice of proposed rulemaking because CBP had determined that: (1) The 
interim regulations involve a foreign affairs function of the United 
States pursuant to section 553(a)(1) of the Administrative Procedure 
Act (APA); and (2) prior public notice and comment procedures on these 
regulations were impracticable, unnecessary, and contrary to the public 
interest pursuant to section 553(b)(B) of the APA. Because no notice of 
proposed rulemaking was required, the provisions of the Regulatory 
Flexibility Act, as amended (5 U.S.C. 601 et seq.), do not apply. 
Accordingly, this final rule is not subject to the regulatory analysis 
requirements or other requirements of 5 U.S.C. 603 and 604.

Paperwork Reduction Act

    The collection of information contained in this final rule has 
previously 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 1651-0125. The collection of 
information in these regulations is in Sec.  10.699. This information 
is required in connection with requests for refunds of any excess 
customs duties paid with respect to entries of textile or apparel goods 
entitled to retroactive application of preferential tariff treatment 
under the CAFTA-DR and the Act and will be used by CBP to determine 
eligibility for such refunds under the CAFTA-DR and the 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 96 minutes per respondent or 
recordkeeper. Comments concerning the accuracy of this burden estimate 
and suggestions for reducing that burden should be directed to the 
Office of Management and Budget, Attention: Desk Officer for the 
Department of Treasury, Office of Information and Regulatory Affairs, 
Washington, DC 20503. A copy should also be sent to the Trade and 
Commercial Regulations Branch, Regulations and Rulings, U.S. Customs 
and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint Annex), 
Washington, DC 20229.

Signing Authority

    This document is being issued in accordance with Sec.  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 related to certain CBP revenue functions.

List of Subjects in 19 CFR Part 10

    Customs duties and inspection, Entry, Imports, Preference programs, 
Reporting and recordkeeping requirements, Trade agreements.

Amendments to CBP Regulations

0
Accordingly, the interim rule amending part 10 of the CBP regulations 
(19 CFR part 10), which was published at 71 FR 11304 on March 7, 2006, 
is adopted as a final rule with certain changes as discussed above and 
set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

0
1. The general authority citation for part 10 and the specific 
authority for Subpart J continue to read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the

[[Page 29250]]

United States), 1321, 1481, 1484, 1498, 1508, 1623, 1624, 3314;
* * * * *
    Section 10.699 also issued under Pub. L. 109-53, 119 Stat. 462.


0
2. In Sec.  10.699:
0
a. The section heading is revised.
0
b. Paragraph (a) is amended by adding the words ``, as amended by Sec.  
1634(d) of the Pension Protection Act of 2006 (Pub. L. 109-280)'' to 
the end of the second sentence, and by adding the words ``, as 
amended,'' immediately following the words ``the Act'' in the third 
sentence;
0
c. Paragraph (b) introductory text is amended by removing the words 
``that country'' and adding, in their place, the words ``the last 
CAFTA-DR country'';
0
d. Paragraph (c) introductory text is amended by removing the words 
``by the later of December 31, 2006, or the date that is'' and adding, 
in their place, the word ``within'', and by removing the words ``that 
country'' and adding, in their place, the words ``the last CAFTA-DR 
country''; and
0
e. Current paragraph (d)(2) is re-designated as paragraph (d)(3) and a 
new paragraph (d)(2) is added.
    The revised section heading and new paragraph (d)(2) read as 
follows:


Sec.  10.699  Refunds of excess customs duties.

* * * * *
    (d) * * *
    (2) ``Last CAFTA-DR country'' means, of Costa Rica, the Dominican 
Republic, El Salvador, Guatemala, Honduras, and Nicaragua, the last 
country for which the Agreement enters into force.
* * * * *

Deborah J. Spero,
Acting Commissioner, Customs and Border Protection.
    Approved: May 21, 2007.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 07-2587 Filed 5-24-07; 8:45 am]
BILLING CODE 9111-14-P