II 

Calendar No. 191 

112TH CONGRESS 

1ST SESSION S. 1643 

To implement the United States–Panama Trade Promotion Agreement. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 3, 2011 

Mr. BAUCUS (for himself, Mr. HATCH, and Mr. MCCONNELL) (by request) introduced the following bill; which was read twice and referred to the Committee on Finance 

OCTOBER 11, 2011 

Reported by Mr. BAUCUS, without amendment 

A BILL 

To implement the United States–Panama Trade Promotion 

Agreement. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘United States–Panama Trade Promotion Agreement Im6 plementation Act’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Purposes. 

Sec. 3. Definitions. 

TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING 

TO, THE AGREEMENT 

Sec. 101. Approval and entry into force of the Agreement. 

Sec. 102. Relationship of the Agreement to United States and State law. 

Sec. 103. Implementing actions in anticipation of entry into force and initial 

regulations. 

Sec. 104. Consultation and layover provisions for, and effective date of, proclaimed actions. 

Sec. 105. Administration of dispute settlement proceedings. 

Sec. 106. Arbitration of claims. 

Sec. 107. Effective dates; effect of termination. 

TITLE II—CUSTOMS PROVISIONS 

Sec. 201. Tariff modifications. 

Sec. 202. Additional duties on certain agricultural goods. 

Sec. 203. Rules of origin. 

Sec. 204. Customs user fees. 

Sec. 205. Disclosure of incorrect information; false certifications of origin; denial of preferential tariff treatment. 

Sec. 206. Reliquidation of entries. 

Sec. 207. Recordkeeping requirements. 

Sec. 208. Enforcement relating to trade in textile or apparel goods. 

Sec. 209. Regulations. 

TITLE III—RELIEF FROM IMPORTS 

Sec. 301. Definitions. 

Subtitle A—Relief From Imports Benefitting From the Agreement 

Sec. 311. Commencing of action for relief. 

Sec. 312. Commission action on petition. 

Sec. 313. Provision of relief. 

Sec. 314. Termination of relief authority. 

Sec. 315. Compensation authority. 

Sec. 316. Confidential business information. 

Subtitle B—Textile and Apparel Safeguard Measures 

Sec. 321. Commencement of action for relief. 

Sec. 322. Determination and provision of relief. 

Sec. 323. Period of relief. 

Sec. 324. Articles exempt from relief. 

Sec. 325. Rate after termination of import relief. 

Sec. 326. Termination of relief authority. 

Sec. 327. Compensation authority. 

Sec. 328. Confidential business information. 


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Subtitle C—Cases Under Title II of the Trade Act of 1974 

Sec. 331. Findings and action on Panamanian articles. 

TITLE IV—MISCELLANEOUS 

Sec. 401. Eligible products. 

Sec. 402. Modification to the Caribbean Basin Economic Recovery Act. 

TITLE V—OFFSETS 

Sec. 501. Extension of customs user fees. 

Sec. 502. Time for payment of corporate estimated taxes. 

1 SEC. 2. PURPOSES. 

2 The purposes of this Act are— 

3 (1) to approve and implement the free trade 

4 agreement between the United States and Panama 

5 entered into under the authority of section 2103(b) 

6 of the Bipartisan Trade Promotion Authority Act of 

7 2002 (19 U.S.C. 3803(b)); 

8 (2) to strengthen and develop economic rela9 tions between the United States and Panama for 

10 their mutual benefit; 

11 (3) to establish free trade between the United 

12 States and Panama through the reduction and elimi13 nation of barriers to trade in goods and services and 

14 to investment; and 

15 (4) to lay the foundation for further coopera16 tion to expand and enhance the benefits of the 

17 Agreement. 

18 SEC. 3. DEFINITIONS. 

19 In this Act: 


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1 (1) AGREEMENT.—The term ‘‘Agreement’’ 

2 means the United States–Panama Trade Promotion 

3 Agreement approved by Congress under section 

4 101(a)(1). 

5 (2) COMMISSION.—The term ‘‘Commission’’ 

6 means the United States International Trade Com7 mission. 

8 (3) HTS.—The term ‘‘HTS’’ means the Har9 monized Tariff Schedule of the United States. 

10 (4) TEXTILE OR APPAREL GOOD.—The term 

11 ‘‘textile or apparel good’’ means a good listed in the 

12 Annex to the Agreement on Textiles and Clothing 

13 referred to in section 101(d)(4) of the Uruguay 

14 Round Agreements Act (19 U.S.C. 3511(d)(4)), 

15 other than a good listed in Annex 3.30 of the Agree16 ment. 

17 TITLE I—APPROVAL OF, AND 

18 GENERAL PROVISIONS RE19 LATING TO, THE AGREEMENT 

20 SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE 

21 AGREEMENT. 

22 (a) APPROVAL OF AGREEMENT AND STATEMENT OF

23 ADMINISTRATIVE ACTION.—Pursuant to section 2105 of 

24 the Bipartisan Trade Promotion Authority Act of 2002 


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1 (19 U.S.C. 3805) and section 151 of the Trade Act of 

2 1974 (19 U.S.C. 2191), Congress approves— 

3 (1) the United States–Panama Trade Pro4 motion Agreement entered into on June 28, 2007, 

5 with the Government of Panama and submitted to 

6 Congress on October 3, 2011; and 

7 (2) the statement of administrative action pro8 posed to implement the Agreement that was sub9 mitted to Congress on October 3, 2011. 

10 (b) CONDITIONS FOR ENTRY INTO FORCE OF THE

11 AGREEMENT.—At such time as the President determines 

12 that Panama has taken measures necessary to comply 

13 with those provisions of the Agreement that are to take 

14 effect on the date on which the Agreement enters into 

15 force, the President is authorized to exchange notes with 

16 the Government of Panama providing for the entry into 

17 force, on or after January 1, 2012, of the Agreement with 

18 respect to the United States. 

19 SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED 

20 STATES AND STATE LAW. 

21 (a) RELATIONSHIP OF AGREEMENT TO UNITED

22 STATES LAW.— 

23 (1) UNITED STATES LAW TO PREVAIL IN CON24 FLICT.—No provision of the Agreement, nor the ap25 plication of any such provision to any person or cirVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1643.RS S1643

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1 cumstance, which is inconsistent with any law of the 

2 United States shall have effect. 

3 (2) CONSTRUCTION.—Nothing in this Act shall 

4 be construed— 

5 (A) to amend or modify any law of the 

6 United States, or 

7 (B) to limit any authority conferred under 

8 any law of the United States, 

9 unless specifically provided for in this Act. 

10 (b) RELATIONSHIP OF AGREEMENT TO STATE

11 LAW.— 

12 (1) LEGAL CHALLENGE.—No State law, or the 

13 application thereof, may be declared invalid as to 

14 any person or circumstance on the ground that the 

15 provision or application is inconsistent with the 

16 Agreement, except in an action brought by the 

17 United States for the purpose of declaring such law 

18 or application invalid. 

19 (2) DEFINITION OF STATE LAW.—For purposes 

20 of this subsection, the term ‘‘State law’’ includes— 

21 (A) any law of a political subdivision of a 

22 State; and 

23 (B) any State law regulating or taxing the 

24 business of insurance. 


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1 (c) EFFECT OF AGREEMENT WITH RESPECT TO PRI2 VATE REMEDIES.—No person other than the United 

3 States— 

4 (1) shall have any cause of action or defense 

5 under the Agreement or by virtue of congressional 

6 approval thereof; or 

7 (2) may challenge, in any action brought under 

8 any provision of law, any action or inaction by any 

9 department, agency, or other instrumentality of the 

10 United States, any State, or any political subdivision 

11 of a State, on the ground that such action or inac12 tion is inconsistent with the Agreement. 

13 SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF 

14 ENTRY INTO FORCE AND INITIAL REGULA15 TIONS. 

16 (a) IMPLEMENTING ACTIONS.— 

17 (1) PROCLAMATION AUTHORITY.—After the 

18 date of the enactment of this Act— 

19 (A) the President may proclaim such ac20 tions, and 

21 (B) other appropriate officers of the 

22 United States Government may issue such reg23 ulations, 

24 as may be necessary to ensure that any provision of 

25 this Act, or amendment made by this Act, that takes 


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1 effect on the date on which the Agreement enters 

2 into force is appropriately implemented on such 

3 date, but no such proclamation or regulation may 

4 have an effective date earlier than the date on which 

5 the Agreement enters into force. 

6 (2) EFFECTIVE DATE OF CERTAIN PROCLAIMED

7 ACTIONS.—Any action proclaimed by the President 

8 under the authority of this Act that is not subject 

9 to the consultation and layover provisions under sec10 tion 104 may not take effect before the 15th day 

11 after the date on which the text of the proclamation 

12 is published in the Federal Register. 

13 (3) WAIVER OF 15-DAY RESTRICTION.—The 15- 

14 day restriction contained in paragraph (2) on the 

15 taking effect of proclaimed actions is waived to the 

16 extent that the application of such restriction would 

17 prevent the taking effect on the date the Agreement 

18 enters into force of any action proclaimed under this 

19 section. 

20 (b) INITIAL REGULATIONS.—Initial regulations nec21 essary or appropriate to carry out the actions required by 

22 or authorized under this Act or proposed in the statement 

23 of administrative action submitted under section 

24 101(a)(2) to implement the Agreement shall, to the max25 imum extent feasible, be issued within 1 year after the 


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1 date on which the Agreement enters into force. In the case 

2 of any implementing action that takes effect on a date 

3 after the date on which the Agreement enters into force, 

4 initial regulations to carry out that action shall, to the 

5 maximum extent feasible, be issued within 1 year after 

6 such effective date. 

7 SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, 

8 AND EFFECTIVE DATE OF, PROCLAIMED AC9 TIONS. 

10 If a provision of this Act provides that the implemen11 tation of an action by the President by proclamation is 

12 subject to the consultation and layover requirements of 

13 this section, such action may be proclaimed only if— 

14 (1) the President has obtained advice regarding 

15 the proposed action from— 

16 (A) the appropriate advisory committees 

17 established under section 135 of the Trade Act 

18 of 1974 (19 U.S.C. 2155); and 

19 (B) the Commission; 

20 (2) the President has submitted to the Com21 mittee on Finance of the Senate and the Committee 

22 on Ways and Means of the House of Representatives 

23 a report that sets forth— 

24 (A) the action proposed to be proclaimed 

25 and the reasons therefor; and 


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1 (B) the advice obtained under paragraph 

2 (1); 

3 (3) a period of 60 calendar days, beginning on 

4 the first day on which the requirements set forth in 

5 paragraphs (1) and (2) have been met, has expired; 

6 and 

7 (4) the President has consulted with the com8 mittees referred to in paragraph (2) regarding the 

9 proposed action during the period referred to in 

10 paragraph (3). 

11 SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PRO12 CEEDINGS. 

13 (a) ESTABLISHMENT OR DESIGNATION OF OFFICE.— 

14 The President is authorized to establish or designate with15 in the Department of Commerce an office that shall be 

16 responsible for providing administrative assistance to pan17 els established under chapter 20 of the Agreement. The 

18 office shall not be considered to be an agency for purposes 

19 of section 552 of title 5, United States Code. 

20 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated for each fiscal year after 

22 fiscal year 2011 to the Department of Commerce up to 

23 $150,000 for the establishment and operations of the of24 fice established or designated under subsection (a) and for 


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1 the payment of the United States share of the expenses 

2 of panels established under chapter 20 of the Agreement. 

3 SEC. 106. ARBITRATION OF CLAIMS. 

4 The United States is authorized to resolve any claim 

5 against the United States covered by article 

6 10.16.1(a)(i)(C) or article 10.16.1(b)(i)(C) of the Agree7 ment, pursuant to the Investor-State Dispute Settlement 

8 procedures set forth in section B of chapter 10 of the 

9 Agreement. 

10 SEC. 107. EFFECTIVE DATES; EFFECT OF TERMINATION. 

11 (a) EFFECTIVE DATES.—Except as provided in sub12 section (b), this Act and the amendments made by this 

13 Act take effect on the date on which the Agreement enters 

14 into force. 

15 (b) EXCEPTIONS.— 

16 (1) IN GENERAL.—Sections 1 through 3, this 

17 title, and title V take effect on the date of the enact18 ment of this Act. 

19 (2) CERTAIN AMENDATORY PROVISIONS.—The 

20 amendments made by sections 204, 205, 207, and 

21 401 of this Act take effect on the date of the enact22 ment of this Act and apply with respect to Panama 

23 on the date on which the Agreement enters into 

24 force. 


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1 (c) TERMINATION OF THE AGREEMENT.—On the 

2 date on which the Agreement terminates, this Act (other 

3 than this subsection and title V) and the amendments 

4 made by this Act (other than the amendments made by 

5 title V) shall cease to have effect. 

6 TITLE II—CUSTOMS PROVISIONS 

7 SEC. 201. TARIFF MODIFICATIONS. 

8 (a) TARIFF MODIFICATIONS PROVIDED FOR IN THE

9 AGREEMENT.— 

10 (1) PROCLAMATION AUTHORITY.—The Presi11 dent may proclaim— 

12 (A) such modifications or continuation of 

13 any duty, 

14 (B) such continuation of duty-free or ex15 cise treatment, or 

16 (C) such additional duties, 

17 as the President determines to be necessary or ap18 propriate to carry out or apply articles 3.3, 3.5, 3.6, 

19 3.26, 3.27, 3.28, and 3.29, and Annex 3.3, of the 

20 Agreement. 

21 (2) EFFECT ON GSP STATUS.—Notwithstanding 

22 section 502(a)(1) of the Trade Act of 1974 (19 

23 U.S.C. 2462(a)(1)), the President shall, on the date 

24 on which the Agreement enters into force, terminate 

25 the designation of Panama as a beneficiary develVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1643.RS S1643

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1 oping country for purposes of title V of the Trade 

2 Act of 1974 (19 U.S.C. 2461 et seq.). 

3 (3) EFFECT ON CBERA STATUS.— 

4 (A) IN GENERAL.—Notwithstanding sec5 tion 212(a) of the Caribbean Basin Economic 

6 Recovery Act (19 U.S.C. 2702(a)), the Presi7 dent shall, on the date on which the Agreement 

8 enters into force, terminate the designation of 

9 Panama as a beneficiary country for purposes 

10 of that Act. 

11 (B) EXCEPTION.—Notwithstanding sub12 paragraph (A), Panama shall be considered a 

13 beneficiary country under section 212(a) of the 

14 Caribbean Basin Economic Recovery Act, for 

15 purposes of— 

16 (i) sections 771(7)(G)(ii)(III) and 

17 771(7)(H) of the Tariff Act of 1930 (19 

18 U.S.C. 1677(7)(G)(ii)(III) and 

19 1677(7)(H)); 

20 (ii) the duty-free treatment provided 

21 under paragraph 4 of the General Notes to 

22 the Schedule of the United States to 

23 Annex 3.3 of the Agreement; and 

24 (iii) section 274(h)(6)(B) of the Inter25 nal Revenue Code of 1986. 


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1 (b) OTHER TARIFF MODIFICATIONS.—Subject to the 

2 consultation and layover provisions of section 104, the 

3 President may proclaim— 

4 (1) such modifications or continuation of any 

5 duty, 

6 (2) such modifications as the United States 

7 may agree to with Panama regarding the staging of 

8 any duty treatment set forth in Annex 3.3 of the 

9 Agreement, 

10 (3) such continuation of duty-free or excise 

11 treatment, or 

12 (4) such additional duties, 

13 as the President determines to be necessary or appropriate 

14 to maintain the general level of reciprocal and mutually 

15 advantageous concessions with respect to Panama pro16 vided for by the Agreement. 

17 (c) CONVERSION TO AD VALOREM RATES.—For pur18 poses of subsections (a) and (b), with respect to any good 

19 for which the base rate in the Schedule of the United 

20 States to Annex 3.3 of the Agreement is a specific or com21 pound rate of duty, the President may substitute for the 

22 base rate an ad valorem rate that the President deter23 mines to be equivalent to the base rate. 

24 (d) TARIFF RATE QUOTAS.—In implementing the 

25 tariff rate quotas set forth in Appendix I to the General 


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1 Notes to the Schedule of the United States to Annex 3.3 

2 of the Agreement, the President shall take such action as 

3 may be necessary to ensure that imports of agricultural 

4 goods do not disrupt the orderly marketing of commodities 

5 in the United States. 

6 SEC. 202. ADDITIONAL DUTIES ON CERTAIN AGRICUL7 TURAL GOODS. 

8 (a) DEFINITIONS.—In this section: 

9 (1) APPLICABLE NTR (MFN) RATE OF DUTY.— 

10 The term ‘‘applicable NTR (MFN) rate of duty’’ 

11 means, with respect to a safeguard good, a rate of 

12 duty equal to the lowest of— 

13 (A) the base rate in the Schedule of the 

14 United States to Annex 3.3 of the Agreement; 

15 (B) the column 1 general rate of duty that 

16 would, on the day before the date on which the 

17 Agreement enters into force, apply to a good 

18 classifiable in the same 8-digit subheading of 

19 the HTS as the safeguard good; or 

20 (C) the column 1 general rate of duty that 

21 would, at the time the additional duty is im22 posed under subsection (b), apply to a good 

23 classifiable in the same 8-digit subheading of 

24 the HTS as the safeguard good. 


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1 (2) SAFEGUARD GOOD.—The term ‘‘safeguard 

2 good’’ means a good— 

3 (A) that is included in the Schedule of the 

4 United States to Annex 3.17 of the Agreement; 

5 (B) that qualifies as an originating good 

6 under section 203; and 

7 (C) for which a claim for preferential tariff 

8 treatment under the Agreement has been made. 

9 (3) SCHEDULE RATE OF DUTY.—The term 

10 ‘‘schedule rate of duty’’ means, with respect to a 

11 safeguard good, the rate of duty for that good that 

12 is set forth in the Schedule of the United States to 

13 Annex 3.3 of the Agreement. 

14 (4) TRIGGER LEVEL.— 

15 (A) IN GENERAL.—The term ‘‘trigger 

16 level’’ means— 

17 (i) in the case of a safeguard good 

18 classified under subheading 0201.10.50, 

19 0201.20.80, 0201.30.80, 0202.10.50, 

20 0202.20.80, or 0202.30.80 of the HTS— 

21 (I) in year 1 of the Agreement, 

22 330 metric tons; and 

23 (II) in year 2 of the Agreement 

24 through year 14 of the Agreement, a 

25 quantity equal to 110 percent of the 


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1 trigger level for that safeguard good 

2 for the preceding calendar year; and 

3 (ii) in the case of any other safeguard 

4 good, 115 percent of the quantity that is 

5 provided for that safeguard good in the 

6 corresponding calendar year in the applica7 ble table contained in Appendix I to the 

8 General Notes to the Schedule of the 

9 United States to Annex 3.3 of the Agree10 ment. 

11 (B) RELATIONSHIP TO TABLE.—For pur12 poses of subparagraph (A)(ii), year 1 in the ap13 plicable table contained in Appendix I to the 

14 General Notes to the Schedule of the United 

15 States to Annex 3.3 of the Agreement cor16 responds to year 1 of the Agreement. 

17 (5) YEAR 1 OF THE AGREEMENT.—The term 

18 ‘‘year 1 of the Agreement’’ means the period begin19 ning on the date, in a calendar year, on which the 

20 Agreement enters into force and ending on Decem21 ber 31 of that calendar year. 

22 (6) YEARS OTHER THAN YEAR 1 OF THE

23 AGREEMENT.—Any reference to a year of the Agree24 ment subsequent to year 1 of the Agreement shall 


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1 be deemed to be a reference to the corresponding 

2 calendar year in which the Agreement is in force. 

3 (b) ADDITIONAL DUTIES ON SAFEGUARD GOODS.— 

4 (1) IN GENERAL.—In addition to any duty pro5 claimed under subsection (a) or (b) of section 201, 

6 the Secretary of the Treasury shall assess a duty, in 

7 the amount determined under paragraph (2), on a 

8 safeguard good imported into the United States in 

9 a calendar year if the Secretary determines that, 

10 prior to such importation, the total volume of that 

11 safeguard good that is imported into the United 

12 States in that calendar year exceeds the trigger level 

13 for that good for that calendar year. 

14 (2) CALCULATION OF ADDITIONAL DUTY.—The 

15 additional duty on a safeguard good under this sub16 section shall be— 

17 (A) in the case of a good classified under 

18 subheading 0201.10.50, 0201.20.80, 

19 0201.30.80, 0202.10.50, 0202.20.80, or 

20 0202.30.80 of the HTS— 

21 (i) in year 1 of the Agreement 

22 through year 6 of the Agreement, an 

23 amount equal to 100 percent of the excess 

24 of the applicable NTR (MFN) rate of duty 

25 over the schedule rate of duty; and 


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1 (ii) in year 7 of the Agreement 

2 through year 14 of the Agreement, an 

3 amount equal to 50 percent of the excess 

4 of the applicable NTR (MFN) rate of duty 

5 over the schedule rate of duty; 

6 (B) in the case of a good classified under 

7 subheading 0406.10.08, 0406.10.88, 

8 0406.20.91, 0406.30.91, 0406.90.97, or 

9 2105.00.20 of the HTS— 

10 (i) in year 1 of the Agreement 

11 through year 11 of the Agreement, an 

12 amount equal to 100 percent of the excess 

13 of the applicable NTR (MFN) rate of duty 

14 over the schedule rate of duty; and 

15 (ii) in year 12 of the Agreement 

16 through year 14 of the Agreement, an 

17 amount equal to 50 percent of the excess 

18 of the applicable NTR (MFN) rate of duty 

19 over the schedule rate of duty; and 

20 (C) in the case of any other safeguard 

21 good— 

22 (i) in year 1 of the Agreement 

23 through year 13 of the Agreement, an 

24 amount equal to 100 percent of the excess 


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1 of the applicable NTR (MFN) rate of duty 

2 over the schedule rate of duty; and 

3 (ii) in year 14 of the Agreement 

4 through year 16 of the Agreement, an 

5 amount equal to 50 percent of the excess 

6 of the applicable NTR (MFN) rate of duty 

7 over the schedule rate of duty. 

8 (3) NOTICE.—Not later than 60 days after the 

9 date on which the Secretary of the Treasury first as10 sesses an additional duty in a calendar year on a 

11 good under this subsection, the Secretary shall no12 tify the Government of Panama in writing of such 

13 action and shall provide to that Government data 

14 supporting the assessment of the additional duty. 

15 (c) EXCEPTIONS.—No additional duty shall be as16 sessed on a good under subsection (b) if, at the time of 

17 entry, the good is subject to import relief under— 

18 (1) subtitle A of title III of this Act; or 

19 (2) chapter 1 of title II of the Trade Act of 

20 1974 (19 U.S.C. 2251 et seq.). 

21 (d) TERMINATION.—The assessment of an additional 

22 duty on a good under subsection (b) shall cease to apply 

23 to that good on the date on which duty-free treatment 

24 must be provided to that good under the Schedule of the 

25 United States to Annex 3.3 of the Agreement. 


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1 SEC. 203. RULES OF ORIGIN. 

2 (a) APPLICATION AND INTERPRETATION.—In this 

3 section: 

4 (1) TARIFF CLASSIFICATION.—The basis for 

5 any tariff classification is the HTS. 

6 (2) REFERENCE TO HTS.—Whenever in this 

7 section there is a reference to a chapter, heading, or 

8 subheading, such reference shall be a reference to a 

9 chapter, heading, or subheading of the HTS. 

10 (3) COST OR VALUE.—Any cost or value re11 ferred to in this section shall be recorded and main12 tained in accordance with the generally accepted ac13 counting principles applicable in the territory of the 

14 country in which the good is produced (whether 

15 Panama or the United States). 

16 (b) ORIGINATING GOODS.—For purposes of this Act 

17 and for purposes of implementing the preferential tariff 

18 treatment provided for under the Agreement, except as 

19 otherwise provided in this section, a good is an originating 

20 good if— 

21 (1) the good is a good wholly obtained or pro22 duced entirely in the territory of Panama, the 

23 United States, or both; 

24 (2) the good— 

25 (A) is produced entirely in the territory of 

26 Panama, the United States, or both, and— 


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1 (i) each of the nonoriginating mate2 rials used in the production of the good 

3 undergoes an applicable change in tariff 

4 classification specified in Annex 4.1 of the 

5 Agreement; or 

6 (ii) the good otherwise satisfies any 

7 applicable regional value-content or other 

8 requirements specified in Annex 4.1 of the 

9 Agreement; and 

10 (B) satisfies all other applicable require11 ments of this section; or 

12 (3) the good is produced entirely in the terri13 tory of Panama, the United States, or both, exclu14 sively from materials described in paragraph (1) or 

15 (2). 

16 (c) REGIONAL VALUE-CONTENT.— 

17 (1) IN GENERAL.—For purposes of subsection 

18 (b)(2), the regional value-content of a good referred 

19 to in Annex 4.1 of the Agreement, except for goods 

20 to which paragraph (4) applies, shall be calculated 

21 by the importer, exporter, or producer of the good, 

22 on the basis of the build-down method described in 

23 paragraph (2) or the build-up method described in 

24 paragraph (3). 

25 (2) BUILD-DOWN METHOD.— 


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1 (A) IN GENERAL.—The regional value-con2 tent of a good may be calculated on the basis 

3 of the following build-down method: 

AV¥VNM 

RVC = ————— × 100 

AV 

4 (B) DEFINITIONS.—In subparagraph (A): 

5 (i) RVC.—The term ‘‘RVC’’ means 

6 the regional value-content of the good, ex7 pressed as a percentage. 

8 (ii) AV.—The term ‘‘AV’’ means the 

9 adjusted value of the good. 

10 (iii) VNM.—The term ‘‘VNM’’ means 

11 the value of nonoriginating materials that 

12 are acquired and used by the producer in 

13 the production of the good, but does not 

14 include the value of a material that is self15 produced. 

16 (3) BUILD-UP METHOD.— 

17 (A) IN GENERAL.—The regional value-con18 tent of a good may be calculated on the basis 

19 of the following build-up method: 

VOM RVC = ————— × 100 

AV 

20 (B) DEFINITIONS.—In subparagraph (A): 

21 (i) RVC.—The term ‘‘RVC’’ means 

22 the regional value-content of the good, ex23 pressed as a percentage. 


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1 (ii) AV.—The term ‘‘AV’’ means the 

2 adjusted value of the good. 

3 (iii) VOM.—The term ‘‘VOM’’ means 

4 the value of originating materials that are 

5 acquired or self-produced, and used by the 

6 producer in the production of the good. 

7 (4) SPECIAL RULE FOR CERTAIN AUTOMOTIVE

8 GOODS.— 

9 (A) IN GENERAL.—For purposes of sub10 section (b)(2), the regional value-content of an 

11 automotive good referred to in Annex 4.1 of the 

12 Agreement may be calculated by the importer, 

13 exporter, or producer of the good on the basis 

14 of the build-down method described in para15 graph (2), the build-up method described in 

16 paragraph (3), or the following net cost method: 

NC¥VNM 

RVC = ————— × 100 

NC 

17 (B) DEFINITIONS.—In subparagraph (A): 

18 (i) AUTOMOTIVE GOOD.—The term 

19 ‘‘automotive good’’ means a good provided 

20 for in any of subheadings 8407.31 through 

21 8407.34, subheading 8408.20, heading 

22 8409, or any of headings 8701 through 

23 8708. 


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1 (ii) RVC.—The term ‘‘RVC’’ means 

2 the regional value-content of the auto3 motive good, expressed as a percentage. 

4 (iii) NC.—The term ‘‘NC’’ means the 

5 net cost of the automotive good. 

6 (iv) VNM.—The term ‘‘VNM’’ means 

7 the value of nonoriginating materials that 

8 are acquired and used by the producer in 

9 the production of the automotive good, but 

10 does not include the value of a material 

11 that is self-produced. 

12 (C) MOTOR VEHICLES.— 

13 (i) BASIS OF CALCULATION.—For 

14 purposes of determining the regional value15 content under subparagraph (A) for an 

16 automotive good that is a motor vehicle 

17 provided for in any of headings 8701 

18 through 8705, an importer, exporter, or 

19 producer may average the amounts cal20 culated under the net cost formula con21 tained in subparagraph (A), over the pro22 ducer’s fiscal year— 

23 (I) with respect to all motor vehi24 cles in any one of the categories de25 scribed in clause (ii); or 


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1 (II) with respect to all motor ve2 hicles in any such category that are 

3 exported to the territory of Panama 

4 or the United States. 

5 (ii) CATEGORIES.—A category is de6 scribed in this clause if it— 

7 (I) is the same model line of 

8 motor vehicles, is in the same class of 

9 motor vehicles, and is produced in the 

10 same plant in the territory of Panama 

11 or the United States, as the good de12 scribed in clause (i) for which regional 

13 value-content is being calculated; 

14 (II) is the same class of motor 

15 vehicles, and is produced in the same 

16 plant in the territory of Panama or 

17 the United States, as the good de18 scribed in clause (i) for which regional 

19 value-content is being calculated; or 

20 (III) is the same model line of 

21 motor vehicles produced in the terri22 tory of Panama or the United States 

23 as the good described in clause (i) for 

24 which regional value-content is being 

25 calculated. 


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1 (D) OTHER AUTOMOTIVE GOODS.—For 

2 purposes of determining the regional value-con3 tent under subparagraph (A) for automotive 

4 materials provided for in any of subheadings 

5 8407.31 through 8407.34, in subheading 

6 8408.20, or in heading 8409, 8706, 8707, or 

7 8708, that are produced in the same plant, an 

8 importer, exporter, or producer may— 

9 (i) average the amounts calculated 

10 under the net cost formula contained in 

11 subparagraph (A) over— 

12 (I) the fiscal year of the motor 

13 vehicle producer to whom the auto14 motive goods are sold, 

15 (II) any quarter or month, or 

16 (III) the fiscal year of the pro17 ducer of such goods, 

18 if the goods were produced during the fis19 cal year, quarter, or month that is the 

20 basis for the calculation; 

21 (ii) determine the average referred to 

22 in clause (i) separately for such goods sold 

23 to 1 or more motor vehicle producers; or 

24 (iii) make a separate determination 

25 under clause (i) or (ii) for such goods that 


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1 are exported to the territory of Panama or 

2 the United States. 

3 (E) CALCULATING NET COST.—The im4 porter, exporter, or producer of an automotive 

5 good shall, consistent with the provisions re6 garding allocation of costs provided for in gen7 erally accepted accounting principles, determine 

8 the net cost of the automotive good under sub9 paragraph (B) by— 

10 (i) calculating the total cost incurred 

11 with respect to all goods produced by the 

12 producer of the automotive good, sub13 tracting any sales promotion, marketing, 

14 and after-sales service costs, royalties, 

15 shipping and packing costs, and nonallow16 able interest costs that are included in the 

17 total cost of all such goods, and then rea18 sonably allocating the resulting net cost of 

19 those goods to the automotive good; 

20 (ii) calculating the total cost incurred 

21 with respect to all goods produced by that 

22 producer, reasonably allocating the total 

23 cost to the automotive good, and then sub24 tracting any sales promotion, marketing, 

25 and after-sales service costs, royalties, 


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1 shipping and packing costs, and nonallow2 able interest costs that are included in the 

3 portion of the total cost allocated to the 

4 automotive good; or 

5 (iii) reasonably allocating each cost 

6 that forms part of the total cost incurred 

7 with respect to the automotive good so that 

8 the aggregate of these costs does not in9 clude any sales promotion, marketing, and 

10 after-sales service costs, royalties, shipping 

11 and packing costs, or nonallowable interest 

12 costs. 

13 (d) VALUE OF MATERIALS.— 

14 (1) IN GENERAL.—For the purpose of calcu15 lating the regional value-content of a good under 

16 subsection (c), and for purposes of applying the de 

17 minimis rules under subsection (f), the value of a 

18 material is— 

19 (A) in the case of a material that is im20 ported by the producer of the good, the ad21 justed value of the material; 

22 (B) in the case of a material acquired in 

23 the territory in which the good is produced, the 

24 value, determined in accordance with Articles 1 

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1 terpretive notes, of the Agreement on Imple2 mentation of Article VII of the General Agree3 ment on Tariffs and Trade 1994 referred to in 

4 section 101(d)(8) of the Uruguay Round Agree5 ments Act (19 U.S.C. 3511(d)(8)), as set forth 

6 in regulations promulgated by the Secretary of 

7 the Treasury providing for the application of 

8 such Articles in the absence of an importation 

9 by the producer; or 

10 (C) in the case of a material that is self11 produced, the sum of— 

12 (i) all expenses incurred in the pro13 duction of the material, including general 

14 expenses; and 

15 (ii) an amount for profit equivalent to 

16 the profit added in the normal course of 

17 trade. 

18 (2) FURTHER ADJUSTMENTS TO THE VALUE OF

19 MATERIALS.— 

20 (A) ORIGINATING MATERIAL.—The fol21 lowing expenses, if not included in the value of 

22 an originating material calculated under para23 graph (1), may be added to the value of the 

24 originating material: 


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1 (i) The costs of freight, insurance, 

2 packing, and all other costs incurred in 

3 transporting the material within or be4 tween the territory of Panama, the United 

5 States, or both, to the location of the pro6 ducer. 

7 (ii) Duties, taxes, and customs broker8 age fees on the material paid in the terri9 tory of Panama, the United States, or 

10 both, other than duties or taxes that are 

11 waived, refunded, refundable, or otherwise 

12 recoverable, including credit against duty 

13 or tax paid or payable. 

14 (iii) The cost of waste and spoilage re15 sulting from the use of the material in the 

16 production of the good, less the value of 

17 renewable scrap or byproducts. 

18 (B) NONORIGINATING MATERIAL.—The 

19 following expenses, if included in the value of a 

20 nonoriginating material calculated under para21 graph (1), may be deducted from the value of 

22 the nonoriginating material: 

23 (i) The costs of freight, insurance, 

24 packing, and all other costs incurred in 

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1 tween the territory of Panama, the United 

2 States, or both, to the location of the pro3 ducer. 

4 (ii) Duties, taxes, and customs broker5 age fees on the material paid in the terri6 tory of Panama, the United States, or 

7 both, other than duties or taxes that are 

8 waived, refunded, refundable, or otherwise 

9 recoverable, including credit against duty 

10 or tax paid or payable. 

11 (iii) The cost of waste and spoilage re12 sulting from the use of the material in the 

13 production of the good, less the value of 

14 renewable scrap or byproducts. 

15 (iv) The cost of originating materials 

16 used in the production of the nonorigi17 nating material in the territory of Panama, 

18 the United States, or both. 

19 (e) ACCUMULATION.— 

20 (1) ORIGINATING MATERIALS USED IN PRODUC21 TION OF GOODS OF THE OTHER COUNTRY.—Origi22 nating materials from the territory of Panama or 

23 the United States that are used in the production of 

24 a good in the territory of the other country shall be 


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1 considered to originate in the territory of such other 

2 country. 

3 (2) MULTIPLE PRODUCERS.—A good that is 

4 produced in the territory of Panama, the United 

5 States, or both, by 1 or more producers, is an origi6 nating good if the good satisfies the requirements of 

7 subsection (b) and all other applicable requirements 

8 of this section. 

9 (f) DE MINIMIS AMOUNTS OF NONORIGINATING MA10 TERIALS.— 

11 (1) IN GENERAL.—Except as provided in para12 graphs (2) and (3), a good that does not undergo a 

13 change in tariff classification pursuant to Annex 4.1 

14 of the Agreement is an originating good if— 

15 (A) the value of all nonoriginating mate16 rials that— 

17 (i) are used in the production of the 

18 good, and 

19 (ii) do not undergo the applicable 

20 change in tariff classification (set forth in 

21 Annex 4.1 of the Agreement), 

22 does not exceed 10 percent of the adjusted 

23 value of the good; 

24 (B) the good meets all other applicable re25 quirements of this section; and 


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1 (C) the value of such nonoriginating mate2 rials is included in the value of nonoriginating 

3 materials for any applicable regional value-con4 tent requirement for the good. 

5 (2) EXCEPTIONS.—Paragraph (1) does not 

6 apply to the following: 

7 (A) A nonoriginating material provided for 

8 in chapter 4, or a nonoriginating dairy prepara9 tion containing over 10 percent by weight of 

10 milk solids provided for in subheading 1901.90 

11 or 2106.90, that is used in the production of a 

12 good provided for in chapter 4. 

13 (B) A nonoriginating material provided for 

14 in chapter 4, or a nonoriginating dairy prepara15 tion containing over 10 percent by weight of 

16 milk solids provided for in subheading 1901.90, 

17 that is used in the production of the following 

18 goods: 

19 (i) Infant preparations containing 

20 over 10 percent by weight of milk solids 

21 provided for in subheading 1901.10. 

22 (ii) Mixes and doughs, containing over 

23 25 percent by weight of butterfat, not put 

24 up for retail sale, provided for in sub25 heading 1901.20. 


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1 (iii) Dairy preparations containing 

2 over 10 percent by weight of milk solids 

3 provided for in subheading 1901.90 or 

4 2106.90. 

5 (iv) Goods provided for in heading 

6 2105. 

7 (v) Beverages containing milk pro8 vided for in subheading 2202.90. 

9 (vi) Animal feeds containing over 10 

10 percent by weight of milk solids provided 

11 for in subheading 2309.90. 

12 (C) A nonoriginating material provided for 

13 in heading 0805, or any of subheadings 

14 2009.11 through 2009.39, that is used in the 

15 production of a good provided for in any of sub16 headings 2009.11 through 2009.39, or in fruit 

17 or vegetable juice of any single fruit or vege18 table, fortified with minerals or vitamins, con19 centrated or unconcentrated, provided for in 

20 subheading 2106.90 or 2202.90. 

21 (D) A nonoriginating material provided for 

22 in heading 0901 or 2101 that is used in the 

23 production of a good provided for in heading 

24 0901 or 2101. 


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1 (E) A nonoriginating material provided for 

2 in heading 1006 that is used in the production 

3 of a good provided for in heading 1102 or 1103 

4 or subheading 1904.90. 

5 (F) A nonoriginating material provided for 

6 in chapter 15 that is used in the production of 

7 a good provided for in chapter 15. 

8 (G) A nonoriginating material provided for 

9 in heading 1701 that is used in the production 

10 of a good provided for in any of headings 1701 

11 through 1703. 

12 (H) A nonoriginating material provided for 

13 in chapter 17 that is used in the production of 

14 a good provided for in subheading 1806.10. 

15 (I) Except as provided in subparagraphs 

16 (A) through (H) and Annex 4.1 of the Agree17 ment, a nonoriginating material used in the 

18 production of a good provided for in any of 

19 chapters 1 through 24, unless the nonorigi20 nating material is provided for in a different 

21 subheading than the good for which origin is 

22 being determined under this section. 

23 (3) TEXTILE OR APPAREL GOODS.— 

24 (A) IN GENERAL.—Except as provided in 

25 subparagraph (B), a textile or apparel good 


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1 that is not an originating good because certain 

2 fibers or yarns used in the production of the 

3 component of the good that determines the tar4 iff classification of the good do not undergo an 

5 applicable change in tariff classification, set 

6 forth in Annex 4.1 of the Agreement, shall be 

7 considered to be an originating good if— 

8 (i) the total weight of all such fibers 

9 or yarns in that component is not more 

10 than 10 percent of the total weight of that 

11 component; or 

12 (ii) the yarns are those described in 

13 section 204(b)(3)(B)(vi)(IV) of the Andean 

14 Trade Preference Act (19 U.S.C. 

15 3203(b)(3)(B)(vi)(IV)) (as in effect on 

16 February 12, 2011). 

17 (B) CERTAIN TEXTILE OR APPAREL

18 GOODS.—A textile or apparel good containing 

19 elastomeric yarns in the component of the good 

20 that determines the tariff classification of the 

21 good shall be considered to be an originating 

22 good only if such yarns are wholly formed and 

23 finished in the territory of Panama, the United 

24 States, or both. 


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1 (C) FABRIC, YARN, OR FIBER.—For pur2 poses of this paragraph, in the case of a good 

3 that is a fabric, yarn, or fiber, the term ‘‘com4 ponent of the good that determines the tariff 

5 classification of the good’’ means all of the fi6 bers in the good. 

7 (g) FUNGIBLE GOODS AND MATERIALS.— 

8 (1) IN GENERAL.— 

9 (A) CLAIM FOR PREFERENTIAL TARIFF

10 TREATMENT.—A person claiming that a fun11 gible good or fungible material is an originating 

12 good may base the claim either on the physical 

13 segregation of the fungible good or fungible ma14 terial or by using an inventory management 

15 method with respect to the fungible good or 

16 fungible material. 

17 (B) INVENTORY MANAGEMENT METHOD.— 

18 In this subsection, the term ‘‘inventory manage19 ment method’’ means— 

20 (i) averaging; 

21 (ii) ‘‘last-in, first-out’’; 

22 (iii) ‘‘first-in, first-out’’; or 

23 (iv) any other method— 

24 (I) recognized in the generally 

25 accepted accounting principles of the 


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1 country in which the production is 

2 performed (whether Panama or the 

3 United States); or 

4 (II) otherwise accepted by that 

5 country. 

6 (2) ELECTION OF INVENTORY METHOD.—A 

7 person selecting an inventory management method 

8 under paragraph (1) for a particular fungible good 

9 or fungible material shall continue to use that meth10 od for that fungible good or fungible material 

11 throughout the fiscal year of such person. 

12 (h) ACCESSORIES, SPARE PARTS, OR TOOLS.— 

13 (1) IN GENERAL.—Subject to paragraphs (2) 

14 and (3), accessories, spare parts, or tools delivered 

15 with a good that form part of the good’s standard 

16 accessories, spare parts, or tools shall— 

17 (A) be treated as originating goods if the 

18 good is an originating good; and 

19 (B) be disregarded in determining whether 

20 all the nonoriginating materials used in the pro21 duction of the good undergo the applicable 

22 change in tariff classification set forth in Annex 

23 4.1 of the Agreement. 

24 (2) CONDITIONS.—Paragraph (1) shall apply 

25 only if— 


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1 (A) the accessories, spare parts, or tools 

2 are classified with and not invoiced separately 

3 from the good, regardless of whether such ac4 cessories, spare parts, or tools are specified or 

5 are separately identified in the invoice for the 

6 good; and 

7 (B) the quantities and value of the acces8 sories, spare parts, or tools are customary for 

9 the good. 

10 (3) REGIONAL VALUE-CONTENT.—If the good is 

11 subject to a regional value-content requirement, the 

12 value of the accessories, spare parts, or tools shall 

13 be taken into account as originating or nonorigi14 nating materials, as the case may be, in calculating 

15 the regional value-content of the good. 

16 (i) PACKAGING MATERIALS AND CONTAINERS FOR

17 RETAIL SALE.—Packaging materials and containers in 

18 which a good is packaged for retail sale, if classified with 

19 the good, shall be disregarded in determining whether all 

20 the nonoriginating materials used in the production of the 

21 good undergo the applicable change in tariff classification 

22 set forth in Annex 4.1 of the Agreement, and, if the good 

23 is subject to a regional value-content requirement, the 

24 value of such packaging materials and containers shall be 

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1 rials, as the case may be, in calculating the regional value2 content of the good. 

3 (j) PACKING MATERIALS AND CONTAINERS FOR

4 SHIPMENT.—Packing materials and containers for ship5 ment shall be disregarded in determining whether a good 

6 is an originating good. 

7 (k) INDIRECT MATERIALS.—An indirect material 

8 shall be treated as an originating material without regard 

9 to where it is produced. 

10 (l) TRANSIT AND TRANSHIPMENT.—A good that has 

11 undergone production necessary to qualify as an origi12 nating good under subsection (b) shall not be considered 

13 to be an originating good if, subsequent to that produc14 tion, the good— 

15 (1) undergoes further production or any other 

16 operation outside the territory of Panama or the 

17 United States, other than unloading, reloading, or 

18 any other operation necessary to preserve the good 

19 in good condition or to transport the good to the ter20 ritory of Panama or the United States; or 

21 (2) does not remain under the control of cus22 toms authorities in the territory of a country other 

23 than Panama or the United States. 

24 (m) GOODS CLASSIFIABLE AS GOODS PUT UP IN

25 SETS.—Notwithstanding the rules set forth in Annex 4.1 


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1 of the Agreement, goods classifiable as goods put up in 

2 sets for retail sale as provided for in General Rule of Inter3 pretation 3 of the HTS shall not be considered to be origi4 nating goods unless— 

5 (1) each of the goods in the set is an origi6 nating good; or 

7 (2) the total value of the nonoriginating goods 

8 in the set does not exceed— 

9 (A) in the case of textile or apparel goods, 

10 10 percent of the adjusted value of the set; or 

11 (B) in the case of goods, other than textile 

12 or apparel goods, 15 percent of the adjusted 

13 value of the set. 

14 (n) DEFINITIONS.—In this section: 

15 (1) ADJUSTED VALUE.—The term ‘‘adjusted 

16 value’’ means the value determined in accordance 

17 with Articles 1 through 8, Article 15, and the cor18 responding interpretive notes, of the Agreement on 

19 Implementation of Article VII of the General Agree20 ment on Tariffs and Trade 1994 referred to in sec21 tion 101(d)(8) of the Uruguay Round Agreements 

22 Act (19 U.S.C. 3511(d)(8)), adjusted, if necessary, 

23 to exclude any costs, charges, or expenses incurred 

24 for transportation, insurance, and related services 

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1 chandise from the country of exportation to the 

2 place of importation. 

3 (2) CLASS OF MOTOR VEHICLES.—The term 

4 ‘‘class of motor vehicles’’ means any one of the fol5 lowing categories of motor vehicles: 

6 (A) Motor vehicles provided for in sub7 heading 8701.20, 8704.10, 8704.22, 8704.23, 

8 8704.32, or 8704.90, or heading 8705 or 8706, 

9 or motor vehicles for the transport of 16 or 

10 more persons provided for in subheading 

11 8702.10 or 8702.90. 

12 (B) Motor vehicles provided for in sub13 heading 8701.10 or any of subheadings 

14 8701.30 through 8701.90. 

15 (C) Motor vehicles for the transport of 15 

16 or fewer persons provided for in subheading 

17 8702.10 or 8702.90, or motor vehicles provided 

18 for in subheading 8704.21 or 8704.31. 

19 (D) Motor vehicles provided for in any of 

20 subheadings 8703.21 through 8703.90. 

21 (3) FUNGIBLE GOOD OR FUNGIBLE MATE22 RIAL.—The term ‘‘fungible good’’ or ‘‘fungible mate23 rial’’ means a good or material, as the case may be, 

24 that is interchangeable with another good or mate25 rial for commercial purposes and the properties of 


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1 which are essentially identical to such other good or 

2 material. 

3 (4) GENERALLY ACCEPTED ACCOUNTING PRIN4 CIPLES.—The term ‘‘generally accepted accounting 

5 principles’’— 

6 (A) means the recognized consensus or 

7 substantial authoritative support given in the 

8 territory of Panama or the United States, as 

9 the case may be, with respect to the recording 

10 of revenues, expenses, costs, assets, and liabil11 ities, the disclosure of information, and the 

12 preparation of financial statements; and 

13 (B) may encompass broad guidelines for 

14 general application as well as detailed stand15 ards, practices, and procedures. 

16 (5) GOOD WHOLLY OBTAINED OR PRODUCED

17 ENTIRELY IN THE TERRITORY OF PANAMA, THE

18 UNITED STATES, OR BOTH.—The term ‘‘good wholly 

19 obtained or produced entirely in the territory of 

20 Panama, the United States, or both’’ means any of 

21 the following: 

22 (A) Plants and plant products harvested or 

23 gathered in the territory of Panama, the United 

24 States, or both. 


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1 (B) Live animals born and raised in the 

2 territory of Panama, the United States, or 

3 both. 

4 (C) Goods obtained in the territory of Pan5 ama, the United States, or both from live ani6 mals. 

7 (D) Goods obtained from hunting, trap8 ping, fishing, or aquaculture conducted in the 

9 territory of Panama, the United States, or 

10 both. 

11 (E) Minerals and other natural resources 

12 not included in subparagraphs (A) through (D) 

13 that are extracted or taken from the territory 

14 of Panama, the United States, or both. 

15 (F) Fish, shellfish, and other marine life 

16 taken from the sea, seabed, or subsoil outside 

17 the territory of Panama or the United States 

18 by— 

19 (i) a vessel that is registered or re20 corded with Panama and flying the flag of 

21 Panama; or 

22 (ii) a vessel that is documented under 

23 the laws of the United States. 


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1 (G) Goods produced on board a factory 

2 ship from goods referred to in subparagraph 

3 (F), if such factory ship— 

4 (i) is registered or recorded with Pan5 ama and flies the flag of Panama; or 

6 (ii) is a vessel that is documented 

7 under the laws of the United States. 

8 (H)(i) Goods taken by Panama or a person 

9 of Panama from the seabed or subsoil outside 

10 the territorial waters of Panama, if Panama 

11 has rights to exploit such seabed or subsoil. 

12 (ii) Goods taken by the United States or a 

13 person of the United States from the seabed or 

14 subsoil outside the territorial waters of the 

15 United States, if the United States has rights 

16 to exploit such seabed or subsoil. 

17 (I) Goods taken from outer space, if the 

18 goods are obtained by Panama or the United 

19 States or a person of Panama or the United 

20 States and not processed in the territory of a 

21 country other than Panama or the United 

22 States. 

23 (J) Waste and scrap derived from— 


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1 (i) manufacturing or processing oper2 ations in the territory of Panama, the 

3 United States, or both; or 

4 (ii) used goods collected in the terri5 tory of Panama, the United States, or 

6 both, if such goods are fit only for the re7 covery of raw materials. 

8 (K) Recovered goods derived in the terri9 tory of Panama, the United States, or both 

10 from used goods, and used in the territory of 

11 Panama, the United States, or both, in the pro12 duction of remanufactured goods. 

13 (L) Goods, at any stage of production, pro14 duced in the territory of Panama, the United 

15 States, or both, exclusively from— 

16 (i) goods referred to in any of sub17 paragraphs (A) through (J), or 

18 (ii) the derivatives of goods referred 

19 to in clause (i). 

20 (6) IDENTICAL GOODS.—The term ‘‘identical 

21 goods’’ means goods that are the same in all re22 spects relevant to the rule of origin that qualifies the 

23 goods as originating goods. 

24 (7) INDIRECT MATERIAL.—The term ‘‘indirect 

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1 ing, or inspection of another good but not physically 

2 incorporated into that other good, or a good used in 

3 the maintenance of buildings or the operation of 

4 equipment associated with the production of another 

5 good, including— 

6 (A) fuel and energy; 

7 (B) tools, dies, and molds; 

8 (C) spare parts and materials used in the 

9 maintenance of equipment or buildings; 

10 (D) lubricants, greases, compounding ma11 terials, and other materials used in production 

12 or used to operate equipment or buildings; 

13 (E) gloves, glasses, footwear, clothing, 

14 safety equipment, and supplies; 

15 (F) equipment, devices, and supplies used 

16 for testing or inspecting the good; 

17 (G) catalysts and solvents; and 

18 (H) any other good that is not incor19 porated into the other good but the use of 

20 which in the production of the other good can 

21 reasonably be demonstrated to be a part of that 

22 production. 

23 (8) MATERIAL.—The term ‘‘material’’ means a 

24 good that is used in the production of another good, 

25 including a part or an ingredient. 


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1 (9) MATERIAL THAT IS SELF-PRODUCED.—The 

2 term ‘‘material that is self-produced’’ means an orig3 inating material that is produced by a producer of 

4 a good and used in the production of that good. 

5 (10) MODEL LINE OF MOTOR VEHICLES.—The 

6 term ‘‘model line of motor vehicles’’ means a group 

7 of motor vehicles having the same platform or model 

8 name. 

9 (11) NET COST.—The term ‘‘net cost’’ means 

10 total cost minus sales promotion, marketing, and 

11 after-sales service costs, royalties, shipping and 

12 packing costs, and nonallowable interest costs that 

13 are included in the total cost. 

14 (12) NONALLOWABLE INTEREST COSTS.—The 

15 term ‘‘nonallowable interest costs’’ means interest 

16 costs incurred by a producer that exceed 700 basis 

17 points above the applicable official interest rate for 

18 comparable maturities of the country in which the 

19 producer is located. 

20 (13) NONORIGINATING GOOD OR NONORIGI21 NATING MATERIAL.—The term ‘‘nonoriginating 

22 good’’ or ‘‘nonoriginating material’’ means a good or 

23 material, as the case may be, that does not qualify 

24 as originating under this section. 


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1 (14) PACKING MATERIALS AND CONTAINERS

2 FOR SHIPMENT.—The term ‘‘packing materials and 

3 containers for shipment’’ means goods used to pro4 tect another good during its transportation and does 

5 not include the packaging materials and containers 

6 in which the other good is packaged for retail sale. 

7 (15) PREFERENTIAL TARIFF TREATMENT.— 

8 The term ‘‘preferential tariff treatment’’ means the 

9 customs duty rate, and the treatment under article 

10 3.10.4 of the Agreement, that are applicable to an 

11 originating good pursuant to the Agreement. 

12 (16) PRODUCER.—The term ‘‘producer’’ means 

13 a person who engages in the production of a good 

14 in the territory of Panama or the United States. 

15 (17) PRODUCTION.—The term ‘‘production’’ 

16 means growing, mining, harvesting, fishing, raising, 

17 trapping, hunting, manufacturing, processing, as18 sembling, or disassembling a good. 

19 (18) REASONABLY ALLOCATE.—The term ‘‘rea20 sonably allocate’’ means to apportion in a manner 

21 that would be appropriate under generally accepted 

22 accounting principles. 

23 (19) RECOVERED GOODS.—The term ‘‘recov24 ered goods’’ means materials in the form of indi25 vidual parts that are the result of— 


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1 (A) the disassembly of used goods into in2 dividual parts; and 

3 (B) the cleaning, inspecting, testing, or 

4 other processing that is necessary for improve5 ment to sound working condition of such indi6 vidual parts. 

7 (20) REMANUFACTURED GOOD.—The term ‘‘re8 manufactured good’’ means a good that is classified 

9 under chapter 84, 85, 87, or 90, or heading 9402, 

10 other than a good classified under heading 8418 or 

11 8516, and that— 

12 (A) is entirely or partially comprised of re13 covered goods; and 

14 (B) has a similar life expectancy and en15 joys a factory warranty similar to such a good 

16 that is new. 

17 (21) TOTAL COST.—The term ‘‘total cost’’ 

18 means all product costs, period costs, and other 

19 costs for a good incurred in the territory of Panama, 

20 the United States, or both. 

21 (22) USED.—The term ‘‘used’’ means utilized 

22 or consumed in the production of goods. 

23 (o) PRESIDENTIAL PROCLAMATION AUTHORITY.— 

24 (1) IN GENERAL.—The President is authorized 

25 to proclaim, as part of the HTS— 


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1 (A) the provisions set forth in Annex 4.1 

2 of the Agreement; and 

3 (B) any additional subordinate category 

4 that is necessary to carry out this title con5 sistent with the Agreement. 

6 (2) FABRICS, YARNS, OR FIBERS NOT AVAIL7 ABLE IN COMMERCIAL QUANTITIES IN THE UNITED

8 STATES.—The President is authorized to proclaim 

9 that a fabric, yarn, or fiber is added to the list in 

10 Annex 3.25 of the Agreement in an unrestricted 

11 quantity, as provided in article 3.25.4(e) of the 

12 Agreement. 

13 (3) MODIFICATIONS.— 

14 (A) IN GENERAL.—Subject to the consulta15 tion and layover provisions of section 104, the 

16 President may proclaim modifications to the 

17 provisions proclaimed under the authority of 

18 paragraph (1)(A), other than provisions of 

19 chapters 50 through 63 (as included in Annex 

20 4.1 of the Agreement). 

21 (B) ADDITIONAL PROCLAMATIONS.—Not22 withstanding subparagraph (A), and subject to 

23 the consultation and layover provisions of sec24 tion 104, the President may proclaim before the 

25 end of the 1-year period beginning on the date 


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1 on which the Agreement enters into force, 

2 modifications to correct any typographical, cler3 ical, or other nonsubstantive technical error re4 garding the provisions of chapters 50 through 

5 63 (as included in Annex 4.1 of the Agree6 ment). 

7 (4) FABRICS, YARNS, OR FIBERS NOT AVAIL8 ABLE IN COMMERCIAL QUANTITIES IN PANAMA AND

9 THE UNITED STATES.— 

10 (A) IN GENERAL.—Notwithstanding para11 graph (3)(A), the list of fabrics, yarns, and fi12 bers set forth in Annex 3.25 of the Agreement 

13 may be modified as provided for in this para14 graph. 

15 (B) DEFINITIONS.—In this paragraph: 

16 (i) INTERESTED ENTITY.—The term 

17 ‘‘interested entity’’ means the Government 

18 of Panama, a potential or actual purchaser 

19 of a textile or apparel good, or a potential 

20 or actual supplier of a textile or apparel 

21 good. 

22 (ii) DAY; DAYS.—All references to 

23 ‘‘day’’ and ‘‘days’’ exclude Saturdays, Sun24 days, and legal holidays observed by the 

25 Government of the United States. 


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1 (C) REQUESTS TO ADD FABRICS, YARNS, 

2 OR FIBERS.— 

3 (i) IN GENERAL.—An interested entity 

4 may request the President to determine 

5 that a fabric, yarn, or fiber is not available 

6 in commercial quantities in a timely man7 ner in Panama and the United States and 

8 to add that fabric, yarn, or fiber to the list 

9 in Annex 3.25 of the Agreement in a re10 stricted or unrestricted quantity. 

11 (ii) DETERMINATIONS.—After receiv12 ing a request under clause (i), the Presi13 dent may determine whether— 

14 (I) the fabric, yarn, or fiber is 

15 available in commercial quantities in a 

16 timely manner in Panama or the 

17 United States; or 

18 (II) any interested entity objects 

19 to the request. 

20 (iii) PROCLAMATION AUTHORITY.— 

21 The President may, within the time peri22 ods specified in clause (iv), proclaim that 

23 the fabric, yarn, or fiber that is the subject 

24 of the request is added to the list in Annex 

25 3.25 of the Agreement in an unrestricted 


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1 quantity, or in any restricted quantity that 

2 the President may establish, if the Presi3 dent has determined under clause (ii) 

4 that— 

5 (I) the fabric, yarn, or fiber is 

6 not available in commercial quantities 

7 in a timely manner in Panama and 

8 the United States; or 

9 (II) no interested entity has ob10 jected to the request. 

11 (iv) TIME PERIODS.—The time peri12 ods within which the President may issue 

13 a proclamation under clause (iii) are— 

14 (I) not later than 30 days after 

15 the date on which a request is sub16 mitted under clause (i); or 

17 (II) not later than 44 days after 

18 the request is submitted, if the Presi19 dent determines, within 30 days after 

20 the date on which the request is sub21 mitted, that the President does not 

22 have sufficient information to make a 

23 determination under clause (ii). 

24 (v) EFFECTIVE DATE.—Notwith25 standing section 103(a)(2), a proclamation 


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1 made under clause (iii) shall take effect on 

2 the date on which the text of the proclama3 tion is published in the Federal Register. 

4 (vi) ELIMINATION OF RESTRICTION.— 

5 Not later than 6 months after proclaiming 

6 under clause (iii) that a fabric, yarn, or 

7 fiber is added to the list in Annex 3.25 of 

8 the Agreement in a restricted quantity, the 

9 President may eliminate the restriction if 

10 the President determines that the fabric, 

11 yarn, or fiber is not available in commer12 cial quantities in a timely manner in Pan13 ama and the United States. 

14 (D) DEEMED APPROVAL OF REQUEST.—If, 

15 after an interested entity submits a request 

16 under subparagraph (C)(i), the President does 

17 not, within the applicable time period specified 

18 in subparagraph (C)(iv), make a determination 

19 under subparagraph (C)(ii) regarding the re20 quest, the fabric, yarn, or fiber that is the sub21 ject of the request shall be considered to be 

22 added, in an unrestricted quantity, to the list in 

23 Annex 3.25 of the Agreement beginning— 

24 (i) 45 days after the date on which 

25 the request is submitted; or 


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1 (ii) 60 days after the date on which 

2 the request is submitted, if the President 

3 made a determination under subparagraph 

4 (C)(iv)(II). 

5 (E) REQUESTS TO RESTRICT OR REMOVE

6 FABRICS, YARNS, OR FIBERS.— 

7 (i) IN GENERAL.—Subject to clause 

8 (ii), an interested entity may request the 

9 President to restrict the quantity of, or re10 move from the list in Annex 3.25 of the 

11 Agreement, any fabric, yarn, or fiber— 

12 (I) that has been added to that 

13 list in an unrestricted quantity pursu14 ant to paragraph (2) or subparagraph 

15 (C)(iii) or (D) of this paragraph; or 

16 (II) with respect to which the 

17 President has eliminated a restriction 

18 under subparagraph (C)(vi). 

19 (ii) TIME PERIOD FOR SUBMISSION.— 

20 An interested entity may submit a request 

21 under clause (i) at any time beginning on 

22 the date that is 6 months after the date of 

23 the action described in subclause (I) or (II) 

24 of that clause. 


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1 (iii) PROCLAMATION AUTHORITY.— 

2 Not later than 30 days after the date on 

3 which a request under clause (i) is sub4 mitted, the President may proclaim an ac5 tion provided for under clause (i) if the 

6 President determines that the fabric, yarn, 

7 or fiber that is the subject of the request 

8 is available in commercial quantities in a 

9 timely manner in Panama or the United 

10 States. 

11 (iv) EFFECTIVE DATE.—A proclama12 tion issued under clause (iii) may not take 

13 effect earlier than the date that is 6 

14 months after the date on which the text of 

15 the proclamation is published in the Fed16 eral Register. 

17 (F) PROCEDURES.—The President shall 

18 establish procedures— 

19 (i) governing the submission of a re20 quest under subparagraphs (C) and (E); 

21 and 

22 (ii) providing an opportunity for inter23 ested entities to submit comments and sup24 porting evidence before the President 


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1 makes a determination under subpara2 graph (C) (ii) or (vi) or (E)(iii). 

3 SEC. 204. CUSTOMS USER FEES. 

4 Section 13031(b) of the Consolidated Omnibus Budg5 et Reconciliation Act of 1985 (19 U.S.C. 58c(b)) is 

6 amended by adding after paragraph (20) the following: 

7 ‘‘(21) No fee may be charged under subsection (a)(9) 

8 or (10) with respect to goods that qualify as originating 

9 goods under section 203 of the United States–Panama 

10 Trade Promotion Agreement Implementation Act. Any 

11 service for which an exemption from such fee is provided 

12 by reason of this paragraph may not be funded with 

13 money contained in the Customs User Fee Account.’’. 

14 SEC. 205. DISCLOSURE OF INCORRECT INFORMATION; 

15 FALSE CERTIFICATIONS OF ORIGIN; DENIAL 

16 OF PREFERENTIAL TARIFF TREATMENT. 

17 (a) DISCLOSURE OF INCORRECT INFORMATION.— 

18 Section 592 of the Tariff Act of 1930 (19 U.S.C. 1592) 

19 is amended— 

20 (1) in subsection (c)— 

21 (A) by redesignating paragraph (13) as 

22 paragraph (14); and 

23 (B) by inserting after paragraph (12) the 

24 following new paragraph: 


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1 ‘‘(13) PRIOR DISCLOSURE REGARDING CLAIMS

2 UNDER THE UNITED STATES–PANAMA TRADE PRO3 MOTION AGREEMENT.—An importer shall not be 

4 subject to penalties under subsection (a) for making 

5 an incorrect claim that a good qualifies as an origi6 nating good under section 203 of the United States– 

7 Panama Trade Promotion Agreement Implementa8 tion Act if the importer, in accordance with regula9 tions issued by the Secretary of the Treasury, 

10 promptly and voluntarily makes a corrected declara11 tion and pays any duties owing with respect to that 

12 good.’’; and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(l) FALSE CERTIFICATIONS OF ORIGIN UNDER THE

16 UNITED STATES–PANAMA TRADE PROMOTION AGREE17 MENT.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

19 it is unlawful for any person to certify falsely, by 

20 fraud, gross negligence, or negligence, in a Panama 

21 TPA certification of origin (as defined in section 

22 508 of this Act) that a good exported from the 

23 United States qualifies as an originating good under 

24 the rules of origin provided for in section 203 of the 

25 United States–Panama Trade Promotion Agreement 


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1 Implementation Act. The procedures and penalties 

2 of this section that apply to a violation of subsection 

3 (a) also apply to a violation of this subsection. 

4 ‘‘(2) PROMPT AND VOLUNTARY DISCLOSURE OF

5 INCORRECT INFORMATION.—No penalty shall be im6 posed under this subsection if, promptly after an ex7 porter or producer that issued a Panama TPA cer8 tification of origin has reason to believe that such 

9 certification contains or is based on incorrect infor10 mation, the exporter or producer voluntarily provides 

11 written notice of such incorrect information to every 

12 person to whom the certification was issued. 

13 ‘‘(3) EXCEPTION.—A person shall not be con14 sidered to have violated paragraph (1) if— 

15 ‘‘(A) the information was correct at the 

16 time it was provided in a Panama TPA certifi17 cation of origin but was later rendered incorrect 

18 due to a change in circumstances; and 

19 ‘‘(B) the person promptly and voluntarily 

20 provides written notice of the change in cir21 cumstances to all persons to whom the person 

22 provided the certification.’’. 

23 (b) DENIAL OF PREFERENTIAL TARIFF TREAT24 MENT.—Section 514 of the Tariff Act of 1930 (19 U.S.C. 


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1 1514) is amended by adding at the end the following new 

2 subsection: 

3 ‘‘(l) DENIAL OF PREFERENTIAL TARIFF TREATMENT

4 UNDER THE UNITED STATES–PANAMA TRADE PRO5 MOTION AGREEMENT.—If U.S. Customs and Border Pro6 tection or U.S. Immigration and Customs Enforcement of 

7 the Department of Homeland Security finds indications 

8 of a pattern of conduct by an importer, exporter, or pro9 ducer of false or unsupported representations that goods 

10 qualify under the rules of origin provided for in section 

11 203 of the United States–Panama Trade Promotion 

12 Agreement Implementation Act, U.S. Customs and Border 

13 Protection, in accordance with regulations issued by the 

14 Secretary of the Treasury, may suspend preferential tariff 

15 treatment under the United States–Panama Trade Pro16 motion Agreement to entries of identical goods covered by 

17 subsequent representations by that importer, exporter, or 

18 producer until U.S. Customs and Border Protection deter19 mines that representations of that person are in con20 formity with such section 203.’’. 

21 SEC. 206. RELIQUIDATION OF ENTRIES. 

22 Section 520(d) of the Tariff Act of 1930 (19 U.S.C. 

23 1520(d)) is amended in the matter preceding paragraph 

24 (1)— 

25 (1) by striking ‘‘or’’; and 


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1 (2) by striking ‘‘for which’’ and inserting ‘‘, or 

2 section 203 of the United States–Panama Trade 

3 Promotion Agreement Implementation Act for 

4 which’’. 

5 SEC. 207. RECORDKEEPING REQUIREMENTS. 

6 Section 508 of the Tariff Act of 1930 (19 U.S.C. 

7 1508) is amended— 

8 (1) by redesignating subsection (k) as sub9 section (l); 

10 (2) by inserting after subsection (j) the fol11 lowing new subsection: 

12 ‘‘(k) CERTIFICATIONS OF ORIGIN FOR GOODS EX13 PORTED UNDER THE UNITED STATES–PANAMA TRADE

14 PROMOTION AGREEMENT.— 

15 ‘‘(1) DEFINITIONS.—In this subsection: 

16 ‘‘(A) RECORDS AND SUPPORTING DOCU17 MENTS.—The term ‘records and supporting 

18 documents’ means, with respect to an exported 

19 good under paragraph (2), records and docu20 ments related to the origin of the good, includ21 ing— 

22 ‘‘(i) the purchase, cost, and value of, 

23 and payment for, the good; 

24 ‘‘(ii) the purchase, cost, and value of, 

25 and payment for, all materials, including 


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1 indirect materials, used in the production 

2 of the good; and 

3 ‘‘(iii) the production of the good in 

4 the form in which it was exported. 

5 ‘‘(B) PANAMA TPA CERTIFICATION OF ORI6 GIN.—The term ‘Panama TPA certification of 

7 origin’ means the certification established under 

8 article 4.15 of the United States–Panama 

9 Trade Promotion Agreement that a good quali10 fies as an originating good under such Agree11 ment. 

12 ‘‘(2) EXPORTS TO PANAMA.—Any person who 

13 completes and issues a Panama TPA certification of 

14 origin for a good exported from the United States 

15 shall make, keep, and, pursuant to rules and regula16 tions promulgated by the Secretary of the Treasury, 

17 render for examination and inspection all records 

18 and supporting documents related to the origin of 

19 the good (including the certification or copies there20 of). 

21 ‘‘(3) RETENTION PERIOD.—The person who 

22 issues a Panama TPA certification of origin shall 

23 keep the records and supporting documents relating 

24 to that certification of origin for a period of at least 


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1 5 years after the date on which the certification is 

2 issued.’’; and 

3 (3) in subsection (l), as so redesignated, by 

4 striking ‘‘(i), or (j)’’ and inserting ‘‘(i), (j), or (k)’’. 

5 SEC. 208. ENFORCEMENT RELATING TO TRADE IN TEXTILE 

6 OR APPAREL GOODS. 

7 (a) ACTION DURING VERIFICATION.— 

8 (1) IN GENERAL.—If the Secretary of the 

9 Treasury requests the Government of Panama to 

10 conduct a verification pursuant to article 3.21 of the 

11 Agreement for purposes of making a determination 

12 under paragraph (2), the President may direct the 

13 Secretary to take appropriate action described in 

14 subsection (b) while the verification is being con15 ducted. 

16 (2) DETERMINATION.—A determination under 

17 this paragraph is a determination of the Secretary 

18 that— 

19 (A) an enterprise in Panama is complying 

20 with applicable customs laws, regulations, and 

21 procedures regarding trade in textile or apparel 

22 goods, or 

23 (B) a claim that a textile or apparel good 

24 exported or produced by such enterprise— 


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1 (i) qualifies as an originating good 

2 under section 203, or 

3 (ii) is a good of Panama, 

4 is accurate. 

5 (b) APPROPRIATE ACTION DESCRIBED.—Appropriate 

6 action under subsection (a)(1) includes— 

7 (1) suspension of preferential tariff treatment 

8 under the Agreement with respect to— 

9 (A) any textile or apparel good exported or 

10 produced by the person that is the subject of a 

11 verification under subsection (a)(1) regarding 

12 compliance described in subsection (a)(2)(A), if 

13 the Secretary of the Treasury determines that 

14 there is insufficient information to support any 

15 claim for preferential tariff treatment that has 

16 been made with respect to any such good; or 

17 (B) the textile or apparel good for which a 

18 claim of preferential tariff treatment has been 

19 made that is the subject of a verification under 

20 subsection (a)(1) regarding a claim described in 

21 subsection (a)(2)(B), if the Secretary deter22 mines that there is insufficient information to 

23 support that claim; 

24 (2) denial of preferential tariff treatment under 

25 the Agreement with respect to— 


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1 (A) any textile or apparel good exported or 

2 produced by the person that is the subject of a 

3 verification under subsection (a)(1) regarding 

4 compliance described in subsection (a)(2)(A), if 

5 the Secretary determines that the person has 

6 provided incorrect information to support any 

7 claim for preferential tariff treatment that has 

8 been made with respect to any such good; or 

9 (B) the textile or apparel good for which a 

10 claim of preferential tariff treatment has been 

11 made that is the subject of a verification under 

12 subsection (a)(1) regarding a claim described in 

13 subsection (a)(2)(B), if the Secretary deter14 mines that a person has provided incorrect in15 formation to support that claim; 

16 (3) detention of any textile or apparel good ex17 ported or produced by the person that is the subject 

18 of a verification under subsection (a)(1) regarding 

19 compliance described in subsection (a)(2)(A) or a 

20 claim described in subsection (a)(2)(B), if the Sec21 retary determines that there is insufficient informa22 tion to determine the country of origin of any such 

23 good; and 

24 (4) denial of entry into the United States of 

25 any textile or apparel good exported or produced by 


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1 the person that is the subject of a verification under 

2 subsection (a)(1) regarding compliance described in 

3 subsection (a)(2)(A) or a claim described in sub4 section (a)(2)(B), if the Secretary determines that 

5 the person has provided incorrect information as to 

6 the country of origin of any such good. 

7 (c) ACTION ON COMPLETION OF A VERIFICATION.— 

8 On completion of a verification under subsection (a), the 

9 President may direct the Secretary of the Treasury to take 

10 appropriate action described in subsection (d) until such 

11 time as the Secretary receives information sufficient to 

12 make the determination under subsection (a)(2) or until 

13 such earlier date as the President may direct. 

14 (d) APPROPRIATE ACTION DESCRIBED.—Appro15 priate action under subsection (c) includes— 

16 (1) denial of preferential tariff treatment under 

17 the Agreement with respect to— 

18 (A) any textile or apparel good exported or 

19 produced by the person that is the subject of a 

20 verification under subsection (a)(1) regarding 

21 compliance described in subsection (a)(2)(A), if 

22 the Secretary of the Treasury determines that 

23 there is insufficient information to support, or 

24 that the person has provided incorrect informa25 tion to support, any claim for preferential tariff 


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1 treatment that has been made with respect to 

2 any such good; or 

3 (B) the textile or apparel good for which a 

4 claim of preferential tariff treatment has been 

5 made that is the subject of a verification under 

6 subsection (a)(1) regarding a claim described in 

7 subsection (a)(2)(B), if the Secretary deter8 mines that there is insufficient information to 

9 support, or that a person has provided incorrect 

10 information to support, that claim; and 

11 (2) denial of entry into the United States of 

12 any textile or apparel good exported or produced by 

13 the person that is the subject of a verification under 

14 subsection (a)(1) regarding compliance described in 

15 subsection (a)(2)(A) or a claim described in sub16 section (a)(2)(B), if the Secretary determines that 

17 there is insufficient information to determine, or 

18 that the person has provided incorrect information 

19 as to, the country of origin of any such good. 

20 (e) PUBLICATION OF NAME OF PERSON.—In accord21 ance with article 3.21.9 of the Agreement, the Secretary 

22 of the Treasury may publish the name of any person that 

23 the Secretary has determined— 


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1 (1) is engaged in intentional circumvention of 

2 applicable laws, regulations, or procedures affecting 

3 trade in textile or apparel goods; or 

4 (2) has failed to demonstrate that it produces, 

5 or is capable of producing, the textile or apparel 

6 goods that are the subject of a verification under 

7 subsection (a)(1). 

8 SEC. 209. REGULATIONS. 

9 The Secretary of the Treasury shall prescribe such 

10 regulations as may be necessary to carry out— 

11 (1) subsections (a) through (n) of section 203; 

12 (2) the amendment made by section 204; and 

13 (3) any proclamation issued under section 

14 203(o). 

15 TITLE III—RELIEF FROM 

16 IMPORTS 

17 SEC. 301. DEFINITIONS. 

18 In this title: 

19 (1) PANAMANIAN ARTICLE.—The term ‘‘Pan20 amanian article’’ means an article that qualifies as 

21 an originating good under section 203(b). 

22 (2) PANAMANIAN TEXTILE OR APPAREL ARTI23 CLE.—The term ‘‘Panamanian textile or apparel ar24 ticle’’ means a textile or apparel good (as defined in 

25 section 3(4)) that is a Panamanian article. 


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1 Subtitle A—Relief From Imports 

2 Benefitting From the Agreement 

3 SEC. 311. COMMENCING OF ACTION FOR RELIEF. 

4 (a) FILING OF PETITION.—A petition requesting ac5 tion under this subtitle for the purpose of adjusting to 

6 the obligations of the United States under the Agreement 

7 may be filed with the Commission by an entity, including 

8 a trade association, firm, certified or recognized union, or 

9 group of workers, that is representative of an industry. 

10 The Commission shall transmit a copy of any petition filed 

11 under this subsection to the United States Trade Rep12 resentative. 

13 (b) INVESTIGATION AND DETERMINATION.—Upon 

14 the filing of a petition under subsection (a), the Commis15 sion, unless subsection (d) applies, shall promptly initiate 

16 an investigation to determine whether, as a result of the 

17 reduction or elimination of a duty provided for under the 

18 Agreement, a Panamanian article is being imported into 

19 the United States in such increased quantities, in absolute 

20 terms or relative to domestic production, and under such 

21 conditions that imports of the Panamanian article con22 stitute a substantial cause of serious injury or threat 

23 thereof to the domestic industry producing an article that 

24 is like, or directly competitive with, the imported article. 


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1 (c) APPLICABLE PROVISIONS.—The following provi2 sions of section 202 of the Trade Act of 1974 (19 U.S.C. 

3 2252) apply with respect to any investigation initiated 

4 under subsection (b): 

5 (1) Paragraphs (1)(B) and (3) of subsection 

6 (b). 

7 (2) Subsection (c). 

8 (3) Subsection (i). 

9 (d) ARTICLES EXEMPT FROM INVESTIGATION.—No 

10 investigation may be initiated under this section with re11 spect to any Panamanian article if, after the date on which 

12 the Agreement enters into force, import relief has been 

13 provided with respect to that Panamanian article under 

14 this subtitle. 

15 SEC. 312. COMMISSION ACTION ON PETITION. 

16 (a) DETERMINATION.—Not later than 120 days after 

17 the date on which an investigation is initiated under sec18 tion 311(b) with respect to a petition, the Commission 

19 shall make the determination required under that section. 

20 (b) APPLICABLE PROVISIONS.—For purposes of this 

21 subtitle, the provisions of paragraphs (1), (2), and (3) of 

22 section 330(d) of the Tariff Act of 1930 (19 U.S.C. 

23 1330(d) (1), (2), and (3)) shall be applied with respect 

24 to determinations and findings made under this section 


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1 as if such determinations and findings were made under 

2 section 202 of the Trade Act of 1974 (19 U.S.C. 2252). 

3 (c) ADDITIONAL FINDING AND RECOMMENDATION IF

4 DETERMINATION AFFIRMATIVE.— 

5 (1) IN GENERAL.—If the determination made 

6 by the Commission under subsection (a) with respect 

7 to imports of an article is affirmative, or if the 

8 President may consider a determination of the Com9 mission to be an affirmative determination as pro10 vided for under paragraph (1) of section 330(d) of 

11 the Tariff Act of 1930 (19 U.S.C. 1330(d)(1)), the 

12 Commission shall find, and recommend to the Presi13 dent in the report required under subsection (d), the 

14 amount of import relief that is necessary to remedy 

15 or prevent the injury found by the Commission in 

16 the determination and to facilitate the efforts of the 

17 domestic industry to make a positive adjustment to 

18 import competition. 

19 (2) LIMITATION ON RELIEF.—The import relief 

20 recommended by the Commission under this sub21 section shall be limited to the relief described in sec22 tion 313(c). 

23 (3) VOTING; SEPARATE VIEWS.—Only those 

24 members of the Commission who voted in the af25 firmative under subsection (a) are eligible to vote on 


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1 the proposed action to remedy or prevent the injury 

2 found by the Commission. Members of the Commis3 sion who did not vote in the affirmative may submit, 

4 in the report required under subsection (d), separate 

5 views regarding what action, if any, should be taken 

6 to remedy or prevent the injury. 

7 (d) REPORT TO PRESIDENT.—Not later than the 

8 date that is 30 days after the date on which a determina9 tion is made under subsection (a) with respect to an inves10 tigation, the Commission shall submit to the President a 

11 report that includes— 

12 (1) the determination made under subsection 

13 (a) and an explanation of the basis for the deter14 mination; 

15 (2) if the determination under subsection (a) is 

16 affirmative, any findings and recommendations for 

17 import relief made under subsection (c) and an ex18 planation of the basis for each recommendation; and 

19 (3) any dissenting or separate views by mem20 bers of the Commission regarding the determination 

21 referred to in paragraph (1) and any finding or rec22 ommendation referred to in paragraph (2). 

23 (e) PUBLIC NOTICE.—Upon submitting a report to 

24 the President under subsection (d), the Commission shall 

25 promptly make public the report (with the exception of 


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1 information which the Commission determines to be con2 fidential) and shall publish a summary of the report in 

3 the Federal Register. 

4 SEC. 313. PROVISION OF RELIEF. 

5 (a) IN GENERAL.—Not later than the date that is 

6 30 days after the date on which the President receives a 

7 report of the Commission in which the Commission’s de8 termination under section 312(a) is affirmative, or which 

9 contains a determination under section 312(a) that the 

10 President considers to be affirmative under paragraph (1) 

11 of section 330(d) of the Tariff Act of 1930 (19 U.S.C. 

12 1330(d)(1)), the President, subject to subsection (b), shall 

13 provide relief from imports of the article that is the subject 

14 of such determination to the extent that the President de15 termines necessary to remedy or prevent the injury found 

16 by the Commission and to facilitate the efforts of the do17 mestic industry to make a positive adjustment to import 

18 competition. 

19 (b) EXCEPTION.—The President is not required to 

20 provide import relief under this section if the President 

21 determines that the provision of the import relief will not 

22 provide greater economic and social benefits than costs. 

23 (c) NATURE OF RELIEF.— 


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1 (1) IN GENERAL.—The import relief that the 

2 President is authorized to provide under this section 

3 with respect to imports of an article is as follows: 

4 (A) The suspension of any further reduc5 tion provided for under Annex 3.3 of the Agree6 ment in the duty imposed on the article. 

7 (B) An increase in the rate of duty im8 posed on the article to a level that does not ex9 ceed the lesser of— 

10 (i) the column 1 general rate of duty 

11 imposed under the HTS on like articles at 

12 the time the import relief is provided; or 

13 (ii) the column 1 general rate of duty 

14 imposed under the HTS on like articles on 

15 the day before the date on which the 

16 Agreement enters into force. 

17 (2) PROGRESSIVE LIBERALIZATION.—If the pe18 riod for which import relief is provided under this 

19 section is greater than 1 year, the President shall 

20 provide for the progressive liberalization (described 

21 in article 8.2.3 of the Agreement) of such relief at 

22 regular intervals during the period of its application. 

23 (d) PERIOD OF RELIEF.— 

24 (1) IN GENERAL.—Subject to paragraph (2), 

25 any import relief that the President provides under 


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1 this section may not, in the aggregate, be in effect 

2 for more than 4 years. 

3 (2) EXTENSION.— 

4 (A) IN GENERAL.—If the initial period for 

5 any import relief provided under this section is 

6 less than 4 years, the President, after receiving 

7 a determination from the Commission under 

8 subparagraph (B) that is affirmative, or which 

9 the President considers to be affirmative under 

10 paragraph (1) of section 330(d) of the Tariff 

11 Act of 1930 (19 U.S.C. 1330(d)(1)), may ex12 tend the effective period of any import relief 

13 provided under this section, subject to the limi14 tation under paragraph (1), if the President de15 termines that— 

16 (i) the import relief continues to be 

17 necessary to remedy or prevent serious in18 jury and to facilitate adjustment by the do19 mestic industry to import competition; and 

20 (ii) there is evidence that the industry 

21 is making a positive adjustment to import 

22 competition. 

23 (B) ACTION BY COMMISSION.— 

24 (i) INVESTIGATION.—Upon a petition 

25 on behalf of the industry concerned that is 


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1 filed with the Commission not earlier than 

2 the date that is 9 months, and not later 

3 than the date that is 6 months, before the 

4 date on which any action taken under sub5 section (a) is to terminate, the Commission 

6 shall conduct an investigation to determine 

7 whether action under this section continues 

8 to be necessary to remedy or prevent seri9 ous injury and whether there is evidence 

10 that the industry is making a positive ad11 justment to import competition. 

12 (ii) NOTICE AND HEARING.—The 

13 Commission shall publish notice of the 

14 commencement of any proceeding under 

15 this subparagraph in the Federal Register 

16 and shall, within a reasonable time there17 after, hold a public hearing at which the 

18 Commission shall afford interested parties 

19 and consumers an opportunity to be 

20 present, to present evidence, and to re21 spond to the presentations of other parties 

22 and consumers, and otherwise to be heard. 

23 (iii) REPORT.—The Commission shall 

24 submit to the President a report on its in25 vestigation and determination under this 


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1 subparagraph not later than 60 days be2 fore the action under subsection (a) is to 

3 terminate, unless the President specifies a 

4 different date. 

5 (e) RATE AFTER TERMINATION OF IMPORT RE6 LIEF.—When import relief under this section is termi7 nated with respect to an article— 

8 (1) the rate of duty on that article after such 

9 termination and on or before December 31 of the 

10 year in which such termination occurs shall be the 

11 rate that, according to the Schedule of the United 

12 States to Annex 3.3 of the Agreement, would have 

13 been in effect 1 year after the provision of relief 

14 under subsection (a); and 

15 (2) the rate of duty for that article after De16 cember 31 of the year in which such termination oc17 curs shall be, at the discretion of the President, ei18 ther— 

19 (A) the applicable rate of duty for that ar20 ticle set forth in the Schedule of the United 

21 States to Annex 3.3 of the Agreement; or 

22 (B) the rate of duty resulting from the 

23 elimination of the tariff in equal annual stages 

24 ending on the date set forth in the Schedule of 


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1 the United States to Annex 3.3 of the Agree2 ment for the elimination of the tariff. 

3 (f) ARTICLES EXEMPT FROM RELIEF.—No import 

4 relief may be provided under this section on— 

5 (1) any article that is subject to import relief 

6 under— 

7 (A) subtitle B; or 

8 (B) chapter 1 of title II of the Trade Act 

9 of 1974 (19 U.S.C. 2251 et seq.); or 

10 (2) any article on which an additional duty as11 sessed under section 202(b) is in effect. 

12 SEC. 314. TERMINATION OF RELIEF AUTHORITY. 

13 (a) GENERAL RULE.—Subject to subsection (b), no 

14 import relief may be provided under this subtitle after the 

15 date that is 10 years after the date on which the Agree16 ment enters into force. 

17 (b) EXCEPTION.—If an article for which relief is pro18 vided under this subtitle is an article for which the period 

19 for tariff elimination, set forth in the Schedule of the 

20 United States to Annex 3.3 of the Agreement, is greater 

21 than 10 years, no relief under this subtitle may be pro22 vided for that article after the date on which that period 

23 ends. 


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1 SEC. 315. COMPENSATION AUTHORITY. 

2 For purposes of section 123 of the Trade Act of 1974 

3 (19 U.S.C. 2133), any import relief provided by the Presi4 dent under section 313 shall be treated as action taken 

5 under chapter 1 of title II of such Act (19 U.S.C. 2251 

6 et seq.). 

7 SEC. 316. CONFIDENTIAL BUSINESS INFORMATION. 

8 Section 202(a)(8) of the Trade Act of 1974 (19 

9 U.S.C. 2252(a)(8)) is amended in the first sentence— 

10 (1) by striking ‘‘and’’; and 

11 (2) by inserting before the period at the end ‘‘, 

12 and title III of the United States–Panama Trade 

13 Promotion Agreement Implementation Act’’. 

14 Subtitle B—Textile and Apparel 

15 Safeguard Measures 

16 SEC. 321. COMMENCEMENT OF ACTION FOR RELIEF. 

17 (a) IN GENERAL.—A request for action under this 

18 subtitle for the purpose of adjusting to the obligations of 

19 the United States under the Agreement may be filed with 

20 the President by an interested party. Upon the filing of 

21 a request, the President shall review the request to deter22 mine, from information presented in the request, whether 

23 to commence consideration of the request. 

24 (b) PUBLICATION OF REQUEST.—If the President de25 termines that the request under subsection (a) provides 

26 the information necessary for the request to be considered, 


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1 the President shall publish in the Federal Register a no2 tice of commencement of consideration of the request, and 

3 notice seeking public comments regarding the request. The 

4 notice shall include a summary of the request and the 

5 dates by which comments and rebuttals must be received. 

6 SEC. 322. DETERMINATION AND PROVISION OF RELIEF. 

7 (a) DETERMINATION.— 

8 (1) IN GENERAL.—If a positive determination is 

9 made under section 321(b), the President shall de10 termine whether, as a result of the elimination of a 

11 duty under the Agreement, a Panamanian textile or 

12 apparel article is being imported into the United 

13 States in such increased quantities, in absolute 

14 terms or relative to the domestic market for that ar15 ticle, and under such conditions as to cause serious 

16 damage, or actual threat thereof, to a domestic in17 dustry producing an article that is like, or directly 

18 competitive with, the imported article. 

19 (2) SERIOUS DAMAGE.—In making a deter20 mination under paragraph (1), the President— 

21 (A) shall examine the effect of increased 

22 imports on the domestic industry, as reflected 

23 in changes in such relevant economic factors as 

24 output, productivity, utilization of capacity, in25 ventories, market share, exports, wages, emVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 E:\BILLS\S1643.RS S1643

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1 ployment, domestic prices, profits, and invest2 ment, no one of which is necessarily decisive; 

3 and 

4 (B) shall not consider changes in consumer 

5 preference or changes in technology as factors 

6 supporting a determination of serious damage 

7 or actual threat thereof. 

8 (3) DEADLINE FOR DETERMINATION.—The 

9 President shall make the determination under para10 graph (1) not later than 30 days after the comple11 tion of any consultations held pursuant to article 

12 3.24.4 of the Agreement. 

13 (b) PROVISION OF RELIEF.— 

14 (1) IN GENERAL.—If a determination under 

15 subsection (a) is affirmative, the President may pro16 vide relief from imports of the article that is the 

17 subject of such determination, as provided in para18 graph (2), to the extent that the President deter19 mines necessary to remedy or prevent the serious 

20 damage and to facilitate adjustment by the domestic 

21 industry. 

22 (2) NATURE OF RELIEF.—The relief that the 

23 President is authorized to provide under this sub24 section with respect to imports of an article is an inVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S1643.RS S1643

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1 crease in the rate of duty imposed on the article to 

2 a level that does not exceed the lesser of— 

3 (A) the column 1 general rate of duty im4 posed under the HTS on like articles at the 

5 time the import relief is provided; or 

6 (B) the column 1 general rate of duty im7 posed under the HTS on like articles on the 

8 day before the date on which the Agreement en9 ters into force. 

10 SEC. 323. PERIOD OF RELIEF. 

11 (a) IN GENERAL.—Subject to subsection (b), any im12 port relief that the President provides under section 

13 322(b) may not, in the aggregate, be in effect for more 

14 than 3 years. 

15 (b) EXTENSION.—If the initial period for any import 

16 relief provided under section 322 is less than 3 years, the 

17 President may extend the effective period of any import 

18 relief provided under that section, subject to the limitation 

19 set forth in subsection (a), if the President determines 

20 that— 

21 (1) the import relief continues to be necessary 

22 to remedy or prevent serious damage and to facili23 tate adjustment by the domestic industry to import 

24 competition; and 


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1 (2) there is evidence that the industry is mak2 ing a positive adjustment to import competition. 

3 SEC. 324. ARTICLES EXEMPT FROM RELIEF. 

4 The President may not provide import relief under 

5 this subtitle with respect to an article if— 

6 (1) import relief previously has been provided 

7 under this subtitle with respect to that article; or 

8 (2) the article is subject to import relief 

9 under— 

10 (A) subtitle A; or 

11 (B) chapter 1 of title II of the Trade Act 

12 of 1974 (19 U.S.C. 2251 et seq.). 

13 SEC. 325. RATE AFTER TERMINATION OF IMPORT RELIEF. 

14 On the date on which import relief under this subtitle 

15 is terminated with respect to an article, the rate of duty 

16 on that article shall be the rate that would have been in 

17 effect but for the provision of such relief. 

18 SEC. 326. TERMINATION OF RELIEF AUTHORITY. 

19 No import relief may be provided under this subtitle 

20 with respect to any article after the date that is 5 years 

21 after the date on which the Agreement enters into force. 

22 SEC. 327. COMPENSATION AUTHORITY. 

23 For purposes of section 123 of the Trade Act of 1974 

24 (19 U.S.C. 2133), any import relief provided by the Presi25 dent under this subtitle shall be treated as action taken 


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1 under chapter 1 of title II of such Act (19 U.S.C. 2251 

2 et seq.). 

3 SEC. 328. CONFIDENTIAL BUSINESS INFORMATION. 

4 The President may not release information received 

5 in connection with an investigation or determination under 

6 this subtitle which the President considers to be confiden7 tial business information unless the party submitting the 

8 confidential business information had notice, at the time 

9 of submission, that such information would be released by 

10 the President, or such party subsequently consents to the 

11 release of the information. To the extent a party submits 

12 confidential business information, the party shall also pro13 vide a nonconfidential version of the information in which 

14 the confidential business information is summarized or, if 

15 necessary, deleted. 

16 Subtitle C—Cases Under Title II of 

17 the Trade Act of 1974 

18 SEC. 331. FINDINGS AND ACTION ON PANAMANIAN ARTI19 CLES. 

20 (a) EFFECT OF IMPORTS.—If, in any investigation 

21 initiated under chapter 1 of title II of the Trade Act of 

22 1974 (19 U.S.C. 2251 et seq.), the Commission makes an 

23 affirmative determination (or a determination which the 

24 President may treat as an affirmative determination under 

25 such chapter by reason of section 330(d) of the Tariff Act 


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1 of 1930 (19 U.S.C. 1330(d))), the Commission shall also 

2 find (and report to the President at the time such injury 

3 determination is submitted to the President) whether im4 ports of the Panamanian article are a substantial cause 

5 of serious injury or threat thereof. 

6 (b) PRESIDENTIAL DETERMINATION REGARDING IM7 PORTS OF PANAMANIAN ARTICLES.—In determining the 

8 nature and extent of action to be taken under chapter 1 

9 of title II of the Trade Act of 1974 (19 U.S.C. 2251 et 

10 seq.), the President may exclude from the action Panama11 nian articles with respect to which the Commission has 

12 made a negative finding under subsection (a). 

13 TITLE IV—MISCELLANEOUS 

14 SEC. 401. ELIGIBLE PRODUCTS. 

15 Section 308(4)(A) of the Trade Agreements Act of 

16 1979 (19 U.S.C. 2518(4)(A)) is amended— 

17 (1) by striking ‘‘or’’ at the end of clause (viii); 

18 (2) by striking the period at the end of clause 

19 (ix) and inserting ‘‘; or’’; and 

20 (3) by adding at the end the following new 

21 clause: 

22 ‘‘(x) a party to the United States– 

23 Panama Trade Promotion Agreement, a 

24 product or service of that country or in25 strumentality which is covered under that 


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1 agreement for procurement by the United 

2 States.’’. 

3 SEC. 402. MODIFICATION TO THE CARIBBEAN BASIN ECO4 NOMIC RECOVERY ACT. 

5 (a) IN GENERAL.—Section 212(b) of the Caribbean 

6 Basin Economic Recovery Act (19 U.S.C. 2702(b)) is 

7 amended by striking ‘‘Panama’’ from the list of countries 

8 eligible for designation as beneficiary countries. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 subsection (a) takes effect on the date on which the Presi11 dent terminates the designation of Panama as a bene12 ficiary country pursuant to section 201(a)(3) of this Act. 

13 TITLE V—OFFSETS 

14 SEC. 501. EXTENSION OF CUSTOMS USER FEES. 

15 Section 13031(j)(3) of the Consolidated Omnibus 

16 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) 

17 is amended by adding at the end the following: 

18 ‘‘(D) Notwithstanding subparagraph (B)(i), fees may 

19 be charged under paragraphs (1) through (8) of sub20 section (a) during the period beginning on September 1, 

21 2021, and ending on September 30, 2021.’’. 

22 SEC. 502. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

23 TAXES. 

24 Notwithstanding section 6655 of the Internal Rev25 enue Code of 1986, in the case of a corporation with assets 


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1 of not less than $1,000,000,000 (determined as of the end 

2 of the preceding taxable year)— 

3 (1) the amount of any required installment of 

4 corporate estimated tax which is otherwise due in 

5 July, August, or September of 2012 shall be in6 creased by 0.25 percent of such amount (determined 

7 without regard to any increase in such amount not 

8 contained in such Code); 

9 (2) the amount of any required installment of 

10 corporate estimated tax which is otherwise due in 

11 July, August, or September of 2016 shall be in12 creased by 0.25 percent of such amount (determined 

13 without regard to any increase in such amount not 

14 contained in such Code); and 

15 (3) the amount of the next required installment 

16 after an installment referred to in paragraph (1) or 

17 (2) shall be appropriately reduced to reflect the 

18 amount of the increase by reason of such paragraph. 


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Calendar No. 191 

112TH CONGRESS 

1ST SESSION S. 1643 

A BILL 

To implement the United States–Panama Trade 

Promotion Agreement. 

OCTOBER 11, 2011 

Reported without amendment 


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