II 

Calendar No. 190 

112TH CONGRESS 

1ST SESSION S. 1642 

To implement the United States–Korea Free Trade 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–Korea Free Trade 

Agreement. 

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

3 SECTION 1. SHORT TITLE. 

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

5 ‘‘United States–Korea Free Trade Agreement Implemen6 tation 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. 

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. Rules of origin. 

Sec. 203. Customs user fees. 

Sec. 204. Disclosure of incorrect information; false certifications of origin; denial of preferential tariff treatment. 

Sec. 205. Reliquidation of entries. 

Sec. 206. Recordkeeping requirements. 

Sec. 207. Enforcement relating to trade in textile or apparel goods. 

Sec. 208. 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—Motor Vehicle Safeguard Measures 

Sec. 321. Motor vehicle safeguard measures. 

Subtitle C—Textile and Apparel Safeguard Measures 

Sec. 331. Commencement of action for relief. 

Sec. 332. Determination and provision of relief. 

Sec. 333. Period of relief. 

Sec. 334. Articles exempt from relief. 

Sec. 335. Rate after termination of import relief. 

Sec. 336. Termination of relief authority. 


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Sec. 337. Compensation authority. 

Sec. 338. Confidential business information. 

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

Sec. 341. Findings and action on Korean articles. 

TITLE IV—PROCUREMENT 

Sec. 401. Eligible products. 

TITLE V—OFFSETS 

Sec. 501. Increase in penalty on paid preparers who fail to comply with earned 

income tax credit due diligence requirements. 

Sec. 502. Requirement for prisons located in the United States to provide information for tax administration. 

Sec. 503. Rate for merchandise processing fees. 

Sec. 504. Extension of customs user fees. 

Sec. 505. 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 Korea en5 tered into under the authority of section 2103(b) of 

6 the Bipartisan Trade Promotion Authority Act of 

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

8 (2) to secure the benefits of the agreement en9 tered into pursuant to an exchange of letters be10 tween the United States and the Government of 

11 Korea on February 10, 2011; 

12 (3) to strengthen and develop economic rela13 tions between the United States and Korea for their 

14 mutual benefit; 

15 (4) to establish free trade between the United 

16 States and Korea through the reduction and elimiVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 nation of barriers to trade in goods and services and 

2 to investment; and 

3 (5) to lay the foundation for further coopera4 tion to expand and enhance the benefits of the 

5 Agreement. 

6 SEC. 3. DEFINITIONS. 

7 In this Act: 

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

9 means the United States–Korea Free Trade Agree10 ment approved by Congress under section 101(a)(1). 

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

12 means the United States International Trade Com13 mission. 

14 (3) HTS.—The term ‘‘HTS’’ means the Har15 monized Tariff Schedule of the United States. 

16 (4) KOREA.—The term ‘‘Korea’’ means the Re17 public of Korea. 

18 (5) TEXTILE OR APPAREL GOOD.—The term 

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

20 Annex to the Agreement on Textiles and Clothing 

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

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


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1 TITLE I—APPROVAL OF, AND 

2 GENERAL PROVISIONS RE3 LATING TO, THE AGREEMENT 

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

5 AGREEMENT. 

6 (a) APPROVAL OF AGREEMENT AND STATEMENT OF

7 ADMINISTRATIVE ACTION.—Pursuant to section 2105 of 

8 the Bipartisan Trade Promotion Authority Act of 2002 

9 (19 U.S.C. 3805) and section 151 of the Trade Act of 

10 1974 (19 U.S.C. 2191), Congress approves— 

11 (1) the United States–Korea Free Trade Agree12 ment entered into on June 30, 2007, with the Gov13 ernment of Korea, and submitted to Congress on 

14 October 3, 2011; and 

15 (2) the statement of administrative action pro16 posed to implement the Agreement that was sub17 mitted to Congress on October 3, 2011. 

18 (b) CONDITIONS FOR ENTRY INTO FORCE OF THE

19 AGREEMENT.—At such time as the President determines 

20 that Korea has taken measures necessary to comply with 

21 those provisions of the Agreement that are to take effect 

22 on the date on which the Agreement enters into force, the 

23 President is authorized to exchange notes with the Gov24 ernment of Korea providing for the entry into force, on 


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1 or after January 1, 2012, of the Agreement with respect 

2 to the United States. 

3 SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED 

4 STATES AND STATE LAW. 

5 (a) RELATIONSHIP OF AGREEMENT TO UNITED

6 STATES LAW.— 

7 (1) UNITED STATES LAW TO PREVAIL IN CON8 FLICT.—No provision of the Agreement, nor the ap9 plication of any such provision to any person or cir10 cumstance, which is inconsistent with any law of the 

11 United States shall have effect. 

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

13 be construed— 

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

15 United States, or 

16 (B) to limit any authority conferred under 

17 any law of the United States, 

18 unless specifically provided for in this Act. 

19 (b) RELATIONSHIP OF AGREEMENT TO STATE

20 LAW.— 

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

22 application thereof, may be declared invalid as to 

23 any person or circumstance on the ground that the 

24 provision or application is inconsistent with the 

25 Agreement, except in an action brought by the 


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1 United States for the purpose of declaring such law 

2 or application invalid. 

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

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

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

6 State; and 

7 (B) any State law regulating or taxing the 

8 business of insurance. 

9 (c) EFFECT OF AGREEMENT WITH RESPECT TO PRI10 VATE REMEDIES.—No person other than the United 

11 States— 

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

13 under the Agreement or by virtue of congressional 

14 approval thereof; or 

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

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

17 department, agency, or other instrumentality of the 

18 United States, any State, or any political subdivision 

19 of a State, on the ground that such action or inac20 tion is inconsistent with the Agreement. 

21 SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF 

22 ENTRY INTO FORCE AND INITIAL REGULA23 TIONS. 

24 (a) IMPLEMENTING ACTIONS.— 


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1 (1) PROCLAMATION AUTHORITY.—After the 

2 date of the enactment of this Act— 

3 (A) the President may proclaim such ac4 tions, and 

5 (B) other appropriate officers of the 

6 United States Government may issue such reg7 ulations, 

8 as may be necessary to ensure that any provision of 

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

10 effect on the date on which the Agreement enters 

11 into force is appropriately implemented on such 

12 date, but no such proclamation or regulation may 

13 have an effective date earlier than the date on which 

14 the Agreement enters into force. 

15 (2) EFFECTIVE DATE OF CERTAIN PROCLAIMED

16 ACTIONS.—Any action proclaimed by the President 

17 under the authority of this Act that is not subject 

18 to the consultation and layover provisions under sec19 tion 104 may not take effect before the 15th day 

20 after the date on which the text of the proclamation 

21 is published in the Federal Register. 

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

23 day restriction contained in paragraph (2) on the 

24 taking effect of proclaimed actions is waived to the 

25 extent that the application of such restriction would 


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1 prevent the taking effect on the date on which the 

2 Agreement enters into force of any action pro3 claimed under this section. 

4 (b) INITIAL REGULATIONS.—Initial regulations nec5 essary or appropriate to carry out the actions required by 

6 or authorized under this Act or proposed in the statement 

7 of administrative action submitted under section 

8 101(a)(2) to implement the Agreement shall, to the max9 imum extent feasible, be issued within 1 year after the 

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

11 of any implementing action that takes effect on a date 

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

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

14 maximum extent feasible, be issued within 1 year after 

15 such effective date. 

16 SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, 

17 AND EFFECTIVE DATE OF, PROCLAIMED AC18 TIONS. 

19 If a provision of this Act provides that the implemen20 tation of an action by the President by proclamation is 

21 subject to the consultation and layover requirements of 

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

23 (1) the President has obtained advice regarding 

24 the proposed action from— 


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1 (A) the appropriate advisory committees 

2 established under section 135 of the Trade Act 

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

4 (B) the Commission; 

5 (2) the President has submitted to the Com6 mittee on Finance of the Senate and the Committee 

7 on Ways and Means of the House of Representatives 

8 a report that sets forth— 

9 (A) the action proposed to be proclaimed 

10 and the reasons therefor; and 

11 (B) the advice obtained under paragraph 

12 (1); 

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

14 the first day on which the requirements set forth in 

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

16 and 

17 (4) the President has consulted with the com18 mittees referred to in paragraph (2) regarding the 

19 proposed action during the period referred to in 

20 paragraph (3). 

21 SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PRO22 CEEDINGS. 

23 (a) ESTABLISHMENT OR DESIGNATION OF OFFICE.— 

24 The President is authorized to establish or designate with25 in the Department of Commerce an office that shall be 


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1 responsible for providing administrative assistance to pan2 els established under chapter 22 of the Agreement. The 

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

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

5 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated for each fiscal year after 

7 fiscal year 2011 to the Department of Commerce up to 

8 $750,000 for the establishment and operations of the of9 fice established or designated under subsection (a) and for 

10 the payment of the United States share of the expenses 

11 of panels established under chapter 22 of the Agreement. 

12 SEC. 106. ARBITRATION OF CLAIMS. 

13 The United States is authorized to resolve any claim 

14 against the United States covered by article 

15 11.16.1(a)(i)(C) or article 11.16.1(b)(i)(C) of the Agree16 ment, pursuant to the Investor-State Dispute Settlement 

17 procedures set forth in section B of chapter 11 of the 

18 Agreement. 

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

20 (a) EFFECTIVE DATES.—Except as provided in sub21 section (b), this Act and the amendments made by this 

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

23 into force. 

24 (b) EXCEPTIONS.— 


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1 (1) IN GENERAL.—Sections 1 through 3, sec2 tion 207(g), this title, and title V take effect on the 

3 date of the enactment of this Act. 

4 (2) CERTAIN AMENDATORY PROVISIONS.—The 

5 amendments made by sections 203, 204, 206, and 

6 401 of this Act take effect on the date of the enact7 ment of this Act and apply with respect to Korea on 

8 the date on which the Agreement enters into force. 

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

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

11 than this subsection and title V) and the amendments 

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

13 title V) shall cease to have effect. 

14 TITLE II—CUSTOMS PROVISIONS 

15 SEC. 201. TARIFF MODIFICATIONS. 

16 (a) TARIFF MODIFICATIONS PROVIDED FOR IN THE

17 AGREEMENT.—The President may proclaim— 

18 (1) such modifications or continuation of any 

19 duty, 

20 (2) such continuation of duty-free or excise 

21 treatment, or 

22 (3) such additional duties, 

23 as the President determines to be necessary or appropriate 

24 to carry out or apply articles 2.3, 2.5, and 2.6, and Annex 

25 2-B, Annex 4-B, and Annex 22-A, of the Agreement. 


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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 Korea regarding the staging of 

8 any duty treatment set forth in Annex 2-B 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 Korea provided 

16 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 2-B 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. 


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1 (d) TARIFF TREATMENT OF MOTOR VEHICLES.— 

2 The President may proclaim the following tariff treatment 

3 with respect to the following motor vehicles of Korea: 

4 (1) CERTAIN PASSENGER CARS.—In the case of 

5 originating goods of Korea classifiable under sub6 heading 8703.10.10, 8703.10.50, 8703.21.00, 

7 8703.22.00, 8703.23.00, 8703.24.00, 8703.31.00, 

8 8703.32.00, or 8703.33.00 of the HTS that are en9 tered, or withdrawn from warehouse for consump10 tion— 

11 (A) the rate of duty for such goods shall 

12 be 2.5 percent for year 1 of the Agreement 

13 through year 4 of the Agreement; and 

14 (B) such goods shall be free of duty for 

15 each year thereafter. 

16 (2) ELECTRIC MOTOR VEHICLES.—In the case 

17 of originating goods of Korea classifiable under sub18 heading 8703.90.00 of the HTS that are entered, or 

19 withdrawn from warehouse for consumption— 

20 (A) the rate of duty for such goods shall 

21 be— 

22 (i) 2.0 percent for year 1 of the 

23 Agreement; 

24 (ii) 1.5 percent for year 2 of the 

25 Agreement; 


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1 (iii) 1.0 percent for year 3 of the 

2 Agreement; and 

3 (iv) 0.5 percent for year 4 of the 

4 Agreement; and 

5 (B) such goods shall be free of duty for 

6 each year thereafter. 

7 (3) CERTAIN TRUCKS.—In the case of origi8 nating goods of Korea classifiable under subheading 

9 8704.21.00, 8704.22.50, 8704.23.00, 8704.31.00, 

10 8704.32.00, or 8704.90.00 of the HTS that are en11 tered, or withdrawn from warehouse for consump12 tion— 

13 (A) the rate of duty for such goods shall 

14 be— 

15 (i) 25 percent for year 1 of the Agree16 ment through year 7 of the Agreement; 

17 (ii) 16.6 percent for year 8 of the 

18 Agreement; and 

19 (iii) 8.3 percent for year 9 of the 

20 Agreement; and 

21 (B) such goods shall be free of duty for 

22 each year thereafter. 

23 (4) DEFINITIONS.—In this subsection— 

24 (A) the term ‘‘year 1 of the Agreement’’ 

25 means the period beginning on the date, in a 


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1 calendar year, on which the Agreement enters 

2 into force and ending on December 31 of that 

3 calendar year; and 

4 (B) the terms ‘‘year 2 of the Agreement’’, 

5 ‘‘year 3 of the Agreement’’, ‘‘year 4 of the 

6 Agreement’’, ‘‘year 5 of the Agreement’’, ‘‘year 

7 6 of the Agreement’’, ‘‘year 7 of the Agree8 ment’’, ‘‘year 8 of the Agreement’’, and ‘‘year 

9 9 of the Agreement’’ mean the second, third, 

10 fourth, fifth, sixth, seventh, eighth, and ninth 

11 calendar years, respectively, in which the Agree12 ment is in force. 

13 SEC. 202. RULES OF ORIGIN. 

14 (a) APPLICATION AND INTERPRETATION.—In this 

15 section: 

16 (1) TARIFF CLASSIFICATION.—The basis for 

17 any tariff classification is the HTS. 

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

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

20 subheading, such reference shall be a reference to a 

21 chapter, heading, or subheading of the HTS. 

22 (3) COST OR VALUE.—Any cost or value re23 ferred to in this section shall be recorded and main24 tained in accordance with the generally accepted ac25 counting principles applicable in the territory of the 


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1 country in which the good is produced (whether 

2 Korea or the United States). 

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

4 and for purposes of implementing the preferential tariff 

5 treatment provided for under the Agreement, except as 

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

7 good if— 

8 (1) the good is a good wholly obtained or pro9 duced entirely in the territory of Korea, the United 

10 States, or both; 

11 (2) the good— 

12 (A) is produced entirely in the territory of 

13 Korea, the United States, or both, and— 

14 (i) each of the nonoriginating mate15 rials used in the production of the good 

16 undergoes an applicable change in tariff 

17 classification specified in Annex 4-A or 

18 Annex 6-A of the Agreement; or 

19 (ii) the good otherwise satisfies any 

20 applicable regional value-content or other 

21 requirements specified in Annex 4-A or 

22 Annex 6-A of the Agreement; and 

23 (B) satisfies all other applicable require24 ments of this section; or 


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1 (3) the good is produced entirely in the terri2 tory of Korea, the United States, or both, exclusively 

3 from materials described in paragraph (1) or (2). 

4 (c) REGIONAL VALUE-CONTENT.— 

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

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

7 to in Annex 6-A of the Agreement, except for goods 

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

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

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

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

12 paragraph (3). 

13 (2) BUILD-DOWN METHOD.— 

14 (A) IN GENERAL.—The regional value-con15 tent of a good may be calculated on the basis 

16 of the following build-down method: 

AV¥VNM 

RVC = ————— × 100. 

AV 

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

18 (i) RVC.—The term ‘‘RVC’’ means 

19 the regional value-content of the good, ex20 pressed as a percentage. 

21 (ii) AV.—The term ‘‘AV’’ means the 

22 adjusted value of the good. 

23 (iii) VNM.—The term ‘‘VNM’’ means 

24 the value of nonoriginating materials, other 


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1 than indirect materials, that are acquired 

2 and used by the producer in the production 

3 of the good, but does not include the value 

4 of a material that is self-produced. 

5 (3) BUILD-UP METHOD.— 

6 (A) IN GENERAL.—The regional value-con7 tent of a good may be calculated on the basis 

8 of the following build-up method: 

VOM 

RVC = ————— × 100. 

AV 

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

10 (i) RVC.—The term ‘‘RVC’’ means 

11 the regional value-content of the good, ex12 pressed as a percentage. 

13 (ii) AV.—The term ‘‘AV’’ means the 

14 adjusted value of the good. 

15 (iii) VOM.—The term ‘‘VOM’’ means 

16 the value of originating materials, other 

17 than indirect materials, that are acquired 

18 or self-produced, and used by the producer 

19 in the production of the good. 

20 (4) SPECIAL RULE FOR CERTAIN AUTOMOTIVE

21 GOODS.— 

22 (A) IN GENERAL.—For purposes of sub23 section (b)(2), the regional value-content of an 

24 automotive good referred to in Annex 6-A of 


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1 the Agreement may be calculated by the im2 porter, exporter, or producer of the good on the 

3 basis of the build-down method described in 

4 paragraph (2), the build-up method described in 

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

NC¥VNM 

RVC = ————— × 100. 

NC 

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

7 (i) AUTOMOTIVE GOOD.—The term 

8 ‘‘automotive good’’ means a good provided 

9 for in any of subheadings 8407.31 through 

10 8407.34, subheading 8408.20, heading 

11 8409, or any of headings 8701 through 

12 8708. 

13 (ii) RVC.—The term ‘‘RVC’’ means 

14 the regional value-content of the auto15 motive good, expressed as a percentage. 

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

17 net cost of the automotive good. 

18 (iv) VNM.—The term ‘‘VNM’’ means 

19 the value of nonoriginating materials, other 

20 than indirect materials, that are acquired 

21 and used by the producer in the production 

22 of the automotive good, but does not in23 clude the value of a material that is self24 produced. 


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1 (C) MOTOR VEHICLES.— 

2 (i) BASIS OF CALCULATION.—For 

3 purposes of determining the regional value4 content under subparagraph (A) for an 

5 automotive good that is a motor vehicle 

6 provided for in any of headings 8701 

7 through 8705, an importer, exporter, or 

8 producer may average the amounts cal9 culated under the net cost formula con10 tained in subparagraph (A), over the pro11 ducer’s fiscal year— 

12 (I) with respect to all motor vehi13 cles in any one of the categories de14 scribed in clause (ii); or 

15 (II) with respect to all motor ve16 hicles in any such category that are 

17 exported to the territory of Korea or 

18 the United States. 

19 (ii) CATEGORIES.—A category is de20 scribed in this clause if it— 

21 (I) is the same model line of 

22 motor vehicles, is in the same class of 

23 motor vehicles, and is produced in the 

24 same plant in the territory of Korea 

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1 scribed in clause (i) for which regional 

2 value-content is being calculated; 

3 (II) is the same class of motor 

4 vehicles, and is produced in the same 

5 plant in the territory of Korea or the 

6 United States, as the good described 

7 in clause (i) for which regional value8 content is being calculated; or 

9 (III) is the same model line of 

10 motor vehicles produced in the terri11 tory of Korea or the United States as 

12 the good described in clause (i) for 

13 which regional value-content is being 

14 calculated. 

15 (D) OTHER AUTOMOTIVE GOODS.—For 

16 purposes of determining the regional value-con17 tent under subparagraph (A) for automotive 

18 materials provided for in any of subheadings 

19 8407.31 through 8407.34, in subheading 

20 8408.20, or in heading 8409, 8706, 8707, or 

21 8708, that are produced in the same plant, an 

22 importer, exporter, or producer may— 

23 (i) average the amounts calculated 

24 under the net cost formula contained in 

25 subparagraph (A) over— 


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1 (I) the fiscal year of the motor 

2 vehicle producer to whom the auto3 motive goods are sold, 

4 (II) any quarter or month, or 

5 (III) the fiscal year of the pro6 ducer of such goods, 

7 if the goods were produced during the fis8 cal year, quarter, or month that is the 

9 basis for the calculation; 

10 (ii) determine the average referred to 

11 in clause (i) separately for such goods sold 

12 to 1 or more motor vehicle producers; or 

13 (iii) make a separate determination 

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

15 are exported to the territory of Korea or 

16 the United States. 

17 (E) CALCULATING NET COST.—The im18 porter, exporter, or producer of an automotive 

19 good shall, consistent with the provisions re20 garding allocation of costs provided for in gen21 erally accepted accounting principles, determine 

22 the net cost of the automotive good under sub23 paragraph (B) by— 

24 (i) calculating the total cost incurred 

25 with respect to all goods produced by the 


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1 producer of the automotive good, sub2 tracting any sales promotion, marketing, 

3 and after-sales service costs, royalties, 

4 shipping and packing costs, and nonallow5 able interest costs that are included in the 

6 total cost of all such goods, and then rea7 sonably allocating the resulting net cost of 

8 those goods to the automotive good; 

9 (ii) calculating the total cost incurred 

10 with respect to all goods produced by that 

11 producer, reasonably allocating the total 

12 cost to the automotive good, and then 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 portion of the total cost allocated to the 

18 automotive good; or 

19 (iii) reasonably allocating each cost 

20 that forms part of the total cost incurred 

21 with respect to the automotive good so that 

22 the aggregate of these costs does not in23 clude any sales promotion, marketing, and 

24 after-sales service costs, royalties, shipping 


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1 and packing costs, or nonallowable interest 

2 costs. 

3 (d) VALUE OF MATERIALS.— 

4 (1) IN GENERAL.—For the purpose of calcu5 lating the regional value-content of a good under 

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

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

8 material is— 

9 (A) in the case of a material that is im10 ported by the producer of the good, the ad11 justed value of the material; 

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

13 the territory in which the good is produced, the 

14 value, determined in accordance with Articles 1 

15 through 8, Article 15, and the corresponding in16 terpretive notes, of the Agreement on Imple17 mentation of Article VII of the General Agree18 ment on Tariffs and Trade 1994 referred to in 

19 section 101(d)(8) of the Uruguay Round Agree20 ments Act (19 U.S.C. 3511(d)(8)), as set forth 

21 in regulations promulgated by the Secretary of 

22 the Treasury providing for the application of 

23 such Articles in the absence of an importation 

24 by the producer; or 


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1 (C) in the case of a material that is self2 produced, the sum of— 

3 (i) all expenses incurred in the pro4 duction of the material, including general 

5 expenses; and 

6 (ii) an amount for profit equivalent to 

7 the profit added in the normal course of 

8 trade. 

9 (2) FURTHER ADJUSTMENTS TO THE VALUE OF

10 MATERIALS.— 

11 (A) ORIGINATING MATERIAL.—The fol12 lowing expenses, if not included in the value of 

13 an originating material calculated under para14 graph (1), may be added to the value of the 

15 originating material: 

16 (i) The costs of freight, insurance, 

17 packing, and all other costs incurred in 

18 transporting the material within or be19 tween the territory of Korea, the United 

20 States, or both, to the location of the pro21 ducer. 

22 (ii) Duties, taxes, and customs broker23 age fees on the material paid in the terri24 tory of Korea, the United States, or both, 

25 other than duties or taxes that are waived, 


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1 refunded, refundable, or otherwise recover2 able, including credit against duty or tax 

3 paid or payable. 

4 (iii) The cost of waste and spoilage re5 sulting from the use of the material in the 

6 production of the good, less the value of 

7 renewable scrap or byproducts. 

8 (B) NONORIGINATING MATERIAL.—The 

9 following expenses, if included in the value of a 

10 nonoriginating material calculated under para11 graph (1), may be deducted from the value of 

12 the nonoriginating material: 

13 (i) The costs of freight, insurance, 

14 packing, and all other costs incurred in 

15 transporting the material within or be16 tween the territory of Korea, the United 

17 States, or both, to the location of the pro18 ducer. 

19 (ii) Duties, taxes, and customs broker20 age fees on the material paid in the terri21 tory of Korea, the United States, or both, 

22 other than duties or taxes that are waived, 

23 refunded, refundable, or otherwise recover24 able, including credit against duty or tax 

25 paid or payable. 


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1 (iii) The cost of waste and spoilage re2 sulting from the use of the material in the 

3 production of the good, less the value of 

4 renewable scrap or byproducts. 

5 (iv) The cost of originating materials 

6 used in the production of the nonorigi7 nating material in the territory of Korea, 

8 the United States, or both. 

9 (e) ACCUMULATION.— 

10 (1) ORIGINATING MATERIALS USED IN PRODUC11 TION OF GOODS OF THE OTHER COUNTRY.—Origi12 nating materials from the territory of Korea or the 

13 United States that are used in the production of a 

14 good in the territory of the other country shall be 

15 considered to originate in the territory of such other 

16 country. 

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

18 produced in the territory of Korea, the United 

19 States, or both, by 1 or more producers, is an origi20 nating good if the good satisfies the requirements of 

21 subsection (b) and all other applicable requirements 

22 of this section. 

23 (f) DE MINIMIS AMOUNTS OF NONORIGINATING MA24 TERIALS.— 


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1 (1) IN GENERAL.—Except as provided in para2 graphs (2) and (3), a good that does not undergo a 

3 change in tariff classification pursuant to Annex 6- 

4 A of the Agreement is an originating good if— 

5 (A) the value of all nonoriginating mate6 rials used in the production of the good that do 

7 not undergo the applicable change in tariff clas8 sification (set forth in Annex 6-A of the Agree9 ment) does not exceed 10 percent of the ad10 justed value of the good; 

11 (B) the good meets all other applicable re12 quirements of this section; and 

13 (C) the value of such nonoriginating mate14 rials is included in the value of nonoriginating 

15 materials for any applicable regional value-con16 tent requirement for the good. 

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

18 apply to the following: 

19 (A) A nonoriginating material provided for 

20 in chapter 3 that is used in the production of 

21 a good provided for in chapter 3. 

22 (B) A nonoriginating material provided for 

23 in chapter 4, or a nonoriginating dairy prepara24 tion containing over 10 percent by weight of 

25 milk solids provided for in subheading 1901.90 


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

2 good provided for in chapter 4. 

3 (C) A nonoriginating material provided for 

4 in chapter 4, or a nonoriginating dairy prepara5 tion containing over 10 percent by weight of 

6 milk solids provided for in subheading 1901.90, 

7 that is used in the production of any of the fol8 lowing goods: 

9 (i) Infant preparations containing 

10 over 10 percent by weight of milk solids 

11 provided for in subheading 1901.10. 

12 (ii) Mixes and doughs, containing over 

13 25 percent by weight of butterfat, not put 

14 up for retail sale, provided for in sub15 heading 1901.20. 

16 (iii) Dairy preparations containing 

17 over 10 percent by weight of milk solids 

18 provided for in subheading 1901.90 or 

19 2106.90. 

20 (iv) Goods provided for in heading 

21 2105. 

22 (v) Beverages containing milk pro23 vided for in subheading 2202.90. 


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1 (vi) Animal feeds containing over 10 

2 percent by weight of milk solids provided 

3 for in subheading 2309.90. 

4 (D) A nonoriginating material provided for 

5 in chapter 7 that is used in the production of 

6 a good provided for in subheading 0703.10, 

7 0703.20, 0709.59, 0709.60, 0711.90, 0712.20, 

8 0714.20, or any of subheadings 0710.21 

9 through 0710.80 or 0712.39 through 0713.10. 

10 (E) A nonoriginating material provided for 

11 in heading 1006, or a nonoriginating rice prod12 uct provided for in chapter 11 that is used in 

13 the production of a good provided for in head14 ing 1006, 1102, 1103, 1104, or subheading 

15 1901.20 or 1901.90. 

16 (F) A nonoriginating material provided for 

17 in heading 0805, or any of subheadings 

18 2009.11 through 2009.39, that is used in the 

19 production of a good provided for in any of sub20 headings 2009.11 through 2009.39, or in fruit 

21 or vegetable juice of any single fruit or vege22 table, fortified with minerals or vitamins, con23 centrated or unconcentrated, provided for in 

24 subheading 2106.90 or 2202.90. 


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1 (G) Nonoriginating peaches, pears, or apri2 cots provided for in chapter 8 or 20 that are 

3 used in the production of a good provided for 

4 in heading 2008. 

5 (H) A nonoriginating material provided for 

6 in chapter 15 that is used in the production of 

7 a good provided for in any of headings 1501 

8 through 1508, or heading 1512, 1514, or 1515. 

9 (I) A nonoriginating material provided for 

10 in heading 1701 that is used in the production 

11 of a good provided for in any of headings 1701 

12 through 1703. 

13 (J) A nonoriginating material provided for 

14 in chapter 17 that is used in the production of 

15 a good provided for in subheading 1806.10. 

16 (K) Except as provided in subparagraphs 

17 (A) through (J) and Annex 6-A of the Agree18 ment, a nonoriginating material used in the 

19 production of a good provided for in any of 

20 chapters 1 through 24, unless the nonorigi21 nating material is provided for in a different 

22 subheading than the good for which origin is 

23 being determined under this section. 

24 (3) TEXTILE OR APPAREL GOODS.— 


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

2 subparagraph (B), a textile or apparel good 

3 that is not an originating good because certain 

4 fibers or yarns used in the production of the 

5 component of the good that determines the tar6 iff classification of the good do not undergo an 

7 applicable change in tariff classification, set 

8 forth in Annex 4-A of the Agreement, shall be 

9 considered to be an originating good if the total 

10 weight of all such fibers or yarns in that com11 ponent is not more than 7 percent of the total 

12 weight of that component. 

13 (B) CERTAIN TEXTILE OR APPAREL

14 GOODS.—A textile or apparel good containing 

15 elastomeric yarns in the component of the good 

16 that determines the tariff classification of the 

17 good shall be considered to be an originating 

18 good only if such yarns are wholly formed and 

19 finished in the territory of Korea, the United 

20 States, or both. 

21 (C) YARN, FABRIC, OR FIBER.—For pur22 poses of this paragraph, in the case of a good 

23 that is a yarn, fabric, or fiber, the term ‘‘com24 ponent of the good that determines the tariff 


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1 classification of the good’’ means all of the fi2 bers in the good. 

3 (g) FUNGIBLE GOODS AND MATERIALS.— 

4 (1) IN GENERAL.— 

5 (A) CLAIM FOR PREFERENTIAL TARIFF

6 TREATMENT.—A person claiming that a fun7 gible good or fungible material is an originating 

8 good may base the claim either on the physical 

9 segregation of the fungible good or fungible ma10 terial or by using an inventory management 

11 method with respect to the fungible good or 

12 fungible material. 

13 (B) INVENTORY MANAGEMENT METHOD.— 

14 In this subsection, the term ‘‘inventory manage15 ment method’’ means— 

16 (i) averaging; 

17 (ii) ‘‘last-in, first-out’’; 

18 (iii) ‘‘first-in, first-out’’; or 

19 (iv) any other method— 

20 (I) recognized in the generally 

21 accepted accounting principles of the 

22 country in which the production is 

23 performed (whether Korea or the 

24 United States); or 


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1 (II) otherwise accepted by that 

2 country. 

3 (2) ELECTION OF INVENTORY METHOD.—A 

4 person selecting an inventory management method 

5 under paragraph (1) for a particular fungible good 

6 or fungible material shall continue to use that meth7 od for that fungible good or fungible material 

8 throughout the fiscal year of such person. 

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

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

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

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

13 accessories, spare parts, or tools shall— 

14 (A) be treated as originating goods if the 

15 good is an originating good; and 

16 (B) be disregarded in determining whether 

17 all the nonoriginating materials used in the pro18 duction of the good undergo the applicable 

19 change in tariff classification set forth in Annex 

20 6-A of the Agreement. 

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

22 only if— 

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

24 are classified with and not invoiced separately 

25 from the good; and 


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1 (B) the quantities and value of the acces2 sories, spare parts, or tools are customary for 

3 the good. 

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

5 subject to a regional value-content requirement, the 

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

7 be taken into account as originating or nonorigi8 nating materials, as the case may be, in calculating 

9 the regional value-content of the good. 

10 (i) PACKAGING MATERIALS AND CONTAINERS FOR

11 RETAIL SALE.—Packaging materials and containers in 

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

13 the good, shall be disregarded in determining whether all 

14 the nonoriginating materials used in the production of the 

15 good undergo the applicable change in tariff classification 

16 set forth in Annex 4-A or Annex 6-A of the Agreement, 

17 and, if the good is subject to a regional value-content re18 quirement, the value of such packaging materials and con19 tainers shall be taken into account as originating or non20 originating materials, as the case may be, in calculating 

21 the regional value-content of the good. 

22 (j) PACKING MATERIALS AND CONTAINERS FOR

23 SHIPMENT.—Packing materials and containers for ship24 ment shall be disregarded in determining whether a good 

25 is an originating good. 


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1 (k) INDIRECT MATERIALS.—An indirect material 

2 shall be disregarded in determining whether a good is an 

3 originating good. 

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

5 undergone production necessary to qualify as an origi6 nating good under subsection (b) shall not be considered 

7 to be an originating good if, subsequent to that produc8 tion, the good— 

9 (1) undergoes further production or any other 

10 operation outside the territory of Korea or the 

11 United States, other than unloading, reloading, or 

12 any other operation necessary to preserve the good 

13 in good condition or to transport the good to the ter14 ritory of Korea or the United States; or 

15 (2) does not remain under the control of cus16 toms authorities in the territory of a country other 

17 than Korea or the United States. 

18 (m) GOODS CLASSIFIABLE AS GOODS PUT UP IN

19 SETS.—Notwithstanding the rules set forth in Annex 4- 

20 A and Annex 6-A of the Agreement, goods classifiable as 

21 goods put up in sets for retail sale as provided for in Gen22 eral Rule of Interpretation 3 of the HTS shall not be con23 sidered to be originating goods unless— 

24 (1) each of the goods in the set is an origi25 nating good; or 


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1 (2) the total value of the nonoriginating goods 

2 in the set does not exceed— 

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

4 10 percent of the adjusted value of the set; or 

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

6 or apparel goods, 15 percent of the adjusted 

7 value of the set. 

8 (n) DEFINITIONS.—In this section: 

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

10 value’’ means the value determined in accordance 

11 with Articles 1 through 8, Article 15, and the cor12 responding interpretive notes, of the Agreement on 

13 Implementation of Article VII of the General Agree14 ment on Tariffs and Trade 1994 referred to in sec15 tion 101(d)(8) of the Uruguay Round Agreements 

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

17 to exclude any costs, charges, or expenses incurred 

18 for transportation, insurance, and related services 

19 incident to the international shipment of the mer20 chandise from the country of exportation to the 

21 place of importation. 

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

23 ‘‘class of motor vehicles’’ means any one of the fol24 lowing categories of motor vehicles: 


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1 (A) Motor vehicles provided for in sub2 heading 8701.20, 8704.10, 8704.22, 8704.23, 

3 8704.32, or 8704.90, or heading 8705 or 8706, 

4 or motor vehicles for the transport of 16 or 

5 more persons provided for in subheading 

6 8702.10 or 8702.90. 

7 (B) Motor vehicles provided for in sub8 heading 8701.10 or any of subheadings 

9 8701.30 through 8701.90. 

10 (C) Motor vehicles for the transport of 15 

11 or fewer persons provided for in subheading 

12 8702.10 or 8702.90, or motor vehicles provided 

13 for in subheading 8704.21 or 8704.31. 

14 (D) Motor vehicles provided for in any of 

15 subheadings 8703.21 through 8703.90. 

16 (3) FUNGIBLE GOOD OR FUNGIBLE MATE17 RIAL.—The term ‘‘fungible good’’ or ‘‘fungible mate18 rial’’ means a good or material, as the case may be, 

19 that is interchangeable with another good or mate20 rial for commercial purposes and the properties of 

21 which are essentially identical to such other good or 

22 material. 

23 (4) GENERALLY ACCEPTED ACCOUNTING PRIN24 CIPLES.—The term ‘‘generally accepted accounting 

25 principles’’— 


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1 (A) means the recognized consensus or 

2 substantial authoritative support given in the 

3 territory of Korea or the United States, as the 

4 case may be, with respect to the recording of 

5 revenues, expenses, costs, assets, and liabilities, 

6 the disclosure of information, and the prepara7 tion of financial statements; and 

8 (B) may encompass broad guidelines for 

9 general application as well as detailed stand10 ards, practices, and procedures. 

11 (5) GOOD WHOLLY OBTAINED OR PRODUCED

12 ENTIRELY IN THE TERRITORY OF KOREA, THE

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

14 obtained or produced entirely in the territory of 

15 Korea, the United States, or both’’ means any of the 

16 following: 

17 (A) Plants and plant products grown, and 

18 harvested or gathered, in the territory of Korea, 

19 the United States, or both. 

20 (B) Live animals born and raised in the 

21 territory of Korea, the United States, or both. 

22 (C) Goods obtained in the territory of 

23 Korea, the United States, or both from live ani24 mals. 


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1 (D) Goods obtained from hunting, trap2 ping, fishing, or aquaculture conducted in the 

3 territory of Korea, the United States, or both. 

4 (E) Minerals and other natural resources 

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

6 that are extracted or taken from the territory 

7 of Korea, the United States, or both. 

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

9 taken from the sea, seabed, or subsoil outside 

10 the territory of Korea or the United States 

11 by— 

12 (i) a vessel that is registered or re13 corded with Korea and flying the flag of 

14 Korea; or 

15 (ii) a vessel that is documented under 

16 the laws of the United States. 

17 (G) Goods produced on board a factory 

18 ship from goods referred to in subparagraph 

19 (F), if such factory ship— 

20 (i) is registered or recorded with 

21 Korea and flies the flag of Korea; or 

22 (ii) is a vessel that is documented 

23 under the laws of the United States. 

24 (H)(i) Goods taken by Korea or a person 

25 of Korea from the seabed or subsoil outside the 


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1 territory of Korea, the United States, or both, 

2 if Korea has rights to exploit such seabed or 

3 subsoil; or 

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

5 person of the United States from the seabed or 

6 subsoil outside the territory of the United 

7 States, Korea, or both, if the United States has 

8 rights to exploit such seabed or subsoil. 

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

10 goods are obtained by Korea or the United 

11 States or a person of Korea or the United 

12 States and not processed in the territory of a 

13 country other than Korea or the United States. 

14 (J) Waste and scrap derived from— 

15 (i) manufacturing or processing oper16 ations in the territory of Korea, the United 

17 States, or both; or 

18 (ii) used goods collected in the terri19 tory of Korea, the United States, or both, 

20 if such goods are fit only for the recovery 

21 of raw materials. 

22 (K) Recovered goods derived in the terri23 tory of Korea, the United States, or both, from 

24 used goods, and used in the territory of Korea, 


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1 the United States, or both, in the production of 

2 remanufactured goods. 

3 (L) Goods, at any stage of production, pro4 duced in the territory of Korea, the United 

5 States, or both, exclusively from— 

6 (i) goods referred to in any of sub7 paragraphs (A) through (J); or 

8 (ii) the derivatives of goods referred 

9 to in clause (i). 

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

11 goods’’ means goods that are the same in all re12 spects relevant to the rule of origin that qualifies the 

13 goods as originating goods. 

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

15 material’’ means a good used in the production, test16 ing, or inspection of another good but not physically 

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

18 the maintenance of buildings or the operation of 

19 equipment associated with the production of another 

20 good, including— 

21 (A) fuel and energy; 

22 (B) tools, dies, and molds; 

23 (C) spare parts and materials used in the 

24 maintenance of equipment or buildings; 


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1 (D) lubricants, greases, compounding ma2 terials, and other materials used in production 

3 or used to operate equipment or buildings; 

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

5 safety equipment, and supplies; 

6 (F) equipment, devices, and supplies used 

7 for testing or inspecting the good; 

8 (G) catalysts and solvents; and 

9 (H) any other good that is not incor10 porated into the other good but the use of 

11 which in the production of the other good can 

12 reasonably be demonstrated to be a part of that 

13 production. 

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

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

16 including a part or an ingredient. 

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

18 term ‘‘material that is self-produced’’ means an orig19 inating material that is produced by a producer of 

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

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

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

23 of motor vehicles having the same platform or model 

24 name. 


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

2 total cost minus sales promotion, marketing, and 

3 after-sales service costs, royalties, shipping and 

4 packing costs, and non-allowable interest costs that 

5 are included in the total cost. 

6 (12) NONALLOWABLE INTEREST COSTS.—The 

7 term ‘‘nonallowable interest costs’’ means interest 

8 costs incurred by a producer that exceed 700 basis 

9 points above the applicable official interest rate for 

10 comparable maturities of the country in which the 

11 producer is located. 

12 (13) NONORIGINATING GOOD OR NONORIGI13 NATING MATERIAL.—The term ‘‘nonoriginating 

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

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

16 as originating under this section. 

17 (14) PACKING MATERIALS AND CONTAINERS

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

19 containers for shipment’’ means goods used to pro20 tect another good during its transportation and does 

21 not include the packaging materials and containers 

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

23 (15) PREFERENTIAL TARIFF TREATMENT.— 

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

25 customs duty rate, and the treatment under article 


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1 2.10.4 of the Agreement, that are applicable to an 

2 originating good pursuant to the Agreement. 

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

4 a person who engages in the production of a good 

5 in the territory of Korea or the United States. 

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

7 means growing, mining, harvesting, fishing, breed8 ing, raising, trapping, hunting, manufacturing, proc9 essing, assembling, or disassembling a good. 

10 (18) REASONABLY ALLOCATE.—The term ‘‘rea11 sonably allocate’’ means to apportion in a manner 

12 that would be appropriate under generally accepted 

13 accounting principles. 

14 (19) RECOVERED GOODS.—The term ‘‘recov15 ered goods’’ means materials in the form of indi16 vidual parts that are the result of— 

17 (A) the disassembly of used goods into in18 dividual parts; and 

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

20 other processing that is necessary for improve21 ment to sound working condition of such indi22 vidual parts. 

23 (20) REMANUFACTURED GOOD.—The term ‘‘re24 manufactured good’’ means a good that is classified 


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

2 and that— 

3 (A) is entirely or partially comprised of re4 covered goods; and 

5 (B) has a similar life expectancy and en6 joys a factory warranty similar to such a good 

7 that is new. 

8 (21) TOTAL COST.— 

9 (A) IN GENERAL.—The term ‘‘total 

10 cost’’— 

11 (i) means all product costs, period 

12 costs, and other costs for a good incurred 

13 in the territory of Korea, the United 

14 States, or both; and 

15 (ii) does not include profits that are 

16 earned by the producer, regardless of 

17 whether they are retained by the producer 

18 or paid out to other persons as dividends, 

19 or taxes paid on those profits, including 

20 capital gains taxes. 

21 (B) OTHER DEFINITIONS.—In this para22 graph: 

23 (i) PRODUCT COSTS.—The term 

24 ‘‘product costs’’ means costs that are asso25 ciated with the production of a good and 


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1 include the value of materials, direct labor 

2 costs, and direct overhead. 

3 (ii) PERIOD COSTS.—The term ‘‘pe4 riod costs’’ means costs, other than prod5 uct costs, that are expensed in the period 

6 in which they are incurred, such as selling 

7 expenses and general and administrative 

8 expenses. 

9 (iii) OTHER COSTS.—The term ‘‘other 

10 costs’’ means all costs recorded on the 

11 books of the producer that are not product 

12 costs or period costs, such as interest. 

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

14 or consumed in the production of goods. 

15 (o) PRESIDENTIAL PROCLAMATION AUTHORITY.— 

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

17 to proclaim, as part of the HTS— 

18 (A) the provisions set forth in Annex 4-A 

19 and Annex 6-A of the Agreement; and 

20 (B) any additional subordinate category 

21 that is necessary to carry out this title con22 sistent with the Agreement. 

23 (2) MODIFICATIONS.— 

24 (A) IN GENERAL.—Subject to the consulta25 tion and layover provisions of section 104, the 


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1 President may proclaim modifications to the 

2 provisions proclaimed under the authority of 

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

4 chapters 50 through 63 (as included in Annex 

5 4-A of the Agreement). 

6 (B) ADDITIONAL PROCLAMATIONS.—Not7 withstanding subparagraph (A), and subject to 

8 the consultation and layover provisions of sec9 tion 104, the President may proclaim— 

10 (i) such modifications to the provi11 sions proclaimed under the authority of 

12 paragraph (1)(A) as are necessary to im13 plement an agreement with Korea pursu14 ant to article 4.2.5 of the Agreement; and 

15 (ii) before the end of the 1-year period 

16 beginning on the date on which the Agree17 ment enters into force, modifications to 

18 correct any typographical, clerical, or other 

19 nonsubstantive technical error regarding 

20 the provisions of chapters 50 through 63 

21 (as included in Annex 4-A of the Agree22 ment). 

23 (3) FIBERS, YARNS, OR FABRICS NOT AVAIL24 ABLE IN COMMERCIAL QUANTITIES IN THE UNITED

25 STATES.— 


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1 (A) IN GENERAL.—Notwithstanding para2 graph (2)(A), the list of fibers, yarns, and fab3 rics set forth in the list of the United States in 

4 Appendix 4-B-1 of the Agreement may be modi5 fied as provided for in this paragraph. 

6 (B) DEFINITIONS.—In this paragraph: 

7 (i) INTERESTED ENTITY.—The term 

8 ‘‘interested entity’’ means the Government 

9 of Korea, a potential or actual purchaser 

10 of a textile or apparel good, or a potential 

11 or actual supplier of a textile or apparel 

12 good. 

13 (ii) DAY; DAYS.—All references to 

14 ‘‘day’’ and ‘‘days’’ exclude Saturdays, Sun15 days, and legal holidays observed by the 

16 Government of the United States. 

17 (C) REQUESTS TO ADD FIBERS, YARNS, OR

18 FABRICS.— 

19 (i) IN GENERAL.—An interested entity 

20 may request the President to determine 

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

22 in commercial quantities in a timely man23 ner in the United States and to add that 

24 fiber, yarn, or fabric to the list of the 


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1 United States in Appendix 4-B-1 of the 

2 Agreement. 

3 (ii) DETERMINATION.—After receiving 

4 a request under clause (i), the President 

5 may determine whether— 

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

7 available in commercial quantities in a 

8 timely manner in the United States; 

9 or 

10 (II) any interested entity objects 

11 to the request. 

12 (iii) PROCLAMATION AUTHORITY.— 

13 The President may, within the time peri14 ods specified in clause (iv), proclaim that 

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

16 of the request is added to the list of the 

17 United States in Appendix 4-B-1 of the 

18 Agreement, if the President has deter19 mined under clause (ii) that— 

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

21 not available in commercial quantities 

22 in a timely manner in the United 

23 States; or 

24 (II) no interested entity has ob25 jected to the request. 


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1 (iv) TIME PERIODS.—The time peri2 ods within which the President may issue 

3 a proclamation under clause (iii) are— 

4 (I) not later than 30 days after 

5 the date on which a request is sub6 mitted under clause (i); or 

7 (II) not later than 60 days after 

8 the request is submitted, if the Presi9 dent determines, within 30 days after 

10 the date on which the request is sub11 mitted, that the President does not 

12 have sufficient information to make a 

13 determination under clause (ii). 

14 (v) EFFECTIVE DATE.—Notwith15 standing section 103(a)(2), a proclamation 

16 made under clause (iii) shall take effect on 

17 the date on which the text of the proclama18 tion is published in the Federal Register. 

19 (D) DEEMED DENIAL OF REQUEST.—If, 

20 after an interested entity submits a request 

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

22 not, within 30 days of the expiration of the ap23 plicable time period specified in subparagraph 

24 (C)(iv), make a determination under subparaVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 graph (C)(ii) regarding the request, the request 

2 shall be considered to be denied. 

3 (E) REQUESTS TO REMOVE FIBERS, 

4 YARNS, OR FABRICS.— 

5 (i) IN GENERAL.—An interested entity 

6 may request the President to remove from 

7 the list of the United States in Appendix 

8 4-B-1 of the Agreement, any fiber, yarn, or 

9 fabric that has been added to that list pur10 suant to subparagraph (C)(iii). 

11 (ii) PROCLAMATION AUTHORITY.—Not 

12 later than 30 days after the date on which 

13 a request under clause (i) is submitted, the 

14 President may proclaim that the fiber, 

15 yarn, or fabric that is the subject of the re16 quest is removed from the list of the 

17 United States in Appendix 4-B-1 of the 

18 Agreement if the President determines 

19 that the fiber, yarn, or fabric is available 

20 in commercial quantities in a timely man21 ner in the United States. 

22 (iii) EFFECTIVE DATE.—A proclama23 tion issued under clause (ii) may not take 

24 effect earlier than the date that is 6 

25 months after the date on which the text of 


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1 the proclamation is published in the Fed2 eral Register. 

3 (F) PROCEDURES.—The President shall 

4 establish procedures— 

5 (i) governing the submission of a re6 quest under subparagraphs (C) and (E); 

7 and 

8 (ii) providing an opportunity for inter9 ested entities to submit comments and sup10 porting evidence before the President 

11 makes a determination under subpara12 graph (C)(ii) or (E)(ii). 

13 SEC. 203. CUSTOMS USER FEES. 

14 Section 13031(b) of the Consolidated Omnibus Budg15 et Reconciliation Act of 1985 (19 U.S.C. 58c(b)) is 

16 amended by adding after paragraph (18) the following: 

17 ‘‘(19) No fee may be charged under subsection (a) 

18 (9) or (10) with respect to goods that qualify as origi19 nating goods under section 202 of the United States– 

20 Korea Free Trade Agreement Implementation Act. Any 

21 service for which an exemption from such fee is provided 

22 by reason of this paragraph may not be funded with 

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


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1 SEC. 204. DISCLOSURE OF INCORRECT INFORMATION; 

2 FALSE CERTIFICATIONS OF ORIGIN; DENIAL 

3 OF PREFERENTIAL TARIFF TREATMENT. 

4 (a) DISCLOSURE OF INCORRECT INFORMATION.— 

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

6 is amended— 

7 (1) in subsection (c)— 

8 (A) by redesignating paragraph (11) as 

9 paragraph (12); and 

10 (B) by inserting after paragraph (10) the 

11 following new paragraph: 

12 ‘‘(11) PRIOR DISCLOSURE REGARDING CLAIMS

13 UNDER THE UNITED STATES–KOREA FREE TRADE

14 AGREEMENT.—An importer shall not be subject to 

15 penalties under subsection (a) for making an incor16 rect claim that a good qualifies as an originating 

17 good under section 202 of the United States–Korea 

18 Free Trade Agreement Implementation Act if the 

19 importer, in accordance with regulations issued by 

20 the Secretary of the Treasury, promptly and volun21 tarily makes a corrected declaration and pays any 

22 duties owing with respect to that good.’’; and 

23 (2) by adding at the end the following new sub24 section: 

25 ‘‘(j) FALSE CERTIFICATIONS OF ORIGIN UNDER THE

26 UNITED STATES–KOREA FREE TRADE AGREEMENT.— 


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

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

3 fraud, gross negligence, or negligence, in a KFTA 

4 certification of origin (as defined in section 508 of 

5 this Act) that a good exported from the United 

6 States qualifies as an originating good under the 

7 rules of origin provided for in section 202 of the 

8 United States–Korea Free Trade Agreement Imple9 mentation Act. The procedures and penalties of this 

10 section that apply to a violation of subsection (a) 

11 also apply to a violation of this subsection. 

12 ‘‘(2) PROMPT AND VOLUNTARY DISCLOSURE OF

13 INCORRECT INFORMATION.—No penalty shall be im14 posed under this subsection if, promptly after an ex15 porter or producer that issued a KFTA certification 

16 of origin has reason to believe that such certification 

17 contains or is based on incorrect information, the ex18 porter or producer voluntarily provides written no19 tice of such incorrect information to every person to 

20 whom the certification was issued. 

21 ‘‘(3) EXCEPTION.—A person shall not be con22 sidered to have violated paragraph (1) if— 

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

24 time it was provided in a KFTA certification of 


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1 origin but was later rendered incorrect due to 

2 a change in circumstances; and 

3 ‘‘(B) the person promptly and voluntarily 

4 provides written notice of the change in cir5 cumstances to all persons to whom the person 

6 provided the certification.’’. 

7 (b) DENIAL OF PREFERENTIAL TARIFF TREAT8 MENT.—Section 514 of the Tariff Act of 1930 (19 U.S.C. 

9 1514) is amended by adding at the end the following new 

10 subsection: 

11 ‘‘(j) DENIAL OF PREFERENTIAL TARIFF TREAT12 MENT UNDER THE UNITED STATES–KOREA FREE TRADE

13 AGREEMENT.—If U.S. Customs and Border Protection or 

14 U.S. Immigration and Customs Enforcement of the De15 partment of Homeland Security finds indications of a pat16 tern of conduct by an importer, exporter, or producer of 

17 false or unsupported representations that goods qualify 

18 under the rules of origin provided for in section 202 of 

19 the United States–Korea Free Trade Agreement Imple20 mentation Act, U.S. Customs and Border Protection, in 

21 accordance with regulations issued by the Secretary of the 

22 Treasury, may suspend preferential tariff treatment under 

23 the United States–Korea Free Trade Agreement Imple24 mentation Act to entries of identical goods covered by sub25 sequent representations by that importer, exporter, or proVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 ducer until U.S. Customs and Border Protection deter2 mines that representations of that person are in con3 formity with such section 202.’’. 

4 SEC. 205. RELIQUIDATION OF ENTRIES. 

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

6 1520(d)) is amended in the matter preceding paragraph 

7 (1)— 

8 (1) by striking ‘‘or’’; and 

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

10 section 202 of the United States–Korea Free Trade 

11 Agreement Implementation Act for which’’. 

12 SEC. 206. RECORDKEEPING REQUIREMENTS. 

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

14 1508) is amended— 

15 (1) by redesignating subsection (i) as subsection 

16 (j); 

17 (2) by inserting after subsection (h) the fol18 lowing new subsection: 

19 ‘‘(i) CERTIFICATIONS OF ORIGIN FOR GOODS EX20 PORTED UNDER THE UNITED STATES–KOREA FREE

21 TRADE AGREEMENT.— 

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

23 ‘‘(A) RECORDS AND SUPPORTING DOCU24 MENTS.—The term ‘records and supporting 

25 documents’ means, with respect to an exported 


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1 good under paragraph (2), records and docu2 ments related to the origin of the good, includ3 ing— 

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

5 and payment for, the good; 

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

7 and payment for, all materials, including 

8 indirect materials, used in the production 

9 of the good; and 

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

11 the form in which it was exported. 

12 ‘‘(B) KFTA CERTIFICATION OF ORIGIN.— 

13 The term ‘KFTA certification of origin’ means 

14 the certification established under article 6.15 

15 of the United States–Korea Free Trade Agree16 ment that a good qualifies as an originating 

17 good under such Agreement. 

18 ‘‘(2) EXPORTS TO KOREA.—Any person who 

19 completes and issues a KFTA certification of origin 

20 for a good exported from the United States shall 

21 make, keep, and, pursuant to rules and regulations 

22 promulgated by the Secretary of the Treasury, 

23 render for examination and inspection all records 

24 and supporting documents related to the origin of 


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1 the good (including the certification or copies there2 of). 

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

4 issues a KFTA certification of origin shall keep the 

5 records and supporting documents relating to that 

6 certification of origin for a period of at least 5 years 

7 after the date on which the certification is issued.’’; 

8 and 

9 (3) in subsection (j), as so redesignated, by 

10 striking ‘‘(g), or (h)’’ and inserting ‘‘(g), (h), or (i)’’. 

11 SEC. 207. ENFORCEMENT RELATING TO TRADE IN TEXTILE 

12 OR APPAREL GOODS. 

13 (a) ACTION DURING VERIFICATION.— 

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

15 Treasury requests the Government of Korea to con16 duct a verification pursuant to article 4.3 of the 

17 Agreement for purposes of making a determination 

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

19 Secretary to take appropriate action described in 

20 subsection (b) while the verification is being con21 ducted. 

22 (2) DETERMINATION.—A determination under 

23 this paragraph is a determination of the Secretary 

24 that— 


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1 (A) an exporter or producer in Korea is 

2 complying with applicable customs laws, regula3 tions, procedures, requirements, and practices 

4 affecting trade in textile or apparel goods; or 

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

6 exported or produced by such exporter or pro7 ducer— 

8 (i) qualifies as an originating good 

9 under section 202, or 

10 (ii) is a good of Korea, 

11 is accurate. 

12 (b) APPROPRIATE ACTION DESCRIBED.—Appropriate 

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

14 (1) suspension of liquidation of the entry of any 

15 textile or apparel good exported or produced by the 

16 person that is the subject of a verification under 

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

18 subsection (a)(2)(A), in a case in which the request 

19 for verification was based on a reasonable suspicion 

20 of unlawful activity related to such goods; and 

21 (2) suspension of liquidation of the entry of a 

22 textile or apparel good for which a claim has been 

23 made that is the subject of a verification under sub24 section (a)(1) regarding a claim described in sub25 section (a)(2)(B). 


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1 (c) ACTION WHEN INFORMATION IS INSUFFI2 CIENT.—If the Secretary of the Treasury determines that 

3 the information obtained within 12 months after making 

4 a request for a verification under subsection (a)(1) is in5 sufficient to make a determination under subsection 

6 (a)(2), the President may direct the Secretary to take ap7 propriate action described in subsection (d) until such 

8 time as the Secretary receives information sufficient to 

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

10 such earlier date as the President may direct. 

11 (d) APPROPRIATE ACTION DESCRIBED.—Appro12 priate action under subsection (c) includes— 

13 (1) denial of preferential tariff treatment under 

14 the Agreement with respect to— 

15 (A) any textile or apparel good exported or 

16 produced by the person that is the subject of a 

17 verification under subsection (a)(1) regarding 

18 compliance described in subsection (a)(2)(A); or 

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

20 claim has been made that is the subject of a 

21 verification under subsection (a)(1) regarding a 

22 claim described in subsection (a)(2)(B); and 

23 (2) denial of entry into the United States of— 

24 (A) any textile or apparel good exported or 

25 produced by the person that is the subject of a 


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1 verification under subsection (a)(1) regarding 

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

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

4 claim has been made that is the subject of a 

5 verification under subsection (a)(1) regarding a 

6 claim described in subsection (a)(2)(B). 

7 (e) PUBLICATION OF NAME OF PERSON.—In accord8 ance with article 4.3.11 of the Agreement, the Secretary 

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

10 the Secretary has determined— 

11 (1) is engaged in circumvention of applicable 

12 laws, regulations, or procedures affecting trade in 

13 textile or apparel goods; or 

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

15 or is capable of producing, textile or apparel goods. 

16 (f) CERTIFICATE OF ELIGIBILITY.—The Commis17 sioner responsible for U.S. Customs and Border Protec18 tion of the Department of Homeland Security may require 

19 an importer to submit at the time the importer files a 

20 claim for preferential tariff treatment under Annex 4-B 

21 of the Agreement a certificate of eligibility, properly com22 pleted and signed by an authorized official of the Govern23 ment of Korea. 

24 (g) VERIFICATIONS IN THE UNITED STATES.—If the 

25 government of a country that is a party to a free trade 


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1 agreement with the United States makes a request for a 

2 verification pursuant to that agreement, the Secretary of 

3 the Treasury may request a verification of the production 

4 of any textile or apparel good in order to assist that gov5 ernment in determining whether— 

6 (1) a claim of origin under the agreement for 

7 a textile or apparel good is accurate; or 

8 (2) an exporter, producer, or other enterprise 

9 located in the United States involved in the move10 ment of textile or apparel goods from the United 

11 States to the territory of the requesting government 

12 is complying with applicable customs laws, regula13 tions, and procedures regarding trade in textile or 

14 apparel goods. 

15 SEC. 208. REGULATIONS. 

16 The Secretary of the Treasury shall prescribe such 

17 regulations as may be necessary to carry out— 

18 (1) subsections (a) through (n) of section 202; 

19 (2) the amendment made by section 203; and 

20 (3) any proclamation issued under section 

21 202(o). 

22 TITLE III—RELIEF FROM 

23 IMPORTS 

24 SEC. 301. DEFINITIONS. 

25 In this title: 


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1 (1) KOREAN ARTICLE.—The term ‘‘Korean arti2 cle’’ means an article that qualifies as an originating 

3 good under section 202(b). 

4 (2) KOREAN MOTOR VEHICLE ARTICLE.—The 

5 term ‘‘Korean motor vehicle article’’ means a good 

6 provided for in heading 8703 or 8704 of the HTS 

7 that qualifies as an originating good under section 

8 202(b). 

9 (3) KOREAN TEXTILE OR APPAREL ARTICLE.— 

10 The term ‘‘Korean textile or apparel article’’ means 

11 a textile or apparel good (as defined in section 3(5)) 

12 that is a Korean article. 

13 Subtitle A—Relief From Imports 

14 Benefitting From the Agreement 

15 SEC. 311. COMMENCING OF ACTION FOR RELIEF. 

16 (a) FILING OF PETITION.— 

17 (1) IN GENERAL.—A petition requesting action 

18 under this subtitle for the purpose of adjusting to 

19 the obligations of the United States under the 

20 Agreement may be filed with the Commission by an 

21 entity, including a trade association, firm, certified 

22 or recognized union, or group of workers, that is 

23 representative of an industry. The Commission shall 

24 transmit a copy of any petition filed under this sub25 section to the United States Trade Representative. 


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1 (2) PROVISIONAL RELIEF.—An entity filing a 

2 petition under this subsection may request that pro3 visional relief be provided as if the petition had been 

4 filed under section 202(a) of the Trade Act of 1974 

5 (19 U.S.C. 2252(a)). 

6 (3) CRITICAL CIRCUMSTANCES.—Any allegation 

7 that critical circumstances exist shall be included in 

8 the petition. 

9 (b) INVESTIGATION AND DETERMINATION.—Upon 

10 the filing of a petition under subsection (a), the Commis11 sion, unless subsection (d) applies, shall promptly initiate 

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

13 reduction or elimination of a duty provided for under the 

14 Agreement, a Korean article is being imported into the 

15 United States in such increased quantities, in absolute 

16 terms or relative to domestic production, and under such 

17 conditions that imports of the Korean article constitute 

18 a substantial cause of serious injury or threat thereof to 

19 the domestic industry producing an article that is like, or 

20 directly competitive with, the imported article. 

21 (c) APPLICABLE PROVISIONS.—The following provi22 sions of section 202 of the Trade Act of 1974 (19 U.S.C. 

23 2252) apply with respect to any investigation initiated 

24 under subsection (b): 


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

2 (b). 

3 (2) Subsection (c). 

4 (3) Subsection (d). 

5 (4) Subsection (i). 

6 (d) ARTICLES EXEMPT FROM INVESTIGATION.—No 

7 investigation may be initiated under this section with re8 spect to any Korean article if, after the date on which 

9 the Agreement enters into force, import relief has been 

10 provided with respect to that Korean article under this 

11 subtitle. 

12 SEC. 312. COMMISSION ACTION ON PETITION. 

13 (a) DETERMINATION.—Not later than 120 days (180 

14 days if critical circumstances have been alleged) after the 

15 date on which an investigation is initiated under section 

16 311(b) with respect to a petition, the Commission shall 

17 make the determination required under that section. 

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

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

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

21 1330(d) (1), (2), and (3)) shall be applied with respect 

22 to determinations and findings made under this section 

23 as if such determinations and findings were made under 

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


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1 (c) ADDITIONAL FINDING AND RECOMMENDATION IF

2 DETERMINATION AFFIRMATIVE.— 

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

4 by the Commission under subsection (a) with respect 

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

6 President may consider a determination of the Com7 mission to be an affirmative determination as pro8 vided for under paragraph (1) of section 330(d) of 

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

10 Commission shall find, and recommend to the Presi11 dent in the report required under subsection (d), the 

12 amount of import relief that is necessary to remedy 

13 or prevent the injury found by the Commission in 

14 the determination and to facilitate the efforts of the 

15 domestic industry to make a positive adjustment to 

16 import competition. 

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

18 recommended by the Commission under this sub19 section shall be limited to the relief described in sec20 tion 313(c). 

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

22 members of the Commission who voted in the af23 firmative under subsection (a) are eligible to vote on 

24 the proposed action to remedy or prevent the injury 

25 found by the Commission. Members of the CommisVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 sion who did not vote in the affirmative may submit, 

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

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

4 to remedy or prevent the injury. 

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

6 date that is 30 days after the date on which a determina7 tion is made under subsection (a) with respect to an inves8 tigation, the Commission shall submit to the President a 

9 report that includes— 

10 (1) the determination made under subsection 

11 (a) and an explanation of the basis for the deter12 mination; 

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

14 affirmative, any findings and recommendations for 

15 import relief made under subsection (c) and an ex16 planation of the basis for each recommendation; and 

17 (3) any dissenting or separate views by mem18 bers of the Commission regarding the determination 

19 referred to in paragraph (1) and any finding or rec20 ommendation referred to in paragraph (2). 

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

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

23 promptly make public the report (with the exception of 

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1 fidential) and shall publish a summary of the report in 

2 the Federal Register. 

3 SEC. 313. PROVISION OF RELIEF. 

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

5 30 days after the date on which the President receives a 

6 report of the Commission in which the Commission’s de7 termination under section 312(a) is affirmative, or which 

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

9 President considers to be affirmative under paragraph (1) 

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

11 1330(d)(1)), the President, subject to subsection (b), shall 

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

13 of such determination to the extent that the President de14 termines necessary to remedy or prevent the injury found 

15 by the Commission and to facilitate the efforts of the do16 mestic industry to make a positive adjustment to import 

17 competition. 

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

19 provide import relief under this section if the President 

20 determines that the provision of the import relief will not 

21 provide greater economic and social benefits than costs. 

22 (c) NATURE OF RELIEF.— 

23 (1) IN GENERAL.—Except as provided in para24 graph (2), the import relief that the President is auVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 thorized to provide under this section with respect to 

2 imports of an article is as follows: 

3 (A) The suspension of any further reduc4 tion provided for under Annex 2-B of the 

5 Agreement in the duty imposed on the article. 

6 (B) An increase in the rate of duty im7 posed on the article to a level that does not ex8 ceed the lesser of— 

9 (i) the column 1 general rate of duty 

10 imposed under the HTS on like articles at 

11 the time the import relief is provided; or 

12 (ii) the column 1 general rate of duty 

13 imposed under the HTS on like articles on 

14 the day before the date on which the 

15 Agreement enters into force. 

16 (2) DUTIES APPLIED ON A SEASONAL BASIS.— 

17 In the case of imports of an article to which a duty 

18 is applied on a seasonal basis, the import relief that 

19 the President is authorized to provide under this 

20 section is as follows: 

21 (A) The suspension of any further reduc22 tion provided for under Annex 2-B of the 

23 Agreement in the duty imposed on the article. 


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1 (B) An increase in the rate of duty im2 posed on the article to a level that does not ex3 ceed the lesser of— 

4 (i) the column 1 general rate of duty 

5 imposed under the HTS on like articles for 

6 the corresponding season immediately pre7 ceding the date the import relief is pro8 vided; or 

9 (ii) the column 1 general rate of duty 

10 imposed under the HTS for the cor11 responding season immediately preceding 

12 the date on which the Agreement enters 

13 into force. 

14 (3) PROGRESSIVE LIBERALIZATION.—If the pe15 riod for which import relief is provided under this 

16 section is greater than 1 year, the President shall 

17 provide for the progressive liberalization (described 

18 in article 10.2.7 of the Agreement) of such relief at 

19 regular intervals during the period of its application. 

20 (d) PERIOD OF RELIEF.— 

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

22 any import relief that the President provides under 

23 this section may not be in effect for more than 2 

24 years. 

25 (2) EXTENSION.— 


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1 (A) IN GENERAL.—Subject to subpara2 graph (C), the President, after receiving a de3 termination from the Commission under sub4 paragraph (B) that is affirmative, or which the 

5 President considers to be affirmative under 

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

7 Act of 1930 (19 U.S.C. 1330(d)(1)), may ex8 tend the effective period of any import relief 

9 provided under this section by up to 1 year, if 

10 the President determines that— 

11 (i) the import relief continues to be 

12 necessary to remedy or prevent serious in13 jury and to facilitate adjustment by the do14 mestic industry to import competition; and 

15 (ii) there is evidence that the industry 

16 is making a positive adjustment to import 

17 competition. 

18 (B) ACTION BY COMMISSION.— 

19 (i) INVESTIGATION.—Upon a petition 

20 on behalf of the industry concerned that is 

21 filed with the Commission not earlier than 

22 the date that is 9 months, and not later 

23 than the date that is 6 months, before the 

24 date on which any action taken under sub25 section (a) is to terminate, the Commission 


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1 shall conduct an investigation to determine 

2 whether action under this section continues 

3 to be necessary to remedy or prevent seri4 ous injury and whether there is evidence 

5 that the industry is making a positive ad6 justment to import competition. 

7 (ii) NOTICE AND HEARING.—The 

8 Commission shall publish notice of the 

9 commencement of any proceeding under 

10 this subparagraph in the Federal Register 

11 and shall, within a reasonable time there12 after, hold a public hearing at which the 

13 Commission shall afford interested parties 

14 and consumers an opportunity to be 

15 present, to present evidence, and to re16 spond to the presentations of other parties 

17 and consumers, and otherwise to be heard. 

18 (iii) REPORT.—The Commission shall 

19 submit to the President a report on its in20 vestigation and determination under this 

21 subparagraph not later than 60 days be22 fore the action under subsection (a) is to 

23 terminate, unless the President specifies a 

24 different date. 


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1 (C) PERIOD OF IMPORT RELIEF.—Any im2 port relief provided under this section, including 

3 any extensions thereof, may not, in the aggre4 gate, be in effect for more than 3 years. 

5 (e) RATE AFTER TERMINATION OF IMPORT RE6 LIEF.—Beginning on the date on which import relief 

7 under this section is terminated with respect to an article, 

8 the rate of duty on that article shall be the rate that would 

9 have been in effect but for the provision of such relief. 

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

11 relief may be provided under this section on any article 

12 that is subject to import relief under— 

13 (1) subtitle B or C; or 

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

15 1974 (19 U.S.C. 2251 et seq.). 

16 SEC. 314. TERMINATION OF RELIEF AUTHORITY. 

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

18 import relief may be provided under this subtitle after the 

19 date that is 10 years after the date on which the Agree20 ment enters into force. 

21 (b) EXCEPTION.—If an article for which relief is pro22 vided under this subtitle is an article for which the period 

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

24 United States to Annex 2-B of the Agreement, is greater 

25 than 10 years, no relief under this subtitle may be proVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 vided for that article after the date on which that period 

2 ends. 

3 (c) PRESIDENTIAL DETERMINATION.—Import relief 

4 may be provided under this subtitle in the case of a Ko5 rean article after the date on which such relief would, but 

6 for this subsection, terminate under subsection (a) and 

7 (b), if the President determines that Korea has consented 

8 to such relief. 

9 SEC. 315. COMPENSATION AUTHORITY. 

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

11 (19 U.S.C. 2133), any import relief provided by the Presi12 dent under section 313 shall be treated as action taken 

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

14 et seq.). 

15 SEC. 316. CONFIDENTIAL BUSINESS INFORMATION. 

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

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

18 (1) by striking ‘‘and’’; and 

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

20 and title III of the United States–Korea Free Trade 

21 Agreement Implementation Act’’. 


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1 Subtitle B—Motor Vehicle 

2 Safeguard Measures 

3 SEC. 321. MOTOR VEHICLE SAFEGUARD MEASURES. 

4 The provisions of subtitle A shall apply with respect 

5 to a Korean motor vehicle article to the same extent that 

6 such provisions apply to Korean articles, except as follows: 

7 (1) Section 311(d) and paragraphs (2) and (3) 

8 of 313(c) shall not apply. 

9 (2) Section 313(d)(2)(A) shall be applied and 

10 administered by substituting ‘‘2 years’’ for ‘‘1 year’’. 

11 (3) Section 313(d)(2)(C) shall be applied and 

12 administered by substituting ‘‘4 years’’ for ‘‘3 

13 years’’. 

14 (4) Section 313(f)(1) shall be applied and ad15 ministered by substituting ‘‘subtitle A’’ for ‘‘subtitle 

16 B or C’’. 

17 (5) Section 314(b) shall be applied and admin18 istered as if such section read as follows: 

19 ‘‘(b) EXCEPTION.—Import relief may be provided 

20 under this subtitle with respect to a Korean motor vehicle 

21 article during any period before the date that is 10 years 

22 after the date on which duties on the article are elimi23 nated, as set forth in section 201(d), or, if the article is 

24 not referred to in section 201(d), the Schedule of the 

25 United States to Annex 2-B of the Agreement.’’. 


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1 Subtitle C—Textile and Apparel 

2 Safeguard Measures 

3 SEC. 331. COMMENCEMENT OF ACTION FOR RELIEF. 

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

5 subtitle for the purpose of adjusting to the obligations of 

6 the United States under the Agreement may be filed with 

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

8 a request, the President shall review the request to deter9 mine, from information presented in the request, whether 

10 to commence consideration of the request. 

11 (b) PUBLICATION OF REQUEST.—If the President de12 termines that the request under subsection (a) provides 

13 the information necessary for the request to be considered, 

14 the President shall publish in the Federal Register a no15 tice of commencement of consideration of the request, and 

16 notice seeking public comments regarding the request. The 

17 notice shall include a summary of the request and the 

18 dates by which comments and rebuttals must be received. 

19 SEC. 332. DETERMINATION AND PROVISION OF RELIEF. 

20 (a) DETERMINATION.— 

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

22 made under section 331(b), the President shall de23 termine whether, as a result of the reduction or 

24 elimination of a duty under the Agreement, a Ko25 rean textile or apparel article is being imported into 


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1 the United States in such increased quantities, in 

2 absolute terms or relative to the domestic market for 

3 that article, and under such conditions as to cause 

4 serious damage, or actual threat thereof, to a domes5 tic industry producing an article that is like, or di6 rectly competitive with, the imported article. 

7 (2) SERIOUS DAMAGE.—In making a deter8 mination under paragraph (1), the President— 

9 (A) shall examine the effect of increased 

10 imports on the domestic industry, as reflected 

11 in changes in such relevant economic factors as 

12 output, productivity, utilization of capacity, in13 ventories, market share, exports, wages, em14 ployment, domestic prices, profits, and invest15 ment, no one of which is necessarily decisive; 

16 and 

17 (B) shall not consider changes in tech18 nology or consumer preference as factors sup19 porting a determination of serious damage or 

20 actual threat thereof. 

21 (b) PROVISION OF RELIEF.— 

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

23 subsection (a) is affirmative, the President may pro24 vide relief from imports of the article that is the 

25 subject of such determination, as provided in paraVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 graph (2), to the extent that the President deter2 mines necessary to remedy or prevent the serious 

3 damage and to facilitate adjustment by the domestic 

4 industry. 

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

6 President is authorized to provide under this sub7 section with respect to imports of an article is— 

8 (A) the suspension of any further reduc9 tion provided for under Annex 2-B of the 

10 Agreement in the duty imposed on the article; 

11 or 

12 (B) an increase in the rate of duty im13 posed on the article to a level that does not ex14 ceed the lesser of— 

15 (i) the column 1 general rate of duty 

16 imposed under the HTS on like articles at 

17 the time the import relief is provided; or 

18 (ii) the column 1 general rate of duty 

19 imposed under the HTS on like articles on 

20 the day before the date on which the 

21 Agreement enters into force. 

22 SEC. 333. PERIOD OF RELIEF. 

23 (a) IN GENERAL.—Subject to subsection (b), the im24 port relief that the President provides under section 

25 332(b) may not be in effect for more than 2 years. 


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1 (b) EXTENSION.— 

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

3 the President may extend the effective period of any 

4 import relief provided under this subtitle for a pe5 riod of not more than 2 years, if the President de6 termines that— 

7 (A) the import relief continues to be nec8 essary to remedy or prevent serious damage 

9 and to facilitate adjustment by the domestic in10 dustry to import competition; and 

11 (B) there is evidence that the industry is 

12 making a positive adjustment to import com13 petition. 

14 (2) LIMITATION.—Any relief provided under 

15 this subtitle, including any extensions thereof, may 

16 not, in the aggregate, be in effect for more than 4 

17 years. 

18 SEC. 334. ARTICLES EXEMPT FROM RELIEF. 

19 The President may not provide import relief under 

20 this subtitle with respect to an article if— 

21 (1) import relief previously has been provided 

22 under this subtitle with respect to that article; or 

23 (2) the article is subject to import relief 

24 under— 

25 (A) subtitle A; or 


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

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

3 SEC. 335. RATE AFTER TERMINATION OF IMPORT RELIEF. 

4 On the date on which import relief under this subtitle 

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

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

7 effect but for the provision of such relief. 

8 SEC. 336. TERMINATION OF RELIEF AUTHORITY. 

9 No import relief may be provided under this subtitle 

10 with respect to any article after the date that is 10 years 

11 after the date on which duties on the article are eliminated 

12 pursuant to the Agreement. 

13 SEC. 337. COMPENSATION AUTHORITY. 

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

15 (19 U.S.C. 2133), any import relief provided by the Presi16 dent under this subtitle shall be treated as action taken 

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

18 et seq.). 

19 SEC. 338. CONFIDENTIAL BUSINESS INFORMATION. 

20 The President may not release information received 

21 in connection with an investigation or determination under 

22 this subtitle which the President considers to be confiden23 tial business information unless the party submitting the 

24 confidential business information had notice, at the time 

25 of submission, that such information would be released by 


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1 the President, or such party subsequently consents to the 

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

3 confidential business information, the party shall also pro4 vide a nonconfidential version of the information in which 

5 the confidential business information is summarized or, if 

6 necessary, deleted. 

7 Subtitle D—Cases Under Title II of 

8 the Trade Act of 1974 

9 SEC. 341. FINDINGS AND ACTION ON KOREAN ARTICLES. 

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

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

12 1974 (19 U.S.C. 2251 et seq.), the Commission makes an 

13 affirmative determination (or a determination which the 

14 President may treat as an affirmative determination under 

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

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

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

18 determination is submitted to the President) whether im19 ports of the Korean article are a substantial cause of seri20 ous injury or threat thereof. 

21 (b) PRESIDENTIAL DETERMINATION REGARDING

22 KOREAN ARTICLES.—In determining the nature and ex23 tent of action to be taken under chapter 1 of title II of 

24 the Trade Act of 1974 (19 U.S.C. 2251 et seq.), the Presi25 dent may exclude from the action Korean articles with reVerDate Mar 15 2010 23:56 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S1642.RS S1642

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1 spect to which the Commission has made a negative find2 ing under subsection (a). 

3 TITLE IV—PROCUREMENT 

4 SEC. 401. ELIGIBLE PRODUCTS. 

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

6 1979 (19 U.S.C. 2518(4)(A)) is amended— 

7 (1) by striking ‘‘or’’ at the end of clause (vi); 

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

9 (vii) and inserting ‘‘; or’’; and 

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

11 clause: 

12 ‘‘(viii) a party to the United States– 

13 Korea Free Trade Agreement, a product or 

14 service of that country or instrumentality 

15 which is covered under that agreement for 

16 procurement by the United States.’’. 

17 TITLE V—OFFSETS 

18 SEC. 501. INCREASE IN PENALTY ON PAID PREPARERS WHO 

19 FAIL TO COMPLY WITH EARNED INCOME TAX 

20 CREDIT DUE DILIGENCE REQUIREMENTS. 

21 (a) IN GENERAL.—Section 6695(g) of the Internal 

22 Revenue Code of 1986 is amended by striking ‘‘$100’’ and 

23 inserting ‘‘$500’’. 


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

2 this section shall apply to returns required to be filed after 

3 December 31, 2011. 

4 SEC. 502. REQUIREMENT FOR PRISONS LOCATED IN THE 

5 UNITED STATES TO PROVIDE INFORMATION 

6 FOR TAX ADMINISTRATION. 

7 (a) IN GENERAL.—Subchapter B of chapter 61 of the 

8 Internal Revenue Code of 1986 is amended by redesig9 nating section 6116 as section 6117 and by inserting after 

10 section 6115 the following new section: 

11 ‘‘SEC. 6116. REQUIREMENT FOR PRISONS LOCATED IN 

12 UNITED STATES TO PROVIDE INFORMATION 

13 FOR TAX ADMINISTRATION. 

14 ‘‘(a) IN GENERAL.—Not later than September 15, 

15 2012, and annually thereafter, the head of the Federal 

16 Bureau of Prisons and the head of any State agency 

17 charged with the responsibility for administration of pris18 ons shall provide to the Secretary in electronic format a 

19 list with the information described in subsection (b) of all 

20 the inmates incarcerated within the prison system for any 

21 part of the prior 2 calendar years or the current calendar 

22 year through August 31. 

23 ‘‘(b) INFORMATION.—The information with respect 

24 to each inmate is— 

25 ‘‘(1) first, middle, and last name, 


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1 ‘‘(2) date of birth, 

2 ‘‘(3) institution of current incarceration or, for 

3 released inmates, most recent incarceration, 

4 ‘‘(4) prison assigned inmate number, 

5 ‘‘(5) the date of incarceration, 

6 ‘‘(6) the date of release or anticipated date of 

7 release, 

8 ‘‘(7) the date of work release, 

9 ‘‘(8) taxpayer identification number and wheth10 er the prison has verified such number, 

11 ‘‘(9) last known address, and 

12 ‘‘(10) any additional information as the Sec13 retary may request. 

14 ‘‘(c) FORMAT.—The Secretary shall determine the 

15 electronic format of the information described in sub16 section (b).’’. 

17 (b) CLERICAL AMENDMENT.—The table of sections 

18 for such subchapter is amended by striking the item relat19 ing to section 6116 and by adding at the end the following 

20 new items: 

‘‘Sec. 6116. Requirement for prisons located in United States to provide information for tax administration. 

‘‘Sec. 6117. Cross reference.’’. 

21 SEC. 503. RATE FOR MERCHANDISE PROCESSING FEES. 

22 For the period beginning on December 1, 2015, and 

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1 solidated Omnibus Budget Reconciliation Act of 1985 (19 

2 U.S.C. 58c(a)(9)) shall be applied and administered— 

3 (1) in subparagraph (A), by substituting 

4 ‘‘0.3464’’ for ‘‘0.21’’; and 

5 (2) in subparagraph (B)(i), by substituting 

6 ‘‘0.3464’’ for ‘‘0.21’’. 

7 SEC. 504. EXTENSION OF CUSTOMS USER FEES. 

8 (a) IN GENERAL.—Section 13031(j)(3)(A) of the 

9 Consolidated Omnibus Budget Reconciliation Act of 1985 

10 (19 U.S.C. 58c(j)(3)(A)) is amended by striking ‘‘January 

11 7, 2020’’ and inserting ‘‘August 2, 2021’’. 

12 (b) OTHER FEES.—Section 13031(j)(3)(B)(i) of the 

13 Consolidated Omnibus Budget Reconciliation Act of 1985 

14 (19 U.S.C. 58c(j)(3)(B)(i)) is amended by striking ‘‘Janu15 ary 14, 2020’’ and inserting ‘‘December 8, 2020’’. 

16 SEC. 505. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

17 TAXES. 

18 Notwithstanding section 6655 of the Internal Rev19 enue Code of 1986, in the case of a corporation with assets 

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

21 of the preceding taxable year)— 

22 (1) the amount of any required installment of 

23 corporate estimated tax which is otherwise due in 

24 July, August, or September of 2012 shall be in25 creased by 0.25 percent of such amount (determined 


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1 without regard to any increase in such amount not 

2 contained in such Code); 

3 (2) the amount of any required installment of 

4 corporate estimated tax which is otherwise due in 

5 July, August, or September of 2016 shall be in6 creased by 2.75 percent of such amount (determined 

7 without regard to any increase in such amount not 

8 contained in such Code); and 

9 (3) the amount of the next required installment 

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

11 (2) shall be appropriately reduced to reflect the 

12 amount of the increase by reason of such paragraph. 


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Calendar No. 190 

112TH CONGRESS 

1ST SESSION S. 1642 

A BILL 

To implement the United States–Korea Free Trade 

Agreement. 

OCTOBER 11, 2011 

Reported without amendment 


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