II

104TH CONGRESS

2D SESSION S. 1951

To ensure the competitiveness of the United States textile and apparel

industry.

IN THE SENATE OF THE UNITED STATES

JULY 12, 1996

Mr. FORD (for himself, Mr. HOLLINGS, Mr. HELMS, Mr. WARNER, Mr. BYRD,

Mr. HEFLIN, Mr. THURMOND, Mr. SHELBY, and Mr. COHEN) introduced

the following bill; which was read twice and referred to the Committee

on Finance

A BILL

To ensure the competitiveness of the United States textile

and apparel industry.

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 This Act may be cited as the ‘‘Customs Enforcement

5 and Market Access Act of 1996’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—

8 (1) the textile and apparel industry is a key

9 part of the United States manufacturing base and
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1 the third largest manufacturing sector in the United

2 States economy;

3 (2) textile and apparel facilities are often lo4 cated in economically sensitive regions;

5 (3) the industry has demonstrated an ability to

6 compete in the global economy where market access

7 is available;

8 (4) the domestic textile and apparel industry

9 has committed significant resources to be competi10 tive and productive;

11 (5) workers in the industry make the highest

12 quality textile and apparel goods in the world and

13 are the world’s most productive;

14 (6) the industry is preparing to compete in the

15 world market without the protection of import

16 quotas authorized by the Multifiber Arrangement;

17 and

18 (7) United States trade policy should be ori19 ented toward expanding exports and ensuring that

20 United States trade laws are vigorously enforced.

21 (8) The Committee for the Implementation of

22 Textile Agreements, the Office of Textiles, Apparel,

23 and Consumer Goods of the Department of Com24 merce, and the Ambassador for Textiles and Apparel
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1 in the Office of the United States Trade Representa2 tive—

3 (A) play central and indispensable roles in

4 administering the laws governing trade in tex5 tile and apparel goods;

6 (B) have diligently carried out laws en7 acted by the Congress and under powers dele8 gated to them by the President; and

9 (C) have acted in accordance with United

10 States and international law.

11 SEC. 3. MARKET ACCESS FOR UNITED STATES TEXTILE AND

12 APPAREL PRODUCTS.

13 (a) ACCESSION PROTOCOLS.—In any case in which

14 the United States negotiates a protocol for accession of

15 a country to the World Trade Organization, the Trade

16 Representative shall negotiate for inclusion in that proto17 col, in addition to any other provisions, the following:

18 (1) Provisions for effective market access to

19 that country’s domestic markets for textile and ap20 parel products of the United States.

21 (2) Provisions allowing the suspension or rev22 ocation of the provisions of paragraph 14 (relating

23 to increasing import levels based on growth rates) of

24 the Agreement on Textiles and Clothing if the Unit-
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1 ed States determines that the country has failed to

2 enforce the provisions referred to in paragraph (1).

3 (b) BILATERAL AGREEMENTS WITH COUNTRIES

4 THAT ARE NOT WTO MEMBERS.—In any case in which

5 the United States negotiates a textile agreement with a

6 country that is not a WTO member, including any agree7 ment negotiated pursuant to section 5 of this Act, the

8 Trade Representative shall negotiate for inclusion in that

9 textile agreement, in addition to any other provisions, the

10 following:

11 (1) Provisions for effective market access to

12 that country’s domestic markets for textile and ap13 parel products of the United States.

14 (2) Provisions that recognize the right of the

15 United States to pursue remedies under United

16 States law, including section 301 of the Trade Act

17 of 1974, to respond to the denial of market access

18 described in paragraph (1).

19 (c) REVIEW OF TEXTILE AGREEMENTS.—The Trade

20 Representative shall take into account the compliance of

21 countries with the provisions negotiated under subsections

22 (a) and (b) in identifying countries for purposes of section

23 183 of the Trade Act of 1974, as added by subsection

24 (d) of this section.

25 (d) PRIORITY FOREIGN COUNTRIES.—
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1 (1) IN GENERAL.—Chapter 8 of title I of the

2 Trade Act of 1974 (19 U.S.C. 2241 and following)

3 is amended by adding at the end the following new

4 section:

5 ‘‘SEC. 183. IDENTIFICATION OF COUNTRIES THAT DENY

6 MARKET ACCESS FOR TEXTILE AND APPAREL

7 PRODUCTS.

8 ‘‘(a) IN GENERAL.—By no later than the date that

9 is 30 days after the date on which the annual report is

10 submitted to congressional committees under section

11 181(b), the United States Trade Representative (hereafter

12 referred to as the ‘Trade Representative’) shall identify—

13 ‘‘(1) those foreign countries that deny fair and

14 equitable market access to United States persons

15 that produce or sell textile or apparel products, and

16 ‘‘(2) those foreign countries identified under

17 paragraph (1) that are determined by the Trade

18 Representative to be priority foreign countries.

19 ‘‘(b) SPECIAL RULES FOR IDENTIFICATIONS.—In

20 identifying priority foreign countries under subsection (a),

21 the following shall apply:

22 ‘‘(1) In identifying priority foreign countries

23 under subsection (a)(2), the Trade Representative

24 shall identify only those foreign countries—
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1 ‘‘(A) that have the most onerous or egre2 gious acts, policies, or practices that deny fair

3 and equitable market access to United States

4 persons that sell or produce textile or apparel

5 products,

6 ‘‘(B) whose acts, policies, or practices de7 scribed in subparagraph (A) have the greatest

8 adverse impact (actual or potential) on the rel9 evant United States products, and

10 ‘‘(C) that are not—

11 ‘‘(i) entering into good faith negotia12 tions, or

13 ‘‘(ii) making significant progress in

14 bilateral or multilateral negotiations,

15 to provide adequate and effective market access

16 for textile and apparel products of the United

17 States.

18 ‘‘(2) In identifying foreign countries under sub19 section (a)(2), the Trade Representative shall—

20 ‘‘(A) consult with the Chair of the Com21 mittee for the Implementation of Textile Agree22 ments and other appropriate officers of the

23 Federal Government, and

24 ‘‘(B) take into account information from

25 such sources as may be available to the Trade
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1 Representative and such information as may be

2 submitted to the Trade Representative in re3 ports submitted under section 181(b) and peti4 tions submitted under section 302.

5 ‘‘(3) The Trade Representative may identify a

6 foreign country under subsection (a)(1) only if the

7 Trade Representative finds that there is a factual

8 basis for the denial of fair and equitable market ac9 cess as a result of the violation of international law

10 or an international agreement, or the existence of

11 barriers referred to in subsection (d)(1).

12 ‘‘(4) In identifying foreign countries under

13 paragraphs (1) and (2) of subsection (a), the Trade

14 Representative shall take into account—

15 ‘‘(A) the history of market access laws and

16 practices of the foreign country, including any

17 previous identification under subsection (a)(2);

18 and

19 ‘‘(B) the history of efforts of the United

20 States, and the response of the foreign country,

21 to achieve fair and equitable market access for

22 textile and apparel products.

23 ‘‘(c) REVOCATIONS AND ADDITIONAL IDENTIFICA24 TIONS.—
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1 ‘‘(1) IN GENERAL.—The Trade Representative

2 may at any time—

3 ‘‘(A) revoke the identification of any for4 eign country as a priority foreign country under

5 this section, or

6 ‘‘(B) identify a foreign country as a prior7 ity foreign country under this section,

8 if information available to the Trade Representative

9 indicates that such action is appropriate.

10 ‘‘(2) REPORTS TO CONGRESS.—The Trade Rep11 resentative shall include in the semiannual report

12 submitted to the Congress under section 309(3) a

13 detailed explanation of the identification of any for14 eign country as a priority foreign country under this

15 section.

16 ‘‘(d) DEFINITIONS.—For the purposes of this sec17 tion—

18 ‘‘(1) a foreign country denies fair and equitable

19 market access if the foreign country effectively de20 nies access for textile or apparel products of the

21 United States through the use of laws, procedures,

22 practices, or regulations which—

23 ‘‘(A) violate provisions of international law

24 or international agreements to which both the
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1 United States and the foreign country are par2 ties, or

3 ‘‘(B) constitute discriminatory nontariff

4 trade barriers;

5 ‘‘(2) a foreign country may be determined to

6 deny fair and equitable market access for textile or

7 apparel products, notwithstanding the fact that the

8 foreign country may be in compliance with the spe9 cific obligations of the Agreement on Textiles and

10 Clothing referred to in section 101(d)(4) of the Uru11 guay Round Agreements Act; and

12 ‘‘(3) fair and equitable market access is not

13 demonstrated only by access for those textile and ap14 parel products that are subsequently reexported to

15 the United States as finished textile or apparel prod16 ucts.

17 In determining whether a foreign country denies fair and

18 equitable market access, the Trade Representative shall

19 consider whether the foreign country has enacted and is

20 enforcing laws which prevent and punish the manufacture,

21 sale, or exportation of counterfeit textile and apparel

22 goods.

23 ‘‘(e) PUBLICATION.—The Trade Representative shall

24 publish in the Federal Register a list of foreign countries

25 identified under subsection (a) and shall make such revi-
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1 sions to the list as may be required by reason of action

2 under subsection (c).’’.

3 (2) CONFORMING AMENDMENT.—The table of

4 contents for the Trade Act of 1974 is amended by

5 inserting after the item relating to section 182 the

6 following new item:

‘‘Sec. 183. Identification of countries that deny market access for textile and

apparel products.’’.

7 (3) TITLE III ACTION.—Section 302(b)(2)(A) of

8 the Trade Act of 1974 (19 U.S.C. 2412(b)(2)(A)) is

9 amended by inserting ‘‘or section 183(a)(2)’’ after

10 ‘‘182(a)(2)’’.

11 SEC. 4. TEXTILE GLOBAL COMPETITIVENESS RESEARCH

12 FUND.

13 (a) ESTABLISHMENT.—There is established in the

14 United States Treasury a Textile Global Competitiveness

15 Research Fund (hereafter in this Act referred to as the

16 ‘‘Fund’’).

17 (b) USE OF FUND.—Amounts in the Fund shall be

18 available, as provided in appropriations Acts, in accord19 ance with subsection (c)—

20 (1) for programs aimed at enhancing the inter21 national competitiveness of the United States textile

22 and apparel manufacturers; and

23 (2) to the Customs Service for the enforcement

24 of laws governing trade in textile and apparel goods.
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1 (c) FUNDING.—

2 (1) DEPOSITS.—There shall be deposited in the

3 Fund in each fiscal year the amount, if any, by

4 which—

5 (A) the amount collected in fines by virtue

6 of the amendments made by section 9 exceed

7 (B) the total amount collected for viola8 tions involving textile and apparel goods during

9 fiscal year 1996 under section 592 of the Tariff

10 Act of 1930, as in effect on the day before the

11 date of the enactment of this Act, adjusted in

12 accordance with paragraph (2).

13 (2) ADJUSTMENT.—(A) The amount referred to

14 in paragraph (1)(B) shall be increased in each fiscal

15 year beginning in fiscal year 1998 by an amount

16 equal to the amount described in paragraph (1)(B)

17 multiplied by the cost-of-living adjustment.

18 (B) For purposes of subparagraph (A), the

19 cost-of-living adjustment for any fiscal year is the

20 percentage (if any) by which—

21 (i) the CPI for the preceding fiscal year,

22 exceeds

23 (ii) the CPI for the fiscal year 1996.

24 (C) For purposes of subparagraph (B), the CPI

25 for any fiscal year is the average of the Consumer
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1 Price Index as of the close of the 12-month period

2 ending on August 31 of such fiscal year.

3 (D) For purposes of subparagraph (C), the

4 term ‘‘Consumer Price Index’’ means the last

5 Consumer Price Index for all-urban consumers pub6 lished by the Department of Labor.

7 (E) If any increase determined under this para8 graph is not a multiple of $100, such increase shall

9 be rounded to the nearest multiple of $100.

10 (3) ALLOCATIONS.—(A) 25 percent of the

11 amounts deposited in the Fund in each fiscal year

12 shall be made available to the Customs Service

13 under subsection (b)(2).

14 (B) 75 percent of the amounts deposited in the

15 Fund in each fiscal year shall be made available for

16 programs designated pursuant to subsection (b)(1).

17 (d) ANNUAL REPORT TO CONGRESS.—The Secretary

18 of Commerce shall submit to the Congress, not later than

19 April 1 of each year, a report on the contribution to the

20 United States economy of the domestic textile and apparel

21 industry.

22 SEC. 5. TEXTILE AND APPAREL QUOTA LEVELS.

23 (a) FOR COUNTRIES THAT ARE NOT WTO MEM24 BERS AND DO NOT HAVE TEXTILE AGREEMENTS WITH

25 THE UNITED STATES.—
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1 (1) IF EXPORTS TO THE UNITED STATES EX2 CEED $100,000,000 ANNUALLY OR ARE CREATING SE3 RIOUS DAMAGE OR ACTUAL THREAT THEREOF.—The

4 Trade Representative shall take the necessary steps

5 to negotiate an agreement, in accordance with para6 graph (2), between the United States and any coun7 try that—

8 (A) is not a WTO member and is not a

9 country to which section 3(a) applies,

10 (B) is not a party to a textile agreement

11 with the United States, and

12 (C) whose exports to the United States of

13 textile and apparel goods—

14 (i) are valued at more than

15 $100,000,000 in the most recent 12-month

16 period ending on the last day of the pre17 ceding month; or

18 (ii) are creating serious damage or ac19 tual threat thereof to the domestic indus20 try in the United States in any textile cat21 egory established by CITA.

22 (2) CONTENTS OF AGREEMENTS.—It is the

23 sense of the Congress that an agreement negotiated

24 with a country under paragraph (1) should establish

25 maximum amounts of textile and apparel products of
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1 that country that may be imported into the United

2 States that do not exceed—

3 (A) in the first 12-month period that the

4 agreement is in effect, an increase of more than

5 8 percent of the total volume in square meter

6 equivalents of all textile and apparel products of

7 that country imported in the 12-month period

8 ending on the date the negotiations began; and

9 (B) in each subsequent 12-month period

10 that the agreement is in effect, an increase of

11 not more than the percentage of growth in the

12 domestic market in the United States for all

13 textile and apparel products in the preceding

14 12-month period.

15 (3) INCLUSION OF OTHER PROVISIONS.—Those

16 provisions required to be included in an agreement

17 under section 3(b) may be included in the agreement

18 negotiated under this subsection.

19 (4) DETERMINATIONS OF SERIOUS DAMAGE OR

20 ACTUAL THREAT THEREOF.—CITA shall make the

21 determinations of serious damage or actual threat

22 thereof referred to in paragraph (2), using the cri23 teria set forth in paragraph 3 of Article 6 of the

24 Agreement on Textiles and Clothing.
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1 (b) FOR COUNTRIES THAT ARE NOT WTO MEM2 BERS AND HAVE TEXTILE AGREEMENTS WITH THE

3 UNITED STATES.—In the case of a country that is not

4 a WTO member but is a party to a textile agreement with

5 the United States, the Trade Representative shall take the

6 necessary steps to negotiate a textile agreement to go into

7 effect when the current agreement expires, that allows im8 ports of textile and apparel products of that country, dur9 ing each 12-month period that the agreement is in effect,

10 to increase by not more than the percentage of growth

11 in the domestic market in the United States for all textile

12 and apparel products in the preceding 12-month period.

13 (c) FOR COUNTRIES THAT ARE ACCEDING TO THE

14 WTO.—In any case in which the United States negotiates

15 a protocol for accession to the WTO under section 3(a),

16 the Trade Representative shall negotiate for inclusion in

17 that protocol provisions that require that the 10-year pe18 riod provided in the Agreement on Textiles and Clothing

19 for phasing out of quotas under that Agreement begin,

20 with respect to that country, on the day on which that

21 country accedes to the WTO.

22 SEC. 6. CIRCUMVENTION OF TEXTILE AGREEMENTS.

23 (a) POLICY FOR COUNTRIES THAT ARE NOT WTO

24 MEMBERS.—In the case of any country that is not a WTO

25 member and—
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1 (1) is negotiating a protocol with the United

2 States for that country’s accession to the World

3 Trade Organization,

4 (2) is a party to a bilateral agreement with the

5 United States that governs imports into the United

6 States of textile and apparel products of that coun7 try, or

8 (3) is a country with which the United States

9 is negotiating an agreement under section 5(a),

10 the Trade Representative shall ensure that the protocol

11 under paragraph (1), a subsequent agreement to replace

12 the agreement under paragraph (2) when it expires, or

13 the agreement described in paragraph (3), as the case may

14 be, provides for a reduction in the quantity of textile and

15 apparel goods of that country that may be imported into

16 the United States if CITA determines that the agreement

17 is being circumvented and that no, or inadequate meas18 ures, are being applied by that country to take action

19 against such circumvention. Any determination by CITA

20 under the preceding sentence shall be made in accordance

21 with the standards set forth in section 8.

22 (b) DEFINITIONS.—For purposes of this section, a

23 reduction in a country’s textile and apparel quotas is a

24 reduction in quantitative limitations otherwise applicable
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1 to imports into the United States of that country’s textile

2 and apparel products that is equal to—

3 (1) the quantity of the goods involved in the

4 circumvention if the circumvention is the first within

5 the most recent 36-month period;

6 (2) twice the quantity of goods involved in the

7 circumvention if the circumvention is the second in

8 the most recent 36-month period; or

9 (3) three times the quantity of goods involved

10 in the circumvention if the circumvention is the

11 third or more in the most recent 36-month period.

12 (c) POLICY FOR WTO MEMBERS.—In any case in

13 which a WTO member is found by CITA to have cir14 cumvented the Agreement on Textiles and Clothing or any

15 other textile agreement, CITA shall pursue the maximum

16 penalty consistent with the WTO.

17 SEC. 7. CUSTOMS ENFORCEMENT ACTION.

18 (a) SHARING OF CUSTOMS INFORMATION WITH

19 CITA.—The Customs Service shall, upon initiating an in20 vestigation relating to a violation of the laws of the United

21 States governing international trade in textile and apparel

22 goods, inform CITA of the investigation in any case in

23 which the alleged violation, if true, would constitute a cir24 cumvention of any textile agreement. In any such case,

25 the Customs Service shall provide to CITA—
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1 (1) all information CITA requests that is rel2 evant to the alleged violation and required in order

3 for CITA to pursue a charge against the quotas on

4 imports of textile and apparel products of that coun5 try as a result of the violation; and

6 (2) notification, at least every 30 days until the

7 investigation is referred to the Department of Jus8 tice or the Customs Service closes the investigation,

9 of the progress of the investigation.

10 (b) FACTORS IN PROCEEDING WITH CHARGES

11 AGAINST QUOTAS.—In deciding whether to pursue a

12 charge described in subsection (a) as a result of an alleged

13 violation described in subsection (a), CITA, in addition to

14 any other relevant factors which CITA may consider, shall

15 weigh the impact of proceeding with such charge on poten16 tial prosecutions or civil penalties and future enforcement

17 of textile agreements, and shall consider the amount of

18 the alleged violation, the probability of successful criminal

19 prosecution, the degree of compliance by the true country

20 of origin with textile agreements, and the damage the al21 leged violation would inflict on the domestic textile and

22 apparel industry.

23 (c) DECISION NOT TO PURSUE A CHARGE.—In any

24 case in which CITA decides under subsection (b) not to

25 pursue a charge, the Customs Service shall, as long as
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1 that decision is in effect, report to CITA, in lieu of the

2 reports under subsection (a)(2)—

3 (1) at least once every 6 months from the date

4 on which the Customs Service initiated the case, on

5 the status of the investigation; and

6 (2) within 10 business days after the Customs

7 Service obtains new information or evidence materi8 ally relevant to the alleged violation.

9 (d) STANDING NOT PROVIDED.—Nothing in this Act

10 shall be construed to provide standing in any court or ad11 ministrative proceeding for legal action against the United

12 States arising from actions taken in carrying out the laws

13 governing trade in textile or apparel goods.

14 (e) REFERRAL OF CASES TO DEPARTMENT OF JUS15 TICE.—In any case in which—

16 (1) the Customs Service refers an alleged viola17 tion described in subsection (a) to the Department

18 of Justice for prosecution, and

19 (2) no indictment has been brought in the case

20 within 6 months after the referral,

21 the Attorney General shall provide to CITA all informa22 tion relevant to imposing a charge against the quotas on

23 imports of textile and apparel products of the country con24 cerned as a result of the violation. CITA may extend the
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1 6-month period referred to in paragraph (2) if requested

2 to do so by the Attorney General.

3 (f) DISCLOSURE OF CERTAIN CONFIDENTIAL INFOR4 MATION NOT REQUIRED.—Nothing in this section shall

5 be construed to require the disclosure by the Customs

6 Service or the Department of Justice of confidential infor7 mation relevant to possible imposition of criminal or civil

8 penalties when that information is not relevant to the im9 position of a charge by CITA against the quotas on im10 ports of textile and apparel products of a country.

11 (g) INITIATION OF INVESTIGATIONS.—

12 (1) BASIS FOR INITIATION.—Subject to para13 graph (2), whenever the Customs Service receives

14 credible evidence that circumvention of a textile

15 agreement has occurred, the Customs Service shall

16 initiate an investigation, to which a customs officer

17 shall be assigned, to determine if such circumvention

18 has occurred, unless such evidence is directly related

19 to an open investigation commenced prior to the re20 ceipt of such evidence.

21 (2) WAIVER.—The head of the Division of Tex22 tile Enforcement established under section 10 may

23 determine not to initiate an investigation under

24 paragraph (1) if he or she transmits to CITA a re25 port setting forth the reasons for that determination.
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1 SEC. 8. STANDARDS OF PROOF.

2 (a) IN GENERAL.—CITA may determine that a coun3 try has circumvented a textile agreement if CITA deter4 mines, after consultations with the country concerned,

5 that there is a substantial likelihood that the circumven6 tion occurred.

7 (b) FAILURE OF COUNTRY TO COOPERATE.—

8 (1) RELIANCE ON BEST AVAILABLE INFORMA9 TION.—If a country fails to cooperate with CITA in

10 an investigation to determine if a textile agreement

11 has been circumvented, CITA shall base its deter12 mination on the best available information.

13 (2) ACTS CONSTITUTING FAILURE TO COOPER14 ATE.—Acts indicating failure of a country to cooper15 ate under paragraph (1) include, but are not limited

16 to—

17 (A) denying entry of officials of the Cus18 toms Service to investigate violations of, or pro19 mote compliance with, any textile agreement;

20 (B) providing appropriate United States

21 officials with inaccurate or incomplete informa22 tion, including information demonstrating com23 pliance with United States rules of origin for

24 textile and apparel products; and

25 (C) denying appropriate United States offi26 cials access to information or documentation re-
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1 lating to production capacity of, and outward

2 processing done by, manufacturers within the

3 country.

4 SEC. 9. PENALTIES FOR VIOLATIONS OF CUSTOMS LAWS IN5 VOLVING TEXTILE AND APPAREL GOODS.

6 (a) PENALTIES.—Section 592 of the Tariff Act of

7 1930 (19 U.S.C. 1592) is amended by adding at the end

8 the following:

9 ‘‘(g) PENALTIES INVOLVING TEXTILE AND APPAREL

10 GOODS.—

11 ‘‘(1) FRAUD.—Notwithstanding subsection (c),

12 the civil penalty for a fraudulent violation of sub13 section (a) involving textile and apparel goods—

14 ‘‘(A) shall, subject to subparagraph (B), be

15 double the amount that would otherwise apply

16 under subsection (c)(1); and

17 ‘‘(B) shall be an amount not to exceed 300

18 percent of the declared value in the United

19 States of the merchandise if the violation has

20 the effect of circumventing any quota on textile

21 and apparel goods.

22 ‘‘(2) GROSS NEGLIGENCE.—Notwithstanding

23 subsection (c), the civil penalty for a grossly neg24 ligent violation of subsection (a) involving textile and

25 apparel goods—
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1 ‘‘(A) shall, subject to subparagraphs (B)

2 and (C), be double the amount that would oth3 erwise apply under subsection (c)(2);

4 ‘‘(B) shall, if the violation has the effect of

5 circumventing any quota of the United States

6 on textile and apparel goods, and subject to

7 subparagraph (C), be 200 percent of the de8 clared value of the merchandise; and

9 ‘‘(C) shall, if the violation is a third or

10 subsequent offense occurring within 3 years, be

11 the penalty for a fraudulent violation under

12 paragraph (1) (A) or (B), whichever is applica13 ble.

14 ‘‘(3) NEGLIGENCE.—Notwithstanding sub15 section (c), the civil penalty for a negligent violation

16 of subsection (a) involving textile and apparel

17 goods—

18 ‘‘(A) shall, subject to subparagraphs (B)

19 and (C), be double the amount that would oth20 erwise apply under subsection (a)(3);

21 ‘‘(B) shall, if the violation has the effect of

22 circumventing any quota of the United States

23 on textile and apparel goods, and subject to

24 subparagraph (C), be 100 percent of the de25 clared value of the merchandise; and
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1 ‘‘(C) shall, if the violation is a third or

2 subsequent offense occurring within 3 years, be

3 the penalty for a grossly negligent violation

4 under paragraph (2) (A) or (B), whichever is

5 applicable.’’.

6 (b) MITIGATION.—Section 618 of the Tariff Act of

7 1930 (19 U.S.C. 1618) is amended—

8 (1) by striking ‘‘Whenever’’ and inserting ‘‘(a)

9 IN GENERAL.—Whenever’’, and

10 (2) by adding at the end the following new sub11 section:

12 ‘‘(b) MITIGATION RULES RELATING TO TEXTILE

13 AND APPAREL GOODS.—

14 ‘‘(1) GENERAL RULE.—Notwithstanding any

15 other provision of law, the Secretary of the Treasury

16 may remit or mitigate any fine or penalty imposed

17 pursuant to section 592 involving textile or apparel

18 goods only if—

19 ‘‘(A) in the case of a first offense, the vio20 lation is due to either negligence or gross neg21 ligence; and

22 ‘‘(B) in the case of a second or subsequent

23 offense, prior disclosure (as defined in section

24 592(c)(4)) is made within 180 days after the

25 entry of the goods.
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1 ‘‘(2) SPECIAL RULE FOR PRIOR DISCLOSURES

2 AFTER 180 DAYS.—In the case of a second or subse3 quent offense where prior disclosure (as defined in

4 section 592(c)(4)) is made after 180 days after the

5 entry of the goods, the Secretary of the Treasury

6 may remit or mitigate not more than 50 percent of

7 such fines or penalties.’’.

8 (c) SEIZURE AND FORFEITURE.—Section 596(c)(2)

9 of the Tariff Act of 1930 (19 U.S.C. 1595a(c)(2)) is

10 amended—

11 (1) in subparagraph (E), by striking ‘‘or’’ after

12 the semicolon;

13 (2) in subparagraph (F), by striking the period

14 and inserting ‘‘; or’’; and

15 (3) by inserting after subparagraph (F) the fol16 lowing:

17 ‘‘(G) consists of textile or apparel goods in18 troduced into the United States for entry, tran19 sit, or exportation, and

20 ‘‘(i) the merchandise or its container

21 bears false or fraudulent markings with re22 spect to the country of origin, unless the

23 importer of the merchandise demonstrates

24 that the markings were made in order to

25 comply with the rules of origin of the coun-
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1 try that is the final destination of the mer2 chandise; or

3 ‘‘(ii) the merchandise or its container

4 is introduced or attempted to be intro5 duced into the United States by means of,

6 or such introduction or attempt is aided or

7 facilitated by means of, a material false

8 statement, act, or omission with the inten9 tion or effect of—

10 ‘‘(I) circumventing any quota

11 that applies to the merchandise, or

12 ‘‘(II) undervaluing the merchan13 dise.’’.

14 (d) CERTIFICATES OF ORIGIN.—Notwithstanding

15 any other provision of law, all importations of textile and

16 apparel goods shall be accompanied by—

17 (1)(A) the name and address of the manufac18 turer or producer of the goods, and any other infor19 mation with respect to the manufacturer or producer

20 that the Customs Service may require; and

21 (B) if there is more than one manufacturer or

22 producer, or there is a contractor or subcontractor

23 of the manufacturer or producer with respect to the

24 manufacture or production of the goods, the infor25 mation required under subparagraph (A) with re-
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1 spect to each such manufacturer, producer, contrac2 tor, or subcontractor, including a description of the

3 process performed by each such entity;

4 (2) a certification by the importer that the im5 porter has exercised reasonable care to ascertain the

6 true country of origin of the textile and apparel

7 goods and the accuracy of all other information pro8 vided on the documentation accompanying the im9 ported goods, as well as a certification of the specific

10 action taken by the importer to ensure reasonable

11 care for purposes of this paragraph; and

12 (3) a certification by the importer that the

13 goods being entered do not violate applicable trade14 mark, copyright, and patent laws.

15 Information provided under this subsection shall be suffi16 cient to demonstrate compliance with the United States

17 rules of origin for textile and apparel goods.

18 SEC. 10. DIVISION ON TEXTILE ENFORCEMENT.

19 (a) ESTABLISHMENT.—The Commissioner of Cus20 toms shall, not later than 6 months after the date of the

21 enactment of this Act, establish in the Customs Service

22 a Division on Textile Enforcement (hereafter in this sec23 tion referred to as the ‘‘DTE’’), using existing resources

24 available to the Customs Service. The head of the DTE
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1 shall be an officer of the Customs Service in a position

2 at the level of an Assistant Commissioner of Customs.

3 (b) FUNCTIONS.—The DTE shall be responsible for

4 enforcing all laws of the United States, and all bilateral

5 and multilateral treaties and agreements, governing the

6 importation of textile and apparel goods, that the Customs

7 Service is responsible for enforcing.

8 (c) PERSONNEL.—The Commissioner of Customs

9 shall assign personnel to the DTE who have expertise in

10 textile and apparel goods, including, but not limited to,

11 import specialists, investigators, attorneys, accountants,

12 laboratory technicians, and members of the textile produc13 tion verification teams.

14 (d) SUBDIVISIONS.—The DTE shall establish a sepa15 rate subdivision for each geographic region which is a

16 major source of textile and apparel goods imported into

17 the United States, including a subdivision for each of the

18 following:

19 (1) The Far East.

20 (2) South Asia.

21 (3) South America.

22 (4) Central America and the Caribbean.

23 (5) The Middle East and Africa.

24 (e) ASSIGNMENTS ABROAD.—
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1 (1) TO CERTAIN COUNTRIES.—If permitted by

2 the host country, at least 1 customs officer shall be

3 assigned in each country, other than Canada or

4 Mexico, whose annual exports to the United States

5 of textile and apparel goods equal or exceed

6 500,000,000 square meter equivalents. Each such

7 customs officer shall be responsible only for matters

8 relating to exports to the United States of textile

9 and apparel goods.

10 (2) RESPONSIBILITY OF SECRETARY OF

11 STATE.—The Secretary of State shall take the nec12 essary steps to facilitate the assignment abroad of

13 customs officers under paragraph (1), by seeking to

14 obtain the approval of the foreign governments con15 cerned for such assignments.

16 (f) REPORTS.—

17 (1) REPORTS BY CUSTOMS OFFICERS.—Each

18 customs officer assigned under subsection (e)(1)

19 shall prepare and submit to the Commissioner of

20 Customs, at least monthly, reports summarizing his

21 or her activities, assessing the compliance with appli22 cable textile agreements by the country concerned,

23 and assessing the intellectual property protection

24 provided to textile and apparel goods in that coun25 try.
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1 (2) REPORTS BY DTE.—The DTE shall prepare

2 and submit to the Commissioner an annual report—

3 (A) evaluating the extent of circumvention

4 of textile agreements with the United States,

5 the extent of compliance with the rules of origin

6 of the United States relating to textile and ap7 parel goods, the extent to which countries act in

8 compliance with Article XX of the GATT 1994

9 (as defined in section 2 of the Uruguay Round

10 Agreements Act (19 U.S.C. 3501)) with respect

11 to textile and apparel goods, and the adequacy

12 of intellectual property protection provided to

13 textile and apparel goods; and

14 (B) recommending new methods, if nec15 essary, to address the matters evaluated under

16 subparagraph (A).

17 (3) AVAILABILITY OF REPORTS.—Each report

18 submitted under this subsection shall be made avail19 able to appropriate agencies of the executive branch,

20 including the Office of Textiles, Apparel, and

21 Consumer Goods of the Department of Commerce.

22 SEC. 11. WITHDRAWAL OF UNILATERAL TRADE CONCES23 SIONS.

24 (a) WITHDRAWAL OF CONCESSIONS.—In any case in

25 which—
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1 (1) CITA determines that a country—

2 (A) has demonstrated a consistent pattern

3 of circumventing textile agreements with the

4 United States,

5 (B) refuses to cooperate with investigations

6 by the United States of any such alleged cir7 cumvention,

8 (C) fails to provide adequate enforcement

9 of intellectual property rights with respect to

10 textile and apparel goods, or

11 (D) fails to provide fair and equitable mar12 ket access for textile and apparel products of

13 the United States, and

14 (2) the United States extends to the products

15 of that country preferential tariff or quota treatment

16 other than pursuant to a bilateral or multilateral

17 agreement,

18 then such preferential treatment shall be withdrawn from

19 the textile and apparel goods that are products of that

20 country for such period as shall be determined by the

21 Trade Representative, in consultation with CITA.

22 (b) NATIONAL INTEREST WAIVER.—The President

23 may waive the application of subsection (a) with respect

24 to a country if the President determines that the waiver

25 will allow the United States to secure effective commit-
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1 ments from that country to prevent future circumvention

2 of textile agreements with the United States, or is other3 wise in the national interest. The President shall publish

4 any such waiver, and the reasons for the waiver, in the

5 Federal Register.

6 SEC. 12. DEFINITIONS.

7 As used in this Act:

8 (1) AGREEMENT ON TEXTILES AND CLOTH9 ING.—The term ‘‘Agreement on Textiles and Cloth10 ing’’ means the Agreement on Textiles and Clothing

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

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

13 (2) CIRCUMVENT AND CIRCUMVENTION.—The

14 terms ‘‘circumvent’’ and ‘‘circumvention’’ refer to a

15 situation in which a country—

16 (A) takes no, or inadequate measures to

17 prevent illegal transshipment of goods that is

18 carried out by rerouting, false declaration con19 cerning country or place of origin, falsification

20 of official documents, evasion of United States

21 rules of origin for textile and apparel goods, or

22 any other means; or

23 (B) takes no or inadequate measures to

24 prevent being used as a transit point for the
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1 shipment of goods in violation of an applicable

2 textile agreement.

3 (3) CITA.—The term ‘‘CITA’’ means the Com4 mittee for the Implementation of Textile Agreements

5 established under Executive Order 11651 of March

6 3, 1972 (7 U.S.C. 1854 note), or any successor en7 tity or officer performing functions of that commit8 tee after the date of the enactment of this Act.

9 (4) COUNTRY.—The term ‘‘country’’ includes a

10 separate customs territory, within the meaning of

11 Article XII of the WTO Agreement or other applica12 ble international agreement.

13 (5) CUSTOMS SERVICE.—The term ‘‘Customs

14 Service’’ means the United States Customs Service.

15 (6) MULTIFIBER ARRANGEMENT.—The term

16 ‘‘Multifiber Arrangement’’ means the Arrangement

17 Regarding International Trade in Textiles referred

18 to in Article 1(3) of the Agreement on Textiles and

19 Clothing.

20 (7) TEXTILE AGREEMENT; TEXTILE AGREE21 MENT WITH THE UNITED STATES.—The terms ‘‘tex22 tile agreement’’ and ‘‘textile agreement with the

23 United States’’ mean an agreement relating to tex24 tile and apparel goods that is negotiated under sec25 tion 204 of the Agricultural Act of 1956 (7 U.S.C.
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1 1854), including the Agreement on Textiles and

2 Clothing.

3 (8) TRADE REPRESENTATIVE.—The term

4 ‘‘Trade Representative’’ means the United States

5 Trade Representative.

6 (9) WORLD TRADE ORGANIZATION AND WTO.—

7 The terms ‘‘World Trade Organization’’ and

8 ‘‘WTO’’ mean the organization established pursuant

9 to the WTO Agreement.

10 (10) WTO AGREEMENT.—The term ‘‘WTO

11 Agreement’’ means the Agreement Establishing the

12 World Trade Organization entered into on April 15,

13 1994.

14 (11) WTO MEMBER.—The term ‘‘WTO mem15 ber’’ means a state, or separate customs territory

16 (within the meaning of Article XII of the WTO

17 Agreement.

18 SEC. 13. EFFECTIVE DATE.

19 This Act and the amendments made by this Act shall

20 take effect on October 1, 1996.

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