I

103D CONGRESS

1ST SESSION H. R. 1402

To amend the Tariff Act of 1930 to provide effective trade remedies under

the countervailing and antidumping duty laws against foreign-built ships

that are subsidized or dumped and to provide otherwise for fair trade

for the United States shipbuilding and repair industry.

IN THE HOUSE OF REPRESENTATIVES

MARCH 18, 1993

Mr. GIBBONS (for himself, Mr. STUDDS, Mr. LIPINSKI, Mr. BATEMAN, Mr.

CARDIN, Mr. PAYNE of Virginia, Mr. KOPETSKI, Mr. JEFFERSON, Mr.

PICKETT, Mr. ANDREWS of Maine, Mr. GENE GREEN of Texas, Mr. TAUZIN, Mrs. BENTLEY, Mr. MURPHY, Mr. FILNER, Mrs. THURMAN, Ms.

SNOWE, Mr. HUNTER, Mr. MURTHA, Mr. REED, Mr. LIVINGSTON, Mr.

GOODLING, and Mr. TORRICELLI) introduced the following bill; which was

referred to the Committee on Ways and Means

A BILL

To amend the Tariff Act of 1930 to provide effective trade

remedies under the countervailing and antidumping duty

laws against foreign-built ships that are subsidized or

dumped and to provide otherwise for fair trade for the

United States shipbuilding and repair industry.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 TITLE I—TREATMENT OF VES2 SELS UNDER THE COUNTER3 VAILING AND ANTIDUMPING

4 DUTY LAWS

5 SEC. 101. AMENDMENT TO TITLE VII OF THE TARIFF ACT

6 OF 1930.

7 (a) IN GENERAL.—Subtitle D of title VII of the Tar8 iff Act of 1930 is amended by adding after section 771B

9 the following new section:

10 ‘‘SEC. 771C. SPECIAL RULES IN APPLYING TITLE TO FOR11 EIGN-MADE VESSELS.

12 ‘‘(a) DEFINITION.—The term ‘vessel’ means any ves13 sel of a kind described in heading 8901, 8902.00.00, or

14 8906 (other than a warship) of the Harmonized Tariff

15 Schedule of the United States of not less than 100 gross

16 tons, as measured under the International Convention on

17 Tonnage Measurement of Ships, 1969.

18 ‘‘(b) VESSELS CONSIDERED AS MERCHANDISE.—

19 Notwithstanding any other provision of law, a vessel is

20 merchandise for purposes of this title and shall be subject

21 to antidumping or countervailing duties if an order has

22 been issued, but only if the construction or repair of the

23 vessel was carried out in a foreign country which—

24 ‘‘(1) is not a signatory to a trade agreement

25 with the United States that provides for the imme-
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1 diate elimination of the dumping of vessels and the

2 subsidizing of vessel construction or repair; or

3 ‘‘(2) is a signatory to a trade agreement de4 scribed in paragraph (1) but was not, as determined

5 by the Secretary, in compliance with its obligations

6 under the trade agreement during the construction

7 or repair.

8 ‘‘(c) APPLICATION OF SUBTITLES A AND B.—

9 ‘‘(1) IN GENERAL.—In applying subtitles A and

10 B with respect to vessels constructed, reconstructed,

11 or repaired in foreign countries—

12 ‘‘(A) a vessel shall be treated as sold for

13 importation into the United States when a

14 United States person enters into a contract

15 for—

16 ‘‘(i) the construction or reconstruction

17 of the vessel by, or the purchase (or leas18 ing, if the equivalent of a purchase) of the

19 vessel after construction or reconstruction

20 from, the builder; or

21 ‘‘(ii) the repair of the vessel; and

22 ‘‘(B) a vessel sold for importation into the

23 United States shall be treated as being offered

24 for entry for consumption under the tariff laws

25 at the time of its first arrival at a port or place
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1 in the United States after construction, recon2 struction, or repair, regardless of where the ves3 sel is registered or documented.

4 ‘‘(2) DEFINITION.—For purposes of paragraph

5 (1), the term ‘United States person’ means—

6 ‘‘(A) any individual or entity described in

7 subsection (a) of section 12102 of title 46,

8 United States Code;

9 ‘‘(B) any agent or other person acting on

10 behalf of any individual or entity referred to in

11 subparagraph (A); or

12 ‘‘(C) any person directly or indirectly

13 owned or controlled by any individual or entity

14 referred to in subparagraph (A).’’.

15 (b) APPLICABILITY OF AMENDMENT.—The amend16 ment made by subsection (a) applies to a vessel—

17 (1) constructed, reconstructed, or repaired

18 under a contract entered into after the date of en19 actment of this Act; or

20 (2) a contract for the construction, reconstruc21 tion, or repair of which was entered into on or be22 fore the date of the enactment of this Act if such

23 construction, reconstruction, or repair is not com24 pleted within 30 months after such date.
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1 TITLE II—FAIR TRADE FOR THE

2 UNITED STATES SHIPBUILD3 ING AND REPAIR INDUSTRY

4 SECTION 201. SHORT TITLE.

5 This title may be cited as the ‘‘Shipbuilding Trade

6 Reform Act of 1993’’.

7 SEC. 202. CONGRESSIONAL FINDINGS.

8 (a) FINDINGS.—The Congress finds that—

9 (1) in 1981, the United States Government ter10 minated funding for the construction differential

11 subsidy program, thereby ending direct subsidization

12 of commercial shipbuilding in the United States;

13 (2) since 1981, the international market for

14 ship construction has been distorted by a wide array

15 of subsidies and other anticompetitive practices by

16 foreign countries, including but not limited to, the

17 member countries of Working Party 6 of the Organi18 zation for Economic Cooperation and Development;

19 (3) such subsidies and anticompetitive practices

20 include, but are not limited to, direct grants, pref21 erential financing, equity infusions, research and de22 velopment assistance, restructuring aid, special tax

23 concessions, debt forgiveness, and other forms of di24 rect and indirect assistance;
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1 (4) foreign countries that directly or indirectly

2 provide subsidies or other forms of anticompetitive

3 assistance for the construction or repair of vessels

4 are engaging in unjustifiable, unreasonable and dis5 criminatory trade practices which—

6 (A) burden and restrict United States

7 commerce,

8 (B) materially injure the United States

9 ship construction and repair industry, and

10 (C) create general or special conditions un11 favorable to the ability of United States ship12 builders to engage in the construction of vessels

13 for international commerce;

14 (5) foreign shipbuilding subsidies have caused,

15 and threaten to cause, material injury to the United

16 States shipbuilding and ship repair industry, as evi17 denced by—

18 (A) the closure of more than 40 major

19 shipyards and the loss of over 120,000 jobs in

20 shipyards and their supplier base since 1981,

21 (B) the potential loss of another 180,000

22 jobs by 1998 if foreign subsidies are not elimi23 nated,

24 (C) the decline in the United States share

25 of the international commercial vessel construc-
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1 tion market from 7.9 percent in 1979 to less

2 than 1 percent in 1991,

3 (D) the sharp drop in the number of

4 oceangoing commercial vessels on order or

5 under construction in United States shipyards

6 from 70 vessels in 1979 to 1 vessel in 1991,

7 (E) the substantial reduction in shipyard

8 profitability and the industry’s difficulty in rais9 ing capital,

10 (F) the dramatic decline in the capacity

11 utilization of United States shipyards and the

12 lost opportunities for technological advance13 ment; and

14 (G) the significant price underselling by

15 foreign shipyards;

16 (6) existing United States trade laws and trade

17 agreements provide limited redress to domestic pro18 ducers of ships for the trade-distorting subsidies and

19 dumping practices of foreign shipbuilders;

20 (7) a strong, effective multilateral agreement

21 among shipbuilding nations to eliminate trade-dis22 torting practices in the ship construction industry is

23 the best means of providing for fair international

24 competition, however, absent such an agreement,

25 greater redress under United States law against un-
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1 fair and unreasonable foreign trade practices in

2 commercial ship construction is necessary;

3 (8) a viable United States ship construction, re4 pair and supplier industry is necessary to achieve

5 the national defense and economic security interests

6 of the United States; and

7 (9) United States shipyards, which have become

8 almost exclusive defense contractors, are positioning

9 themselves to make those investments in commercial

10 facilities, ship designs, manufacturing process, and

11 structural reorganization that are necessary for their

12 conversion to compete in the international commer13 cial ship construction and repair market and thereby

14 ensure a viable United States industry which can re15 spond to the Nation’s future national security re16 quirements; however, this conversion to the commer17 cial market cannot be achieved unless the massive

18 subsidies provided by foreign governments for the

19 construction and repair of commercial ships are

20 eliminated.

21 (b) PURPOSE.—It is the purpose of this title to en22 sure fair trade in the commercial shipbuilding and repair

23 industry by providing for additional trade remedies

24 against unfair foreign competition, particularly with re25 gard to those situations that cannot be dealt with effec-
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1 tively under the antidumping and countervailing duty

2 laws.

3 SEC. 203. LISTING OF SUBSIDIZING COUNTRIES.

4 (a) ESTABLISHMENT OF LIST.—The Secretary shall

5 establish and maintain a list containing the name of each

6 foreign country that provides, after the date of the enact7 ment of this Act, directly or indirectly, any subsidy for

8 the construction or repair of vessels. The Secretary shall

9 publish the list in the Federal Register on at least a bian10 nual basis.

11 (b) STATUTORY LISTINGS.—

12 (1) IN GENERAL.—Unless the Secretary deter13 mines, with clear and convincing evidence, that a

14 foreign country that was a party to negotiating a

15 multilateral agreement for the elimination of ship16 building subsidies in the Organization for Economic

17 Cooperation and Development Working Party 6 on

18 October 16, 1991, does not provide, directly or indi19 rectly, any vessel construction or repair subsidy, the

20 Secretary shall, on the date of the enactment of this

21 Act—

22 (A) place the foreign country on the list;

23 (B) notify the foreign country of its inclu24 sion on the list; and
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1 (C) publish notice of the listing in the Fed2 eral Register.

3 (2) DURATION OF LISTING.—Each foreign

4 country listed under subsection (a) as a result of

5 this paragraph shall remain on the list until such

6 time as the foreign country signs a trade agreement

7 with the United States that provides for the imme8 diate elimination of subsidies for the construction

9 and repair of vessels (including the elimination of

10 continuing benefits from prior subsidy programs).

11 (c) LISTINGS AFTER INVESTIGATIONS.—

12 (1) INITIATION OF INVESTIGATIONS.—

13 (A) INITIAL INVESTIGATION.—On the date

14 of the enactment of this Act, the Secretary shall

15 initiate an initial investigation into the practices

16 of foreign countries that provide, directly or in17 directly, subsidies for the construction or repair

18 of vessels in such countries. The investigation

19 required under this subparagraph shall be con20 cerned with those foreign countries, other than

21 those required to be listed under subsection (b),

22 which the Secretary has reasonable cause to be23 lieve provide, directly or indirectly, any subsidy

24 for the construction or repair of vessels.
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1 (B) SUBSEQUENT INVESTIGATIONS.—If at

2 any time after the date of the enactment of this

3 Act, the Secretary receives—

4 (i) new information; or

5 (ii) a petition for an investigation

6 from an interested party that specifically

7 alleges the existence of one or more sub8 sidy practices and contains information

9 reasonably available to the petitioner sup10 porting such allegation;

11 the Secretary shall, within 20 days after the

12 date of receipt, initiate an investigation into the

13 subsidy practices of the foreign country if the

14 Secretary has reasonable cause, on the basis of

15 such information or petition, to believe that the

16 foreign country is providing, directly or indi17 rectly, any subsidy for the construction or re18 pair of vessels in that country.

19 (2) ADMINISTRATIVE PROCEDURE FOR INVES20 TIGATIONS; PRELIMINARY DETERMINATIONS.—

21 (A) NOTICE.—Within 7 days after initiat22 ing an investigation under paragraph (1)(A) or

23 (B), the Secretary shall publish in the Federal

24 Register a notice of such investigation together

25 with a request for public comments.
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1 (B) PUBLIC COMMENTS.—The Secretary

2 shall—

3 (i) receive public comments during the

4 30-day period following the day on which

5 notice is published under subparagraph

6 (A); and

7 (ii) subject to section 206(a), make

8 such comments available to the general

9 public upon request.

10 (C) PRELIMINARY DETERMINATION.—

11 Within 30 days after the close of the public

12 comment period referred to in subparagraph

13 (B), the Secretary, on the basis of the evidence

14 contained in the record, shall make a prelimi15 nary determination regarding whether the for16 eign country provides, directly or indirectly, any

17 subsidy for the construction or repair of vessels.

18 (D) NOTICE OF PRELIMINARY DETERMINA19 TION.—Within 7 days after the day on which a

20 preliminary determination is made under sub21 paragraph (C), the Secretary shall publish in

22 the Federal Register a notice of the preliminary

23 determination together with—

24 (i) an explanation of the determina25 tion, including the nature and extent of
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1 any subsidy identified as the basis for the

2 preliminary determination; and

3 (ii) a request for public comment re4 garding the preliminary determination.

5 (E) PUBLIC COMMENTS ON PRELIMINARY

6 DETERMINATION.—The Secretary shall—

7 (i) receive public comments during the

8 30-day period following the day on which

9 notice is published under subparagraph

10 (D); and

11 (ii) subject to section 206(a), make

12 such comments available to the general

13 public upon request.

14 (d) FINAL DETERMINATION.—

15 (1) IN GENERAL.—Within—

16 (A) 30 days after the close of the public

17 comment period referred to in subsection

18 (c)(2)(E)(i), in case of an investigation initiated

19 under subsection (c)(1)(A) or (B); or

20 (B) 30 days after the completion of an in21 vestigation regarding an emergency listing

22 under subsection (e);

23 the Secretary shall make a final determination re24 garding whether a foreign country provides, directly

25 or indirectly, any subsidy for the construction or re-
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1 pair of vessels. Any determination made by the Sec2 retary under this subsection shall be based solely

3 upon evidence contained in the record, including that

4 information which is otherwise treated as propri5 etary under 206(a).

6 (2) NOTIFICATION AND PUBLICATION OF LIST7 ING.—If the Secretary determines under paragraph

8 (1) that a foreign country provides, directly or indi9 rectly, any subsidy for the construction or repair of

10 vessels, the Secretary shall, within 7 days after the

11 date of the determination—

12 (A) place the foreign country on the list;

13 (B) notify the foreign country of its inclu14 sion on the list; and

15 (C) publish in the Federal Register a no16 tice of the determination and listing together

17 with a full explanation of the determination, in18 cluding the nature and extent of any subsidy

19 identified as the basis for the determination.

20 (e) EMERGENCY LISTING.—If at any time the Sec21 retary determines that compelling prima facia evidence

22 has been provided by any interested party indicating that

23 a foreign country is providing any subsidy for the con24 struction or repair of vessels, the Secretary shall, within

25 7 days after receiving such evidence, place that country
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1 on the list. Within 7 days after making an emergency list2 ing under this subsection, the Secretary shall—

3 (1) notify the affected foreign country thereof;

4 (2) publish in the Federal Register a notice of

5 the determination and the emergency listing, to6 gether with a request for public comment and a

7 schedule for an investigation into the alleged sub8 sidy; and

9 (3) initiate an investigation into the alleged

10 subsidy.

11 An investigation initiated under paragraph (3) shall be

12 concluded by the Secretary within 60 days after the day

13 of initiation. Upon completion of the investigation, the

14 Secretary shall make a final determination under sub15 section (d).

16 (f) RECONSIDERATION AND REMOVAL OF LIST17 INGS.—

18 (1) RECONSIDERATION.—The Secretary may

19 reconsider a final determination under subsection

20 (d)—

21 (A) after receiving an application for re22 consideration from the foreign country listed

23 under subsection (a) as a result of that deter24 mination, if the application alleges changed cir25 cumstances concerning the elimination by the
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1 foreign country of its subsidy practices and the

2 Secretary considers the allegations sufficient to

3 warrant a reconsideration; or

4 (B) if the Secretary receives information

5 concerning the signing of an agreement between

6 the United States Government and that foreign

7 country that provides for the immediate elimi8 nation by that country of construction and re9 pair subsidies for vessels.

10 (2) RESTRICTION ON RECONSIDERATION.—A

11 foreign country may not make more than one appli12 cation for reconsideration under this subsection in

13 any calendar year.

14 (3) BURDEN OF PERSUASION.—In any recon15 sideration under paragraph (1)(A), the burden of

16 persuasion regarding whether there are changed cir17 cumstances sufficient to warrant a determination

18 that the foreign country should be removed from the

19 list is on the applicant.

20 (4) REMOVAL FROM LIST.—The Secretary may

21 remove a foreign country from the list only if the

22 Secretary determines—

23 (A) based solely on the evidence contained

24 in the public record, including that information

25 which is otherwise treated as proprietary under
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1 section 206(a), that the foreign country does

2 not provide any subsidy, directly or indirectly,

3 for the construction or repair of vessels (includ4 ing any continuing benefit from any prior sub5 sidy program); or

6 (B) that there is a signed agreement be7 tween the United States Government and the

8 foreign country that provides for the immediate

9 elimination of subsidies for the construction and

10 repair of vessels.

11 (5) ADMINISTRATIVE PROCEDURES FOR RECON12 SIDERATION.—

13 (A) NOTICE AND COMMENT.—After receiv14 ing an application for reconsideration under

15 paragraph (4) from a foreign country, the Sec16 retary shall—

17 (i) within 7 days publish in the Fed18 eral Register the text of the application to19 gether with a request for public comments;

20 and

21 (ii) receive comments from the public

22 for a period of 60 days after the date of

23 publication and, subject to section 206(a),

24 make such comments available to the gen25 eral public upon request.
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1 (B) REVIEW AND DETERMINATION.—With2 in 90 days after receiving an application for re3 consideration under paragraph (4), the Sec4 retary shall—

5 (i) review the comments received

6 under subparagraph (A) and issue a final

7 affirmative or negative determination re8 garding the removal of the foreign country

9 from the list; and

10 (ii) publish notice in the Federal Reg11 ister of the determination together with a

12 full explanation thereof.

13 (g) JUDICIAL REVIEW.—

14 (1) REVIEW OF DETERMINATION.—Within 30

15 days after the date of publication in the Federal

16 Register of a final determination of the Secretary

17 made under subsection (d)(1) or (f)(5)(B), any per18 son who is a party to the proceeding in connection

19 with which the matter arises may commence an ac20 tion in the United States Court of International

21 Trade by filing concurrently a summons and com22 plaint, each with the content and in the form, man23 ner, and style prescribed by the rules of that court,

24 contesting any factual findings or legal conclusions

25 upon which the determination is based.
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1 (2) PROCEDURES AND FEES.—The procedures

2 and fees set forth in chapter 169 of title 28, United

3 States Code, apply to an action under this sub4 section.

5 (3) STANDARD OF REVIEW.—The court shall

6 hold unlawful any determination, finding, or conclu7 sion found to be unsupported by substantial evidence

8 on the record, or otherwise not in accordance with

9 law.

10 (4) RECORD FOR REVIEW.—The record for re11 view shall consist of a copy of all information pre12 sented to or obtained by the Secretary during the

13 course of the administrative proceeding, including all

14 governmental memoranda pertaining to the case and

15 the record of ex parte meetings, as well as a copy

16 of the determination, all transcripts or records of

17 conferences and hearings, and all notices published

18 in the Federal Register.

19 (5) STANDING.—Any person who was a party

20 to the administrative proceedings described in this

21 section shall have the right to appear and be heard

22 as a party in interest before the United States Court

23 of International Trade. The party filing the action

24 shall notify all such persons of the filing of an action
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1 under this section, in the form, manner, and within

2 the time prescribed by the rules of the court.

3 (6) CONFORMING AMENDMENT.—Section 1581

4 of title 28, United States Code, is amended by add5 ing the following subsection:

6 ‘‘(k) The Court of International Trade shall have ex7 clusive jurisdiction of any civil action commenced under

8 section 203(g) of the Shipbuilding Trade Reform Act of

9 1993.’’.

10 SEC. 204. PENALTIES.

11 (a) PENALTY FOR FALSE INFORMATION AND RE12 NEWAL OF SUBSIDIES.—

13 (1) IN GENERAL.—The Secretary shall place a

14 foreign country on the list for a period of not less

15 than 5 years if the Secretary—

16 (A) determines that a foreign country pro17 vided the Secretary with false or misleading in18 formation during any investigation or reconsid19 eration under section 203; or

20 (B) after making a final determination

21 under section 203(d) or (f) that the foreign

22 country is not providing a subsidy, determines

23 that the foreign country provides, directly or in24 directly, any new construction or repair subsidy
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1 (including the reinstatement of any benefit

2 under any prior subsidy program).

3 A listing required by this subsection shall be made

4 within 30 days after the date of the determination

5 under paragraph (1) or (2).

6 (2) TIME LIMITS FOR DETERMINATIONS.—The

7 Secretary shall make a determination under sub8 paragraph (A) or (B) of paragraph (1) within 30

9 days after the day on which the Secretary receives

10 information indicating that a violation of the sub11 paragraph has likely occurred.

12 (b) PENALTIES FOR FAILURE TO ELIMINATE SUB13 SIDIES.—

14 (1) PRECONDITION FOR IMPOSITION OF PEN15 ALTIES.—Actions by the Secretary under paragraphs

16 (2), (3), and (4) may be taken only if the Secretary

17 determines that the foreign country concerned has

18 been notified of its inclusion on the list and has

19 failed within 180 days after that notification to

20 enter into any agreement with the United States

21 that provides for the immediate elimination of sub22 sidies for the construction and repair of vessels.

23 (2) PENALTIES FOR NEW AFFECTED VES24 SELS.—Subject to paragraph (1) and subsection (c),
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1 the Secretary shall take one or more of the following

2 actions with respect to any new affected vessel:

3 (A) Limit the sailings of the vessel to or

4 from the United States, or the amount of cargo

5 carried, by the vessel to not less than 50 per6 cent of the number of sailings, or the amount

7 of cargo carried, by the vessel during the imme8 diately preceding full calendar year.

9 (B) Impose on the vessel a fee not less

10 than $500,000 and not more than $1,000,000

11 per voyage.

12 (C) Direct the appropriate customs officer

13 at any port or place of destination in the Unit14 ed States to refuse the clearance required by

15 section 4197 of the Revised Statutes of the

16 United States to the vessel.

17 (D) Direct the Secretary of the department

18 in which the Coast Guard is operating to deny

19 entry for purpose of oceanborne trade of the

20 vessel to any port or place in the United States

21 or the navigable waters of the United States.

22 (3) PENALTIES FOR EXISTING AFFECTED VES23 SELS.—Subject to paragraph (1) and subsection (c),

24 if the Secretary finds the existence of conditions un25 favorable to the ability of any United States ship-
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1 builder to engage in the construction or repair of

2 vessels for international commerce which arise out

3 of, or result from, a subsidy provided by a foreign

4 country on the list established under subsection (a),

5 the Secretary shall take either or both of the actions

6 described in subparagraphs (A) and (B) of para7 graph (2) with respect to an existing affected vessel

8 of that country.

9 (4) CARGO DIVERSION.—Subject to paragraph

10 (1) and subsection (c), the Secretary shall direct the

11 appropriate customs officer to deny entry of cargo

12 into the United States that has been transported on

13 an affected vessel if that cargo has been transported

14 to a port or place in the United States through a

15 foreign port or place in a country contiguous to the

16 United States.

17 (5) DEFINITIONS.—As used in this subsection:

18 (A) The term ‘‘affected vessel’’ means a

19 vessel—

20 (i) that is documented under the laws

21 of a foreign country that is on the list; or

22 (ii) the controlling interest in which is

23 held by a citizen or national of, or a legal

24 entity existing under the laws of, a foreign

25 country that is on the list, regardless of
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1 whether the vessel is documented under

2 the laws of that country.

3 (B) The term ‘‘existing affected vessel’’

4 means an affected vessel that is not a new af5 fected vessel.

6 (C) The term ‘‘new affected vessel’’ means

7 an affected vessel that was constructed after

8 the date of the enactment of this Act, unless

9 such construction was completed within 30

10 months after such date of enactment under a

11 contract entered into before such date of enact12 ment.

13 (c) IMPOSITION AND DURATION OF PENALTIES IM14 POSED UNDER THIS SECTION.—No penalty may be im15 posed under this section before 120 days after the date

16 of the enactment of this Act. Any penalty imposed under

17 subsection (b)(2), (3), or (4) shall remain in effect until

18 such time as the foreign country is removed from the list

19 under section 203(f).

20 SEC. 205. TRADE AGREEMENTS.

21 (a) IN GENERAL.—Any negotiation to which the

22 United States is a party for the elimination of subsidies

23 for the construction or repair of vessels by foreign coun24 tries shall be conducted by the United States Government
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1 in full consultation with the affected industries in the

2 United States.

3 (b) MONITORING.—The Secretary shall monitor the

4 compliance of each foreign country with any agreement

5 to which the United States and such country are parties

6 for the elimination of subsidies for the construction or re7 pair of vessels. The Secretary shall publish annually in the

8 Federal Register the findings made by the Secretary under

9 this subsection together with a request for public com10 ments.

11 (c) PENALTY FOR NONCOMPLIANCE.—If, based on

12 the findings made and the public comments received under

13 subsection (b), the Secretary determines (within 90 days

14 after the day of publication of the findings under sub15 section (b)) that a foreign country is not in compliance

16 with the agreement, the Secretary shall, within 7 days

17 after making such determination, place such foreign coun18 try on the list and impose penalties under paragraph (2),

19 (3), or (4) of section 204(b) with respect to such country

20 (and for purposes of applying any such penalty, paragraph

21 (1) of section 204(b) shall be disregarded).

22 SEC. 206. GENERAL ADMINISTRATIVE PROVISIONS.

23 (a) PROPRIETARY INFORMATION.—The procedures

24 set forth in section 777 of the Tariff Act of 1930 shall

25 govern the rights of access to information obtained by the
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1 Secretary during the course of any investigation conducted

2 under section 203.

3 (b) INFORMATION USED IN MAKING DETERMINA4 TIONS.—The Secretary shall, before making any final de5 termination under section 203, 204, or 205 verify all in6 formation that will be relied upon in making that deter7 mination. If the Secretary is unable to verify any informa8 tion submitted, the Secretary shall use the best informa9 tion available as the basis for action. Whenever a party

10 refuses or is unable to produce the information requested

11 in a timely manner and in the form provided, the Sec12 retary shall use the best information otherwise available.

13 All information presented to or obtained by the Secretary

14 shall be part of the record of the proceeding.

15 (c) PUBLIC AVAILABILITY OF DETERMINATIONS.—

16 The Secretary shall make available for public inspection

17 the text of all determinations made under section 203,

18 204, or 205.

19 SEC. 207. DEFINITIONS.

20 (a) DEFINITIONS.—As used in this title:

21 (1) The term ‘‘conditions unfavorable to the

22 ability of any United States shipbuilder to engage in

23 the construction or repair of vessels for international

24 commerce’’ includes, but is not limited to, any condi25 tions available to, and favorable for, foreign ship-
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1 builders which are not reciprocally available to and

2 favorable for United States shipbuilders and

3 which—

4 (A) provide any disincentive to investment

5 in United States ship construction or repair fa6 cilities, equipment, and technology;

7 (B) contribute to any reduction in the

8 competitiveness of any United States ship9 builder to engage in the construction or repair

10 of vessels for international commerce; or

11 (C) otherwise contribute to any distortion

12 of the international market for ship construc13 tion or repair.

14 (2) The term ‘‘construction’’ includes recon15 struction.

16 (3) The term ‘‘interested party’’ means—

17 (i) a person that engages in ship construc18 tion or repair in the United States;

19 (ii) a certified union or recognized union or

20 group of workers which is representative of an

21 industry that engages in ship construction or

22 repair in the United States;

23 (iii) a trade or business association whose

24 members include firms, partnerships, or other
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1 entities that engage in ship construction or re2 pair in the United States; and

3 (iv) an association, a majority of whose

4 members is composed of interested parties de5 scribed in clauses (i), (ii), and (iii) with respect

6 to ship construction.

7 (4) The term ‘‘foreign shipyard’’ includes a ship

8 construction or repair facility located in a foreign

9 country that is directly or indirectly owned, con10 trolled, managed, or financed by a foreign shipyard

11 that receives or benefits from a subsidy.

12 (5) The term ‘‘list’’ means the list established

13 under section 203(a).

14 (6) The term ‘‘Secretary’’ means the Secretary

15 of Commerce.

16 (7) The term ‘‘subsidy’’ includes, but is not lim17 ited to, any of the following:

18 (A) Officially supported export credits and

19 development assistance.

20 (B) Direct official operating support to the

21 commercial shipbuilding and repair industry, or

22 to a related entity that favors the operation of

23 shipbuilding and repair, including—

24 (i) grants;
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1 (ii) loans and loan guarantees other

2 than those available on the commercial

3 market;

4 (iii) forgiveness of debt;

5 (iv) equity infusions on terms incon6 sistent with commercially reasonable in7 vestment practices;

8 (v) preferential provision of goods and

9 services; and

10 (vi) public sector ownership of com11 mercial shipyards on terms inconsistent

12 with commercially reasonable investment

13 practices.

14 (C) Direct official support for investment

15 in the commercial shipbuilding and repair in16 dustry, or to a related entity that favors the op17 eration of shipbuilding and repair, including the

18 kinds of support listed in clauses (i) through (v)

19 of subparagraph (B), and any restructuring

20 support, except public support for social pur21 poses directly and effectively linked to shipyard

22 closures.

23 (D) Assistance in the form of grants, pref24 erential loans, preferential tax treatment, or

25 otherwise, that benefits or is directly related to
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1 shipbuilding and repair for purposes of research

2 and development that is not equally open to do3 mestic and foreign enterprises.

4 (E) Tax policies and practices that favor

5 the shipbuilding and repair industry, directly or

6 indirectly, such as tax credits, deductions, ex7 emptions and preferences, including accelerated

8 depreciation, if the benefits are not generally

9 available to persons or firms not engaged in

10 shipbuilding or repair.

11 (F) Any official regulation or practice that

12 authorizes or encourages persons or firms en13 gaged in shipbuilding or repair to enter into

14 anticompetitive arrangements.

15 (G) Any indirect support directly related,

16 in law or in fact, to shipbuilding and repair at

17 national yards, including any public assistance

18 favoring shipowners with an indirect effect on

19 shipbuilding or repair activities, and any assist20 ance provided to suppliers of significant inputs

21 to shipbuilding, which results in benefits to do22 mestic shipbuilders.

23 (H) Any export subsidy identified in the Il24 lustrative List of Export Subsidies in the Annex

25 to the Agreement on Interpretation and Appli-
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1 cation of Articles VI, XVI, and XXIII of the

2 General Agreement on Tariffs and Trade or

3 any other export subsidy that may be prohibited

4 as a result of the Uruguay Round of trade ne5 gotiations.

6 (8) The term ‘‘vessel’’ means any self-propelled,

7 seagoing vessel—

8 (A) of not less than one hundred gross

9 tons, as measured under the International Con10 vention of Tonnage Measurement of Ships,

11 1969; and

12 (B) not exempt from entry under section

13 441 of the Tariff Act of 1930.

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