II

103D CONGRESS

1ST SESSION S. 1627

To implement the North American Free Trade Agreement.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 4 (legislative day, NOVEMBER 2), 1993

Mr. MITCHELL (for himself and Mr. DOLE) (by request) introduced the following bill; which was read twice and referred jointly to the Committees on

Finance, Agriculture, Nutrition, and Forestry, Commerce, Science, and

Transportation, Governmental Affairs, the Judiciary, and Foreign Relations pursuant to 19 U.S.C. 2191(c)

A BILL

To implement the North American 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 AND TABLE OF CONTENTS.

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

5 ‘‘North American Free Trade Agreement Implementation

6 Act’’.

7 (b) TABLE OF CONTENTS.—

Sec. 1. Short title and table of contents.

Sec. 2. Definitions.
2

TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING

TO, THE NORTH AMERICAN FREE TRADE AGREEMENT

Sec. 101. Approval and entry into force of the North American Free Trade

Agreement.

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

Sec. 103. Consultation and layover requirements for, and effective date of, proclaimed actions.

Sec. 104. Implementing actions in anticipation of entry into force and initial

regulations.

Sec. 105. United States section of the NAFTA secretariat.

Sec. 106. Appointments to chapter 20 panel proceedings.

Sec. 107. Termination or suspension of United States-Canada Free-Trade

Agreement.

Sec. 108. Congressional intent regarding future accessions.

Sec. 109. Effective dates; effect of termination of NAFTA status.

TITLE II—CUSTOMS PROVISIONS

Sec. 201. Tariff modifications.

Sec. 202. Rules of origin.

Sec. 203. Drawback.

Sec. 204. Customs user fees.

Sec. 205. Enforcement.

Sec. 206. Reliquidation of entries for NAFTA-origin goods.

Sec. 207. Country of origin marking of NAFTA goods.

Sec. 208. Protests against adverse origin determinations.

Sec. 209. Exchange of information.

Sec. 210. Prohibition on drawback for television picture tubes.

Sec. 211. Monitoring of television and picture tube imports.

Sec. 212. Title VI amendments.

Sec. 213. Effective dates.

TITLE III—APPLICATION OF AGREEMENT TO SECTORS AND

SERVICES

Subtitle A—Safeguards

PART 1—RELIEF FROM IMPORTS BENEFITING FROM THE AGREEMENT

Sec. 301. Definitions.

Sec. 302. Commencing of action for relief.

Sec. 303. International Trade Commission action on petition.

Sec. 304. Provision of relief.

Sec. 305. Termination of relief authority.

Sec. 306. Compensation authority.

Sec. 307. Submission of petitions.

Sec. 308. Special tariff provisions for Canadian fresh fruits and vegetables.

Sec. 309. Price-based snapback for frozen concentrated orange juice.

PART 2—RELIEF FROM IMPORTS FROM ALL COUNTRIES

Sec. 311. NAFTA article impact in import relief cases under the Trade Act of

1974.

Sec. 312. Presidential action regarding NAFTA imports.
3

PART 3—GENERAL PROVISIONS

Sec. 315. Provisional relief.

Sec. 316. Monitoring.

Sec. 317. Procedures concerning the conduct of International Trade Commission investigations.

Sec. 318. Effective date.

Subtitle B—Agriculture

Sec. 321. Agriculture.

Subtitle C—Intellectual Property

Sec. 331. Treatment of inventive activity.

Sec. 332. Rental rights in sound recordings.

Sec. 333. Nonregistrability of misleading geographic indications.

Sec. 334. Motion pictures in the public domain.

Sec. 335. Effective dates.

Subtitle D—Temporary Entry of Business Persons

Sec. 341. Temporary entry.

Sec. 342. Effective date.

Subtitle E—Standards

PART 1—STANDARDS AND MEASURES

Sec. 351. Standards and sanitary and phytosanitary measures.

Sec. 352. Transportation.

PART 2—AGRICULTURAL STANDARDS

Sec. 361. Agricultural technical and conforming amendments.

Subtitle F—Corporate Average Fuel Economy

Sec. 371. Corporate average fuel economy.

Subtitle G—Government Procurement

Sec. 381. Government procurement.

TITLE IV—DISPUTE SETTLEMENT IN ANTIDUMPING AND

COUNTERVAILING DUTY CASES

Subtitle A—Organizational, Administrative, and Procedural Provisions

Regarding the Implementation of Chapter 19 of the Agreement

Sec. 401. References in subtitle.

Sec. 402. Organizational and administrative provisions.

Sec. 403. Testimony and production of papers in extraordinary challenges.

Sec. 404. Requests for review of determinations by competent investigating authorities of NAFTA countries.

Sec. 405. Rules of procedure for panels and committees.

Sec. 406. Subsidy negotiations.

Sec. 407. Identification of industries facing subsidized imports.

Sec. 408. Treatment of amendments to antidumping and countervailing duty

law.
4

Subtitle B—Conforming Amendments and Provisions

Sec. 411. Judicial review in antidumping duty and countervailing duty cases.

Sec. 412. Conforming amendments to other provisions of the Tariff Act of

1930.

Sec. 413. Consequential amendment to Free-Trade Agreement Act of 1988.

Sec. 414. Conforming amendments to title 28, United States Code.

Sec. 415. Effect of termination of NAFTA country status.

Sec. 416. Effective date.

TITLE V—NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE AND

OTHER PROVISIONS

Subtitle A—NAFTA Transitional Adjustment Assistance Program

Sec. 501. Short title.

Sec. 502. Establishment of NAFTA transitional adjustment assistance program.

Sec. 503. Conforming amendments.

Sec. 504. Authorization of appropriations.

Sec. 505. Termination of transition program.

Sec. 506. Effective date.

Sec. 507. Treatment of self-employment assistance programs.

Subtitle B—Provisions Relating to Performance Under the Agreement

Sec. 511. Discriminatory taxes.

Sec. 512. Review of the operation and effects of the agreement.

Sec. 513. Actions affecting United States cultural industries.

Sec. 514. Report on impact of NAFTA on motor vehicle exports to Mexico.

Sec. 515. Center for the study of western hemispheric trade.

Sec. 516. Effective date.

Subtitle C—Funding

PART 1—CUSTOMS USER FEES

Sec. 521. Fees for certain customs services.

PART 2—INTERNAL REVENUE CODE AMENDMENTS

Sec. 522. Authority to disclose certain tax information to the United States

customs service.

Sec. 523. Use of electronic fund transfer system for collection of certain taxes.

Subtitle D—Implementation of NAFTA Supplemental Agreements

PART 1—AGREEMENTS RELATING TO LABOR AND ENVIRONMENT

Sec. 531. Agreement on labor cooperation.

Sec. 532. Agreement on environmental cooperation.

Sec. 533. Agreement on Border Environment Cooperation Commission.

PART 2—NORTH AMERICAN DEVELOPMENT BANK AND RELATED

PROVISIONS.

Sec. 541. North American Development Bank.

Sec. 542. Status, immunities, and privileges.
5

Sec. 543. Community adjustment and investment program.

Sec. 544. Definition.

TITLE VI—CUSTOMS MODERNIZATION

Sec. 601. Reference.

Subtitle A—Improvements in Customs Enforcement

Sec. 611. Penalties for violations of arrival, reporting, entry, and clearance requirements.

Sec. 612. Failure to declare.

Sec. 613. Customs testing laboratories; detention of merchandise.

Sec. 614. Recordkeeping.

Sec. 615. Examination of books and witnesses.

Sec. 616. Judicial enforcement.

Sec. 617. Review of protests.

Sec. 618. Repeal of provision relating to reliquidation on account of fraud.

Sec. 619. Penalties relating to manifests.

Sec. 620. Unlawful unlading or transshipment.

Sec. 621. Penalties for fraud, gross negligence, and negligence; prior disclosure.

Sec. 622. Penalties for false drawback claims.

Sec. 623. Interpretive rulings and decisions; public information.

Sec. 624. Seizure authority.

Subtitle B—National Customs Automation Program

Sec. 631. National Customs Automation Program.

Sec. 632. Drawback and refunds.

Sec. 633. Effective date of rates of duty.

Sec. 634. Definitions.

Sec. 635. Manifests.

Sec. 636. Invoice contents.

Sec. 637. Entry of merchandise.

Sec. 638. Appraisement and other procedures.

Sec. 639. Voluntary reliquidations.

Sec. 640. Appraisement regulations.

Sec. 641. Limitation on liquidation.

Sec. 642. Payment of duties and fees.

Sec. 643. Abandonment and damage.

Sec. 644. Customs officer’s immunity.

Sec. 645. Protests.

Sec. 646. Refunds and errors.

Sec. 647. Bonds and other security.

Sec. 648. Customhouse brokers.

Sec. 649. Conforming amendments.

Subtitle C—Miscellaneous Amendments to the Tariff Act of 1930

Sec. 651. Administrative exemptions.

Sec. 652. Report of arrival.

Sec. 653. Entry of vessels.

Sec. 654. Unlawful return of foreign vessel papers.

Sec. 655. Vessels not required to enter.

Sec. 656. Unlading.

Sec. 657. Declarations.

Sec. 658. General orders.
6

Sec. 659. Unclaimed merchandise.

Sec. 660. Destruction of merchandise.

Sec. 661. Proceeds of sale.

Sec. 662. Entry under regulations.

Sec. 663. American trademarks.

Sec. 664. Simplified recordkeeping for merchandise transported by pipeline.

Sec. 665. Entry for warehouse.

Sec. 666. Cartage.

Sec. 667. Seizure.

Sec. 668. Limitation on actions.

Sec. 669. Collection of fees on behalf of other agencies.

Sec. 670. Authority to settle claims.

Sec. 671. Use of private collection agencies.

Subtitle D—Miscellaneous Provisions and Consequential and Conforming

Amendments to Other Laws

Sec. 681. Amendments to the Harmonized Tariff Schedule.

Sec. 682. Customs personnel airport work shift regulation.

Sec. 683. Use of harbor maintenance trust fund amounts for administrative expenses.

Sec. 684. Amendments to title 28, United States Code.

Sec. 685. Treasury forfeiture fund.

Sec. 686. Amendments to the Revised Statutes of the United States.

Sec. 687. Amendments to title 18, United States Code.

Sec. 688. Amendment to the Act to Prevent Pollution from Ships.

Sec. 689. Miscellaneous technical amendments.

Sec. 690. Repeal of obsolete provisions of law.

Sec. 691. Reports to Congress.

Sec. 692. Effective date.

1 SEC. 2. DEFINITIONS.

2 For purposes of this Act:

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

4 means the North American Free Trade Agreement

5 approved by the Congress under section 101(a).

6 (2) HTS.—The term ‘‘HTS’’ means the Har7 monized Tariff Schedule of the United States.

8 (3) MEXICO.—Any reference to Mexico shall be

9 considered to be a reference to the United Mexican

10 States.
7

1 (4) NAFTA COUNTRY.—Except as provided in

2 section 202, the term ‘‘NAFTA country’’ means—

3 (A) Canada for such time as the Agree4 ment is in force with respect to, and the United

5 States applies the Agreement to, Canada; and

6 (B) Mexico for such time as the Agreement

7 is in force with respect to, and the United

8 States applies the Agreement to, Mexico.

9 (5) INTERNATIONAL TRADE COMMISSION.—The

10 term ‘‘International Trade Commission’’ means the

11 United States International Trade Commission.

12 (6) TRADE REPRESENTATIVE.—The term

13 ‘‘Trade Representative’’ means the United States

14 Trade Representative.

15 TITLE I—APPROVAL OF, AND

16 GENERAL PROVISIONS RE17 LATING TO, THE NORTH

18 AMERICAN FREE TRADE

19 AGREEMENT

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

21 NORTH AMERICAN FREE TRADE AGREEMENT.

22 (a) APPROVAL OF AGREEMENT AND STATEMENT OF

23 ADMINISTRATIVE ACTION.—Pursuant to section 1103 of

24 the Omnibus Trade and Competitiveness Act of 1988 (19
8

1 U.S.C. 2903) and section 151 of the Trade Act of 1974

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

3 (1) the North American Free Trade Agreement

4 entered into on December 17, 1992, with the Gov5 ernments of Canada and Mexico and submitted to

6 the Congress on November 4, 1993; and

7 (2) the statement of administrative action pro8 posed to implement the Agreement that was submit9 ted to the Congress on November 4, 1993.

10 (b) CONDITIONS FOR ENTRY INTO FORCE OF THE

11 AGREEMENT.—The President is authorized to exchange

12 notes with the Government of Canada or Mexico providing

13 for the entry into force, on or after January 1, 1994, of

14 the Agreement for the United States with respect to such

15 country at such time as—

16 (1) the President—

17 (A) determines that such country has im18 plemented the statutory changes necessary to

19 bring that country into compliance with its obli20 gations under the Agreement and has made

21 provision to implement the Uniform Regula22 tions provided for under article 511 of the

23 Agreement regarding the interpretation, appli24 cation, and administration of the rules of ori25 gin, and
9

1 (B) transmits a report to the House of

2 Representatives and the Senate setting forth

3 the determination under subparagraph (A) and

4 including, in the case of Mexico, a description

5 of the specific measures taken by that country

6 to—

7 (i) bring its laws into conformity with

8 the requirements of the Schedule of Mexico

9 in Annex 1904.15 of the Agreement, and

10 (ii) otherwise ensure the effective im11 plementation of the binational panel review

12 process under chapter 19 of the Agreement

13 regarding final antidumping and counter14 vailing duty determinations; and

15 (2) the Government of such country exchanges

16 notes with the United States providing for the entry

17 into force of the North American Agreement on En18 vironmental Cooperation and the North American

19 Agreement on Labor Cooperation for that country

20 and the United States.

21 SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED

22 STATES AND STATE LAW.

23 (a) RELATIONSHIP OF AGREEMENT TO UNITED

24 STATES LAW.—
10

1 (1) UNITED STATES LAW TO PREVAIL IN CON2 FLICT.—No provision of the Agreement, nor the ap3 plication of any such provision to any person or cir4 cumstance, which is inconsistent with any law of the

5 United States shall have effect.

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

7 be construed—

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

9 United States, including any law regarding—

10 (i) the protection of human, animal,

11 or plant life or health,

12 (ii) the protection of the environment,

13 or

14 (iii) motor carrier or worker safety; or

15 (B) to limit any authority conferred under

16 any law of the United States, including section

17 301 of the Trade Act of 1974;

18 unless specifically provided for in this Act.

19 (b) RELATIONSHIP OF AGREEMENT TO STATE

20 LAW.—

21 (1) FEDERAL-STATE CONSULTATION.—

22 (A) IN GENERAL.—Upon the enactment of

23 this Act, the President shall, through the inter24 governmental policy advisory committees on

25 trade established under section 306(c)(2)(A) of
11

1 the Trade and Tariff Act of 1984, consult with

2 the States for the purpose of achieving con3 formity of State laws and practices with the

4 Agreement.

5 (B) FEDERAL-STATE CONSULTATION

6 PROCESS.—The Trade Representative shall es7 tablish within the Office of the United States

8 Trade Representative a Federal-State consulta9 tion process for addressing issues relating to

10 the Agreement that directly relate to, or will po11 tentially have a direct impact on, the States.

12 The Federal-State consultation process shall in13 clude procedures under which—

14 (i) the Trade Representative will as15 sist the States in identifying those State

16 laws that may not conform with the Agree17 ment but may be maintained under the

18 Agreement by reason of being in effect be19 fore the Agreement entered into force;

20 (ii) the States will be informed on a

21 continuing basis of matters under the

22 Agreement that directly relate to, or will

23 potentially have a direct impact on, the

24 States;
12

1 (iii) the States will be provided oppor2 tunity to submit, on a continuing basis, to

3 the Trade Representative information and

4 advice with respect to matters referred to

5 in clause (ii);

6 (iv) the Trade Representative will

7 take into account the information and ad8 vice received from the States under clause

9 (iii) when formulating United States posi10 tions regarding matters referred to in

11 clause (ii); and

12 (v) the States will be involved (includ13 ing involvement through the inclusion of

14 appropriate representatives of the States)

15 to the greatest extent practicable at each

16 stage of the development of United States

17 positions regarding matters referred to in

18 clause (ii) that will be addressed by com19 mittees, subcommittees, or working groups

20 established under the Agreement or

21 through dispute settlement processes pro22 vided for under the Agreement.

23 The Federal Advisory Committee Act (5 U.S.C.

24 App.) shall not apply to the Federal-State consulta25 tion process established by this paragraph.
13

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

2 application thereof, may be declared invalid as to

3 any person or circumstance on the ground that the

4 provision or application is inconsistent with the

5 Agreement, except in an action brought by the Unit6 ed States for the purpose of declaring such law or

7 application invalid.

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

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

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

11 State; and

12 (B) any State law regulating or taxing the

13 business of insurance.

14 (c) EFFECT OF AGREEMENT WITH RESPECT TO PRI15 VATE REMEDIES.—No person other than the United

16 States—

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

18 under—

19 (A) the Agreement or by virtue of Congres20 sional approval thereof, or

21 (B) the North American Agreement on

22 Environmental Cooperation or the North Amer23 ican Agreement on Labor Cooperation; or

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

25 any provision of law, any action or inaction by any
14

1 department, agency, or other instrumentality of the

2 United States, any State, or any political subdivision

3 of a State on the ground that such action or inaction

4 is inconsistent with the Agreement, the North Amer5 ican Agreement on Environmental Cooperation, or

6 the North American Agreement on Labor Coopera7 tion.

8 SEC. 103. CONSULTATION AND LAYOVER REQUIREMENTS

9 FOR, AND EFFECTIVE DATE OF, PROCLAIMED

10 ACTIONS.

11 (a) CONSULTATION AND LAYOVER REQUIRE12 MENTS.—If a provision of this Act provides that the imple13 mentation of an action by the President by proclamation

14 is subject to the consultation and layover requirements of

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

16 (1) the President has obtained advice regarding

17 the proposed action from—

18 (A) the appropriate advisory committees

19 established under section 135 of the Trade Act

20 of 1974, and

21 (B) the International Trade Commission;

22 (2) the President has submitted a report to the

23 Committee on Ways and Means of the House of

24 Representatives and the Committee on Finance of

25 the Senate that sets forth—
15

1 (A) the action proposed to be proclaimed

2 and the reasons therefor, and

3 (B) the advice obtained under paragraph

4 (1);

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

6 with the first day on which the President has met

7 the requirements of paragraphs (1) and (2) with re8 spect to such action, has expired; and

9 (4) the President has consulted with such Com10 mittees regarding the proposed action during the pe11 riod referred to in paragraph (3).

12 (b) EFFECTIVE DATE OF CERTAIN PROCLAIMED AC13 TIONS.—Any action proclaimed by the President under the

14 authority of this Act that is not subject to the consultation

15 and layover requirements under subsection (a) may not

16 take effect before the 15th day after the date on which

17 the text of the proclamation is published in the Federal

18 Register.

19 SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF

20 ENTRY INTO FORCE AND INITIAL REGULA21 TIONS.

22 (a) IMPLEMENTING ACTIONS.—After the date of the

23 enactment of this Act—

24 (1) the President may proclaim such actions;

25 and
16

1 (2) other appropriate officers of the United

2 States Government may issue such regulations;

3 as may be necessary to ensure that any provision of this

4 Act, or amendment made by this Act, that takes effect

5 on the date the Agreement enters into force is appro6 priately implemented on such date, but no such proclama7 tion or regulation may have an effective date earlier than

8 the date of entry into force. The 15-day restriction in sec9 tion 103(b) on the taking effect of proclaimed actions is

10 waived to the extent that the application of such restric11 tion would prevent the taking effect on the date the Agree12 ment enters into force of any action proclaimed under this

13 section.

14 (b) INITIAL REGULATIONS.—Initial regulations nec15 essary or appropriate to carry out the actions proposed

16 in the statement of administrative action submitted under

17 section 101(a)(2) to implement the Agreement shall, to

18 the maximum extent feasible, be issued within 1 year after

19 the date of entry into force of the Agreement; except that

20 interim or initial regulations to implement those Uniform

21 Regulations regarding rules of origin provided for under

22 article 511 of the Agreement shall be issued no later than

23 the date of entry into force of the Agreement. In the case

24 of any implementing action that takes effect on a date

25 after the date of entry into force of the Agreement, initial
17

1 regulations to carry out that action shall, to the maximum

2 extent feasible, be issued within 1 year after such effective

3 date.

4 SEC. 105. UNITED STATES SECTION OF THE NAFTA SEC5 RETARIAT.

6 (a) ESTABLISHMENT OF THE UNITED STATES SEC7 TION.—The President is authorized to establish within

8 any department or agency of the United States Govern9 ment a United States Section of the Secretariat estab10 lished under chapter 20 of the Agreement. The United

11 States Section, subject to the oversight of the interagency

12 group established under section 402, shall carry out its

13 functions within the Secretariat to facilitate the operation

14 of the Agreement, including the operation of chapters 19

15 and 20 of the Agreement and the work of the panels, ex16 traordinary challenge committees, special committees, and

17 scientific review boards convened under those chapters.

18 The United States Section may not be considered to be

19 an agency for purposes of section 552 of title 5, United

20 States Code.

21 (b) AUTHORIZATION OF APPROPRIATIONS.—There

22 are authorized to be appropriated for each fiscal year after

23 fiscal year 1993 to the department or agency within which

24 the United States Section is established the lesser of—

25 (1) such sums as may be necessary; or
18

1 (2) $2,000,000;

2 for the establishment and operations of the United States

3 Section and for the payment of the United States share

4 of the expenses of binational panels and extraordinary

5 challenge committees convened under chapter 19, and of

6 the expenses incurred in dispute settlement proceedings

7 under chapter 20, of the Agreement.

8 (c) REIMBURSEMENT OF CERTAIN EXPENSES.—If,

9 in accordance with Annex 2002.2 of the Agreement, the

10 Canadian Section or the Mexican Section of the Secretar11 iat provides funds to the United States Section during any

12 fiscal year, as reimbursement for expenses by the Cana13 dian Section or the Mexican Section in connection with

14 settlement proceedings under chapter 19 or 20 of the

15 Agreement, the United States Section may retain and use

16 such funds to carry out the functions described in sub17 section (a).

18 SEC. 106. APPOINTMENTS TO CHAPTER 20 PANEL PRO19 CEEDINGS.

20 (a) CONSULTATION.—The Trade Representative shall

21 consult with the Committee on Ways and Means of the

22 House of Representatives and the Committee on Finance

23 of the Senate regarding the selection and appointment of

24 candidates for the rosters described in article 2009 of the

25 Agreement.
19

1 (b) SELECTION OF INDIVIDUALS WITH ENVIRON2 MENTAL EXPERTISE.—The United States shall, to the

3 maximum extent practicable, encourage the selection of in4 dividuals who have expertise and experience in environ5 mental issues for service in panel proceedings under chap6 ter 20 of the Agreement to hear any challenge to a United

7 States or State environmental law.

8 SEC. 107. TERMINATION OR SUSPENSION OF UNITED

9 STATES-CANADA FREE-TRADE AGREEMENT.

10 Section 501(c) of the United States-Canada Free11 Trade Implementation Act of 1988 (19 U.S.C. 2112 note)

12 is amended to read as follows:

13 ‘‘(c) TERMINATION OR SUSPENSION OF AGREE14 MENT.—

15 ‘‘(1) TERMINATION OF AGREEMENT.—On the

16 date the Agreement ceases to be in force, the provi17 sions of this Act (other than this paragraph and sec18 tion 410(b)), and the amendments made by this Act,

19 shall cease to have effect.

20 ‘‘(2) EFFECT OF AGREEMENT SUSPENSION.—

21 An agreement by the United States and Canada to

22 suspend the operation of the Agreement shall not be

23 deemed to cause the Agreement to cease to be in

24 force within the meaning of paragraph (1).
20

1 ‘‘(3) SUSPENSION RESULTING FROM NAFTA.—

2 On the date the United States and Canada agree to

3 suspend the operation of the Agreement by reason of

4 the entry into force between them of the North

5 American Free Trade Agreement, the following pro6 visions of this Act are suspended and shall remain

7 suspended until such time as the suspension of the

8 Agreement may be terminated:

9 ‘‘(A) Sections 204(a) and (b) and 205(a).

10 ‘‘(B) Sections 302 and 304(f).

11 ‘‘(C) Sections 404, 409, and 410(b).’’.

12 SEC. 108. CONGRESSIONAL INTENT REGARDING FUTURE

13 ACCESSIONS.

14 (a) IN GENERAL.—Section 101(a) may not be con15 strued as conferring Congressional approval of the entry

16 into force of the Agreement for the United States with

17 respect to countries other than Canada and Mexico.

18 (b) FUTURE FREE TRADE AREA NEGOTIATIONS.—

19 (1) FINDINGS.—The Congress makes the fol20 lowing findings:

21 (A) Efforts by the United States to obtain

22 greater market opening through multilateral ne23 gotiations have not produced agreements that

24 fully satisfy the trade negotiating objectives of

25 the United States.
21

1 (B) United States trade policy should pro2 vide for additional mechanisms with which to

3 pursue greater market access for United States

4 exports of goods and services and opportunities

5 for export-related investment by United States

6 persons.

7 (C) Among the additional mechanisms

8 should be a system of bilateral and multilateral

9 trade agreements that provide greater market

10 access for United States exports and opportuni11 ties for export-related investment by United

12 States persons.

13 (D) The system of trade agreements can

14 and should be structured to be consistent with,

15 and complementary to, existing international

16 obligations of the United States and ongoing

17 multilateral efforts to open markets.

18 (2) REPORT ON SIGNIFICANT MARKET OPEN19 ING.—No later than May 1, 1994, and May 1, 1997,

20 the Trade Representative shall submit to the Presi21 dent, and to the Committee on Finance of the Sen22 ate and the Committee on Ways and Means of the

23 House of Representatives (hereafter in this section

24 referred to as the ‘‘appropriate Congressional com-
22

1 mittees’’), a report which lists those foreign coun2 tries—

3 (A) that—

4 (i) currently provide fair and equitable

5 market access for United States exports of

6 goods and services and opportunities for

7 export-related investment by United States

8 persons, beyond what is required by exist9 ing multilateral trade agreements or obli10 gations; or

11 (ii) have made significant progress in

12 opening their markets to United States ex13 ports of goods and services and export-re14 lated investment by United States persons;

15 and

16 (B) the further opening of whose markets

17 has the greatest potential to increase United

18 States exports of goods and services and export19 related investment by United States persons, ei20 ther directly or through the establishment of a

21 beneficial precedent.

22 (3) PRESIDENTIAL DETERMINATION.—The

23 President, on the basis of the report submitted by

24 the Trade Representative under paragraph (2), shall

25 determine with which foreign country or countries, if
23

1 any, the United States should seek to negotiate a

2 free trade area agreement or agreements.

3 (4) RECOMMENDATIONS ON FUTURE FREE

4 TRADE AREA NEGOTIATIONS.—No later than July 1,

5 1994, and July 1, 1997, the President shall submit

6 to the appropriate Congressional committees a writ7 ten report that contains—

8 (A) recommendations for free trade area

9 negotiations with each foreign country selected

10 under paragraph (3);

11 (B) with respect to each country selected,

12 the specific negotiating objectives that are nec13 essary to meet the objectives of the United

14 States under this section; and

15 (C) legislative proposals to ensure ade16 quate consultation with the Congress and the

17 private sector during the negotiations, advance

18 Congressional approval of the negotiations rec19 ommended by the President, and Congressional

20 approval of any trade agreement entered into

21 by the President as a result of the negotiations.

22 (5) GENERAL NEGOTIATING OBJECTIVES.—The

23 general negotiating objectives of the United States

24 under this section are to obtain—
24

1 (A) preferential treatment for United

2 States goods;

3 (B) national treatment and, where appro4 priate, equivalent competitive opportunity for

5 United States services and foreign direct invest6 ment by United States persons;

7 (C) the elimination of barriers to trade in

8 goods and services by United States persons

9 through standards, testing, labeling, and certifi10 cation requirements;

11 (D) nondiscriminatory government pro12 curement policies and practices with respect to

13 United States goods and services;

14 (E) the elimination of other barriers to

15 market access for United States goods and

16 services, and the elimination of barriers to for17 eign direct investment by United States per18 sons;

19 (F) the elimination of acts, policies, and

20 practices which deny fair and equitable market

21 opportunities, including foreign government tol22 eration of anticompetitive business practices by

23 private firms or among private firms that have

24 the effect of restricting, on a basis that is in25 consistent with commercial considerations, pur-
25

1 chasing by such firms of United States goods

2 and services;

3 (G) adequate and effective protection of in4 tellectual property rights of United States per5 sons, and fair and equitable market access for

6 United States persons that rely upon intellec7 tual property protection;

8 (H) the elimination of foreign export and

9 domestic subsidies that distort international

10 trade in United States goods and services or

11 cause material injury to United States indus12 tries;

13 (I) the elimination of all export taxes;

14 (J) the elimination of acts, policies, and

15 practices which constitute export targeting; and

16 (K) monitoring and effective dispute settle17 ment mechanisms to facilitate compliance with

18 the matters described in subparagraphs (A)

19 through (J).

20 SEC. 109. EFFECTIVE DATES; EFFECT OF TERMINATION OF

21 NAFTA STATUS.

22 (a) EFFECTIVE DATES.—

23 (1) IN GENERAL.—This title (other than the

24 amendment made by section 107) takes effect on the

25 date of the enactment of this Act.
26

1 (2) SECTION 107 AMENDMENT.—The amend2 ment made by section 107 takes effect on the date

3 the Agreement enters into force between the United

4 States and Canada.

5 (b) TERMINATION OF NAFTA STATUS.—During any

6 period in which a country ceases to be a NAFTA country,

7 sections 101 through 106 shall cease to have effect with

8 respect to such country.

9 TITLE II—CUSTOMS PROVISIONS

10 SEC. 201. TARIFF MODIFICATIONS.

11 (a) TARIFF MODIFICATIONS PROVIDED FOR IN THE

12 AGREEMENT.—

13 (1) PROCLAMATION AUTHORITY.—The Presi14 dent may proclaim—

15 (A) such modifications or continuation of

16 any duty,

17 (B) such continuation of duty-free or ex18 cise treatment, or

19 (C) such additional duties,

20 as the President determines to be necessary or ap21 propriate to carry out or apply articles 302, 305,

22 307, 308, and 703 and Annexes 302.2, 307.1,

23 308.1, 308.2, 300-B, 703.2, and 703.3 of the Agree24 ment.
27

1 (2) EFFECT ON MEXICAN GSP STATUS.—Not2 withstanding section 502(a)(2) of the Trade Act of

3 1974 (19 U.S.C. 2462(a)(2)), the President shall

4 terminate the designation of Mexico as a beneficiary

5 developing country for purposes of title V of the

6 Trade Act of 1974 on the date of entry into force

7 of the Agreement between the United States and

8 Mexico.

9 (b) OTHER TARIFF MODIFICATIONS.—

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

11 and the consultation and layover requirements of

12 section 103(a), the President may proclaim—

13 (A) such modifications or continuation of

14 any duty,

15 (B) such modifications as the United

16 States may agree to with Mexico or Canada re17 garding the staging of any duty treatment set

18 forth in Annex 302.2 of the Agreement,

19 (C) such continuation of duty-free or excise

20 treatment, or

21 (D) such additional duties,

22 as the President determines to be necessary or ap23 propriate to maintain the general level of reciprocal

24 and mutually advantageous concessions with respect

25 to Canada or Mexico provided for by the Agreement.
28

1 (2) SPECIAL RULE FOR ARTICLES WITH TARIFF

2 PHASEOUT PERIODS OF MORE THAN 10 YEARS.—The

3 President may not consider a request to accelerate

4 the staging of duty reductions for an article for

5 which the United States tariff phaseout period is

6 more than 10 years if a request for acceleration with

7 respect to such article has been denied in the preced8 ing 3 calendar years.

9 (c) CONVERSION TO AD VALOREM RATES FOR CER10 TAIN TEXTILES.—For purposes of subsections (a) and

11 (b), with respect to an article covered by Annex 300–B

12 of the Agreement imported from Mexico for which the base

13 rate in the Schedule of the United States in Annex 300–

14 B is a specific or compound rate of duty, the President

15 may substitute for the base rate an ad valorem rate that

16 the President determines to be equivalent to the base rate.

17 SEC. 202. RULES OF ORIGIN.

18 (a) ORIGINATING GOODS.—

19 (1) IN GENERAL.—For purposes of implement20 ing the tariff treatment and quantitative restrictions

21 provided for under the Agreement, except as other22 wise provided in this section, a good originates in

23 the territory of a NAFTA country if—
29

1 (A) the good is wholly obtained or pro2 duced entirely in the territory of one or more of

3 the NAFTA countries;

4 (B)(i) each nonoriginating material used in

5 the production of the good—

6 (I) undergoes an applicable change in

7 tariff classification set out in Annex 401 of

8 the Agreement as a result of production

9 occurring entirely in the territory of one or

10 more of the NAFTA countries; or

11 (II) where no change in tariff classi12 fication is required, the good otherwise sat13 isfies the applicable requirements of such

14 Annex; and

15 (ii) the good satisfies all other applicable

16 requirements of this section;

17 (C) the good is produced entirely in the

18 territory of one or more of the NAFTA coun19 tries exclusively from originating materials; or

20 (D) except for a good provided for in chap21 ters 61 through 63 of the HTS, the good is

22 produced entirely in the territory of one or

23 more of the NAFTA countries, but one or more

24 of the nonoriginating materials, that are pro25 vided for as parts under the HTS and are used
30

1 in the production of the good, does not undergo

2 a change in tariff classification because—

3 (i) the good was imported into the ter4 ritory of a NAFTA country in an unassem5 bled or a disassembled form but was classi6 fied as an assembled good pursuant to

7 General Rule of Interpretation 2(a) of the

8 HTS; or

9 (ii)(I) the heading for the good pro10 vides for and specifically describes both the

11 good itself and its parts and is not further

12 subdivided into subheadings; or

13 (II) the subheading for the good pro14 vides for and specifically describes both the

15 good itself and its parts.

16 (2) SPECIAL RULES.—

17 (A) FOREIGN-TRADE ZONES.—Subpara18 graph (B) of paragraph (1) shall not apply to

19 a good produced in a foreign-trade zone or

20 subzone (established pursuant to the Act of

21 June 18, 1934, commonly known as the For22 eign Trade Zones Act) that is entered for con23 sumption in the customs territory of the United

24 States.
31

1 (B) REGIONAL VALUE-CONTENT REQUIRE2 MENT.—For purposes of subparagraph (D) of

3 paragraph (1), a good shall be treated as origi4 nating in a NAFTA country if the regional

5 value-content of the good, determined in accord6 ance with subsection (b), is not less than 60

7 percent where the transaction value method is

8 used, or not less than 50 percent where the net

9 cost method is used, and the good satisfies all

10 other applicable requirements of this section.

11 (b) REGIONAL VALUE-CONTENT.—

12 (1) IN GENERAL.—Except as provided in para13 graph (5), the regional value-content of a good shall

14 be calculated, at the choice of the exporter or pro15 ducer of the good, on the basis of—

16 (A) the transaction value method described

17 in paragraph (2); or

18 (B) the net cost method described in para19 graph (3).

20 (2) TRANSACTION VALUE METHOD.—

21 (A) IN GENERAL.—An exporter or pro22 ducer may calculate the regional value-content

23 of a good on the basis of the following trans24 action value method:

TV–VNM
32

RVC = ———— × 100

TV

1 (B) DEFINITIONS.—For purposes of sub2 paragraph (A):

3 (i) The term ‘‘RVC’’ means the re4 gional value-content, expressed as a per5 centage.

6 (ii) The term ‘‘TV’’ means the trans7 action value of the good adjusted to a

8 F.O.B. basis.

9 (iii) The term ‘‘VNM’’ means the

10 value of nonoriginating materials used by

11 the producer in the production of the good.

12 (3) NET COST METHOD.—

13 (A) IN GENERAL.—An exporter or pro14 ducer may calculate the regional value-content

15 of a good on the basis of the following net cost

16 method:

NC–VNM

RVC = ———— × 100

NC

17 (B) DEFINITIONS.—For purposes of sub18 paragraph (A):

19 (i) The term ‘‘RVC’’ means the re20 gional value-content, expressed as a per21 centage.
33

1 (ii) The term ‘‘NC’’ means the net

2 cost of the good.

3 (iii) The term ‘‘VNM’’ means the

4 value of nonoriginating materials used by

5 the producer in the production of the good.

6 (4) VALUE OF NONORIGINATING MATERIALS

7 USED IN ORIGINATING MATERIALS.—Except as pro8 vided in subsection (c)(1), and for a motor vehicle

9 identified in subsection (c)(2) or a component identi10 fied in Annex 403.2 of the Agreement, the value of

11 nonoriginating materials used by the producer in the

12 production of a good shall not, for purposes of cal13 culating the regional value-content of the good under

14 paragraph (2) or (3), include the value of

15 nonoriginating materials used to produce originating

16 materials that are subsequently used in the produc17 tion of the good.

18 (5) NET COST METHOD MUST BE USED IN CER19 TAIN CASES.—An exporter or producer shall cal20 culate the regional value-content of a good solely on

21 the basis of the net cost method described in para22 graph (3), if—

23 (A) there is no transaction value for the

24 good;
34

1 (B) the transaction value of the good is

2 unacceptable under Article 1 of the Customs

3 Valuation Code;

4 (C) the good is sold by the producer to a

5 related person and the volume, by units of

6 quantity, of sales of identical or similar goods

7 to related persons during the six-month period

8 immediately preceding the month in which the

9 good is sold exceeds 85 percent of the produc10 er’s total sales of such goods during that pe11 riod;

12 (D) the good is—

13 (i) a motor vehicle provided for in

14 heading 8701 or 8702, subheadings

15 8703.21 through 8703.90, or heading

16 8704, 8705, or 8706;

17 (ii) identified in Annex 403.1 or 403.2

18 of the Agreement and is for use in a motor

19 vehicle provided for in heading 8701 or

20 8702, subheadings 8703.21 through

21 8703.90, or heading 8704, 8705, or 8706;

22 (iii) provided for in subheadings

23 6401.10 through 6406.10; or

24 (iv) a word processing machine pro25 vided for in subheading 8469.10.00;
35

1 (E) the exporter or producer chooses to ac2 cumulate the regional value-content of the good

3 in accordance with subsection (d); or

4 (F) the good is designated as an intermedi5 ate material under paragraph (10) and is sub6 ject to a regional value-content requirement.

7 (6) NET COST METHOD ALLOWED FOR ADJUST8 MENTS.—If an exporter or producer of a good cal9 culates the regional value-content of the good on the

10 basis of the transaction value method and a NAFTA

11 country subsequently notifies the exporter or pro12 ducer, during the course of a verification conducted

13 in accordance with chapter 5 of the Agreement, that

14 the transaction value of the good or the value of any

15 material used in the production of the good must be

16 adjusted or is unacceptable under Article 1 of the

17 Customs Valuation Code, the exporter or producer

18 may calculate the regional value-content of the good

19 on the basis of the net cost method.

20 (7) REVIEW OF ADJUSTMENT.—Nothing in

21 paragraph (6) shall be construed to prevent any re22 view or appeal available in accordance with article

23 510 of the Agreement with respect to an adjustment

24 to or a rejection of—

25 (A) the transaction value of a good; or
36

1 (B) the value of any material used in the

2 production of a good.

3 (8) CALCULATING NET COST.—The producer

4 may, consistent with regulations implementing this

5 section, calculate the net cost of a good under para6 graph (3), by—

7 (A) calculating the total cost incurred with

8 respect to all goods produced by that producer,

9 subtracting any sales promotion, marketing and

10 after-sales service costs, royalties, shipping and

11 packing costs, and nonallowable interest costs

12 that are included in the total cost of all such

13 goods, and reasonably allocating the resulting

14 net cost of those goods to the good;

15 (B) calculating the total cost incurred with

16 respect to all goods produced by that producer,

17 reasonably allocating the total cost to the good,

18 and subtracting any sales promotion, marketing

19 and after-sales service costs, royalties, shipping

20 and packing costs, and nonallowable interest

21 costs that are included in the portion of the

22 total cost allocated to the good; or

23 (C) reasonably allocating each cost that is

24 part of the total cost incurred with respect to

25 the good so that the aggregate of these costs
37

1 does not include any sales promotion, market2 ing and after-sales service costs, royalties, ship3 ping and packing costs, or nonallowable interest

4 costs.

5 (9) VALUE OF MATERIAL USED IN PRODUC6 TION.—Except as provided in paragraph (11), the

7 value of a material used in the production of a

8 good—

9 (A) shall—

10 (i) be the transaction value of the ma11 terial determined in accordance with Arti12 cle 1 of the Customs Valuation Code; or

13 (ii) in the event that there is no trans14 action value or the transaction value of the

15 material is unacceptable under Article 1 of

16 the Customs Valuation Code, be deter17 mined in accordance with Articles 2

18 through 7 of the Customs Valuation Code;

19 and

20 (B) if not included under clause (i) or (ii)

21 of subparagraph (A), shall include—

22 (i) freight, insurance, packing, and all

23 other costs incurred in transporting the

24 material to the location of the producer;
38

1 (ii) duties, taxes, and customs broker2 age fees paid on the material in the terri3 tory of one or more of the NAFTA coun4 tries; and

5 (iii) the cost of waste and spoilage re6 sulting from the use of the material in the

7 production of the good, less the value of

8 renewable scrap or by-product.

9 (10) INTERMEDIATE MATERIAL.—Except for

10 goods described in subsection (c)(1), any self-pro11 duced material, other than a component identified in

12 Annex 403.2 of the Agreement, that is used in the

13 production of a good may be designated by the pro14 ducer of the good as an intermediate material for

15 the purpose of calculating the regional value-content

16 of the good under paragraph (2) or (3); provided

17 that if the intermediate material is subject to a re18 gional value-content requirement, no other self-pro19 duced material that is subject to a regional value20 content requirement and is used in the production of

21 the intermediate material may be designated by the

22 producer as an intermediate material.

23 (11) VALUE OF INTERMEDIATE MATERIAL.—

24 The value of an intermediate material shall be—
39

1 (A) the total cost incurred with respect to

2 all goods produced by the producer of the good

3 that can be reasonably allocated to the inter4 mediate material; or

5 (B) the aggregate of each cost that is part

6 of the total cost incurred with respect to the in7 termediate material that can be reasonably allo8 cated to that intermediate material.

9 (12) INDIRECT MATERIAL.—The value of an in10 direct material shall be based on the Generally Ac11 cepted Accounting Principles applicable in the terri12 tory of the NAFTA country in which the good is

13 produced.

14 (c) AUTOMOTIVE GOODS.—

15 (1) PASSENGER VEHICLES AND LIGHT TRUCKS,

16 AND THEIR AUTOMOTIVE PARTS.—For purposes of

17 calculating the regional value-content under the net

18 cost method for—

19 (A) a good that is a motor vehicle for the

20 transport of 15 or fewer persons provided for in

21 subheading 8702.10.00 or 8702.90.00, or a

22 motor vehicle provided for in subheadings

23 8703.21 through 8703.90, or subheading

24 8704.21 or 8704.31, or
40

1 (B) a good provided for in the tariff provi2 sions listed in Annex 403.1 of the Agreement,

3 that is subject to a regional value-content re4 quirement and is for use as original equipment

5 in the production of a motor vehicle for the

6 transport of 15 or fewer persons provided for in

7 subheading 8702.10.00 or 8702.90.00, or a

8 motor vehicle provided for in subheadings

9 8703.21 through 8703.90, or subheading

10 8704.21 or 8704.31,

11 the value of nonoriginating materials used by the

12 producer in the production of the good shall be the

13 sum of the values of all nonoriginating materials, de14 termined in accordance with subsection (b)(9) at the

15 time the nonoriginating materials are received by the

16 first person in the territory of a NAFTA country

17 who takes title to them, that are imported from out18 side the territories of the NAFTA countries under

19 the tariff provisions listed in Annex 403.1 of the

20 Agreement and are used in the production of the

21 good or that are used in the production of any mate22 rial used in the production of the good.

23 (2) OTHER VEHICLES AND THEIR AUTOMOTIVE

24 PARTS.—For purposes of calculating the regional

25 value-content under the net cost method for a good
41

1 that is a motor vehicle provided for in heading 8701,

2 subheading 8704.10, 8704.22, 8704.23, 8704.32, or

3 8704.90, or heading 8705 or 8706, a motor vehicle

4 for the transport of 16 or more persons provided for

5 in subheading 8702.10.00 or 8702.90.00, or a com6 ponent identified in Annex 403.2 of the Agreement

7 for use as original equipment in the production of

8 the motor vehicle, the value of nonoriginating mate9 rials used by the producer in the production of the

10 good shall be the sum of—

11 (A) for each material used by the producer

12 listed in Annex 403.2 of the Agreement, wheth13 er or not produced by the producer, at the

14 choice of the producer and determined in ac15 cordance with subsection (b), either—

16 (i) the value of such material that is

17 nonoriginating, or

18 (ii) the value of nonoriginating mate19 rials used in the production of such mate20 rial; and

21 (B) the value of any other nonoriginating

22 material used by the producer that is not listed

23 in Annex 403.2 of the Agreement determined in

24 accordance with subsection (b).

25 (3) AVERAGING PERMITTED.—
42

1 (A) IN GENERAL.—For purposes of cal2 culating the regional value-content of a motor

3 vehicle described in paragraph (1) or (2), the

4 producer may average its calculation over its

5 fiscal year, using any of the categories de6 scribed in subparagraph (B), on the basis of ei7 ther all motor vehicles in the category or on the

8 basis of only the motor vehicles in the category

9 that are exported to the territory of one or

10 more of the other NAFTA countries.

11 (B) CATEGORY DESCRIBED.—A category is

12 described in this subparagraph if it is—

13 (i) the same model line of motor vehi14 cles in the same class of vehicles produced

15 in the same plant in the territory of a

16 NAFTA country;

17 (ii) the same class of motor vehicles

18 produced in the same plant in the territory

19 of a NAFTA country;

20 (iii) the same model line of motor ve21 hicles produced in the territory of a

22 NAFTA country; or

23 (iv) if applicable, the basis set out in

24 Annex 403.3 of the Agreement.
43

1 (4) ANNEX 403.1 AND ANNEX 403.2.—For pur2 poses of calculating the regional value-content for

3 any or all goods provided for in a tariff provision

4 listed in Annex 403.1 of the Agreement, or a compo5 nent or material identified in Annex 403.2 of the

6 Agreement, produced in the same plant, the pro7 ducer of the good may—

8 (A) average its calculation—

9 (i) over the fiscal year of the motor

10 vehicle producer to whom the good is sold;

11 (ii) over any quarter or month; or

12 (iii) over its fiscal year, if the good is

13 sold as an aftermarket part;

14 (B) calculate the average referred to in

15 subparagraph (A) separately for any or all

16 goods sold to one or more motor vehicle produc17 ers; or

18 (C) with respect to any calculation under

19 this paragraph, make a separate calculation for

20 goods that are exported to the territory of one

21 or more NAFTA countries.

22 (5) PHASE-IN OF REGIONAL VALUE-CONTENT

23 REQUIREMENT.—Notwithstanding Annex 401 of the

24 Agreement, and except as provided in paragraph (6),

25 the regional value-content requirement shall be—
44

1 (A) for a producer’s fiscal year beginning

2 on the day closest to January 1, 1998, and

3 thereafter, 56 percent calculated under the net

4 cost method, and for a producer’s fiscal year

5 beginning on the day closest to January 1,

6 2002, and thereafter, 62.5 percent calculated

7 under the net cost method, for—

8 (i) a good that is a motor vehicle for

9 the transport of 15 or fewer persons pro10 vided for in subheading 8702.10.00 or

11 8702.90.00, or a motor vehicle provided

12 for in subheadings 8703.21 through

13 8703.90, or subheading 8704.21 or

14 8704.31; and

15 (ii) a good provided for in heading

16 8407 or 8408, or subheading 8708.40,

17 that is for use in a motor vehicle identified

18 in clause (i); and

19 (B) for a producer’s fiscal year beginning

20 on the day closest to January 1, 1998, and

21 thereafter, 55 percent calculated under the net

22 cost method, and for a producer’s fiscal year

23 beginning on the day closest to January 1,

24 2002, and thereafter, 60 percent calculated

25 under the net cost method, for—
45

1 (i) a good that is a motor vehicle pro2 vided for in heading 8701, subheading

3 8704.10, 8704.22, 8704.23, 8704.32, or

4 8704.90, or heading 8705 or 8706, or a

5 motor vehicle for the transport of 16 or

6 more persons provided for in subheading

7 8702.10.00 or 8702.90.00;

8 (ii) a good provided for in heading

9 8407 or 8408, or subheading 8708.40 that

10 is for use in a motor vehicle identified in

11 clause (i); and

12 (iii) except for a good identified in

13 subparagraph (A)(ii) or a good provided

14 for in subheadings 8482.10 through

15 8482.80, or subheading 8483.20 or

16 8483.30, a good identified in Annex 403.1

17 of the Agreement that is subject to a re18 gional value-content requirement and is for

19 use in a motor vehicle identified in sub20 paragraph (A)(i) or (B)(i).

21 (6) NEW AND REFITTED PLANTS.—The re22 gional value-content requirement for a motor vehicle

23 identified in paragraph (1) or (2) shall be—

24 (A) 50 percent for 5 years after the date

25 on which the first motor vehicle prototype is
46

1 produced in a plant by a motor vehicle assem2 bler, if—

3 (i) it is a motor vehicle of a class, or

4 marque, or, except for a motor vehicle

5 identified in paragraph (2), size category

6 and underbody, not previously produced by

7 the motor vehicle assembler in the territory

8 of any of the NAFTA countries;

9 (ii) the plant consists of a new build10 ing in which the motor vehicle is assem11 bled; and

12 (iii) the plant contains substantially

13 all new machinery that is used in the as14 sembly of the motor vehicle; or

15 (B) 50 percent for 2 years after the date

16 on which the first motor vehicle prototype is

17 produced at a plant following a refit, if it is a

18 motor vehicle of a class, or marque, or, except

19 for a motor vehicle identified in paragraph (2),

20 size category and underbody, different from

21 that assembled by the motor vehicle assembler

22 in the plant before the refit.

23 (7) ELECTION FOR CERTAIN VEHICLES FROM

24 CANADA.—In the case of goods provided for in sub25 headings 8703.21 through 8703.90, or subheading
47

1 8704.21 or 8704.31, exported from Canada directly

2 to the United States, and entered on or after Janu3 ary 1, 1989, and before the date of entry into force

4 of the Agreement between the United States and

5 Canada, an importer may elect to use the rules of

6 origin set out in this section in lieu of the rules of

7 origin contained in section 202 of the United States8 Canada Free-Trade Agreement Implementation Act

9 of 1988 (19 U.S.C. 2112 note) and may elect to use

10 the method for calculating the value of

11 nonoriginating materials established in article

12 403(2) of the Agreement in lieu of the method es13 tablished in article 403(1) of the Agreement for pur14 poses of determining eligibility for preferential duty

15 treatment under the United States-Canada Free16 Trade Agreement. Any election under this paragraph

17 shall be made in writing to the Customs Service not

18 later than the date that is 180 days after the date

19 of entry into force of the Agreement between the

20 United States and Canada. Any such election may

21 be made only if the liquidation of such entry has not

22 become final. For purposes of averaging the calcula23 tion of regional value-content for the goods covered

24 by such entry, where the producer’s 1989–1990 fis25 cal year began after January 1, 1989, the producer
48

1 may include the period between January 1, 1989,

2 and the beginning of its first fiscal year after Janu3 ary 1, 1989, as part of fiscal year 1989–1990.

4 (d) ACCUMULATION.—

5 (1) DETERMINATION OF ORIGINATING GOOD.—

6 For purposes of determining whether a good is an

7 originating good, the production of the good in the

8 territory of one or more of the NAFTA countries by

9 one or more producers shall, at the choice of the ex10 porter or producer of the good, be considered to

11 have been performed in the territory of any of the

12 NAFTA countries by that exporter or producer, if—

13 (A) all nonoriginating materials used in

14 the production of the good undergo an applica15 ble tariff classification change set out in Annex

16 401 of the Agreement;

17 (B) the good satisfies any applicable re18 gional value-content requirement; and

19 (C) the good satisfies all other applicable

20 requirements of this section.

21 The requirements of subparagraphs (A) and (B)

22 must be satisfied entirely in the territory of one or

23 more of the NAFTA countries.

24 (2) TREATMENT AS SINGLE PRODUCER.—For

25 purposes of subsection (b)(10), the production of a
49

1 producer that chooses to accumulate its production

2 with that of other producers under paragraph (1)

3 shall be treated as the production of a single pro4 ducer.

5 (e) DE MINIMIS AMOUNTS OF NONORIGINATING MA6 TERIALS.—

7 (1) IN GENERAL.—Except as provided in para8 graphs (3), (4), (5), and (6), a good shall be consid9 ered to be an originating good if—

10 (A) the value of all nonoriginating mate11 rials used in the production of the good that do

12 not undergo an applicable change in tariff clas13 sification (set out in Annex 401 of the Agree14 ment) is not more than 7 percent of the trans15 action value of the good, adjusted to a F.O.B.

16 basis, or

17 (B) where the transaction value of the

18 good is unacceptable under Article 1 of the

19 Customs Valuation Code, the value of all such

20 nonoriginating materials is not more than 7

21 percent of the total cost of the good,

22 provided that the good satisfies all other applicable

23 requirements of this section and, if the good is sub24 ject to a regional value-content requirement, the

25 value of such nonoriginating materials is taken into
50

1 account in calculating the regional value-content of

2 the good.

3 (2) GOODS NOT SUBJECT TO REGIONAL VALUE4 CONTENT REQUIREMENT.—A good that is otherwise

5 subject to a regional value-content requirement shall

6 not be required to satisfy such requirement if—

7 (A)(i) the value of all nonoriginating mate8 rials used in the production of the good is not

9 more than 7 percent of the transaction value of

10 the good, adjusted to a F.O.B. basis; or

11 (ii) where the transaction value of the good

12 is unacceptable under Article 1 of the Customs

13 Valuation Code, the value of all nonoriginating

14 materials is not more than 7 percent of the

15 total cost of the good; and

16 (B) the good satisfies all other applicable

17 requirements of this section.

18 (3) DAIRY PRODUCTS, ETC.—Paragraph (1)

19 does not apply to—

20 (A) a nonoriginating material provided for

21 in chapter 4 of the HTS or a dairy preparation

22 containing over 10 percent by weight of milk

23 solids provided for in subheading 1901.90.30,

24 1901.90.40, or 1901.90.80 that is used in the
51

1 production of a good provided for in chapter 4

2 of the HTS;

3 (B) a nonoriginating material provided for

4 in chapter 4 of the HTS or a dairy preparation

5 containing over 10 percent by weight of milk

6 solids provided for in subheading 1901.90.30,

7 1901.90.40, or 1901.90.80 that is used in the

8 production of—

9 (i) preparations for infants containing

10 over 10 percent by weight of milk solids

11 provided for in subheading 1901.10.00;

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 1901.20.00;

16 (iii) a dairy preparation containing

17 over 10 percent by weight of milk solids

18 provided for in subheading 1901.90.30,

19 1901.90.40, or 1901.90.80;

20 (iv) a good provided for in heading

21 2105 or subheading 2106.90.05, or prep22 arations containing over 10 percent by

23 weight of milk solids provided for in sub24 heading 2106.90.15, 2106.90.40,

25 2106.90.50, or 2106.90.65;
52

1 (v) a good provided for in subheading

2 2202.90.10 or 2202.90.20; or

3 (vi) animal feeds containing over 10

4 percent by weight of milk solids provided

5 for in subheading 2309.90.30;

6 (C) a nonoriginating material provided for

7 in heading 0805 or subheadings 2009.11

8 through 2009.30 that is used in the production

9 of—

10 (i) a good provided for in subheadings

11 2009.11 through 2009.30, or subheading

12 2106.90.16, or concentrated fruit or vege13 table juice of any single fruit or vegetable,

14 fortified with minerals or vitamins, pro15 vided for in subheading 2106.90.19; or

16 (ii) a good provided for in subheading

17 2202.90.30 or 2202.90.35, or fruit or veg18 etable juice of any single fruit or vegetable,

19 fortified with minerals or vitamins, pro20 vided for in subheading 2202.90.36;

21 (D) a nonoriginating material provided for

22 in chapter 9 of the HTS that is used in the

23 production of instant coffee, not flavored, pro24 vided for in subheading 2101.10.20;
53

1 (E) a nonoriginating material provided for

2 in chapter 15 of the HTS that is used in the

3 production of a good provided for in headings

4 1501 through 1508, or heading 1512, 1514, or

5 1515;

6 (F) a nonoriginating material provided for

7 in heading 1701 that is used in the production

8 of a good provided for in headings 1701

9 through 1703;

10 (G) a nonoriginating material provided for

11 in chapter 17 of the HTS or heading 1805 that

12 is used in the production of a good provided for

13 in subheading 1806.10;

14 (H) a nonoriginating material provided for

15 in headings 2203 through 2208 that is used in

16 the production of a good provided for in head17 ings 2207 through 2208;

18 (I) a nonoriginating material used in the

19 production of—

20 (i) a good provided for in subheading

21 7321.11.30;

22 (ii) a good provided for in subheading

23 8415.10, subheadings 8415.81 through

24 8415.83, subheadings 8418.10 through

25 8418.21, subheadings 8418.29 through
54

1 8418.40, subheading 8421.12 or 8422.11,

2 subheadings 8450.11 through 8450.20, or

3 subheadings 8451.21 through 8451.29;

4 (iii) trash compactors provided for in

5 subheading 8479.89.60; or

6 (iv) a good provided for in subheading

7 8516.60.40; and

8 (J) a printed circuit assembly that is a

9 nonoriginating material used in the production

10 of a good where the applicable change in tariff

11 classification for the good, as set out in Annex

12 401 of the Agreement, places restrictions on the

13 use of such nonoriginating material.

14 (4) CERTAIN FRUIT JUICES.—Paragraph (1)

15 does not apply to a nonoriginating single juice ingre16 dient provided for in heading 2009 that is used in

17 the production of—

18 (A) a good provided for in subheading

19 2009.90, or concentrated mixtures of fruit or

20 vegetable juice, fortified with minerals or vita21 mins, provided for in subheading 2106.90.19;

22 or

23 (B) mixtures of fruit or vegetable juices,

24 fortified with minerals or vitamins, provided for

25 in subheading 2202.90.39.
55

1 (5) GOODS PROVIDED FOR IN CHAPTERS 1

2 THROUGH 27 OF THE HTS.—Paragraph (1) does not

3 apply to a nonoriginating material used in the pro4 duction of a good provided for in chapters 1 through

5 27 of the HTS unless the nonoriginating material is

6 provided for in a different subheading than the good

7 for which origin is being determined under this sec8 tion.

9 (6) GOODS PROVIDED FOR IN CHAPTERS 50

10 THROUGH 63 OF THE HTS.—A good provided for in

11 chapters 50 through 63 of the HTS, that does not

12 originate because certain fibers or yarns used in the

13 production of the component of the good that deter14 mines the tariff classification of the good do not un15 dergo an applicable change in tariff classification set

16 out in Annex 401 of the Agreement, shall be consid17 ered to be a good that originates if the total weight

18 of all such fibers or yarns in that component is not

19 more than 7 percent of the total weight of that com20 ponent.

21 (f) FUNGIBLE GOODS AND MATERIALS.—For pur22 poses of determining whether a good is an originating

23 good—

24 (1) if originating and nonoriginating fungible

25 materials are used in the production of the good, the
56

1 determination of whether the materials are originat2 ing need not be made through the identification of

3 any specific fungible material, but may be deter4 mined on the basis of any of the inventory manage5 ment methods set out in regulations implementing

6 this section; and

7 (2) if originating and nonoriginating fungible

8 goods are commingled and exported in the same

9 form, the determination may be made on the basis

10 of any of the inventory management methods set out

11 in regulations implementing this section.

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

13 (1) IN GENERAL.—Except as provided in para14 graph (2), accessories, spare parts, or tools delivered

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

16 accessories, spare parts, or tools shall—

17 (A) be considered as originating goods if

18 the good is an originating good, and

19 (B) be disregarded in determining whether

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

22 change in tariff classification set out in Annex

23 401 of the Agreement.

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

25 only if—
57

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

2 are not invoiced separately from the good;

3 (B) the quantities and value of the acces4 sories, spare parts, or tools are customary for

5 the good; and

6 (C) in any case in which the good is sub7 ject to a regional value-content requirement, the

8 value of the accessories, spare parts, or tools

9 are taken into account as originating or

10 nonoriginating materials, as the case may be, in

11 calculating the regional value-content of the

12 good.

13 (h) INDIRECT MATERIALS.—An indirect material

14 shall be considered to be an originating material without

15 regard to where it is produced.

16 (i) PACKAGING MATERIALS AND CONTAINERS FOR

17 RETAIL SALE.—Packaging materials and containers in

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

19 the good, shall be disregarded in determining whether all

20 the nonoriginating materials used in the production of the

21 good undergo an applicable change in tariff classification

22 set out in Annex 401 of the Agreement. If the good is

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

24 of such packaging materials and containers shall be taken

25 into account as originating or nonoriginating materials, as
58

1 the case may be, in calculating the regional value-content

2 of the good.

3 (j) PACKING MATERIALS AND CONTAINERS FOR

4 SHIPMENT.—Packing materials and containers in which

5 a good is packed for shipment shall be disregarded—

6 (1) in determining whether the nonoriginating

7 materials used in the production of the good under8 go an applicable change in tariff classification set

9 out in Annex 401 of the Agreement; and

10 (2) in determining whether the good satisfies a

11 regional value-content requirement.

12 (k) TRANSSHIPMENT.—A good shall not be consid13 ered to be an originating good by reason of having under14 gone production that satisfies the requirements of sub15 section (a) if, subsequent to that production, the good un16 dergoes further production or any other operation outside

17 the territories of the NAFTA countries, other than un18 loading, reloading, or any other operation necessary to

19 preserve it in good condition or to transport the good to

20 the territory of a NAFTA country.

21 (l) NONQUALIFYING OPERATIONS.—A good shall not

22 be considered to be an originating good merely by reason

23 of—
59

1 (1) mere dilution with water or another sub2 stance that does not materially alter the characteris3 tics of the good; or

4 (2) any production or pricing practice with re5 spect to which it may be demonstrated, by a prepon6 derance of evidence, that the object was to cir7 cumvent this section.

8 (m) INTERPRETATION AND APPLICATION.—For pur9 poses of this section:

10 (1) The basis for any tariff classification is the

11 HTS.

12 (2) Except as otherwise expressly provided,

13 whenever in this section there is a reference to a

14 heading or subheading such reference shall be a ref15 erence to a heading or subheading of the HTS.

16 (3) In applying subsection (a)(4), the deter17 mination of whether a heading or subheading under

18 the HTS provides for and specifically describes both

19 a good and its parts shall be made on the basis of

20 the nomenclature of the heading or subheading, the

21 rules of interpretation, or notes of the HTS.

22 (4) In applying the Customs Valuation Code—

23 (A) the principles of the Customs Valu24 ation Code shall apply to domestic transactions,

25 with such modifications as may be required by
60

1 the circumstances, as would apply to inter2 national transactions;

3 (B) the provisions of this section shall take

4 precedence over the Customs Valuation Code to

5 the extent of any difference; and

6 (C) the definitions in subsection (o) shall

7 take precedence over the definitions in the Cus8 toms Valuation Code to the extent of any dif9 ference.

10 (5) All costs referred to in this section shall be

11 recorded and maintained in accordance with the

12 Generally Accepted Accounting Principles applicable

13 in the territory of the NAFTA country in which the

14 good is produced.

15 (n) ORIGIN OF AUTOMATIC DATA PROCESSING

16 GOODS.—Notwithstanding any other provision of this sec17 tion, when the NAFTA countries apply the most-favored18 nation rate of duty described in paragraph 1 of section

19 A of Annex 308.1 of the Agreement to a good provided

20 for under the tariff provisions set out in Table 308.1.1

21 of such Annex, the good shall, upon importation from a

22 NAFTA country, be deemed to originate in the territory

23 of a NAFTA country for purposes of this section.

24 (o) SPECIAL RULE FOR CERTAIN AGRICULTURAL

25 PRODUCTS.—Notwithstanding any other provision of this
61

1 section, for purposes of applying a rate of duty to a good

2 provided for in—

3 (1) heading 1202 that is exported from the ter4 ritory of Mexico, if the good is not wholly obtained

5 in the territory of Mexico,

6 (2) subheading 2008.11 that is exported from

7 the territory of Mexico, if any material provided for

8 in heading 1202 used in the production of that good

9 is not wholly obtained in the territory of Mexico, or

10 (3) subheading 1806.10.42 or 2106.90.12 that

11 is exported from the territory of Mexico, if any ma12 terial provided for in subheading 1701.99 used in

13 the production of that good is not a qualifying good,

14 such good shall be treated as a nonoriginating good and,

15 for purposes of this subsection, the terms ‘‘qualifying

16 good’’ and ‘‘wholly obtained in the territory of’’ have the

17 meaning given such terms in paragraph 26 of section A

18 of Annex 703.2 of the Agreement.

19 (p) DEFINITIONS.—For purposes of this section—

20 (1) CLASS OF MOTOR VEHICLES.—The term

21 ‘‘class of motor vehicles’’ means any one of the fol22 lowing categories of motor vehicles:

23 (A) Motor vehicles provided for in sub24 heading 8701.20, subheading 8704.10,

25 8704.22, 8704.23, 8704.32, or 8704.90, or
62

1 heading 8705 or 8706, or motor vehicles de2 signed for the transport of 16 or more persons

3 provided for in subheading 8702.10.00 or

4 8702.90.00.

5 (B) Motor vehicles provided for in sub6 heading 8701.10, or subheadings 8701.30

7 through 8701.90.

8 (C) Motor vehicles for the transport of 15

9 or fewer persons provided for in subheading

10 8702.10.00 or 8702.90.00, or motor vehicles

11 provided for in subheading 8704.21 or 8704.31.

12 (D) Motor vehicles provided for in sub13 headings 8703.21 through 8703.90.

14 (2) CUSTOMS VALUATION CODE.—The term

15 ‘‘Customs Valuation Code’’ means the Agreement on

16 Implementation of Article VII of the General Agree17 ment on Tariffs and Trade, including its interpreta18 tive notes.

19 (3) F.O.B.—The term ‘‘F.O.B.’’ means free on

20 board, regardless of the mode of transportation, at

21 the point of direct shipment by the seller to the

22 buyer.

23 (4) FUNGIBLE GOODS AND FUNGIBLE MATE24 RIALS.—The terms ‘‘fungible goods’’ and ‘‘fungible

25 materials’’ mean goods or materials that are inter-
63

1 changeable for commercial purposes and whose prop2 erties are essentially identical.

3 (5) GENERALLY ACCEPTED ACCOUNTING PRIN4 CIPLES.—The term ‘‘Generally Accepted Accounting

5 Principles’’ means the recognized consensus or sub6 stantial authoritative support in the territory of a

7 NAFTA country with respect to the recording of

8 revenues, expenses, costs, assets and liabilities, dis9 closure of information, and preparation of financial

10 statements. These standards may be broad guide11 lines of general application as well as detailed stand12 ards, practices, or procedures.

13 (6) GOODS WHOLLY OBTAINED OR PRODUCED

14 ENTIRELY IN THE TERRITORY OF ONE OR MORE OF

15 THE NAFTA COUNTRIES.—The term ‘‘goods wholly

16 obtained or produced entirely in the territory of one

17 or more of the NAFTA countries’’ means—

18 (A) mineral goods extracted in the terri19 tory of one or more of the NAFTA countries;

20 (B) vegetable goods harvested in the terri21 tory of one or more of the NAFTA countries;

22 (C) live animals born and raised in the ter23 ritory of one or more of the NAFTA countries;
64

1 (D) goods obtained from hunting, trap2 ping, or fishing in the territory of one or more

3 of the NAFTA countries;

4 (E) goods (such as fish, shellfish, and

5 other marine life) taken from the sea by vessels

6 registered or recorded with a NAFTA country

7 and flying its flag;

8 (F) goods produced on board factory ships

9 from the goods referred to in subparagraph

10 (E), if such factory ships are registered or re11 corded with that NAFTA country and fly its

12 flag;

13 (G) goods taken by a NAFTA country or

14 a person of a NAFTA country from the seabed

15 or beneath the seabed outside territorial waters,

16 provided that a NAFTA country has rights to

17 exploit such seabed;

18 (H) goods taken from outer space, if the

19 goods are obtained by a NAFTA country or a

20 person of a NAFTA country and not processed

21 in a country other than a NAFTA country;

22 (I) waste and scrap derived from—

23 (i) production in the territory of one

24 or more of the NAFTA countries; or
65

1 (ii) used goods collected in the terri2 tory of one or more of the NAFTA coun3 tries, if such goods are fit only for the re4 covery of raw materials; and

5 (J) goods produced in the territory of one

6 or more of the NAFTA countries exclusively

7 from goods referred to in subparagraphs (A)

8 through (I), or from their derivatives, at any

9 stage of production.

10 (7) IDENTICAL OR SIMILAR GOODS.—The term

11 ‘‘identical or similar goods’’ means ‘‘identical goods’’

12 and ‘‘similar goods’’, respectively, as defined in the

13 Customs Valuation Code.

14 (8) INDIRECT MATERIAL.—

15 (A) The term ‘‘indirect material’’ means a

16 good—

17 (i) used in the production, testing, or

18 inspection of a good but not physically in19 corporated into the good, or

20 (ii) used in the maintenance of build21 ings or the operation of equipment associ22 ated with the production of a good,

23 in the territory of one or more of the NAFTA

24 countries.
66

1 (B) When used for a purpose described in

2 subparagraph (A), the following materials are

3 among those considered to be indirect mate4 rials:

5 (i) Fuel and energy.

6 (ii) Tools, dies, and molds.

7 (iii) Spare parts and materials used in

8 the maintenance of equipment and build9 ings.

10 (iv) Lubricants, greases, compounding

11 materials, and other materials used in pro12 duction or used to operate equipment and

13 buildings.

14 (v) Gloves, glasses, footwear, clothing,

15 safety equipment, and supplies.

16 (vi) Equipment, devices, and supplies

17 used for testing or inspecting the goods.

18 (vii) Catalysts and solvents.

19 (viii) Any other goods that are not in20 corporated into the good, if the use of such

21 goods in the production of the good can

22 reasonably be demonstrated to be a part of

23 that production.

24 (9) INTERMEDIATE MATERIAL.—The term ‘‘in25 termediate material’’ means a material that is self-
67

1 produced, used in the production of a good, and des2 ignated pursuant to subsection (b)(10).

3 (10) MARQUE.—The term ‘‘marque’’ means the

4 trade name used by a separate marketing division of

5 a motor vehicle assembler.

6 (11) MATERIAL.—The term ‘‘material’’ means

7 a good that is used in the production of another

8 good and includes a part or an ingredient.

9 (12) MODEL LINE.—The term ‘‘model line’’

10 means a group of motor vehicles having the same

11 platform or model name.

12 (13) MOTOR VEHICLE ASSEMBLER.—The term

13 ‘‘motor vehicle assembler’’ means a producer of

14 motor vehicles and any related persons or joint ven15 tures in which the producer participates.

16 (14) NAFTA COUNTRY.—The term ‘‘NAFTA

17 country’’ means the United States, Canada or Mex18 ico for such time as the Agreement is in force with

19 respect to Canada or Mexico, and the United States

20 applies the Agreement to Canada or Mexico.

21 (15) NEW BUILDING.—The term ‘‘new build22 ing’’ means a new construction, including at least

23 the pouring or construction of new foundation and

24 floor, the erection of a new structure and roof, and

25 installation of new plumbing, electrical, and other
68

1 utilities to house a complete vehicle assembly proc2 ess.

3 (16) NET COST.—The term ‘‘net cost’’ means

4 total cost less sales promotion, marketing and after5 sales service costs, royalties, shipping and packing

6 costs, and nonallowable interest costs that are in7 cluded in the total cost.

8 (17) NET COST OF A GOOD.—The term ‘‘net

9 cost of a good’’ means the net cost that can be rea10 sonably allocated to a good using one of the methods

11 set out in subsection (b)(8).

12 (18) NONALLOWABLE INTEREST COSTS.—The

13 term ‘‘nonallowable interest costs’’ means interest

14 costs incurred by a producer as a result of an inter15 est rate that exceeds the applicable federal govern16 ment interest rate for comparable maturities by

17 more than 700 basis points, determined pursuant to

18 regulations implementing this section.

19 (19) NONORIGINATING GOOD; NONORIGINATING

20 MATERIAL.—The term ‘‘nonoriginating good’’ or

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

22 that does not qualify as an originating good or mate23 rial under the rules of origin set out in this section.
69

1 (20) ORIGINATING.—The term ‘‘originating’’

2 means qualifying under the rules of origin set out in

3 this section.

4 (21) PRODUCER.—The term ‘‘producer’’ means

5 a person who grows, mines, harvests, fishes, traps,

6 hunts, manufactures, processes, or assembles a good.

7 (22) PRODUCTION.—The term ‘‘production’’

8 means growing, mining, harvesting, fishing, trap9 ping, hunting, manufacturing, processing, or assem10 bling a good.

11 (23) REASONABLY ALLOCATE.—The term ‘‘rea12 sonably allocate’’ means to apportion in a manner

13 appropriate to the circumstances.

14 (24) REFIT.—The term ‘‘refit’’ means a plant

15 closure, for purposes of plant conversion or retool16 ing, that lasts at least 3 months.

17 (25) RELATED PERSONS.—The term ‘‘related

18 persons’’ means persons specified in any of the fol19 lowing subparagraphs:

20 (A) Persons who are officers or directors

21 of one another’s businesses.

22 (B) Persons who are legally recognized

23 partners in business.

24 (C) Persons who are employer and em25 ployee.
70

1 (D) Persons one of whom owns, controls,

2 or holds 25 percent or more of the outstanding

3 voting stock or shares of the other.

4 (E) Persons if 25 percent or more of the

5 outstanding voting stock or shares of each of

6 them is directly or indirectly owned, controlled,

7 or held by a third person.

8 (F) Persons one of whom is directly or in9 directly controlled by the other.

10 (G) Persons who are directly or indirectly

11 controlled by a third person.

12 (H) Persons who are members of the same

13 family.

14 For purposes of this paragraph, the term ‘‘members

15 of the same family’’ means natural or adoptive chil16 dren, brothers, sisters, parents, grandparents, or

17 spouses.

18 (26) ROYALTIES.—The term ‘‘royalties’’ means

19 payments of any kind, including payments under

20 technical assistance or similar agreements, made as

21 consideration for the use or right to use any copy22 right, literary, artistic, or scientific work, patent,

23 trademark, design, model, plan, secret formula, or

24 process. It does not include payments under tech-
71

1 nical assistance or similar agreements that can be

2 related to specific services such as—

3 (A) personnel training, without regard to

4 where performed; and

5 (B) if performed in the territory of one or

6 more of the NAFTA countries, engineering,

7 tooling, die-setting, software design and similar

8 computer services, or other services.

9 (27) SALES PROMOTION, MARKETING, AND

10 AFTER-SALES SERVICE COSTS.—The term ‘‘sales

11 promotion, marketing, and after-sales service costs’’

12 means the costs related to sales promotion, market13 ing, and after-sales service for the following:

14 (A) Sales and marketing promotion, media

15 advertising, advertising and market research,

16 promotional and demonstration materials, ex17 hibits, sales conferences, trade shows, conven18 tions, banners, marketing displays, free sam19 ples, sales, marketing and after-sales service lit20 erature (product brochures, catalogs, technical

21 literature, price lists, service manuals, sales aid

22 information), establishment and protection of

23 logos and trademarks, sponsorships, wholesale

24 and retail restocking charges, and entertain25 ment.
72

1 (B) Sales and marketing incentives,

2 consumer, retailer, or wholesaler rebates, and

3 merchandise incentives.

4 (C) Salaries and wages, sales commissions,

5 bonuses, benefits (such as medical, insurance,

6 and pension), traveling and living expenses, and

7 membership and professional fees for sales pro8 motion, marketing, and after-sales service per9 sonnel.

10 (D) Recruiting and training of sales pro11 motion, marketing, and after-sales service per12 sonnel, and after-sales training of customers’

13 employees, where such costs are identified sepa14 rately for sales promotion, marketing, and

15 after-sales service of goods on the financial

16 statements or cost accounts of the producer.

17 (E) Product liability insurance.

18 (F) Office supplies for sales promotion,

19 marketing, and after-sales service of goods,

20 where such costs are identified separately for

21 sales promotion, marketing, and after-sales

22 service of goods on the financial statements or

23 cost accounts of the producer.

24 (G) Telephone, mail, and other commu25 nications, where such costs are identified sepa-
73

1 rately for sales promotion, marketing, and

2 after-sales service of goods on the financial

3 statements or cost accounts of the producer.

4 (H) Rent and depreciation of sales pro5 motion, marketing, and after-sales service of6 fices and distribution centers.

7 (I) Property insurance, taxes, utilities, and

8 repair and maintenance of sales promotion,

9 marketing, and after-sales service offices and

10 distribution centers, where such costs are iden11 tified separately for sales promotion, marketing,

12 and after-sales service of goods on the financial

13 statements or cost accounts of the producer.

14 (J) Payments by the producer to other

15 persons for warranty repairs.

16 (28) SELF-PRODUCED MATERIAL.—The term

17 ‘‘self-produced material’’ means a material that is

18 produced by the producer of a good and used in the

19 production of that good.

20 (29) SHIPPING AND PACKING COSTS.—The

21 term ‘‘shipping and packing costs’’ means the costs

22 incurred in packing a good for shipment and ship23 ping the good from the point of direct shipment to

24 the buyer, but does not include the costs of prepar25 ing and packaging the good for retail sale.
74

1 (30) SIZE CATEGORY.—The term ‘‘size cat2 egory’’ means with respect to a motor vehicle identi3 fied in subsection (c)(1)(A)—

4 (A) 85 cubic feet or less of passenger and

5 luggage interior volume;

6 (B) more than 85 cubic feet, but less than

7 100 cubic feet, of passenger and luggage inte8 rior volume;

9 (C) at least 100 cubic feet, but not more

10 than 110 cubic feet, of passenger and luggage

11 interior volume;

12 (D) more than 110 cubic feet, but less

13 than 120 cubic feet, of passenger and luggage

14 interior volume; and

15 (E) 120 cubic feet or more of passenger

16 and luggage interior volume.

17 (31) TERRITORY.—The term ‘‘territory’’ means

18 a territory described in Annex 201.1 of the Agree19 ment.

20 (32) TOTAL COST.—The term ‘‘total cost’’

21 means all product costs, period costs, and other

22 costs incurred in the territory of one or more of the

23 NAFTA countries.

24 (33) TRANSACTION VALUE.—Except as pro25 vided in subsection (c)(1) or (c)(2)(A), the term
75

1 ‘‘transaction value’’ means the price actually paid or

2 payable for a good or material with respect to a

3 transaction of the producer of the good, adjusted in

4 accordance with the principles of paragraphs 1, 3,

5 and 4 of Article 8 of the Customs Valuation Code

6 and determined without regard to whether the good

7 or material is sold for export.

8 (34) UNDERBODY.—The term ‘‘underbody’’

9 means the floor pan of a motor vehicle.

10 (35) USED.—The term ‘‘used’’ means used or

11 consumed in the production of goods.

12 (q) PRESIDENTIAL PROCLAMATION AUTHORITY.—

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

14 to proclaim, as a part of the HTS—

15 (A) the provisions set out in Appendix 6.A

16 of Annex 300–B, Annex 401, Annex 403.1,

17 Annex 403.2, and Annex 403.3, of the Agree18 ment, and

19 (B) any additional subordinate category

20 necessary to carry out this title consistent with

21 the Agreement.

22 (2) MODIFICATIONS.—Subject to the consulta23 tion and layover requirements of section 103, the

24 President may proclaim—
76

1 (A) modifications to the provisions pro2 claimed under the authority of paragraph

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

4 A of Appendix 6 of Annex 300–B and section

5 XI of part B of Annex 401 of the Agreement;

6 and

7 (B) a modified version of the definition of

8 any term set out in subsection (p) (and such

9 modified version of the definition shall super10 sede the version in subsection (p)), but only if

11 the modified version reflects solely those modi12 fications to the same term in article 415 of the

13 Agreement that are agreed to by the NAFTA

14 countries before the 1st anniversary of the date

15 of the enactment of this Act.

16 (3) SPECIAL RULES FOR TEXTILES.—Notwith17 standing the provisions of paragraph (2)(A), and

18 subject to the consultation and layover requirements

19 of section 103, the President may proclaim—

20 (A) modifications to the provisions pro21 claimed under the authority of paragraph

22 (1)(A) as are necessary to implement an agree23 ment with one or more of the NAFTA countries

24 pursuant to paragraph 2 of section 7 of Annex

25 300–B of the Agreement, and
77

1 (B) before the 1st anniversary of the date

2 of the enactment of this Act, modifications to

3 correct any typographical, clerical, or other

4 nonsubstantive technical error regarding the

5 provisions of Appendix 6.A of Annex 300–B

6 and section XI of part B of Annex 401 of the

7 Agreement.

8 SEC. 203. DRAWBACK.

9 (a) DEFINITION OF A GOOD SUBJECT TO NAFTA

10 DRAWBACK.—For purposes of this Act and the amend11 ments made by subsection (b), the term ‘‘good subject to

12 NAFTA drawback’’ means any imported good other than

13 the following:

14 (1) A good entered under bond for transpor15 tation and exportation to a NAFTA country.

16 (2) A good exported to a NAFTA country in

17 the same condition as when imported into the Unit18 ed States. For purposes of this paragraph—

19 (A) processes such as testing, cleaning, re20 packing, or inspecting a good, or preserving it

21 in its same condition, shall not be considered to

22 change the condition of the good, and

23 (B) except for a good referred to in para24 graph 12 of section A of Annex 703.2 of the

25 Agreement that is exported to Mexico, if a good
78

1 described in the first sentence of this paragraph

2 is commingled with fungible goods and exported

3 in the same condition, the origin of the good

4 may be determined on the basis of the inventory

5 methods provided for in the regulations imple6 menting this title.

7 (3) A good—

8 (A) that is—

9 (i) deemed to be exported from the

10 United States,

11 (ii) used as a material in the produc12 tion of another good that is deemed to be

13 exported to a NAFTA country, or

14 (iii) substituted for by a good of the

15 same kind and quality that is used as a

16 material in the production of another good

17 that is deemed to be exported to a NAFTA

18 country, and

19 (B) that is delivered—

20 (i) to a duty-free shop,

21 (ii) for ship’s stores or supplies for

22 ships or aircraft, or

23 (iii) for use in a project undertaken

24 jointly by the United States and a NAFTA
79

1 country and destined to become the prop2 erty of the United States.

3 (4) A good exported to a NAFTA country for

4 which a refund of customs duties is granted by rea5 son of—

6 (A) the failure of the good to conform to

7 sample or specification, or

8 (B) the shipment of the good without the

9 consent of the consignee.

10 (5) A good that qualifies under the rules of ori11 gin set out in section 202 that is—

12 (A) exported to a NAFTA country,

13 (B) used as a material in the production of

14 another good that is exported to a NAFTA

15 country, or

16 (C) substituted for by a good of the same

17 kind and quality that is used as a material in

18 the production of another good that is exported

19 to a NAFTA country.

20 (6) A good provided for in subheading

21 1701.11.02 of the HTS that is—

22 (A) used as a material, or

23 (B) substituted for by a good of the same

24 kind and quality that is used as a material,
80

1 in the production of a good provided for in existing

2 Canadian tariff item 1701.99.00 or existing Mexican

3 tariff item 1701.99.01 or 1701.99.99 (relating to re4 fined sugar).

5 (7) A citrus product that is exported to Can6 ada.

7 (8) A good used as a material, or substituted

8 for by a good of the same kind and quality that is

9 used as a material, in the production of—

10 (A) apparel, or

11 (B) a good provided for in subheading

12 6307.90.99 (insofar as it relates to furniture

13 moving pads), 5811.00.20, or 5811.00.30 of the

14 HTS,

15 that is exported to Canada and that is subject to

16 Canada’s most-favored-nation rate of duty upon im17 portation into Canada.

18 Where in paragraph (6) a good referred to by an item

19 is described in parentheses following the item, the descrip20 tion is provided for purposes of reference only.

21 (b) CONSEQUENTIAL AMENDMENTS WITH DELAYED

22 EFFECT.—

23 (1) BONDED MANUFACTURING WAREHOUSES.—

24 The last paragraph of section 311 of the Tariff Act
81

1 of 1930 (19 U.S.C. 1311) is amended to read as fol2 lows:

3 ‘‘No article manufactured in a bonded warehouse

4 from materials that are goods subject to NAFTA draw5 back, as defined in section 203(a) of the North American

6 Free Trade Agreement Implementation Act, may be with7 drawn from warehouse for exportation to a NAFTA coun8 try, as defined in section 2(4) of that Act, without assess9 ment of a duty on the materials in their condition and

10 quantity, and at their weight, at the time of importation

11 into the United States. The duty shall be paid before the

12 61st day after the date of exportation, except that upon

13 the presentation, before such 61st day, of satisfactory evi14 dence of the amount of any customs duties paid to the

15 NAFTA country on the article, the customs duty may be

16 waived or reduced (subject to section 508(b)(2)(B)) in an

17 amount that does not exceed the lesser of—

18 ‘‘(1) the total amount of customs duties paid or

19 owed on the materials on importation into the Unit20 ed States, or

21 ‘‘(2) the total amount of customs duties paid on

22 the article to the NAFTA country.

23 If Canada ceases to be a NAFTA country and the suspen24 sion of the operation of the United States-Canada Free25 Trade Agreement thereafter terminates, no article manu-
82

1 factured in a bonded warehouse, except to the extent that

2 such article is made from an article that is a drawback

3 eligible good under section 204(a) of the United States4 Canada Free-Trade Agreement Implementation Act of

5 1988, may be withdrawn from such warehouse for expor6 tation to Canada during the period such Agreement is in

7 operation without payment of a duty on such imported

8 merchandise in its condition, and at the rate of duty in

9 effect, at the time of importation.’’.

10 (2) BONDED SMELTING AND REFINING WARE11 HOUSES.—Section 312 of the Tariff Act of 1930 (19

12 U.S.C. 1312) is amended—

13 (A) in paragraphs (1) and (4) of sub14 section (b), by striking out the parenthetical

15 matter and the final ‘‘, or’’ and by adding at

16 the end the following:

17 ‘‘; except that in the case of a withdrawal for expor18 tation of such a product to a NAFTA country, as

19 defined in section 2(4) of the North American Free

20 Trade Agreement Implementation Act, if any of the

21 imported metal-bearing materials are goods subject

22 to NAFTA drawback, as defined in section 203(a)

23 of that Act, the duties on the materials shall be

24 paid, and the charges against the bond canceled, be25 fore the 61st day after the date of exportation; but
83

1 upon the presentation, before such 61st day, of sat2 isfactory evidence of the amount of any customs du3 ties paid to the NAFTA country on the product, the

4 duties on the materials may be waived or reduced

5 (subject to section 508(b)(2)(B)) in an amount that

6 does not exceed the lesser of—

7 ‘‘(A) the total amount of customs duties

8 owed on the materials on importation into the

9 United States, or

10 ‘‘(B) the total amount of customs duties

11 paid to the NAFTA country on the product,

12 or’’;

13 (B) by adding at the end of subsection (b)

14 the following new flush sentence.

15 ‘‘If Canada ceases to be a NAFTA country and the sus16 pension of the operation of the United States-Canada

17 Free-Trade Agreement thereafter terminates, no charges

18 against such bond may be canceled in whole or part upon

19 an exportation to Canada under paragraph (1) or (4) dur20 ing the period such Agreement is in operation except to

21 the extent that the metal-bearing materials were of Cana22 dian origin as determined in accordance with section 202

23 of the United States-Canada Free-Trade Agreement Im24 plementation Act of 1988.’’; and
84

1 (C) in subsection (d) by striking out the

2 parenthetical matter and by inserting before the

3 period the following:

4 ‘‘; except that in the case of a withdrawal for exportation

5 to a NAFTA country, as defined in section 2(4) of the

6 North American Free Trade Agreement Implementation

7 Act, if any of the imported metal-bearing materials are

8 goods subject to NAFTA drawback, as defined in section

9 203(a) of that Act, charges against the bond shall be paid

10 before the 61st day after the date of exportation; but upon

11 the presentation, before such 61st day, of satisfactory evi12 dence of the amount of any customs duties paid to the

13 NAFTA country on the product, the bond shall be credited

14 (subject to section 508(b)(2)(B)) in an amount not to ex15 ceed the lesser of—

16 ‘‘(1) the total amount of customs duties paid or

17 owed on the materials on importation into the Unit18 ed States, or

19 ‘‘(2) the total amount of customs duties paid to

20 the NAFTA country on the product.

21 If Canada ceases to be a NAFTA country and the suspen22 sion of the operation of the United States-Canada Free23 Trade Agreement thereafter terminates, no bond shall be

24 credited under this subsection with respect to an expor25 tation of a product to Canada during the period such
85

1 Agreement is in operation except to the extent that the

2 product is a drawback eligible good under section 204(a)

3 of the United States-Canada Free Trade Agreement Im4 plementation Act of 1988’’.

5 (3) DRAWBACK.—Subsections (n) and (o) of

6 section 313 of the Tariff Act of 1930 (19 U.S.C.

7 1313(n) and (o)) are amended to read as follows:

8 ‘‘(n)(1) For purposes of this subsection and sub9 section (o)—

10 ‘‘(A) the term ‘NAFTA Act’ means the North

11 American Free Trade Agreement Implementation

12 Act;

13 ‘‘(B) the terms ‘NAFTA country’ and ‘good

14 subject to NAFTA drawback’ have the same respec15 tive meanings that are given such terms in sections

16 2(4) and 203(a) of the NAFTA Act; and

17 ‘‘(C) a refund, waiver, or reduction of duty

18 under paragraph (2) of this subsection or paragraph

19 (1) of subsection (o) is subject to section

20 508(b)(2)(B).

21 ‘‘(2) For purposes of subsections (a), (b), (f), (h), (p),

22 and (q), if an article that is exported to a NAFTA country

23 is a good subject to NAFTA drawback, no customs duties

24 on the good may be refunded, waived, or reduced in an

25 amount that exceeds the lesser of—
86

1 ‘‘(A) the total amount of customs duties paid or

2 owed on the good on importation into the United

3 States, or

4 ‘‘(B) the total amount of customs duties paid

5 on the good to the NAFTA country.

6 ‘‘(3) If Canada ceases to be a NAFTA country and

7 the suspension of the operation of the United States-Can8 ada Free-Trade Agreement thereafter terminates, then for

9 purposes of subsections (a), (b), (f), (h), (j)(2), and (q),

10 the shipment to Canada during the period such Agreement

11 is in operation of an article made from or substituted for,

12 as appropriate, a drawback eligible good under section

13 204(a) of the United States-Canada Free-Trade Imple14 mentation Act of 1988 does not constitute an exportation.

15 ‘‘(o)(1) For purposes of subsection (g), if—

16 ‘‘(A) a vessel is built for the account and own17 ership of a resident of a NAFTA country or the gov18 ernment of a NAFTA country, and

19 ‘‘(B) imported materials that are used in the

20 construction and equipment of the vessel are goods

21 subject to NAFTA drawback,

22 the amount of customs duties refunded, waived, or re23 duced on such materials may not exceed the lesser of the

24 total amount of customs duties paid or owed on the mate25 rials on importation into the United States or the total
87

1 amount of customs duties paid on the vessel to the

2 NAFTA country.

3 ‘‘(2) If Canada ceases to be a NAFTA country and

4 the suspension of the operation of the United States-Can5 ada Free-Trade Agreement thereafter terminates, then for

6 purposes of subsection (g), vessels built for Canadian ac7 count and ownership, or for the Government of Canada,

8 may not be considered to be built for any foreign account

9 and ownership, or for the government of any foreign coun10 try, except to the extent that the materials in such vessels

11 are drawback eligible goods under section 204(a) of the

12 United States-Canada Free-Trade Implementation Act of

13 1988.’’.

14 (4) MANIPULATION IN WAREHOUSE.—Section

15 562 of the Tariff Act of 1930 (19 U.S.C. 1562) is

16 amended—

17 (A) in the second sentence by striking out

18 ‘‘without payment of duties—’’ and inserting a

19 dash;

20 (B) by striking out paragraphs (1), (2),

21 and (3) and inserting the following:

22 ‘‘(1) without payment of duties for exportation

23 to a NAFTA country, as defined in section 2(4) of

24 the North American Free Trade Agreement Imple25 mentation Act, if the merchandise is of a kind de-
88

1 scribed in any of paragraphs (1) through (8) of sec2 tion 203(a) of that Act;

3 ‘‘(2) for exportation to a NAFTA country if the

4 merchandise consists of goods subject to NAFTA

5 drawback, as defined in section 203(a) of that Act,

6 except that—

7 ‘‘(A) the merchandise may not be with8 drawn from warehouse without assessment of a

9 duty on the merchandise in its condition and

10 quantity, and at its weight, at the time of with11 drawal from the warehouse with such additions

12 to or deductions from the final appraised value

13 as may be necessary by reason of change in

14 condition, and

15 ‘‘(B) duty shall be paid on the merchan16 dise before the 61st day after the date of expor17 tation, but upon the presentation, before such

18 61st day, of satisfactory evidence of the amount

19 of any customs duties paid to the NAFTA

20 country on the merchandise, the customs duty

21 may be waived or reduced (subject to section

22 508(b)(2)(B)) in an amount that does not ex23 ceed the lesser of—
89

1 ‘‘(i) the total amount of customs du2 ties paid or owed on the merchandise on

3 importation into the United States, or

4 ‘‘(ii) the total amount of customs du5 ties paid on the merchandise to the

6 NAFTA country;

7 ‘‘(3) without payment of duties for exportation

8 to any foreign country other than to a NAFTA

9 country or to Canada when exports to that country

10 are subject to paragraph (4);

11 ‘‘(4) without payment of duties for exportation

12 to Canada (if that country ceases to be a NAFTA

13 country and the suspension of the operation of the

14 United States-Canada Free-Trade Agreement there15 after terminates), but the exemption from the pay16 ment of duties under this paragraph applies only in

17 the case of an exportation during the period such

18 Agreement is in operation of merchandise that—

19 ‘‘(A) is only cleaned, sorted, or repacked in

20 a bonded warehouse, or

21 ‘‘(B) is a drawback eligible good under sec22 tion 204(a) of the United States-Canada Free23 Trade Agreement Implementation Act of 1988;

24 and
90

1 ‘‘(5) without payment of duties for shipment to

2 the Virgin Islands, American Samoa, Wake Island,

3 Midway Island, Kingman Reef, Johnston Island or

4 the island of Guam.’’; and

5 (B) in the third sentence by striking out

6 ‘‘paragraph (1) of the preceding sentence’’ and

7 inserting ‘‘paragraph (4) of the preceding sen8 tence’’.

9 (5) FOREIGN TRADE ZONES.—Section 3(a) of

10 the Act of June 18, 1934 (commonly known as the

11 ‘‘Foreign Trade Zones Act’’; 19 U.S.C. 81c(a)) is

12 amended—

13 (A) in the last proviso—

14 (i) by inserting after ‘‘That’’ the fol15 lowing: ‘‘, if Canada ceases to be a

16 NAFTA country and the suspension of the

17 operation of the United States-Canada

18 Free-Trade Agreement thereafter termi19 nates,’’; and

20 (ii) by striking out ‘‘on or after Janu21 ary 1, 1994, or such later date as may be

22 proclaimed by the President under section

23 204(b)(2)(B) of such Act of 1988,’’ and

24 inserting ‘‘during the period such Agree25 ment is in operation’’; and
91

1 (B) by inserting before such last proviso

2 the following new proviso: ‘‘: Provided, further,

3 That no merchandise that consists of goods

4 subject to NAFTA drawback, as defined in sec5 tion 203(a) of the North American Free Trade

6 Agreement Implementation Act, that is manu7 factured or otherwise changed in condition shall

8 be exported to a NAFTA country, as defined in

9 section 2(4) of that Act, without an assessment

10 of a duty on the merchandise in its condition

11 and quantity, and at its weight, at the time of

12 its exportation (or if the privilege in the first

13 proviso to this subsection was requested, an as14 sessment of a duty on the merchandise in its

15 condition and quantity, and at its weight, at the

16 time of its admission into the zone) and the

17 payment of the assessed duty before the 61st

18 day after the date of exportation of the article,

19 except that upon the presentation, before such

20 61st day, of satisfactory evidence of the amount

21 of any customs duties paid or owed to the

22 NAFTA country on the article, the customs

23 duty may be waived or reduced (subject to sec24 tion 508(b)(2)(B) of the Tariff Act of 1930) in

25 an amount that does not exceed the lesser of
92

1 (1) the total amount of customs duties paid or

2 owed on the merchandise on importation into

3 the United States, or (2) the total amount of

4 customs duties paid on the article to the

5 NAFTA country:’’.

6 (c) CONSEQUENTIAL AMENDMENT WITH IMMEDIATE

7 EFFECT.—Section 313(j) of the Tariff Act of 1930 (19

8 U.S.C. 1313(j)) is amended—

9 (1) by striking out ‘‘If’’ in paragraph (2) and

10 inserting ‘‘Subject to paragraph (4), if’’; and

11 (2) by adding at the end the following new

12 paragraph:

13 ‘‘(4) Effective upon the entry into force of the

14 North American Free Trade Agreement, the expor15 tation to a NAFTA country, as defined in section

16 2(4) of the North American Free Trade Agreement

17 Implementation Act, of merchandise that is fungible

18 with and substituted for imported merchandise,

19 other than merchandise described in paragraphs (1)

20 through (8) of section 203(a) of that Act, shall not

21 constitute an exportation for purposes of paragraph

22 (2).’’.

23 (d) ELIMINATION OF DRAWBACK FOR SECTION 22

24 FEES.—Notwithstanding any other provision of law, the

25 Secretary of the Treasury may not, on condition of export,
93

1 refund or reduce a fee applied pursuant to section 22 of

2 the Agricultural Adjustment Act (7 U.S.C. 624) with re3 spect to goods included under subsection (a) that are ex4 ported to—

5 (1) Canada after December 31, 1995, for so

6 long as it is a NAFTA country; or

7 (2) Mexico after December 31, 2000, for so

8 long as it is a NAFTA country.

9 (e) INAPPLICABILITY TO COUNTERVAILING AND

10 ANTIDUMPING DUTIES.—Nothing in this section or the

11 amendments made by it shall be considered to authorize

12 the refund, waiver, or reduction of countervailing duties

13 or antidumping duties imposed on an imported good.

14 SEC. 204. CUSTOMS USER FEES.

15 Paragraph (10) of section 13031(b) of the Consoli16 dated Omnibus Budget Reconciliation Act of 1985 (19

17 U.S.C. 58c(b)(10)) is amended to read as follows:

18 ‘‘(10)(A) The fee charged under subsection (a)(9) or

19 (10) with respect to goods of Canadian origin (as deter20 mined under section 202 of the United States-Canada

21 Free-Trade Agreement) when the United States-Canada

22 Free-Trade Agreement is in force shall be in accordance

23 with section 403 of that Agreement.

24 ‘‘(B) For goods qualifying under the rules of origin

25 set out in section 202 of the North American Free Trade
94

1 Agreement Implementation Act, the fee under subsection

2 (a)(9) or (10)—

3 ‘‘(i) may not be charged with respect to goods

4 that qualify to be marked as goods of Canada pursu5 ant to Annex 311 of the North American Free

6 Trade Agreement, for such time as Canada is a

7 NAFTA country, as defined in section 2(4) of such

8 Implementation Act; and

9 ‘‘(ii) may not be increased after December 31,

10 1993, and may not be charged after June 29, 1999,

11 with respect to goods that qualify to be marked as

12 goods of Mexico pursuant to such Annex 311, for

13 such time as Mexico is a NAFTA country.

14 Any service for which an exemption from such fee is pro15 vided by reason of this paragraph may not be funded with

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

17 SEC. 205. ENFORCEMENT.

18 (a) RECORDKEEPING REQUIREMENTS.—Section 508

19 of the Tariff Act of 1930 (19 U.S.C. 1508) is amended

20 as follows:

21 (1) Subsection (b) is amended to read as fol22 lows:

23 ‘‘(b) EXPORTATIONS TO FREE TRADE COUNTRIES.—

24 ‘‘(1) DEFINITIONS.—As used in this sub25 section—
95

1 ‘‘(A) The term ‘associated records’ means,

2 in regard to an exported good under paragraph

3 (2), records associated with—

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

5 and payment for, the good;

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

7 and payment for, all material, including in8 direct materials, used in the production of

9 the good; and

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

11 For purposes of this subparagraph, the terms

12 ‘indirect material,’ ‘material,’ ‘preferential tariff

13 treatment,’ ‘used,’ and ‘value’ have the respec14 tive meanings given them in articles 415 and

15 514 of the North American Free Trade Agree16 ment.

17 ‘‘(B) The term ‘NAFTA Certificate of Ori18 gin’ means the certification, established under

19 article 501 of the North American Free Trade

20 Agreement, that a good qualifies as an originat21 ing good under such Agreement.

22 ‘‘(2) EXPORTS TO NAFTA COUNTRIES.—

23 ‘‘(A) IN GENERAL.—Any person who com24 pletes and signs a NAFTA Certificate of Origin

25 for a good for which preferential treatment
96

1 under the North American Free Trade Agree2 ment is claimed shall make, keep, and render

3 for examination and inspection all records relat4 ing to the origin of the good (including the Cer5 tificate or copies thereof) and the associated

6 records.

7 ‘‘(B) CLAIMS FOR CERTAIN WAIVERS, RE8 DUCTIONS, OR REFUNDS OF DUTIES OR FOR

9 CREDIT AGAINST BONDS.—

10 ‘‘(i) IN GENERAL.—Any person that

11 claims with respect to an article—

12 ‘‘(I) a waiver or reduction of

13 duty under the last paragraph of sec14 tion 311, section 312(b)(1) or (4),

15 section 562(2), or the last proviso to

16 section 3(a) of the Foreign Trade

17 Zones Act;

18 ‘‘(II) a credit against a bond

19 under section 312(d); or

20 ‘‘(III) a refund, waiver, or reduc21 tion of duty under section 313(n)(2)

22 or (o)(1);

23 must disclose to the Customs Service the

24 information described in clause (ii).
97

1 ‘‘(ii) INFORMATION REQUIRED.—

2 Within 30 days after making a claim de3 scribed in clause (i) with respect to an ar4 ticle, the person making the claim must

5 disclose to the Customs Service whether

6 that person has prepared, or has knowl7 edge that another person has prepared, a

8 NAFTA Certificate of Origin for the arti9 cle. If after such 30-day period the person

10 making the claim either—

11 ‘‘(I) prepares a NAFTA Certifi12 cate of Origin for the article; or

13 ‘‘(II) learns of the existence of

14 such a Certificate for the article;

15 that person, within 30 days after the oc16 currence described in subclause (I) or (II),

17 must disclose the occurrence to the Cus18 toms Service.

19 ‘‘(iii) ACTION ON CLAIM.—If the Cus20 toms Service determines that a NAFTA

21 Certificate of Origin has been prepared

22 with respect to an article for which a claim

23 described in clause (i) is made, the Cus24 toms Service may make such adjustments
98

1 regarding the previous customs treatment

2 of the article as may be warranted.

3 ‘‘(3) EXPORTS UNDER THE CANADIAN AGREE4 MENT.—Any person who exports, or who knowingly

5 causes to be exported, any merchandise to Canada

6 during such time as the United States-Canada Free7 Trade Agreement is in force with respect to, and the

8 United States applies that Agreement to, Canada

9 shall make, keep, and render for examination and

10 inspection such records (including certifications of

11 origin or copies thereof) which pertain to the expor12 tations.’’.

13 (2) Subsection (c) is amended to read as fol14 lows:

15 ‘‘(c) PERIOD OF TIME.—The records required by sub16 sections (a) and (b) shall be kept for such periods of time

17 as the Secretary shall prescribe; except that—

18 ‘‘(1) no period of time for the retention of the

19 records required under subsection (a) or (b)(3) may

20 exceed 5 years from the date of entry or exportation,

21 as appropriate;

22 ‘‘(2) the period of time for the retention of the

23 records required under subsection (b)(2) shall be at

24 least 5 years from the date of signature of the

25 NAFTA Certificate of Origin; and
99

1 ‘‘(3) records for any drawback claim shall be

2 kept until the 3rd anniversary of the date of pay3 ment of the claim.’’.

4 (3) Subsection (e) is amended to read as fol5 lows:

6 ‘‘(e) SUBSECTION (b) PENALTIES.—

7 ‘‘(1) RELATING TO NAFTA EXPORTS.—Any per8 son who fails to retain records required by para9 graph (2) of subsection (b) or the regulations issued

10 to implement that paragraph shall be liable for—

11 ‘‘(A) a civil penalty not to exceed $10,000;

12 or

13 ‘‘(B) the general recordkeeping penalty

14 that applies under the customs laws;

15 whichever penalty is higher.

16 ‘‘(2) RELATING TO CANADIAN AGREEMENT EX17 PORTS.—Any person who fails to retain the records

18 required by paragraph (3) of subsection (b) or the

19 regulations issued to implement that paragraph shall

20 be liable for a civil penalty not to exceed $10,000.’’.

21 (b) CONFORMING AMENDMENT.—Section

22 509(a)(2)(A)(ii) of the Tariff Act of 1930 (19 U.S.C.

23 1509(a)(2)(A)(ii)) is amended to read as follows:

24 ‘‘(ii) exported merchandise, or know25 ingly caused merchandise to be exported,
100

1 to a NAFTA country (as defined in section

2 2(4) of the North American Free Trade

3 Agreement Implementation Act) or to Can4 ada during such time as the United States5 Canada Free-Trade Agreement is in force

6 with respect to, and the United States ap7 plies that Agreement to, Canada,’’.

8 (c) DISCLOSURE OF INCORRECT INFORMATION.—

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

10 is amended—

11 (1) in subsection (c)—

12 (A) by redesignating paragraph (5) as

13 paragraph (6); and

14 (B) by inserting after paragraph (4) the

15 following new paragraph:

16 ‘‘(5) PRIOR DISCLOSURE REGARDING NAFTA

17 CLAIMS.—An importer shall not be subject to pen18 alties under subsection (a) for making an incorrect

19 claim for preferential tariff treatment under section

20 202 of the North American Free Trade Agreement

21 Implementation Act if the importer—

22 ‘‘(A) has reason to believe that the

23 NAFTA Certificate of Origin (as defined in sec24 tion 508(b)(1)) on which the claim was based

25 contains incorrect information; and
101

1 ‘‘(B) in accordance with regulations issued

2 by the Secretary, voluntarily and promptly

3 makes a corrected declaration and pays any du4 ties owing.’’; and

5 (2) by adding at the end the following new sub6 section:

7 ‘‘(f) FALSE CERTIFICATIONS REGARDING EXPORTS

8 TO NAFTA COUNTRIES.—

9 ‘‘(1) IN GENERAL.—Subject to paragraph (3),

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

11 fraud, gross negligence, or negligence, in a NAFTA

12 Certificate of Origin (as defined in section

13 508(b)(1)) that a good to be exported to a NAFTA

14 country (as defined in section 2(4) of the North

15 American Free Trade Agreement Implementation

16 Act) qualifies under the rules of origin set out in

17 section 202 of that Act.

18 ‘‘(2) APPLICABLE PROVISIONS.—The proce19 dures and penalties of this section that apply to a

20 violation of subsection (a) also apply to a violation

21 of paragraph (1), except that—

22 ‘‘(A) subsection (d) does not apply, and

23 ‘‘(B) subsection (c)(5) applies only if the

24 person voluntarily and promptly provides, to all

25 persons to whom the person provided the
102

1 NAFTA Certificate of Origin, written notice of

2 the falsity of the Certificate.

3 ‘‘(3) EXCEPTION.—A person may not be consid4 ered to have violated paragraph (1) if—

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

6 time it was provided in a NAFTA Certificate of

7 Origin but was later rendered incorrect due to

8 a change in circumstances; and

9 ‘‘(B) the person voluntarily and promptly

10 provides written notice of the change to all per11 sons to whom the person provided the Certifi12 cate of Origin.’’.

13 SEC. 206. RELIQUIDATION OF ENTRIES FOR NAFTA-ORIGIN

14 GOODS.

15 Section 520 of the Tariff Act of 1930 (19 U.S.C.

16 1520) is amended by adding at the end the following new

17 subsection:

18 ‘‘(d) Notwithstanding the fact that a valid protest

19 was not filed, the Customs Service may, in accordance

20 with regulations prescribed by the Secretary, reliquidate

21 an entry to refund any excess duties paid on a good quali22 fying under the rules of origin set out in section 202 of

23 the North American Free Trade Agreement Implementa24 tion Act for which no claim for preferential tariff treat25 ment was made at the time of importation if the importer,
103

1 within 1 year after the date of importation, files, in ac2 cordance with those regulations, a claim that includes—

3 ‘‘(1) a written declaration that the good quali4 fied under those rules at the time of importation;

5 ‘‘(2) copies of all applicable NAFTA Certifi6 cates of Origin (as defined in section 508(b)(1));

7 and

8 ‘‘(3) such other documentation relating to the

9 importation of the goods as the Customs Service

10 may require.’’.

11 SEC. 207. COUNTRY OF ORIGIN MARKING OF NAFTA GOODS.

12 (a) AMENDMENTS TO TARIFF ACT OF 1930.—Sec13 tion 304 of the Tariff Act of 1930 (19 U.S.C. 1304) is

14 amended—

15 (1) in subsection (c)(1), by striking ‘‘or engrav16 ing’’ and inserting ‘‘engraving, or continuous paint

17 stenciling’’;

18 (2) in subsection (c)(2)—

19 (A) by striking ‘‘four’’ and inserting

20 ‘‘five’’; and

21 (B) by striking ‘‘such as paint stenciling’’;

22 (3) in subsection (e), by striking ‘‘or engraving’’

23 and inserting ‘‘engraving, or an equally permanent

24 method of marking’’;
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1 (4) by redesignating subsection (h) as sub2 section (i); and

3 (5) by inserting after subsection (g) the follow4 ing new subsection:

5 ‘‘(h) TREATMENT OF GOODS OF A NAFTA COUN6 TRY.—

7 ‘‘(1) APPLICATION OF SECTION.—In applying

8 this section to an article that qualifies as a good of

9 a NAFTA country (as defined in section 2(4) of the

10 North American Free Trade Agreement Implemen11 tation Act) under the regulations issued by the Sec12 retary to implement Annex 311 of the North Amer13 ican Free Trade Agreement—

14 ‘‘(A) the exemption under subsection

15 (a)(3)(H) shall be applied by substituting ‘rea16 sonably know’ for ‘necessarily know’;

17 ‘‘(B) the Secretary shall exempt the good

18 from the requirements for marking under sub19 section (a) if the good—

20 ‘‘(i) is an original work of art, or

21 ‘‘(ii) is provided for under subheading

22 6904.10, heading 8541, or heading 8542

23 of the Harmonized Tariff Schedule of the

24 United States; and
105

1 ‘‘(C) subsection (b) does not apply to the

2 usual container of any good described in sub3 section (a)(3)(E) or (I) or subparagraph (B)(i)

4 or (ii) of this paragraph.

5 ‘‘(2) PETITION RIGHTS OF NAFTA EXPORTERS

6 AND PRODUCERS REGARDING MARKING DETERMINA7 TIONS.—

8 ‘‘(A) DEFINITIONS.—For purposes of this

9 paragraph:

10 ‘‘(i) The term ‘adverse marking deci11 sion’ means a determination by the Cus12 toms Service which an exporter or pro13 ducer of merchandise believes to be con14 trary to Annex 311 of the North American

15 Free Trade Agreement.

16 ‘‘(ii) A person may not be treated as

17 the exporter or producer of merchandise

18 regarding which an adverse marking deci19 sion was made unless such person—

20 ‘‘(I) if claiming to be the ex21 porter, is located in a NAFTA coun22 try and is required to maintain

23 records in that country regarding ex24 portations to NAFTA countries; or
106

1 ‘‘(II) if claiming to be the pro2 ducer, grows, mines, harvests, fishes,

3 traps, hunts, manufactures, processes,

4 or assembles such merchandise in a

5 NAFTA country.

6 ‘‘(B) INTERVENTION OR PETITION RE7 GARDING ADVERSE MARKING DECISIONS.—If

8 the Customs Service makes an adverse marking

9 decision regarding any merchandise, the Cus10 toms Service shall, upon written request by the

11 exporter or producer of the merchandise, pro12 vide to the exporter or producer a statement of

13 the basis for the decision. If the exporter or

14 producer believes that the decision is not cor15 rect, it may intervene in any protest proceeding

16 initiated by the importer of the merchandise. If

17 the importer does not file a protest with regard

18 to the decision, the exporter or producer may

19 file a petition with the Customs Service setting

20 forth—

21 ‘‘(i) a description of the merchandise;

22 and

23 ‘‘(ii) the basis for its claim that the

24 merchandise should be marked as a good

25 of a NAFTA country.
107

1 ‘‘(C) EFFECT OF DETERMINATION RE2 GARDING DECISION.—If, after receipt and con3 sideration of a petition filed by an exporter or

4 producer under subparagraph (B), the Customs

5 Service determines that the adverse marking

6 decision—

7 ‘‘(i) is not correct, the Customs Serv8 ice shall notify the petitioner of the deter9 mination and all merchandise entered, or

10 withdrawn from warehouse for consump11 tion, more than 30 days after the date that

12 notice of the determination under this

13 clause is published in the weekly Custom

14 Bulletin shall be marked in conformity

15 with the determination; or

16 ‘‘(ii) is correct, the Customs Service

17 shall notify the petitioner that the petition

18 is denied.

19 ‘‘(D) JUDICIAL REVIEW.—For purposes of

20 judicial review, the denial of a petition under

21 subparagraph (C)(ii) shall be treated as if it

22 were a denial of a petition of an interested

23 party under section 516 regarding an issue

24 arising under any of the preceding provisions of

25 this section.’’.
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1 (b) COORDINATION WITH 1988 ACT REGARDING

2 CERTAIN ARTICLES.—Articles that qualify as goods of a

3 NAFTA country under regulations issued by the Secretary

4 in accordance with Annex 311 of the Agreement are ex5 empt from the marking requirements promulgated by the

6 Secretary of the Treasury under section 1907(c) of the

7 Omnibus Trade and Competitiveness Act of 1988 (Public

8 Law 100–418), but are subject to the requirements of sec9 tion 304 of the Tariff Act of 1930 (19 U.S.C. 1304).

10 SEC. 208. PROTESTS AGAINST ADVERSE ORIGIN DETER11 MINATIONS.

12 Section 514 of the Tariff Act of 1930 (19 U.S.C.

13 1514) is amended—

14 (1) in subsection (c)(1) by inserting ‘‘, or with

15 respect to a determination of origin under section

16 202 of the North American Free Trade Agreement

17 Implementation Act,’’ after ‘‘with respect to any one

18 category of merchandise’’ in the fourth sentence;

19 (2) in subsection (c)(2)—

20 (A) by striking out ‘‘or’’ at the end of sub21 paragraph (D);

22 (B) by redesignating subparagraph (E) as

23 subparagraph (F);

24 (C) by inserting after subparagraph (D)

25 the following new subparagraph:
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1 ‘‘(E) with respect to a determination of or2 igin under section 202 of the North American

3 Free Trade Agreement Implementation Act,

4 any exporter or producer of the merchandise

5 subject to that determination, if the exporter or

6 producer completed and signed a NAFTA Cer7 tificate of Origin covering the merchandise; or’’;

8 and

9 (D) by striking ‘‘clauses (A) through (D)’’

10 in subparagraph (F) (as redesignated by sub11 paragraph (B)), and inserting ‘‘clauses (A)

12 through (E)’’; and

13 (3) by adding at the end the following new sub14 sections:

15 ‘‘(e) ADVANCE NOTICE OF CERTAIN DETERMINA16 TIONS.—Except as provided in subsection (f), an exporter

17 or producer referred to in subsection (c)(2)(E) shall be

18 provided notice in advance of an adverse determination of

19 origin under section 202 of the North American Free

20 Trade Agreement Implementation Act. The Secretary

21 may, by regulations, prescribe the time period in which

22 such advance notice shall be issued and authorize the Cus23 toms Service to provide in the notice the entry number

24 and any other entry information considered necessary to
110

1 allow the exporter or producer to exercise the rights pro2 vided by this section.

3 ‘‘(f) DENIAL OF PREFERENTIAL TREATMENT.—If

4 the Customs Service finds indications of a pattern of con5 duct by an exporter or producer of false or unsupported

6 representations that goods qualify under the rules of ori7 gin set out in section 202 of the North American Free

8 Trade Agreement Implementation Act—

9 ‘‘(1) the Customs Service, in accordance with

10 regulations issued by the Secretary, may deny pref11 erential tariff treatment to entries of identical goods

12 exported or produced by that person; and

13 ‘‘(2) the advance notice requirement in sub14 section (e) shall not apply to that person;

15 until the person establishes to the satisfaction of the Cus16 toms Service that its representations are in conformity

17 with section 202.’’.

18 SEC. 209. EXCHANGE OF INFORMATION.

19 Section 628 of the Tariff Act of 1930 (19 U.S.C.

20 1628) is amended by adding at the end the following new

21 subsection:

22 ‘‘(c) The Secretary may authorize the Customs Serv23 ice to exchange information with any government agency

24 of a NAFTA country, as defined in section 2(4) of the
111

1 North American Free Trade Agreement Implementation

2 Act, if the Secretary—

3 ‘‘(1) reasonably believes the exchange of infor4 mation is necessary to implement chapter 3, 4, or 5

5 of the North American Free Trade Agreement, and

6 ‘‘(2) obtains assurances from such country that

7 the information will be held in confidence and used

8 only for governmental purposes.’’.

9 SEC. 210. PROHIBITION ON DRAWBACK FOR TELEVISION

10 PICTURE TUBES.

11 Notwithstanding any other provision of law, no cus12 toms duties may be refunded, waived, or reduced on color

13 cathode-ray television picture tubes, including video mon14 itor cathode-ray tubes (provided for in subheading

15 8540.11.00 of the HTS), that are nonoriginating goods

16 under section 202(p)(19) and are—

17 (A) exported to a NAFTA country;

18 (B) used as a material in the production of

19 other goods that are exported to a NAFTA country;

20 or

21 (C) substituted for by goods of the same kind

22 and quality used as a material in the production of

23 other goods that are exported to a NAFTA country.
112

1 SEC. 211. MONITORING OF TELEVISION AND PICTURE TUBE

2 IMPORTS.

3 (a) MONITORING.—Beginning on the date the Agree4 ment enters into force with respect to the United States,

5 the United States Customs Service shall, for a period of

6 5 years, monitor imports into the United States of articles

7 described in subheading 8528.10 of the HTS from

8 NAFTA countries and shall take action to exercise all

9 rights of the United States under chapter 5 of the Agree10 ment with respect to such imports. The United States

11 Customs Service shall take appropriate action under chap12 ter 5 of the Agreement with respect to such imports, in13 cluding verifications to ensure that the rules of origin

14 under the Agreement are fully complied with and that the

15 duty drawback obligations contained in article 303 and

16 Annex 303.8 of the Agreement are fully implemented and

17 duties are correctly assessed.

18 (b) REPORT TO TRADE REPRESENTATIVE.—The

19 United States Customs Service shall make the results of

20 the monitoring and verification required by subsection (a)

21 available to the President and the Trade Representative.

22 If, based on such information, the President has reason

23 to believe that articles described in subheading 8540.11

24 of the HTS, intended for ultimate consumption in the

25 United States, are entering the territory of a NAFTA

26 country inconsistent with the provisions of the Agreement,
113

1 or have been undervalued in a manner that may raise con2 cerns under United States trade laws, the President shall

3 promptly take such action as may be appropriate under

4 all relevant provisions of the Agreement, including article

5 317 and chapter 20, and under applicable United States

6 trade statutes.

7 SEC. 212. TITLE VI AMENDMENTS.

8 Any amendment in this title to a law that is also

9 amended under title VI shall be made after the title VI

10 amendment is executed.

11 SEC. 213. EFFECTIVE DATES.

12 (a) PROVISIONS EFFECTIVE ON DATE OF ENACT13 MENT.—Section 212 and this section take effect on the

14 date of the enactment of this Act.

15 (b) PROVISIONS EFFECTIVE WHEN AGREEMENT EN16 TERS INTO FORCE.—Section 201, section 202, section

17 203(a), (d), and (e), section 210 and section 211, the

18 amendment made by section 203(c), and the amendments

19 made by sections 204 through 209 take effect on the date

20 the Agreement enters into force with respect to the United

21 States.

22 (c) PROVISIONS WITH DELAYED EFFECTIVE

23 DATES.—The amendments made by section 203(b)

24 apply—
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1 (1) with respect to exports from the United

2 States to Canada—

3 (A) on January 1, 1996, if Canada is a

4 NAFTA country on that date, and

5 (B) after such date for so long as Canada

6 continues to be a NAFTA country; and

7 (2) with respect to exports from the United

8 States to Mexico—

9 (A) on January 1, 2001, if Mexico is a

10 NAFTA country on that date; and

11 (B) after such date for so long as Mexico

12 continues to be a NAFTA country.

13 TITLE III—APPLICATION OF

14 AGREEMENT TO SECTORS

15 AND SERVICES

16 Subtitle A—Safeguards

17 PART 1—RELIEF FROM IMPORTS BENEFITING

18 FROM THE AGREEMENT

19 SEC. 301. DEFINITIONS.

20 As used in this part:

21 (1) CANADIAN ARTICLE.—The term ‘‘Canadian

22 article’’ means an article that—

23 (A) is an originating good under chapter 4

24 of the Agreement; and
115

1 (B) qualifies under the Agreement to be

2 marked as a good of Canada.

3 (2) MEXICAN ARTICLE.—The term ‘‘Mexican

4 article’’ means an article that—

5 (A) is an originating good under chapter 4

6 of the Agreement; and

7 (B) qualifies under the Agreement to be

8 marked as a good of Mexico.

9 SEC. 302. COMMENCING OF ACTION FOR RELIEF.

10 (a) FILING OF PETITION.—

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

12 under this part for the purpose of adjusting to the

13 obligations of the United States under the Agree14 ment may be filed with the International Trade

15 Commission by an entity, including a trade associa16 tion, firm, certified or recognized union, or group of

17 workers, that is representative of an industry. The

18 International Trade Commission shall transmit a

19 copy of any petition filed under this subsection to

20 the Trade Representative.

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

22 petition under this subsection may request that pro23 visional relief be provided as if the petition had been

24 filed under section 202(a) of the Trade Act of 1974.
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1 (3) CRITICAL CIRCUMSTANCES.—An allegation

2 that critical circumstances exist must be included in

3 the petition or made on or before the 90th day after

4 the date on which the investigation is initiated under

5 subsection (b).

6 (b) INVESTIGATION AND DETERMINATION.—Upon

7 the filing of a petition under subsection (a), the Inter8 national Trade Commission, unless subsection (d) applies,

9 shall promptly initiate an investigation to determine

10 whether, as a result of the reduction or elimination of a

11 duty provided for under the Agreement, a Canadian article

12 or a Mexican article, as the case may be, is being imported

13 into the United States in such increased quantities (in ab14 solute terms) and under such conditions so that imports

15 of the article, alone, constitute a substantial cause of—

16 (1) serious injury; or

17 (2) except in the case of a Canadian article, a

18 threat of serious injury;

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

20 or directly competitive with, the imported article.

21 (c) APPLICABLE PROVISIONS.—The provisions of—

22 (1) paragraphs (1)(B), (3) (except subpara23 graph (A)), and (4) of subsection (b);

24 (2) subsection (c); and

25 (3) subsection (d),
117

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

2 apply with respect to any investigation initiated under

3 subsection (b).

4 (d) ARTICLES EXEMPT FROM INVESTIGATION.—No

5 investigation may be initiated under this section with re6 spect to—

7 (1) any Canadian article or Mexican article if

8 import relief has been provided under this part with

9 respect to that article; or

10 (2) any textile or apparel article set out in Ap11 pendix 1.1 of Annex 300–B of the Agreement.

12 SEC. 303. INTERNATIONAL TRADE COMMISSION ACTION ON

13 PETITION.

14 (a) DETERMINATION.—By no later than 120 days

15 after the date on which an investigation is initiated under

16 section 302(b) with respect to a petition, the International

17 Trade Commission shall—

18 (1) make the determination required under that

19 section; and

20 (2) if the determination referred to in para21 graph (1) is affirmative and an allegation regarding

22 critical circumstances was made under section

23 302(a), make a determination regarding that allega24 tion.
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1 (b) ADDITIONAL FINDING AND RECOMMENDATION IF

2 DETERMINATION AFFIRMATIVE.—If the determination

3 made by the International Trade Commission under sub4 section (a) with respect to imports of an article is affirma5 tive, the International Trade Commission shall find, and

6 recommend to the President in the report required under

7 subsection (c), the amount of import relief that is nec8 essary to remedy or, except in the case of imports of a

9 Canadian article, prevent the injury found by the Inter10 national Trade Commission in the determination. The im11 port relief recommended by the International Trade Com12 mission under this subsection shall be limited to that de13 scribed in section 304(c).

14 (c) REPORT TO PRESIDENT.—No later than the date

15 that is 30 days after the date on which a determination

16 is made under subsection (a) with respect to an investiga17 tion, the International Trade Commission shall submit to

18 the President a report that shall include—

19 (1) a statement of the basis for the determina20 tion;

21 (2) dissenting and separate views; and

22 (3) any finding made under subsection (b) re23 garding import relief.

24 (d) PUBLIC NOTICE.—Upon submitting a report to

25 the President under subsection (c), the International
119

1 Trade Commission shall promptly make public such report

2 (with the exception of information which the International

3 Trade Commission determines to be confidential) and

4 shall cause a summary thereof to be published in the Fed5 eral Register.

6 (e) APPLICABLE PROVISIONS.—For purposes of this

7 part, the provisions of paragraphs (1), (2), and (3) of sec8 tion 330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d))

9 shall be applied with respect to determinations and find10 ings made under this section as if such determinations and

11 findings were made under section 202 of the Trade Act

12 of 1974 (19 U.S.C. 2252).

13 SEC. 304. PROVISION OF RELIEF.

14 (a) IN GENERAL.—No later than the date that is 30

15 days after the date on which the President receives the

16 report of the International Trade Commission containing

17 an affirmative determination of the International Trade

18 Commission under section 303(a), the President, subject

19 to subsection (b), shall provide relief from imports of the

20 article that is the subject of such determination to the ex21 tent that the President determines necessary to remedy

22 or, except in the case of imports of a Canadian article,

23 prevent the injury found by the International Trade

24 Commission.
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1 (b) EXCEPTION.—The President is not required to

2 provide import relief under this section if the President

3 determines that the provision of the import relief will not

4 provide greater economic and social benefits than costs.

5 (c) NATURE OF RELIEF.—The import relief (includ6 ing provisional relief) that the President is authorized to

7 provide under this part is as follows:

8 (1) In the case of imports of a Canadian arti9 cle—

10 (A) the suspension of any further reduc11 tion provided for under Annex 401.2 of the

12 United States-Canada Free-Trade Agreement

13 in the duty imposed on such article;

14 (B) an increase in the rate of duty im15 posed on such article to a level that does not

16 exceed the lesser of—

17 (i) the column 1 general rate of duty

18 imposed under the HTS on like articles at

19 the time the import relief is provided, or

20 (ii) the column 1 general rate of duty

21 imposed on like articles on December 31,

22 1988; or

23 (C) in the case of a duty applied on a sea24 sonal basis to such article, an increase in the

25 rate of duty imposed on the article to a level
121

1 that does not exceed the column 1 general rate

2 of duty imposed on the article for the cor3 responding season occurring immediately before

4 January 1, 1989.

5 (2) In the case of imports of a Mexican arti6 cle—

7 (A) the suspension of any further reduc8 tion provided for under the United States

9 Schedule to Annex 302.2 of the Agreement in

10 the duty imposed on such article;

11 (B) an increase in the rate of duty im12 posed on such article to a level that does not

13 exceed the lesser of—

14 (i) the column 1 general rate of duty

15 imposed under the HTS on like articles at

16 the time the import relief is provided, or

17 (ii) the column 1 general rate of duty

18 imposed under the HTS on like articles on

19 the day before the date on which the

20 Agreement enters into force; or

21 (C) in the case of a duty applied on a sea22 sonal basis to such article, an increase in the

23 rate of duty imposed on the article to a level

24 that does not exceed the column 1 general rate

25 of duty imposed under the HTS on the article
122

1 for the corresponding season immediately occur2 ring before the date on which the Agreement

3 enters into force.

4 (d) PERIOD OF RELIEF.—The import relief that the

5 President is authorized to provide under this section may

6 not exceed 3 years, except that, if a Canadian article or

7 Mexican article which is the subject of the action—

8 (1) is provided for in an item for which the

9 transition period of tariff elimination set out in the

10 United States Schedule to Annex 302.2 of the

11 Agreement is greater than 10 years; and

12 (2) the President determines that the affected

13 industry has undertaken adjustment and requires an

14 extension of the period of the import relief;

15 the President, after obtaining the advice of the Inter16 national Trade Commission, may extend the period of the

17 import relief for not more than 1 year, if the duty applied

18 during the initial period of the relief is substantially re19 duced at the beginning of the extension period.

20 (e) RATE ON MEXICAN ARTICLES AFTER TERMI21 NATION OF IMPORT RELIEF.—When import relief under

22 this part is terminated with respect to a Mexican article—

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

24 termination and on or before December 31 of the

25 year in which termination occurs shall be the rate
123

1 that, according to the United States Schedule to

2 Annex 302.2 of the Agreement for the staged elimi3 nation of the tariff, would have been in effect 1 year

4 after the initiation of the import relief action under

5 section 302; and

6 (2) the tariff treatment for that article after

7 December 31 of the year in which termination oc8 curs shall be, at the discretion of the President, ei9 ther—

10 (A) the rate of duty conforming to the ap11 plicable rate set out in the United States

12 Schedule to Annex 302.2; or

13 (B) the rate of duty resulting from the

14 elimination of the tariff in equal annual stages

15 ending on the date set out in the United States

16 Schedule to Annex 302.2 for the elimination of

17 the tariff.

18 SEC. 305. TERMINATION OF RELIEF AUTHORITY.

19 (a) GENERAL RULE.—Except as provided in sub20 section (b), no import relief may be provided under this

21 part—

22 (1) in the case of a Canadian article, after De23 cember 31, 1998; or
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1 (2) in the case of a Mexican article, after the

2 date that is 10 years after the date on which the

3 Agreement enters into force;

4 unless the article against which the action is taken is an

5 item for which the transition period for tariff elimination

6 set out in the United States Schedule to Annex 302.2 of

7 the Agreement is greater than 10 years, in which case the

8 period during which relief may be granted shall be the pe9 riod of staged tariff elimination for that article.

10 (b) EXCEPTION.—Import relief may be provided

11 under this part in the case of a Canadian article or Mexi12 can article after the date on which such relief would, but

13 for this subsection, terminate under subsection (a), but

14 only if the Government of Canada or Mexico, as the case

15 may be, consents to such provision.

16 SEC. 306. COMPENSATION AUTHORITY.

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

18 (19 U.S.C. 2133), any import relief provided by the Presi19 dent under section 304 shall be treated as action taken

20 under chapter I of title II of such Act.

21 SEC. 307. SUBMISSION OF PETITIONS.

22 A petition for import relief may be submitted to the

23 International Trade Commission under—

24 (1) this part;
125

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

2 1974; or

3 (3) under both this part and such chapter 1 at

4 the same time, in which case the International

5 Trade Commission shall consider such petitions

6 jointly.

7 SEC. 308. SPECIAL TARIFF PROVISIONS FOR CANADIAN

8 FRESH FRUITS AND VEGETABLES.

9 (a) IN GENERAL.—Section 301(a) of the United

10 States-Canada Free-Trade Agreement Implementation

11 Act (19 U.S.C. 2112 note) is amended—

12 (1) in paragraph (1), by striking ‘‘promptly’’ in

13 the flush sentence at the end thereof and inserting

14 ‘‘immediately’’,

15 (2) by redesignating paragraphs (2) through

16 (9) as paragraphs (3) through (10), respectively,

17 (3) by inserting after paragraph (1) the follow18 ing new paragraph:

19 ‘‘(2) No later than 6 days after publication in

20 the Federal Register of the notice described in para21 graph (1), the Secretary shall decide whether to rec22 ommend the imposition of a temporary duty to the

23 President, and if the Secretary decides to make such

24 a recommendation, the recommendation shall be for25 warded immediately to the President.’’,
126

1 (4) in paragraph (5), as redesignated by para2 graph (2), by striking ‘‘paragraph (3)’’ and inserting

3 ‘‘paragraph (4)’’,

4 (5) by amending paragraph (9), as redesignated

5 by paragraph (2), to read as follows:

6 ‘‘(9) For purposes of assisting the Secretary in

7 carrying out this subsection—

8 ‘‘(A) the Commissioner of Customs and

9 the Director of the Bureau of Census shall co10 operate in providing the Secretary with timely

11 information and data relating to the importa12 tion of Canadian fresh fruits and vegetables,

13 and

14 ‘‘(B) importers shall report such informa15 tion relating to Canadian fresh fruits and vege16 tables to the Commissioner of Customs at such

17 time and in such manner as the Commissioner

18 requires.’’.

19 (b) EFFECTIVE DATE.—The amendments made by

20 subsection (a) take effect on the date of the enactment

21 of this Act.

22 SEC. 309. PRICE-BASED SNAPBACK FOR FROZEN CON23 CENTRATED ORANGE JUICE.

24 (a) TRIGGER PRICE DETERMINATION.—
127

1 (1) IN GENERAL.—The Secretary shall deter2 mine—

3 (A) each period of 5 consecutive business

4 days in which the daily price for frozen con5 centrated orange juice is less than the trigger

6 price; and

7 (B) for each period determined under sub8 paragraph (A), the first period occurring there9 after of 5 consecutive business days in which

10 the daily price for frozen concentrated orange

11 juice is greater than the trigger price.

12 (2) NOTICE OF DETERMINATIONS.—The Sec13 retary shall immediately notify the Commissioner of

14 Customs and publish notice in the Federal Register

15 of any determination under paragraph (1), and the

16 date of such publication shall be the determination

17 date for that determination.

18 (b) IMPORTS OF MEXICAN ARTICLES.—Whenever

19 after any determination date for a determination under

20 subsection (a)(1)(A), the quantity of Mexican articles of

21 frozen concentrated orange juice that is entered exceeds—

22 (1) 264,978,000 liters (single strength equiva23 lent) in any of calendar years 1994 through 2002;

24 or
128

1 (2) 340,560,000 liters (single strength equiva2 lent) in any of calendar years 2003 through 2007;

3 the rate of duty on Mexican articles of frozen concentrated

4 orange juice that are entered after the date on which the

5 applicable limitation in paragraph (1) or (2) is reached

6 and before the determination date for the related deter7 mination under subsection (a)(1)(B) shall be the rate of

8 duty specified in subsection (c).

9 (c) RATE OF DUTY.—The rate of duty specified for

10 purposes of subsection (b) for articles entered on any day

11 is the rate in the HTS that is the lower of—

12 (1) the column 1–General rate of duty in effect

13 for such articles on July 1, 1991; or

14 (2) the column 1–General rate of duty in effect

15 on that day.

16 (d) DEFINITIONS.—For purposes of this section—

17 (1) The term ‘‘daily price’’ means the daily

18 closing price of the New York Cotton Exchange, or

19 any successor as determined by the Secretary, for

20 the closest month in which contracts for frozen con21 centrated orange juice are being traded on the Ex22 change.

23 (2) The term ‘‘business day’’ means a day in

24 which contracts for frozen concentrated orange juice
129

1 are being traded on the New York Cotton Exchange,

2 or any successor as determined by the Secretary.

3 (3) The term ‘‘entered’’ means entered or with4 drawn from warehouse for consumption, in the cus5 toms territory of the United States.

6 (4) The term ‘‘frozen concentrated orange

7 juice’’ means all products classifiable under sub8 heading 2009.11.00 of the HTS.

9 (5) The term ‘‘Secretary’’ means the Secretary

10 of Agriculture.

11 (6) The term ‘‘trigger price’’ means the average

12 daily closing price of the New York Cotton Ex13 change, or any successor as determined by the Sec14 retary, for the corresponding month during the pre15 vious 5-year period, excluding the year with the

16 highest average price for the corresponding month

17 and the year with the lowest average price for the

18 corresponding month.

19 PART 2—RELIEF FROM IMPORTS FROM ALL

20 COUNTRIES

21 SEC. 311. NAFTA ARTICLE IMPACT IN IMPORT RELIEF

22 CASES UNDER THE TRADE ACT OF 1974.

23 (a) IN GENERAL.—If, in any investigation initiated

24 under chapter 1 of title II of the Trade Act of 1974, the

25 International Trade Commission makes an affirmative de-
130

1 termination (or a determination which the President may

2 treat as an affirmative determination under such chapter

3 by reason of section 330(d) of the Tariff Act of 1930),

4 the International Trade Commission shall also find (and

5 report to the President at the time such injury determina6 tion is submitted to the President) whether—

7 (1) imports of the article from a NAFTA coun8 try, considered individually, account for a substan9 tial share of total imports; and

10 (2) imports of the article from a NAFTA coun11 try, considered individually or, in exceptional cir12 cumstances, imports from NAFTA countries consid13 ered collectively, contribute importantly to the seri14 ous injury, or threat thereof, caused by imports.

15 (b) FACTORS.—

16 (1) SUBSTANTIAL IMPORT SHARE.—In deter17 mining whether imports from a NAFTA country,

18 considered individually, account for a substantial

19 share of total imports, such imports normally shall

20 not be considered to account for a substantial share

21 of total imports if that country is not among the top

22 5 suppliers of the article subject to the investigation,

23 measured in terms of import share during the most

24 recent 3-year period.
131

1 (2) APPLICATION OF ‘‘CONTRIBUTE IMPOR2 TANTLY’’ STANDARD.—In determining whether im3 ports from a NAFTA country or countries contrib4 ute importantly to the serious injury, or threat

5 thereof, the International Trade Commission shall

6 consider such factors as the change in the import

7 share of the NAFTA country or countries, and the

8 level and change in the level of imports of such

9 country or countries. In applying the preceding sen10 tence, imports from a NAFTA country or countries

11 normally shall not be considered to contribute impor12 tantly to serious injury, or the threat thereof, if the

13 growth rate of imports from such country or coun14 tries during the period in which an injurious in15 crease in imports occurred is appreciably lower than

16 the growth rate of total imports from all sources

17 over the same period.

18 (c) DEFINITION.—For purposes of this section and

19 section 312(a), the term ‘‘contribute importantly’’ refers

20 to an important cause, but not necessarily the most impor21 tant cause.

22 SEC. 312. PRESIDENTIAL ACTION REGARDING NAFTA IM23 PORTS.

24 (a) IN GENERAL.—In determining whether to take

25 action under chapter 1 of title II of the Trade Act of 1974
132

1 with respect to imports from a NAFTA country, the Presi2 dent shall determine whether—

3 (1) imports from such country, considered indi4 vidually, account for a substantial share of total im5 ports; or

6 (2) imports from a NAFTA country, considered

7 individually, or in exceptional circumstances imports

8 from NAFTA countries considered collectively, con9 tribute importantly to the serious injury, or threat

10 thereof, found by the International Trade Commis11 sion.

12 (b) EXCLUSION OF NAFTA IMPORTS.—In determin13 ing the nature and extent of action to be taken under

14 chapter 1 of title II of the Trade Act of 1974, the Presi15 dent shall exclude from such action imports from a

16 NAFTA country if the President makes a negative deter17 mination under subsection (a)(1) or (2) with respect to

18 imports from such country.

19 (c) ACTION AFTER EXCLUSION OF NAFTA COUN20 TRY IMPORTS.—

21 (1) IN GENERAL.—If the President, under sub22 section (b), excludes imports from a NAFTA coun23 try or countries from action under chapter 1 of title

24 II of the Trade Act of 1974 but thereafter deter25 mines that a surge in imports from that country or
133

1 countries is undermining the effectiveness of the ac2 tion—

3 (A) the President may take appropriate ac4 tion under such chapter 1 to include those im5 ports in the action; and

6 (B) any entity that is representative of an

7 industry for which such action is being taken

8 may request the International Trade Commis9 sion to conduct an investigation of the surge in

10 such imports.

11 (2) INVESTIGATION.—Upon receiving a request

12 under paragraph (1)(B), the International Trade

13 Commission shall conduct an investigation to deter14 mine whether a surge in such imports undermines

15 the effectiveness of the action. The International

16 Trade Commission shall submit the findings of its

17 investigation to the President no later than 30 days

18 after the request is received by the International

19 Trade Commission.

20 (3) DEFINITION.—For purposes of this sub21 section, the term ‘‘surge’’ means a significant in22 crease in imports over the trend for a recent rep23 resentative base period.

24 (d) CONDITION APPLICABLE TO QUANTITATIVE RE25 STRICTIONS.—Any action taken under this section pro-
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1 claiming a quantitative restriction shall permit the impor2 tation of a quantity or value of the article which is not

3 less than the quantity or value of such article imported

4 into the United States during the most recent period that

5 is representative of imports of such article, with allowance

6 for reasonable growth.

7 PART 3—GENERAL PROVISIONS

8 SEC. 315. PROVISIONAL RELIEF.

9 Section 202(d) of the Trade Act of 1974 (19 U.S.C.

10 2252(d)) is amended—

11 (1) in paragraph (1)(A) by inserting ‘‘or citrus

12 product’’ after ‘‘agricultural product’’ each place it

13 appears;

14 (2) in the text of paragraph (1)(C) that appears

15 before subclauses (I) and (II)—

16 (A) by inserting ‘‘or citrus product’’ after

17 ‘‘agricultural product’’ each place it appears,

18 and

19 (B) by inserting ‘‘or citrus product’’ after

20 ‘‘perishable product’’;

21 (3) by redesignating subparagraphs (A) and

22 (B) of paragraph (5) as subparagraphs (B) and (C);

23 and

24 (4) by inserting a new subparagraph (A) in

25 paragraph (5) to read as follows:
135

1 ‘‘(A) The term ‘citrus product’ means any

2 processed oranges or grapefruit, or any orange

3 or grapefruit juice, including concentrate.’’.

4 SEC. 316. MONITORING.

5 For purposes of expediting an investigation concern6 ing provisional relief under this subtitle or section 202 of

7 the Trade Act of 1974 regarding—

8 (1) fresh or chilled tomatoes provided for in

9 subheading 0702.00.00 of the HTS; and

10 (2) fresh or chilled peppers, other than chili

11 peppers provided for in subheading 0709.60.00 of

12 the HTS;

13 the International Trade Commission, until January 1,

14 2009, shall monitor imports of such goods as if proper

15 requests for such monitoring had been made under sub16 section 202(d)(1)(C)(i) of such section 202. At the request

17 of the International Trade Commission, the Secretary of

18 Agriculture and the Commissioner of Customs shall pro19 vide to the International Trade Commission information

20 relevant to the monitoring carried out under this section.

21 SEC. 317. PROCEDURES CONCERNING THE CONDUCT OF

22 INTERNATIONAL TRADE COMMISSION INVES23 TIGATIONS.

24 (a) PROCEDURES AND RULES.—The International

25 Trade Commission shall adopt such procedures and rules
136

1 and regulations as are necessary to bring its procedures

2 into conformity with chapter 8 of the Agreement.

3 (b) CONFORMING AMENDMENT.—Section 202(a) of

4 the Trade Act of 1974 is amended by adding at the end

5 thereof the following:

6 ‘‘(8) The procedures concerning the release of

7 confidential business information set forth in section

8 332(g) of the Tariff Act of 1930 shall apply with re9 spect to information received by the Commission in

10 the course of investigations conducted under this

11 chapter and part 1 of title III of the North Amer12 ican Free Trade Agreement Implementation Act.’’.

13 SEC. 318. EFFECTIVE DATE.

14 Except as provided in section 308(b), the provisions

15 of this subtitle take effect on the date the Agreement en16 ters into force with respect to the United States.

17 Subtitle B—Agriculture

18 SEC. 321. AGRICULTURE.

19 (a) MEAT IMPORT ACT OF 1979.—The Meat Import

20 Act of 1979 (19 U.S.C. 2253 note) is amended—

21 (1) in subsection (b)—

22 (A) by striking the last sentence in para23 graph (2),
137

1 (B) by redesignating paragraph (3) as

2 paragraph (4) and inserting after paragraph

3 (2) the following new paragraph:

4 ‘‘(3) The term ‘meat articles’ does not include

5 any article described in paragraph (2) that—

6 ‘‘(A) originates in a NAFTA country (as

7 determined in accordance with section 202 of

8 the NAFTA Act), or

9 ‘‘(B) originates in Canada (as determined

10 in accordance with section 202 of the United

11 States-Canada Free-Trade Agreement Imple12 mentation Act of 1988) during such time as the

13 United States-Canada Free-Trade Agreement is

14 in force with respect to, and the United States

15 applies such Agreement to, Canada.’’; and

16 (C) by inserting after paragraph (4) (as

17 redesignated by subparagraph (B) of this para18 graph) the following new paragraphs:

19 ‘‘(5) The term ‘NAFTA Act’ means the North

20 American Free Trade Agreement Implementation

21 Act.

22 ‘‘(6) The term ‘NAFTA country’ has the mean23 ing given such term in section 2(4) of the NAFTA

24 Act.’’;
138

1 (2) in subsection (f)(1), by striking the end pe2 riod and inserting ‘‘, except that the President may

3 exclude any such article originating in a NAFTA

4 country (as determined in accordance with section

5 202 of the NAFTA Act) or, if paragraph (3)(B) ap6 plies, any such article originating in Canada as de7 termined in accordance with such paragraph

8 (3)(B).’’; and

9 (3) in subsection (i), by inserting ‘‘and Mexico’’

10 after ‘‘Canada’’ each place it appears.

11 (b) SECTION 22 OF THE AGRICULTURAL ADJUST12 MENT ACT.—

13 (1) IN GENERAL.—The President may, pursu14 ant to article 309 and Annex 703.2 of the Agree15 ment, exempt from any quantitative limitation or fee

16 imposed pursuant to section 22 of the Agricultural

17 Adjustment Act (7 U.S.C. 624), reenacted with

18 amendments by the Agricultural Marketing Agree19 ment Act of 1937, any article which originates in

20 Mexico, if Mexico is a NAFTA country.

21 (2) QUALIFICATION OF ARTICLES.—The deter22 mination of whether an article originates in Mexico

23 shall be made in accordance with section 202, except

24 that operations performed in, or materials obtained

25 from, any country other than the United States or
139

1 Mexico shall be treated as if performed in or ob2 tained from a country other than a NAFTA country.

3 (c) TARIFF RATE QUOTAS.—In implementing the

4 tariff rate quotas set out in the United States Schedule

5 to Annex 302.2 of the Agreement, the President shall take

6 such action as may be necessary to ensure that imports

7 of agricultural goods do not disrupt the orderly marketing

8 of commodities in the United States.

9 (d) PEANUTS.—

10 (1) EFFECT OF THE AGREEMENT.—

11 (A) IN GENERAL.—Nothing in the Agree12 ment or this Act reduces or eliminates—

13 (i) any penalty required under section

14 358e(d) of the Agricultural Adjustment

15 Act of 1938 (7 U.S.C. 1359a(d)); or

16 (ii) any requirement under Marketing

17 Agreement No. 146, Regulating the Qual18 ity of Domestically Produced Peanuts, on

19 peanuts in the domestic market, pursuant

20 to section 108B(f) of the Agricultural Act

21 of 1949 (7 U.S.C. 1445c–3(f)).

22 (B) REENTRY OF EXPORTED PEANUTS.—

23 Paragraph (6) of section 358e(d) of the Agri24 cultural Adjustment Act of 1938 (7 U.S.C.

25 1359a(d)(6)) is amended to read as follows:
140

1 ‘‘(6) REENTRY OF EXPORTED PEANUTS.—

2 ‘‘(A) PENALTY.—If any additional peanuts

3 exported by a handler are reentered into the

4 United States in commercial quantities as de5 termined by the Secretary, the importer of the

6 peanuts shall be subject to a penalty at a rate

7 equal to 140 percent of the loan level for quota

8 peanuts on the quantity of peanuts reentered.

9 ‘‘(B) RECORDS.—Each person, firm, or

10 handler who imports peanuts into the United

11 States shall maintain such records and docu12 ments as are required by the Secretary to en13 sure compliance with this subsection.’’.

14 (2) CONSULTATIONS ON IMPORTS.—It is the

15 sense of Congress that the United States should re16 quest consultations in the Working Group on Emer17 gency Action, established in the Understanding Be18 tween the Parties to the North American Free

19 Trade Agreement Concerning Chapter Eight—

20 Emergency Action, if imports of peanuts exceed the

21 in-quota quantity under a tariff rate quota set out

22 in the United States Schedule to Annex 302.2 of the

23 Agreement concerning whether—

24 (A) the increased imports of peanuts con25 stitute a substantial cause of, or contribute im-
141

1 portantly to, serious injury, or threat of serious

2 injury, to the domestic peanut industry; and

3 (B) recourse under Chapter Eight of the

4 Agreement or Article XIX of the General

5 Agreement on Tariffs and Trade is appropriate.

6 (e) FRESH FRUITS, VEGETABLES, AND CUT FLOW7 ERS.—

8 (1) IN GENERAL.—The Secretary of Agriculture

9 shall collect and compile the information specified

10 under paragraph (3), if reasonably available, from

11 appropriate Federal departments and agencies and

12 the relevant counterpart ministries of the Govern13 ment of Mexico.

14 (2) DESIGNATION OF AN OFFICE.—The Sec15 retary of Agriculture shall designate an office within

16 the United States Department of Agriculture to be

17 responsible for maintaining and disseminating, in a

18 timely manner, the data accumulated for verifying

19 citrus, fruit, vegetable, and cut flower trade between

20 the United States and Mexico. The information shall

21 be made available to the public and the NAFTA Ag22 riculture Committee Working Groups.

23 (3) INFORMATION COLLECTED.—The informa24 tion to be collected, if reasonably available, in25 cludes—
142

1 (A) monthly fresh fruit, fresh vegetable,

2 fresh citrus, and processed citrus product im3 port and export data;

4 (B) monthly citrus juice production and

5 export data;

6 (C) data on inspections of shipments of cit7 rus, vegetables, and cut flowers entering the

8 United States from Mexico; and

9 (D) in the case of fruits, vegetables, and

10 cut flowers entering the United States from

11 Mexico, data regarding—

12 (i) planted and harvested acreage; and

13 (ii) wholesale prices, quality, and

14 grades.

15 (f) END-USE CERTIFICATES.—

16 (1) IN GENERAL.—The Secretary of Agriculture

17 (referred to in this subsection as the ‘‘Secretary’’)

18 shall implement, in coordination with the Commis19 sioner of Customs, a program requiring that end-use

20 certificates be included in the documentation cover21 ing the entry into, or the withdrawal from a ware22 house for consumption in, the customs territory of

23 the United States—

24 (A) of any wheat that is a product of any

25 foreign country or instrumentality that re-
143

1 quires, as of the effective date of this sub2 section, end-use certificates for imports of

3 wheat that is a product of the United States

4 (referred to in this subsection as ‘‘United

5 States-produced wheat’’); and

6 (B) of any barley that is a product of any

7 foreign country or instrumentality that re8 quires, as of the effective date of this sub9 section, end-use certificates for imports of bar10 ley that is a product of the United States (re11 ferred to in this subsection as ‘‘United States12 produced barley’’).

13 (2) REGULATIONS.—The Secretary shall pre14 scribe by regulation such requirements regarding the

15 information to be included in end-use certificates as

16 may be necessary and appropriate to carry out this

17 subsection.

18 (3) PRODUCER PROTECTION DETERMINA19 TION.—At any time after the effective date of the

20 requirements established under paragraph (1), the

21 Secretary may, subject to paragraph (5), suspend

22 the requirements when making a determination,

23 after consultation with domestic producers, that the

24 program implemented under this subsection has di25 rectly resulted in—
144

1 (A) the reduction of income to the United

2 States producers of agricultural commodities; or

3 (B) the reduction of the competitiveness of

4 United States agricultural commodities in the

5 world export markets.

6 (4) SUSPENSION OF REQUIREMENTS.—

7 (A) WHEAT.—If a foreign country or in8 strumentality that requires end-use certificates

9 for imports of United States-produced wheat as

10 of the effective date of the requirement under

11 paragraph (1)(A) eliminates the requirement,

12 the Secretary shall suspend the requirement

13 under paragraph (1)(A) beginning 30 calendar

14 days after suspension by the foreign country or

15 instrumentality.

16 (B) BARLEY.—If a foreign country or in17 strumentality that requires end-use certificates

18 for imports of United States-produced barley as

19 of the effective date of the requirement under

20 paragraph (1)(B) eliminates the requirement,

21 the Secretary shall suspend the requirement

22 under paragraph (1)(B) beginning 30 calendar

23 days after suspension by the foreign country or

24 instrumentality.
145

1 (5) REPORT TO CONGRESS.—The Secretary

2 shall not suspend the requirements established under

3 paragraph (1) under circumstances identified in

4 paragraph (3) before the Secretary submits a report

5 to Congress detailing the determination made under

6 paragraph (3) and the reasons for making the deter7 mination.

8 (6) COMPLIANCE.—It shall be a violation of

9 section 1001 of title 18, United States Code, for a

10 person to engage in fraud or knowingly violate this

11 subsection or a regulation implementing this sub12 section.

13 (7) EFFECTIVE DATE.—This subsection shall

14 become effective on the date that is 120 days after

15 the date of enactment of this Act.

16 (g) AGRICULTURAL FELLOWSHIP PROGRAM.—Sec17 tion 1542(d) of the Food, Agriculture, Conservation, and

18 Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 5622

19 note) is amended by adding at the end the following new

20 paragraph:

21 ‘‘(3) AGRICULTURAL FELLOWSHIPS FOR NAFTA

22 COUNTRIES.—

23 ‘‘(A) IN GENERAL.—The Secretary shall

24 grant fellowships to individuals from countries

25 that are parties to the North American Free
146

1 Trade Agreement (referred to in this paragraph

2 as ‘NAFTA’) to study agriculture in the United

3 States, and to individuals in the United States

4 to study agriculture in other NAFTA countries.

5 ‘‘(B) PURPOSE.—The purpose of fellow6 ships granted under this paragraph is—

7 ‘‘(i) to allow the recipients to expand

8 their knowledge and understanding of agri9 cultural systems and practices in other

10 NAFTA countries;

11 ‘‘(ii) to facilitate the improvement of

12 agricultural systems in NAFTA countries;

13 and

14 ‘‘(iii) to establish and expand agricul15 tural trade linkages between the United

16 States and other NAFTA countries.

17 ‘‘(C) ELIGIBLE RECIPIENTS.—The Sec18 retary may provide fellowships under this para19 graph to agricultural producers and consult20 ants, government officials, and other individuals

21 from the private and public sectors.

22 ‘‘(D) ACCEPTANCE OF GIFTS.—The Sec23 retary may accept money, funds, property, and

24 services of every kind by gift, devise, bequest,

25 grant, or otherwise, and may in any manner,
147

1 dispose of all of the holdings and use the re2 ceipts generated from the disposition to carry

3 out this paragraph. Receipts under this para4 graph shall remain available until expended.’’.

5 ‘‘(E) AUTHORIZATION OF APPROPRIA6 TION.—There are authorized to be appropriated

7 such sums as are necessary to carry out this

8 paragraph.’’.

9 (h) ASSISTANCE FOR AFFECTED FARMWORKERS.—

10

11 (1) IN GENERAL.—Subject to paragraph (3), if

12 at any time the Secretary of Agriculture determines

13 that the implementation of the Agreement has

14 caused low-income migrant or seasonal farmworkers

15 to lose income, the Secretary may make available

16 grants, not to exceed $20,000,000 for any fiscal

17 year, to public agencies or private organizations with

18 tax-exempt status under section 501(c)(3) of the In19 ternal Revenue Code of 1986, that have experience

20 in providing emergency services to low-income mi21 grant or seasonal farmworkers. Emergency services

22 to be provided with assistance received under this

23 subsection may include such types of assistance as

24 the Secretary determines to be necessary and appro25 priate.
148

1 (2) DEFINITION.—As used in this subsection,

2 the term ‘‘low-income migrant or seasonal farm3 worker’’ shall have the same meaning as provided in

4 section 2281(b) of the Food, Agriculture, Conserva5 tion, and Trade Act of 1990 (42 U.S.C. 5177a(b)).

6 (3) AUTHORIZATION OF APPROPRIATIONS.—

7 There are authorized to be appropriated

8 $20,000,000 for each fiscal year to carry out this

9 subsection.

10 (i) BIENNIAL REPORT ON EFFECTS OF THE AGREE11 MENT ON AMERICAN AGRICULTURE.—

12 (1) IN GENERAL.—The Secretary of Agriculture

13 shall prepare a biennial report on the effects of the

14 Agreement on United States producers of agricul15 tural commodities and on rural communities located

16 in the United States.

17 (2) CONTENTS OF REPORT.—The report re18 quired under this subsection shall include—

19 (A) an assessment of the effects of imple20 menting the Agreement on the various agricul21 tural commodities affected by the Agreement,

22 on a commodity-by-commodity basis;

23 (B) an assessment of the effects of imple24 menting the Agreement on investments made in
149

1 United States agriculture and on rural commu2 nities located in the United States;

3 (C) an assessment of the effects of imple4 menting the Agreement on employment in Unit5 ed States agriculture, including any gains or

6 losses of jobs in businesses directly or indirectly

7 related to United States agriculture; and

8 (D) such other information and data as

9 the Secretary determines appropriate.

10 (3) SUBMISSION OF REPORT.—The Secretary

11 shall furnish the report required under this sub12 section to the Committee on Agriculture, Nutrition,

13 and Forestry of the Senate and to the Committee on

14 Agriculture of the House of Representatives. The re15 port shall be due every 2 years and shall be submit16 ted by March 1 of the year in which the report is

17 due. The first report shall be due by March 1, 1997,

18 and the final report shall be due by March 1, 2011.

19 Subtitle C—Intellectual Property

20 SEC. 331. TREATMENT OF INVENTIVE ACTIVITY.

21 Section 104 of title 35, United States Code, is

22 amended to read as follows:

23 ‘‘§ 104. Invention made abroad

24 ‘‘(a) IN GENERAL.—In proceedings in the Patent and

25 Trademark Office, in the courts, and before any other
150

1 competent authority, an applicant for a patent, or a pat2 entee, may not establish a date of invention by reference

3 to knowledge or use thereof, or other activity with respect

4 thereto, in a foreign country other than a NAFTA coun5 try, except as provided in sections 119 and 365 of this

6 title. Where an invention was made by a person, civil or

7 military, while domiciled in the United States or a

8 NAFTA country and serving in any other country in con9 nection with operations by or on behalf of the United

10 States or a NAFTA country, the person shall be entitled

11 to the same rights of priority in the United States with

12 respect to such invention as if such invention had been

13 made in the United States or a NAFTA country. To the

14 extent that any information in a NAFTA country concern15 ing knowledge, use, or other activity relevant to proving

16 or disproving a date of invention has not been made avail17 able for use in a proceeding in the Office, a court, or any

18 other competent authority to the same extent as such in19 formation could be made available in the United States,

20 the Commissioner, court, or such other authority shall

21 draw appropriate inferences, or take other action per22 mitted by statute, rule, or regulation, in favor of the party

23 that requested the information in the proceeding.

24 ‘‘(b) DEFINITION.—As used in this section, the term

25 ‘NAFTA country’ has the meaning given that term in sec-
151

1 tion 2(4) of the North American Free Trade Agreement

2 Implementation Act.’’.

3 SEC. 332. RENTAL RIGHTS IN SOUND RECORDINGS.

4 Section 4 of the Record Rental Amendment of 1984

5 (17 U.S.C. 109 note) is amended by striking out sub6 section (c).

7 SEC. 333. NONREGISTRABILITY OF MISLEADING GEO8 GRAPHIC INDICATIONS.

9 (a) MARKS NOT REGISTRABLE ON THE PRINCIPAL

10 REGISTER.—Section 2 of the Act entitled ‘‘An Act to pro11 vide for the registration and protection of trademarks used

12 in commerce, to carry out the provisions of certain inter13 national conventions, and for other purposes’’, approved

14 July 5, 1946, commonly referred to as the Trademark Act

15 of 1946 (15 U.S.C. 1052(e)), is amended—

16 (1) by amending subsection (e) to read as fol17 lows:

18 ‘‘(e) Consists of a mark which (1) when used on or

19 in connection with the goods of the applicant is merely

20 descriptive or deceptively misdescriptive of them, (2) when

21 used on or in connection with the goods of the applicant

22 is primarily geographically descriptive of them, except as

23 indications of regional origin may be registrable under sec24 tion 4, (3) when used on or in connection with the goods

25 of the applicant is primarily geographically deceptively
152

1 misdescriptive of them, or (4) is primarily merely a sur2 name.’’; and

3 (2) in subsection (f)—

4 (A) by striking out ‘‘and (d)’’ and insert5 ing ‘‘(d), and (e)(3)’’; and

6 (B) by adding at the end the following new

7 sentence: ‘‘Nothing in this section shall prevent

8 the registration of a mark which, when used on

9 or in connection with the goods of the appli10 cant, is primarily geographically deceptively

11 misdescriptive of them, and which became dis12 tinctive of the applicant’s goods in commerce

13 before the date of the enactment of the North

14 American Free Trade Agreement Implementa15 tion Act.’’.

16 (b) SUPPLEMENTAL REGISTER.—Section 23(a) of

17 the Trademark Act of 1946 (15 U.S.C. 1091(a)) is

18 amended—

19 (1) by striking out ‘‘and (d)’’ and inserting

20 ‘‘(d), and (e)(3)’’; and

21 (2) by adding at the end the following new sen22 tence: ‘‘Nothing in this section shall prevent the reg23 istration on the supplemental register of a mark, ca24 pable of distinguishing the applicant’s goods or serv25 ices and not registrable on the principal register
153

1 under this Act, that is declared to be unregistrable

2 under section 2(e)(3), if such mark has been in law3 ful use in commerce by the owner thereof, on or in

4 connection with any goods or services, since before

5 the date of the enactment of the North American

6 Free Trade Agreement Implementation Act.’’.

7 SEC. 334. MOTION PICTURES IN THE PUBLIC DOMAIN.

8 (a) IN GENERAL.—Chapter 1 of title 17, United

9 States Code, is amended by inserting after section 104 the

10 following new section:

11 ‘‘§ 104A. Copyright in certain motion pictures

12 ‘‘(a) RESTORATION OF COPYRIGHT.—Subject to sub13 sections (b) and (c)—

14 ‘‘(1) any motion picture that is first fixed or

15 published in the territory of a NAFTA country as

16 defined in section 2(4) of the North American Free

17 Trade Agreement Implementation Act to which

18 Annex 1705.7 of the North American Free Trade

19 Agreement applies, and

20 ‘‘(2) any work included in such motion picture

21 that is first fixed in or published with such motion

22 picture,

23 that entered the public domain in the United States be24 cause it was first published on or after January 1, 1978,

25 and before March 1, 1989, without the notice required by
154

1 section 401, 402, or 403 of this title, the absence of which

2 has not been excused by the operation of section 405 of

3 this title, as such sections were in effect during that pe4 riod, shall have copyright protection under this title for

5 the remainder of the term of copyright protection to which

6 it would have been entitled in the United States had it

7 been published with such notice.

8 ‘‘(b) EFFECTIVE DATE OF PROTECTION.—The pro9 tection provided under subsection (a) shall become effec10 tive, with respect to any motion picture or work included

11 in such motion picture meeting the criteria of that sub12 section, 1 year after the date on which the North Amer13 ican Free Trade Agreement enters into force with respect

14 to, and the United States applies the Agreement to, the

15 country in whose territory the motion picture was first

16 fixed or published if, before the end of that 1-year period,

17 the copyright owner in the motion picture or work files

18 with the Copyright Office a statement of intent to have

19 copyright protection restored under subsection (a). The

20 Copyright Office shall publish in the Federal Register

21 promptly after that effective date a list of motion pictures,

22 and works included in such motion pictures, for which pro23 tection is provided under subsection (a).

24 ‘‘(c) USE OF PREVIOUSLY OWNED COPIES.—A na25 tional or domiciliary of the United States who, before the
155

1 date of the enactment of the North American Free Trade

2 Agreement Implementation Act, made or acquired copies

3 of a motion picture, or other work included in such motion

4 picture, that is subject to protection under subsection (a),

5 may sell or distribute such copies or continue to perform

6 publicly such motion picture and other work without liabil7 ity for such sale, distribution, or performance, for a period

8 of 1 year after the date on which the list of motion pic9 tures, and works included in such motion pictures, that

10 are subject to protection under subsection (a) is published

11 in the Federal Register under subsection (b).’’.

12 (b) CONFORMING AMENDMENT.—The table of sec13 tions at the beginning of chapter 1 of title 17, United

14 States Code, is amended by inserting after the item relat15 ing to section 104 the following new item:

‘‘104A. Copyright in certain motion pictures.’’.

16 SEC. 335. EFFECTIVE DATES.

17 (a) IN GENERAL.—Subject to subsections (b) and (c),

18 the amendments made by this subtitle take effect on the

19 date the Agreement enters into force with respect to the

20 United States.

21 (b) SECTION 331.—The amendments made by sec22 tion 331 shall apply to all patent applications that are

23 filed on or after the date of the enactment of this Act:

24 Provided, That an applicant for a patent, or a patentee,

25 may not establish a date of invention by reference to
156

1 knowledge or use thereof, or other activity with respect

2 thereto, in a NAFTA country, except as provided in sec3 tions 119 and 365 of title 35, United States Code, that

4 is earlier than the date of the enactment of this Act.

5 (c) SECTION 333.—The amendments made by section

6 333 shall apply only to trademark applications filed on

7 or after the date of the enactment of this Act.

8 Subtitle D—Temporary Entry of

9 Business Persons

10 SEC. 341. TEMPORARY ENTRY.

11 (a) NONIMMIGRANT TRADERS AND INVESTORS.—

12 Upon a basis of reciprocity secured by the Agreement, an

13 alien who is a citizen of Canada or Mexico, and the spouse

14 and children of any such alien if accompanying or follow15 ing to join such alien, may, if otherwise eligible for a visa

16 and if otherwise admissible into the United States under

17 the Immigration and Nationality Act (8 U.S.C. 1101 et

18 seq.), be considered to be classifiable as a nonimmigrant

19 under section 101(a)(15)(E) of such Act (8 U.S.C.

20 1101(a)(15)(E)) if entering solely for a purpose specified

21 in Section B of Annex 1603 of the Agreement, but only

22 if any such purpose shall have been specified in such

23 Annex on the date of entry into force of the Agreement.

24 For purposes of this section, the term ‘‘citizen of Mexico’’
157

1 means ‘‘citizen’’ as defined in Annex 1608 of the Agree2 ment.

3 (b) NONIMMIGRANT PROFESSIONALS AND ANNUAL

4 NUMERICAL LIMIT.—Section 214 of the Immigration and

5 Nationality Act (8 U.S.C. 1184) is amended by redesig6 nating subsection (e) as paragraph (1) of subsection (e)

7 and adding after such paragraph (1), as redesignated, the

8 following new paragraphs:

9 ‘‘(2) An alien who is a citizen of Canada or Mexico,

10 and the spouse and children of any such alien if accom11 panying or following to join such alien, who seeks to enter

12 the United States under and pursuant to the provisions

13 of Section D of Annex 1603 of the North American Free

14 Trade Agreement (in this subsection referred to as

15 ‘NAFTA’) to engage in business activities at a profes16 sional level as provided for in such Annex, may be admit17 ted for such purpose under regulations of the Attorney

18 General promulgated after consultation with the Secretar19 ies of State and Labor. For purposes of this Act, including

20 the issuance of entry documents and the application of

21 subsection (b), such alien shall be treated as if seeking

22 classification, or classifiable, as a nonimmigrant under

23 section 101(a)(15). The admission of an alien who is a

24 citizen of Mexico shall be subject to paragraphs (3), (4),

25 and (5). For purposes of this paragraph and paragraphs
158

1 (3), (4), and (5), the term ‘‘citizen of Mexico’’ means ‘‘citi2 zen’’ as defined in Annex 1608 of NAFTA.

3 ‘‘(3) The Attorney General shall establish an annual

4 numerical limit on admissions under paragraph (2) of

5 aliens who are citizens of Mexico, as set forth in Appendix

6 1603.D.4 of Annex 1603 of the NAFTA. Subject to para7 graph (4), the annual numerical limit—

8 ‘‘(A) beginning with the second year that

9 NAFTA is in force, may be increased in accordance

10 with the provisions of paragraph 5(a) of Section D

11 of such Annex, and

12 ‘‘(B) shall cease to apply as provided for in

13 paragraph 3 of such Appendix.

14 ‘‘(4) The annual numerical limit referred to in para15 graph (3) may be increased or shall cease to apply (other

16 than by operation of paragraph 3 of such Appendix) only

17 if—

18 ‘‘(A) the President has obtained advice regard19 ing the proposed action from the appropriate advi20 sory committees established under section 135 of the

21 Trade Act of 1974 (19 U.S.C. 2155);

22 ‘‘(B) the President has submitted a report to

23 the Committee on the Judiciary of the Senate and

24 the Committee on the Judiciary of the House of

25 Representatives that sets forth—
159

1 ‘‘(i) the action proposed to be taken and

2 the reasons therefor, and

3 ‘‘(ii) the advice obtained under subpara4 graph (A);

5 ‘‘(C) a period of at least 60 calendar days that

6 begins on the first day on which the President has

7 met the requirements of subparagraphs (A) and (B)

8 with respect to such action has expired; and

9 ‘‘(D) the President has consulted with such

10 committees regarding the proposed action during the

11 period referred to in subparagraph (C).

12 ‘‘(5) During the period that the provisions of Appen13 dix 1603.D.4 of Annex 1603 of the NAFTA apply, the

14 entry of an alien who is a citizen of Mexico under and

15 pursuant to the provisions of Section D of Annex 1603

16 of NAFTA shall be subject to the attestation requirement

17 of section 212(m), in the case of a registered nurse, or

18 the application requirement of section 212(n), in the case

19 of all other professions set out in Appendix 1603.D.1 of

20 Annex 1603 of NAFTA, and the petition requirement of

21 subsection (c), to the extent and in the manner prescribed

22 in regulations promulgated by the Secretary of Labor,

23 with respect to sections 212(m) and 212(n), and the At24 torney General, with respect to subsection (c).’’.
160

1 (c) LABOR DISPUTES.—Section 214 of the Immigra2 tion and Nationality Act (8 U.S.C. 1184) is amended by

3 adding at the end the following new subsection:

4 ‘‘(j) Notwithstanding any other provision of this Act,

5 an alien who is a citizen of Canada or Mexico who seeks

6 to enter the United States under and pursuant to the pro7 visions of Section B, Section C, or Section D of Annex

8 1603 of the North American Free Trade Agreement, shall

9 not be classified as a nonimmigrant under such provisions

10 if there is in progress a strike or lockout in the course

11 of a labor dispute in the occupational classification at the

12 place or intended place of employment, unless such alien

13 establishes, pursuant to regulations promulgated by the

14 Attorney General, that the alien’s entry will not affect ad15 versely the settlement of the strike or lockout or the em16 ployment of any person who is involved in the strike or

17 lockout. Notice of a determination under this subsection

18 shall be given as may be required by paragraph 3 of article

19 1603 of such Agreement. For purposes of this subsection,

20 the term ‘citizen of Mexico’ means ‘citizen’ as defined in

21 Annex 1608 of such Agreement.’’.

22 SEC. 342. EFFECTIVE DATE.

23 The provisions of this subtitle take effect on the date

24 the Agreement enters into force with respect to the United

25 States.
161

1 Subtitle E—Standards

2 PART 1—STANDARDS AND MEASURES

3 SEC. 351. STANDARDS AND SANITARY AND PHYTOSANITARY

4 MEASURES.

5 (a) IN GENERAL.—Title IV of the Trade Agreements

6 Act of 1979 (19 U.S.C. 2531 et seq.) is amended by in7 serting at the end the following new subtitle:

8 ‘‘Subtitle E—Standards and Meas9 ures Under the North American

10 Free Trade Agreement

11 ‘‘CHAPTER 1—SANITARY AND

12 PHYTOSANITARY MEASURES

13 ‘‘SEC. 461. GENERAL.

14 ‘‘Nothing in this chapter may be construed—

15 ‘‘(1) to prohibit a Federal agency or State

16 agency from engaging in activity related to sanitary

17 or phytosanitary measures to protect human, ani18 mal, or plant life or health; or

19 ‘‘(2) to limit the authority of a Federal agency

20 or State agency to determine the level of protection

21 of human, animal, or plant life or health the agency

22 considers appropriate.

23 ‘‘SEC. 462. INQUIRY POINT.

24 ‘‘The standards information center maintained under

25 section 414 shall, in addition to the functions specified
162

1 therein, make available to the public relevant documents,

2 at such reasonable fees as the Secretary of Commerce may

3 prescribe, and information regarding—

4 ‘‘(1) any sanitary or phytosanitary measure of

5 general application, including any control or inspec6 tion procedure or approval procedure proposed,

7 adopted, or maintained by a Federal or State agen8 cy;

9 ‘‘(2) the procedures of a Federal or State agen10 cy for risk assessment, and factors the agency con11 siders in conducting the assessment and in establish12 ing the levels of protection that the agency considers

13 appropriate;

14 ‘‘(3) the membership and participation of the

15 Federal Government and State governments in inter16 national and regional sanitary and phytosanitary or17 ganizations and systems, and in bilateral and multi18 lateral arrangements regarding sanitary and

19 phytosanitary measures, and the provisions of those

20 systems and arrangements; and

21 ‘‘(4) the location of notices of the type required

22 under article 719 of the NAFTA, or where the infor23 mation contained in such notices can be obtained.
163

1 ‘‘SEC. 463. CHAPTER DEFINITIONS.

2 ‘‘Notwithstanding section 451, for purposes of this

3 chapter—

4 ‘‘(1) ANIMAL.—The term ‘animal’ includes fish,

5 bees, and wild fauna.

6 ‘‘(2) APPROVAL PROCEDURE.—The term ‘ap7 proval procedure’ means any registration, notifica8 tion, or other mandatory administrative procedure

9 for—

10 ‘‘(A) approving the use of an additive for

11 a stated purpose or under stated conditions, or

12 ‘‘(B) establishing a tolerance for a stated

13 purpose or under stated conditions for a con14 taminant,

15 in a food, beverage, or feedstuff prior to permitting

16 the use of the additive or the marketing of a food,

17 beverage, or feedstuff containing the additive or con18 taminant.

19 ‘‘(3) CONTAMINANT.—The term ‘contaminant’

20 includes pesticide and veterinary drug residues and

21 extraneous matter.

22 ‘‘(4) CONTROL OR INSPECTION PROCEDURE.—

23 The term ‘control or inspection procedure’ means

24 any procedure used, directly or indirectly, to deter25 mine that a sanitary or phytosanitary measure is

26 fulfilled, including sampling, testing, inspection,
164

1 evaluation, verification, monitoring, auditing, assur2 ance of conformity, accreditation, registration, cer3 tification, or other procedure involving the physical

4 examination of a good, of the packaging of a good,

5 or of the equipment or facilities directly related to

6 production, marketing, or use of a good, but does

7 not mean an approval procedure.

8 ‘‘(5) PLANT.—The term ‘plant’ includes wild

9 flora.

10 ‘‘(6) RISK ASSESSMENT.—The term ‘risk as11 sessment’ means an evaluation of—

12 ‘‘(A) the potential for the introduction, es13 tablishment or spread of a pest or disease and

14 associated biological and economic con15 sequences; or

16 ‘‘(B) the potential for adverse effects on

17 human or animal life or health arising from the

18 presence of an additive, contaminant, toxin or

19 disease-causing organism in a food, beverage, or

20 feedstuff.

21 ‘‘(7) SANITARY OR PHYTOSANITARY MEAS22 URE.—

23 ‘‘(A) IN GENERAL.—The term ‘sanitary or

24 phytosanitary measure’ means a measure to—
165

1 ‘‘(i) protect animal or plant life or

2 health in the United States from risks

3 arising from the introduction, establish4 ment, or spread of a pest or disease;

5 ‘‘(ii) protect human or animal life or

6 health in the United States from risks

7 arising from the presence of an additive,

8 contaminant, toxin, or disease-causing or9 ganism in a food, beverage, or feedstuff;

10 ‘‘(iii) protect human life or health in

11 the United States from risks arising from

12 a disease-causing organism or pest carried

13 by an animal or plant, or a product there14 of; or

15 ‘‘(iv) prevent or limit other damage in

16 the United States arising from the intro17 duction, establishment, or spread of a pest.

18 ‘‘(B) FORM.—The form of a sanitary or

19 phytosanitary measure includes—

20 ‘‘(i) end product criteria;

21 ‘‘(ii) a product-related processing or

22 production method;

23 ‘‘(iii) a testing, inspection, certifi24 cation, or approval procedure;

25 ‘‘(iv) a relevant statistical method;
166

1 ‘‘(v) a sampling procedure;

2 ‘‘(vi) a method of risk assessment;

3 ‘‘(vii) a packaging and labeling re4 quirement directly related to food safety;

5 and

6 ‘‘(viii) a quarantine treatment, such

7 as a relevant requirement associated with

8 the transportation of animals or plants or

9 with material necessary for their survival

10 during transportation.

11 ‘‘CHAPTER 2—STANDARDS-RELATED

12 MEASURES

13 ‘‘SEC. 471. GENERAL.

14 ‘‘(a) NO BAR TO ENGAGING IN STANDARDS ACTIV15 ITY.—Nothing in this chapter shall be construed—

16 ‘‘(1) to prohibit a Federal agency from engag17 ing in activity related to standards-related measures,

18 including any such measure relating to safety, the

19 protection of human, animal, or plant life or health,

20 the environment or consumers; or

21 ‘‘(2) to limit the authority of a Federal agency

22 to determine the level it considers appropriate of

23 safety or of protection of human, animal, or plant

24 life or health, the environment or consumers.

25 ‘‘(b) EXCLUSION.—This chapter does not apply to—
167

1 ‘‘(1) technical specifications prepared by a Fed2 eral agency for production or consumption require3 ments of the agency; or

4 ‘‘(2) sanitary or phytosanitary measures under

5 chapter 1.

6 ‘‘SEC. 472. INQUIRY POINT.

7 ‘‘The standards information center maintained under

8 section 414 shall, in addition to the functions specified

9 therein, make available to the public relevant documents,

10 at such reasonable fees as the Secretary of Commerce may

11 prescribe, and information regarding—

12 ‘‘(1) the membership and participation of the

13 Federal Government, State governments, and rel14 evant nongovernmental bodies in the United States

15 in international and regional standardizing bodies

16 and conformity assessment systems, and in bilateral

17 and multilateral arrangements regarding standards18 related measures, and the provisions of those sys19 tems and arrangements;

20 ‘‘(2) the location of notices of the type required

21 under article 909 of the NAFTA, or where the infor22 mation contained in such notice can be obtained;

23 and

24 ‘‘(3) the Federal agency procedures for assess25 ment of risk, and factors the agency considers in
168

1 conducting the assessment and establishing the lev2 els of protection that the agency considers appro3 priate.

4 ‘‘SEC. 473. CHAPTER DEFINITIONS.

5 ‘‘Notwithstanding section 451, for purposes of this

6 chapter—

7 ‘‘(1) APPROVAL PROCEDURE.—The term ‘ap8 proval procedure’ means any registration, notifica9 tion, or other mandatory administrative procedure

10 for granting permission for a good or service to be

11 produced, marketed, or used for a stated purpose or

12 under stated conditions.

13 ‘‘(2) CONFORMITY ASSESSMENT PROCEDURE.—

14 The term ‘conformity assessment procedure’ means

15 any procedure used, directly or indirectly, to deter16 mine that a technical regulation or standard is ful17 filled, including sampling, testing, inspection, evalua18 tion, verification, monitoring, auditing, assurance of

19 conformity, accreditation, registration, or approval

20 used for such a purpose, but does not mean an ap21 proval procedure.

22 ‘‘(3) OBJECTIVE.—The term ‘objective’ in23 cludes—

24 ‘‘(A) safety,
169

1 ‘‘(B) protection of human, animal, or plant

2 life or health, the environment or consumers,

3 including matters relating to quality and iden4 tifiability of goods or services, and

5 ‘‘(C) sustainable development,

6 but does not include the protection of domestic pro7 duction.

8 ‘‘(4) SERVICE.—The term ‘service’ means a

9 land transportation service or a telecommunications

10 service.

11 ‘‘(5) STANDARD.—The term ‘standard’

12 means—

13 ‘‘(A) characteristics for a good or a service,

14 ‘‘(B) characteristics, rules, or guidelines

15 for—

16 ‘‘(i) processes or production methods

17 relating to such good, or

18 ‘‘(ii) operating methods relating to

19 such service, and

20 ‘‘(C) provisions specifying terminology,

21 symbols, packaging, marking, or labelling for—

22 ‘‘(i) a good or its related process or

23 production methods, or

24 ‘‘(ii) a service or its related operating

25 methods,
170

1 for common and repeated use, including explan2 atory and other related provisions set out in a

3 document approved by a standardizing body,

4 with which compliance is not mandatory.

5 ‘‘(6) STANDARDS-RELATED MEASURE.—The

6 term ‘standards-related measure’ means a standard,

7 technical regulation, or conformity assessment proce8 dure.

9 ‘‘(7) TECHNICAL REGULATION.—The term

10 ‘technical regulation’ means—

11 ‘‘(A) characteristics or their related proc12 esses and production methods for a good,

13 ‘‘(B) characteristics for a service or its re14 lated operating methods, or

15 ‘‘(C) provisions specifying terminology,

16 symbols, packaging, marking, or labelling for—

17 ‘‘(i) a good or its related process or

18 production method, or

19 ‘‘(ii) a service or its related operating

20 method,

21 set out in a document, including applicable adminis22 trative, explanatory, and other related provisions,

23 with which compliance is mandatory.

24 ‘‘(8) TELECOMMUNICATIONS SERVICE.—The

25 term ‘telecommunications service’ means a service
171

1 provided by means of the transmission and reception

2 of signals by any electromagnetic means, but does

3 not mean the cable, broadcast, or other electro4 magnetic distribution of radio or television program5 ming to the public generally.

6 ‘‘CHAPTER 3—SUBTITLE DEFINITIONS

7 ‘‘SEC. 481. DEFINITIONS.

8 ‘‘Notwithstanding section 451, for purposes of this

9 subtitle—

10 ‘‘(1) NAFTA.—The term ‘NAFTA’ means the

11 North American Free Trade Agreement.

12 ‘‘(2) STATE.—The term ‘State’ means any of

13 the several States, the District of Columbia, and the

14 Commonwealth of Puerto Rico.’’.

15 (b) TECHNICAL AMENDMENTS.—

16 (1) DEFINITION OF TRADE REPRESENTA17 TIVE.—Section 451(12) of the Trade Agreements

18 Act of 1979 is amended to read as follows:

19 ‘‘(12) TRADE REPRESENTATIVE.—The term

20 ‘Trade Representative’ means the United States

21 Trade Representative.’’.

22 (2) CONFORMING AMENDMENTS.—Title IV of

23 the Trade Agreement Act of 1979 is further amend24 ed—
172

1 (A) by striking out ‘‘Special Representa2 tive’’ each place it appears and inserting

3 ‘‘Trade Representative’’; and

4 (B) in the section heading to section 411,

5 by striking out ‘‘SPECIAL REPRESENTATIVE’’

6 and inserting ‘‘TRADE REPRESENTATIVE’’.

7 SEC. 352. TRANSPORTATION.

8 No regulation issued by the Secretary of Transpor9 tation implementing a recommendation of the Land

10 Transportation Standards Subcommittee established

11 under article 913(5)(a)(i) of the Agreement may take ef12 fect before the date 90 days after the date of issuance.

13 PART 2—AGRICULTURAL STANDARDS

14 SEC. 361. AGRICULTURAL TECHNICAL AND CONFORMING

15 AMENDMENTS.

16 (a) FEDERAL SEED ACT.—Section 302(e)(1) of the

17 Federal Seed Act (7 U.S.C. 1582(e)(1)) is amended by

18 inserting ‘‘or Mexico’’ after ‘‘Canada’’.

19 (b) IMPORTATION OF ANIMALS.—The first sentence

20 of section 6 of the Act of August 30, 1890 (26 Stat. 416,

21 chapter 839; 21 U.S.C. 104), is amended by striking ‘‘:

22 Provided’’ and all that follows through the period at the

23 end of the sentence and inserting ‘‘, except that the Sec24 retary of Agriculture, in accordance with such regulations

25 as the Secretary may issue, may (1) permit the importa-
173

1 tion of cattle, sheep, or other ruminants, and swine, from

2 Canada or Mexico, and (2) permit the importation from

3 the British Virgin Islands into the Virgin Islands of the

4 United States, for slaughter only, of cattle that have been

5 infested with or exposed to ticks on being freed from the

6 ticks.’’.

7 (c) INSPECTION OF ANIMALS.—Section 10 of the Act

8 of August 30, 1890 (26 Stat. 417, chapter 839; 21 U.S.C.

9 105), is amended—

10 (1) by inserting above ‘‘SEC. 10.’’ the following

11 new section heading:

12 ‘‘SEC. 10. INSPECTION OF ANIMALS.’’;

13 (2) by striking ‘‘SEC. 10. That the Secretary of

14 Agriculture shall’’ and inserting ‘‘(a) IN GEN15 ERAL.—Except as provided in subsection (b), the

16 Secretary of Agriculture shall’’; and

17 (3) by adding at the end the following new sub18 section:

19 ‘‘(b) EXCEPTION.—The Secretary of Agriculture, in

20 accordance with such regulations as the Secretary may

21 issue, may waive any provision of subsection (a) in the

22 case of shipments between the United States and Canada

23 or Mexico.’’.

24 (d) DISEASE-FREE COUNTRIES OR REGIONS.—
174

1 (1) TARIFF ACT OF 1930.—Section 306 of the

2 Tariff Act of 1930 (19 U.S.C. 1306) is amended—

3 (A) in subsection (a), by striking ‘‘RIN4 DERPEST AND FOOT-AND-MOUTH DISEASE.—If

5 the Secretary of Agriculture’’ and inserting ‘‘IN

6 GENERAL.—Except as provided in subsection

7 (b), if the Secretary of Agriculture’’; and

8 (B) by striking subsection (b) and insert9 ing the following new subsection:

10 ‘‘(b) EXCEPTION.—The Secretary of Agriculture may

11 permit, subject to such terms and conditions as the Sec12 retary determines appropriate, the importation of cattle,

13 sheep, other ruminants, or swine (including embryos of the

14 animals), or the fresh, chilled, or frozen meat of the ani15 mals, from a region if the Secretary determines that the

16 region from which the animal or meat originated is, and

17 is likely to remain, free from rinderpest and foot-and18 mouth disease.’’.

19 (2) HONEYBEE ACT.—The first section of the

20 Act of August 31, 1922 (commonly known as the

21 ‘‘Honeybee Act’’) (42 Stat. 833, chapter 301; 7

22 U.S.C. 281), is amended—

23 (A) in subsection (a)—

24 (i) by striking ‘‘, or’’ at the end of

25 paragraph (1) and inserting a semicolon;
175

1 (ii) by striking the period at the end

2 of paragraph (2) and inserting ‘‘; or’’; and

3 (iii) by adding at the end the follow4 ing new paragraph:

5 ‘‘(3) from Canada or Mexico, subject to such

6 terms and conditions as the Secretary of Agriculture

7 determines appropriate, if the Secretary determines

8 that the region of Canada or Mexico from which the

9 honeybees originated is, and is likely to remain, free

10 of diseases or parasites harmful to honeybees, and

11 undesirable species or subspecies of honeybees.’’; and

12 (B) in subsection (b)—

13 (i) by inserting ‘‘(1)’’ after ‘‘imported

14 into the United States only from’’; and

15 (ii) by inserting before the period the

16 following: ‘‘, or (2) Canada or Mexico, if

17 the Secretary of Agriculture determines

18 that the region of Canada or Mexico from

19 which the imports originate is, and is likely

20 to remain, free of undesirable species or

21 subspecies of honeybees’’.

22 (e) POULTRY PRODUCTS INSPECTION ACT.—Section

23 17(d) of the Poultry Products Inspection Act (21 U.S.C.

24 466(d)) is amended—
176

1 (1) in paragraph (1), by inserting after ‘‘Not2 withstanding any other provision of law,’’ the follow3 ing: ‘‘except as provided in paragraph (2),’’;

4 (2) by redesignating paragraphs (2) and (3) as

5 paragraphs (3) and (4), respectively; and

6 (3) by inserting after paragraph (1) the follow7 ing new paragraph:

8 ‘‘(2)(A) Notwithstanding any other provision of law,

9 all poultry, or parts or products of poultry, capable of use

10 as human food offered for importation into the United

11 States from Canada and Mexico shall—

12 ‘‘(i) comply with paragraph (1); or

13 ‘‘(ii)(I) be subject to inspection, sanitary, qual14 ity, species verification, and residue standards that

15 are equivalent to United States standards; and

16 ‘‘(II) have been processed in facilities and

17 under conditions that meet standards that are equiv18 alent to United States standards.

19 ‘‘(B) The Secretary may treat as equivalent to a

20 United States standard a standard of Canada or Mexico

21 described in subparagraph (A)(ii) if the exporting country

22 provides the Secretary with scientific evidence or other in23 formation, in accordance with risk assessment methodolo24 gies agreed to by the Secretary and the exporting country,

25 to demonstrate that the standard of the exporting country
177

1 achieves the level of protection that the Secretary consid2 ers appropriate.

3 ‘‘(C) The Secretary may—

4 ‘‘(i) determine, on a scientific basis, that the

5 standard of the exporting country does not achieve

6 the level of protection that the Secretary considers

7 appropriate; and

8 ‘‘(ii) provide the basis for the determination in

9 writing to the exporting country on request.’’.

10 (f) FEDERAL MEAT INSPECTION ACT.—Section

11 20(e) of the Federal Meat Inspection Act (21 U.S.C.

12 620(e)) is amended—

13 (1) by striking ‘‘not be limited to—’’ and in14 serting ‘‘not be limited to the following:’’;

15 (2) by striking paragraph (1);

16 (3) by redesignating paragraphs (2) through

17 (6) as paragraphs (3) through (7), respectively;

18 (4) by inserting after ‘‘not be limited to the fol19 lowing:’’ (as amended by paragraph (1)) the follow20 ing new paragraphs:

21 ‘‘(1)(A) Subject to subparagraphs (B) and (C),

22 a certification by the Secretary that foreign plants

23 in Canada and Mexico that export carcasses or meat

24 or meat products referred to in subsection (a) have

25 complied with paragraph (2) or with requirements
178

1 that are equivalent to United States requirements

2 with regard to all inspection and building construc3 tion standards, and all other provisions of this Act

4 and regulations issued under this Act.

5 ‘‘(B) Subject to subparagraph (C), the Sec6 retary may treat as equivalent to a United States re7 quirement a requirement described in subparagraph

8 (A) if the exporting country provides the Secretary

9 with scientific evidence or other information, in ac10 cordance with risk assessment methodologies agreed

11 to by the Secretary and the exporting country, to

12 demonstrate that the requirement or standard of the

13 exporting country achieves the level of protection

14 that the Secretary considers appropriate.

15 ‘‘(C) The Secretary may—

16 ‘‘(i) determine, on a scientific basis, that a

17 requirement of an exporting country does not

18 achieve the level of protection that the Sec19 retary considers appropriate; and

20 ‘‘(ii) provide the basis for the determina21 tion to the exporting country in writing on re22 quest.

23 ‘‘(2) A certification by the Secretary that, ex24 cept as provided in paragraph (1), foreign plants

25 that export carcasses or meat or meat products re-
179

1 ferred to in subsection (a) have complied with re2 quirements that are at least equal to all inspection

3 and building construction standards and all other

4 provisions of this Act and regulations issued under

5 this Act.’’;

6 (5) in paragraphs (3) through (7) (as redesig7 nated by paragraph (3)), by striking ‘‘the’’ the first

8 place it appears in each paragraph and inserting

9 ‘‘The’’;

10 (6) in paragraphs (3) through (5) (as so redes11 ignated), by striking the semicolon at the end of

12 each paragraph and inserting a period; and

13 (7) in paragraph (6) (as so redesignated), by

14 striking ‘‘; and’’ at the end and inserting a period.

15 (g) PEANUT BUTTER AND PEANUT PASTE.—

16 (1) IN GENERAL.—Except as provided in para17 graph (2), all peanut butter and peanut paste in the

18 United States domestic market shall be processed

19 from peanuts that meet the quality standards estab20 lished for peanuts under Marketing Agreement No.

21 146.

22 (2) IMPORTS.—Peanut butter and peanut paste

23 imported into the United States shall comply with

24 paragraph (1) or with sanitary measures that

25 achieve at least the same level of sanitary protection.
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1 (h) ANIMAL HEALTH BIOCONTAINMENT FACILITY.—

2 (1) GRANT FOR CONSTRUCTION.—The Sec3 retary of Agriculture shall make a grant to a land

4 grant college or university described in paragraph

5 (2) for the construction of a facility at the college

6 or university for the conduct of research in animal

7 health, disease-transmitting insects, and toxic chemi8 cals that requires the use of biocontainment facilities

9 and equipment. The facility to be constructed with

10 the grant shall be known as the ‘‘Southwest Re11 gional Animal Health Biocontainment Facility’’.

12 (2) GRANT RECIPIENT DESCRIBED.—To be eli13 gible for the grant under paragraph (1), a land

14 grant college or university must be—

15 (A) located in a State adjacent to the

16 international border with Mexico; and

17 (B) determined by the Secretary of Agri18 culture to have an established program in ani19 mal health research and education and to have

20 a collaborative relationship with one or more

21 colleges of veterinary medicine or universities

22 located in Mexico.

23 (3) ACTIVITIES OF THE FACILITY.—The facility

24 constructed using the grant made under paragraph
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1 (1) shall be used for conducting the following activi2 ties:

3 (A) The biocontainment facility shall offer

4 the ability to organize multidisciplinary inter5 national teams working on basic and applied re6 search on diagnostic method development and

7 disease control strategies, including develop8 ment of vaccines.

9 (B) The biocontainment facility shall sup10 port research that will improve the scientific

11 basis for regulatory activities, decreasing the

12 need for new regulatory programs and enhanc13 ing international trade.

14 (C) The biocontainment facility shall allow

15 academic institutions, governmental agencies,

16 and the private sector to conduct research in

17 basic and applied research biology, epidemiol18 ogy, pathogenesis, host response, and diagnostic

19 methods, on disease agents that threaten the

20 livestock industries of the United States and

21 Mexico.

22 (D) The biocontainment facility may be

23 used to support research involving food safety,

24 toxicology, environmental pollutants,

25 radioisotopes, recombinant microorganisms, and
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1 selected naturally resistant or transgenic ani2 mals.

3 (4) AUTHORIZATION OF APPROPRIATIONS.—

4 There are authorized to be appropriated for each fis5 cal year such sums as are necessary to carry out this

6 subsection.

7 (i) REPORTS ON INSPECTION OF IMPORTED MEAT,

8 POULTRY, OTHER FOODS, ANIMALS, AND PLANTS.—

9 (1) DEFINITIONS.—As used in this subsection:

10 (A) IMPORTS.—The term ‘‘imports’’ means

11 any meat, poultry, other food, animal, or plant

12 that is imported into the United States in com13 mercially significant quantities.

14 (B) SECRETARY.—The term ‘‘Secretary’’

15 means the Secretary of Agriculture.

16 (2) IN GENERAL.—In consultation with rep17 resentatives of other appropriate agencies, the Sec18 retary shall prepare an annual report on the impact

19 of the Agreement on the inspection of imports.

20 (3) CONTENTS OF REPORTS.—The report re21 quired under this subsection shall, to the maximum

22 extent practicable, include a description of—

23 (A) the quantity or, with respect to the

24 Customs Service, the number of shipments, of

25 imports from a NAFTA country that are in-
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1 spected at the borders of the United States with

2 Canada and Mexico during the prior year;

3 (B) any change in the level or types of in4 spections of imports in each NAFTA country

5 during the prior year;

6 (C) in any case in which the Secretary has

7 determined that the inspection system of an8 other NAFTA country is equivalent to the in9 spection system of the United States, the rea10 sons supporting the determination of the Sec11 retary;

12 (D) the incidence of violations of inspec13 tion requirements by imports from NAFTA

14 countries during the prior year—

15 (i) at the borders of the United States

16 with Mexico or Canada; or

17 (ii) at the last point of inspection in

18 a NAFTA country prior to shipment to the

19 United States if the agency accepts inspec20 tion in that country;

21 (E) the incidence of violations of inspection

22 requirements of imports to the United States

23 from Mexico or Canada prior to the implemen24 tation of the Agreement;
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1 (F) any additional cost associated with

2 maintaining an adequate inspection system of

3 imports as a result of the implementation of the

4 Agreement;

5 (G) any incidence of transshipment of im6 ports—

7 (i) that originate in a country other

8 than a NAFTA country;

9 (ii) that are shipped to the United

10 States through a NAFTA country during

11 the prior year; and

12 (iii) that are incorrectly represented

13 by the importer to qualify for preferential

14 treatment under the Agreement;

15 (H) the quantity and results of any mon16 itoring by the United States of equivalent in17 spection systems of imports in other NAFTA

18 countries during the prior year;

19 (I) the use by other NAFTA countries of

20 sanitary and phytosanitary measures (as de21 fined in the Agreement) to limit exports of

22 United States meat, poultry, other foods, ani23 mals, and plants to the countries during the

24 prior year; and
185

1 (J) any other information the Secretary

2 determines to be appropriate.

3 (4) FREQUENCY OF REPORTS.—The Secretary

4 shall submit—

5 (A) the initial report required under this

6 subsection not later than January 31, 1995;

7 and

8 (B) an annual report required under this

9 subsection not later than 1 year after the date

10 of the submission of the initial report and the

11 end of each 1-year period thereafter through

12 calendar year 2004.

13 (5) REPORT TO CONGRESS.—The Secretary

14 shall prepare and submit the report required under

15 this subsection to the Committee on Agriculture of

16 the House of Representatives and the Committee on

17 Agriculture, Nutrition, and Forestry of the Senate.

18 Subtitle F—Corporate Average

19 Fuel Economy

20 SEC. 371. CORPORATE AVERAGE FUEL ECONOMY.

21 (a) IN GENERAL.—Section 503(b)(2) of the Motor

22 Vehicle Information and Cost Savings Act (15 U.S.C.

23 2003(b)(2)) is amended by adding at the end the following

24 new subparagraph:
186

1 ‘‘(G)(i) In accordance with the schedule set out

2 in clause (ii), an automobile shall be considered do3 mestically manufactured in a model year if at least

4 75 percent of the cost to the manufacturer of the

5 automobile is attributable to value added in the

6 United States, Canada, or Mexico, unless the assem7 bly of the automobile is completed in Canada or

8 Mexico and the automobile is not imported into the

9 United States prior to the expiration of 30 days fol10 lowing the end of that model year.

11 ‘‘(ii) Clause (i) shall apply to all automobiles

12 manufactured by a manufacturer and sold in the

13 United States, wherever assembled, in accordance

14 with the following schedule:

15 ‘‘(I) With respect to a manufacturer that

16 initiated the assembly of automobiles in Mexico

17 before model year 1992, the manufacturer may

18 elect, at any time between January 1, 1997,

19 and January 1, 2004, to have clause (i) apply

20 to all automobiles it manufactures, beginning

21 with the model year commencing after the date

22 of such election.

23 ‘‘(II) With respect to a manufacturer initi24 ating the assembly of automobiles in Mexico

25 after model year 1991, clause (i) shall apply to
187

1 all automobiles it manufactures, beginning with

2 the model year commencing after January 1,

3 1994, or the model year commencing after the

4 date that the manufacturer initiates the assem5 bly of automobiles in Mexico, whichever is later.

6 ‘‘(III) With respect to a manufacturer not

7 described by subclause (I) or (II) assembling

8 automobiles in the United States or Canada but

9 not in Mexico, the manufacturer may elect, at

10 any time between January 1, 1997, and Janu11 ary 1, 2004, to have clause (i) apply to all auto12 mobiles it manufactures, beginning with the

13 model year commencing after the date of such

14 election, except that if such manufacturer initi15 ates the assembly of automobiles in Mexico be16 fore making such election, this subclause shall

17 not apply and the manufacturer shall be subject

18 to clause (II).

19 ‘‘(IV) With respect to a manufacturer not

20 assembling automobiles in the United States,

21 Canada, or Mexico, clause (i) shall apply to all

22 automobiles it manufactures, beginning with the

23 model year commencing after January 1, 1994.

24 ‘‘(V) With respect to a manufacturer au25 thorized to make an election under subclause
188

1 (I) or (III) which has not made that election

2 within the specified period, clause (i) shall

3 apply to all automobiles it manufactures, begin4 ning with the model year commencing after

5 January 1, 2004.

6 ‘‘(iii) The Secretary shall prescribe reasonable

7 procedures for elections under this subparagraph,

8 and the EPA Administrator may prescribe rules for

9 purposes of carrying out this subparagraph.’’.

10 (b) CONFORMING AMENDMENTS.—The first sentence

11 of section 503(b)(2)(E) of the Motor Vehicle Information

12 and Cost Savings Act (15 U.S.C. 2003(b)(2)(E)) is

13 amended—

14 (1) by striking ‘‘An’’ and inserting ‘‘Except as

15 provided in subparagraph (G), an’’, and

16 (2) in the last sentence, by striking ‘‘this sub17 paragraph’’ and inserting ‘‘this subparagraph and

18 subparagraph (G)’’.

19 Subtitle G—Government

20 Procurement

21 SEC. 381. GOVERNMENT PROCUREMENT.

22 (a) IN GENERAL.—Section 301 of the Trade Agree23 ments Act of 1979 (19 U.S.C. 2511) is amended—
189

1 (1) in subsection (a) by striking ‘‘The Presi2 dent’’ and inserting ‘‘Subject to subsection (f) of

3 this section, the President’’;

4 (2) by inserting ‘‘or the North American Free

5 Trade Agreement’’ after ‘‘the Agreement’’ in para6 graph (1) of subsection (b); and

7 (3) by adding at the end the following new sub8 sections:

9 ‘‘(e) PROCUREMENT PROCEDURES BY CERTAIN FED10 ERAL AGENCIES.—Notwithstanding any other provision of

11 law, the President may direct any agency of the United

12 States listed in Annex 1001.1a–2 of the North American

13 Free Trade Agreement to procure eligible products in

14 compliance with the procedural provisions of chapter 10

15 of such Agreement.

16 ‘‘(f) SMALL BUSINESS AND MINORITY PREF17 ERENCES.—The authority of the President under sub18 section (a) of this section to waive any law, regulation,

19 procedure, or practice regarding Government procurement

20 does not authorize the waiver of any small business or mi21 nority preference.’’.

22 (b) RECIPROCAL COMPETITIVE PROCUREMENT

23 PRACTICES.—Section 302(a) of such Act (19 U.S.C.

24 2512(a)) is amended by striking ‘‘would otherwise be eligi25 ble products’’ in paragraph (1) and inserting ‘‘are prod-
190

1 ucts covered under the Agreement for procurement by the

2 United States’’.

3 (c) DEFINITION OF ELIGIBLE PRODUCT.—Section

4 308(4)(A) of such Act (19 U.S.C. 2518(4)(A)) is amended

5 to read as follows:

6 ‘‘(A) IN GENERAL.—The term ‘eligible

7 product’ means, with respect to any foreign

8 country or instrumentality that is—

9 ‘‘(i) a party to the Agreement, a prod10 uct or service of that country or instru11 mentality which is covered under the

12 Agreement for procurement by the United

13 States; or

14 ‘‘(ii) a party to the North American

15 Free Trade Agreement, a product or serv16 ice of that country or instrumentality

17 which is covered under the North Amer18 ican Free Trade Agreement for procure19 ment by the United States.’’.

20 (d) CONFORMING AMENDMENTS.—Section 401 of the

21 Rural Electrification Act of 1938 (7 U.S.C. 903 note) is

22 amended by inserting ‘‘, Mexico, or Canada’’ after ‘‘the

23 United States’’ each place it appears.
191

1 (e) EFFECTIVE DATE.—The provisions of this sub2 title take effect on the date the Agreement enters into

3 force with respect to the United States.

4 TITLE IV—DISPUTE SETTLE5 MENT IN ANTIDUMPING AND

6 COUNTERVAILING DUTY

7 CASES

8 Subtitle A—Organizational, Admin9 istrative, and Procedural Provi10 sions Regarding the Implemen11 tation of Chapter 19 of the

12 Agreement

13 SEC. 401. REFERENCES IN SUBTITLE.

14 Any reference in this subtitle to an Annex, chapter,

15 or article shall be considered to be a reference to the re16 spective Annex, chapter, or article of the Agreement.

17 SEC. 402. ORGANIZATIONAL AND ADMINISTRATIVE PROVI18 SIONS.

19 (a) CRITERIA FOR SELECTION OF INDIVIDUALS TO

20 SERVE ON PANELS AND COMMITTEES.—

21 (1) IN GENERAL.—The selection of individuals

22 under this section for—

23 (A) placement on lists prepared by the

24 interagency group under subsection (c)(2)(B)(i)

25 and (ii);
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1 (B) placement on preliminary candidate

2 lists under subsection (c)(3)(A);

3 (C) placement on final candidate lists

4 under subsection (c)(4)(A);

5 (D) placement by the Trade Representative

6 on the rosters described in paragraph 1 of

7 Annex 1901.2 and paragraph 1 of Annex

8 1904.13; and

9 (E) appointment by the Trade Representa10 tive for service on the panels and committees

11 convened under chapter 19;

12 shall be made on the basis of the criteria provided

13 in paragraph 1 of Annex 1901.2 and paragraph 1 of

14 Annex 1904.13 and shall be made without regard to

15 political affiliation.

16 (2) ADDITIONAL CRITERIA FOR ROSTER PLACE17 MENTS AND APPOINTMENTS UNDER PARAGRAPH 1

18 OF ANNEX 1901.2.—Rosters described in paragraph 1

19 of Annex 1901.2 shall include, to the fullest extent

20 practicable, judges and former judges who meet the

21 criteria referred to in paragraph (1). The Trade

22 Representative shall, subject to subsection (b), ap23 point judges to binational panels convened under

24 chapter 19, extraordinary challenge committees con25 vened under chapter 19, and special committees es-
193

1 tablished under article 1905, where such judges

2 offer and are available to serve and such service is

3 authorized by the chief judge of the court on which

4 they sit.

5 (b) SELECTION OF CERTAIN JUDGES TO SERVE ON

6 PANELS AND COMMITTEES.—

7 (1) APPLICABILITY.—This subsection applies

8 only with respect to the selection of individuals for

9 binational panels convened under chapter 19, ex10 traordinary challenge committees convened under

11 chapter 19, and special committees established

12 under article 1905, who are judges of courts created

13 under article III of the Constitution of the United

14 States.

15 (2) CONSULTATION WITH CHIEF JUDGES.—The

16 Trade Representative shall consult, from time to

17 time, with the chief judges of the Federal judicial

18 circuits regarding the interest in, and availability

19 for, participation in binational panels, extraordinary

20 challenge committees, and special committees, of

21 judges within their respective circuits. If the chief

22 judge of a Federal judicial circuit determines that it

23 is appropriate for one or more judges within that

24 circuit to be included on a roster described in sub25 section (a)(1)(D), the chief judge shall identify all
194

1 such judges for the Chief Justice of the United

2 States who may, upon his or her approval, submit

3 the names of such judges to the Trade Representa4 tive. The Trade Representative shall include the

5 names of such judges on the roster.

6 (3) SUBMISSION OF LISTS TO CONGRESS.—The

7 Trade Representative shall submit to the Committee

8 on the Judiciary and the Committee on Ways and

9 Means of the House of Representatives and to the

10 Committee on Finance and the Committee on the

11 Judiciary of the Senate a list of all judges included

12 on a roster under paragraph (2). Such list shall be

13 submitted at the same time as the final candidate

14 lists are submitted under subsection (c)(4)(A) and

15 the final forms of amendments are submitted under

16 subsection (c)(4)(C)(iv).

17 (4) APPOINTMENT OF JUDGES TO PANELS OR

18 COMMITTEES.—At such time as the Trade Rep19 resentative proposes to appoint a judge described in

20 paragraph (1) to a binational panel, an extraor21 dinary challenge committee, or a special committee,

22 the Trade Representative shall consult with that

23 judge in order to ascertain whether the judge is

24 available for such appointment.

25 (c) SELECTION OF OTHER CANDIDATES.—
195

1 (1) APPLICABILITY.—This subsection applies

2 only with respect to the selection of individuals for

3 binational panels convened under chapter 19, ex4 traordinary challenge committees convened under

5 chapter 19, and special committees established

6 under article 1905, other than those individuals to

7 whom subsection (b) applies.

8 (2) INTERAGENCY GROUP.—

9 (A) ESTABLISHMENT.—There is estab10 lished within the interagency organization es11 tablished under section 242 of the Trade Ex12 pansion Act of 1962 (19 U.S.C. 1872) an inter13 agency group which shall—

14 (i) be chaired by the Trade Represent15 ative; and

16 (ii) consist of such officers (or the

17 designees thereof) of the United States

18 Government as the Trade Representative

19 considers appropriate.

20 (B) FUNCTIONS.—The interagency group

21 established under subparagraph (A) shall, in a

22 manner consistent with chapter 19—

23 (i) prepare by January 3 of each cal24 endar year—
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1 (I) a list of individuals who are

2 qualified to serve as members of bina3 tional panels convened under chapter

4 19; and

5 (II) a list of individuals who are

6 qualified to serve on extraordinary

7 challenge committees convened under

8 chapter 19 and special committees es9 tablished under article 1905;

10 (ii) if the Trade Representative makes

11 a request under paragraph (4)(C)(i) with

12 respect to a final candidate list during any

13 calendar year, prepare by July 1 of such

14 calendar year a list of those individuals

15 who are qualified to be added to that final

16 candidate list;

17 (iii) exercise oversight of the adminis18 tration of the United States Section that is

19 authorized to be established under section

20 105; and

21 (iv) make recommendations to the

22 Trade Representative regarding the con23 vening of extraordinary challenge commit24 tees and special committees under chapter

25 19.
197

1 (3) PRELIMINARY CANDIDATE LISTS.—

2 (A) IN GENERAL.—The Trade Representa3 tive shall select individuals from the respective

4 lists prepared by the interagency group under

5 paragraph (2)(B)(i) for placement on—

6 (i) a preliminary candidate list of indi7 viduals eligible to serve as members of bi8 national panels under Annex 1901.2; and

9 (ii) a preliminary candidate list of in10 dividuals eligible for selection as members

11 of extraordinary challenge committees

12 under Annex 1904.13 and special commit13 tees under article 1905.

14 (B) SUBMISSION OF LISTS TO CONGRES15 SIONAL COMMITTEES.—

16 (i) IN GENERAL.—No later than Jan17 uary 3 of each calendar year, the Trade

18 Representative shall submit to the Com19 mittee on Finance of the Senate and the

20 Committee on Ways and Means of the

21 House of Representatives (hereafter in this

22 section referred to as the ‘‘appropriate

23 Congressional Committees’’) the prelimi24 nary candidate lists of those individuals se25 lected by the Trade Representative under
198

1 subparagraph (A) to be candidates eligible

2 to serve on panels or committees convened

3 pursuant to chapter 19 during the 1-year

4 period beginning on April 1 of such cal5 endar year.

6 (ii) ADDITIONAL INFORMATION.—At

7 the time the candidate lists are submitted

8 under clause (i), the Trade Representative

9 shall submit for each individual on the list

10 a statement of professional qualifications.

11 (C) CONSULTATION.—Upon submission of

12 the preliminary candidate lists under subpara13 graph (B) to the appropriate Congressional

14 Committees, the Trade Representative shall

15 consult with such Committees with regard to

16 the individuals included on the preliminary can17 didate lists.

18 (D) REVISION OF LISTS.—The Trade Rep19 resentative may add and delete individuals from

20 the preliminary candidate lists submitted under

21 subparagraph (B) after consultation with the

22 appropriate Congressional Committees regard23 ing the additions and deletions. The Trade Rep24 resentative shall provide to the appropriate

25 Congressional Committees written notice of any
199

1 addition or deletion of an individual from the

2 preliminary candidate lists, along with the in3 formation described in subparagraph (B)(ii)

4 with respect to any proposed addition.

5 (4) FINAL CANDIDATE LISTS.—

6 (A) SUBMISSION OF LISTS TO CONGRES7 SIONAL COMMITTEES.—No later than March 31

8 of each calendar year, the Trade Representative

9 shall submit to the appropriate Congressional

10 Committees the final candidate lists of those in11 dividuals selected by the Trade Representative

12 to be candidates eligible to serve on panels and

13 committees convened under chapter 19 during

14 the 1-year period beginning on April 1 of such

15 calendar year. An individual may be included on

16 a final candidate list only if such individual was

17 included in the preliminary candidate list or if

18 written notice of the addition of such individual

19 to the preliminary candidate list was submitted

20 to the appropriate Congressional Committees at

21 least 15 days before the date on which that

22 final candidate list is submitted to such Com23 mittees under this subparagraph.

24 (B) FINALITY OF LISTS.—Except as pro25 vided in subparagraph (C), no additions may be
200

1 made to the final candidate lists after the final

2 candidate lists are submitted to the appropriate

3 Congressional Committees under subparagraph

4 (A).

5 (C) AMENDMENT OF LISTS.—

6 (i) IN GENERAL.—If, after the Trade

7 Representative has submitted the final

8 candidate lists to the appropriate Congres9 sional Committees under subparagraph (A)

10 for a calendar year and before July 1 of

11 such calendar year, the Trade Representa12 tive determines that additional individuals

13 need to be added to a final candidate list,

14 the Trade Representative shall—

15 (I) request the interagency group

16 established under paragraph (2)(A) to

17 prepare a list of individuals who are

18 qualified to be added to such can19 didate list;

20 (II) select individuals from the

21 list prepared by the interagency group

22 under paragraph (2)(B)(ii) to be in23 cluded in a proposed amendment to

24 such final candidate list; and
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1 (III) by no later than July 1 of

2 such calendar year, submit to the ap3 propriate Congressional Committees

4 the proposed amendments to such

5 final candidate list developed by the

6 Trade Representative under subclause

7 (II), along with the information de8 scribed in paragraph (3)(B)(ii).

9 (ii) CONSULTATION WITH CONGRES10 SIONAL COMMITTEES.—Upon submission

11 of a proposed amendment under clause

12 (i)(III) to the appropriate Congressional

13 Committees, the Trade Representative

14 shall consult with the appropriate Congres15 sional Committees with regard to the indi16 viduals included in the proposed amend17 ment.

18 (iii) ADJUSTMENT OF PROPOSED

19 AMENDMENT.—The Trade Representative

20 may add and delete individuals from any

21 proposed amendment submitted under

22 clause (i)(III) after consulting with the ap23 propriate Congressional Committees with

24 regard to the additions and deletions. The

25 Trade Representative shall provide to the
202

1 appropriate Congressional Committees

2 written notice of any addition or deletion

3 of an individual from the proposed amend4 ment.

5 (iv) FINAL AMENDMENT.—

6 (I) IN GENERAL.—If the Trade

7 Representative submits under clause

8 (i)(III) in any calendar year a pro9 posed amendment to a final candidate

10 list, the Trade Representative shall,

11 no later than September 30 of such

12 calendar year, submit to the appro13 priate Congressional Committees the

14 final form of such amendment. On

15 October 1 of such calendar year, such

16 amendment shall take effect and, sub17 ject to subclause (II), the individuals

18 included in the final form of such

19 amendment shall be added to the final

20 candidate list.

21 (II) INCLUSION OF INDIVID22 UALS.—An individual may be included

23 in the final form of an amendment

24 submitted under subclause (I) only if

25 such individual was included in the
203

1 proposed form of such amendment or

2 if written notice of the addition of

3 such individual to the proposed form

4 of such amendment was submitted to

5 the appropriate Congressional Com6 mittees at least 15 days before the

7 date on which the final form of such

8 amendment is submitted to such Com9 mittees under subclause (I).

10 (III) ELIGIBILITY FOR SERV11 ICE.—Individuals added to a final

12 candidate list under subclause (I)

13 shall be eligible to serve on panels or

14 committees convened under chapter

15 19 during the 6-month period begin16 ning on October 1 of the calendar

17 year in which such addition occurs.

18 (IV) FINALITY OF AMEND19 MENT.—No additions may be made to

20 the final form of an amendment de21 scribed in subclause (I) after the final

22 form of such amendment is submitted

23 to the appropriate Congressional

24 Committees under subclause (I).
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1 (5) TREATMENT OF RESPONSES.—For purposes

2 of applying section 1001 of title 18, United States

3 Code, the written or oral responses of individuals to

4 inquiries of the interagency group established under

5 paragraph (2)(A) or of the Trade Representative re6 garding their personal and professional qualifica7 tions, and financial and other relevant interests, that

8 bear on their suitability for the placements and ap9 pointments described in subsection (a)(1), shall be

10 treated as matters within the jurisdiction of an

11 agency of the United States.

12 (d) SELECTION AND APPOINTMENT.—

13 (1) AUTHORITY OF TRADE REPRESENTATIVE.—

14 The Trade Representative is the only officer of the

15 United States Government authorized to act on be16 half of the United States Government in making any

17 selection or appointment of an individual to—

18 (A) the rosters described in paragraph 1 of

19 Annex 1901.2 and paragraph 1 of Annex

20 1904.13; or

21 (B) the panels or committees convened

22 under chapter 19;

23 that is to be made solely or jointly by the United

24 States Government under the terms of the Agree25 ment.
205

1 (2) RESTRICTIONS ON SELECTION AND AP2 POINTMENT.—Except as provided in paragraph

3 (3)—

4 (A) the Trade Representative may—

5 (i) select an individual for placement

6 on the rosters described in paragraph 1 of

7 Annex 1901.2 and paragraph 1 of Annex

8 1904.13 during the 1-year period begin9 ning on April 1 of any calendar year;

10 (ii) appoint an individual to serve as

11 one of those members of any panel or com12 mittee convened under chapter 19 during

13 such 1-year period who, under the terms of

14 the Agreement, are to be appointed solely

15 by the United States Government; or

16 (iii) act to make a joint appointment

17 with the Government of a NAFTA coun18 try, under the terms of the Agreement, of

19 any individual who is a citizen or national

20 of the United States to serve as any other

21 member of such a panel or committee;

22 only if such individual is on the appropriate

23 final candidate list that was submitted to the

24 appropriate Congressional Committees under

25 subsection (c)(4)(A) during such calendar year
206

1 or on such list as it may be amended under

2 subsection (c)(4)(C)(iv)(I), or on the list sub3 mitted under subsection (b)(3) to the congres4 sional committees referred to in such sub5 section; and

6 (B) no individual may—

7 (i) be selected by the United States

8 Government for placement on the rosters

9 described in paragraph 1 of Annex 1901.2

10 and paragraph 1 of Annex 1904.13; or

11 (ii) be appointed solely or jointly by

12 the United States Government to serve as

13 a member of a panel or committee con14 vened under chapter 19;

15 during the 1-year period beginning on April 1

16 of any calendar year for which the Trade Rep17 resentative has not met the requirements of

18 subsection (a), and of subsection (b) or (c) (as

19 the case may be).

20 (3) EXCEPTIONS.—Notwithstanding subsection

21 (c)(3) (other than subparagraph (B)), (c)(4), or

22 paragraph (2)(A) of this subsection, individuals in23 cluded on the preliminary candidate lists submitted

24 to the appropriate Congressional Committees under

25 subsection (c)(3)(B) may—
207

1 (A) be selected by the Trade Representa2 tive for placement on the rosters described in

3 paragraph 1 of Annex 1901.2 and paragraph 1

4 of Annex 1904.13 during the 3-month period

5 beginning on the date on which the Agreement

6 enters into force with respect to the United

7 States; and

8 (B) be appointed solely or jointly by the

9 Trade Representative under the terms of the

10 Agreement to serve as members of panels or

11 committees that are convened under chapter 19

12 during such 3-month period.

13 (e) TRANSITION.—If the Agreement enters into force

14 between the United States and a NAFTA country after

15 January 3, 1994, the provisions of subsection (c) shall be

16 applied with respect to the calendar year in which such

17 entering into force occurs—

18 (1) by substituting ‘‘the date that is 30 days

19 after the date on which the Agreement enters into

20 force with respect to the United States’’ for ‘‘Janu21 ary 3 of each calendar year’’ in subsections

22 (c)(2)(B)(i) and (c)(3)(B)(i); and

23 (2) by substituting ‘‘the date that is 3 months

24 after the date on which the Agreement enters into
208

1 force with respect to the United States’’ for ‘‘March

2 31 of each calendar year’’ in subsection (c)(4)(A).

3 (f) IMMUNITY.—With the exception of acts described

4 in section 777(f)(3) of the Tariff Act of 1930 (19 U.S.C.

5 1677f(f)(3)), individuals serving on panels or committees

6 convened pursuant to chapter 19, and individuals des7 ignated to assist the individuals serving on such panels

8 or committees, shall be immune from suit and legal proc9 ess relating to acts performed by such individuals in their

10 official capacity and within the scope of their functions

11 as such panelists or committee members or assistants to

12 such panelists or committee members.

13 (g) REGULATIONS.—The administering authority

14 under title VII of the Tariff Act of 1930, the International

15 Trade Commission, and the Trade Representative may

16 promulgate such regulations as are necessary or appro17 priate to carry out actions in order to implement their re18 spective responsibilities under chapter 19. Initial regula19 tions to carry out such functions shall be issued before

20 the date on which the Agreement enters into force with

21 respect to the United States.

22 (h) REPORT TO CONGRESS.—At such time as the

23 final candidate lists are submitted under subsection

24 (c)(4)(A) and the final forms of amendments are submit25 ted under subsection (c)(4)(C)(iv), the Trade Representa-
209

1 tive shall submit to the Committee on the Judiciary and

2 the Committee on Ways and Means of the House of Rep3 resentatives, and to the Committee on Finance and the

4 Committee on the Judiciary of the Senate, a report re5 garding the efforts made to secure the participation of

6 judges and former judges on binational panels, extraor7 dinary challenge committees, and special committees es8 tablished under chapter 19.

9 SEC. 403. TESTIMONY AND PRODUCTION OF PAPERS IN EX10 TRAORDINARY CHALLENGES.

11 (a) AUTHORITY OF EXTRAORDINARY CHALLENGE

12 COMMITTEE TO OBTAIN INFORMATION.—If an extraor13 dinary challenge committee (hereafter in this section re14 ferred to as the ‘‘committee’’) is convened under para15 graph 13 of article 1904, and the allegations before the

16 committee include a matter referred to in paragraph

17 13(a)(i) of article 1904, for the purposes of carrying out

18 its functions and duties under Annex 1904.13, the com19 mittee—

20 (1) shall have access to, and the right to copy,

21 any document, paper, or record pertinent to the sub22 ject matter under consideration, in the possession of

23 any individual, partnership, corporation, association,

24 organization, or other entity;
210

1 (2) may summon witnesses, take testimony, and

2 administer oaths;

3 (3) may require any individual, partnership,

4 corporation, association, organization, or other entity

5 to produce documents, books, or records relating to

6 the matter in question; and

7 (4) may require any individual, partnership,

8 corporation, association, organization, or other entity

9 to furnish in writing, in such detail and in such form

10 as the committee may prescribe, information in its

11 possession pertaining to the matter.

12 Any member of the committee may sign subpoenas, and

13 members of the committee, when authorized by the com14 mittee, may administer oaths and affirmations, examine

15 witnesses, take testimony, and receive evidence.

16 (b) WITNESSES AND EVIDENCE.—The attendance of

17 witnesses who are authorized to be summoned, and the

18 production of documentary evidence authorized to be or19 dered, under subsection (a) may be required from any

20 place in the United States at any designated place of hear21 ing. In the case of disobedience to a subpoena authorized

22 under subsection (a), the committee may request the At23 torney General of the United States to invoke the aid of

24 any district or territorial court of the United States in

25 requiring the attendance and testimony of witnesses and
211

1 the production of documentary evidence. Such court, with2 in the jurisdiction of which such inquiry is carried on,

3 may, in case of contumacy or refusal to obey a subpoena

4 issued to any individual, partnership, corporation, associa5 tion, organization, or other entity, issue an order requiring

6 such individual or entity to appear before the committee,

7 or to produce documentary evidence if so ordered or to

8 give evidence concerning the matter in question. Any fail9 ure to obey such order of the court may be punished by

10 such court as a contempt thereof.

11 (c) MANDAMUS.—Any court referred to in subsection

12 (b) shall have jurisdiction to issue writs of mandamus

13 commanding compliance with the provisions of this section

14 or any order of the committee made in pursuance thereof.

15 (d) DEPOSITIONS.—The committee may order testi16 mony to be taken by deposition at any stage of the com17 mittee review. Such deposition may be taken before any

18 person designated by the committee and having power to

19 administer oaths. Such testimony shall be reduced to writ20 ing by the person taking the deposition, or under the di21 rection of such person, and shall then be subscribed by

22 the deponent. Any individual, partnership, corporation, as23 sociation, organization, or other entity may be compelled

24 to appear and be deposed and to produce documentary evi25 dence in the same manner as witnesses may be compelled
212

1 to appear and testify and produce documentary evidence

2 before the committee, as provided in this section.

3 SEC. 404. REQUESTS FOR REVIEW OF DETERMINATIONS BY

4 COMPETENT INVESTIGATING AUTHORITIES

5 OF NAFTA COUNTRIES.

6 (a) DEFINITIONS.—As used in this section:

7 (1) COMPETENT INVESTIGATING AUTHORITY.—

8 The term ‘‘competent investigating authority’’

9 means the competent investigating authority, as de10 fined in article 1911, of a NAFTA country.

11 (2) UNITED STATES SECRETARY.—The term

12 ‘‘United States Secretary’’ means that officer of the

13 United States referred to in article 1908.

14 (b) REQUESTS FOR REVIEW BY THE UNITED

15 STATES.—In the case of a final determination of a com16 petent investigating authority, requests by the United

17 States for binational panel review of such determination

18 under article 1904 shall be made by the United States

19 Secretary.

20 (c) REQUESTS FOR REVIEW BY A PERSON.—In the

21 case of a final determination of a competent investigating

22 authority, a person, within the meaning of paragraph 5

23 of article 1904, may request a binational panel review of

24 such determination by filing such a request with the

25 United States Secretary within the time limit provided for
213

1 in paragraph 4 of article 1904. The receipt of such request

2 by the United States Secretary shall be deemed to be a

3 request for binational panel review within the meaning of

4 article 1904. The request for such panel review shall be

5 without prejudice to any challenge before a binational

6 panel of the basis for a particular request for review.

7 (d) SERVICE OF REQUEST FOR REVIEW.—Whenever

8 binational panel review of a final determination made by

9 a competent investigating authority is requested under

10 this section, the United States Secretary shall serve a copy

11 of the request on all persons who would otherwise be enti12 tled under the law of the importing country to commence

13 proceedings for judicial review of the determination.

14 SEC. 405. RULES OF PROCEDURE FOR PANELS AND COM15 MITTEES.

16 (a) RULES OF PROCEDURE FOR BINATIONAL PAN17 ELS.—The administering authority shall prescribe rules,

18 negotiated in accordance with paragraph 14 of article

19 1904, governing, with respect to binational panel re20 views—

21 (1) requests for such reviews, complaints, other

22 pleadings, and other papers;

23 (2) the amendment, filing, and service of such

24 pleadings and papers;
214

1 (3) the joinder, suspension, and termination of

2 such reviews; and

3 (4) other appropriate procedural matters.

4 (b) RULES OF PROCEDURE FOR EXTRAORDINARY

5 CHALLENGE COMMITTEES.—The administering authority

6 shall prescribe rules, negotiated in accordance with para7 graph 2 of Annex 1904.13, governing the procedures for

8 reviews by extraordinary challenge committees.

9 (c) RULES OF PROCEDURE FOR SAFEGUARDING THE

10 PANEL REVIEW SYSTEM.—The administering authority

11 shall prescribe rules, negotiated in accordance with Annex

12 1905.6, governing the procedures for special committees

13 described in such Annex.

14 (d) PUBLICATION OF RULES.—The rules prescribed

15 under subsections (a), (b), and (c) shall be published in

16 the Federal Register.

17 (e) ADMINISTERING AUTHORITY.—As used in this

18 section, the term ‘‘administering authority’’ has the mean19 ing given such term in section 771(1) of the Tariff Act

20 of 1930 (19 U.S.C. 1677(1)).

21 SEC. 406. SUBSIDY NEGOTIATIONS.

22 In the case of any trade agreement which may be en23 tered into by the President with a NAFTA country, the

24 negotiating objectives of the United States with respect

25 to subsidies shall include—
215

1 (1) achievement of increased discipline on do2 mestic subsidies provided by a foreign government,

3 including—

4 (A) the provision of capital, loans, or loan

5 guarantees on terms inconsistent with commer6 cial considerations;

7 (B) the provision of goods or services at

8 preferential rates;

9 (C) the granting of funds or forgiveness of

10 debt to cover operating losses sustained by a

11 specific industry; and

12 (D) the assumption of any costs or ex13 penses of manufacture, production, or distribu14 tion;

15 (2) achievement of increased discipline on ex16 port subsidies provided by a foreign government,

17 particularly with respect to agricultural products;

18 and

19 (3) maintenance of effective remedies against

20 subsidized imports, including, where appropriate,

21 countervailing duties.

22 SEC. 407. IDENTIFICATION OF INDUSTRIES FACING SUB23 SIDIZED IMPORTS.

24 (a) PETITIONS.—Any entity, including a trade asso25 ciation, firm, certified or recognized union, or group of
216

1 workers, that is representative of a United States industry

2 and has reason to believe—

3 (1) that—

4 (A) as a result of implementation of provi5 sions of the Agreement, the industry is likely to

6 face increased competition from subsidized im7 ports, from a NAFTA country, with which it di8 rectly competes; or

9 (B) the industry is likely to face increased

10 competition from subsidized imports with which

11 it directly competes from any other country des12 ignated by the President, following consulta13 tions with the Congress, as benefiting from a

14 reduction of tariffs or other trade barriers

15 under a trade agreement that enters into force

16 with respect to the United States after January

17 1, 1994; and

18 (2) that the industry is likely to experience a

19 deterioration of its competitive position before more

20 effective rules and disciplines relating to the use of

21 government subsidies have been developed with re22 spect to the country concerned;

23 may file with the Trade Representative a petition that

24 such industry be identified under this section.
217

1 (b) IDENTIFICATION OF INDUSTRY.—Within 90 days

2 after receipt of a petition under subsection (a), the Trade

3 Representative, in consultation with the Secretary of Com4 merce, shall decide whether to identify the industry on the

5 basis that there is a reasonable likelihood that the industry

6 may face both the subsidization described in subsection

7 (a)(1) and the deterioration described in subsection (a)(2).

8 (c) ACTION AFTER IDENTIFICATION.—At the request

9 of an entity that is representative of an industry identified

10 under subsection (b), the Trade Representative shall—

11 (1) compile and make available to the industry

12 information under section 308 of the Trade Act of

13 1974;

14 (2) recommend to the President that an inves15 tigation by the International Trade Commission be

16 requested under section 332 of the Tariff Act of

17 1930; or

18 (3) take actions described in both paragraphs

19 (1) and (2).

20 The industry may request the Trade Representative to

21 take appropriate action to update (as often as annually)

22 any information obtained under paragraph (1) or (2), or

23 both, as the case may be, until an agreement on more ef24 fective rules and disciplines relating to government sub-
218

1 sidies is reached between the United States and the

2 NAFTA countries.

3 (d) INITIATION OF ACTION UNDER OTHER LAW.—

4 (1) IN GENERAL.—The Trade Representative

5 and the Secretary of Commerce shall review infor6 mation obtained under subsection (c) and consult

7 with the industry identified under subsection (b)

8 with a view to deciding whether any action is appro9 priate—

10 (A) under section 301 of the Trade Act of

11 1974, including the initiation of an investiga12 tion under section 302(c) of that Act (in the

13 case of the Trade Representative); or

14 (B) under subtitle A of title VII of the

15 Tariff Act of 1930, including the initiation of

16 an investigation under section 702(a) of that

17 Act (in the case of the Secretary of Commerce).

18 (2) CRITERIA FOR INITIATION.—In determining

19 whether to initiate any investigation under section

20 301 of the Trade Act of 1974 or any other trade

21 law, other than title VII of the Tariff Act of 1930,

22 the Trade Representative, after consultation with

23 the Secretary of Commerce—
219

1 (A) shall seek the advice of the advisory

2 committees established under section 135 of the

3 Trade Act of 1974;

4 (B) shall consult with the Committee on

5 Finance of the Senate and the Committee on

6 Ways and Means of the House of Representa7 tives;

8 (C) shall coordinate with the interagency

9 organization established under section 242 of

10 the Trade Expansion Act of 1962; and

11 (D) may ask the President to request ad12 vice from the International Trade Commission.

13 (3) TITLE III ACTIONS.—In the event an inves14 tigation is initiated under section 302(c) of the

15 Trade Act of 1974 as a result of a review under this

16 subsection and the Trade Representative, following

17 such investigation (including any applicable dispute

18 settlement proceedings under the Agreement or any

19 other trade agreement), determines to take action

20 under section 301(a) of such Act, the Trade Rep21 resentative shall give preference to actions that most

22 directly affect the products that benefit from govern23 mental subsidies and were the subject of the inves24 tigation, unless there are no significant imports of

25 such products or the Trade Representative otherwise
220

1 determines that application of the action to other

2 products would be more effective.

3 (e) EFFECT OF DECISIONS.—Any decision, whether

4 positive or negative, or any action by the Trade Represent5 ative or the Secretary of Commerce under this section

6 shall not in any way—

7 (1) prejudice the right of any industry to file a

8 petition under any trade law;

9 (2) prejudice, affect, or substitute for, any pro10 ceeding, investigation, determination, or action by

11 the Secretary of Commerce, the International Trade

12 Commission, or the Trade Representative pursuant

13 to such a petition, or

14 (3) prejudice, affect, substitute for, or obviate

15 any proceeding, investigation, or determination

16 under section 301 of the Trade Act of 1974, title

17 VII of the Tariff Act of 1930, or any other trade

18 law.

19 (f) STANDING.—Nothing in this section may be con20 strued to alter in any manner the requirements in effect

21 before the date of the enactment of this Act for standing

22 under any law of the United States or to add any addi23 tional requirements for standing under any law of the

24 United States.
221

1 SEC. 408. TREATMENT OF AMENDMENTS TO ANTIDUMPING

2 AND COUNTERVAILING DUTY LAW.

3 Any amendment enacted after the Agreement enters

4 into force with respect to the United States that is made

5 to—

6 (1) section 303 or title VII of the Tariff Act of

7 1930, or any successor statute, or

8 (2) any other statute which—

9 (A) provides for judicial review of final de10 terminations under such section, title, or suc11 cessor statute, or

12 (B) indicates the standard of review to be

13 applied,

14 shall apply to goods from a NAFTA country only to the

15 extent specified in the amendment.

16 Subtitle B—Conforming

17 Amendments and Provisions

18 SEC. 411. JUDICIAL REVIEW IN ANTIDUMPING DUTY AND

19 COUNTERVAILING DUTY CASES.

20 Section 516A of the Tariff Act of 1930 (19 U.S.C.

21 1516a) is amended as follows:

22 (1) Subsection (a)(5) (relating to time limits for

23 commencing review) is amended to read as follows:

24 ‘‘(5) TIME LIMITS IN CASES INVOLVING MER25 CHANDISE FROM FREE TRADE AREA COUNTRIES.—

26 Notwithstanding any other provision of this sub-
222

1 section, in the case of a determination to which the

2 provisions of subsection (g) apply, an action under

3 this subsection may not be commenced, and the time

4 limits for commencing an action under this sub5 section shall not begin to run, until the day specified

6 in whichever of the following subparagraphs applies:

7 ‘‘(A) For a determination described in

8 paragraph (1)(B) or clause (i), (ii) or (iii) of

9 paragraph (2)(B), the 31st day after the date

10 on which notice of the determination is pub11 lished in the Federal Register.

12 ‘‘(B) For a determination described in

13 clause (vi) of paragraph (2)(B), the 31st day

14 after the date on which the government of the

15 relevant FTA country receives notice of the de16 termination.

17 ‘‘(C) For a determination with respect to

18 which binational panel review has commenced

19 in accordance with subsection (g)(8), the day

20 after the date as of which—

21 ‘‘(i) the binational panel has dismissed

22 binational panel review of the determina23 tion for lack of jurisdiction, and

24 ‘‘(ii) any interested party seeking re25 view of the determination under paragraph
223

1 (1), (2), or (3) of this subsection has pro2 vided timely notice under subsection

3 (g)(3)(B).

4 If such an interested party files a summons and

5 complaint under this subsection after dismissal

6 by the binational panel, and if a request for an

7 extraordinary challenge committee is made with

8 respect to the decision by the binational panel

9 to dismiss—

10 ‘‘(I) judicial review under this sub11 section shall be stayed during consider12 ation by the committee of the request, and

13 ‘‘(II) the United States Court of

14 International Trade shall dismiss the ac15 tion if the committee vacates or remands

16 the binational panel decision to dismiss.

17 ‘‘(D) For a determination for which review

18 by the United States Court of International

19 Trade is provided for—

20 ‘‘(i) under subsection (g)(12)(B), the

21 day after the date of publication in the

22 Federal Register of notice that article

23 1904 of the NAFTA has been suspended,

24 or
224

1 ‘‘(ii) under subsection (g)(12)(D), the

2 day after the date that notice of settlement

3 is published in the Federal Register.’’.

4 (2) Subsection (b)(3) (relating to the standards

5 of review) is amended—

6 (A) by inserting ‘‘NAFTA OR’’ after ‘‘DECI7 SIONS BY’’ in the heading; and

8 (B) by inserting ‘‘of the NAFTA or’’ after

9 ‘‘article 1904’’.

10 (3) Subsection (f) (relating to definitions) is

11 amended—

12 (A) by amending paragraphs (6) and (7)

13 to read as follows:

14 ‘‘(6) UNITED STATES SECRETARY.—The term

15 ‘United States Secretary’ means—

16 ‘‘(A) the secretary for the United States

17 Section referred to in article 1908 of the

18 NAFTA, and

19 ‘‘(B) the secretary of the United States

20 Section provided for in article 1909 of the

21 Agreement.

22 ‘‘(7) RELEVANT FTA SECRETARY.—The term

23 ‘relevant FTA Secretary’ means the Secretary—

24 ‘‘(A) referred to in article 1908 of the

25 NAFTA, or
225

1 ‘‘(B) provided for in paragraph 5 of article

2 1909 of the Agreement,

3 of the relevant FTA country.’’; and

4 (B) by adding at the end the following new

5 paragraphs:

6 ‘‘(8) NAFTA.—The term ‘NAFTA’ means the

7 North American Free Trade Agreement.

8 ‘‘(9) RELEVANT FTA COUNTRY.—The term ‘rel9 evant FTA country’ means the free trade area coun10 try to which an antidumping or countervailing duty

11 proceeding pertains.

12 ‘‘(10) FREE TRADE AREA COUNTRY.—The term

13 ‘free trade area country’ means the following:

14 ‘‘(A) Canada for such time as the NAFTA

15 is in force with respect to, and the United

16 States applies the NAFTA to, Canada.

17 ‘‘(B) Mexico for such time as the NAFTA

18 is in force with respect to, and the United

19 States applies the NAFTA to, Mexico.

20 ‘‘(C) Canada for such time as—

21 ‘‘(i) it is not a free trade area country

22 under subparagraph (A); and

23 ‘‘(ii) the Agreement is in force with

24 respect to, and the United States applies

25 the Agreement to, Canada.’’.
226

1 (4) Subsection (g) (relating to review of coun2 tervailing and antidumping duty determinations) is

3 amended as follows:

4 (A) The subsection heading is amended by

5 striking out ‘‘CANADIAN MERCHANDISE’’ and

6 inserting ‘‘FREE TRADE AREA COUNTRY MER7 CHANDISE’’.

8 (B) Paragraph (1) is amended by striking

9 out ‘‘Canadian merchandise’’ and inserting

10 ‘‘free trade area country merchandise’’.

11 (C) Paragraph (2) is amended by inserting

12 ‘‘of the NAFTA or’’ after ‘‘article 1904’’.

13 (D) Paragraph (3)(A) is amended—

14 (i) by striking out ‘‘nor Canada’’ and

15 inserting ‘‘nor the relevant FTA country’’

16 in each of clauses (i) and (ii);

17 (ii) by inserting ‘‘of the NAFTA or’’

18 before ‘‘of the Agreement’’ in each of

19 clauses (i) and (iii);

20 (iii) by striking out ‘‘or’’ at the end of

21 clause (iii);

22 (iv) by amending clause (iv)—

23 (I) by striking out ‘‘under para24 graph (2)(A)’’; and
227

1 (II) by striking out the period

2 and inserting a comma; and

3 (v) by adding at the end of subpara4 graph (A) the following:

5 ‘‘(v) a determination as to which bina6 tional panel review has terminated pursu7 ant to paragraph 12 of article 1905 of the

8 NAFTA, or

9 ‘‘(vi) a determination as to which ex10 traordinary challenge committee review has

11 terminated pursuant to paragraph 12 of

12 article 1905 of the NAFTA.’’.

13 (E) The first and second sentences of

14 paragraph (3)(B) are amended to read as fol15 lows: ‘‘A determination described in subpara16 graph (A)(i) or (iv) is reviewable under sub17 section (a) only if the party seeking to com18 mence review has provided timely notice of its

19 intent to commence such review to—

20 ‘‘(i) the United States Secretary and

21 the relevant FTA Secretary;

22 ‘‘(ii) all interested parties who were

23 parties to the proceeding in connection

24 with which the matter arises; and
228

1 ‘‘(iii) the administering authority or

2 the Commission, as appropriate.

3 Such notice is timely provided if the notice is

4 delivered no later than the date that is 20 days

5 after the date described in subparagraph (A) or

6 (B) of subsection (a)(5) that is applicable to

7 such determination, except that, if the time for

8 requesting binational panel review is suspended

9 under paragraph (8)(A)(ii) of this subsection,

10 any unexpired time for providing notice of in11 tent to commence judicial review shall, during

12 the pendency of any such suspension, also be

13 suspended.’’.

14 (F) Paragraph (4)(A) is amended—

15 (i) in the first sentence—

16 (I) by inserting ‘‘the North

17 American Free Trade Agreement Im18 plementation Act implementing the bi19 national dispute settlement system

20 under chapter 19 of the NAFTA, or’’

21 after ‘‘or amendment made by,’’;

22 (II) by inserting a comma before

23 ‘‘violates’’;

24 (III) by inserting ‘‘only’’ after

25 ‘‘may be brought’’; and
229

1 (IV) by inserting ‘‘, which shall

2 have jurisdiction of such action’’ after

3 ‘‘Circuit’’; and

4 (ii) by striking the last sentence.

5 (G) Paragraph (5) is amended—

6 (i) by inserting ‘‘of the NAFTA or’’

7 after ‘‘article 1904’’ in each of subpara8 graphs (A), (B), and (C)(i);

9 (ii) by striking out ‘‘, the Canadian

10 Secretary,’’ in subparagraph (C)(ii) and in11 serting ‘‘, the relevant FTA Secretary,’’;

12 and

13 (iii) by inserting ‘‘of the NAFTA or’’

14 after ‘‘chapter 19’’ in subparagraph

15 (C)(iii).

16 (H) Paragraph (6) is amended by inserting

17 ‘‘of the NAFTA or’’ after ‘‘article 1904’’.

18 (I) Paragraph (7) is amended—

19 (i) by inserting ‘‘OF THE NAFTA OR

20 THE AGREEMENT’’ before the period in the

21 paragraph heading;

22 (ii) by striking out ‘‘IN GENERAL.—’’

23 in the heading to subparagraph (A) and in24 serting ‘‘ACTION UPON REMAND.—’’; and
230

1 (iii) by inserting ‘‘the NAFTA or’’ be2 fore ‘‘the Agreement’’ in subparagraph

3 (A).

4 (J) Paragraph (8)(A) is amended—

5 (i) by inserting ‘‘(i) GENERAL

6 RULE.—’’ before ‘‘An interested party’’;

7 (ii) by inserting ‘‘of the NAFTA or’’

8 after ‘‘article 1904(4)’’;

9 (iii) by indenting the text so as to

10 align it with new clause (ii) (as added by

11 clause (iv) of this subparagraph); and

12 (iv) by adding at the end the following

13 new clause:

14 ‘‘(ii) SUSPENSION OF TIME TO RE15 QUEST BINATIONAL PANEL REVIEW UNDER

16 THE NAFTA.—Notwithstanding clause (i),

17 the time for requesting binational panel re18 view shall be suspended during the pend19 ency of any stay of binational panel review

20 that is issued pursuant to paragraph 11(a)

21 of article 1905 of the NAFTA.’’.

22 (K) Paragraph (8)(B)(ii) is amended by

23 striking out ‘‘Canadian Secretary,’’ and insert24 ing ‘‘relevant FTA Secretary,’’.
231

1 (L) Paragraph (8)(C) is amended by strik2 ing out ‘‘under article 1904 of the Agreement

3 of a determination’’ and inserting ‘‘of a deter4 mination under article 1904 of the NAFTA or

5 the Agreement’’.

6 (M) Paragraph (9) is amended by inserting

7 ‘‘of the NAFTA or’’ after ‘‘chapter 19’’.

8 (N) Paragraph (10) is amended by striking

9 out ‘‘Government of Canada’’ and all that fol10 lows thereafter and inserting ‘‘Government of

11 the relevant FTA country received notice of the

12 determination under paragraph 4 of article

13 1904 of the NAFTA or the Agreement.’’.

14 (O) The following new paragraphs are

15 added at the end:

16 ‘‘(11) SUSPENSION AND TERMINATION OF SUS17 PENSION OF ARTICLE 1904 OF THE NAFTA.—

18 ‘‘(A) SUSPENSION OF ARTICLE 1904.—If a

19 special committee established under article

20 1905 of the NAFTA issues an affirmative find21 ing, the Trade Representative may, in accord22 ance with paragraph 8(a) or 9, as appropriate,

23 of article 1905 of the NAFTA, suspend the op24 eration of article 1904 of the NAFTA.
232

1 ‘‘(B) TERMINATION OF SUSPENSION OF

2 ARTICLE 1904.—If a special committee is recon3 vened and makes an affirmative determination

4 described in paragraph 10(b) of article 1905 of

5 the NAFTA, any suspension of the operation of

6 article 1904 of the NAFTA shall terminate.

7 ‘‘(12) JUDICIAL REVIEW UPON TERMINATION

8 OF BINATIONAL PANEL OR COMMITTEE REVIEW

9 UNDER THE NAFTA.—

10 ‘‘(A) NOTICE OF SUSPENSION OR TERMI11 NATION OF SUSPENSION OF ARTICLE 1904.—

12 ‘‘(i) Upon notification by the Trade

13 Representative or the Government of a

14 country described in subsection (f)(10)(A)

15 or (B) that the operation of article 1904 of

16 the NAFTA has been suspended in accord17 ance with paragraph 8(a) or 9 of article

18 1905 of the NAFTA, the United States

19 Secretary shall publish in the Federal Reg20 ister a notice of suspension of article 1904

21 of the NAFTA.

22 ‘‘(ii) Upon notification by the Trade

23 Representative or the Government of a

24 country described in subsection (f)(10)(A)

25 or (B) that the suspension of the operation
233

1 of article 1904 of the NAFTA is termi2 nated in accordance with paragraph 10 of

3 article 1905 of the NAFTA, the United

4 States Secretary shall publish in the Fed5 eral Register a notice of termination of

6 suspension of article 1904 of the NAFTA.

7 ‘‘(B) TRANSFER OF FINAL DETERMINA8 TIONS FOR JUDICIAL REVIEW UPON SUSPEN9 SION OF ARTICLE 1904.—If the operation of ar10 ticle 1904 of the NAFTA is suspended in ac11 cordance with paragraph 8(a) or 9 of article

12 1905 of the NAFTA—

13 ‘‘(i) upon the request of an authorized

14 person described in subparagraph (C), any

15 final determination that is the subject of a

16 binational panel review or an extraordinary

17 challenge committee review shall be trans18 ferred to the United States Court of Inter19 national Trade (in accordance with rules

20 issued by the Court) for review under sub21 section (a); or

22 ‘‘(ii) in a case in which—

23 ‘‘(I) a binational panel review

24 was completed fewer than 30 days be25 fore the suspension, and
234

1 ‘‘(II) extraordinary challenge

2 committee review has not been re3 quested,

4 upon the request of an authorized person

5 described in subparagraph (C) which is

6 made within 60 days after the completion

7 of the binational panel review, the final de8 termination that was the subject of the bi9 national panel review shall be transferred

10 to the United States Court of International

11 Trade (in accordance with rules issued by

12 the Court) for review under subsection (a).

13 ‘‘(C) PERSONS AUTHORIZED TO REQUEST

14 TRANSFER OF FINAL DETERMINATIONS FOR JU15 DICIAL REVIEW.—A request that a final deter16 mination be transferred to the Court of Inter17 national Trade under subparagraph (B) may be

18 made by—

19 ‘‘(i) if the United States made an alle20 gation under paragraph 1 of article 1905

21 of the NAFTA and the operation of article

22 1904 of the NAFTA was suspended pursu23 ant to paragraph 8(a) of article 1905 of

24 the NAFTA—
235

1 ‘‘(I) the government of the rel2 evant country described in subsection

3 (f)(10)(A) or (B),

4 ‘‘(II) an interested party that

5 was a party to the panel or committee

6 review, or

7 ‘‘(III) an interested party that

8 was a party to the proceeding in con9 nection with which panel review was

10 requested, but only if the time period

11 for filing notices of appearance in the

12 panel review has not expired, or

13 ‘‘(ii) if a country described in sub14 section (f)(10)(A) or (B) made an allega15 tion under paragraph 1 of article 1905 of

16 the NAFTA and the operation of article

17 1904 of the NAFTA was suspended pursu18 ant to paragraph 9 of article 1905 of the

19 NAFTA—

20 ‘‘(I) the government of that

21 country,

22 ‘‘(II) an interested party that is

23 a person of that country and that was

24 a party to the panel or committee re25 view, or
236

1 ‘‘(III) an interested party that is

2 a person of that country and that was

3 a party to the proceeding in connec4 tion with which panel review was re5 quested, but only if the time period

6 for filing notices of appearance in the

7 panel review has not expired.

8 ‘‘(D)(i) TRANSFER FOR JUDICIAL REVIEW

9 UPON SETTLEMENT.—If the Trade Representa10 tive achieves a settlement with the government

11 of a country described in subsection (f)(10)(A)

12 or (B) pursuant to paragraph 7 of article 1905

13 of the NAFTA, and referral for judicial review

14 is among the terms of such settlement, any

15 final determination that is the subject of a bi16 national panel review or an extraordinary chal17 lenge committee review shall, upon a request

18 described in clause (ii), be transferred to the

19 United States Court of International Trade (in

20 accordance with rules issued by the Court) for

21 review under subsection (a).

22 ‘‘(ii) A request referred to in clause (i) is

23 a request made by—

24 ‘‘(I) the country referred to in clause

25 (i),
237

1 ‘‘(II) an interested party that was a

2 party to the panel or committee review, or

3 ‘‘(III) an interested party that was a

4 party to the proceeding in connection with

5 which panel review was requested, but only

6 if the time for filing notices of appearance

7 in the panel review has not expired.’’.

8 SEC. 412. CONFORMING AMENDMENTS TO OTHER PROVI9 SIONS OF THE TARIFF ACT OF 1930.

10 (a) REGULATIONS FOR APPRAISEMENT AND CLASSI11 FICATION; FINALITY AND DECISION.—Sections 502(b)

12 and 514(b) of the Tariff Act of 1930 (19 U.S.C. 1502(b)

13 and 1514(b)) are each amended by inserting ‘‘the North

14 American Free Trade Agreement or’’ before ‘‘the United

15 States-Canada Free-Trade Agreement’’.

16 (b) DEFINITION.—Section 771 of the Tariff Act of

17 1930 (19 U.S.C. 1677) is amended—

18 (1) by redesignating as paragraph (21) (and

19 placing in numerical sequence) the second paragraph

20 that is designated as paragraph (18) (relating to the

21 definition of the United States-Canada Agreement)

22 in such section; and

23 (2) by inserting after paragraph (21) (as redes24 ignated by paragraph (1) of this subsection) the fol25 lowing new paragraph:
238

1 ‘‘(22) NAFTA.—The term ‘NAFTA’ means the

2 North American Free Trade Agreement.’’.

3 (c) DISCLOSURE OF PROPRIETARY INFORMATION IN

4 TITLE VII PROCEEDINGS.—Section 777(f) of the Tariff

5 Act of 1930 (19 U.S.C. 1677f(f)) is amended—

6 (1) by inserting ‘‘THE NORTH AMERICAN FREE

7 TRADE AGREEMENT OR’’ before ‘‘THE UNITED

8 STATES-CANADA AGREEMENT’’ in the heading;

9 (2) by inserting ‘‘the NAFTA or’’ before ‘‘the

10 United States-Canada Agreement’’ each place it ap11 pears in paragraph (1)(A);

12 (3) in the second sentence of paragraph

13 (1)(A)—

14 (A) by inserting ‘‘or extraordinary chal15 lenge committee’’ after ‘‘binational panel’’; and

16 (B) by inserting ‘‘or committee’’ after ‘‘the

17 panel’’;

18 (4) in paragraph (1)(B)—

19 (A) by inserting ‘‘the NAFTA or’’ before

20 ‘‘the Agreement’’ in clauses (iii) and (iv); and

21 (B) by striking out ‘‘Government of Can22 ada designated by an authorized agency of Can23 ada’’ in clause (iv) and inserting ‘‘Government

24 of a free trade area country (as defined in sec-
239

1 tion 516A(f)(10)) designated by an authorized

2 agency of such country’’;

3 (5) in paragraph (2) by inserting ‘‘, including

4 any extraordinary challenge,’’ after ‘‘binational panel

5 proceeding’’;

6 (6) in paragraph (3)—

7 (A) by inserting ‘‘or extraordinary chal8 lenge committee’’ after ‘‘binational panel’’, and

9 (B) by inserting ‘‘the NAFTA or’’ before

10 ‘‘the United States-Canada Agreement’’;

11 (7) by striking out ‘‘agency of Canada’’ in each

12 of paragraphs (3) and (4) and inserting ‘‘agency of

13 a free trade area country (as defined in section

14 516A(f)(10))’’; and

15 (8) in the first sentence of paragraph (4) by in16 serting ‘‘, except a judge appointed to a binational

17 panel or an extraordinary challenge committee under

18 section 402(b) of the North American Free Trade

19 Agreement Implementation Act,’’ after ‘‘Any per20 son’’.

21 SEC. 413. CONSEQUENTIAL AMENDMENT TO FREE-TRADE

22 AGREEMENT ACT OF 1988.

23 Section 410(a) of the United States-Canada Free24 Trade Agreement Implementation Act of 1988 (19 U.S.C.

25 2112 note) is amended by adding at the end the following
240

1 new sentence: ‘‘In calculating the 7-year period referred

2 to in paragraph (1), any time during which Canada is a

3 NAFTA country (as defined in section 2(4) of the North

4 American Free Trade Agreement Implementation Act)

5 shall be disregarded.’’.

6 SEC. 414. CONFORMING AMENDMENTS TO TITLE 28, UNITED

7 STATES CODE.

8 (a) COURT OF INTERNATIONAL TRADE.—Chapter 95

9 of title 28, United States Code, is amended—

10 (1) in section 1581(i) by inserting ‘‘the North

11 American Free Trade Agreement or’’ before ‘‘the

12 United States-Canada Free-Trade Agreement’’;

13 (2) in section 1584—

14 (A) by amending the section heading to

15 read as follows:

16 ‘‘§ 1584. Civil actions under the North American Free

17 Trade Agreement or the United States18 Canada Free-Trade Agreement’’; and

19 (B) by striking out ‘‘777(d)’’ and inserting

20 ‘‘777(f)’’; and

21 (3) in the table of contents for such chapter by

22 amending the entry for section 1584 to read as fol23 lows:

‘‘1584. Civil actions under the North American Free Trade Agreement or the

United States-Canada Free-Trade Agreement.’’.
241

1 (b) PARTICULAR PROCEEDINGS.—Sections 2201(a)

2 and 2643(c)(5) of title 28, United States Code, are each

3 amended by striking out ‘‘Canadian merchandise,’’ and in4 serting ‘‘merchandise of a free trade area country (as de5 fined in section 516A(f)(10) of the Tariff Act of 1930),’’.

6 SEC. 415. EFFECT OF TERMINATION OF NAFTA COUNTRY

7 STATUS.

8 (a) IN GENERAL.—Except as provided in subsection

9 (b), on the date on which a country ceases to be a NAFTA

10 country, the provisions of this title (other than this sec11 tion) and the amendments made by this title shall cease

12 to have effect with respect to that country.

13 (b) TRANSITION PROVISIONS.—

14 (1) PROCEEDINGS REGARDING PROTECTIVE OR15 DERS AND UNDERTAKINGS.—If on the date on which

16 a country ceases to be a NAFTA country an inves17 tigation or enforcement proceeding concerning the

18 violation of a protective order issued under section

19 777(f) of the Tariff Act of 1930 (as amended by

20 this subtitle) or an undertaking of the Government

21 of that country is pending, the investigation or pro22 ceeding shall continue, and sanctions may continue

23 to be imposed, in accordance with the provisions of

24 such section 777(f).
242

1 (2) BINATIONAL PANEL AND EXTRAORDINARY

2 CHALLENGE COMMITTEE REVIEWS.—If on the date

3 on which a country ceases to be a NAFTA coun4 try—

5 (A) a binational panel review under article

6 1904 of the Agreement is pending, or has been

7 requested; or

8 (B) an extraordinary challenge committee

9 review under article 1904 of the Agreement is

10 pending, or has been requested;

11 with respect to a determination which involves a

12 class or kind of merchandise and to which section

13 516A(g)(2) of the Tariff Act of 1930 applies, such

14 determination shall be reviewable under section

15 516A(a) of the Tariff Act of 1930. In the case of

16 a determination to which the provisions of this para17 graph apply, the time limits for commencing an ac18 tion under 516A(a) of the Tariff Act of 1930 shall

19 not begin to run until the date on which the Agree20 ment ceases to be in force with respect to that coun21 try.

22 SEC. 416. EFFECTIVE DATE.

23 The provisions of this title and the amendments made

24 by this title take effect on the date the Agreement enters
243

1 into force with respect to the United States, but shall not

2 apply—

3 (1) to any final determination described in

4 paragraph (1)(B), or (2)(B)(i), (ii), or (iii), of sec5 tion 516A(a) of the Tariff Act of 1930 notice of

6 which is published in the Federal Register before

7 such date, or to a determination described in para8 graph (2)(B)(vi) of section 516A(a) of such Act no9 tice of which is received by the Government of Can10 ada or Mexico before such date; or

11 (2) to any binational panel review under the

12 United States-Canada Free-Trade Agreement, or

13 any extraordinary challenge arising out of any such

14 review, that was commenced before such date.

15 TITLE V—NAFTA TRANSITIONAL

16 ADJUSTMENT ASSISTANCE

17 AND OTHER PROVISIONS

18 Subtitle A—NAFTA Transitional

19 Adjustment Assistance Program

20 SEC. 501. SHORT TITLE.

21 This subtitle may be cited as the ‘‘NAFTA Worker

22 Security Act’’.
244

1 SEC. 502. ESTABLISHMENT OF NAFTA TRANSITIONAL AD2 JUSTMENT ASSISTANCE PROGRAM.

3 Chapter 2 of title II of the Trade Act of 1974 (19

4 U.S.C. 2271 et seq.) is amended by adding at the end

5 the following new subchapter:

6 ‘‘Subchapter D—NAFTA Transitional

7 Adjustment Assistance Program

8 ‘‘SEC. 250. ESTABLISHMENT OF TRANSITIONAL PROGRAM.

9 ‘‘(a) GROUP ELIGIBILITY REQUIREMENTS.—

10 ‘‘(1) CRITERIA.—A group of workers (including

11 workers in any agricultural firm or subdivision of an

12 agricultural firm) shall be certified as eligible to

13 apply for adjustment assistance under this sub14 chapter pursuant to a petition filed under subsection

15 (b) if the Secretary determines that a significant

16 number or proportion of the workers in such work17 ers’ firm or an appropriate subdivision of the firm

18 have become totally or partially separated, or are

19 threatened to become totally or partially separated,

20 and either—

21 ‘‘(A) that—

22 ‘‘(i) the sales or production, or both,

23 of such firm or subdivision have decreased

24 absolutely,

25 ‘‘(ii) imports from Mexico or Canada

26 of articles like or directly competitive with
245

1 articles produced by such firm or subdivi2 sion have increased, and

3 ‘‘(iii) the increase in imports under

4 clause (ii) contributed importantly to such

5 workers’ separation or threat of separation

6 and to the decline in the sales or produc7 tion of such firm or subdivision; or

8 ‘‘(B) that there has been a shift in produc9 tion by such workers’ firm or subdivision to

10 Mexico or Canada of articles like or directly

11 competitive with articles which are produced by

12 the firm or subdivision.

13 ‘‘(2) DEFINITION OF CONTRIBUTED IMPOR14 TANTLY.—The term ‘contributed importantly’, as

15 used in paragraph (1)(A)(iii), means a cause which

16 is important but not necessarily more important

17 than any other cause.

18 ‘‘(3) REGULATIONS.—The Secretary shall issue

19 regulations relating to the application of the criteria

20 described in paragraph (1) in making preliminary

21 findings under subsection (b) and determinations

22 under subsection (c).

23 ‘‘(b) PRELIMINARY FINDINGS AND BASIC ASSIST24 ANCE.—
246

1 ‘‘(1) FILING OF PETITIONS.—A petition for cer2 tification of eligibility to apply for adjustment assist3 ance under this subchapter may be filed by a group

4 of workers (including workers in any agricultural

5 firm or subdivision of an agricultural firm) or by

6 their certified or recognized union or other duly au7 thorized representative with the Governor of the

8 State in which such workers’ firm or subdivision

9 thereof is located.

10 ‘‘(2) FINDINGS AND ASSISTANCE.—Upon re11 ceipt of a petition under paragraph (1), the Gov12 ernor shall—

13 ‘‘(A) notify the Secretary that the Gov14 ernor has received the petition;

15 ‘‘(B) within 10 days after receiving the pe16 tition—

17 ‘‘(i) make a preliminary finding as to

18 whether the petition meets the criteria de19 scribed in subsection (a)(1) (and for pur20 poses of this clause the criteria described

21 under subparagraph (A)(iii) of such sub22 section shall be disregarded), and

23 ‘‘(ii) transmit the petition, together

24 with a statement of the finding under
247

1 clause (i) and reasons therefor, to the Sec2 retary for action under subsection (c); and

3 ‘‘(C) if the preliminary finding under sub4 paragraph (B)(i) is affirmative, ensure that

5 rapid response and basic readjustment services

6 authorized under other Federal law are made

7 available to the workers.

8 ‘‘(c) REVIEW OF PETITIONS BY SECRETARY; CER9 TIFICATIONS.—

10 ‘‘(1) IN GENERAL.—The Secretary, within 30

11 days after receiving a petition under subsection (b),

12 shall determine whether the petition meets the cri13 teria described in subsection (a)(1). Upon a deter14 mination that the petition meets such criteria, the

15 Secretary shall issue to workers covered by the peti16 tion a certification of eligibility to apply for assist17 ance described in subsection (d).

18 ‘‘(2) DENIAL OF CERTIFICATION.—Upon denial

19 of certification with respect to a petition under para20 graph (1), the Secretary shall review the petition in

21 accordance with the requirements of subchapter A to

22 determine if the workers may be certified under such

23 subchapter.

24 ‘‘(d) COMPREHENSIVE ASSISTANCE.—Workers cov25 ered by certification issued by the Secretary under sub-
248

1 section (c) shall be provided, in the same manner and to

2 the same extent as workers covered under a certification

3 under subchapter A, the following:

4 ‘‘(1) Employment services described in section

5 235.

6 ‘‘(2) Training described in section 236, except

7 that notwithstanding the provisions of section

8 236(a)(2)(A), the total amount of payments for

9 training under this subchapter for any fiscal year

10 shall not exceed $30,000,000.

11 ‘‘(3) Trade readjustment allowances described

12 in sections 231 through 234, except that—

13 ‘‘(A) the provisions of sections

14 231(a)(5)(C) and 231(c), authorizing the pay15 ment of trade readjustment allowances upon a

16 finding that it is not feasible or appropriate to

17 approve a training program for a worker, shall

18 not be applicable to payment of such allowances

19 under this subchapter; and

20 ‘‘(B) notwithstanding the provisions of sec21 tion 233(b), in order for a worker to qualify for

22 trade readjustment allowances under this sub23 chapter, the worker shall be enrolled in a train24 ing program approved by the Secretary under

25 section 236(a) by the later of—
249

1 ‘‘(i) the last day of the 16th week of

2 such worker’s initial unemployment com3 pensation benefit period, or

4 ‘‘(ii) the last day of the 6th week after

5 the week in which the Secretary issues a

6 certification covering such worker.

7 In cases of extenuating circumstances relating to en8 rollment in a training program, the Secretary may

9 extend the time for enrollment for a period not to

10 exceed 30 days .

11 ‘‘(4) Job search allowances described in section

12 237.

13 ‘‘(5) Relocation allowances described in section

14 238.

15 ‘‘(e) ADMINISTRATION.—The provisions of sub16 chapter C shall apply to the administration of the program

17 under this subchapter in the same manner and to the

18 same extent as such provisions apply to the administration

19 of the program under subchapters A and B, except that

20 the agreement between the Secretary and the States de21 scribed in section 239 shall specify the procedures that

22 will be used to carry out the certification process under

23 subsection (c) and the procedures for providing relevant

24 data by the Secretary to assist the States in making pre25 liminary findings under subsection (b).’’.
250

1 SEC. 503. CONFORMING AMENDMENTS.

2 (a) REFERENCES.—Sections 221(a), 222(a), and

3 223(a) of the Trade Act of 1974 (19 U.S.C. 2271(a),

4 2272(a), and 2273(a)) are each amended by striking out

5 ‘‘assistance under this chapter’’ and inserting ‘‘assistance

6 under this subchapter’’.

7 (b) BENEFIT INFORMATION.—Section 225(b) of the

8 Trade Act of 1974 (19 U.S.C. 2275(b)) is amended by

9 inserting ‘‘or subchapter D’’ after ‘‘subchapter A’’ each

10 place it appears.

11 (c) NONDUPLICATION OF ASSISTANCE.—Subchapter

12 C of chapter 2 of title II of the Trade Act of 1974 is

13 amended by adding at the end the following new section:

14 ‘‘SEC. 249A. NONDUPLICATION OF ASSISTANCE.

15 ‘‘No worker may receive assistance relating to a sepa16 ration pursuant to certifications under both subchapters

17 A and D of this chapter.’’.

18 (d) JUDICIAL REVIEW.—Section 284 of the Trade

19 Act of 1974 (19 U.S.C. 2395(a)) is amended by inserting

20 ‘‘or section 250(c)’’ after ‘‘section 223’’.

21 (e) TABLE OF CONTENTS.—The table of contents for

22 chapter 2 of title II of the Trade Act of 1974 is amend23 ed—

24 (1) by inserting after the item relating to sec25 tion 249 the following new item:

‘‘Sec. 249A. Nonduplication of assistance.’’;
251

1 and

2 (2) by adding at the end thereof the following

3 new items:

‘‘SUBCHAPTER D—NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM

‘‘Sec. 250. Establishment of transitional program.’’.

4 SEC. 504. AUTHORIZATION OF APPROPRIATIONS.

5 Section 245 of the Trade Act of 1974 (19 U.S.C.

6 2317) is amended—

7 (1) by striking ‘‘There’’ and inserting ‘‘(a) IN

8 GENERAL.—There’’,

9 (2) by inserting ‘‘, other than subchapter D’’

10 after ‘‘chapter’’, and

11 (3) by adding at the end the following new sub12 section:

13 ‘‘(b) SUBCHAPTER D.—There are authorized to be

14 appropriated to the Department of Labor, for each of fis15 cal years 1994, 1995, 1996, 1997, and 1998, such sums

16 as may be necessary to carry out the purposes of sub17 chapter D of this chapter.’’.

18 SEC. 505. TERMINATION OF TRANSITION PROGRAM.

19 Subsection (c) of section 285 of the Trade Act of

20 1974 (19 U.S.C. 2271 preceding note) is amended—

21 (1) by striking ‘‘No’’ and inserting ‘‘(1) Except

22 as provided in paragraph (2), no’’; and

23 (2) by adding at the end the following new

24 paragraph:
252

1 ‘‘(2)(A) Except as provided in subparagraph (B), no

2 assistance, vouchers, allowances, or other payments may

3 be provided under subchapter D of chapter 2 after the

4 day that is the earlier of—

5 ‘‘(i) September 30, 1998, or

6 ‘‘(ii) the date on which legislation, establishing

7 a program providing dislocated workers with com8 prehensive assistance substantially similar to the as9 sistance provided by such subchapter D, becomes ef10 fective.

11 ‘‘(B) Notwithstanding subparagraph (A), if, on or be12 fore the day described in subparagraph (A), a worker—

13 ‘‘(i) is certified as eligible to apply for assist14 ance, under subchapter D of chapter 2; and

15 ‘‘(ii) is otherwise eligible to receive assistance in

16 accordance with section 250,

17 such worker shall continue to be eligible to receive such

18 assistance for any week for which the worker meets the

19 eligibility requirements of such section.’’.

20 SEC. 506. EFFECTIVE DATE.

21 (a) IN GENERAL.—The amendments made by sec22 tions 501, 502, 503, 504, and 505 shall take effect on

23 the date the Agreement enters into force with respect to

24 the United States.

25 (b) COVERED WORKERS.—
253

1 (1) GENERAL RULE.—Except as provided in

2 paragraph (2), no worker shall be certified as eligi3 ble to receive assistance under subchapter D of

4 chapter 2 of title II of the Trade Act of 1974 (as

5 added by this subtitle) whose last total or partial

6 separation from a firm (or appropriate subdivision of

7 a firm) occurred before such date of entry into force.

8 (2) REACHBACK.—Notwithstanding paragraph

9 (1), any worker—

10 (A) whose last total or partial separation

11 from a firm (or appropriate subdivision of a

12 firm) occurs—

13 (i) after the date of the enactment of

14 this Act, and

15 (ii) before such date of entry into

16 force, and

17 (B) who would otherwise be eligible to re18 ceive assistance under subchapter D of chapter

19 2 of title II of the Trade Act of 1974,

20 shall be eligible to receive such assistance in the

21 same manner as if such separation occurred on or

22 after such date of entry into force.
254

1 SEC. 507. TREATMENT OF SELF-EMPLOYMENT ASSISTANCE

2 PROGRAMS.

3 (a) GENERAL RULE.—Section 3306 of the Internal

4 Revenue Code of 1986 is amended by adding at the end

5 the following new subsection:

6 ‘‘(t) SELF-EMPLOYMENT ASSISTANCE PROGRAM.—

7 For the purposes of this chapter, the term ‘self-employ8 ment assistance program’ means a program under

9 which—

10 ‘‘(1) individuals who meet the requirements de11 scribed in paragraph (3) are eligible to receive an al12 lowance in lieu of regular unemployment compensa13 tion under the State law for the purpose of assisting

14 such individuals in establishing a business and be15 coming self-employed;

16 ‘‘(2) the allowance payable to individuals pursu17 ant to paragraph (1) is payable in the same amount,

18 at the same interval, on the same terms, and subject

19 to the same conditions, as regular unemployment

20 compensation under the State law, except that—

21 ‘‘(A) State requirements relating to avail22 ability for work, active search for work, and re23 fusal to accept work are not applicable to such

24 individuals;

25 ‘‘(B) State requirements relating to dis26 qualifying income are not applicable to income
255

1 earned from self-employment by such individ2 uals; and

3 ‘‘(C) such individuals are considered to be

4 unemployed for the purposes of Federal and

5 State laws applicable to unemployment com6 pensation,

7 as long as such individuals meet the requirements

8 applicable under this subsection;

9 ‘‘(3) individuals may receive the allowance

10 described in paragraph (1) if such individuals—

11 ‘‘(A) are eligible to receive regular unem12 ployment compensation under the State law, or

13 would be eligible to receive such compensation

14 except for the requirements described in sub15 paragraph (A) or (B) of paragraph (2);

16 ‘‘(B) are identified pursuant to a State

17 worker profiling system as individuals likely to

18 exhaust regular unemployment compensation;

19 and

20 ‘‘(C) are participating in self-employment

21 assistance activities which—

22 ‘‘(i) include entrepreneurial training,

23 business counseling, and technical assist24 ance; and
256

1 ‘‘(ii) are approved by the State agen2 cy; and

3 ‘‘(D) are actively engaged on a full-time

4 basis in activities (which may include training)

5 relating to the establishment of a business and

6 becoming self-employed;

7 ‘‘(4) the aggregate number of individuals receiv8 ing the allowance under the program does not at any

9 time exceed 5 percent of the number of individuals

10 receiving regular unemployment compensation under

11 the State law at such time;

12 ‘‘(5) the program does not result in any cost to

13 the Unemployment Trust Fund (established by sec14 tion 904(a) of the Social Security Act) in excess of

15 the cost that would be incurred by such State and

16 charged to such Fund if the State had not partici17 pated in such program; and

18 ‘‘(6) the program meets such other require19 ments as the Secretary of Labor determines to be

20 appropriate.’’.

21 (b) CONFORMING AMENDMENTS.—

22 (1) Section 3304(a)(4) of such Code is amend23 ed—

24 (A) in subparagraph (D), by striking ‘‘;

25 and’’ and inserting a semicolon;
257

1 (B) in subparagraph (E), by striking the

2 semicolon and inserting ‘‘; and’’; and

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

4 subparagraph:

5 ‘‘(F) amounts may be withdrawn for the

6 payment of allowances under a self-employment

7 assistance program (as defined in section

8 3306(t));’’.

9 (2) Section 3306(f) of such Code is amended—

10 (A) in paragraph (3), by striking ‘‘; and’’

11 and inserting a semicolon;

12 (B) in paragraph (4), by striking the pe13 riod and inserting ‘‘; and’’; and

14 (C) by adding at the end the following new

15 paragraph:

16 ‘‘(5) amounts may be withdrawn for the pay17 ment of allowances under a self-employment assist18 ance program (as defined in subsection (t)).’’.

19 (3) Section 303(a)(5) of the Social Security Act

20 (42 U.S.C. 503(a)(5)) is amended by striking ‘‘;

21 and’’ and inserting ‘‘: Provided further, That

22 amounts may be withdrawn for the payment of al23 lowances under a self-employment assistance pro24 gram (as defined in section 3306(t) of the Internal

25 Revenue Code of 1986); and’’.
258

1 (c) STATE REPORTS.—Any State operating a self-em2 ployment program authorized by the Secretary of Labor

3 under this section shall report annually to the Secretary

4 on the number of individuals who participate in the self5 employment assistance program, the number of individ6 uals who are able to develop and sustain businesses, the

7 operating costs of the program, compliance with program

8 requirements, and any other relevant aspects of program

9 operations requested by the Secretary.

10 (d) REPORT TO CONGRESS.—Not later than 4 years

11 after the date of the enactment of this Act, the Secretary

12 of Labor shall submit a report to the Congress with re13 spect to the operation of the program authorized under

14 this section. Such report shall be based on the reports re15 ceived from the States pursuant to subsection (c) and in16 clude such other information as the Secretary of Labor

17 determines is appropriate.

18 (e) EFFECTIVE DATE; SUNSET.—

19 (1) EFFECTIVE DATE.—The provisions of this

20 section and the amendments made by this section

21 shall take effect on the date of the enactment of this

22 Act.

23 (2) SUNSET.—The authority provided by this

24 section, and the amendments made by this section,
259

1 shall terminate 5 years after the date of the enact2 ment of this Act.

3 Subtitle B—Provisions Relating to

4 Performance Under the Agreement

5 SEC. 511. DISCRIMINATORY TAXES.

6 It is the sense of the Congress that when a State,

7 province, or other governmental entity of a NAFTA coun8 try discriminatorily enforces sales or other taxes so as to

9 afford protection to domestic production or domestic serv10 ice providers, such enforcement is in violation of the terms

11 of the Agreement. When such discriminatory enforcement

12 adversely affects United States producers of goods or

13 United States service providers, the Trade Representative

14 should pursue all appropriate remedies to obtain removal

15 of such discriminatory enforcement, including invocation

16 of the provisions of the Agreement.

17 SEC. 512. REVIEW OF THE OPERATION AND EFFECTS OF

18 THE AGREEMENT.

19 (a) STUDY.—By not later than July 1, 1997, the

20 President shall provide to the Congress a comprehensive

21 study on the operation and effects of the Agreement. The

22 study shall include an assessment of the following factors:

23 (1) The net effect of the Agreement on the

24 economy of the United States, including with respect
260

1 to the United States gross national product, employ2 ment, balance of trade, and current account balance.

3 (2) The industries (including agricultural indus4 tries) in the United States that have significantly in5 creased exports to Mexico or Canada as a result of

6 the Agreement, or in which imports into the United

7 States from Mexico or Canada have increased sig8 nificantly as a result of the Agreement, and the ex9 tent of any change in the wages, employment, or

10 productivity in each such industry as a result of the

11 Agreement.

12 (3) The extent to which investment in new or

13 existing production or other operations in the United

14 States has been redirected to Mexico as a result of

15 the Agreement, and the effect on United States em16 ployment of such redirection.

17 (4) The extent of any increase in investment,

18 including foreign direct investment and increased in19 vestment by United States investors, in new or exist20 ing production or other operations in the United

21 States as a result of the Agreement, and the effect

22 on United States employment of such investment.

23 (5) The extent to which the Agreement has con24 tributed to—
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1 (A) improvement in real wages and work2 ing conditions in Mexico,

3 (B) effective enforcement of labor and en4 vironmental laws in Mexico, and

5 (C) the reduction or abatement of pollution

6 in the region of the United States-Mexico bor7 der.

8 (b) SCOPE.—In assessing the factors listed in sub9 section (a), to the extent possible, the study shall distin10 guish between the consequences of the Agreement and

11 events that likely would have occurred without the Agree12 ment. In addition, the study shall evaluate the effects of

13 the Agreement relative to aggregate economic changes

14 and, to the extent possible, relative to the effects of other

15 factors, including—

16 (1) international competition,

17 (2) reductions in defense spending,

18 (3) the shift from traditional manufacturing to

19 knowledge and information based economic activity,

20 and

21 (4) the Federal debt burden.

22 (c) RECOMMENDATIONS OF THE PRESIDENT.—The

23 study shall include any appropriate recommendations by

24 the President with respect to the operation and effects of
262

1 the Agreement, including recommendations with respect to

2 the specific factors listed in subsection (a).

3 (d) RECOMMENDATIONS OF CERTAIN COMMIT4 TEES.—The President shall provide the study to the Com5 mittee on Ways and Means of the House of Representa6 tives and the Committee on Finance of the Senate and

7 any other committee that has jurisdiction over any provi8 sion of United States law that was either enacted or

9 amended by the North American Free Trade Agreement

10 Implementation Act. Each such committee may hold hear11 ings and make recommendations to the President with re12 spect to the operation and effects of the Agreement.

13 SEC. 513. ACTIONS AFFECTING UNITED STATES CULTURAL

14 INDUSTRIES.

15 Section 182 of the Trade Act of 1974 (19 U.S.C.

16 2242) is amended by adding at the end the following new

17 subsection:

18 ‘‘(f) SPECIAL RULE FOR ACTIONS AFFECTING UNIT19 ED STATES CULTURAL INDUSTRIES.—

20 ‘‘(1) IN GENERAL.—By no later than the date

21 that is 30 days after the date on which the annual

22 report is submitted to Congressional committees

23 under section 181(b), the Trade Representative shall

24 identify any act, policy, or practice of Canada

25 which—
263

1 ‘‘(A) affects cultural industries,

2 ‘‘(B) is adopted or expanded after Decem3 ber 17, 1992, and

4 ‘‘(C) is actionable under article 2106 of

5 the North American Free Trade Agreement.

6 ‘‘(2) SPECIAL RULES FOR IDENTIFICATIONS.—

7 For purposes of section 302(b)(2)(A), an act, policy,

8 or practice identified under this subsection shall be

9 treated as an act, policy, or practice that is the basis

10 for identification of a country under subsection

11 (a)(2), unless the United States has already taken

12 action pursuant to article 2106 of the North Amer13 ican Free Trade Agreement in response to such act,

14 policy, or practice. In deciding whether to identify

15 an act, policy, or practice under paragraph (1), the

16 Trade Representative shall—

17 ‘‘(A) consult with and take into account

18 the views of representatives of the relevant do19 mestic industries, appropriate committees es20 tablished pursuant to section 135, and appro21 priate officers of the Federal Government, and

22 ‘‘(B) take into account the information

23 from such sources as may be available to the

24 Trade Representative and such information as

25 may be submitted to the Trade Representative
264

1 by interested persons, including information

2 contained in reports submitted under section

3 181(b).

4 ‘‘(3) CULTURAL INDUSTRIES.—For purposes of

5 this subsection, the term ‘cultural industries’ means

6 persons engaged in any of the following activities:

7 ‘‘(A) The publication, distribution, or sale

8 of books, magazines, periodicals, or newspapers

9 in print or machine readable form but not in10 cluding the sole activity of printing or type11 setting any of the foregoing.

12 ‘‘(B) The production, distribution, sale, or

13 exhibition of film or video recordings.

14 ‘‘(C) The production, distribution, sale, or

15 exhibition of audio or video music recordings.

16 ‘‘(D) The publication, distribution, or sale

17 of music in print or machine readable form.

18 ‘‘(E) Radio communications in which the

19 transmissions are intended for direct reception

20 by the general public, and all radio, television,

21 and cable broadcasting undertakings and all

22 satellite programming and broadcast network

23 services.’’.
265

1 SEC. 514. REPORT ON IMPACT OF NAFTA ON MOTOR VEHI2 CLE EXPORTS TO MEXICO.

3 (a) FINDINGS.—The Congress makes the following

4 findings:

5 (1 ) Trade in motor vehicles and motor vehicle

6 parts is one of the most restricted areas of trade be7 tween the United States and Mexico.

8 (2) The elimination of Mexico’s restrictive bar9 riers to trade in motor vehicles and motor vehicle

10 parts over a 10-year period under the Agreement

11 should increase substantially United States exports

12 of such products to Mexico.

13 (3) The Department of Commerce estimates

14 that the Agreement provides the opportunity to in15 crease United States exports of motor vehicles and

16 motor vehicle parts by $1,000,000,000 during the

17 first year of the Agreement’s implementation with

18 the potential for additional increases over the 10-

19 year transition period.

20 (4) The United States automotive industry has

21 estimated that United States exports of motor vehi22 cles to Mexico should increase to more than 60,000

23 units during the first year of the Agreement’s imple24 mentation, which is substantially above the current

25 level of 4,000 units.
266

1 (b) TRADE REPRESENTATIVE REPORT.—No later

2 than July 1, 1995, and annually thereafter through 1999,

3 the Trade Representative shall submit a report to the

4 Committee on Finance of the Senate and the Committee

5 on Ways and Means of the House of Representatives on

6 how effective the provisions of the Agreement are with re7 spect to increasing United States exports of motor vehicles

8 and motor vehicle parts to Mexico. Each report shall iden9 tify and determine the following:

10 (1) The patterns of trade in motor vehicles and

11 motor vehicle parts between the United States and

12 Mexico during the preceding 12-month period.

13 (2) The level of tariff and nontariff barriers

14 that were in force during the preceding 12-month

15 period.

16 (3) The amount by which United States exports

17 of motor vehicles and motor vehicle parts to Mexico

18 have increased from the preceding 12-month period

19 as a result of the elimination of Mexican tariff and

20 nontariff barriers under the Agreement.

21 (4) Whether any such increase in United States

22 exports meets the levels of new export opportunities

23 anticipated under the Agreement.

24 (5) If the anticipated levels of new United

25 States export opportunities are not reached, what
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1 actions the Trade Representative is prepared to take

2 to realize the benefits anticipated under the Agree3 ment, including possible initiation of additional ne4 gotiations with Mexico for the purpose of seeking

5 modifications of the Agreement.

6 SEC. 515. CENTER FOR THE STUDY OF WESTERN HEMI7 SPHERIC TRADE.

8 (a) AMENDMENT TO THE CBI.—The Caribbean

9 Basin Economic Recovery Act (19 U.S.C. 2701 et seq.)

10 is amended by inserting after section 218 the following

11 new section:

12 ‘‘SEC. 219. CENTER FOR THE STUDY OF WESTERN HEMI13 SPHERIC TRADE.

14 ‘‘(a) ESTABLISHMENT.—The Commissioner of Cus15 toms, after consultation with appropriate officials in the

16 State of Texas, is authorized and directed to make grants

17 to an institution (or a consortium of such institutions) to

18 assist such institution in planning, establishing, and oper19 ating a Center for the Study of Western Hemispheric

20 Trade (hereafter in this section referred to as the ‘Cen21 ter’). The Commissioner of Customs shall make the first

22 grant not later than December 1, 1994, and the Center

23 shall be established not later than February 1, 1995.

24 ‘‘(b) SCOPE OF THE CENTER.—The Center shall be

25 a year-round program operated by an institution located
268

1 in the State of Texas (or a consortium of such institu2 tions), the purpose of which is to promote and study trade

3 between and among Western Hemisphere countries. The

4 Center shall conduct activities designed to examine—

5 ‘‘(1) the impact of the NAFTA on the econo6 mies in, and trade within, the Western Hemisphere,

7 ‘‘(2) the negotiation of any future free trade

8 agreements, including possible accessions to the

9 NAFTA; and

10 ‘‘(3) adjusting tariffs, reducing nontariff bar11 riers, improving relations among customs officials,

12 and promoting economic relations among countries

13 in the Western Hemisphere.

14 ‘‘(c) CONSULTATION; SELECTION CRITERIA.—The

15 Commissioner of Customs shall consult with appropriate

16 officials of the State of Texas and private sector authori17 ties with respect to selecting, planning, and establishing

18 the Center. In selecting the appropriate institution, the

19 Commissioner of Customs shall give consideration to—

20 ‘‘(1) the institution’s ability to carry out the

21 programs and activities described in this section;

22 and

23 ‘‘(2) any resources the institution can provide

24 the Center in addition to Federal funds provided

25 under this program.
269

1 ‘‘(d) PROGRAMS AND ACTIVITIES.—The Center shall

2 conduct the following activities:

3 ‘‘(1) Provide forums for international discussion

4 and debate for representatives from countries in the

5 Western Hemisphere regarding issues which affect

6 trade and other economic relations within the hemi7 sphere, including the impact of the NAFTA on indi8 vidual economies and the desirability and feasibility

9 of possible accessions to the NAFTA by such coun10 tries.

11 ‘‘(2) Conduct studies and research projects on

12 subjects which affect Western Hemisphere trade, in13 cluding tariffs, customs, regional and national eco14 nomics, business development and finance, produc15 tion and personnel management, manufacturing, ag16 riculture, engineering, transportation, immigration,

17 telecommunications, medicine, science, urban stud18 ies, border demographics, social anthropology, and

19 population.

20 ‘‘(3) Publish materials, disseminate informa21 tion, and conduct seminars and conferences to sup22 port and educate representatives from countries in

23 the Western Hemisphere who seek to do business

24 with or invest in other Western Hemisphere coun25 tries.
270

1 ‘‘(4) Provide grants, fellowships, endowed

2 chairs, and financial assistance to outstanding schol3 ars and authorities from Western Hemisphere coun4 tries.

5 ‘‘(5) Provide grants, fellowships, and other fi6 nancial assistance to qualified graduate students,

7 from Western Hemisphere countries, to study at the

8 Center.

9 ‘‘(6) Implement academic exchange programs

10 and other cooperative research and instructional

11 agreements with the complementary North/South

12 Center at the University of Miami at Coral Gables.

13 ‘‘(e) DEFINITIONS.—For purposes of this section—

14 ‘‘(1) NAFTA.—The term ‘NAFTA’ means the

15 North American Free Trade Agreement.

16 ‘‘(2) WESTERN HEMISPHERE COUNTRIES.—The

17 terms ‘Western Hemisphere countries’, ‘countries in

18 the Western Hemisphere’, and ‘Western Hemi19 sphere’ mean Canada, the United States, Mexico,

20 countries located in South America, beneficiary

21 countries (as defined by section 212), the Common22 wealth of Puerto Rico, and the United States Virgin

23 Islands.

24 ‘‘(f) FEES FOR SEMINARS AND PUBLICATIONS.—

25 Notwithstanding any other provision of law, a grant made
271

1 under this section may provide that the Center may charge

2 a reasonable fee for attendance at seminars and con3 ferences and for copies of publications, studies, reports,

4 and other documents the Center publishes. The Center

5 may waive such fees in any case in which it determines

6 imposing a fee would impose a financial hardship and the

7 purposes of the Center would be served by granting such

8 a waiver.

9 ‘‘(g) DURATION OF GRANT.—The Commissioner of

10 Customs is directed to make grants to any institution or

11 institutions selected as the Center for fiscal years 1994,

12 1995, 1996, and 1997.

13 ‘‘(h) REPORT.—The Commissioner of Customs shall,

14 no later than July 1, 1994, and annually thereafter for

15 years for which grants are made, submit a written report

16 to the Committee on Finance of the Senate and the Com17 mittee on Ways and Means of the House of Representa18 tives. The first report shall include—

19 ‘‘(1) a statement identifying the institution or

20 institutions selected as the Center,

21 ‘‘(2) the reasons for selecting the institution or

22 institutions as the Center, and

23 ‘‘(3) the plan of such institution or institutions

24 for operating the Center.
272

1 Each subsequent report shall include information with re2 spect to the operations of the Center, the collaboration of

3 the Center with, and dissemination of information to, Gov4 ernment policymakers and the business community with

5 respect to the study of Western Hemispheric trade by the

6 Center, and the plan and efforts of the Center to continue

7 operations after grants under this section have expired.’’.

8 (b) AUTHORIZATION OF APPROPRIATIONS.—There

9 are authorized to be appropriated $10,000,000 for fiscal

10 year 1994, and such sums as may be necessary in the 3

11 succeeding fiscal years to carry out the purposes of section

12 219 of the Caribbean Basin Economic Recovery Act (as

13 added by subsection (a)).

14 SEC. 516. EFFECTIVE DATE.

15 (a) IN GENERAL.—Except as provided in subsection

16 (b), the provisions of this subtitle shall take effect on the

17 date the Agreement enters into force with respect to the

18 United States.

19 (b) EXCEPTION.—Section 515 shall take effect on the

20 date of the enactment of this Act.
273

1 Subtitle C—Funding

2 PART 1—CUSTOMS USER FEES

3 SEC. 521. FEES FOR CERTAIN CUSTOMS SERVICES.

4 (a) IN GENERAL.—Section 13031 of the Consolidated

5 Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.

6 58c) is amended—

7 (1) by amending paragraph (5) of subsection

8 (a) to read as follows:

9 ‘‘(5)(A) For fiscal years 1994, 1995, 1996, and

10 1997, for the arrival of each passenger aboard a

11 commercial vessel or commercial aircraft from out12 side the customs territory of the United States,

13 $6.50.

14 ‘‘(B) For fiscal year 1998 and each fiscal year

15 thereafter, for the arrival of each passenger aboard

16 a commercial vessel or commercial aircraft from a

17 place outside the United States (other than a place

18 referred to in subsection (b)(1)(A) of this section),

19 $5.’’

20 (2) by adding at the end of paragraph (1) of

21 subsection (b), the following flush sentence:

22 ‘‘Subparagraph (A) shall not apply to fiscal years

23 1994, 1995, 1996, and 1997.’’,

24 (3) in subsection (f)—
274

1 (A) in paragraph (1), by striking ‘‘except’’

2 and all that follows through the end period and

3 inserting: ‘‘except—

4 ‘‘(A) the portion of such fees that is re5 quired under paragraph (3) for the direct reim6 bursement of appropriations, and

7 ‘‘(B) the portion of such fees that is deter8 mined by the Secretary to be excess fees under

9 paragraph (5).’’,

10 (B) in paragraph (3)(A), by striking the

11 first parenthetical and inserting ‘‘(other than

12 the fees under subsection (a) (9) and (10) and

13 the excess fees determined by the Secretary

14 under paragraph (5))’’,

15 (C) in paragraph (4), by striking ‘‘under

16 subsection (a)’’ and inserting ‘‘under subsection

17 (a) (other than the excess fees determined by

18 the Secretary under paragraph (5))’’, and

19 (D) by adding at the end thereof the fol20 lowing new paragraph:

21 ‘‘(5) At the close of each of fiscal years 1994,

22 1995, 1996, and 1997, the Secretary of the Treas23 ury shall determine the amount of the fees collected

24 under paragraph (5)(A) of subsection (a) for that

25 fiscal year that exceeds the amount of such fees that
275

1 would have been collected for such fiscal year if the

2 fees that were in effect on the day before the effec3 tive date of this paragraph applied to such fiscal

4 year. The amount of the excess fees determined

5 under the preceding sentence shall be deposited in

6 the Customs User Fee Account and shall be avail7 able for reimbursement of inspectional costs (includ8 ing passenger processing costs) not otherwise reim9 bursed under this section, and shall be available only

10 to the extent provided in appropriations Acts.’’, and

11 (4) in paragraph (3) of subsection (j), by strik12 ing ‘‘September 30, 1998’’ and inserting ‘‘September

13 30, 2003.’’.

14 (b) EFFECTIVE DATE.—The amendments made by

15 this section shall take effect on the date the Agreement

16 enters into force with respect to the United States.

17 PART 2—INTERNAL REVENUE CODE

18 AMENDMENTS

19 SEC. 522. AUTHORITY TO DISCLOSE CERTAIN TAX INFOR20 MATION TO THE UNITED STATES CUSTOMS

21 SERVICE.

22 (a) IN GENERAL.—Subsection (l) of section 6103 of

23 the Internal Revenue Code of 1986 (relating to confiden24 tiality and disclosure of returns and return information)
276

1 is amended by adding at the end thereof the following new

2 paragraph:

3 ‘‘(14) DISCLOSURE OF RETURN INFORMATION

4 TO UNITED STATES CUSTOMS SERVICE.—The Sec5 retary may, upon written request from the Commis6 sioner of the United States Customs Service, dis7 close to officers and employees of the Department of

8 the Treasury such return information with respect

9 to taxes imposed by chapters 1 and 6 as the Sec10 retary may prescribe by regulations, solely for the

11 purpose of, and only to the extent necessary in—

12 ‘‘(A) ascertaining the correctness of any

13 entry in audits as provided for in section 509

14 of the Tariff Act of 1930 (19 U.S.C. 1509), or

15 ‘‘(B) other actions to recover any loss of

16 revenue, or to collect duties, taxes, and fees, de17 termined to be due and owing pursuant to such

18 audits.’’

19 (b) CONFORMING AMENDMENTS.—Paragraphs

20 (3)(A) and (4) of section 6103(p) of such Code are each

21 amended by striking ‘‘or (13)’’ each place it appears and

22 inserting ‘‘(13), or (14)’’.

23 (c) EFFECTIVE DATE.—

24 (1) IN GENERAL.—The amendments made by

25 this section shall take effect on the date the Agree-
277

1 ment enters into force with respect to the United

2 States.

3 (2) REGULATIONS.—Not later than 90 days

4 after the date of the enactment of this Act, the Sec5 retary of the Treasury or his delegate shall issue

6 temporary regulations to carry out section

7 6103(l)(14) of the Internal Revenue Code of 1986,

8 as added by this section.

9 SEC. 523. USE OF ELECTRONIC FUND TRANSFER SYSTEM

10 FOR COLLECTION OF CERTAIN TAXES.

11 (a) GENERAL RULE.—Section 6302 of the Internal

12 Revenue Code of 1986 (relating to mode or time of collec13 tion) is amended by redesignating subsection (h) as sub14 section (i) and by inserting after subsection (g) the follow15 ing new subsection:

16 ‘‘(h) USE OF ELECTRONIC FUND TRANSFER SYSTEM

17 FOR COLLECTION OF CERTAIN TAXES.—

18 ‘‘(1) ESTABLISHMENT OF SYSTEM.—

19 ‘‘(A) IN GENERAL.—The Secretary shall

20 prescribe such regulations as may be necessary

21 for the development and implementation of an

22 electronic fund transfer system which is re23 quired to be used for the collection of deposi24 tory taxes. Such system shall be designed in

25 such manner as may be necessary to ensure
278

1 that such taxes are credited to the general ac2 count of the Treasury on the date on which

3 such taxes would otherwise have been required

4 to be deposited under the Federal tax deposit

5 system.

6 ‘‘(B) EXEMPTIONS.—The regulations pre7 scribed under subparagraph (A) may contain

8 such exemptions as the Secretary may deem

9 appropriate.

10 ‘‘(2) PHASE-IN REQUIREMENTS.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 subparagraph (B), the regulations referred to in

13 paragraph (1)—

14 ‘‘(i) shall contain appropriate proce15 dures to assure that an orderly conversion

16 from the Federal tax deposit system to the

17 electronic fund transfer system is accom18 plished, and

19 ‘‘(ii) may provide for a phase-in of

20 such electronic fund transfer system by

21 classes of taxpayers based on the aggre22 gate undeposited taxes of such taxpayers

23 at the close of specified periods and any

24 other factors the Secretary may deem ap25 propriate.
279

1 ‘‘(B) PHASE-IN REQUIREMENTS.—The

2 phase-in of the electronic fund transfer system

3 shall be designed in such manner as may be

4 necessary to ensure that—

5 ‘‘(i) during each fiscal year beginning

6 after September 30, 1993, at least the ap7 plicable required percentage of the total

8 depository taxes imposed by chapters 21,

9 22, and 24 shall be collected by means of

10 electronic fund transfer, and

11 ‘‘(ii) during each fiscal year beginning

12 after September 30, 1993, at least the ap13 plicable required percentage of the total

14 other depository taxes shall be collected by

15 means of electronic fund transfer.

16 ‘‘(C) APPLICABLE REQUIRED PERCENT17 AGE.—

18 ‘‘(i) In the case of the depository

19 taxes imposed by chapters 21, 22, and 24,

20 the applicable required percentage is—

21 ‘‘(I) 3 percent for fiscal year

22 1994,

23 ‘‘(II) 16.9 percent for fiscal year

24 1995,
280

1 ‘‘(III) 20.1 percent for fiscal year

2 1996,

3 ‘‘(IV) 58.3 percent for fiscal

4 years 1997 and 1998, and

5 ‘‘(V) 94 percent for fiscal year

6 1999 and all fiscal years thereafter.

7 ‘‘(ii) In the case of other depository

8 taxes, the applicable required percentage

9 is—

10 ‘‘(I) 3 percent for fiscal year

11 1994,

12 ‘‘(II) 20 percent for fiscal year

13 1995,

14 ‘‘(III) 30 percent for fiscal year

15 1996,

16 ‘‘(IV) 60 percent for fiscal years

17 1997 and 1998, and

18 ‘‘(V) 94 percent for fiscal year

19 1999 and all fiscal years thereafter.

20 ‘‘(3) DEFINITIONS.—For purposes of this sub21 section—

22 ‘‘(A) DEPOSITORY TAX.—The term ‘depos23 itory tax’ means any tax if the Secretary is au24 thorized to require deposits of such tax.
281

1 ‘‘(B) ELECTRONIC FUND TRANSFER.—The

2 term ‘electronic fund transfer’ means any trans3 fer of funds, other than a transaction originated

4 by check, draft, or similar paper instrument,

5 which is initiated through an electronic termi6 nal, telephonic instrument, or computer or mag7 netic tape so as to order, instruct, or authorize

8 a financial institution or other financial

9 intermediary to debit or credit an account.

10 ‘‘(4) COORDINATION WITH OTHER ELECTRONIC

11 FUND TRANSFER REQUIREMENTS.—

12 ‘‘(A) COORDINATION WITH CERTAIN EX13 CISE TAXES.—In determining whether the re14 quirements of subparagraph (B) of paragraph

15 (2) are met, taxes required to be paid by elec16 tronic fund transfer under sections 5061(e) and

17 5703(b) shall be disregarded.

18 ‘‘(B) ADDITIONAL REQUIREMENT.—Under

19 regulations, any tax required to be paid by elec20 tronic fund transfer under section 5061(e) or

21 5703(b) shall be paid in such a manner as to

22 ensure that the requirements of the second sen23 tence of paragraph (1)(A) of this subsection are

24 satisfied.’’

25 (b) EFFECTIVE DATE.—
282

1 (1) IN GENERAL.—The amendments made by

2 this section shall take effect on the date the Agree3 ment enters into force with respect to the United

4 States.

5 (2) REGULATIONS.—Not later than 210 days

6 after the date of enactment of this Act, the Sec7 retary of the Treasury or his delegate shall prescribe

8 temporary regulations under section 6302(h) of the

9 Internal Revenue Code of 1986 (as added by this

10 section).

11 Subtitle D—Implementation of

12 NAFTA Supplemental Agreements

13 PART 1—AGREEMENTS RELATING TO LABOR AND

14 ENVIRONMENT

15 SEC. 531. AGREEMENT ON LABOR COOPERATION.

16 (a) COMMISSION FOR LABOR COOPERATION.—

17 (1) MEMBERSHIP.—The United States is au18 thorized to participate in the Commission for Labor

19 Cooperation in accordance with the North American

20 Agreement on Labor Cooperation.

21 (2) CONTRIBUTIONS TO BUDGET.—There are

22 authorized to be appropriated to the President (or

23 such agency as the President may designate)

24 $2,000,000 for each of fiscal years 1994 and 1995

25 for United States contributions to the annual budget
283

1 of the Commission for Labor Cooperation pursuant

2 to Article 43 of the North American Agreement on

3 Labor Cooperation. Funds authorized to be appro4 priated for such contributions by this paragraph are

5 in addition to any funds otherwise available for such

6 contributions. Funds authorized to be appropriated

7 by this paragraph are authorized to be made avail8 able until expended.

9 (b) DEFINITIONS.—As used in this section—

10 (1) the term ‘‘Commission for Labor Coopera11 tion’’ means the commission established by Part

12 Three of the North American Agreement on Labor

13 Cooperation; and

14 (2) the term ‘‘North American Agreement on

15 Labor Cooperation’’ means the North American

16 Agreement on Labor Cooperation Between the Gov17 ernment of the United States of America, the Gov18 ernment of Canada, and the Government of the

19 United Mexican States (signed at Mexico City,

20 Washington, and Ottawa on September 8, 9, 12, and

21 14, 1993).

22 SEC. 532. AGREEMENT ON ENVIRONMENTAL COOPERA23 TION.

24 (a) COMMISSION FOR ENVIRONMENTAL COOPERA25 TION.—
284

1 (1) MEMBERSHIP.—The United States is au2 thorized to participate in the Commission for Envi3 ronmental Cooperation in accordance with the North

4 American Agreement on Environmental Cooperation.

5 (2) CONTRIBUTIONS TO BUDGET.—There are

6 authorized to be appropriated to the President (or

7 such agency as the President may designate)

8 $5,000,000 for each of fiscal years 1994 and 1995

9 for United States contributions to the annual budget

10 of the Commission for Environmental Cooperation

11 pursuant to Article 43 of the North American

12 Agreement on Environmental Cooperation. Funds

13 authorized to be appropriated for such contributions

14 by this paragraph are in addition to any funds oth15 erwise available for such contributions. Funds au16 thorized to be appropriated by this paragraph are

17 authorized to be made available until expended.

18 (b) DEFINITIONS.—As used in this section—

19 (1) the term ‘‘Commission for Environmental

20 Cooperation’’ means the commission established by

21 Part Three of the North American Agreement on

22 Environmental Cooperation; and

23 (2) the term ‘‘North American Agreement on

24 Environmental Cooperation’’ means the North

25 American Agreement on Environmental Cooperation
285

1 Between the Government of the United States of

2 America, the Government of Canada, and the Gov3 ernment of the United Mexican States (signed at

4 Mexico City, Washington, and Ottawa on September

5 8, 9, 12, and 14, 1993).

6 SEC. 533. AGREEMENT ON BORDER ENVIRONMENT CO7 OPERATION COMMISSION.

8 (a) BORDER ENVIRONMENT COOPERATION COMMIS9 SION.—

10 (1) MEMBERSHIP.—The United States is au11 thorized to participate in the Border Environment

12 Cooperation Commission in accordance with the

13 Border Environment Cooperation Agreement.

14 (2) CONTRIBUTIONS TO THE COMMISSION

15 BUDGET.—There are authorized to be appropriated

16 to the President (or such agency as the President

17 may designate) $5,000,000 for fiscal year 1994 and

18 each fiscal year thereafter for United States con19 tributions to the budget of the Border Environment

20 Cooperation Commission pursuant to section 7 of

21 Article III of Chapter I of the Border Environment

22 Cooperation Agreement. Funds authorized to be ap23 propriated for such contributions by this paragraph

24 are in addition to any funds otherwise available for

25 such contributions. Funds authorized to be appro-
286

1 priated by this paragraph are authorized to be made

2 available until expended.

3 (b) CIVIL ACTIONS INVOLVING THE COMMISSION.—

4 For the purpose of any civil action which may be brought

5 within the United States by or against the Border Envi6 ronment Cooperation Commission in accordance with the

7 Border Environment Cooperation Agreement (including

8 an action brought to enforce an arbitral award against the

9 Commission), the Commission shall be deemed to be an

10 inhabitant of the Federal judicial district in which its prin11 cipal office within the United States, or its agent ap12 pointed for the purpose of accepting service or notice of

13 service, is located. Any such action to which the Commis14 sion is a party shall be deemed to arise under the laws

15 of the United States, and the district courts of the United

16 States (including the courts enumerated in section 460 of

17 title 28, United States Code) shall have original jurisdic18 tion of any such action. When the Commission is a defend19 ant in any action in a State court, it may at any time

20 before trial remove the action into the appropriate district

21 court of the United States by following the procedure for

22 removal provided in section 1446 of title 28, United States

23 Code.

24 (c) DEFINITIONS.—As used in this section—
287

1 (1) the term ‘‘Border Environment Cooperation

2 Agreement’’ means the November 1993 Agreement

3 Between the Government of the United States of

4 America and the Government of the United Mexican

5 States Concerning the Establishment of a Border

6 Environment Cooperation Commission and a North

7 American Development Bank;

8 (2) the terms ‘‘Border Environment Coopera9 tion Commission’’ and ‘‘Commission’’ mean the com10 mission established pursuant to Chapter I of the

11 Border Environment Cooperation Agreement; and

12 (3) the term ‘‘United States’’ means the United

13 States, its territories and possessions, and the Com14 monwealth of Puerto Rico.

15 PART 2—NORTH AMERICAN DEVELOPMENT

16 BANK AND RELATED PROVISIONS

17 SEC. 541. NORTH AMERICAN DEVELOPMENT BANK.

18 (a) ACCEPTANCE OF MEMBERSHIP.—The President

19 is hereby authorized to accept membership for the United

20 States in the North American Development Bank (here21 after in this part referred to as the ‘‘Bank’’) provided for

22 in Chapter II of the Border Environment Cooperation

23 Agreement (hereafter in this part referred to as the ‘‘Co24 operation Agreement’’).

25 (b) SUBSCRIPTION OF STOCK.—
288

1 (1) SUBSCRIPTION AUTHORITY.—

2 (A) IN GENERAL.—The Secretary of the

3 Treasury may subscribe on behalf of the United

4 States up to 150,000 shares of the capital stock

5 of the Bank.

6 (B) EFFECTIVENESS OF SUBSCRIPTION.—

7 Except as provided in paragraph (3), any such

8 subscription shall be effective only to such ex9 tent or in such amounts as are provided in ad10 vance in appropriations Acts.

11 (2) LIMITATIONS ON AUTHORIZATION OF AP12 PROPRIATIONS.—For payment by the Secretary of

13 the Treasury of the subscription of the United

14 States for shares described in paragraph (1), there

15 are authorized to be appropriated $1,500,000,000

16 ($225,000,000 of which may be used for paid-in

17 capital and $1,275,000,000 of which may be used

18 for callable capital) without fiscal year limitation.

19 (3) FUNDING; LIMITATION ON CALLABLE CAP20 ITAL SUBSCRIPTIONS.—

21 (A) FUNDING.—For fiscal year 1995, the

22 Secretary of the Treasury shall pay to the Bank

23 out of any sums in the Treasury not otherwise

24 appropriated the sum of $56,250,000 for the

25 paid-in portion of the United States share of
289

1 the capital stock of the Bank, 10 percent of

2 which may be transferred by the Bank to the

3 President pursuant to section 543 to pay for

4 the cost of direct and guaranteed Federal loans.

5 (B) LIMITATION ON CALLABLE CAPITAL

6 SUBSCRIPTIONS.—For fiscal year 1995, the

7 Secretary of the Treasury shall subscribe to the

8 callable capital portion of the United States

9 share of the capital stock of the Bank in an

10 amount not to exceed $318,750,000.

11 (4) DISPOSITION OF NET INCOME DISTRIBUTED

12 BY THE FACILITY.—Any payment made to the

13 United States by the Bank as a distribution of net

14 income shall be covered into the Treasury as a mis15 cellaneous receipt.

16 (c) COMPENSATION OF BOARD MEMBERS.—No per17 son shall be entitled to receive any salary or other com18 pensation from the Bank or the United States for services

19 as a Board member.

20 (d) APPLICABILITY OF BRETTON WOODS AGREE21 MENTS ACT.—The provisions of section 4 of the Bretton

22 Woods Agreements Act shall apply with respect to the

23 Bank to the same extent as with respect to the Inter24 national Bank for Reconstruction and Development and

25 the International Monetary Fund.
290

1 (e) RESTRICTIONS.—Unless authorized by law, nei2 ther the President nor any person or agency shall, on be3 half of the United States—

4 (1) subscribe to additional shares of stock of

5 the Bank;

6 (2) vote for or agree to any amendment of the

7 Cooperation Agreement which increases the obliga8 tions of the United States, or which changes the

9 purpose or functions of the Bank; or

10 (3) make a loan or provide other financing to

11 the Bank.

12 (f) FEDERAL RESERVE BANKS AS DEPOSITORIES.—

13 Any Federal Reserve bank that is requested to do so by

14 the Bank shall act as its depository or as its fiscal agent,

15 and the Board of Governors of the Federal Reserve Sys16 tem shall supervise and direct the carrying out of these

17 functions by the Federal Reserve banks.

18 (g) JURISDICTION OF UNITED STATES COURTS AND

19 ENFORCEMENT OF ARBITRAL AWARDS.—For the purpose

20 of any civil action which may be brought within the United

21 States, its territories or possessions, or the Commonwealth

22 of Puerto Rico, by or against the Bank in accordance with

23 the Cooperation Agreement, including an action brought

24 to enforce an arbitral award against the Bank, the Bank

25 shall be deemed to be an inhabitant of the Federal judicial
291

1 district in which its principal office within the United

2 States or its agency appointed for the purpose of accepting

3 service or notice of service is located, and any such action

4 to which the Bank shall be a party shall be deemed to

5 arise under the laws of the United States, and the district

6 courts of the United States, including the courts enumer7 ated in section 460 of title 28, United States Code, shall

8 have original jurisdiction of any such action. When the

9 Bank is a defendant in any action in a State court, it may

10 at any time before trial remove the action into the appro11 priate district court of the United States by following the

12 procedure for removal provided in section 1446 of title 28,

13 United States Code.

14 (h) EXEMPTION FROM SECURITIES LAWS FOR CER15 TAIN SECURITIES ISSUED BY THE BANK; REPORTS RE16 QUIRED.—

17 (1) EXEMPTIONS FROM LIMITATIONS AND RE18 STRICTIONS ON THE POWER OF NATIONAL BANKING

19 ASSOCIATIONS TO DEAL IN AND UNDERWRITE IN20 VESTMENT SECURITIES OF THE BANK.—The seventh

21 sentence of the seventh undesignated paragraph of

22 section 5136 of the Revised Statutes of the United

23 States (12 U.S.C. 24), is amended by inserting ‘‘the

24 North American Development Bank,’’ after ‘‘Inter25 American Development Bank,’’.
292

1 (2) EXEMPTION FROM SECURITIES LAWS FOR

2 CERTAIN SECURITIES ISSUED BY THE BANK; RE3 PORTS REQUIRED.—Any securities issued by the

4 Bank (including any guarantee by the Bank, wheth5 er or not limited in scope) in connection with the

6 raising of funds for inclusion in the Bank’s capital

7 resources as defined in Section 4 of Article II of

8 Chapter II of the Cooperation Agreement, and any

9 securities guaranteed by the Bank as to both the

10 principal and interest to which the commitment in

11 Section 3(d) of Article II of Chapter II of the Co12 operation Agreement is expressly applicable, shall be

13 deemed to be exempted securities within the mean14 ing of section 3(a)(2) of the Securities Act of 1933

15 (15 U.S.C. 77c), and section 3(a)(12) of the Securi16 ties Exchange Act of 1934 (15 U.S.C. 78c). The

17 Bank shall file with the Securities and Exchange

18 Commission such annual and other reports with re19 gard to such securities as the Commission shall de20 termine to be appropriate in view of the special char21 acter of the Bank and its operations and necessary

22 in the public interest or for the protection of inves23 tors.

24 (3) AUTHORITY OF SECURITIES AND EXCHANGE

25 COMMISSION TO SUSPEND EXEMPTION; REPORTS TO
293

1 THE CONGRESS.—The Securities and Exchange

2 Commission, acting in consultation with the Na3 tional Advisory Council on International Monetary

4 and Financial Problems, is authorized to suspend

5 the provisions of paragraph (2) at any time as to

6 any or all securities issued or guaranteed by the

7 Bank during the period of such suspension. The

8 Commission shall include in its annual reports to

9 Congress such information as it shall deem advisable

10 with regard to the operations and effect of this sub11 section and in connection therewith shall include any

12 views submitted for such purpose by any association

13 of dealers registered with the Commission.

14 SEC. 542. STATUS, IMMUNITIES, AND PRIVILEGES.

15 Article VIII of Chapter II of the Cooperation Agree16 ment shall have full force and effect in the United States,

17 its territories and possessions, and the Commonwealth of

18 Puerto Rico, upon entry into force of the Cooperation

19 Agreement.

20 SEC. 543. COMMUNITY ADJUSTMENT AND INVESTMENT

21 PROGRAM.

22 (a) THE PRESIDENT.—(1) The President may enter

23 into an agreement with the Bank that facilitates imple24 mentation by the President of a program for community

25 adjustment and investment in support of the Agreement
294

1 pursuant to chapter II of the Cooperation Agreement

2 (hereafter in this section referred to as the ‘‘community

3 adjustment and investment program’’).

4 (2) The President may receive from the Bank 10 per5 cent of the paid-in capital actually paid to the Bank by

6 the United States for the President to carry out, without

7 further appropriations, through Federal agencies and

8 their loan and loan guarantee programs, the community

9 adjustment and investment program, pursuant to an

10 agreement between the President and the Bank.

11 (3) The President may select one or more Federal

12 agencies that make loans or guarantees the repayment of

13 loans to assist in carrying out the community adjustment

14 and investment program, and may transfer the funds re15 ceived from the Bank to such agency or agencies for the

16 purpose of assisting in carrying out the community adjust17 ment and investment program.

18 (4)(A) Each Federal agency selected by the President

19 to assist in carrying out the community adjustment and

20 investment program shall use the funds transferred to it

21 by the President from the Bank to pay for the costs of

22 direct and guaranteed loans, as defined in section 502 of

23 the Congressional Budget Act of 1974, and, as appro24 priate, other costs associated with such loans, all subject
295

1 to the restrictions and limitations that apply to such agen2 cy’s existing loan or loan guarantee program.

3 (B) Funds transferred to an agency under subpara4 graph (A) shall be in addition to the amount of funds au5 thorized in any appropriations Act to be expended by that

6 agency for its loan or loan guarantee program.

7 (5) The President shall—

8 (A) establish guidelines for the loans and loan

9 guarantees to be made under the community adjust10 ment and investment program;

11 (B) endorse the grants made by the Bank for

12 the community adjustment and investment program,

13 as provided in Article I, section 1(b), and Article III,

14 section 11(a), of Chapter II of the Cooperation

15 Agreement; and

16 (C) endorse any loans or guarantees made by

17 the Bank for the community adjustment and invest18 ment program, as provided in Article I, section 1(b),

19 and Article III, section 6(a) and (c) of Chapter II

20 of the Cooperation Agreement.

21 (b) ADVISORY COMMITTEE.—

22 (1) ESTABLISHMENT.—The President shall es23 tablish an advisory committee to be known as the

24 Community Adjustment and Investment Program

25 Advisory Committee (in this section referred to as
296

1 the ‘‘Advisory Committee’’) in accordance with the

2 provisions of the Federal Advisory Committee Act.

3 (2) MEMBERSHIP.—

4 (A) IN GENERAL.—The Advisory Commit5 tee shall consist of 9 members of the public, ap6 pointed by the President, who, collectively, rep7 resent—

8 (i) community groups whose constitu9 encies include low-income families;

10 (ii) any scientific, professional, busi11 ness, nonprofit, or public interest organiza12 tion or association which is neither affili13 ated with, nor under the direction of, a

14 government;

15 (iii) for-profit business interests; and

16 (iv) other appropriate entities with

17 relevant expertise.

18 (B) REPRESENTATION.—Each of the cat19 egories described in clauses (i) through (iv) of

20 subparagraph (A) shall be represented by no

21 fewer than 1 and no more than 3 members of

22 the Advisory Committee.

23 (3) FUNCTION.—It shall be the function of the

24 Advisory Committee—
297

1 (A) to provide advice to the President re2 garding the implementation of the community

3 adjustment and investment program, including

4 advice on the guidelines to be established by the

5 President for the loans and loan guarantees to

6 be made pursuant to subsection (a)(4), advice

7 on identifying the needs for adjustment assist8 ance and investment in support of the goals and

9 objectives of the Agreement, taking into ac10 count economic and geographic considerations,

11 and advice on such other matters as may be re12 quested by the President; and

13 (B) to review on a regular basis the oper14 ation of the community adjustment and invest15 ment program and provide the President with

16 the conclusions of its review.

17 (4) TERMS OF MEMBERS.—

18 (A) IN GENERAL.—Each member of the

19 Advisory Committee shall serve at the pleasure

20 of the President.

21 (B) CHAIRPERSON.—The President shall

22 appoint a chairperson from among the members

23 of the Advisory Committee.

24 (C) MEETINGS.—The Advisory Committee

25 shall meet at least annually and at such other
298

1 times as requested by the President or the

2 chairperson. A majority of the members of the

3 Advisory Committee shall constitute a quorum.

4 (D) REIMBURSEMENT FOR EXPENSES.—

5 The members of the Advisory Committee may

6 receive reimbursement for travel, per diem, and

7 other necessary expenses incurred in the per8 formance of their duties, in accordance with the

9 Federal Advisory Committee Act.

10 (E) STAFF AND FACILITIES.—The Advi11 sory Committee may utilize the facilities and

12 services of employees of any Federal agency

13 without cost to the Advisory Committee, and

14 any such agency is authorized to provide serv15 ices as requested by the Committee.

16 (c) OMBUDSMAN.—The President shall appoint an

17 ombudsman to provide the public with an opportunity to

18 participate in the carrying out of the community adjust19 ment and investment program.

20 (1) FUNCTION.—It shall be the function of the

21 ombudsman—

22 (A) to establish procedures for receiving

23 comments from the general public on the oper24 ation of the community adjustment and invest25 ment program, to receive such comments, and
299

1 to provide the President with summaries of the

2 public comments; and

3 (B) to perform an independent inspection

4 and programmatic audit of the operation of the

5 community adjustment and investment program

6 and to provide the President with the conclu7 sions of its investigation and audit.

8 (2) AUTHORIZATION OF APPROPRIATIONS.—

9 There are authorized to be appropriated to the

10 President, or such agency as the President may des11 ignate, $25,000 for fiscal year 1995 and for each

12 fiscal year thereafter, for the costs of the ombuds13 man.

14 (d) REPORTING REQUIREMENT.—The President

15 shall submit to the appropriate congressional committees

16 an annual report on the community adjustment and in17 vestment program (if any) that is carried out pursuant

18 to this section. Each report shall state the amount of the

19 loans made or guaranteed during the 12-month period

20 ending on the day before the date of the report.

21 SEC. 544. DEFINITION.

22 For purposes of this part, the term ‘‘Border Environ23 ment Cooperation Agreement’’ (referred to in this part as

24 the ‘‘Cooperation Agreement’’) means the November 1993

25 Agreement Between the Government of the United States
300

1 of America and the Government of the United Mexican

2 States Concerning the Establishment of a Border Envi3 ronment Cooperation Commission and a North American

4 Development Bank.

5 TITLE VI—CUSTOMS

6 MODERNIZATION

7 SEC. 601. REFERENCE.

8 Whenever in subtitle A, B, or C an amendment or

9 repeal is expressed in terms of an amendment to, or repeal

10 of, a part, section, subsection, or other provision, the ref11 erence shall be considered to be made a part, section, sub12 section, or other provision of the Tariff Act of 1930 (19

13 U.S.C. 1202 et seq.).

14 Subtitle A—Improvements in

15 Customs Enforcement

16 SEC. 611. PENALTIES FOR VIOLATIONS OF ARRIVAL, RE17 PORTING, ENTRY, AND CLEARANCE REQUIRE18 MENTS.

19 Section 436 (19 U.S.C. 1436) is amended—

20 (1) by amending subsection (a)—

21 (A) by striking out ‘‘433’’ in paragraph (1)

22 and inserting ‘‘431, 433, or 434 of this Act or

23 section 4197 of the Revised Statutes of the

24 United States (46 U.S.C. App. 91)’’,
301

1 (B) by amending paragraph (2) to read as

2 follows:

3 ‘‘(2) to present or transmit, electronically or

4 otherwise, any forged, altered, or false document,

5 paper, information, data or manifest to the Customs

6 Service under section 431(e), 433(d), or 434 of this

7 Act or section 4197 of the Revised Statutes of the

8 United States (46 U.S.C. App. 91) without revealing

9 the facts; or’’, and

10 (C) by amending paragraph (3) to read as

11 follows:

12 ‘‘(3) to fail to make entry or to obtain clearance

13 as required by section 434 or 644 of this Act, sec14 tion 4197 of the Revised Statutes of the United

15 States (46 U.S.C. App. 91), or section 1109 of the

16 Federal Aviation Act of 1958 (49 U.S.C. App.

17 1509); or’’; and

18 (2) by striking out ‘‘AND ENTRY’’ in the sec19 tion heading and inserting ‘‘ENTRY, AND CLEAR20 ANCE’’.

21 SEC. 612. FAILURE TO DECLARE.

22 Section 497(a) (19 U.S.C. 1497(a)) is amended—

23 (1) by inserting ‘‘or transmitted’’ after ‘‘made’’

24 in paragraph (1)(A); and
302

1 (2) by amending paragraph (2)(A) to read as

2 follows:

3 ‘‘(A) if the article is a controlled sub4 stance, either $500 or an amount equal to

5 1,000 percent of the value of the article, which6 ever amount is greater; and’’.

7 SEC. 613. CUSTOMS TESTING LABORATORIES; DETENTION

8 OF MERCHANDISE.

9 (a) AMENDMENT.—Section 499 (19 U.S.C. 1499) is

10 amended to read as follows:

11 ‘‘SEC. 499. EXAMINATION OF MERCHANDISE.

12 ‘‘(a) ENTRY EXAMINATION.—

13 ‘‘(1) IN GENERAL.—Imported merchandise that

14 is required by law or regulation to be inspected, ex15 amined, or appraised shall not be delivered from cus16 toms custody (except under such bond or other secu17 rity as may be prescribed by the Secretary to assure

18 compliance with all applicable laws, regulations, and

19 instructions which the Secretary or the Customs

20 Service is authorized to enforce) until the merchan21 dise has been inspected, appraised, or examined and

22 is reported by the Customs Service to have been

23 truly and correctly invoiced and found to comply

24 with the requirements of the laws of the United

25 States.
303

1 ‘‘(2) EXAMINATION.—The Customs Service—

2 ‘‘(A) shall designate the packages or quan3 tities of merchandise covered by any invoice or

4 entry which are to be opened and examined for

5 the purpose of appraisement or otherwise;

6 ‘‘(B) shall order such packages or quan7 tities to be sent to such place as is designated

8 by the Secretary by regulation for such pur9 pose;

10 ‘‘(C) may require such additional packages

11 or quantities as the Secretary considers nec12 essary for such purpose; and

13 ‘‘(D) shall inspect a sufficient number of

14 shipments, and shall examine a sufficient num15 ber of entries, to ensure compliance with the

16 laws enforced by the Customs Service.

17 ‘‘(3) UNSPECIFIED ARTICLES.—If any package

18 contains any article not specified in the invoice or

19 entry and, in the opinion of the Customs Service, the

20 article was omitted from the invoice or entry—

21 ‘‘(A) with fraudulent intent on the part of

22 the seller, shipper, owner, agent, importer of

23 record, or entry filer, the contents of the entire

24 package in which such article is found shall be

25 subject to seizure; or
304

1 ‘‘(B) without fraudulent intent, the value

2 of the article shall be added to the entry and

3 the duties, fees, and taxes thereon paid accord4 ingly.

5 ‘‘(4) DEFICIENCY.—If a deficiency is found in

6 quantity, weight, or measure in the examination of

7 any package, the person finding the deficiency shall

8 make a report thereof to the Customs Service. The

9 Customs Service shall make allowance for the defi10 ciency in the liquidation of duties.

11 ‘‘(5) INFORMATION REQUIRED FOR RELEASE.—

12 If an examination is conducted, any information re13 quired for release shall be provided, either electroni14 cally or in paper form, to the Customs Service at the

15 port of examination. The absence of such informa16 tion does not limit the authority of the Customs

17 Service to conduct an examination.

18 ‘‘(b) TESTING LABORATORIES.—

19 ‘‘(1) ACCREDITATION OF PRIVATE TESTING

20 LABORATORIES.—The Customs Service shall estab21 lish and implement a procedure, under regulations

22 promulgated by the Secretary, for accrediting pri23 vate laboratories within the United States which

24 may be used to perform tests (that would otherwise

25 be performed by Customs Service laboratories) to es-
305

1 tablish the characteristics, quantities, or composition

2 of imported merchandise. Such regulations—

3 ‘‘(A) shall establish the conditions required

4 for the laboratories to receive and maintain ac5 creditation for purposes of this subsection;

6 ‘‘(B) shall establish the conditions regard7 ing the suspension and revocation of accredita8 tion, which may include the imposition of a

9 monetary penalty not to exceed $100,000 and

10 such penalty is in addition to the recovery, from

11 a gauger or laboratory accredited under para12 graph (1), of any loss of revenue that may have

13 occurred, but the Customs Service—

14 ‘‘(i) may seek to recover lost revenue

15 only in cases where the gauger or labora16 tory intentionally falsified the analysis or

17 gauging report in collusion with the im18 porter; and

19 ‘‘(ii) shall neither assess penalties nor

20 seek to recover lost revenue because of a

21 good faith difference of professional opin22 ion; and

23 ‘‘(C) may provide for the imposition of a

24 reasonable charge for accreditation and periodic

25 reaccreditation.
306

1 The collection of any charge for accreditation and

2 reaccreditation under this section is not prohibited

3 by section 13031(e)(6) of the Consolidated Omnibus

4 Budget Reconciliation Act of 1985 (19 U.S.C.

5 58c(e)(6)).

6 ‘‘(2) APPEAL OF ADVERSE ACCREDITATION DE7 CISIONS.—A laboratory applying for accreditation,

8 or that is accredited, under this section may contest

9 any decision or order of the Customs Service deny10 ing, suspending, or revoking accreditation, or impos11 ing a monetary penalty, by commencing an action in

12 accordance with chapter 169 of title 28, United

13 States Code, in the Court of International Trade

14 within 60 days after issuance of the decision or

15 order.

16 ‘‘(3) TESTING BY ACCREDITED LABORA17 TORIES.—When requested by an importer of record

18 of merchandise, the Customs Service shall authorize

19 the release to the importer of a representative sam20 ple of the merchandise for testing, at the expense of

21 the importer, by a laboratory accredited under para22 graph (1). The testing results from a laboratory ac23 credited under paragraph (1) that are submitted by

24 an importer of record with respect to merchandise in

25 an entry shall, in the absence of testing results ob-
307

1 tained from a Customs Service laboratory, be accept2 ed by the Customs Service if the importer of record

3 certifies that the sample tested was taken from the

4 merchandise in the entry. Nothing in this subsection

5 shall be construed to limit in any way or preclude

6 the authority of the Customs Service to test or ana7 lyze any sample or merchandise independently.

8 ‘‘(4) AVAILABILITY OF TESTING PROCEDURE,

9 METHODOLOGIES, AND INFORMATION.—Testing pro10 cedures and methodologies used by the Customs

11 Service, and information resulting from any testing

12 conducted by the Customs Service, shall be made

13 available as follows:

14 ‘‘(A) Testing procedures and methodologies

15 shall be made available upon request to any

16 person unless the procedures or methodologies

17 are—

18 ‘‘(i) proprietary to the holder of a

19 copyright or patent related to such proce20 dures or methodologies, or

21 ‘‘(ii) developed by the Customs Serv22 ice for enforcement purposes.

23 ‘‘(B) Information resulting from testing

24 shall be made available upon request to the im-
308

1 porter of record and any agent thereof unless

2 the information reveals information which is—

3 ‘‘(i) proprietary to the holder of a

4 copyright or patent; or

5 ‘‘(ii) developed by the Customs Serv6 ice for enforcement purposes.

7 ‘‘(5) MISCELLANEOUS PROVISIONS.—For pur8 poses of this subsection—

9 ‘‘(A) any reference to a private laboratory

10 includes a reference to a private gauger; and

11 ‘‘(B) accreditation of private laboratories

12 extends only to the performance of functions by

13 such laboratories that are within the scope of

14 those responsibilities for determinations of the

15 elements relating to admissibility, quantity,

16 composition, or characteristics of imported mer17 chandise that are vested in, or delegated to, the

18 Customs Service.

19 ‘‘(c) DETENTIONS.—Except in the case of merchan20 dise with respect to which the determination of admissibil21 ity is vested in an agency other than the Customs Service,

22 the following apply:

23 ‘‘(1) IN GENERAL.—Within the 5-day period

24 (excluding weekends and holidays) following the date

25 on which merchandise is presented for customs ex-
309

1 amination, the Customs Service shall decide whether

2 to release or detain the merchandise. Merchandise

3 which is not released within such 5-day period shall

4 be considered to be detained merchandise.

5 ‘‘(2) NOTICE OF DETENTION.—The Customs

6 Service shall issue a notice to the importer or other

7 party having an interest in detained merchandise no

8 later than 5 days, excluding weekends and holidays,

9 after the decision to detain the merchandise is made.

10 The notice shall advise the importer or other inter11 ested party of—

12 ‘‘(A) the initiation of the detention;

13 ‘‘(B) the specific reason for the detention;

14 ‘‘(C) the anticipated length of the deten15 tion;

16 ‘‘(D) the nature of the tests or inquiries to

17 be conducted; and

18 ‘‘(E) the nature of any information which,

19 if supplied to the Customs Service, may acceler20 ate the disposition of the detention.

21 ‘‘(3) TESTING RESULTS.—Upon request by the

22 importer or other party having an interest in de23 tained merchandise, the Customs Service shall pro24 vide the party with copies of the results of any test25 ing conducted by the Customs Service on the mer-
310

1 chandise and a description of the testing procedures

2 and methodologies (unless such procedures or meth3 odologies are proprietary to the holder of a copyright

4 or patent or were developed by the Customs Service

5 for enforcement purposes). The results and test de6 scription shall be in sufficient detail to permit the

7 duplication and analysis of the testing and the re8 sults.

9 ‘‘(4) SEIZURE AND FORFEITURE.—If otherwise

10 provided by law, detained merchandise may be seized

11 and forfeited.

12 ‘‘(5) EFFECT OF FAILURE TO MAKE DETER13 MINATION.—

14 ‘‘(A) The failure by the Customs Service to

15 make a final determination with respect to the

16 admissibility of detained merchandise within 30

17 days after the merchandise has been presented

18 for customs examination, or such longer period

19 if specifically authorized by law, shall be treated

20 as a decision of the Customs Service to exclude

21 the merchandise for purposes of section

22 514(a)(4).

23 ‘‘(B) For purposes of section 1581 of title

24 28, United States Code, a protest against the

25 decision to exclude the merchandise which has
311

1 not been allowed or denied in whole or in part

2 before the 30th day after the day on which the

3 protest was filed shall be treated as having been

4 denied on such 30th day.

5 ‘‘(C) Notwithstanding section 2639 of title

6 28, United States Code, once an action respect7 ing a detention is commenced, unless the Cus8 toms Service establishes by a preponderance of

9 the evidence that an admissibility decision has

10 not been reached for good cause, the court shall

11 grant the appropriate relief which may include,

12 but is not limited to, an order to cancel the de13 tention and release the merchandise.’’.

14 (b) EXISTING LABORATORIES.—Accreditation under

15 section 499(b) of the Tariff Act of 1930 (as added by sub16 section (a)) is not required for any private laboratory (in17 cluding any gauger) that was accredited or approved by

18 the Customs Service as of the day before the date of the

19 enactment of this Act; but any such laboratory is subject

20 to reaccreditation under the provisions of such section and

21 the regulations promulgated thereunder.

22 SEC. 614. RECORDKEEPING.

23 Section 508 (19 U.S.C. 1508) is amended—

24 (1) by amending subsection (a) to read as fol25 lows:
312

1 ‘‘(a) REQUIREMENTS.—Any—

2 ‘‘(1) owner, importer, consignee, importer of

3 record, entry filer, or other party who—

4 ‘‘(A) imports merchandise into the customs

5 territory of the United States, files a drawback

6 claim, or transports or stores merchandise car7 ried or held under bond, or

8 ‘‘(B) knowingly causes the importation or

9 transportation or storage of merchandise car10 ried or held under bond into or from the cus11 toms territory of the United States;

12 ‘‘(2) agent of any party described in paragraph

13 (1); or

14 ‘‘(3) person whose activities require the filing of

15 a declaration or entry, or both;

16 shall make, keep, and render for examination and inspec17 tion records (which for purposes of this section include,

18 but are not limited to, statements, declarations, docu19 ments and electronically generated or machine readable

20 data) which—

21 ‘‘(A) pertain to any such activity, or to the in22 formation contained in the records required by this

23 Act in connection with any such activity; and

24 ‘‘(B) are normally kept in the ordinary course

25 of business.’’; and
313

1 (2) by amending subsection (c) to read as fol2 lows:

3 ‘‘(c) PERIOD OF TIME.—The records required by sub4 sections (a) and (b) shall be kept for such period of time,

5 not to exceed 5 years from the date of entry or expor6 tation, as appropriate, as the Secretary shall prescribe; ex7 cept that records for any drawback claim shall be kept

8 until the 3rd anniversary of the date of payment of the

9 claim.’’.

10 SEC. 615. EXAMINATION OF BOOKS AND WITNESSES.

11 Section 509 (19 U.S.C. 1509) is amended as follows:

12 (1) Subsection (a) is amended—

13 (A) by striking out ‘‘and taxes’’ wherever

14 it appears and inserting ‘‘, fees and taxes’’;

15 (B) by amending paragraph (1) to read as

16 follows:

17 ‘‘(1) examine, or cause to be examined, upon

18 reasonable notice, any record (which for purposes of

19 this section, includes, but is not limited to, any

20 statement, declaration, document, or electronically

21 generated or machine readable data) described in

22 the notice with reasonable specificity, which may be

23 relevant to such investigation or inquiry, except

24 that—
314

1 ‘‘(A) if such record is required by law or

2 regulation for the entry of the merchandise

3 (whether or not the Customs Service required

4 its presentation at the time of entry) it shall be

5 provided to the Customs Service within a rea6 sonable time after demand for its production is

7 made, taking into consideration the number,

8 type, and age of the item demanded; and

9 ‘‘(B) if a person of whom demand is made

10 under subparagraph (A) fails to comply with

11 the demand, the person may be subject to pen12 alty under subsection (g);’’;

13 (C) by amending that part of paragraph

14 (2) that precedes subparagraph (D) to read as

15 follows:

16 ‘‘(2) summon, upon reasonable notice—

17 ‘‘(A) the person who—

18 ‘‘(i) imported, or knowingly caused to

19 be imported, merchandise into the customs

20 territory of the United States,

21 ‘‘(ii) exported merchandise, or know22 ingly caused merchandise to be exported,

23 to Canada,

24 ‘‘(iii) transported or stored merchan25 dise that was or is carried or held under
315

1 customs bond, or knowingly caused such

2 transportation or storage, or

3 ‘‘(iv) filed a declaration, entry, or

4 drawback claim with the Customs Service;

5 ‘‘(B) any officer, employee, or agent of any

6 person described in subparagraph (A);

7 ‘‘(C) any person having possession, custody

8 or care of records relating to the importation or

9 other activity described in subparagraph (A);

10 or’’; and

11 (D) by striking out the comma at the end

12 of subparagraph (D) and inserting a semicolon.

13 (2) Subsections (b) and (c) are redesignated as

14 subsections (c) and (d), respectively.

15 (3) The following new subsection is inserted

16 after subsection (a):

17 ‘‘(b) REGULATORY AUDIT PROCEDURES.—

18 ‘‘(1) In conducting a regulatory audit under

19 this section (which does not include a quantity ver20 ification for a customs bonded warehouse or general

21 purpose foreign trade zone), the Customs Service

22 auditor shall provide the person being audited, in

23 advance of the audit, with a reasonable estimate of

24 the time to be required for the audit. If in the

25 course of an audit it becomes apparent that addi-
316

1 tional time will be required, the Customs Service

2 auditor shall immediately provide a further estimate

3 of such additional time.

4 ‘‘(2) Before commencing an audit, the Customs

5 Service auditor shall inform the party to be audited

6 of his right to an entry conference at which time the

7 purpose will be explained and an estimated termi8 nation date set. Upon completion of on-site audit ac9 tivities, the Customs Service auditor shall schedule a

10 closing conference to explain the preliminary results

11 of the audit.

12 ‘‘(3) Except as provided in paragraph (5), if the

13 estimated or actual termination date for an audit

14 passes without the Customs Service auditor provid15 ing a closing conference to explain the results of the

16 audit, the person being audited may petition in writ17 ing for such a conference to the appropriate regional

18 commissioner, who, upon receipt of such a request,

19 shall provide for such a conference to be held within

20 15 days after the date of receipt.

21 ‘‘(4) Except as provided in paragraph (5), the

22 Customs Service auditor shall complete the formal

23 written audit report within 90 days following the

24 closing conference unless the appropriate regional

25 commissioner provides written notice to the person
317

1 being audited of the reason for any delay and the

2 anticipated completion date. After application of any

3 exemption contained in section 552 of title 5, United

4 States Code, a copy of the formal written audit re5 port shall be sent to the person audited no later

6 than 30 days following completion of the report.

7 ‘‘(5) Paragraphs (3) and (4) shall not apply

8 after the Customs Service commences a formal in9 vestigation with respect to the issue involved.’’.

10 (4) Subsection (d) (as redesignated by para11 graph (2)) is amended—

12 (A) by striking out ‘‘statements, declara13 tions, or documents’’ in paragraph (1)(A) and

14 inserting ‘‘those’’;

15 (B) by inserting ‘‘, unless such custom16 house broker is the importer of record on an

17 entry’’ after ‘‘broker’’ in paragraph (1)(C)(i);

18 (C) by striking out ‘‘import’’ in each of

19 paragraphs (2)(B) and (4)(B);

20 (D) by inserting ‘‘described in section

21 508’’ after ‘‘transactions’’ in each of para22 graphs (2)(B) and (4)(B); and

23 (E) by inserting ‘‘, fees,’’ after ‘‘duties’’ in

24 paragraph (4)(A).
318

1 (5) The following new subsections are added at

2 the end thereof:

3 ‘‘(e) LIST OF RECORDS AND INFORMATION.—The

4 Customs Service shall identify and publish a list of the

5 records or entry information that is required to be main6 tained and produced under subsection (a)(1)(A).

7 ‘‘(f) RECORDKEEPING COMPLIANCE PROGRAM.—

8 ‘‘(1) IN GENERAL.—After consultation with the

9 importing community, the Customs Service shall by

10 regulation establish a recordkeeping compliance pro11 gram which the parties listed in section 508(a) may

12 participate in after being certified by the Customs

13 Service under paragraph (2). Participation in the

14 recordkeeping compliance program by recordkeepers

15 is voluntary.

16 ‘‘(2) CERTIFICATION.—A recordkeeper may be

17 certified as a participant in the recordkeeping com18 pliance program after meeting the general record19 keeping requirements established under the program

20 or after negotiating an alternative program suited to

21 the needs of the recordkeeper and the Customs Serv22 ice. Certification requirements shall take into ac23 count the size and nature of the importing business

24 and the volume of imports. In order to be certified,
319

1 the recordkeeper must be able to demonstrate that

2 it—

3 ‘‘(A) understands the legal requirements

4 for recordkeeping, including the nature of the

5 records required to be maintained and produced

6 and the time periods involved;

7 ‘‘(B) has in place procedures to explain the

8 recordkeeping requirements to those employees

9 who are involved in the preparation, mainte10 nance, and production of required records;

11 ‘‘(C) has in place procedures regarding the

12 preparation and maintenance of required

13 records, and the production of such records to

14 the Customs Service;

15 ‘‘(D) has designated a dependable individ16 ual or individuals to be responsible for record17 keeping compliance under the program and

18 whose duties include maintaining familiarity

19 with the recordkeeping requirements of the

20 Customs Service;

21 ‘‘(E) has a record maintenance procedure

22 approved by the Customs Service for original

23 records, or, if approved by the Customs Service,

24 for alternative records or recordkeeping formats

25 other than the original records; and
320

1 ‘‘(F) has procedures for notifying the Cus2 toms Service of occurrences of variances to, and

3 violations of, the requirements of the record4 keeping compliance program or the negotiated

5 alternative programs, and for taking corrective

6 action when notified by the Customs Service of

7 violations or problems regarding such program.

8 ‘‘(g) PENALTIES.—

9 ‘‘(1) DEFINITION.—For purposes of this sub10 section, the term ‘information’ means any record,

11 statement, declaration, document, or electronically

12 stored or transmitted information or data referred to

13 in subsection (a)(1)(A).

14 ‘‘(2) EFFECTS OF FAILURE TO COMPLY WITH

15 DEMAND.—Except as provided in paragraph (4), if

16 a person fails to comply with a lawful demand for

17 information under subsection (a)(1)(A) the following

18 provisions apply:

19 ‘‘(A) If the failure to comply is a result of

20 the willful failure of the person to maintain,

21 store, or retrieve the demanded information,

22 such person shall be subject to a penalty, for

23 each release of merchandise, not to exceed

24 $100,000, or an amount equal to 75 percent of
321

1 the appraised value of the merchandise, which2 ever amount is less.

3 ‘‘(B) If the failure to comply is a result of

4 the negligence of the person in maintaining,

5 storing, or retrieving the demanded informa6 tion, such person shall be subject to a penalty,

7 for each release of merchandise, not to exceed

8 $10,000, or an amount equal to 40 percent of

9 the appraised value of the merchandise, which10 ever amount is less.

11 ‘‘(C) In addition to any penalty imposed

12 under subparagraph (A) or (B) regarding de13 manded information, if such information related

14 to the eligibility of merchandise for a column 1

15 special rate of duty under title I, the entry of

16 such merchandise—

17 ‘‘(i) if unliquidated, shall be liquidated

18 at the applicable column 1 general rate of

19 duty; or

20 ‘‘(ii) if liquidated within the 2-year

21 period preceding the date of the demand,

22 shall be reliquidated, notwithstanding the

23 time limitation in section 514 or 520, at

24 the applicable column 1 general rate of

25 duty;
322

1 except that any liquidation or reliquidation

2 under clause (i) or (ii) shall be at the applicable

3 column 2 rate of duty if the Customs Service

4 demonstrates that the merchandise should be

5 dutiable at such rate.

6 ‘‘(3) AVOIDANCE OF PENALTY.—No penalty

7 may be assessed under this subsection if the person

8 can show—

9 ‘‘(A) that the loss of the demanded infor10 mation was the result of an act of God or other

11 natural casualty or disaster beyond the fault of

12 such person or an agent of the person;

13 ‘‘(B) on the basis of other evidence satis14 factory to the Customs Service, that the de15 mand was substantially complied with; or

16 ‘‘(C) the information demanded was pre17 sented to and retained by the Customs Service

18 at the time of entry or submitted in response to

19 an earlier demand.

20 ‘‘(4) PENALTIES NOT EXCLUSIVE.—Any penalty

21 imposed under this subsection shall be in addition to

22 any other penalty provided by law except for—

23 ‘‘(A) a penalty imposed under section 592

24 for a material omission of the demanded infor25 mation, or
323

1 ‘‘(B) disciplinary action taken under sec2 tion 641.

3 ‘‘(5) REMISSION OR MITIGATION.—A penalty

4 imposed under this section may be remitted or miti5 gated under section 618.

6 ‘‘(6) CUSTOMS SUMMONS.—Nothing in this sub7 section shall limit or preclude the Customs Service

8 from issuing, or seeking the enforcement of, a cus9 toms summons.

10 ‘‘(7) ALTERNATIVES TO PENALTIES.—

11 ‘‘(A) IN GENERAL.—When a recordkeeper

12 who—

13 ‘‘(i) has been certified as a participant

14 in the recordkeeping compliance program

15 under subsection (f); and

16 ‘‘(ii) is generally in compliance with

17 the appropriate procedures and require18 ments of the program;

19 does not produce a demanded record or infor20 mation for a specific release or provide the in21 formation by acceptable alternative means, the

22 Customs Service, in the absence of willfulness

23 or repeated violations, shall issue a written no24 tice of the violation to the recordkeeper in lieu

25 of a monetary penalty. Repeated violations by
324

1 the recordkeeper may result in the issuance of

2 penalties and removal of certification under the

3 program until corrective action, satisfactory to

4 the Customs Service, is taken.

5 ‘‘(B) CONTENTS OF NOTICE.—A notice of

6 violation issued under subparagraph (A) shall—

7 ‘‘(i) state that the recordkeeper has

8 violated the recordkeeping requirements;

9 ‘‘(ii) indicate the record or informa10 tion which was demanded; and

11 ‘‘(iii) warn the recordkeeper that fu12 ture failures to produce demanded records

13 or information may result in the imposition

14 of monetary penalties.

15 ‘‘(C) RESPONSE TO NOTICE.—Within a

16 reasonable time after receiving written notice

17 under subparagraph (A), the recordkeeper shall

18 notify the Customs Service of the steps it has

19 taken to prevent a recurrence of the violation.

20 ‘‘(D) REGULATIONS.—The Secretary shall

21 promulgate regulations to implement this para22 graph. Such regulations may specify the time

23 periods for compliance with a demand for infor24 mation and provide guidelines which define re25 peated violations for purposes of this para-
325

1 graph. Any penalty issued for a recordkeeping

2 violation shall take into account the degree of

3 compliance compared to the total number of im4 portations, the nature of the demanded records

5 and the recordkeeper’s cooperation.’’.

6 SEC. 616. JUDICIAL ENFORCEMENT.

7 The second sentence of section 510(a) (19 U.S.C.

8 1510(a)) is amended by inserting ‘‘and such court may

9 assess a monetary penalty’’ after ‘‘as a contempt thereof’’.

10 SEC. 617. REVIEW OF PROTESTS.

11 Section 515 (19 U.S.C. 1515) is amended by insert12 ing at the end the following new subsections:

13 ‘‘(c) If a protesting party believes that an application

14 for further review was erroneously or improperly denied

15 or was denied without authority for such action, it may

16 file with the Commissioner of Customs a written request

17 that the denial of the application for further review be set

18 aside. Such request must be filed within 60 days after the

19 date of the notice of the denial. The Commissioner of Cus20 toms may review such request and, based solely on the

21 information before the Customs Service at the time the

22 application for further review was denied, may set aside

23 the denial of the application for further review and void

24 the denial of protest, if appropriate. If the Commissioner

25 of Customs fails to act within 60 days after the date of
326

1 the request, the request shall be considered denied. All de2 nials of protests are effective from the date of original de3 nial for purposes of section 2636 of title 28, United States

4 Code. If an action is commenced in the Court of Inter5 national Trade that arises out of a protest or an applica6 tion for further review, all administrative action pertaining

7 to such protest or application shall terminate and any ad8 ministrative action taken subsequent to the commence9 ment of the action is null and void.

10 ‘‘(d) If a protest is timely and properly filed, but is

11 denied contrary to proper instructions, the Customs Serv12 ice may on its own initiative, or pursuant to a written re13 quest by the protesting party filed with the appropriate

14 district director within 90 days after the date of the pro15 test denial, void the denial of the protest.’’.

16 SEC. 618. REPEAL OF PROVISION RELATING TO RELIQUIDA17 TION ON ACCOUNT OF FRAUD.

18 Section 521 (19 U.S.C. 1521) is repealed.

19 SEC. 619. PENALTIES RELATING TO MANIFESTS.

20 Section 584 (19 U.S.C. 1584) is amended—

21 (1) by amending subsection (a)—

22 (A) by striking out ‘‘appropriate customs

23 officer’’ wherever it appears and inserting

24 ‘‘Customs Service’’,
327

1 (B) by striking out ‘‘officer demanding the

2 same’’ in paragraph (1) and inserting ‘‘officer

3 (whether of the Customs Service or the Coast

4 Guard) demanding the same’’, and

5 (C) by inserting ‘‘(electronically or other6 wise)’’ after ‘‘submission’’ in the last sentence

7 of paragraph (1); and

8 (2) by amending subsection (b)—

9 (A) by striking out ‘‘the appropriate cus10 toms officer’’, ‘‘he’’ (except in paragraph

11 (1)(F)), and ‘‘such officer’’ wherever they ap12 pear and inserting ‘‘the Customs Service’’,

13 (B) by striking out ‘‘written’’ wherever it

14 appears (other than paragraph (1)(F)),

15 (C) by inserting ‘‘or electronically trans16 mit’’ after ‘‘issue’’ wherever it appears, and

17 (D) by striking out ‘‘his intention’’ in the

18 first sentence of paragraph (1) and inserting

19 ‘‘intent’’.

20 SEC. 620. UNLAWFUL UNLADING OR TRANSSHIPMENT.

21 Section 586 (19 U.S.C. 1586) is amended—

22 (1) by inserting ‘‘, or of a hovering vessel which

23 has received or delivered merchandise while outside

24 the territorial sea,’’ after ‘‘from a foreign port or

25 place’’ wherever it appears; and
328

1 (2) by amending subsection (f)—

2 (A) by striking out ‘‘the appropriate cus3 toms officer of the’’ and ‘‘the appropriate cus4 toms officer within the’’ and inserting ‘‘the

5 Customs Service at the’’; and

6 (B) by striking out ‘‘the appropriate cus7 toms officer is’’ and inserting ‘‘the Customs

8 Service is’’.

9 SEC. 621. PENALTIES FOR FRAUD, GROSS NEGLIGENCE,

10 AND NEGLIGENCE; PRIOR DISCLOSURE.

11 Section 592 (19 U.S.C. 1592) is amended—

12 (1) by inserting ‘‘or electronically transmitted

13 data or information’’ after ‘‘document’’ in subsection

14 (a)(1)(A)(i);

15 (2) by inserting ‘‘The mere nonintentional rep16 etition by an electronic system of an initial clerical

17 error does not constitute a pattern of negligent con18 duct.’’ at the end of subsection (a)(2);

19 (3) by amending subsection (b)—

20 (A) by amending the first sentence of

21 paragraph (1)(A)—

22 (i) by striking out ‘‘the appropriate

23 customs officer’’ and inserting ‘‘the Cus24 toms Service’’,
329

1 (ii) by striking out ‘‘he’’ and inserting

2 ‘‘it’’, and

3 (iii) by striking out ‘‘his’’ and insert4 ing ‘‘its’’, and

5 (B) by amending paragraph (2)—

6 (i) by striking out ‘‘the appropriate

7 customs officer’’ wherever it appears and

8 inserting ‘‘the Customs Service’’,

9 (ii) by striking out ‘‘such officer’’

10 wherever it appears and inserting ‘‘the

11 Customs Service’’, and

12 (iii) by striking out ‘‘he’’ wherever it

13 appears and inserting ‘‘it’’;

14 (4) by amending subsection (c)(4)—

15 (A) by striking ‘‘time of disclosure or with16 in thirty days, or such longer period as the ap17 propriate customs officer may provide, after no18 tice by the appropriate customs officer of his’’

19 in subparagraph (A)(i) and by striking out

20 ‘‘time of disclosure in 30 days, or such longer

21 period as the appropriate customs officer may

22 provide, after notice by the appropriate customs

23 officer of his’’ in subparagraph (B), and insert24 ing in each place ‘‘time of disclosure, or within

25 30 days (or such longer period as the Customs
330

1 Service may provide) after notice by the Cus2 toms Service of its’’; and

3 (B) by inserting after the last sentence the

4 following: ‘‘For purposes of this section, a for5 mal investigation of a violation is considered to

6 be commenced with regard to the disclosing

7 party and the disclosed information on the date

8 recorded in writing by the Customs Service as

9 the date on which facts and circumstances were

10 discovered or information was received which

11 caused the Customs Service to believe that a

12 possibility of a violation of subsection (a) ex13 isted.’’; and

14 (5) by amending subsection (d)—

15 (A) by striking out ‘‘the appropriate cus16 toms officer’’ and inserting ‘‘the Customs Serv17 ice’’,

18 (B) by striking out ‘‘duties’’ wherever it

19 appears and inserting ‘‘duties, taxes, or fees’’,

20 and

21 (C) by inserting ‘‘, TAXES OR FEES’’ after

22 ‘‘DUTIES’’ in the sideheading.

23 SEC. 622. PENALTIES FOR FALSE DRAWBACK CLAIMS.

24 (a) AMENDMENT.—Part V of title IV is amended by

25 inserting after section 593 the following new section:
331

1 ‘‘SEC. 593A. PENALTIES FOR FALSE DRAWBACK CLAIMS.

2 ‘‘(a) PROHIBITION.—

3 ‘‘(1) GENERAL RULE.—No person, by fraud, or

4 negligence—

5 ‘‘(A) may seek, induce or affect, or at6 tempt to seek, induce, or affect, the payment or

7 credit to that person or others of any drawback

8 claim by means of—

9 ‘‘(i) any document, written or oral

10 statement, or electronically transmitted

11 data or information, or act which is mate12 rial and false, or

13 ‘‘(ii) any omission which is material;

14 or

15 ‘‘(B) may aid or abet any other person to

16 violate subparagraph (A).

17 ‘‘(2) EXCEPTION.—Clerical errors or mistakes

18 of fact are not violations of paragraph (1) unless

19 they are part of a pattern of negligent conduct. The

20 mere nonintentional repetition by an electronic sys21 tem of an initial clerical error does not constitute a

22 pattern of negligent conduct.

23 ‘‘(b) PROCEDURES.—

24 ‘‘(1) PREPENALTY NOTICE.—

25 ‘‘(A) IN GENERAL.—If the Customs Serv26 ice has reasonable cause to believe that there
332

1 has been a violation of subsection (a) and deter2 mines that further proceedings are warranted,

3 the Customs Service shall issue to the person

4 concerned a written notice of intent to issue a

5 claim for a monetary penalty. Such notice

6 shall—

7 ‘‘(i) identify the drawback claim;

8 ‘‘(ii) set forth the details relating to

9 the seeking, inducing, or affecting, or the

10 attempted seeking, inducing, or affecting,

11 or the aiding or procuring of, the drawback

12 claim;

13 ‘‘(iii) specify all laws and regulations

14 allegedly violated;

15 ‘‘(iv) disclose all the material facts

16 which establish the alleged violation;

17 ‘‘(v) state whether the alleged viola18 tion occurred as a result of fraud or neg19 ligence;

20 ‘‘(vi) state the estimated actual or po21 tential loss of revenue due to the drawback

22 claim, and, taking into account all cir23 cumstances, the amount of the proposed

24 monetary penalty; and
333

1 ‘‘(vii) inform such person that he shall

2 have a reasonable opportunity to make rep3 resentations, both oral and written, as to

4 why a claim for a monetary penalty should

5 not be issued in the amount stated.

6 ‘‘(B) EXCEPTIONS.—The Customs Service

7 may not issue a prepenalty notice if the amount

8 of the penalty in the penalty claim issued under

9 paragraph (2) is $1,000 or less. In such cases,

10 the Customs Service may proceed directly with

11 a penalty claim.

12 ‘‘(C) PRIOR APPROVAL.—No prepenalty

13 notice in which the alleged violation occurred as

14 a result of fraud shall be issued without the

15 prior approval of Customs Headquarters.

16 ‘‘(2) PENALTY CLAIM.—After considering rep17 resentations, if any, made by the person concerned

18 pursuant to the notice issued under paragraph (1),

19 the Customs Service shall determine whether any

20 violation of subsection (a), as alleged in the notice,

21 has occurred. If the Customs Service determines

22 that there was no violation, the Customs Service

23 shall promptly issue a written statement of the de24 termination to the person to whom the notice was

25 sent. If the Customs Service determines that there
334

1 was a violation, Customs shall issue a written pen2 alty claim to such person. The written penalty claim

3 shall specify all changes in the information provided

4 under clauses (i) through (vii) of paragraph (1)(A).

5 Such person shall have a reasonable opportunity

6 under section 618 to make representations, both oral

7 and written, seeking remission or mitigation of the

8 monetary penalty. At the conclusion of any proceed9 ing under section 618, the Customs Service shall

10 provide to the person concerned a written statement

11 which sets forth the final determination, and the

12 findings of fact and conclusions of law on which

13 such determination is based.

14 ‘‘(c) MAXIMUM PENALTIES.—

15 ‘‘(1) FRAUD.—A fraudulent violation of sub16 section (a) of this section is punishable by a civil

17 penalty in an amount not to exceed 3 times the ac18 tual or potential loss of revenue.

19 ‘‘(2) NEGLIGENCE.—

20 ‘‘(A) IN GENERAL.—A negligent violation

21 of subsection (a) is punishable by a civil penalty

22 in an amount not to exceed 20 percent of the

23 actual or potential loss of revenue for the 1st

24 violation.
335

1 ‘‘(B) REPETITIVE VIOLATIONS.—If the

2 Customs Service determines that a repeat neg3 ligent violation occurs relating to the same

4 issue, the penalty amount for the 2d violation

5 shall be in an amount not to exceed 50 percent

6 of the total actual or potential loss of revenue.

7 The penalty amount for each succeeding repet8 itive negligent violation shall be in an amount

9 not to exceed the actual or potential loss of rev10 enue. If the same party commits a nonrepetitive

11 violation, that violation shall be subject to a

12 penalty not to exceed 20 percent of the actual

13 or potential loss of revenue.

14 ‘‘(3) PRIOR DISCLOSURE.—

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), if the person concerned discloses the

17 circumstances of a violation of subsection (a)

18 before, or without knowledge of the commence19 ment of, a formal investigation of such viola20 tion, the monetary penalty assessed under this

21 subsection may not exceed—

22 ‘‘(i) if the violation resulted from

23 fraud, an amount equal to the actual or

24 potential revenue of which the United
336

1 States is or may be deprived as a result of

2 overpayment of the claim; or

3 ‘‘(ii) if the violation resulted from

4 negligence, an amount equal to the interest

5 computed on the basis of the prevailing

6 rate of interest applied under section 6621

7 of the Internal Revenue Code of 1986 on

8 the amount of actual revenue of which the

9 United States is or may be deprived during

10 the period that—

11 ‘‘(I) begins on the date of the

12 overpayment of the claim; and

13 ‘‘(II) ends on the date on which

14 the person concerned tenders the

15 amount of the overpayment.

16 ‘‘(B) CONDITION AFFECTING PENALTY

17 LIMITATIONS.—The limitations in subparagraph

18 (A) on the amount of the monetary penalty to

19 be assessed under subsection (c) apply only if

20 the person concerned tenders the amount of the

21 overpayment made on the claim at the time of

22 disclosure, or within 30 days (or such longer

23 period as the Customs Service may provide),

24 after notice by the Customs Service of its cal25 culation of the amount of the overpayment.
337

1 ‘‘(C) BURDEN OF PROOF.—The person as2 serting lack of knowledge of the commencement

3 of a formal investigation has the burden of

4 proof in establishing such lack of knowledge.

5 ‘‘(4) COMMENCEMENT OF INVESTIGATION.—

6 For purposes of this section, a formal investigation

7 of a violation is considered to be commenced with re8 gard to the disclosing party and the disclosed infor9 mation on the date recorded in writing by the Cus10 toms Service as the date on which facts and cir11 cumstances were discovered or information was re12 ceived which caused the Customs Service to believe

13 that a possibility of a violation of subsection (a) ex14 isted.

15 ‘‘(5) EXCLUSIVITY.—Penalty claims under this

16 section shall be the exclusive civil remedy for any

17 drawback related violation of subsection (a).

18 ‘‘(d) DEPRIVATION OF LAWFUL REVENUE.—Not19 withstanding section 514, if the United States has been

20 deprived of lawful duties and taxes resulting from a viola21 tion of subsection (a), the Customs Service shall require

22 that such duties and taxes be restored whether or not a

23 monetary penalty is assessed.

24 ‘‘(e) DRAWBACK COMPLIANCE PROGRAM.—
338

1 ‘‘(1) IN GENERAL.—After consultation with the

2 drawback trade community, the Customs Service

3 shall establish a drawback compliance program in

4 which claimants and other parties in interest may

5 participate after being certified by the Customs

6 Service under paragraph (2). Participation in the

7 drawback compliance program is voluntary.

8 ‘‘(2) CERTIFICATION.—A party may be certified

9 as a participant in the drawback compliance pro10 gram after meeting the general requirements estab11 lished under the program or after negotiating an al12 ternative program suited to the needs of the party

13 and the Customs Service. Certification requirements

14 shall take into account the size and nature of the

15 party’s drawback program and the volume of claims.

16 In order to be certified, the participant must be able

17 to demonstrate that it—

18 ‘‘(A) understands the legal requirements

19 for filing claims, including the nature of the

20 records required to be maintained and produced

21 and the time periods involved;

22 ‘‘(B) has in place procedures to explain the

23 Customs Service requirements to those employ24 ees that are involved in the preparation of
339

1 claims, and the maintenance and production of

2 required records;

3 ‘‘(C) has in place procedures regarding the

4 preparation of claims and maintenance of re5 quired records, and the production of such

6 records to the Customs Service;

7 ‘‘(D) has designated a dependable individ8 ual or individuals to be responsible for compli9 ance under the program and whose duties in10 clude maintaining familiarity with the drawback

11 requirements of the Customs Service;

12 ‘‘(E) has a record maintenance procedure

13 approved by the Customs Service for original

14 records, or, if approved by the Customs Service,

15 for alternate records or recordkeeping formats

16 other than the original records; and

17 ‘‘(F) has procedures for notifying the Cus18 toms Service of variances to, and violations of,

19 the requirements of the drawback compliance

20 program or any negotiated alternative pro21 grams, and for taking corrective action when

22 notified by the Customs Service for violations or

23 problems regarding such program.

24 ‘‘(f) ALTERNATIVES TO PENALTIES.—

25 ‘‘(1) IN GENERAL.—When a party that—
340

1 ‘‘(A) has been certified as a participant in

2 the drawback compliance program under sub3 section (e); and

4 ‘‘(B) is generally in compliance with the

5 appropriate procedures and requirements of the

6 program;

7 commits a violation of subsection (a), the Customs

8 Service, shall, in the absence of fraud or repeated

9 violations, and in lieu of a monetary penalty, issue

10 a written notice of the violation to the party. Re11 peated violations by a party may result in the issu12 ance of penalties and removal of certification under

13 the program until corrective action, satisfactory to

14 the Customs Service, is taken.

15 ‘‘(2) CONTENTS OF NOTICE.—A notice of viola16 tion issued under paragraph (1) shall—

17 ‘‘(A) state that the party has violated sub18 section (a);

19 ‘‘(B) explain the nature of the violation;

20 and

21 ‘‘(C) warn the party that future violations

22 of subsection (a) may result in the imposition

23 of monetary penalties.

24 ‘‘(3) RESPONSE TO NOTICE.—Within a reason25 able time after receiving written notice under para-
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1 graph (1), the party shall notify the Customs Service

2 of the steps it has taken to prevent a recurrence of

3 the violation.

4 ‘‘(g) REPETITIVE VIOLATIONS.—

5 ‘‘(1) A party who has been issued a written no6 tice under subsection (f)(1) and subsequently com7 mits a repeat negligent violation involving the same

8 issue is subject to the following monetary penalties:

9 ‘‘(A) 2D VIOLATION.—An amount not to

10 exceed 20 percent of the loss of revenue.

11 ‘‘(B) 3RD VIOLATION.—An amount not to

12 exceed 50 percent of the loss of revenue.

13 ‘‘(C) 4TH AND SUBSEQUENT VIOLA14 TIONS.—An amount not to exceed 100 percent

15 of the loss of revenue.

16 ‘‘(2) If a party that has been certified as a par17 ticipant in the drawback compliance program under

18 subsection (e) commits an alleged violation which

19 was not repetitive, the party shall be issued a ‘warn20 ing letter’, and, for any subsequent violation, shall

21 be subject to the same maximum penalty amounts

22 stated in paragraph (1).

23 ‘‘(h) REGULATION.—The Secretary shall promulgate

24 regulations and guidelines to implement this section. Such

25 regulations shall specify that for purposes of subsection
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1 (g), a repeat negligent violation involving the same issue

2 shall be treated as a repetitive violation for a maximum

3 period of 3 years.

4 ‘‘(i) COURT OF INTERNATIONAL TRADE PROCEED5 INGS.—Notwithstanding any other provision of law, in any

6 proceeding commenced by the United States in the Court

7 of International Trade for the recovery of any monetary

8 penalty claimed under this section—

9 ‘‘(1) all issues, including the amount of the pen10 alty, shall be tried de novo;

11 ‘‘(2) if the monetary penalty is based on fraud,

12 the United States shall have the burden of proof to

13 establish the alleged violation by clear and convinc14 ing evidence; and

15 ‘‘(3) if the monetary penalty is based on neg16 ligence, the United States shall have the burden of

17 proof to establish the act or omission constituting

18 the violation, and the alleged violator shall have the

19 burden of providing evidence that the act or omis20 sion did not occur as a result of negligence.’’.

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

22 subsection (a) applies to drawback claims filed on and

23 after the nationwide operational implementation of an

24 automated drawback selectivity program by the Customs
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1 Service. The Customs Service shall publish notice of this

2 date in the Customs Bulletin.

3 SEC. 623. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC

4 INFORMATION.

5 Section 625 (19 U.S.C. 1625) is amended to read as

6 follows:

7 ‘‘SEC. 625. INTERPRETIVE RULINGS AND DECISIONS; PUB8 LIC INFORMATION.

9 ‘‘(a) PUBLICATION.—Within 90 days after the date

10 of issuance of any interpretive ruling (including any ruling

11 letter, or internal advice memorandum) or protest review

12 decision under this chapter with respect to any customs

13 transaction, the Secretary shall have such ruling or deci14 sion published in the Customs Bulletin or shall otherwise

15 make such ruling or decision available for public

16 inspection.

17 ‘‘(b) APPEALS.—A person may appeal an adverse in18 terpretive ruling and any interpretation of any regulation

19 prescribed to implement such ruling to a higher level of

20 authority within the Customs Service for de novo review.

21 Upon a reasonable showing of business necessity, any such

22 appeal shall be considered and decided no later than 60

23 days following the date on which the appeal is filed. The

24 Secretary shall issue regulations to implement this sub25 section.
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1 ‘‘(c) MODIFICATION AND REVOCATION.—A proposed

2 interpretive ruling or decision which would—

3 ‘‘(1) modify (other than to correct a clerical

4 error) or revoke a prior interpretive ruling or deci5 sion which has been in effect for at least 60 days;

6 or

7 ‘‘(2) have the effect of modifying the treatment

8 previously accorded by the Customs Service to sub9 stantially identical transactions;

10 shall be published in the Customs Bulletin. The Secretary

11 shall give interested parties an opportunity to submit, dur12 ing not less than the 30-day period after the date of such

13 publication, comments on the correctness of the proposed

14 ruling or decision. After consideration of any comments

15 received, the Secretary shall publish a final ruling or deci16 sion in the Customs Bulletin within 30 days after the clos17 ing of the comment period. The final ruling or decision

18 shall become effective 60 days after the date of its

19 publication.

20 ‘‘(d) PUBLICATION OF CUSTOMS DECISIONS THAT

21 LIMIT COURT DECISIONS.—A decision that proposes to

22 limit the application of a court decision shall be published

23 in the Customs Bulletin together with notice of oppor24 tunity for public comment thereon prior to a final decision.
345

1 ‘‘(e) PUBLIC INFORMATION.—The Secretary may

2 make available in writing or through electronic media, in

3 an efficient, comprehensive and timely manner, all infor4 mation, including directives, memoranda, electronic mes5 sages and telexes which contain instructions, require6 ments, methods or advice necessary for importers and ex7 porters to comply with the Customs laws and regulations.

8 All information which may be made available pursuant to

9 this subsection shall be subject to any exemption from dis10 closure provided by section 552 of title 5, United States

11 Code.’’.

12 SEC. 624. SEIZURE AUTHORITY.

13 Section 596(c) (19 U.S.C. 1595a(c)) is amended to

14 read as follows:

15 ‘‘(c) Merchandise which is introduced or attempted

16 to be introduced into the United States contrary to law

17 shall be treated as follows:

18 ‘‘(1) The merchandise shall be seized and for19 feited if it—

20 ‘‘(A) is stolen, smuggled, or clandestinely

21 imported or introduced;

22 ‘‘(B) is a controlled substance, as defined

23 in the Controlled Substances Act (21 U.S.C.

24 801 et seq.), and is not imported in accordance

25 with applicable law; or
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1 ‘‘(C) is a contraband article, as defined in

2 section 1 of the Act of August 9, 1939 (49

3 U.S.C. App. 781).

4 ‘‘(2) The merchandise may be seized and for5 feited if—

6 ‘‘(A) its importation or entry is subject to

7 any restriction or prohibition which is imposed

8 by law relating to health, safety, or conserva9 tion and the merchandise is not in compliance

10 with the applicable rule, regulation, or statute;

11 ‘‘(B) its importation or entry requires a li12 cense, permit or other authorization of an agen13 cy of the United States Government and the

14 merchandise is not accompanied by such li15 cense, permit, or authorization;

16 ‘‘(C) it is merchandise or packaging in

17 which copyright, trademark, or trade name pro18 tection violations are involved (including, but

19 not limited to, violations of section 42, 43, or

20 45 of the Act of July 5, 1946 (15 U.S.C. 1124,

21 1125, or 1127), section 506 or 509 of title 17,

22 United States Code, or section 2318 or 2320 of

23 title 18, United States Code);

24 ‘‘(D) it is trade dress merchandise involved

25 in the violation of a court order citing section
347

1 43 of such Act of July 5, 1946 (15 U.S.C.

2 1125);

3 ‘‘(E) it is merchandise which is marked in4 tentionally in violation of section 304; or

5 ‘‘(F) it is merchandise for which the im6 porter has received written notices that previous

7 importations of identical merchandise from the

8 same supplier were found to have been marked

9 in violation of section 304.

10 ‘‘(3) If the importation or entry of the mer11 chandise is subject to quantitative restrictions re12 quiring a visa, permit, license, or other similar docu13 ment, or stamp from the United States Government

14 or from a foreign government or issuing authority

15 pursuant to a bilateral or multilateral agreement,

16 the merchandise shall be subject to detention in ac17 cordance with section 499 unless the appropriate

18 visa, license, permit, or similar document or stamp

19 is presented to the Customs Service; but if the visa,

20 permit, license, or similar document or stamp which

21 is presented in connection with the importation or

22 entry of the merchandise is counterfeit, the mer23 chandise may be seized and forfeited.

24 ‘‘(4) If the merchandise is imported or intro25 duced contrary to a provision of law which governs
348

1 the classification or value of merchandise and there

2 are no issues as to the admissibility of the merchan3 dise into the United States, it shall not be seized ex4 cept in accordance with section 592.

5 ‘‘(5) In any case where the seizure and forfeit6 ure of merchandise are required or authorized by

7 this section, the Secretary may—

8 ‘‘(A) remit the forfeiture under section

9 618, or

10 ‘‘(B) permit the exportation of the mer11 chandise, unless its release would adversely af12 fect health, safety, or conservation or be in con13 travention of a bilateral or multilateral agree14 ment or treaty.’’.

15 Subtitle B—National Customs

16 Automation Program

17 SEC. 631. NATIONAL CUSTOMS AUTOMATION PROGRAM.

18 Part I of title IV is amended—

19 (1) by striking out

20 ‘‘PART I—DEFINITIONS

21 and inserting

22 ‘‘PART I—DEFINITIONS AND NATIONAL CUSTOMS

23 AUTOMATION PROGRAM

24 ‘‘Subpart A—Definitions’’;

25 and
349

1 (2) by inserting after section 402 the following:

2 ‘‘Subpart B—National Customs Automation Program

3 ‘‘SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.

4 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab5 lish the National Customs Automation Program (herein6 after in this subpart referred to as the ‘Program’) which

7 shall be an automated and electronic system for processing

8 commercial importations and shall include the following

9 existing and planned components:

10 ‘‘(1) Existing components:

11 ‘‘(A) The electronic entry of merchandise.

12 ‘‘(B) The electronic entry summary of re13 quired information.

14 ‘‘(C) The electronic transmission of invoice

15 information.

16 ‘‘(D) The electronic transmission of mani17 fest information.

18 ‘‘(E) Electronic payments of duties, fees,

19 and taxes.

20 ‘‘(F) The electronic status of liquidation

21 and reliquidation.

22 ‘‘(G) The electronic selection of high risk

23 entries for examination (cargo selectivity and

24 entry summary selectivity).

25 ‘‘(2) Planned components:
350

1 ‘‘(A) The electronic filing and status of

2 protests.

3 ‘‘(B) The electronic filing (including re4 mote filing under section 414) of entry informa5 tion with the Customs Service at any location.

6 ‘‘(C) The electronic filing of import activity

7 summary statements and reconciliation.

8 ‘‘(D) The electronic filing of bonds.

9 ‘‘(E) The electronic penalty process.

10 ‘‘(F) The electronic filing of drawback

11 claims, records, or entries.

12 ‘‘(G) Any other component initiated by the

13 Customs Service to carry out the goals of this

14 subpart.

15 ‘‘(b) PARTICIPATION IN PROGRAM.—The Secretary

16 shall by regulation prescribe the eligibility criteria for par17 ticipation in the Program. Participation in the Program

18 is voluntary.

19 ‘‘SEC. 412. PROGRAM GOALS.

20 ‘‘The goals of the Program are to ensure that all reg21 ulations and rulings that are administered or enforced by

22 the Customs Service are administered and enforced in a

23 manner that—

24 ‘‘(1) is uniform and consistent;
351

1 ‘‘(2) is as minimally intrusive upon the normal

2 flow of business activity as practicable; and

3 ‘‘(3) improves compliance.

4 ‘‘SEC. 413. IMPLEMENTATION AND EVALUATION OF PRO5 GRAM.

6 ‘‘(a) OVERALL PROGRAM PLAN.—

7 ‘‘(1) IN GENERAL.—Before the 180th day after

8 the date of the enactment of this Act, the Secretary

9 shall develop and transmit to the Committees an

10 overall plan for the Program. The overall Program

11 plan shall set forth—

12 ‘‘(A) a general description of the ultimate

13 configuration of the Program;

14 ‘‘(B) a description of each of the existing

15 components of the Program listed in section

16 411(a)(1); and

17 ‘‘(C) estimates regarding the stages on

18 which planned components of the Program list19 ed in section 411(a)(2) will be brought on-line.

20 ‘‘(2) ADDITIONAL INFORMATION.—In addition

21 to the information required under paragraph (1), the

22 overall Program plan shall include a statement re23 garding—

24 ‘‘(A) the extent to which the existing com25 ponents of the Program currently meet, and the
352

1 planned components will meet, the Program

2 goals set forth in section 412; and

3 ‘‘(B) the effects that the existing compo4 nents are currently having, and the effects that

5 the planned components will likely have, on—

6 ‘‘(i) importers, brokers, and other

7 users of the Program, and

8 ‘‘(ii) Customs Service occupations, op9 erations, processes, and systems.

10 ‘‘(b) IMPLEMENTATION PLAN, TESTING, AND EVAL11 UATION.—

12 ‘‘(1) IMPLEMENTATION PLAN.—For each of the

13 planned components of the Program listed in section

14 411(a)(2), the Secretary shall—

15 ‘‘(A) develop an implementation plan;

16 ‘‘(B) test the component in order to assess

17 its viability;

18 ‘‘(C) evaluate the component in order to

19 assess its contribution toward achieving the

20 program goals; and

21 ‘‘(D) transmit to the Committees the im22 plementation plan, the testing results, and an

23 evaluation report.

24 In developing an implementation plan under sub25 paragraph (A) and evaluating components under
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1 subparagraph (C), the Secretary shall publish a re2 quest for comments in the Customs Bulletin and

3 shall consult with the trade community, including

4 importers, brokers, shippers, and other affected

5 parties.

6 ‘‘(2) IMPLEMENTATION.—

7 ‘‘(A) The Secretary may implement on a

8 permanent basis any Program component re9 ferred to in paragraph (1) on or after the date

10 which is 30 days after paragraph (1)(D) is

11 complied with.

12 ‘‘(B) For purposes of subparagraph (A),

13 the 30 days shall be computed by excluding—

14 ‘‘(i) the days either House is not in

15 session because of an adjournment of more

16 than 3 days to a day certain or an ad17 journment of the Congress sine die, and

18 ‘‘(ii) any Saturday and Sunday, not

19 excluded under clause (i), when either

20 House is not in session.

21 ‘‘(3) EVALUATION AND REPORT.—The Sec22 retary shall—

23 ‘‘(A) develop a user satisfaction survey of

24 parties participating in the Program;
354

1 ‘‘(B) evaluate the results of the user satis2 faction survey on a biennial basis (fiscal years)

3 and transmit a report to the Committees on the

4 evaluation by no later than the 90th day after

5 the close of each 2d fiscal year;

6 ‘‘(C) with respect to the existing Program

7 component listed in section 411(a)(1)(G) trans8 mit to the Committees—

9 ‘‘(i) a written evaluation of such com10 ponent before the 180th day after the date

11 of the enactment of this section and before

12 the implementation of the planned Pro13 gram components listed in section

14 411(a)(2) (B) and (C), and

15 ‘‘(ii) a report on such component for

16 each of the 3 full fiscal years occurring

17 after the date of the enactment of this sec18 tion, which report shall be transmitted not

19 later than the 90th day after the close of

20 each such year; and

21 ‘‘(D) not later than the 90th day after the

22 close of fiscal year 1994, and annually there23 after through fiscal year 2000, transmit to the

24 Committees a written evaluation with respect to

25 the implementation and effect on users of each
355

1 of the planned Program components listed in

2 section 411(a)(2).

3 In carrying out the provisions of this paragraph, the

4 Secretary shall publish requests for comments in the

5 Customs Bulletin and shall consult with the trade

6 community, including importers, brokers, shippers,

7 and other affected parties.

8 ‘‘(c) COMMITTEES.—For purposes of this section, the

9 term ‘Committees’ means the Committee on Ways and

10 Means of the House of Representatives and the Committee

11 on Finance of the Senate.

12 ‘‘SEC. 414. REMOTE LOCATION FILING.

13 ‘‘(a) CORE ENTRY INFORMATION.—

14 ‘‘(1) IN GENERAL.—A Program participant

15 may file electronically an entry of merchandise with

16 the Customs Service from a location other than the

17 district designated in the entry for examination

18 (hereafter in this section referred to as a ‘remote lo19 cation’) if—

20 ‘‘(A) the Customs Service is satisfied that

21 the participant has the capabilities referred to

22 in paragraph (2)(A) regarding such method of

23 filing; and

24 ‘‘(B) the participant elects to file from the

25 remote location.
356

1 ‘‘(2) REQUIREMENTS.—

2 ‘‘(A) IN GENERAL.—In order to qualify for

3 filing from a remote location, a Program partic4 ipant must have the capability to provide, on an

5 entry-by-entry basis, for the following:

6 ‘‘(i) The electronic entry of merchan7 dise.

8 ‘‘(ii) The electronic entry summary of

9 required information.

10 ‘‘(iii) The electronic transmission of

11 invoice information (when required by the

12 Customs Service).

13 ‘‘(iv) The electronic payment of du14 ties, fees, and taxes.

15 ‘‘(v) Such other electronic capabilities

16 within the existing or planned components

17 of the Program as the Secretary shall by

18 regulation require.

19 ‘‘(B) RESTRICTION ON EXEMPTION FROM

20 REQUIREMENTS.—The Customs Service may

21 not permit any exemption or waiver from the

22 requirements established by this section for par23 ticipation in remote entry filing.

24 ‘‘(3) CONDITIONS ON FILING UNDER THIS SEC25 TION.—The Secretary may prohibit a Program par-
357

1 ticipant from participating in remote location filing,

2 and may remove a Program participant from partici3 pation in remote location filing, if the participant—

4 ‘‘(i) fails to meet all the compliance re5 quirements and operational standards of remote

6 location filing; or

7 ‘‘(ii) fails to adhere to all applicable laws

8 and regulations.

9 ‘‘(4) ALTERNATIVE FILING.—Any Program par10 ticipant that is eligible to file entry information elec11 tronically from a remote location but chooses not to

12 do so in the case of any entry must file any paper

13 documentation for the entry at the designated loca14 tion referred to in subsection (d).

15 ‘‘(b) ADDITIONAL ENTRY INFORMATION.—

16 ‘‘(1) IN GENERAL.—A Program participant that

17 is eligible under subsection (a) to file entry informa18 tion from a remote location may, if the Customs

19 Service is satisfied that the participant meets the re20 quirements under paragraph (2), also electronically

21 file from the remote location additional information

22 that is required by the Customs Service to be pre23 sented before the acceptance of entry summary in24 formation and at the time of acceptance of entry

25 summary information.
358

1 ‘‘(2) REQUIREMENTS.—The Secretary shall

2 publish, and periodically update, a list of those capa3 bilities within the existing and planned components

4 of the Program that a Program participant must

5 have for purposes of this subsection.

6 ‘‘(3) FILING OF ADDITIONAL INFORMATION.—

7 ‘‘(A) IF INFORMATION ELECTRONICALLY

8 ACCEPTABLE.—A Program participant that is

9 eligible under paragraph (1) to file additional

10 information from a remote location shall elec11 tronically file all such information that the Cus12 toms Service can accept electronically.

13 ‘‘(B) ALTERNATIVE FILING.—If the Cus14 toms Service cannot accept additional informa15 tion electronically, the Program participant

16 shall file the paper documentation with respect

17 to the information at the appropriate filing lo18 cation.

19 ‘‘(C) APPROPRIATE LOCATION.—For pur20 poses of subparagraph (B), the ‘appropriate lo21 cation’ is—

22 ‘‘(i) before January 1, 1999, a des23 ignated location; and

24 ‘‘(ii) after December 31, 1998—
359

1 ‘‘(I) if the paper documentation

2 is required for release, a designated

3 location; or

4 ‘‘(II) if the paper documentation

5 is not required for release, a remote

6 location designated by the Customs

7 Service or a designated location.

8 ‘‘(D) OTHER.—A Program participant that

9 is eligible under paragraph (1) to file additional

10 information electronically from a remote loca11 tion but chooses not to do so must file the

12 paper documentation with respect to the infor13 mation at a designated location.

14 ‘‘(c) POST-ENTRY SUMMARY INFORMATION.—A Pro15 gram participant that is eligible to file electronically entry

16 information under subsection (a) and additional informa17 tion under subsection (b) from a remote location may file

18 at any remote location designated by the Customs Service

19 any information required by the Customs Service after

20 entry summary.

21 ‘‘(d) DEFINITIONS.—As used in this section:

22 ‘‘(1) The term ‘designated location’ means a

23 customs office located in the customs district des24 ignated by the entry filer for purposes of customs

25 examination of the merchandise.
360

1 ‘‘(2) The term ‘Program participant’ means,

2 with respect to an entry of merchandise, any party

3 entitled to make the entry under section

4 484(a)(2)(B).’’.

5 SEC. 632. DRAWBACK AND REFUNDS.

6 (a) AMENDMENTS.—Section 313 (19 U.S.C. 1313) is

7 amended as follows:

8 (1) Subsection (a) is amended—

9 (A) by inserting ‘‘or destruction under cus10 toms supervision’’ after ‘‘Upon the expor11 tation’’;

12 (B) by inserting ‘‘provided that those arti13 cles have not been used prior to such expor14 tation or destruction,’’ after ‘‘manufactured or

15 produced in the United States with the use of

16 imported merchandise,’’;

17 (C) by inserting ‘‘or destruction’’ after ‘‘re18 funded upon the exportation’’; and

19 (D) by striking out ‘‘wheat imported after

20 ninety days after the date of the enactment of

21 this Act’’ and inserting ‘‘imported wheat’’.

22 (2) Subsection (b) is amended—

23 (A) by striking out ‘‘duty-free or domestic

24 merchandise’’ and inserting ‘‘any other mer25 chandise (whether imported or domestic)’’;
361

1 (B) by inserting ‘‘, or destruction under

2 customs supervision,’’ after ‘‘there shall be al3 lowed upon the exportation’’;

4 (C) by inserting ‘‘or destroyed’’ after ‘‘not5 withstanding the fact that none of the imported

6 merchandise may actually have been used in the

7 manufacture or production of the exported’’;

8 (D) by inserting ‘‘, but only if those arti9 cles have not been used prior to such expor10 tation or destruction’’ after ‘‘an amount of

11 drawback equal to that which would have been

12 allowable had the merchandise used therein

13 been imported’’; and

14 (E) by inserting ‘‘or destruction under cus15 toms supervision’’ after ‘‘but the total amount

16 of drawback allowed upon the exportation’’.

17 (3) Subsection (c) is amended to read as fol18 lows:

19 ‘‘(c) MERCHANDISE NOT CONFORMING TO SAMPLE

20 OR SPECIFICATIONS.—Upon the exportation, or destruc21 tion under the supervision of the Customs Service, of mer22 chandise—

23 ‘‘(1) not conforming to sample or specifications,

24 shipped without the consent of the consignee, or de-
362

1 termined to be defective as of the time of importa2 tion;

3 ‘‘(2) upon which the duties have been paid;

4 ‘‘(3) which has been entered or withdrawn for

5 consumption; and

6 ‘‘(4) which, within 3 years after release from

7 the custody of the Customs Service, has been re8 turned to the custody of the Customs Service for ex9 portation or destruction under the supervision of the

10 Customs Service;

11 the full amount of the duties paid upon such merchandise,

12 less 1 percent, shall be refunded as drawback.’’.

13 (4) Subsection (j) is amended to read as fol14 lows:

15 ‘‘(j) UNUSED MERCHANDISE DRAWBACK.—

16 ‘‘(1) If imported merchandise, on which was

17 paid any duty, tax, or fee imposed under Federal

18 law because of its importation—

19 ‘‘(A) is, before the close of the 3-year pe20 riod beginning on the date of importation—

21 ‘‘(i) exported, or

22 ‘‘(ii) destroyed under customs super23 vision; and

24 ‘‘(B) is not used within the United States

25 before such exportation or destruction;
363

1 then upon such exportation or destruction 99 per2 cent of the amount of each duty, tax, or fee so paid

3 shall be refunded as drawback. The exporter (or de4 stroyer) has the right to claim drawback under this

5 paragraph, but may endorse such right to the im6 porter or any intermediate party.

7 ‘‘(2) If there is, with respect to imported mer8 chandise on which was paid any duty, tax, or fee im9 posed under Federal law because of its importation,

10 any other merchandise (whether imported or domes11 tic), that—

12 ‘‘(A) is commercially interchangeable with

13 such imported merchandise;

14 ‘‘(B) is, before the close of the 3-year pe15 riod beginning on the date of importation of the

16 imported merchandise, either exported or de17 stroyed under customs supervision; and

18 ‘‘(C) before such exportation or destruc19 tion—

20 ‘‘(i) is not used within the United

21 States, and

22 ‘‘(ii) is in the possession of, including

23 ownership while in bailment, in leased fa24 cilities, in transit to, or in any other man25 ner under the operational control of, the
364

1 party claiming drawback under this para2 graph, if that party—

3 ‘‘(I) is the importer of the im4 ported merchandise, or

5 ‘‘(II) received from the person

6 who imported and paid any duty due

7 on the imported merchandise a certifi8 cate of delivery transferring to the

9 party the imported merchandise, com10 mercially interchangeable merchan11 dise, or any combination of imported

12 and commercially interchangeable

13 merchandise (and any such trans14 ferred merchandise, regardless of its

15 origin, will be treated as the imported

16 merchandise and any retained mer17 chandise will be treated as domestic

18 merchandise);

19 then upon the exportation or destruction of

20 such other merchandise the amount of each

21 such duty, tax, and fee paid regarding the im22 ported merchandise shall be refunded as draw23 back, but in no case may the total drawback on

24 the imported merchandise, whether available

25 under this paragraph or any other provision of
365

1 law or any combination thereof, exceed 99 per2 cent of that duty, tax, or fee.

3 ‘‘(3) The performing of any operation or com4 bination of operations (including, but not limited to,

5 testing, cleaning, repacking, inspecting, sorting, re6 furbishing, freezing, blending, repairing, reworking,

7 cutting, slitting, adjusting, replacing components,

8 relabeling, disassembling, and unpacking), not

9 amounting to manufacture or production for draw10 back purposes under the preceding provisions of this

11 section on—

12 ‘‘(A) the imported merchandise itself in

13 cases to which paragraph (1) applies, or

14 ‘‘(B) the commercially interchangeable

15 merchandise in cases to which paragraph (2)

16 applies,

17 shall not be treated as a use of that merchandise for

18 purposes of applying paragraph (1)(B) or (2)(C).’’.

19 (5) Subsection (l) is amended by striking out

20 ‘‘the fixing of a time limit within which drawback

21 entries or entries for refund under any of the provi22 sions of this section or section 309(b) shall be filed

23 and completed,’’ and inserting ‘‘the authority for the

24 electronic submission of drawback entries’’.
366

1 (6) Subsection (p) is amended to read as fol2 lows:

3 ‘‘(p) SUBSTITUTION OF FINISHED PETROLEUM DE4 RIVATIVES.—

5 ‘‘(1) IN GENERAL.—Notwithstanding any other

6 provision of this section, if—

7 ‘‘(A) an article (hereafter referred to in

8 this subsection as the ‘exported article’) of the

9 same kind and quality as a qualified article is

10 exported;

11 ‘‘(B) the requirements set forth in para12 graph (2) are met; and

13 ‘‘(C) a drawback claim is filed regarding

14 the exported article;

15 the amount of the duties paid on, or attributable to,

16 such qualified article shall be refunded as drawback

17 to the drawback claimant.

18 ‘‘(2) REQUIREMENTS.—The requirements re19 ferred to in paragraph (1) are as follows:

20 ‘‘(A) The exporter of the exported article—

21 ‘‘(i) manufactured or produced the

22 qualified article in a quantity equal to or

23 greater than the quantity of the exported

24 article,
367

1 ‘‘(ii) purchased or exchanged, directly

2 or indirectly, the qualified article from a

3 manufacturer or producer described in

4 subsection (a) or (b) in a quantity equal to

5 or greater than the quantity of the ex6 ported article,

7 ‘‘(iii) imported the qualified article in

8 a quantity equal to or greater than the

9 quantity of the exported article, or

10 ‘‘(iv) purchased or exchanged, directly

11 or indirectly, an imported qualified article

12 from an importer in a quantity equal to or

13 greater than the quantity of the exported

14 article.

15 ‘‘(B) In the case of the requirement de16 scribed in subparagraph (A)(ii), the manufac17 turer or producer produced the qualified article

18 in a quantity equal to or greater than the quan19 tity of the exported article.

20 ‘‘(C) In the case of the requirement of sub21 paragraph (A)(i) or (A)(ii), the exported article

22 is exported during the period that the qualified

23 article described in subparagraph (A)(i) or

24 (A)(ii) (whichever is applicable) is manufac-
368

1 tured or produced, or within 180 days after the

2 close of such period.

3 ‘‘(D) In the case of the requirement of

4 subparagraph (A)(i) or (A)(ii), the specific pe5 troleum refinery or production facility which

6 made the qualified article concerned is identi7 fied.

8 ‘‘(E) In the case of the requirement of sub9 paragraph (A)(iii) or (A)(iv), the exported arti10 cle is exported within 180 days after the date

11 of entry of an imported qualified article de12 scribed in subparagraph (A)(iii) or (A)(iv)

13 (whichever is applicable).

14 ‘‘(F) Except as otherwise specifically pro15 vided in this subsection, the drawback claimant

16 complies with all requirements of this section,

17 including providing certificates which establish

18 the drawback eligibility of articles for which

19 drawback is claimed.

20 ‘‘(G) The manufacturer, producer, im21 porter, exporter, and drawback claimant of the

22 qualified article and the exported article main23 tain all records required by regulation.

24 ‘‘(3) DEFINITION OF QUALIFIED ARTICLE,

25 ETC.—For purposes of this subsection—
369

1 ‘‘(A) The term ‘qualified article’ means an

2 article—

3 ‘‘(i) described in—

4 ‘‘(I) headings 2707, 2708, 2710,

5 2711, 2712, 2713, 2714, 2715, 2901,

6 and 2902 of the Harmonized Tariff

7 Schedule of the United States, or

8 ‘‘(II) headings 3901 through

9 3914 of such Schedule (as such head10 ings apply to liquids, pastes, powders,

11 granules, and flakes), and

12 ‘‘(ii) which is—

13 ‘‘(I) manufactured or produced

14 as described in subsection (a) or (b)

15 from crude petroleum or a petroleum

16 derivative, or

17 ‘‘(II) imported duty-paid.

18 ‘‘(B) An exported article is of the same

19 kind and quality as the qualified article for

20 which it is substituted under this subsection if

21 it is a product that is commercially interchange22 able with or referred to under the same eight23 digit classification of the Harmonized Tariff

24 Schedule of the United States as the qualified

25 article.
370

1 ‘‘(C) The term ‘drawback claimant’ means

2 the exporter of the exported article or the re3 finer, producer, or importer of such article. Any

4 person eligible to file a drawback claim under

5 this subparagraph may designate another per6 son to file such claim.

7 ‘‘(4) LIMITATION ON DRAWBACK.—The amount

8 of drawback payable under this subsection shall not

9 exceed the amount of drawback that would be attrib10 utable to the article—

11 ‘‘(A) manufactured or produced under sub12 section (a) or (b) by the manufacturer or pro13 ducer described in clause (i) or (ii) of para14 graph (2)(A), or

15 ‘‘(B) imported under clause (iii) or (iv) of

16 paragraph (2)(A).’’.

17 (7) The following new subsections are inserted

18 after subsection (p):

19 ‘‘(q) PACKAGING MATERIAL.—Packaging material,

20 when used on or for articles or merchandise exported or

21 destroyed under subsection (a), (b), (c), or (j), shall be

22 eligible under such subsection for refund, as drawback, of

23 99 percent of any duty, tax, or fee imposed under Federal

24 law on the importation of such material.

25 ‘‘(r) FILING DRAWBACK CLAIMS.—
371

1 ‘‘(1) A drawback entry and all documents nec2 essary to complete a drawback claim, including those

3 issued by the Customs Service, shall be filed or ap4 plied for, as applicable, within 3 years after the date

5 of exportation or destruction of the articles on which

6 drawback is claimed, except that any landing certifi7 cate required by regulation shall be filed within the

8 time limit prescribed in such regulation. Claims not

9 completed within the 3-year period shall be consid10 ered abandoned. No extension will be granted unless

11 it is established that the Customs Service was re12 sponsible for the untimely filing.

13 ‘‘(2) A drawback entry for refund filed pursu14 ant to any subsection of this section shall be deemed

15 filed pursuant to any other subsection of this section

16 should it be determined that drawback is not allow17 able under the entry as originally filed but is allow18 able under such other subsection.

19 ‘‘(s) DESIGNATION OF MERCHANDISE BY SUCCES20 SOR.—

21 ‘‘(1) For purposes of subsection (b), a draw22 back successor may designate imported merchandise

23 used by the predecessor before the date of succession

24 as the basis for drawback on articles manufactured
372

1 by the drawback successor after the date of succes2 sion.

3 ‘‘(2) For purposes of subsection (j)(2), a draw4 back successor may designate—

5 ‘‘(A) imported merchandise which the

6 predecessor, before the date of succession, im7 ported; or

8 ‘‘(B) imported merchandise, commercially

9 interchangeable merchandise, or any combina10 tion of imported and commercially interchange11 able merchandise for which the successor re12 ceived, before the date of succession, from the

13 person who imported and paid any duty due on

14 the imported merchandise a certificate of deliv15 ery transferring to the successor such merchan16 dise;

17 as the basis for drawback on merchandise possessed

18 by the drawback successor after the date of succes19 sion.

20 ‘‘(3) For purposes of this subsection, the term

21 ‘drawback successor’ means an entity to which an22 other entity (in this subsection referred to as the

23 ‘predecessor’) has transferred by written agreement,

24 merger, or corporate resolution—
373

1 ‘‘(A) all or substantially all of the rights,

2 privileges, immunities, powers, duties, and li3 abilities of the predecessor; or

4 ‘‘(B) the assets and other business inter5 ests of a division, plant, or other business unit

6 of such predecessor, but only if in such transfer

7 the value of the transferred realty, personalty,

8 and intangibles (other than drawback rights, in9 choate or otherwise) exceeds the value of all

10 transferred drawback rights, inchoate or other11 wise.

12 ‘‘(4) No drawback shall be paid under this sub13 section until either the predecessor or the drawback

14 successor (who shall also certify that it has the pred15 ecessor’s records) certifies that—

16 ‘‘(A) the transferred merchandise was not

17 and will not be claimed by the predecessor, and

18 ‘‘(B) the predecessor did not and will not

19 issue any certificate to any other person that

20 would enable that person to claim drawback.

21 ‘‘(t) DRAWBACK CERTIFICATES.—Any person who is22 sues a certificate which would enable another person to

23 claim drawback shall be subject to the recordkeeping pro24 visions of this chapter, with the retention period beginning

25 on the date that such certificate is issued.
374

1 ‘‘(u) ELIGIBILITY OF ENTERED OR WITHDRAWN

2 MERCHANDISE.—Imported merchandise that has not been

3 regularly entered or withdrawn for consumption shall not

4 satisfy any requirement for use, exportation, or destruc5 tion under this section.

6 ‘‘(v) MULTIPLE DRAWBACK CLAIMS.—Merchandise

7 that is exported or destroyed to satisfy any claim for draw8 back shall not be the basis of any other claim for draw9 back; except that appropriate credit and deductions for

10 claims covering components or ingredients of such mer11 chandise shall be made in computing drawback pay12 ments.’’.

13 (b) APPLICATION OF AMENDMENT TO FINISHED PE14 TROLEUM DERIVATIVES.—Notwithstanding section 514 of

15 the Tariff Act of 1930 (19 U.S.C. 1514) or any other pro16 vision of law, the amendment made by paragraph (6) of

17 subsection (a) shall apply to—

18 (1) claims filed or liquidated on or after Janu19 ary 1, 1988, and

20 (2) claims that are unliquidated, under protest,

21 or in litigation on the date of the enactment of this

22 Act.

23 SEC. 633. EFFECTIVE DATE OF RATES OF DUTY.

24 Section 315 (19 U.S.C. 1315) is amended—
375

1 (1) by striking out ‘‘appropriate customs officer

2 in the form and manner prescribed by regulations of

3 the Secretary of the Treasury,’’ in the first sentence

4 of subsection (a) and inserting ‘‘Customs Service by

5 written, electronic or such other means as the Sec6 retary by regulation shall prescribe,’’;

7 (2) by striking out ‘‘customs custody’’ in the

8 first sentence of subsection (b) and inserting ‘‘cus9 tody of the Customs Service’’; and

10 (3) by striking out ‘‘paragraph 813’’ in sub11 section (c) and inserting ‘‘chapter 98 of the Har12 monized Tariff Schedule of the United States’’.

13 SEC. 634. DEFINITIONS.

14 Section 401 (19 U.S.C. 1401) is amended—

15 (1) by amending subsection (k) to read as fol16 lows:

17 ‘‘(k) The term ‘hovering vessel’ means—

18 ‘‘(1) any vessel which is found or kept off the

19 coast of the United States within or without the cus20 toms waters, if, from the history, conduct, character,

21 or location of the vessel, it is reasonable to believe

22 that such vessel is being used or may be used to in23 troduce or promote or facilitate the introduction or

24 attempted introduction of merchandise into the
376

1 United States in violation of the laws of the United

2 States; and

3 ‘‘(2) any vessel which has visited a vessel de4 scribed in paragraph (1).’’; and

5 (2) by inserting at the end thereof the following

6 new subsections:

7 ‘‘(n) The term ‘electronic transmission’ means the

8 transfer of data or information through an authorized

9 electronic data interchange system consisting of, but not

10 limited to, computer modems and computer networks.

11 ‘‘(o) The term ‘electronic entry’ means the electronic

12 transmission to the Customs Service of—

13 ‘‘(1) entry information required for the entry of

14 merchandise, and

15 ‘‘(2) entry summary information required for

16 the classification and appraisement of the merchan17 dise, the verification of statistical information, and

18 the determination of compliance with applicable law.

19 ‘‘(p) The term ‘electronic data interchange system’

20 means any established mechanism approved by the Com21 missioner of Customs through which information can be

22 transferred electronically.

23 ‘‘(q) The term ‘National Customs Automation Pro24 gram’ means the program established under section 411.
377

1 ‘‘(r) The term ‘import activity summary statement’

2 refers to data or information transmitted electronically to

3 the Customs Service, in accordance with such regulations

4 as the Secretary prescribes, at the end of a specified pe5 riod of time which enables the Customs Service to assess

6 properly the duties, taxes and fees on merchandise im7 ported during that period, collect accurate statistics and

8 determine whether any other applicable requirement of law

9 (other than a requirement relating to release from customs

10 custody) is met.

11 ‘‘(s) The term ‘reconciliation’ means an electronic

12 process, initiated at the request of an importer, under

13 which the elements of an entry, other than those elements

14 related to the admissibility of the merchandise, that are

15 undetermined at the time of entry summary are provided

16 to the Customs Service at a later time. A reconciliation

17 is treated as an entry for purposes of liquidation, reliqui18 dation, and protest.’’.

19 SEC. 635. MANIFESTS.

20 Section 431 (19 U.S.C. 1431) is amended—

21 (1) by amending subsections (a) and (b) to read

22 as follows:

23 ‘‘(a) IN GENERAL.—Every vessel required to make

24 entry under section 434 or obtain clearance under section

25 4197 of the Revised Statutes of the United States (46
378

1 U.S.C. App. 91) shall have a manifest that complies with

2 the requirements prescribed under subsection (d).

3 ‘‘(b) PRODUCTION OF MANIFEST.—Any manifest re4 quired by the Customs Service shall be signed, produced,

5 delivered or electronically transmitted by the master or

6 person in charge of the vessel, aircraft, or vehicle, or by

7 any other authorized agent of the owner or operator of

8 the vessel, aircraft, or vehicle in accordance with the re9 quirements prescribed under subsection (d). A manifest

10 may be supplemented by bill of lading data supplied by

11 the issuer of such bill. If any irregularity of omission or

12 commission occurs in any way in respect to any manifest

13 or bill of lading data, the owner or operator of the vessel,

14 aircraft or vehicle, or any party responsible for such irreg15 ularity, shall be liable for any fine or penalty prescribed

16 by law with respect to such irregularity. The Customs

17 Service may take appropriate action against any of the

18 parties.’’; and

19 (2) by inserting after subsection (c) the follow20 ing new subsection:

21 ‘‘(d) REGULATIONS.—

22 ‘‘(1) IN GENERAL.—The Secretary shall by reg23 ulation—
379

1 ‘‘(A) specify the form for, and the informa2 tion and data that must be contained in, the

3 manifest required by subsection (a);

4 ‘‘(B) allow, at the option of the individual

5 producing the manifest and subject to para6 graph (2), letters and documents shipments to

7 be accounted for by summary manifesting pro8 cedures;

9 ‘‘(C) prescribe the manner of production

10 for, and the delivery for electronic transmittal

11 of, the manifest required by subsection (a); and

12 ‘‘(D) prescribe the manner for

13 supplementing manifests with bill of lading data

14 under subsection (b).

15 ‘‘(2) LETTERS AND DOCUMENTS SHIPMENTS.—

16 For purposes of paragraph (1)(B)—

17 ‘‘(A) the Customs Service may require with

18 respect to letters and documents shipments—

19 ‘‘(i) that they be segregated by coun20 try of origin, and

21 ‘‘(ii) additional examination proce22 dures that are not necessary for individ23 ually manifested shipments;

24 ‘‘(B) standard letter envelopes and stand25 ard document packs shall be segregated from
380

1 larger document shipments for purposes of cus2 toms inspections; and

3 ‘‘(C) the term ‘letters and documents’

4 means—

5 ‘‘(i) data described in General Head6 note 4(c) of the Harmonized Tariff Sched7 ule of the United States,

8 ‘‘(ii) securities and similar evidences

9 of value described in heading 4907 of such

10 Schedule, but not monetary instruments

11 defined pursuant to chapter 53 of title 31,

12 United States Code, and

13 ‘‘(iii) personal correspondence, wheth14 er on paper, cards, photographs, tapes, or

15 other media.’’.

16 SEC. 636. INVOICE CONTENTS.

17 Section 481 (19 U.S.C. 1481) is amended—

18 (1) by amending subsection (a)—

19 (A) by amending the matter preceding

20 paragraph (1) to read as follows: ‘‘IN GEN21 ERAL.—All invoices of merchandise to be im22 ported into the United States and any elec23 tronic equivalent thereof considered acceptable

24 by the Secretary in regulations prescribed under

25 this section shall set forth, in written, elec-
381

1 tronic, or such other form as the Secretary

2 shall prescribe, the following:’’,

3 (B) by amending paragraph (3) to read as

4 follows:

5 ‘‘(3) A detailed description of the merchandise,

6 including the commercial name by which each item

7 is known, the grade or quality, and the marks, num8 bers, or symbols under which sold by the seller or

9 manufacturer in the country of exportation, together

10 with the marks and numbers of the packages in

11 which the merchandise is packed;’’, and

12 (C) by amending paragraph (10) to read

13 as follows:

14 ‘‘(10) Any other fact that the Secretary may by

15 regulation require as being necessary to a proper ap16 praisement, examination and classification of the

17 merchandise.’’;

18 (2) by amending subsection (c) to read as

19 follows:

20 ‘‘(c) IMPORTER PROVISION OF INFORMATION.—Any

21 information required to be set forth on an invoice may

22 alternatively be provided by any of the parties qualifying

23 as an ‘importer of record’ under section 484(a)(2)(B) by

24 such means, in such form or manner, and within such time

25 as the Secretary shall by regulation prescribe.’’; and
382

1 (3) by inserting before the period at the end of

2 subsection (d) the following: ‘‘and may allow for the

3 submission or electronic transmission of partial in4 voices, electronic equivalents of invoices, bills, or

5 other documents or parts thereof, required under

6 this section’’.

7 SEC. 637. ENTRY OF MERCHANDISE.

8 (a) AMENDMENTS TO SECTION 484.—Section 484

9 (19 U.S.C. 1484) is amended to read as follows:

10 ‘‘SEC. 484. ENTRY OF MERCHANDISE.

11 ‘‘(a) REQUIREMENT AND TIME.—

12 ‘‘(1) Except as provided in sections 490, 498,

13 552, 553, and 336(j), one of the parties qualifying

14 as ‘importer of record’ under paragraph (2)(B), ei15 ther in person or by an agent authorized by the

16 party in writing, shall, using reasonable care—

17 ‘‘(A) make entry therefor by filing with the

18 Customs Service—

19 ‘‘(i) such documentation or, pursuant

20 to an electronic data interchange system,

21 such information as is necessary to enable

22 the Customs Service to determine whether

23 the merchandise may be released from cus24 toms custody, and
383

1 ‘‘(ii) notification whether an import

2 activity summary statement will be filed;

3 and

4 ‘‘(B) complete the entry by filing with the

5 Customs Service the declared value, classifica6 tion and rate of duty applicable to the merchan7 dise, and such other documentation or, pursu8 ant to an electronic data interchange system,

9 such other information as is necessary to enable

10 the Customs Service to—

11 ‘‘(i) properly assess duties on the mer12 chandise,

13 ‘‘(ii) collect accurate statistics with re14 spect to the merchandise, and

15 ‘‘(iii) determine whether any other ap16 plicable requirement of law (other than a

17 requirement relating to release from cus18 toms custody) is met.

19 ‘‘(2)(A) The documentation or information re20 quired under paragraph (1) with respect to any im21 ported merchandise shall be filed or transmitted in

22 such manner and within such time periods as the

23 Secretary shall by regulation prescribe. Such regula24 tions shall provide for the filing of import activity

25 summary statements, covering entries or warehouse
384

1 withdrawals made during a calendar month, within

2 such time period as is prescribed in regulations but

3 not to exceed the 20th day following such calendar

4 month.

5 ‘‘(B) When an entry of merchandise is made

6 under this section, the required documentation or in7 formation shall be filed or electronically transmitted

8 either by the owner or purchaser of the merchandise

9 or, when appropriately designated by the owner, pur10 chaser, or consignee of the merchandise, a person

11 holding a valid license under section 641. When a

12 consignee declares on entry that he is the owner or

13 purchaser of merchandise the Customs Service may,

14 without liability, accept the declaration. For the pur15 poses of this Act, the importer of record must be one

16 of the parties who is eligible to file the documenta17 tion or information required by this section.

18 ‘‘(C) The Secretary, in prescribing regulations

19 to carry out this subsection, shall establish proce20 dures which insure the accuracy and timeliness of

21 import statistics, particularly statistics relevant to

22 the classification and valuation of imports. Correc23 tions of errors in such statistical data shall be trans24 mitted immediately to the Director of the Bureau of

25 the Census, who shall make corrections in the statis-
385

1 tics maintained by the Bureau. The Secretary shall

2 also provide, to the maximum extent practicable, for

3 the protection of the revenue, the enforcement of

4 laws governing the importation and exportation of

5 merchandise, the facilitation of the commerce of the

6 United States, and the equal treatment of all im7 porters of record of imported merchandise.

8 ‘‘(b) RECONCILIATION.—

9 ‘‘(1) IN GENERAL.—A party that electronically

10 transmits an entry summary or import activity sum11 mary statement may at the time of filing such sum12 mary or statement notify the Customs Service of his

13 intention to file a reconciliation pursuant to such

14 regulations as the Secretary may prescribe. Such

15 reconciliation must be filed by the importer of record

16 within such time period as is prescribed by regula17 tion but no later than 15 months following the filing

18 of the entry summary or import activity summary

19 statement; except that the prescribed time period for

20 reconciliation issues relating to the assessment of

21 antidumping and countervailing duties shall require

22 filing no later than 90 days after the Customs Serv23 ice advises the importer that a period of review for

24 antidumping or countervailing duty purposes has

25 been completed. Before filing a reconciliation, an im-
386

1 porter of record shall post bond or other security

2 pursuant to such regulations as the Secretary may

3 prescribe.

4 ‘‘(2) REGULATIONS REGARDING AD/CV DU5 TIES.—The Secretary shall prescribe, in consultation

6 with the Secretary of Commerce, such regulations as

7 are necessary to adapt the reconciliation process for

8 use in the collection of antidumping and countervail9 ing duties.

10 ‘‘(c) RELEASE OF MERCHANDISE.—The Customs

11 Service may permit the entry and release of merchandise

12 from customs custody in accordance with such regulations

13 as the Secretary may prescribe. No officer of the Customs

14 Service shall be liable to any person with respect to the

15 delivery of merchandise released from customs custody in

16 accordance with such regulations.

17 ‘‘(d) SIGNING AND CONTENTS.—Entries shall be

18 signed by the importer of record, or his agent, unless filed

19 pursuant to an electronic data interchange system. If elec20 tronically filed, each transmission of data shall be certified

21 by an importer of record or his agent, one of whom shall

22 be resident in the United States for purposes of receiving

23 service of process, as being true and correct to the best

24 of his knowledge and belief, and such transmission shall

25 be binding in the same manner and to the same extent
387

1 as a signed document. The entry shall set forth such facts

2 in regard to the importation as the Secretary may require

3 and shall be accompanied by such invoices, bills of lading,

4 certificates, and documents, or their electronically submit5 ted equivalents, as are required by regulation.

6 ‘‘(e) PRODUCTION OF INVOICE.—The Secretary may

7 provide by regulation for the production of an invoice,

8 parts thereof, or the electronic equivalents thereof, in such

9 manner and form, and under such terms and conditions,

10 as the Secretary considers necessary.

11 ‘‘(f) STATISTICAL ENUMERATION.—The Secretary,

12 the Secretary of Commerce, and the United States Inter13 national Trade Commission shall establish from time to

14 time for statistical purposes an enumeration of articles in

15 such detail as in their judgment may be necessary, com16 prehending all merchandise imported into the United

17 States and exported from the United States, and shall

18 seek, in conjunction with statistical programs for domestic

19 production and programs for achieving international har20 monization of trade statistics, to establish the comparabil21 ity thereof with such enumeration of articles. All import

22 entries and export declarations shall include or have at23 tached thereto an accurate statement specifying, in terms

24 of such detailed enumeration, the kinds and quantities of
388

1 all merchandise imported and exported and the value of

2 the total quantity of each kind of article.

3 ‘‘(g) STATEMENT OF COST OF PRODUCTION.—Under

4 such regulations as the Secretary may prescribe, the Cus5 toms Service may require a verified statement from the

6 manufacturer or producer showing the cost of producing

7 the imported merchandise, if the Customs Service consid8 ers such verification necessary for the appraisement of

9 such merchandise.

10 ‘‘(h) ADMISSIBILITY OF DATA ELECTRONICALLY

11 TRANSMITTED.—Any entry or other information transmit12 ted by means of an authorized electronic data interchange

13 system shall be admissible in any and all administrative

14 and judicial proceedings as evidence of such entry or infor15 mation.’’.

16 (b) AMENDMENT TO SECTION 771.—Section 771 (19

17 U.S.C. 1677) is amended by adding at the end the follow18 ing new paragraph:

19 ‘‘(23) ENTRY.—The term ‘entry’ includes, in

20 appropriate circumstances as determined by the ad21 ministering authority, a reconciliation entry created

22 under a reconciliation process, defined in section

23 401(s), that is initiated by an importer. The liability

24 of an importer under an antidumping or countervail25 ing duty proceeding for entries of merchandise sub-
389

1 ject to the proceeding will attach to the correspond2 ing reconciliation entry or entries. Suspension of liq3 uidation of the reconciliation entry or entries, for the

4 purpose of enforcing this title, is equivalent to the

5 suspension of liquidation of the corresponding indi6 vidual entries; but the suspension of liquidation of

7 the reconciliation entry or entries for such purpose

8 does not preclude liquidation for any other pur9 pose.’’.

10 SEC. 638. APPRAISEMENT AND OTHER PROCEDURES.

11 Section 500 (19 U.S.C. 1500) is amended—

12 (1) by striking out ‘‘The appropriate customs

13 officer’’ and inserting ‘‘The Customs Service’’;

14 (2) by striking out ‘‘appraise’’ in subsection (a)

15 and inserting ‘‘fix the final appraisement of’’;

16 (3) by striking out ‘‘ascertain the’’ in sub17 section (b) and inserting ‘‘fix the final’’;

18 (4) by amending subsection (c)—

19 (A) by inserting ‘‘final’’ after ‘‘fix the’’,

20 and

21 (B) by inserting ‘‘, taxes, and fees’’ after

22 ‘‘duties’’ wherever it appears; and

23 (5) by amending subsections (d) and (e) to read

24 as follows:
390

1 ‘‘(d) liquidate the entry and reconciliation, if

2 any, of such merchandise; and

3 ‘‘(e) give or transmit, pursuant to an electronic

4 data interchange system, notice of such liquidation

5 to the importer, his consignee, or agent in such form

6 and manner as the Secretary shall by regulation pre7 scribe.’’.

8 SEC. 639. VOLUNTARY RELIQUIDATIONS.

9 Section 501 (19 U.S.C. 1501) is amended—

10 (1) by striking out ‘‘the appropriate customs of11 ficer on his own initiative’’ and inserting ‘‘the Cus12 toms Service’’;

13 (2) by inserting ‘‘or transmitted’’ after ‘‘given’’

14 wherever it appears; and

15 (3) by amending the section heading to read as

16 follows:

17 ‘‘SEC. 501. VOLUNTARY RELIQUIDATIONS BY THE CUSTOMS

18 SERVICE.’’.

19 SEC. 640. APPRAISEMENT REGULATIONS.

20 Section 502 (19 U.S.C. 1502) is amended—

21 (1) by amending subsection (a)—

22 (A) by inserting ‘‘(including regulations es23 tablishing procedures for the issuance of bind24 ing rulings prior to the entry of the merchan25 dise concerned)’’ after ‘‘law’’,
391

1 (B) by striking out ‘‘ports of entry, and’’

2 inserting ‘‘ports of entry. The Secretary’’,

3 (C) by inserting ‘‘or classifying’’ after ‘‘ap4 praising’’ wherever it appears, and

5 (D) by striking out ‘‘such port’’ and insert6 ing ‘‘any port, and may direct any customs offi7 cer at any port to review entries of merchandise

8 filed at any other port’’; and

9 (2) by striking out subsection (b) and redesig10 nating subsection (c) as subsection (b).

11 SEC. 641. LIMITATION ON LIQUIDATION.

12 Section 504 (19 U.S.C. 1504) is amended—

13 (1) by amending subsection (a)—

14 (A) by striking out ‘‘Except as provided in

15 subsection (b),’’ and inserting ‘‘Unless an entry

16 is extended under subsection (b) or suspended

17 as required by statute or court order,’’,

18 (B) by striking out ‘‘or’’ at the end of

19 paragraph (2),

20 (C) by inserting ‘‘or’’ after the semicolon

21 at the end of paragraph (3), and

22 (D) by inserting the following new para23 graph after paragraph (3):

24 ‘‘(4) if a reconciliation is filed, or should have

25 been filed, the date of the filing under section 484
392

1 or the date the reconciliation should have been

2 filed;’’; and

3 (2) by amending subsections (b), (c), and (d) to

4 read as follows:

5 ‘‘(b) EXTENSION.—The Secretary may extend the pe6 riod in which to liquidate an entry if—

7 ‘‘(1) the information needed for the proper ap8 praisement or classification of the merchandise, or

9 for insuring compliance with applicable law, is not

10 available to the Customs Service; or

11 ‘‘(2) the importer of record requests such exten12 sion and shows good cause therefor.

13 The Secretary shall give notice of an extension under this

14 subsection to the importer of record and the surety of such

15 importer of record. Notice shall be in such form and man16 ner (which may include electronic transmittal) as the Sec17 retary shall by regulation prescribe. Any entry the liquida18 tion of which is extended under this subsection shall be

19 treated as having been liquidated at the rate of duty,

20 value, quantity, and amount of duty asserted at the time

21 of entry by the importer of record at the expiration of 4

22 years from the applicable date specified in subsection (a).

23 ‘‘(c) NOTICE OF SUSPENSION.—If the liquidation of

24 any entry is suspended, the Secretary shall by regulation

25 require that notice of the suspension be provided, in such
393

1 manner as the Secretary considers appropriate, to the im2 porter of record and to any authorized agent and surety

3 of such importer of record.

4 ‘‘(d) REMOVAL OF SUSPENSION.—When a suspension

5 required by statute or court order is removed, the Customs

6 Service shall liquidate the entry within 6 months after re7 ceiving notice of the removal from the Department of

8 Commerce, other agency, or a court with jurisdiction over

9 the entry. Any entry not liquidated by the Customs Service

10 within 6 months after receiving such notice shall be treat11 ed as having been liquidated at the rate of duty, value,

12 quantity, and amount of duty asserted at the time of entry

13 by the importer of record.’’.

14 SEC. 642. PAYMENT OF DUTIES AND FEES.

15 (a) AMENDMENT TO SECTION 505.—Section 505

16 (U.S.C. 1505) is amended to read as follows:

17 ‘‘SEC. 505. PAYMENT OF DUTIES AND FEES.

18 ‘‘(a) DEPOSIT OF ESTIMATED DUTIES, FEES, AND

19 INTEREST.—Unless merchandise is entered for warehouse

20 or transportation, or under bond, the importer of record

21 shall deposit with the Customs Service at the time of mak22 ing entry, or at such later time as the Secretary may pre23 scribe by regulation, the amount of duties and fees esti24 mated to be payable thereon. Such regulations may pro25 vide that estimated duties and fees shall be deposited be-
394

1 fore or at the time an import activity summary statement

2 is filed. If an import activity summary statement is filed,

3 the estimated duties and fees shall be deposited together

4 with interest, at a rate determined by the Secretary, ac5 cruing from the first date of the month the statement is

6 required to be filed until the date such statement is actu7 ally filed.

8 ‘‘(b) COLLECTION OR REFUND OF DUTIES, FEES,

9 AND INTEREST DUE UPON LIQUIDATION OR RELIQUIDA10 TION.—The Customs Service shall collect any increased or

11 additional duties and fees due, together with interest

12 thereon, or refund any excess moneys deposited, together

13 with interest thereon, as determined on a liquidation or

14 reliquidation. Duties, fees, and interest determined to be

15 due upon liquidation or reliquidation are due 30 days after

16 issuance of the bill for such payment. Refunds of excess

17 moneys deposited, together with interest thereon, shall be

18 paid within 30 days of liquidation or reliquidation.

19 ‘‘(c) INTEREST.—Interest assessed due to an

20 underpayment of duties, fees, or interest shall accrue, at

21 a rate determined by the Secretary, from the date the im22 porter of record is required to deposit estimated duties,

23 fees, and interest to the date of liquidation or reliquidation

24 of the applicable entry or reconciliation. Interest on excess

25 moneys deposited shall accrue, at a rate determined by
395

1 the Secretary, from the date the importer of record depos2 its estimated duties, fees, and interest to the date of liq3 uidation or reliquidation of the applicable entry or rec4 onciliation.

5 ‘‘(d) DELINQUENCY.—If duties, fees, and interest de6 termined to be due or refunded are not paid in full within

7 the 30-day period specified in subsection (b), any unpaid

8 balance shall be considered delinquent and bear interest

9 by 30-day periods, at a rate determined by the Secretary,

10 from the date of liquidation or reliquidation until the full

11 balance is paid. No interest shall accrue during the 30-

12 day period in which payment is actually made.’’.

13 (b) CONFORMING AMENDMENT.—Subsection (d) of

14 section 520 (19 U.S.C. 1520(d)) is repealed.

15 SEC. 643. ABANDONMENT AND DAMAGE.

16 Section 506 (19 U.S.C. 1506) is amended—

17 (1) by striking out ‘‘the appropriate customs of18 ficer’’ and ‘‘such customs officer’’ wherever they ap19 pear and inserting ‘‘the Customs Service’’;

20 (2) by amending paragraph (1)—

21 (A) by striking out ‘‘not sent to the ap22 praiser’s stores for’’ and inserting ‘‘released

23 without an’’,

24 (B) by striking out ‘‘of the examination

25 packages or quantities of merchandise’’,
396

1 (C) by striking out ‘‘the appraiser’s stores’’

2 and inserting ‘‘the Customs Service’’, and

3 (D) by inserting ‘‘or entry’’ after ‘‘in4 voice’’, and

5 (3) by amending paragraph (2)—

6 (A) by inserting ‘‘, electronically or other7 wise,’’ after ‘‘files’’, and

8 (B) by striking out ‘‘written’’.

9 SEC. 644. CUSTOMS OFFICER’S IMMUNITY.

10 Section 513 (19 U.S.C. 1513) is amended to read as

11 follows:

12 ‘‘SEC. 513. CUSTOMS OFFICER’S IMMUNITY.

13 ‘‘No customs officer shall be liable in any way to any

14 person for or on account of—

15 ‘‘(1) any ruling or decision regarding the ap16 praisement or the classification of any imported

17 merchandise or regarding the duties, fees, and taxes

18 charged thereon,

19 ‘‘(2) the collection of any dues, charges, duties,

20 fees, and taxes on or on account of any imported

21 merchandise, or

22 ‘‘(3) any other matter or thing as to which any

23 person might under this Act be entitled to protest or

24 appeal from the decision of such officer.’’.
397

1 SEC. 645. PROTESTS.

2 Section 514 (19 U.S.C. 1514) is amended—

3 (1) by amending subsection (a)—

4 (A) by striking out ‘‘appropriate customs

5 officer’’ in the text preceding paragraph (1) and

6 inserting ‘‘Customs Service’’,

7 (B) by inserting ‘‘or reconciliation as to

8 the issues contained therein,’’ after ‘‘entry,’’ in

9 paragraph (5),

10 (C) by striking out ‘‘and’’ and inserting

11 ‘‘or’’ at the end of paragraph (6),

12 (D) by striking out the comma at the end

13 of paragraph (7) and inserting a semicolon, and

14 (E) by striking out ‘‘appropriate customs

15 officer, who’’ in the text following paragraph

16 (7) and inserting ‘‘Customs Service, which’’;

17 (2) by amending subsection (b) by striking out

18 ‘‘appropriate customs officer’’ and inserting ‘‘Cus19 toms Service’’;

20 (3) by amending the first sentence of subsection

21 (c)(1) to read as follows: ‘‘A protest of a decision

22 made under subsection (a) shall be filed in writing,

23 or transmitted electronically pursuant to an elec24 tronic data interchange system, in accordance with

25 regulations prescribed by the Secretary. A protest

26 must set forth distinctly and specifically—
398

1 ‘‘(A) each decision described in subsection

2 (a) as to which protest is made;

3 ‘‘(B) each category of merchandise affected

4 by each decision set forth under paragraph (1);

5 ‘‘(C) the nature of each objection and the

6 reasons therefor; and

7 ‘‘(D) any other matter required by the Sec8 retary by regulation.’’;

9 (4) by redesignating paragraph (2) of sub10 section (c) as paragraph (3) and by striking out

11 ‘‘such customs officer’’ in such redesignated para12 graph and inserting ‘‘the Customs Service’’;

13 (5) by designating the last sentence of para14 graph (1) of subsection (c) as paragraph (2);

15 (6) by striking out ‘‘customs officer’’ in sub16 section (d) and inserting ‘‘Customs Service’’; and

17 (7) by amending the section heading to read as

18 follows:

19 ‘‘SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS

20 SERVICE.’’.

21 SEC. 646. REFUNDS AND ERRORS.

22 Section 520 (19 U.S.C. 1520) is amended—

23 (1) by inserting ‘‘or reconciliation’’ after

24 ‘‘entry’’ in paragraphs (1) and (4) of subsection (a);

25 and
399

1 (2) by amending subsection (c)—

2 (A) by striking out ‘‘appropriate customs

3 officer’’ wherever it appears and inserting

4 ‘‘Customs Service’’,

5 (B) by inserting ‘‘or reconciliation’’ after

6 ‘‘reliquidate an entry’’, and

7 (C) by inserting ‘‘, whether or not result8 ing from or contained in electronic trans9 mission,’’ after ‘‘inadvertence’’ the first place it

10 appears in paragraph (1).

11 SEC. 647. BONDS AND OTHER SECURITY.

12 Section 623 (19 U.S.C. 1623) is amended—

13 (1) by inserting ‘‘and the manner in which the

14 bond may be filed with or, pursuant to an author15 ized electronic data interchange system, transmitted

16 to the Customs Service’’ after ‘‘form of such bond’’

17 in subsection (b)(1); and

18 (2) by inserting at the end of subsection (d) the

19 following new sentence: ‘‘Any bond transmitted to

20 the Customs Service pursuant to an authorized elec21 tronic data interchange system shall have the same

22 force and effect and be binding upon the parties

23 thereto as if such bond were manually executed,

24 signed, and filed.’’.
400

1 SEC. 648. CUSTOMHOUSE BROKERS.

2 Section 641 (19 U.S.C. 1641) is amended—

3 (1) by adding at the end of subsection (a)(2)

4 the following new sentence: ‘‘It also includes the

5 preparation of documents or forms in any format

6 and the electronic transmission of documents, in7 voices, bills, or parts thereof, intended to be filed

8 with the Customs Service in furtherance of such ac9 tivities, whether or not signed or filed by the pre10 parer, or activities relating to such preparation, but

11 does not include the mere electronic transmission of

12 data received for transmission to Customs.’’;

13 (2) by amending subsection (c)(1) to read as

14 follows:

15 ‘‘(1) IN GENERAL.—Each person granted a cus16 toms broker’s license under subsection (b) shall be

17 issued, in accordance with such regulations as the

18 Secretary shall prescribe, either or both of the

19 following:

20 ‘‘(A) A national permit for the conduct of

21 such customs business as the Secretary pre22 scribes by regulation.

23 ‘‘(B) A permit for each customs district in

24 which that person conducts customs business

25 and, except as provided in paragraph (2), regu26 larly employs at least 1 individual who is li-
401

1 censed under subsection (b)(2) to exercise re2 sponsible supervision and control over the cus3 toms business conducted by that person in that

4 district.’’;

5 (3) by inserting at the end of subsection (c) the

6 following new paragraph:

7 ‘‘(4) APPOINTMENT OF SUBAGENTS.—Notwith8 standing subsection (c)(1), upon the implementation

9 by the Secretary under section 413(b)(2) of the com10 ponent of the National Customs Automation Pro11 gram referred to in section 411(a)(2)(B), a licensed

12 broker may appoint another licensed broker holding

13 a permit in a customs district to act on its behalf

14 as its subagent in that district if such activity re15 lates to the filing of information that is permitted by

16 law or regulation to be filed electronically. A licensed

17 broker appointing a subagent pursuant to this para18 graph shall remain liable for any and all obligations

19 arising under bond and any and all duties, taxes,

20 and fees, as well as any other liabilities imposed by

21 law, and shall be precluded from delegating to a

22 subagent such liability.’’;

23 (4) by amending subsection (d)(2)(B)—
402

1 (A) by striking out ‘‘appropriate customs

2 officer’’ and inserting ‘‘Customs Service’’ in the

3 first and third sentences,

4 (B) by striking out ‘‘he’’ and inserting ‘‘it’’

5 in the third sentence,

6 (C) by striking out ‘‘15 days’’ and insert7 ing ‘‘30 days’’ in the third sentence,

8 (D) by striking out ‘‘the appropriate cus9 toms officer and the customs broker; they’’ and

10 inserting ‘‘the Customs Service and the customs

11 broker; which’’ in the sixth sentence,

12 (E) by striking out ‘‘his’’ and inserting

13 ‘‘the’’ in the seventh sentence, and

14 (F) by striking out ‘‘for his decision’’ and

15 inserting ‘‘for the decision’’ in the eighth sen16 tence; and

17 (5) by amending subsection (f) by striking out

18 ‘‘United States Customs Service.’’ and inserting

19 ‘‘Customs Service. The Secretary may not prohibit

20 customs brokers from limiting their liability to other

21 persons in the conduct of customs business. For pur22 poses of this subsection or any other provision of

23 this Act pertaining to recordkeeping, all data re24 quired to be retained by a customs broker may be

25 kept on microfilm, optical disc, magnetic tapes, disks
403

1 or drums, video files or any other electrically gen2 erated medium. Pursuant to such regulations as the

3 Secretary shall prescribe, the conversion of data to

4 such storage medium may be accomplished at any

5 time subsequent to the relevant customs transaction

6 and the data may be retained in a centralized basis

7 according to such broker’s business system.’’.

8 SEC. 649. CONFORMING AMENDMENTS.

9 (a) PLACE OF ENTRY AND UNLADING.—Section 447

10 (19 U.S.C. 1447) is amended by striking out ‘‘the appro11 priate customs officer shall consider’’ and inserting ‘‘the

12 Customs Service considers’’.

13 (b) UNLADING.—Section 449 (19 U.S.C. 1449) is

14 amended by striking out ‘‘appropriate customs officer of

15 such port issues a permit for the unlading of such mer16 chandise or baggage,’’ and inserting ‘‘Customs Service is17 sues a permit for the unlading of such merchandise or

18 baggage at such port,’’.

19 Subtitle C—Miscellaneous Amend20 ments to the Tariff Act of 1930

21 SEC. 651. ADMINISTRATIVE EXEMPTIONS.

22 Section 321 (19 U.S.C. 1321) is amended—

23 (1) by amending subsection (a)(1)—
404

1 (A) by striking out ‘‘of less than $10’’ and

2 inserting ‘‘of an amount specified by the Sec3 retary by regulation, but not less than $20,’’,

4 (B) by inserting ‘‘, fees,’’ after ‘‘duties’’

5 wherever it appears, and

6 (C) by striking out ‘‘and’’ at the end there7 of;

8 (2) by amending subsection (a)(2)—

9 (A) by striking out ‘‘shall not exceed—’’

10 and inserting ‘‘shall not exceed an amount spec11 ified by the Secretary by regulation, but not

12 less than—’’,

13 (B) by striking out ‘‘$50’’ and ‘‘$100’’ in

14 subparagraph (A) and inserting ‘‘$100’’ and

15 ‘‘$200’’, respectively,

16 (C) by striking out ‘‘$25’’ in subparagraph

17 (B) and inserting ‘‘$200’’,

18 (D) by striking out ‘‘$5’’ in subparagraph

19 (C) and inserting ‘‘$200’’, and

20 (E) by striking the period at the end there21 of and inserting ‘‘; and’’, and

22 (3) by inserting a new paragraph (3) at the end

23 of subsection (a) to read as follows:

24 ‘‘(3) waive the collection of duties, fees, and

25 taxes due on entered merchandise when such duties,
405

1 fees, or taxes are less than $20 or such greater

2 amount as may be specified by the Secretary by reg3 ulation.’’; and

4 (4) by amending subsection (b)—

5 (A) by striking out ‘‘to diminish any dollar

6 amount specified in subsection (a) and’’; and

7 (B) by striking out ‘‘such subsection’’

8 wherever it appears and inserting ‘‘subsection

9 (a)’’.

10 SEC. 652. REPORT OF ARRIVAL.

11 Section 433 (19 U.S.C. 1433) is amended—

12 (1) by amending subsection (a)(1)—

13 (A) by striking out ‘‘or’’ at the end of sub14 paragraph (B),

15 (B) by inserting ‘‘or’’ after the semicolon

16 at the end of subparagraph (C), and

17 (C) by adding after subparagraph (C) the

18 following:

19 ‘‘(D) any vessel which has visited a hover20 ing vessel or received merchandise while outside

21 the territorial sea;’’;

22 (2) by striking out ‘‘present to customs officers

23 such’’ in subsection (d) and inserting ‘‘present, or

24 transmit pursuant to an electronic data interchange
406

1 system, to the Customs Service such information,

2 data,’’; and

3 (3) by amending subsection (e) to read as fol4 lows:

5 ‘‘(e) PROHIBITION ON DEPARTURES AND DIS6 CHARGE.—Unless otherwise authorized by law, a vessel,

7 aircraft or vehicle after arriving in the United States or

8 Virgin Islands may, but only in accordance with regula9 tions prescribed by the Secretary—

10 ‘‘(1) depart from the port, place, or airport of

11 arrival; or

12 ‘‘(2) discharge any passenger or merchandise

13 (including baggage).’’.

14 SEC. 653. ENTRY OF VESSELS.

15 Section 434 (19 U.S.C. 1434) amended to read as

16 follows:

17 ‘‘SEC. 434. ENTRY; VESSELS.

18 ‘‘(a) FORMAL ENTRY.—Within 24 hours (or such

19 other period of time as may be provided under subsection

20 (c)(2)) after the arrival at any port or place in the United

21 States of—

22 ‘‘(1) any vessel from a foreign port or place;

23 ‘‘(2) any foreign vessel from a domestic port;
407

1 ‘‘(3) any vessel of the United States having on

2 board bonded merchandise or foreign merchandise

3 for which entry has not been made; or

4 ‘‘(4) any vessel which has visited a hovering

5 vessel or has delivered or received merchandise while

6 outside the territorial sea;

7 the master of the vessel shall, unless otherwise provided

8 by law, make formal entry at the nearest customs facility

9 or such other place as the Secretary may prescribe by

10 regulation.

11 ‘‘(b) PRELIMINARY ENTRY.—The Secretary may by

12 regulation permit the master to make preliminary entry

13 of the vessel with the Customs Service in lieu of formal

14 entry or before formal entry is made. In permitting pre15 liminary entry, the Customs Service shall board a suffi16 cient number of vessels to ensure compliance with the laws

17 it enforces.

18 ‘‘(c) REGULATIONS.—The Secretary may by regula19 tion—

20 ‘‘(1) prescribe the manner and format in which

21 entry under subsection (a) or subsection (b), or

22 both, must be made, and such regulations may pro23 vide that any such entry may be made electronically

24 pursuant to an electronic data interchange system;

25 ‘‘(2) provide that—
408

1 ‘‘(A) formal entry must be made within a

2 greater or lesser time than 24 hours after arriv3 al, but in no case more than 48 hours after ar4 rival, and

5 ‘‘(B) formal entry may be made before ar6 rival; and

7 ‘‘(3) authorize the Customs Service to permit

8 entry or preliminary entry of any vessel to be made

9 at a place other than a designated port of entry,

10 under such conditions as may be prescribed.’’.

11 SEC. 654. UNLAWFUL RETURN OF FOREIGN VESSEL PA12 PERS.

13 Section 438 (19 U.S.C. 1438) is amended—

14 (1) by striking out ‘‘section 435’’ and inserting

15 ‘‘section 434’’;

16 (2) by inserting ‘‘, or regulations issued there17 under,’’ after ‘‘of this Act’’; and

18 (3) by striking out ‘‘the appropriate customs of19 ficer of the port where such vessel has been en20 tered.’’ and inserting ‘‘the Customs Service in the

21 port in which such vessel has entered.’’.

22 SEC. 655. VESSELS NOT REQUIRED TO ENTER.

23 Section 441 (19 U.S.C. 1441) is amended—

24 (1) by amending the text preceding paragraph

25 (1) to read as follows: ‘‘The following vessels shall
409

1 not be required to make entry under section 434 or

2 to obtain clearance under section 4197 of the Re3 vised Statutes of the United States (46 U.S.C. App.

4 91):’’;

5 (2) by amending paragraph (3) to read as

6 follows:

7 ‘‘(3) Any vessel carrying passengers on excursion

8 from the United States Virgin Islands to the British Vir9 gin Islands and returning, if—

10 ‘‘(A) the vessel does not in any way violate the

11 customs or navigation laws of the United States;

12 ‘‘(B) the vessel has not visited any hovering

13 vessel; and

14 ‘‘(C) the master of the vessel, if there is on

15 board any article required by law to be entered, re16 ports the article to the Customs Service immediately

17 upon arrival.’’;

18 (3) by redesignating paragraphs (4) and (5) as

19 paragraphs (5) and (6), respectively, and inserting

20 after paragraph (3) the following:

21 ‘‘(4) Any United States documented vessel with rec22 reational endorsement or any undocumented United

23 States pleasure vessel not engaged in trade, if—
410

1 ‘‘(A) the vessel complies with the reporting re2 quirements of section 433, and with the customs and

3 navigation laws of the United States;

4 ‘‘(B) the vessel has not visited any hovering

5 vessel; and

6 ‘‘(C) the master of, and any other person on

7 board, the vessel, if the master or such person has

8 on board any article required by law to be entered

9 or declared, reports such article to the Customs

10 Service immediately upon arrival;’’;

11 (4) by amending paragraph (6) (as so redesig12 nated) by striking out ‘‘enrolled and licensed to en13 gage in the foreign and coasting trade in the north14 ern, northeastern, and northwestern frontiers’’ and

15 inserting ‘‘documented under chapter 121 of title

16 46, United States Code, with a Great Lakes en17 dorsement’’; and

18 (5) by amending the section heading to read as

19 follows:

20 ‘‘SEC. 441. EXCEPTIONS TO VESSEL ENTRY AND CLEAR21 ANCE REQUIREMENTS.’’.

22 SEC. 656. UNLADING.

23 Section 448(a) (19 U.S.C. 1448(a)) is amended—

24 (1) by amending the first sentence—
411

1 (A) by striking out ‘‘enter)’’ and inserting

2 ‘‘enter or clear)’’,

3 (B) by striking out ‘‘or vehicle arriving

4 from a foreign port or place’’ and inserting ‘‘re5 quired to make entry under section 434, or ve6 hicle required to report arrival under section

7 433,’’,

8 (C) by inserting ‘‘or transmitted pursuant

9 to an electronic data interchange system’’ after

10 ‘‘issued’’, and

11 (D) by striking out the colon after ‘‘offi12 cer’’ and the proviso and inserting a period;

13 (2) by amending the second sentence—

14 (A) by striking out ‘‘, preliminary or other15 wise,’’, and

16 (B) by inserting ‘‘, electronically pursuant

17 to an authorized electronic data interchange

18 system or otherwise,’’ after ‘‘may issue a per19 mit’’;

20 (3) by striking out the last sentence and insert21 ing the following: ‘‘The owner or master of any ves22 sel or vehicle, or agent thereof, shall notify the Cus23 toms Service of any merchandise or baggage so un24 laden for which entry is not made within the time

25 prescribed by law or regulation. The Secretary shall
412

1 by regulation prescribe administrative penalties not

2 to exceed $1,000 for each bill of lading for which no3 tice is not given. Any such administrative penalty

4 shall be subject to mitigation and remittance under

5 section 618. Such unentered merchandise or bag6 gage shall be the responsibility of the master or per7 son in charge of the importing vessel or vehicle, or

8 agent thereof, until it is removed from the carrier’s

9 control in accordance with section 490.’’; and

10 (4) by striking out ‘‘the appropriate customs of11 ficer’’ and ‘‘such customs officer’’ wherever they ap12 pear and inserting ‘‘the Customs Service’’.

13 SEC. 657. DECLARATIONS.

14 Section 485 (19 U.S.C. 1485) is amended—

15 (1) by amending subsection (a)—

16 (A) by inserting ‘‘or transmit electroni17 cally’’ after ‘‘file’’, and

18 (B) by inserting ‘‘and manner’’ after

19 ‘‘form’’;

20 (2) by amending subsection (d)—

21 (A) by striking out ‘‘A importer’’ and in22 serting ‘‘An importer’’, and

23 (B) by striking out ‘‘a importer’’ and in24 serting ‘‘an importer’’; and
413

1 (3) by inserting after subsection (f) the follow2 ing new subsection:

3 ‘‘(g) EXPORTED MERCHANDISE RETURNED AS

4 UNDELIVERABLE.—With respect to any importation of

5 merchandise to which General Headnote 4(e) of the Har6 monized Tariff Schedule of the United States applies, any

7 person who gained any benefit from, or met any obligation

8 to, the United States as a result of the prior exportation

9 of such merchandise shall, in accordance with regulations

10 prescribed by the Secretary, within a reasonable time in11 form the Customs Service of the return of the merchan12 dise.’’.

13 SEC. 658. GENERAL ORDERS.

14 Section 490 (19 U.S.C. 1490) is amended—

15 (1) by amending subsection (a) to read as fol16 lows:

17 ‘‘(a) INCOMPLETE ENTRY.—

18 ‘‘(1) Whenever—

19 ‘‘(A) the entry of any imported merchan20 dise is not made within the time provided by

21 law or by regulation prescribed by the Sec22 retary;

23 ‘‘(B) the entry of imported merchandise is

24 incomplete because of failure to pay the esti25 mated duties, fees, or interest;
414

1 ‘‘(C) in the opinion of the Customs Serv2 ice, the entry of imported merchandise cannot

3 be made for want of proper documents or other

4 cause; or

5 ‘‘(D) the Customs Service believes that any

6 merchandise is not correctly and legally

7 invoiced;

8 the carrier (unless subject to subsection (c)) shall

9 notify the bonded warehouse of such unentered mer10 chandise.

11 ‘‘(2) After notification under paragraph (1), the

12 bonded warehouse shall arrange for the transpor13 tation and storage of the merchandise at the risk

14 and expense of the consignee. The merchandise shall

15 remain in the bonded warehouse until—

16 ‘‘(A) entry is made or completed and the

17 proper documents are produced;

18 ‘‘(B) the information and data necessary

19 for entry are transmitted to the Customs Serv20 ice pursuant to an authorized electronic data

21 interchange system; or

22 ‘‘(C) a bond is given for the production of

23 documents or the transmittal of data.’’;

24 (2) by amending subsection (b)—
415

1 (A) by amending the heading for sub2 section (b) to read as follows:

3 ‘‘(b) REQUEST FOR POSSESSION BY CUSTOMS.—’’,

4 and

5 (B) by striking out ‘‘appropriate customs

6 officer’’ and inserting ‘‘Customs Service’’; and

7 (3) by adding at the end the following new sub8 section:

9 ‘‘(c) GOVERNMENT MERCHANDISE.—Any imported

10 merchandise that—

11 ‘‘(1) is described in any of paragraphs (1)

12 through (4) of subsection (a); and

13 ‘‘(2) is consigned to, or owned by, the United

14 States Government;

15 shall be stored and disposed of in accordance with such

16 rules and procedures as the Secretary shall by regulation

17 prescribe.’’.

18 SEC. 659. UNCLAIMED MERCHANDISE.

19 Section 491 (19 U.S.C. 1491) is amended—

20 (1) by amending subsection (a)—

21 (A) by striking out ‘‘customs custody for

22 one year’’ in the first sentence and inserting ‘‘in

23 a bonded warehouse pursuant to section 490 for

24 6 months’’,
416

1 (B) by striking out ‘‘public store or bonded

2 warehouse for a period of one year’’ in the sec3 ond sentence and inserting ‘‘pursuant to section

4 490 in a bonded warehouse for 6 months’’,

5 (C) by striking out ‘‘estimated duties and

6 storage’’ in the first sentence and inserting ‘‘es7 timated duties, taxes, fees, interest, storage,’’,

8 (D) by inserting ‘‘taxes, fees, interest,’’

9 after ‘‘duties,’’ wherever it appears, and

10 (E) by striking out ‘‘duties’’ in the last

11 sentence and inserting ‘‘duties, taxes, interest,

12 and fees’’; and

13 (2) by redesignating subsection (b) as sub14 section (e) and inserting after subsection (a) the fol15 lowing new subsections:

16 ‘‘(b) NOTICE OF TITLE VESTING IN THE UNITED

17 STATES.—At the end of the 6-month period referred to

18 in subsection (a), the Customs Service may, in lieu of sale

19 of the merchandise, provide notice to all known interested

20 parties that the title to such merchandise shall be consid21 ered to vest in the United States free and clear of any

22 liens or encumbrances, on the 30th day after the date of

23 the notice unless, before such 30th day—

24 ‘‘(1) the subject merchandise is entered or with25 drawn for consumption; and
417

1 ‘‘(2) payment is made of all duties, taxes, fees,

2 transfer and storage charges, and other expenses

3 that may have accrued thereon.

4 ‘‘(c) RETENTION, TRANSFER, DESTRUCTION, OR

5 OTHER DISPOSITION.—If title to any merchandise vests

6 in the United States by operation of subsection (b), such

7 merchandise may be retained by the Customs Service for

8 official use, transferred to any other Federal agency or

9 to any State or local agency, destroyed, or otherwise dis10 posed of in accordance with such regulations as the Sec11 retary shall prescribe. All transfer and storage charges or

12 expenses accruing on retained or transferred merchandise

13 shall be paid by the receiving agency.

14 ‘‘(d) PETITION.—Whenever any party, having lost a

15 substantial interest in merchandise by virtue of title vest16 ing in the United States under subsection (b), can estab17 lish such title or interest to the satisfaction of the Sec18 retary within 30 days after the day on which title vests

19 in the United States under subsection (b), or can establish

20 to the satisfaction of the Secretary that the party did not

21 receive notice under subsection (b), the Secretary may,

22 upon receipt of a timely and proper petition and upon

23 finding that the facts and circumstances warrant, pay

24 such party out of the Treasury of the United States the

25 amount the Secretary believes the party would have re-
418

1 ceived under section 493 had the merchandise been sold

2 and a proper claim filed. The decision of the Secretary

3 with respect to any such petition is final and conclusive

4 on all parties.’’; and

5 (3) by amending subsection (e) (as so redesig6 nated) by striking out ‘‘appropriate customs officer’’

7 in paragraph (3) and inserting ‘‘Customs Service’’.

8 SEC. 660. DESTRUCTION OF MERCHANDISE.

9 Section 492 (19 U.S.C. 1492) is amended—

10 (1) by inserting ‘‘, retained for official use, or

11 otherwise disposed of’’ after ‘‘destroyed’’; and

12 (2) by striking out ‘‘appropriate customs offi13 cer’’ and inserting ‘‘Customs Service’’.

14 SEC. 661. PROCEEDS OF SALE.

15 Section 493 (19 U.S.C. 1493) is amended—

16 (1) by inserting ‘‘taxes, and fees,’’ after ‘‘du17 ties,’’;

18 (2) by striking out ‘‘by the appropriate customs

19 officer’’; and

20 (3) by striking out ‘‘such customs officer’’ and

21 inserting ‘‘the Customs Service’’.

22 SEC. 662. ENTRY UNDER REGULATIONS.

23 Section 498(a) (19 U.S.C. 1498(a)) is amended—

24 (1) by amending paragraph (1) to read as fol25 lows:
419

1 ‘‘(1) Merchandise, when—

2 ‘‘(A) the aggregate value of the shipment

3 does not exceed an amount specified by the Sec4 retary by regulation, but not more than $2,500;

5 or

6 ‘‘(B) different commercial facilitation and

7 risk considerations that may vary for different

8 classes or kinds of merchandise or different

9 classes of transactions may dictate;’’; and

10 (2) by striking out ‘‘$10,000’’ in paragraph (2)

11 and inserting ‘‘such amounts as the Secretary may

12 prescribe’’.

13 SEC. 663. AMERICAN TRADEMARKS.

14 Section 526(e)(3) (19 U.S.C. 1526(e)(3)) is amend15 ed—

16 (1) by striking out ‘‘1 year’’ and inserting ‘‘90

17 days’’; and

18 (2) by striking out ‘‘appropriate customs offi19 cers’’ and inserting ‘‘the Customs Service’’.

20 SEC. 664. SIMPLIFIED RECORDKEEPING FOR MERCHAN21 DISE TRANSPORTED BY PIPELINE.

22 Part IV of title IV is amended by inserting after sec23 tion 553 the following new section:
420

1 ‘‘SEC. 553A. RECORDKEEPING FOR MERCHANDISE TRANS2 PORTED BY PIPELINE.

3 ‘‘Merchandise in Customs custody that is transported

4 by pipeline may be accounted for on a quantitative basis,

5 based on the bill of lading, or equivalent document of re6 ceipt, issued by the pipeline carrier. Unless the Customs

7 Service has reasonable cause to suspect fraud, the Cus8 toms Service may accept the bill of lading, or equivalent

9 document of receipt, issued by the pipeline carrier to the

10 shipper and accepted by the consignee to maintain iden11 tity. The shipper, pipeline operator, and consignee shall

12 be subject to the recordkeeping requirements of sections

13 508 and 509.’’.

14 SEC. 665. ENTRY FOR WAREHOUSE.

15 Section 557(a) (19 U.S.C. 1557(a)) is amended—

16 (1) by designating the first 2 sentences of such

17 subsection as paragraph (1);

18 (2) by striking out in such paragraph (1) (as so

19 designated) ‘‘: Provided, That the total period of

20 time for which such merchandise may remain in

21 bonded warehouse shall not exceed 5 years from the

22 date of importation.’’ and inserting the following: ‘‘;

23 except that—

24 ‘‘(A) the total period of time for which such

25 merchandise may remain in bonded warehouse shall

26 not exceed 5 years from the date of importation; and
421

1 ‘‘(B) turbine fuel may be withdrawn for use

2 under section 309 without the payment of duty if an

3 amount equal to the quantity of fuel withdrawn is

4 shown to be used within 30 days after the day of

5 withdrawal, but duties (together with interest pay6 able from the date of the withdrawal at the rate of

7 interest established under section 6621 of title 26,

8 United States Code) shall be deposited by the 40th

9 day after the day of withdrawal on fuel that was

10 withdrawn in excess of the quantity shown to have

11 been so used during such 30-day period.’’; and

12 (3) by designating the remaining sentences of

13 such subsection as paragraph (2).

14 SEC. 666. CARTAGE.

15 The first sentence of section 565 (19 U.S.C. 1565)

16 is amended to read as follows: ‘‘The cartage of merchan17 dise entered for warehouse shall be done by—

18 ‘‘(1) cartmen appointed and licensed by the

19 Customs Service; or

20 ‘‘(2) carriers designated under section 551 to

21 carry bonded merchandise;

22 who shall give bond, in a penal sum to be fixed by the

23 Customs Service, for the protection of the Government

24 against any loss of, or damage to, the merchandise while

25 being so carted.’’.
422

1 SEC. 667. SEIZURE.

2 Section 612 (19 U.S.C. 1612) is amended—

3 (1) by amending subsection (a)—

4 (A) by striking out ‘‘the appropriate cus5 toms officer’’, ‘‘such officer’’ and ‘‘the customs

6 officer’’ wherever they appear and inserting

7 ‘‘the Customs Service’’, and

8 (B) by striking out ‘‘the appraiser’s return

9 and his’’ and inserting ‘‘its’’; and

10 (2) by amending subsection (b) to read as fol11 lows:

12 ‘‘(b) If the Customs Service determines that the ex13 pense of keeping the vessel, vehicle, aircraft, merchandise,

14 or baggage is disproportionate to the value thereof, the

15 Customs Service may promptly order the destruction or

16 other appropriate disposition of such property under regu17 lations prescribed by the Secretary. No customs officer

18 shall be liable for the destruction or other disposition of

19 property made pursuant to this section.’’.

20 SEC. 668. LIMITATION ON ACTIONS.

21 Section 621 (19 U.S.C. 1621) is amended—

22 (1) by inserting ‘‘any duty under section

23 592(d), 593A(d), or’’ before ‘‘any pecuniary pen24 alty’’; and
423

1 (2) by striking out ‘‘discovered:’’ and all that

2 follows thereafter and inserting the follow3 ing: ‘‘discovered; except that—

4 ‘‘(1) in the case of an alleged violation of sec5 tion 592 or 593A, no suit or action (including a suit

6 or action for restoration of lawful duties under sub7 section (d) of such sections) may be instituted unless

8 commenced within 5 years after the date of the al9 leged violation or, if such violation arises out of

10 fraud, within 5 years after the date of discovery of

11 fraud, and

12 ‘‘(2) the time of the absence from the United

13 States of the person subject to the penalty or forfeit14 ure, or of any concealment or absence of the prop15 erty, shall not be reckoned within the 5-year period

16 of limitation.’’.

17 SEC. 669. COLLECTION OF FEES ON BEHALF OF OTHER

18 AGENCIES.

19 The Tariff Act of 1930 is amended by inserting after

20 section 528 the following new section:

21 ‘‘SEC. 529. COLLECTION OF FEES ON BEHALF OF OTHER

22 AGENCIES.

23 ‘‘The Customs Service shall be reimbursed from the

24 fees collected for the cost and expense, administrative and
424

1 otherwise, incurred in collecting any fees on behalf of any

2 government agency for any reason.’’.

3 SEC. 670. AUTHORITY TO SETTLE CLAIMS.

4 The Tariff Act of 1930 is amended by inserting after

5 section 629 the following new section:

6 ‘‘SEC. 630. AUTHORITY TO SETTLE CLAIMS.

7 ‘‘(a) IN GENERAL.—With respect to a claim that can8 not be settled under chapter 171 of title 28, United States

9 Code, the Secretary may settle, for not more than $50,000

10 in any one case, a claim for damage to, or loss of, privately

11 owned property caused by an investigative or law enforce12 ment officer (as defined in section 2680(h) of title 28,

13 United States Code) who is employed by the Customs

14 Service and acting within the scope of his or her employ15 ment.

16 ‘‘(b) LIMITATIONS.—The Secretary may not pay a

17 claim under subsection (a) that—

18 ‘‘(1) concerns commercial property;

19 ‘‘(2) is presented to the Secretary more than 1

20 year after it occurs; or

21 ‘‘(3) is presented by an officer or employee of

22 the United States Government and arose within the

23 scope of employment.
425

1 ‘‘(c) FINAL SETTLEMENT.—A claim may be paid

2 under this section only if the claimant accepts the amount

3 of settlement in complete satisfaction of the claim.’’.

4 SEC. 671. USE OF PRIVATE COLLECTION AGENCIES.

5 The Tariff Act of 1930 is amended by inserting after

6 section 630 the following new section:

7 ‘‘SEC. 631. USE OF PRIVATE COLLECTION AGENCIES.

8 ‘‘(a) IN GENERAL.—Notwithstanding any other pro9 vision of law, the Secretary, under such terms and condi10 tions as the Secretary considers appropriate, shall enter

11 into contracts and incur obligations with one or more per12 sons for collection services to recover indebtedness arising

13 under the customs laws and owed the United States Gov14 ernment, but only after the Customs Service has ex15 hausted all administrative efforts, including all claims

16 against applicable surety bonds, to collect the indebted17 ness.

18 ‘‘(b) CONTRACT REQUIREMENTS.—Any contract en19 tered into under subsection (a) shall provide that—

20 ‘‘(1) the Secretary retains the authority to re21 solve a dispute, compromise a claim, end collection

22 action, and refer a matter to the Attorney General

23 to bring a civil action; and

24 ‘‘(2) the person is subject to—
426

1 ‘‘(A) section 552a of title 5, United States

2 Code, to the extent provided in subsection (m)

3 of such section; and

4 ‘‘(B) laws and regulations of the United

5 States Government and State governments re6 lated to debt collection practices.’’.

7 Subtitle D—Miscellaneous Provi8 sions and Consequential and

9 Conforming Amendments to

10 Other Laws

11 SEC. 681. AMENDMENTS TO THE HARMONIZED TARIFF

12 SCHEDULE.

13 (a) RETURN SHIPMENTS.—General Note 4 of the

14 Harmonized Tariff Schedule of the United States is

15 amended—

16 (1) by striking out ‘‘and’’ at the end of subdivi17 sion (c);

18 (2) by inserting ‘‘and’’ after ‘‘1930,’’ in subdivi19 sion (d);

20 (3) by inserting after subdivision (d) the

21 following:

22 ‘‘(e) articles exported from the United States

23 which are returned within 45 days after such expor24 tation from the United States as undeliverable and
427

1 which have not left the custody of the carrier or for2 eign customs service,’’; and

3 (4) by adding at the end the following new sen4 tence: ‘‘No exportation referred to in subdivision (e)

5 may be treated as satisfying any requirement for ex6 portation in order to receive a benefit from, or meet

7 an obligation to, the United States as a result of

8 such exportation.’’.

9 (b) ENTRY NOT REQUIRED FOR LOCOMOTIVES AND

10 RAILWAY FREIGHT CARS.—

11 (1) The Notes to chapter 86 of such Schedule

12 are amended by inserting after note 3 the following

13 new note:

14 ‘‘4. Railway locomotives (provided for in headings 8601

15 and 8602) and railway freight cars (provided for in head16 ing 8606) on which no duty is owed are not subject to

17 the entry or release requirements for imported merchan18 dise set forth in sections 448 and 484 of the Tariff Act

19 of 1930. The Secretary of the Treasury may by regulation

20 establish appropriate reporting requirements, including

21 the requirement that a bond be posted to ensure compli22 ance.’’.

23 (2) The U.S. Notes to subchapter V of chapter

24 99 of such Schedule are amended by inserting after

25 note 8 the following new note:
428

1 ‘‘9. Railway freight cars provided for in subheadings

2 9905.86.05 and 9905.86.10 are not subject to the entry

3 or release requirements for imported merchandise set

4 forth in sections 448 and 484 of the Tariff Act of 1930.

5 The Secretary of the Treasury may by regulation establish

6 appropriate reporting requirements, including the require7 ment that a bond be posted to ensure compliance.’’.

8 (c) INSTRUMENTS OF INTERNATIONAL TRAFFIC.—

9 The U.S. Notes to subchapter III of chapter 98 of such

10 Schedule is amended by inserting after note 3 the follow11 ing new note:

12 ‘‘4. Instruments of international traffic, such as contain13 ers, lift vans, rail cars and locomotives, truck cabs and

14 trailers, etc. are exempt from formal entry procedures but

15 are required to be accounted for when imported and ex16 ported into and out of the United States, respectively,

17 through the manifesting procedures required for all inter18 national carriers by the United States Customs Service.

19 Fees associated with the importation of such instruments

20 of international traffic shall be reported and paid on a

21 periodic basis as required by regulations issued by the Sec22 retary of the Treasury and in accordance with 1956 Cus23 toms Convention on Containers (20 UST 30; TIAS

24 6634).’’.
429

1 SEC. 682. CUSTOMS PERSONNEL AIRPORT WORK SHIFT

2 REGULATION.

3 Section 13031(g) of the Consolidated Omnibus

4 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(g)) is

5 amended—

6 (1) by striking out ‘‘In addition to the regula7 tions required under paragraph (2), the’’ and insert8 ing ‘‘The’’;

9 (2) by striking out paragraph (2); and

10 (3) by redesignating paragraph (3) as para11 graph (2).

12 SEC. 683. USE OF HARBOR MAINTENANCE TRUST FUND

13 AMOUNTS FOR ADMINISTRATIVE EXPENSES.

14 (a) IN GENERAL.—Paragraph (3) of section 9505(c)

15 of the Internal Revenue Code of 1986 (relating to expendi16 tures from Harbor Maintenance Trust Fund) is amended

17 to read as follows:

18 ‘‘(3) for the payment of all expenses of adminis19 tration incurred by the Department of the Treasury,

20 the Army Corps of Engineers, and the Department

21 of Commerce related to the administration of sub22 chapter A of chapter 36 (relating to harbor mainte23 nance tax), but not in excess of $5,000,000 for any

24 fiscal year.’’.
430

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

2 subsection (a) shall apply to fiscal years beginning after

3 the date of the enactment of this Act.

4 SEC. 684. AMENDMENTS TO TITLE 28, UNITED STATES

5 CODE.

6 (a) AMENDMENTS RELATING TO ACCREDITATION OF

7 PRIVATE LABORATORIES.—Title 28 of the United States

8 Code is amended as follows:

9 (1) Section 1581(g) is amended by—

10 (A) striking out ‘‘and’’ at the end of para11 graph (1);

12 (B) by striking out the period at the end

13 of paragraph (2) and inserting ‘‘; and’’; and

14 (C) by adding at the end the following:

15 ‘‘(3) any decision or order of the Customs Serv16 ice to deny, suspend, or revoke accreditation of a

17 private laboratory under section 499(b) of the Tariff

18 Act of 1930.’’.

19 (2) Section 2631(g) is amended by inserting at

20 the end the following new paragraph:

21 ‘‘(3) A civil action to review any decision or order

22 of the Customs Service to deny, suspend, or revoke accred23 itation of a private laboratory under section 499(b) of the

24 Tariff Act of 1930 may be commenced in the Court of
431

1 International Trade by the person whose accreditation was

2 denied, suspended, or revoked.’’.

3 (3) Section 2636 is amended—

4 (A) by redesignating subsection (h) as sub5 section (i); and

6 (B) by inserting after subsection (g) the

7 following new subsection:

8 ‘‘(h) A civil action contesting the denial, suspension,

9 or revocation by the Customs Service of a private labora10 tory’s accreditation under section 499(b) of the Tariff Act

11 of 1930 is barred unless commenced in accordance with

12 the rules of the Court of International Trade within 60

13 days after the date of the decision or order of the Customs

14 Service.’’.

15 (4) Section 2640 is amended—

16 (A) by redesignating subsection (d) as sub17 section (e); and

18 (B) by inserting after subsection (c) the

19 following new subsection:

20 ‘‘(d) In any civil action commenced to review any

21 order or decision of the Customs Service under section

22 499(b) of the Tariff Act of 1930, the court shall review

23 the action on the basis of the record before the Customs

24 Service at the time of issuing such decision or order.’’.
432

1 (5) Section 2642 is amended by inserting before

2 the period the following: ‘‘or laboratories accredited

3 by the Customs Service under section 499(b) of the

4 Tariff Act of 1930’’.

5 (b) APPLICATION OF SUBSECTION (a) AMEND6 MENTS.—For purposes of applying the amendments made

7 by subsection (a), any decision or order of the Customs

8 Service denying, suspending, or revoking the accreditation

9 of a private laboratory on or after the date of the enact10 ment of this Act and before regulations to implement sec11 tion 499(b) of the Tariff Act of 1930 are issued shall be

12 treated as having been denied, suspended, or revoked

13 under such section 499(b).

14 (c) JURISDICTION OF COURT.—Section 1582(1) of

15 title 28, United States Code, is amended by inserting

16 ‘‘593A,’’ after ‘‘592,’’.

17 (d) FILING OF OFFICIAL DOCUMENTS.—Section

18 2635(a) of title 28, United States Code, is amended to

19 read as follows:

20 ‘‘(a) In any action commenced in the Court of Inter21 national Trade contesting the denial of a protest under

22 section 515 of the Tariff Act of 1930 or the denial of a

23 petition under section 516 of such Act, the Customs Serv24 ice, as prescribed by the rules of the court, shall file with

25 the clerk of the court, as part of the official record, any
433

1 document, paper, information or data relating to the entry

2 of merchandise and the administrative determination that

3 is the subject of the protest or petition.’’.

4 SEC. 685. TREASURY FORFEITURE FUND.

5 Section 9703 of title 31, United States Code (as

6 added by Public Law 102–393), is amended—

7 (1) by redesignating subparagraphs (E), (F),

8 (G), (H), and (I) of subsection (a)(2) as subpara9 graphs (F), (G), (H), (I), and (J), respectively;

10 (2) by inserting after subparagraph (D) of sub11 section (a)(2) the following new subparagraph:

12 ‘‘(E) the payment of claims against em13 ployees of the Customs Service settled by the

14 Secretary under section 630 of the Tariff Act

15 of 1930;’’; and

16 (3) by striking out ‘‘shall’’ the first place it ap17 pears in subsection (e) and inserting ‘‘may’’.

18 SEC. 686. AMENDMENTS TO THE REVISED STATUTES OF

19 THE UNITED STATES.

20 (a) TECHNICAL AMENDMENTS.—The Revised Stat21 utes of the United States are amended as follows:

22 (1) Section 2793 (19 U.S.C. 288, 46 U.S.C.

23 App. 111, 123) is amended—

24 (A) by striking out ‘‘Enrolled or licensed

25 vessels engaged in the foreign and coasting
434

1 trade on the northern, northeastern, and north2 western frontiers of the United States,’’ and in3 serting ‘‘Documented vessels with a coastwise,

4 Great Lakes endorsement,’’; and

5 (B) by striking out the first semicolon and

6 all the text that follows thereafter and inserting

7 a period.

8 (2) Section 3126 (19 U.S.C. 293) is amended—

9 (A) by striking out ‘‘Any vessel, on being

10 duly registered in pursuance of the laws of the

11 United States,’’ and inserting ‘‘Any United

12 States documented vessel with a registry or

13 coastwise endorsement, or both’’ and

14 (B) by striking out all the text occurring

15 after the first sentence.

16 (3) Section 3127 (19 U.S.C. 294) is amended

17 by striking out ‘‘in registered vessels’’ and inserting

18 ‘‘a United States documented vessel with a registry

19 or coastwise endorsement, or both,’’.

20 (4) Section 4136 (46 U.S.C. App. 14) is

21 amended by striking out—

22 (A) ‘‘The Secretary of Commerce may

23 issue a register or enrollment’’ and inserting

24 ‘‘The Secretary of Transportation may issue a
435

1 certificate of documentation with a coastwise

2 endorsement’’; and

3 (B) ‘‘Secretary of Commerce,’’ and insert4 ing ‘‘Secretary of Transportation,’’.

5 (5) Section 4336 (46 U.S.C. App. 277) is

6 amended—

7 (A) by striking out ‘‘register or enrollment

8 or license of any vessel’’ and inserting ‘‘certifi9 cate of documentation of any documented ves10 sel’’; and

11 (B) by striking out ‘‘Secretary of the

12 Treasury is not required to have its register or

13 enrollment or license’’ and inserting ‘‘Secretary

14 of Transportation is not required to have its

15 certificate of documentation’’.

16 (b) CLEARANCE REQUIREMENTS.—Section 4197 of

17 such Revised Statutes (46 U.S.C. App. 91) is amended

18 to read as follows:

19 ‘‘SEC. 4197. CLEARANCE; VESSELS.

20 ‘‘(a) WHEN REQUIRED; VESSELS OF THE UNITED

21 STATES.—Except as otherwise provided by law, any vessel

22 of the United States shall obtain clearance from the Cus23 toms Service before proceeding from a port or place in

24 the United States—

25 ‘‘(1) for a foreign port or place;
436

1 ‘‘(2) for another port or place in the United

2 States if the vessel has on board bonded merchan3 dise or foreign merchandise for which entry has not

4 been made; or

5 ‘‘(3) outside the territorial sea to visit a hover6 ing vessel or to receive merchandise while outside

7 the territorial sea.

8 ‘‘(b) WHEN REQUIRED; OTHER VESSELS.—Except

9 as otherwise provided by law, any vessel that is not a ves10 sel of the United States shall obtain clearance from the

11 Customs Service before proceeding from a port or place

12 in the United States—

13 ‘‘(1) for a foreign port or place;

14 ‘‘(2) for another port or place in the United

15 States; or

16 ‘‘(3) outside the territorial sea to visit a hover17 ing vessel or to receive or deliver merchandise while

18 outside the territorial sea.

19 ‘‘(c) REGULATIONS.—The Secretary of the Treasury

20 may by regulation—

21 ‘‘(1) prescribe the manner in which clearance

22 under this section is to be obtained, including the

23 documents, data or information which shall be sub24 mitted or transmitted, pursuant to an authorized

25 data interchange system, to obtain the clearance;
437

1 ‘‘(2) permit the Customs Service to grant clear2 ance for a vessel under this section before all re3 quirements for clearance are complied with, but only

4 if the owner or operator of the vessel files a bond

5 in an amount set by the Secretary of the Treasury

6 conditioned upon the compliance by the owner or op7 erator with all specified requirements for clearance

8 within a time period (not exceeding 4 business days)

9 established by the Secretary of the Treasury; and

10 ‘‘(3) authorize the Customs Service to permit

11 clearance of any vessel to be obtained at a place

12 other than a designated port of entry, under such

13 conditions as he may prescribe.’’.

14 SEC. 687. AMENDMENTS TO TITLE 18, UNITED STATES

15 CODE.

16 Section 965(a) of title 18, United States Code, is

17 amended—

18 (1) by striking out ‘‘sections 91, 92, and 94 of

19 Title 46’’ and inserting ‘‘section 431 of the Tariff

20 Act of 1930 (19 U.S.C. 1431) and section 4197 of

21 the Revised Statutes of the United States (46

22 U.S.C. App. 91),’’;

23 (2) by striking out ‘‘the collector of customs for

24 the district wherein such vessel is then located’’ and

25 inserting ‘‘the Customs Service’’; and
438

1 (3) by striking out ‘‘the collector like’’ and in2 serting in lieu thereof ‘‘the Customs Service like’’.

3 SEC. 688. AMENDMENT TO THE ACT TO PREVENT POLLU4 TION FROM SHIPS.

5 Section 9(e) of the Act to Prevent Pollution from

6 Ships (94 Stat. 2301, 33 U.S.C. 1908(e)) is amended by

7 striking out ‘‘shall refuse or revoke’’ and all of the text

8 following thereafter and inserting ‘‘shall refuse or revoke

9 the clearance required by section 4197 of the Revised

10 Statutes of the United States (46 U.S.C. App. 91). Clear11 ance may be granted upon the filing of a bond or other

12 surety satisfactory to the Secretary.’’.

13 SEC. 689. MISCELLANEOUS TECHNICAL AMENDMENTS.

14 (a) ACT OF OCTOBER 3, 1913.—The Act of October

15 3, 1913, is amended—

16 (1) in section IV, J, subsection 1 (19 U.S.C.

17 128) by striking out ‘‘registered as a vessel of the

18 United States,’’ and inserting ‘‘documented under

19 chapter 121 of title 46, United States Code,’’; and

20 (2) in section IV, J, subsection 3 (19 U.S.C.

21 131)—

22 (A) by striking out ‘‘vessels of the United

23 States’’ and inserting ‘‘United States docu24 mented vessels’’; and
439

1 (B) by striking out ‘‘registered as a vessel

2 of the United States.’’ and inserting ‘‘docu3 mented under chapter 121 of title 46, United

4 States Code.’’.

5 (b) ACT OF AUGUST 5, 1935.—Section 4 of the Act

6 of August 5, 1935 (19 U.S.C. 1704) is amended—

7 (1) by striking out ‘‘whenever the collector of

8 customs of the district in which any vessel is, or is

9 sought to be, registered, enrolled, licensed, or num10 bered,’’ and inserting ‘‘when the Secretary of Trans11 portation’’;

12 (2) by striking out ‘‘such collector’’ and insert13 ing ‘‘the Secretary of Transportation’’;

14 (3) by striking out ‘‘said collector shall revoke

15 the registry, enrollment, license, or number of such

16 vessel’’ and inserting ‘‘the Secretary of Transpor17 tation shall revoke any endorsement on the vessel’s

18 certificate of documentation or number (when the

19 Secretary is the authority issuing the number under

20 chapter 123 of title 46, United States Code)’’; and

21 (4) by striking out ‘‘Such collector and all per22 sons’’ and inserting ‘‘The Secretary of Transpor23 tation and all persons’’.
440

1 (c) ACT OF NOVEMBER 6, 1966.—Sections 2(e) and

2 3(e) of the Act of November 6, 1966 (46 U.S.C. App.

3 817d(e) and 817e(e)) are each amended—

4 (1) by striking out ‘‘The collector of customs

5 at’’ and inserting ‘‘At’’; and

6 (2) by inserting ‘‘, the Customs Service’’ after

7 ‘‘subsection (a) of this section’’.

8 SEC. 690. REPEAL OF OBSOLETE PROVISIONS OF LAW.

9 (a) REVISED STATUTES.—The following provisions of

10 the Revised Statutes of the United States are repealed:

11 (1) So much of section 2792 as is codified at

12 19 U.S.C. 289 and 46 U.S.C. App. 110 and 112 (as

13 in effect on the date of the enactment of this Act).

14 (2) Section 3111 (19 U.S.C. 282).

15 (3) Section 3118 (19 U.S.C. 286).

16 (4) Section 3119 (19 U.S.C. 287).

17 (5) Section 3122 (19 U.S.C. 290).

18 (6) Section 3124 (19 U.S.C. 291).

19 (7) Section 3125 (19 U.S.C. 292).

20 (8) Section 4198 (46 U.S.C. App. 94).

21 (9) Section 4199 (46 U.S.C. App. 93).

22 (10) Section 4201 (46 U.S.C. App. 96).

23 (11) Section 4207.

24 (12) Section 4208 (46 U.S.C. App. 102).

25 (13) Section 4213 (46 U.S.C. App. 101).
441

1 (14) So much of section 4221 as is codified at

2 46 U.S.C. App. 113 (as in effect on the date of the

3 enactment of this Act).

4 (15) Section 4222 (46 U.S.C. App. 126).

5 (16) Sections 4306, 4307, and 4308 (46 U.S.C.

6 App. 351 through 353).

7 (17) Section 4332 (46 U.S.C. App. 274).

8 (18) Section 4348 (46 U.S.C. App. 293).

9 (19) Section 4358 (46 U.S.C. App. 306).

10 (20) Section 4361 (46 U.S.C. App. 307).

11 (21) Sections 4362 through 4369 (46 U.S.C.

12 App. 308 through 315).

13 (22) Sections 4573 through 4576 (46 U.S.C.

14 App. 674 through 677).

15 (b) TARIFF ACT OF 1930.—The following sections of

16 the Tariff Act of 1930 are repealed:

17 (1) Section 432 (19 U.S.C. 1432).

18 (2) Section 435 (19 U.S.C. 1435).

19 (3) Section 437 (19 U.S.C. 1437).

20 (4) Section 439 (19 U.S.C. 1439).

21 (5) Section 440 (19 U.S.C. 1440).

22 (6) Sections 443, 444, and 445 (19 U.S.C.

23 1443, 1444, and 1445).

24 (7) Section 465 (19 U.S.C. 1465).

25 (8) Section 482 (19 U.S.C. 1482).
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1 (9) Section 583 (19 U.S.C. 1583).

2 (10) Section 585 (19 U.S.C. 1585).

3 (c) MISCELLANEOUS PROVISIONS.—The following

4 provisions are repealed:

5 (1) Section 1 of the Act of February 10, 1900

6 (46 U.S.C. App. 131).

7 (2) Section 2 of the Act of April 29, 1908 (46

8 U.S.C. App. 127).

9 (3) Section 1 of the Act of July 1, 1916 (46

10 U.S.C. App. 130).

11 (4) Sections 1 and 2 of the Act of July 3, 1926

12 (46 U.S.C. App. 293a and 293b).

13 (5) The last undesignated paragraph of section

14 201 of the Act of August 5, 1935 (19 U.S.C.

15 1432a), is repealed.

16 (6) The Act of June 16, 1937 (19 U.S.C.

17 1435b).

18 (7) The Act of May 4, 1934 (46 U.S.C. App.

19 91a).

20 (8) Section 1403(b) of the Water Resources De21 velopment Act of 1986 (Public Law 99–662; 26

22 U.S.C. 4461 note).

23 SEC. 691. REPORTS TO CONGRESS.

24 (a) ANTIDUMPING AND COUNTERVAILING DUTY

25 COLLECTIONS.—The Commissioner of Customs shall be-
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1 fore the 60th day of each fiscal year after fiscal year 1994

2 submit to Congress a report regarding the collection dur3 ing the preceding fiscal year of duties imposed under the

4 antidumping and countervailing duty laws.

5 (b) CES FEE REPORT.—

6 (1) AMENDMENT.—Section 9501(c) of the Om7 nibus Budget Reconciliation Act of 1987 (19 U.S.C.

8 3 note) is amended by adding at the end the follow9 ing new paragraph:

10 ‘‘(3) The Commissioner of Customs is author11 ized to obtain from the operators of centralized

12 cargo examination stations information regarding

13 the fees paid to them for the provision of services at

14 these stations.’’.

15 (2) REPORT.—Within 9 months after the date

16 of the enactment of this subsection, the Commis17 sioner of Customs shall submit to the Committees

18 referred to in section 9501(c) of the Omnibus Budg19 et Reconciliation Act of 1987, a report setting

20 forth—

21 (A) an estimate of the aggregate amount

22 of fees paid to operators of centralized cargo

23 examination stations during fiscal year 1993;

24 and
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1 (B) the variations, if any, among customs

2 districts with respect to the amounts of the fees

3 charged for centralized cargo examination sta4 tion services.

5 (c) COMPLIANCE WITH CUSTOMS LAWS.—Section

6 123 of the Customs and Trade Act of 1990 (19 U.S.C.

7 2083) is amended—

8 (1) by redesignating subsection (d) as sub9 section (e), and

10 (2) by inserting after subsection (c) the follow11 ing:

12 ‘‘(d) COMPLIANCE PROGRAM.—The Commissioner of

13 Customs shall—

14 ‘‘(1) devise and implement a methodology for

15 estimating the level of compliance with the laws ad16 ministered by the Customs Service; and

17 ‘‘(2) include as an additional part of the report

18 required to be submitted under subsection (a) for

19 each of fiscal years 1994, 1995, and 1996, an eval20 uation of the extent to which such compliance was

21 obtained during the 12-month period preceding the

22 60th day before each such fiscal year.’’.

23 (d) COURIER SERVICES COMPLIANCE REPORT.—The

24 Commissioner of Customs shall initiate a compliance re25 view of certain courier services which may not be eligible
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1 for benefits under the regulations of the Customs Service

2 prescribed in part 128 of title 19 of the Code of Federal

3 Regulations and shall submit a report to Congress on the

4 results of such review within 1 year after the date of the

5 enactment of this Act.

6 SEC. 692. EFFECTIVE DATE.

7 This title takes effect on the date of the enactment

8 of this Act.

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