Calendar No. 309

103D CONGRESS

1ST SESSION S. 1627

[Report No. 103–189]

A BILL

To implement the North American Free Trade

Agreement.

NOVEMBER 18 (legislative day, NOVEMBER 2), 1993

Reported without amendment
II

Calendar No. 309

103D CONGRESS

1ST SESSION S. 1627

[Report No. 103–189]

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)

NOVEMBER 18 (legislative day, NOVEMBER 2), 1993

Reported by Mr. MOYNIHAN (from the Committee on Finance), and on behalf

of Mr. LEAHY (from the Committee on Agriculture, Nutrition, and Forestry), Mr. HOLLINGS (from the Committee on Commerce, Science, and

Transportation), Mr. GLENN (from the Committee on Governmental Affairs), Mr. BIDEN (from the Committee on the Judiciary), and Mr. PELL

(from the Committee on Foreign Relations), without amendment

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,
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1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

3 ‘‘North American Free Trade Agreement Implementation

4 Act’’.

5 (b) TABLE OF CONTENTS.—

Sec. 1. Short title and table of contents.

Sec. 2. Definitions.

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.
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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.

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
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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.

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.
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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.

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.
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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.

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).
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1 (2) HTS.—The term ‘‘HTS’’ means the Har2 monized Tariff Schedule of the United States.

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

4 considered to be a reference to the United Mexican

5 States.

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

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

8 (A) Canada for such time as the Agree9 ment is in force with respect to, and the United

10 States applies the Agreement to, Canada; and

11 (B) Mexico for such time as the Agreement

12 is in force with respect to, and the United

13 States applies the Agreement to, Mexico.

14 (5) INTERNATIONAL TRADE COMMISSION.—The

15 term ‘‘International Trade Commission’’ means the

16 United States International Trade Commission.

17 (6) TRADE REPRESENTATIVE.—The term

18 ‘‘Trade Representative’’ means the United States

19 Trade Representative.
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1 TITLE I—APPROVAL OF, AND

2 GENERAL PROVISIONS RE3 LATING TO, THE NORTH

4 AMERICAN FREE TRADE

5 AGREEMENT

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

7 NORTH AMERICAN FREE TRADE AGREEMENT.

8 (a) APPROVAL OF AGREEMENT AND STATEMENT OF

9 ADMINISTRATIVE ACTION.—Pursuant to section 1103 of

10 the Omnibus Trade and Competitiveness Act of 1988 (19

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

12 (19 U.S.C. 2191), the Congress approves—

13 (1) the North American Free Trade Agreement

14 entered into on December 17, 1992, with the Gov15 ernments of Canada and Mexico and submitted to

16 the Congress on November 4, 1993; and

17 (2) the statement of administrative action pro18 posed to implement the Agreement that was submit19 ted to the Congress on November 4, 1993.

20 (b) CONDITIONS FOR ENTRY INTO FORCE OF THE

21 AGREEMENT.—The President is authorized to exchange

22 notes with the Government of Canada or Mexico providing

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

24 the Agreement for the United States with respect to such

25 country at such time as—
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1 (1) the President—

2 (A) determines that such country has im3 plemented the statutory changes necessary to

4 bring that country into compliance with its obli5 gations under the Agreement and has made

6 provision to implement the Uniform Regula7 tions provided for under article 511 of the

8 Agreement regarding the interpretation, appli9 cation, and administration of the rules of ori10 gin, and

11 (B) transmits a report to the House of

12 Representatives and the Senate setting forth

13 the determination under subparagraph (A) and

14 including, in the case of Mexico, a description

15 of the specific measures taken by that country

16 to—

17 (i) bring its laws into conformity with

18 the requirements of the Schedule of Mexico

19 in Annex 1904.15 of the Agreement, and

20 (ii) otherwise ensure the effective im21 plementation of the binational panel review

22 process under chapter 19 of the Agreement

23 regarding final antidumping and counter24 vailing duty determinations; and
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1 (2) the Government of such country exchanges

2 notes with the United States providing for the entry

3 into force of the North American Agreement on En4 vironmental Cooperation and the North American

5 Agreement on Labor Cooperation for that country

6 and the United States.

7 SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED

8 STATES AND STATE LAW.

9 (a) RELATIONSHIP OF AGREEMENT TO UNITED

10 STATES LAW.—

11 (1) UNITED STATES LAW TO PREVAIL IN CON12 FLICT.—No provision of the Agreement, nor the ap13 plication of any such provision to any person or cir14 cumstance, which is inconsistent with any law of the

15 United States shall have effect.

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

17 be construed—

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

19 United States, including any law regarding—

20 (i) the protection of human, animal,

21 or plant life or health,

22 (ii) the protection of the environment,

23 or

24 (iii) motor carrier or worker safety; or
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1 (B) to limit any authority conferred under

2 any law of the United States, including section

3 301 of the Trade Act of 1974;

4 unless specifically provided for in this Act.

5 (b) RELATIONSHIP OF AGREEMENT TO STATE

6 LAW.—

7 (1) FEDERAL-STATE CONSULTATION.—

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

9 this Act, the President shall, through the inter10 governmental policy advisory committees on

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

12 the Trade and Tariff Act of 1984, consult with

13 the States for the purpose of achieving con14 formity of State laws and practices with the

15 Agreement.

16 (B) FEDERAL-STATE CONSULTATION

17 PROCESS.—The Trade Representative shall es18 tablish within the Office of the United States

19 Trade Representative a Federal-State consulta20 tion process for addressing issues relating to

21 the Agreement that directly relate to, or will po22 tentially have a direct impact on, the States.

23 The Federal-State consultation process shall in24 clude procedures under which—
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1 (i) the Trade Representative will as2 sist the States in identifying those State

3 laws that may not conform with the Agree4 ment but may be maintained under the

5 Agreement by reason of being in effect be6 fore the Agreement entered into force;

7 (ii) the States will be informed on a

8 continuing basis of matters under the

9 Agreement that directly relate to, or will

10 potentially have a direct impact on, the

11 States;

12 (iii) the States will be provided oppor13 tunity to submit, on a continuing basis, to

14 the Trade Representative information and

15 advice with respect to matters referred to

16 in clause (ii);

17 (iv) the Trade Representative will

18 take into account the information and ad19 vice received from the States under clause

20 (iii) when formulating United States posi21 tions regarding matters referred to in

22 clause (ii); and

23 (v) the States will be involved (includ24 ing involvement through the inclusion of

25 appropriate representatives of the States)
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1 to the greatest extent practicable at each

2 stage of the development of United States

3 positions regarding matters referred to in

4 clause (ii) that will be addressed by com5 mittees, subcommittees, or working groups

6 established under the Agreement or

7 through dispute settlement processes pro8 vided for under the Agreement.

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

10 App.) shall not apply to the Federal-State consulta11 tion process established by this paragraph.

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

13 application thereof, may be declared invalid as to

14 any person or circumstance on the ground that the

15 provision or application is inconsistent with the

16 Agreement, except in an action brought by the Unit17 ed States for the purpose of declaring such law or

18 application invalid.

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

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

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

22 State; and

23 (B) any State law regulating or taxing the

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

3 States—

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

5 under—

6 (A) the Agreement or by virtue of Congres7 sional approval thereof, or

8 (B) the North American Agreement on

9 Environmental Cooperation or the North Amer10 ican Agreement on Labor Cooperation; or

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

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

13 department, agency, or other instrumentality of the

14 United States, any State, or any political subdivision

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

16 is inconsistent with the Agreement, the North Amer17 ican Agreement on Environmental Cooperation, or

18 the North American Agreement on Labor Coopera19 tion.

20 SEC. 103. CONSULTATION AND LAYOVER REQUIREMENTS

21 FOR, AND EFFECTIVE DATE OF, PROCLAIMED

22 ACTIONS.

23 (a) CONSULTATION AND LAYOVER REQUIRE24 MENTS.—If a provision of this Act provides that the imple25 mentation of an action by the President by proclamation
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1 is subject to the consultation and layover requirements of

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

3 (1) the President has obtained advice regarding

4 the proposed action from—

5 (A) the appropriate advisory committees

6 established under section 135 of the Trade Act

7 of 1974, and

8 (B) the International Trade Commission;

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

10 Committee on Ways and Means of the House of

11 Representatives and the Committee on Finance of

12 the Senate that sets forth—

13 (A) the action proposed to be proclaimed

14 and the reasons therefor, and

15 (B) the advice obtained under paragraph

16 (1);

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

18 with the first day on which the President has met

19 the requirements of paragraphs (1) and (2) with re20 spect to such action, has expired; and

21 (4) the President has consulted with such Com22 mittees regarding the proposed action during the pe23 riod referred to in paragraph (3).

24 (b) EFFECTIVE DATE OF CERTAIN PROCLAIMED AC25 TIONS.—Any action proclaimed by the President under the
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1 authority of this Act that is not subject to the consultation

2 and layover requirements under subsection (a) may not

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

4 the text of the proclamation is published in the Federal

5 Register.

6 SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF

7 ENTRY INTO FORCE AND INITIAL REGULA8 TIONS.

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

10 enactment of this Act—

11 (1) the President may proclaim such actions;

12 and

13 (2) other appropriate officers of the United

14 States Government may issue such regulations;

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

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

17 on the date the Agreement enters into force is appro18 priately implemented on such date, but no such proclama19 tion or regulation may have an effective date earlier than

20 the date of entry into force. The 15-day restriction in sec21 tion 103(b) on the taking effect of proclaimed actions is

22 waived to the extent that the application of such restric23 tion would prevent the taking effect on the date the Agree24 ment enters into force of any action proclaimed under this

25 section.
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1 (b) INITIAL REGULATIONS.—Initial regulations nec2 essary or appropriate to carry out the actions proposed

3 in the statement of administrative action submitted under

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

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

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

7 interim or initial regulations to implement those Uniform

8 Regulations regarding rules of origin provided for under

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

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

11 of any implementing action that takes effect on a date

12 after the date of entry into force of the Agreement, initial

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

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

15 date.

16 SEC. 105. UNITED STATES SECTION OF THE NAFTA SEC17 RETARIAT.

18 (a) ESTABLISHMENT OF THE UNITED STATES SEC19 TION.—The President is authorized to establish within

20 any department or agency of the United States Govern21 ment a United States Section of the Secretariat estab22 lished under chapter 20 of the Agreement. The United

23 States Section, subject to the oversight of the interagency

24 group established under section 402, shall carry out its

25 functions within the Secretariat to facilitate the operation
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1 of the Agreement, including the operation of chapters 19

2 and 20 of the Agreement and the work of the panels, ex3 traordinary challenge committees, special committees, and

4 scientific review boards convened under those chapters.

5 The United States Section may not be considered to be

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

7 States Code.

8 (b) AUTHORIZATION OF APPROPRIATIONS.—There

9 are authorized to be appropriated for each fiscal year after

10 fiscal year 1993 to the department or agency within which

11 the United States Section is established the lesser of—

12 (1) such sums as may be necessary; or

13 (2) $2,000,000;

14 for the establishment and operations of the United States

15 Section and for the payment of the United States share

16 of the expenses of binational panels and extraordinary

17 challenge committees convened under chapter 19, and of

18 the expenses incurred in dispute settlement proceedings

19 under chapter 20, of the Agreement.

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

21 in accordance with Annex 2002.2 of the Agreement, the

22 Canadian Section or the Mexican Section of the Secretar23 iat provides funds to the United States Section during any

24 fiscal year, as reimbursement for expenses by the Cana25 dian Section or the Mexican Section in connection with
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1 settlement proceedings under chapter 19 or 20 of the

2 Agreement, the United States Section may retain and use

3 such funds to carry out the functions described in sub4 section (a).

5 SEC. 106. APPOINTMENTS TO CHAPTER 20 PANEL PRO6 CEEDINGS.

7 (a) CONSULTATION.—The Trade Representative shall

8 consult with the Committee on Ways and Means of the

9 House of Representatives and the Committee on Finance

10 of the Senate regarding the selection and appointment of

11 candidates for the rosters described in article 2009 of the

12 Agreement.

13 (b) SELECTION OF INDIVIDUALS WITH ENVIRON14 MENTAL EXPERTISE.—The United States shall, to the

15 maximum extent practicable, encourage the selection of in16 dividuals who have expertise and experience in environ17 mental issues for service in panel proceedings under chap18 ter 20 of the Agreement to hear any challenge to a United

19 States or State environmental law.

20 SEC. 107. TERMINATION OR SUSPENSION OF UNITED

21 STATES-CANADA FREE-TRADE AGREEMENT.

22 Section 501(c) of the United States-Canada Free23 Trade Implementation Act of 1988 (19 U.S.C. 2112 note)

24 is amended to read as follows:
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1 ‘‘(c) TERMINATION OR SUSPENSION OF AGREE2 MENT.—

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

4 date the Agreement ceases to be in force, the provi5 sions of this Act (other than this paragraph and sec6 tion 410(b)), and the amendments made by this Act,

7 shall cease to have effect.

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

9 An agreement by the United States and Canada to

10 suspend the operation of the Agreement shall not be

11 deemed to cause the Agreement to cease to be in

12 force within the meaning of paragraph (1).

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

14 On the date the United States and Canada agree to

15 suspend the operation of the Agreement by reason of

16 the entry into force between them of the North

17 American Free Trade Agreement, the following pro18 visions of this Act are suspended and shall remain

19 suspended until such time as the suspension of the

20 Agreement may be terminated:

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

22 ‘‘(B) Sections 302 and 304(f).

23 ‘‘(C) Sections 404, 409, and 410(b).’’.
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1 SEC. 108. CONGRESSIONAL INTENT REGARDING FUTURE

2 ACCESSIONS.

3 (a) IN GENERAL.—Section 101(a) may not be con4 strued as conferring Congressional approval of the entry

5 into force of the Agreement for the United States with

6 respect to countries other than Canada and Mexico.

7 (b) FUTURE FREE TRADE AREA NEGOTIATIONS.—

8 (1) FINDINGS.—The Congress makes the fol9 lowing findings:

10 (A) Efforts by the United States to obtain

11 greater market opening through multilateral ne12 gotiations have not produced agreements that

13 fully satisfy the trade negotiating objectives of

14 the United States.

15 (B) United States trade policy should pro16 vide for additional mechanisms with which to

17 pursue greater market access for United States

18 exports of goods and services and opportunities

19 for export-related investment by United States

20 persons.

21 (C) Among the additional mechanisms

22 should be a system of bilateral and multilateral

23 trade agreements that provide greater market

24 access for United States exports and opportuni25 ties for export-related investment by United

26 States persons.
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1 (D) The system of trade agreements can

2 and should be structured to be consistent with,

3 and complementary to, existing international

4 obligations of the United States and ongoing

5 multilateral efforts to open markets.

6 (2) REPORT ON SIGNIFICANT MARKET OPEN7 ING.—No later than May 1, 1994, and May 1, 1997,

8 the Trade Representative shall submit to the Presi9 dent, and to the Committee on Finance of the Sen10 ate and the Committee on Ways and Means of the

11 House of Representatives (hereafter in this section

12 referred to as the ‘‘appropriate Congressional com13 mittees’’), a report which lists those foreign coun14 tries—

15 (A) that—

16 (i) currently provide fair and equitable

17 market access for United States exports of

18 goods and services and opportunities for

19 export-related investment by United States

20 persons, beyond what is required by exist21 ing multilateral trade agreements or obli22 gations; or

23 (ii) have made significant progress in

24 opening their markets to United States ex25 ports of goods and services and export-re-
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1 lated investment by United States persons;

2 and

3 (B) the further opening of whose markets

4 has the greatest potential to increase United

5 States exports of goods and services and export6 related investment by United States persons, ei7 ther directly or through the establishment of a

8 beneficial precedent.

9 (3) PRESIDENTIAL DETERMINATION.—The

10 President, on the basis of the report submitted by

11 the Trade Representative under paragraph (2), shall

12 determine with which foreign country or countries, if

13 any, the United States should seek to negotiate a

14 free trade area agreement or agreements.

15 (4) RECOMMENDATIONS ON FUTURE FREE

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

17 1994, and July 1, 1997, the President shall submit

18 to the appropriate Congressional committees a writ19 ten report that contains—

20 (A) recommendations for free trade area

21 negotiations with each foreign country selected

22 under paragraph (3);

23 (B) with respect to each country selected,

24 the specific negotiating objectives that are nec-
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1 essary to meet the objectives of the United

2 States under this section; and

3 (C) legislative proposals to ensure ade4 quate consultation with the Congress and the

5 private sector during the negotiations, advance

6 Congressional approval of the negotiations rec7 ommended by the President, and Congressional

8 approval of any trade agreement entered into

9 by the President as a result of the negotiations.

10 (5) GENERAL NEGOTIATING OBJECTIVES.—The

11 general negotiating objectives of the United States

12 under this section are to obtain—

13 (A) preferential treatment for United

14 States goods;

15 (B) national treatment and, where appro16 priate, equivalent competitive opportunity for

17 United States services and foreign direct invest18 ment by United States persons;

19 (C) the elimination of barriers to trade in

20 goods and services by United States persons

21 through standards, testing, labeling, and certifi22 cation requirements;

23 (D) nondiscriminatory government pro24 curement policies and practices with respect to

25 United States goods and services;
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1 (E) the elimination of other barriers to

2 market access for United States goods and

3 services, and the elimination of barriers to for4 eign direct investment by United States per5 sons;

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

7 practices which deny fair and equitable market

8 opportunities, including foreign government tol9 eration of anticompetitive business practices by

10 private firms or among private firms that have

11 the effect of restricting, on a basis that is in12 consistent with commercial considerations, pur13 chasing by such firms of United States goods

14 and services;

15 (G) adequate and effective protection of in16 tellectual property rights of United States per17 sons, and fair and equitable market access for

18 United States persons that rely upon intellec19 tual property protection;

20 (H) the elimination of foreign export and

21 domestic subsidies that distort international

22 trade in United States goods and services or

23 cause material injury to United States indus24 tries;

25 (I) the elimination of all export taxes;
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1 (J) the elimination of acts, policies, and

2 practices which constitute export targeting; and

3 (K) monitoring and effective dispute settle4 ment mechanisms to facilitate compliance with

5 the matters described in subparagraphs (A)

6 through (J).

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

8 NAFTA STATUS.

9 (a) EFFECTIVE DATES.—

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

11 amendment made by section 107) takes effect on the

12 date of the enactment of this Act.

13 (2) SECTION 107 AMENDMENT.—The amend14 ment made by section 107 takes effect on the date

15 the Agreement enters into force between the United

16 States and Canada.

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

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

19 sections 101 through 106 shall cease to have effect with

20 respect to such country.

21 TITLE II—CUSTOMS PROVISIONS

22 SEC. 201. TARIFF MODIFICATIONS.

23 (a) TARIFF MODIFICATIONS PROVIDED FOR IN THE

24 AGREEMENT.—
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1 (1) PROCLAMATION AUTHORITY.—The Presi2 dent may proclaim—

3 (A) such modifications or continuation of

4 any duty,

5 (B) such continuation of duty-free or ex6 cise treatment, or

7 (C) such additional duties,

8 as the President determines to be necessary or ap9 propriate to carry out or apply articles 302, 305,

10 307, 308, and 703 and Annexes 302.2, 307.1,

11 308.1, 308.2, 300-B, 703.2, and 703.3 of the Agree12 ment.

13 (2) EFFECT ON MEXICAN GSP STATUS.—Not14 withstanding section 502(a)(2) of the Trade Act of

15 1974 (19 U.S.C. 2462(a)(2)), the President shall

16 terminate the designation of Mexico as a beneficiary

17 developing country for purposes of title V of the

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

19 of the Agreement between the United States and

20 Mexico.

21 (b) OTHER TARIFF MODIFICATIONS.—

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

23 and the consultation and layover requirements of

24 section 103(a), the President may proclaim—
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1 (A) such modifications or continuation of

2 any duty,

3 (B) such modifications as the United

4 States may agree to with Mexico or Canada re5 garding the staging of any duty treatment set

6 forth in Annex 302.2 of the Agreement,

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

8 treatment, or

9 (D) such additional duties,

10 as the President determines to be necessary or ap11 propriate to maintain the general level of reciprocal

12 and mutually advantageous concessions with respect

13 to Canada or Mexico provided for by the Agreement.

14 (2) SPECIAL RULE FOR ARTICLES WITH TARIFF

15 PHASEOUT PERIODS OF MORE THAN 10 YEARS.—The

16 President may not consider a request to accelerate

17 the staging of duty reductions for an article for

18 which the United States tariff phaseout period is

19 more than 10 years if a request for acceleration with

20 respect to such article has been denied in the preced21 ing 3 calendar years.

22 (c) CONVERSION TO AD VALOREM RATES FOR CER23 TAIN TEXTILES.—For purposes of subsections (a) and

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

25 of the Agreement imported from Mexico for which the base
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1 rate in the Schedule of the United States in Annex 300–

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

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

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

5 SEC. 202. RULES OF ORIGIN.

6 (a) ORIGINATING GOODS.—

7 (1) IN GENERAL.—For purposes of implement8 ing the tariff treatment and quantitative restrictions

9 provided for under the Agreement, except as other10 wise provided in this section, a good originates in

11 the territory of a NAFTA country if—

12 (A) the good is wholly obtained or pro13 duced entirely in the territory of one or more of

14 the NAFTA countries;

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

16 the production of the good—

17 (I) undergoes an applicable change in

18 tariff classification set out in Annex 401 of

19 the Agreement as a result of production

20 occurring entirely in the territory of one or

21 more of the NAFTA countries; or

22 (II) where no change in tariff classi23 fication is required, the good otherwise sat24 isfies the applicable requirements of such

25 Annex; and
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1 (ii) the good satisfies all other applicable

2 requirements of this section;

3 (C) the good is produced entirely in the

4 territory of one or more of the NAFTA coun5 tries exclusively from originating materials; or

6 (D) except for a good provided for in chap7 ters 61 through 63 of the HTS, the good is

8 produced entirely in the territory of one or

9 more of the NAFTA countries, but one or more

10 of the nonoriginating materials, that are pro11 vided for as parts under the HTS and are used

12 in the production of the good, does not undergo

13 a change in tariff classification because—

14 (i) the good was imported into the ter15 ritory of a NAFTA country in an unassem16 bled or a disassembled form but was classi17 fied as an assembled good pursuant to

18 General Rule of Interpretation 2(a) of the

19 HTS; or

20 (ii)(I) the heading for the good pro21 vides for and specifically describes both the

22 good itself and its parts and is not further

23 subdivided into subheadings; or
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1 (II) the subheading for the good pro2 vides for and specifically describes both the

3 good itself and its parts.

4 (2) SPECIAL RULES.—

5 (A) FOREIGN-TRADE ZONES.—Subpara6 graph (B) of paragraph (1) shall not apply to

7 a good produced in a foreign-trade zone or

8 subzone (established pursuant to the Act of

9 June 18, 1934, commonly known as the For10 eign Trade Zones Act) that is entered for con11 sumption in the customs territory of the United

12 States.

13 (B) REGIONAL VALUE-CONTENT REQUIRE14 MENT.—For purposes of subparagraph (D) of

15 paragraph (1), a good shall be treated as origi16 nating in a NAFTA country if the regional

17 value-content of the good, determined in accord18 ance with subsection (b), is not less than 60

19 percent where the transaction value method is

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

21 cost method is used, and the good satisfies all

22 other applicable requirements of this section.

23 (b) REGIONAL VALUE-CONTENT.—

24 (1) IN GENERAL.—Except as provided in para25 graph (5), the regional value-content of a good shall
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1 be calculated, at the choice of the exporter or pro2 ducer of the good, on the basis of—

3 (A) the transaction value method described

4 in paragraph (2); or

5 (B) the net cost method described in para6 graph (3).

7 (2) TRANSACTION VALUE METHOD.—

8 (A) IN GENERAL.—An exporter or pro9 ducer may calculate the regional value-content

10 of a good on the basis of the following trans11 action value method:

RVC =

TV–VNM

× 100

TV

12 (B) DEFINITIONS.—For purposes of sub13 paragraph (A):

14 (i) The term ‘‘RVC’’ means the re15 gional value-content, expressed as a per16 centage.

17 (ii) The term ‘‘TV’’ means the trans18 action value of the good adjusted to a

19 F.O.B. basis.

20 (iii) The term ‘‘VNM’’ means the

21 value of nonoriginating materials used by

22 the producer in the production of the good.

23 (3) NET COST METHOD.—
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1 (A) IN GENERAL.—An exporter or pro2 ducer may calculate the regional value-content

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

4 method:

RVC =

NC–VNM

× 100

NC

5 (B) DEFINITIONS.—For purposes of sub6 paragraph (A):

7 (i) The term ‘‘RVC’’ means the re8 gional value-content, expressed as a per9 centage.

10 (ii) The term ‘‘NC’’ means the net

11 cost of the good.

12 (iii) The term ‘‘VNM’’ means the

13 value of nonoriginating materials used by

14 the producer in the production of the good.

15 (4) VALUE OF NONORIGINATING MATERIALS

16 USED IN ORIGINATING MATERIALS.—Except as pro17 vided in subsection (c)(1), and for a motor vehicle

18 identified in subsection (c)(2) or a component identi19 fied in Annex 403.2 of the Agreement, the value of

20 nonoriginating materials used by the producer in the

21 production of a good shall not, for purposes of cal22 culating the regional value-content of the good under

23 paragraph (2) or (3), include the value of
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1 nonoriginating materials used to produce originating

2 materials that are subsequently used in the produc3 tion of the good.

4 (5) NET COST METHOD MUST BE USED IN CER5 TAIN CASES.—An exporter or producer shall cal6 culate the regional value-content of a good solely on

7 the basis of the net cost method described in para8 graph (3), if—

9 (A) there is no transaction value for the

10 good;

11 (B) the transaction value of the good is

12 unacceptable under Article 1 of the Customs

13 Valuation Code;

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

15 related person and the volume, by units of

16 quantity, of sales of identical or similar goods

17 to related persons during the six-month period

18 immediately preceding the month in which the

19 good is sold exceeds 85 percent of the produc20 er’s total sales of such goods during that pe21 riod;

22 (D) the good is—

23 (i) a motor vehicle provided for in

24 heading 8701 or 8702, subheadings
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1 8703.21 through 8703.90, or heading

2 8704, 8705, or 8706;

3 (ii) identified in Annex 403.1 or 403.2

4 of the Agreement and is for use in a motor

5 vehicle provided for in heading 8701 or

6 8702, subheadings 8703.21 through

7 8703.90, or heading 8704, 8705, or 8706;

8 (iii) provided for in subheadings

9 6401.10 through 6406.10; or

10 (iv) a word processing machine pro11 vided for in subheading 8469.10.00;

12 (E) the exporter or producer chooses to ac13 cumulate the regional value-content of the good

14 in accordance with subsection (d); or

15 (F) the good is designated as an intermedi16 ate material under paragraph (10) and is sub17 ject to a regional value-content requirement.

18 (6) NET COST METHOD ALLOWED FOR ADJUST19 MENTS.—If an exporter or producer of a good cal20 culates the regional value-content of the good on the

21 basis of the transaction value method and a NAFTA

22 country subsequently notifies the exporter or pro23 ducer, during the course of a verification conducted

24 in accordance with chapter 5 of the Agreement, that

25 the transaction value of the good or the value of any
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1 material used in the production of the good must be

2 adjusted or is unacceptable under Article 1 of the

3 Customs Valuation Code, the exporter or producer

4 may calculate the regional value-content of the good

5 on the basis of the net cost method.

6 (7) REVIEW OF ADJUSTMENT.—Nothing in

7 paragraph (6) shall be construed to prevent any re8 view or appeal available in accordance with article

9 510 of the Agreement with respect to an adjustment

10 to or a rejection of—

11 (A) the transaction value of a good; or

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

13 production of a good.

14 (8) CALCULATING NET COST.—The producer

15 may, consistent with regulations implementing this

16 section, calculate the net cost of a good under para17 graph (3), by—

18 (A) calculating the total cost incurred with

19 respect to all goods produced by that producer,

20 subtracting any sales promotion, marketing and

21 after-sales service costs, royalties, shipping and

22 packing costs, and nonallowable interest costs

23 that are included in the total cost of all such

24 goods, and reasonably allocating the resulting

25 net cost of those goods to the good;
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1 (B) calculating the total cost incurred with

2 respect to all goods produced by that producer,

3 reasonably allocating the total cost to the good,

4 and subtracting any sales promotion, marketing

5 and after-sales service costs, royalties, shipping

6 and packing costs, and nonallowable interest

7 costs that are included in the portion of the

8 total cost allocated to the good; or

9 (C) reasonably allocating each cost that is

10 part of the total cost incurred with respect to

11 the good so that the aggregate of these costs

12 does not include any sales promotion, market13 ing and after-sales service costs, royalties, ship14 ping and packing costs, or nonallowable interest

15 costs.

16 (9) VALUE OF MATERIAL USED IN PRODUC17 TION.—Except as provided in paragraph (11), the

18 value of a material used in the production of a

19 good—

20 (A) shall—

21 (i) be the transaction value of the ma22 terial determined in accordance with Arti23 cle 1 of the Customs Valuation Code; or

24 (ii) in the event that there is no trans25 action value or the transaction value of the
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1 material is unacceptable under Article 1 of

2 the Customs Valuation Code, be deter3 mined in accordance with Articles 2

4 through 7 of the Customs Valuation Code;

5 and

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

7 of subparagraph (A), shall include—

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

9 other costs incurred in transporting the

10 material to the location of the producer;

11 (ii) duties, taxes, and customs broker12 age fees paid on the material in the terri13 tory of one or more of the NAFTA coun14 tries; and

15 (iii) the cost of waste and spoilage re16 sulting from the use of the material in the

17 production of the good, less the value of

18 renewable scrap or by-product.

19 (10) INTERMEDIATE MATERIAL.—Except for

20 goods described in subsection (c)(1), any self-pro21 duced material, other than a component identified in

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

23 production of a good may be designated by the pro24 ducer of the good as an intermediate material for

25 the purpose of calculating the regional value-content
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1 of the good under paragraph (2) or (3); provided

2 that if the intermediate material is subject to a re3 gional value-content requirement, no other self-pro4 duced material that is subject to a regional value5 content requirement and is used in the production of

6 the intermediate material may be designated by the

7 producer as an intermediate material.

8 (11) VALUE OF INTERMEDIATE MATERIAL.—

9 The value of an intermediate material shall be—

10 (A) the total cost incurred with respect to

11 all goods produced by the producer of the good

12 that can be reasonably allocated to the inter13 mediate material; or

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

15 of the total cost incurred with respect to the in16 termediate material that can be reasonably allo17 cated to that intermediate material.

18 (12) INDIRECT MATERIAL.—The value of an in19 direct material shall be based on the Generally Ac20 cepted Accounting Principles applicable in the terri21 tory of the NAFTA country in which the good is

22 produced.

23 (c) AUTOMOTIVE GOODS.—

24 (1) PASSENGER VEHICLES AND LIGHT TRUCKS,

25 AND THEIR AUTOMOTIVE PARTS.—For purposes of
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1 calculating the regional value-content under the net

2 cost method for—

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

4 transport of 15 or fewer persons provided for in

5 subheading 8702.10.00 or 8702.90.00, or a

6 motor vehicle provided for in subheadings

7 8703.21 through 8703.90, or subheading

8 8704.21 or 8704.31, or

9 (B) a good provided for in the tariff provi10 sions listed in Annex 403.1 of the Agreement,

11 that is subject to a regional value-content re12 quirement and is for use as original equipment

13 in the production of a motor vehicle for the

14 transport of 15 or fewer persons provided for in

15 subheading 8702.10.00 or 8702.90.00, or a

16 motor vehicle provided for in subheadings

17 8703.21 through 8703.90, or subheading

18 8704.21 or 8704.31,

19 the value of nonoriginating materials used by the

20 producer in the production of the good shall be the

21 sum of the values of all nonoriginating materials, de22 termined in accordance with subsection (b)(9) at the

23 time the nonoriginating materials are received by the

24 first person in the territory of a NAFTA country

25 who takes title to them, that are imported from out-
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1 side the territories of the NAFTA countries under

2 the tariff provisions listed in Annex 403.1 of the

3 Agreement and are used in the production of the

4 good or that are used in the production of any mate5 rial used in the production of the good.

6 (2) OTHER VEHICLES AND THEIR AUTOMOTIVE

7 PARTS.—For purposes of calculating the regional

8 value-content under the net cost method for a good

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

10 subheading 8704.10, 8704.22, 8704.23, 8704.32, or

11 8704.90, or heading 8705 or 8706, a motor vehicle

12 for the transport of 16 or more persons provided for

13 in subheading 8702.10.00 or 8702.90.00, or a com14 ponent identified in Annex 403.2 of the Agreement

15 for use as original equipment in the production of

16 the motor vehicle, the value of nonoriginating mate17 rials used by the producer in the production of the

18 good shall be the sum of—

19 (A) for each material used by the producer

20 listed in Annex 403.2 of the Agreement, wheth21 er or not produced by the producer, at the

22 choice of the producer and determined in ac23 cordance with subsection (b), either—

24 (i) the value of such material that is

25 nonoriginating, or
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1 (ii) the value of nonoriginating mate2 rials used in the production of such mate3 rial; and

4 (B) the value of any other nonoriginating

5 material used by the producer that is not listed

6 in Annex 403.2 of the Agreement determined in

7 accordance with subsection (b).

8 (3) AVERAGING PERMITTED.—

9 (A) IN GENERAL.—For purposes of cal10 culating the regional value-content of a motor

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

12 producer may average its calculation over its

13 fiscal year, using any of the categories de14 scribed in subparagraph (B), on the basis of ei15 ther all motor vehicles in the category or on the

16 basis of only the motor vehicles in the category

17 that are exported to the territory of one or

18 more of the other NAFTA countries.

19 (B) CATEGORY DESCRIBED.—A category is

20 described in this subparagraph if it is—

21 (i) the same model line of motor vehi22 cles in the same class of vehicles produced

23 in the same plant in the territory of a

24 NAFTA country;
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1 (ii) the same class of motor vehicles

2 produced in the same plant in the territory

3 of a NAFTA country;

4 (iii) the same model line of motor ve5 hicles produced in the territory of a

6 NAFTA country; or

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

8 Annex 403.3 of the Agreement.

9 (4) ANNEX 403.1 AND ANNEX 403.2.—For pur10 poses of calculating the regional value-content for

11 any or all goods provided for in a tariff provision

12 listed in Annex 403.1 of the Agreement, or a compo13 nent or material identified in Annex 403.2 of the

14 Agreement, produced in the same plant, the pro15 ducer of the good may—

16 (A) average its calculation—

17 (i) over the fiscal year of the motor

18 vehicle producer to whom the good is sold;

19 (ii) over any quarter or month; or

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

21 sold as an aftermarket part;

22 (B) calculate the average referred to in

23 subparagraph (A) separately for any or all

24 goods sold to one or more motor vehicle produc25 ers; or
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1 (C) with respect to any calculation under

2 this paragraph, make a separate calculation for

3 goods that are exported to the territory of one

4 or more NAFTA countries.

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

6 REQUIREMENT.—Notwithstanding Annex 401 of the

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

8 the regional value-content requirement shall be—

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

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

11 thereafter, 56 percent calculated under the net

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

13 beginning on the day closest to January 1,

14 2002, and thereafter, 62.5 percent calculated

15 under the net cost method, for—

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

17 the transport of 15 or fewer persons pro18 vided for in subheading 8702.10.00 or

19 8702.90.00, or a motor vehicle provided

20 for in subheadings 8703.21 through

21 8703.90, or subheading 8704.21 or

22 8704.31; and

23 (ii) a good provided for in heading

24 8407 or 8408, or subheading 8708.40,
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1 that is for use in a motor vehicle identified

2 in clause (i); and

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

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

5 thereafter, 55 percent calculated under the net

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

7 beginning on the day closest to January 1,

8 2002, and thereafter, 60 percent calculated

9 under the net cost method, for—

10 (i) a good that is a motor vehicle pro11 vided for in heading 8701, subheading

12 8704.10, 8704.22, 8704.23, 8704.32, or

13 8704.90, or heading 8705 or 8706, or a

14 motor vehicle for the transport of 16 or

15 more persons provided for in subheading

16 8702.10.00 or 8702.90.00;

17 (ii) a good provided for in heading

18 8407 or 8408, or subheading 8708.40 that

19 is for use in a motor vehicle identified in

20 clause (i); and

21 (iii) except for a good identified in

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

23 for in subheadings 8482.10 through

24 8482.80, or subheading 8483.20 or

25 8483.30, a good identified in Annex 403.1
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1 of the Agreement that is subject to a re2 gional value-content requirement and is for

3 use in a motor vehicle identified in sub4 paragraph (A)(i) or (B)(i).

5 (6) NEW AND REFITTED PLANTS.—The re6 gional value-content requirement for a motor vehicle

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

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

9 on which the first motor vehicle prototype is

10 produced in a plant by a motor vehicle assem11 bler, if—

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

13 marque, or, except for a motor vehicle

14 identified in paragraph (2), size category

15 and underbody, not previously produced by

16 the motor vehicle assembler in the territory

17 of any of the NAFTA countries;

18 (ii) the plant consists of a new build19 ing in which the motor vehicle is assem20 bled; and

21 (iii) the plant contains substantially

22 all new machinery that is used in the as23 sembly of the motor vehicle; or

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

25 on which the first motor vehicle prototype is
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1 produced at a plant following a refit, if it is a

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

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

4 size category and underbody, different from

5 that assembled by the motor vehicle assembler

6 in the plant before the refit.

7 (7) ELECTION FOR CERTAIN VEHICLES FROM

8 CANADA.—In the case of goods provided for in sub9 headings 8703.21 through 8703.90, or subheading

10 8704.21 or 8704.31, exported from Canada directly

11 to the United States, and entered on or after Janu12 ary 1, 1989, and before the date of entry into force

13 of the Agreement between the United States and

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

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

16 origin contained in section 202 of the United States17 Canada Free-Trade Agreement Implementation Act

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

19 the method for calculating the value of

20 nonoriginating materials established in article

21 403(2) of the Agreement in lieu of the method es22 tablished in article 403(1) of the Agreement for pur23 poses of determining eligibility for preferential duty

24 treatment under the United States-Canada Free25 Trade Agreement. Any election under this paragraph
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1 shall be made in writing to the Customs Service not

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

3 of entry into force of the Agreement between the

4 United States and Canada. Any such election may

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

6 become final. For purposes of averaging the calcula7 tion of regional value-content for the goods covered

8 by such entry, where the producer’s 1989–1990 fis9 cal year began after January 1, 1989, the producer

10 may include the period between January 1, 1989,

11 and the beginning of its first fiscal year after Janu12 ary 1, 1989, as part of fiscal year 1989–1990.

13 (d) ACCUMULATION.—

14 (1) DETERMINATION OF ORIGINATING GOOD.—

15 For purposes of determining whether a good is an

16 originating good, the production of the good in the

17 territory of one or more of the NAFTA countries by

18 one or more producers shall, at the choice of the ex19 porter or producer of the good, be considered to

20 have been performed in the territory of any of the

21 NAFTA countries by that exporter or producer, if—

22 (A) all nonoriginating materials used in

23 the production of the good undergo an applica24 ble tariff classification change set out in Annex

25 401 of the Agreement;
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1 (B) the good satisfies any applicable re2 gional value-content requirement; and

3 (C) the good satisfies all other applicable

4 requirements of this section.

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

6 must be satisfied entirely in the territory of one or

7 more of the NAFTA countries.

8 (2) TREATMENT AS SINGLE PRODUCER.—For

9 purposes of subsection (b)(10), the production of a

10 producer that chooses to accumulate its production

11 with that of other producers under paragraph (1)

12 shall be treated as the production of a single pro13 ducer.

14 (e) DE MINIMIS AMOUNTS OF NONORIGINATING MA15 TERIALS.—

16 (1) IN GENERAL.—Except as provided in para17 graphs (3), (4), (5), and (6), a good shall be consid18 ered to be an originating good if—

19 (A) the value of all nonoriginating mate20 rials used in the production of the good that do

21 not undergo an applicable change in tariff clas22 sification (set out in Annex 401 of the Agree23 ment) is not more than 7 percent of the trans24 action value of the good, adjusted to a F.O.B.

25 basis, or
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1 (B) where the transaction value of the

2 good is unacceptable under Article 1 of the

3 Customs Valuation Code, the value of all such

4 nonoriginating materials is not more than 7

5 percent of the total cost of the good,

6 provided that the good satisfies all other applicable

7 requirements of this section and, if the good is sub8 ject to a regional value-content requirement, the

9 value of such nonoriginating materials is taken into

10 account in calculating the regional value-content of

11 the good.

12 (2) GOODS NOT SUBJECT TO REGIONAL VALUE13 CONTENT REQUIREMENT.—A good that is otherwise

14 subject to a regional value-content requirement shall

15 not be required to satisfy such requirement if—

16 (A)(i) the value of all nonoriginating mate17 rials used in the production of the good is not

18 more than 7 percent of the transaction value of

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

20 (ii) where the transaction value of the good

21 is unacceptable under Article 1 of the Customs

22 Valuation Code, the value of all nonoriginating

23 materials is not more than 7 percent of the

24 total cost of the good; and
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1 (B) the good satisfies all other applicable

2 requirements of this section.

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

4 does not apply to—

5 (A) a nonoriginating material provided for

6 in chapter 4 of the HTS or a dairy preparation

7 containing over 10 percent by weight of milk

8 solids provided for in subheading 1901.90.30,

9 1901.90.40, or 1901.90.80 that is used in the

10 production of a good provided for in chapter 4

11 of the HTS;

12 (B) a nonoriginating material provided for

13 in chapter 4 of the HTS or a dairy preparation

14 containing over 10 percent by weight of milk

15 solids provided for in subheading 1901.90.30,

16 1901.90.40, or 1901.90.80 that is used in the

17 production of—

18 (i) preparations for infants containing

19 over 10 percent by weight of milk solids

20 provided for in subheading 1901.10.00;

21 (ii) mixes and doughs, containing over

22 25 percent by weight of butterfat, not put

23 up for retail sale, provided for in sub24 heading 1901.20.00;
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1 (iii) a dairy preparation containing

2 over 10 percent by weight of milk solids

3 provided for in subheading 1901.90.30,

4 1901.90.40, or 1901.90.80;

5 (iv) a good provided for in heading

6 2105 or subheading 2106.90.05, or prep7 arations containing over 10 percent by

8 weight of milk solids provided for in sub9 heading 2106.90.15, 2106.90.40,

10 2106.90.50, or 2106.90.65;

11 (v) a good provided for in subheading

12 2202.90.10 or 2202.90.20; or

13 (vi) animal feeds containing over 10

14 percent by weight of milk solids provided

15 for in subheading 2309.90.30;

16 (C) a nonoriginating material provided for

17 in heading 0805 or subheadings 2009.11

18 through 2009.30 that is used in the production

19 of—

20 (i) a good provided for in subheadings

21 2009.11 through 2009.30, or subheading

22 2106.90.16, or concentrated fruit or vege23 table juice of any single fruit or vegetable,

24 fortified with minerals or vitamins, pro25 vided for in subheading 2106.90.19; or
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1 (ii) a good provided for in subheading

2 2202.90.30 or 2202.90.35, or fruit or veg3 etable juice of any single fruit or vegetable,

4 fortified with minerals or vitamins, pro5 vided for in subheading 2202.90.36;

6 (D) a nonoriginating material provided for

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

8 production of instant coffee, not flavored, pro9 vided for in subheading 2101.10.20;

10 (E) a nonoriginating material provided for

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

12 production of a good provided for in headings

13 1501 through 1508, or heading 1512, 1514, or

14 1515;

15 (F) a nonoriginating material provided for

16 in heading 1701 that is used in the production

17 of a good provided for in headings 1701

18 through 1703;

19 (G) a nonoriginating material provided for

20 in chapter 17 of the HTS or heading 1805 that

21 is used in the production of a good provided for

22 in subheading 1806.10;

23 (H) a nonoriginating material provided for

24 in headings 2203 through 2208 that is used in
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1 the production of a good provided for in head2 ings 2207 through 2208;

3 (I) a nonoriginating material used in the

4 production of—

5 (i) a good provided for in subheading

6 7321.11.30;

7 (ii) a good provided for in subheading

8 8415.10, subheadings 8415.81 through

9 8415.83, subheadings 8418.10 through

10 8418.21, subheadings 8418.29 through

11 8418.40, subheading 8421.12 or 8422.11,

12 subheadings 8450.11 through 8450.20, or

13 subheadings 8451.21 through 8451.29;

14 (iii) trash compactors provided for in

15 subheading 8479.89.60; or

16 (iv) a good provided for in subheading

17 8516.60.40; and

18 (J) a printed circuit assembly that is a

19 nonoriginating material used in the production

20 of a good where the applicable change in tariff

21 classification for the good, as set out in Annex

22 401 of the Agreement, places restrictions on the

23 use of such nonoriginating material.

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

25 does not apply to a nonoriginating single juice ingre-
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1 dient provided for in heading 2009 that is used in

2 the production of—

3 (A) a good provided for in subheading

4 2009.90, or concentrated mixtures of fruit or

5 vegetable juice, fortified with minerals or vita6 mins, provided for in subheading 2106.90.19;

7 or

8 (B) mixtures of fruit or vegetable juices,

9 fortified with minerals or vitamins, provided for

10 in subheading 2202.90.39.

11 (5) GOODS PROVIDED FOR IN CHAPTERS 1

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

13 apply to a nonoriginating material used in the pro14 duction of a good provided for in chapters 1 through

15 27 of the HTS unless the nonoriginating material is

16 provided for in a different subheading than the good

17 for which origin is being determined under this sec18 tion.

19 (6) GOODS PROVIDED FOR IN CHAPTERS 50

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

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

22 originate because certain fibers or yarns used in the

23 production of the component of the good that deter24 mines the tariff classification of the good do not un25 dergo an applicable change in tariff classification set
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1 out in Annex 401 of the Agreement, shall be consid2 ered to be a good that originates if the total weight

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

4 more than 7 percent of the total weight of that com5 ponent.

6 (f) FUNGIBLE GOODS AND MATERIALS.—For pur7 poses of determining whether a good is an originating

8 good—

9 (1) if originating and nonoriginating fungible

10 materials are used in the production of the good, the

11 determination of whether the materials are originat12 ing need not be made through the identification of

13 any specific fungible material, but may be deter14 mined on the basis of any of the inventory manage15 ment methods set out in regulations implementing

16 this section; and

17 (2) if originating and nonoriginating fungible

18 goods are commingled and exported in the same

19 form, the determination may be made on the basis

20 of any of the inventory management methods set out

21 in regulations implementing this section.

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

23 (1) IN GENERAL.—Except as provided in para24 graph (2), accessories, spare parts, or tools delivered
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1 with the good that form part of the good’s standard

2 accessories, spare parts, or tools shall—

3 (A) be considered as originating goods if

4 the good is an originating good, and

5 (B) be disregarded in determining whether

6 all the nonoriginating materials used in the pro7 duction of the good undergo an applicable

8 change in tariff classification set out in Annex

9 401 of the Agreement.

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

11 only if—

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

13 are not invoiced separately from the good;

14 (B) the quantities and value of the acces15 sories, spare parts, or tools are customary for

16 the good; and

17 (C) in any case in which the good is sub18 ject to a regional value-content requirement, the

19 value of the accessories, spare parts, or tools

20 are taken into account as originating or

21 nonoriginating materials, as the case may be, in

22 calculating the regional value-content of the

23 good.
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1 (h) INDIRECT MATERIALS.—An indirect material

2 shall be considered to be an originating material without

3 regard to where it is produced.

4 (i) PACKAGING MATERIALS AND CONTAINERS FOR

5 RETAIL SALE.—Packaging materials and containers in

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

7 the good, shall be disregarded in determining whether all

8 the nonoriginating materials used in the production of the

9 good undergo an applicable change in tariff classification

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

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

12 of such packaging materials and containers shall be taken

13 into account as originating or nonoriginating materials, as

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

15 of the good.

16 (j) PACKING MATERIALS AND CONTAINERS FOR

17 SHIPMENT.—Packing materials and containers in which

18 a good is packed for shipment shall be disregarded—

19 (1) in determining whether the nonoriginating

20 materials used in the production of the good under21 go an applicable change in tariff classification set

22 out in Annex 401 of the Agreement; and

23 (2) in determining whether the good satisfies a

24 regional value-content requirement.
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1 (k) TRANSSHIPMENT.—A good shall not be consid2 ered to be an originating good by reason of having under3 gone production that satisfies the requirements of sub4 section (a) if, subsequent to that production, the good un5 dergoes further production or any other operation outside

6 the territories of the NAFTA countries, other than un7 loading, reloading, or any other operation necessary to

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

9 the territory of a NAFTA country.

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

11 be considered to be an originating good merely by reason

12 of—

13 (1) mere dilution with water or another sub14 stance that does not materially alter the characteris15 tics of the good; or

16 (2) any production or pricing practice with re17 spect to which it may be demonstrated, by a prepon18 derance of evidence, that the object was to cir19 cumvent this section.

20 (m) INTERPRETATION AND APPLICATION.—For pur21 poses of this section:

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

23 HTS.

24 (2) Except as otherwise expressly provided,

25 whenever in this section there is a reference to a
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1 heading or subheading such reference shall be a ref2 erence to a heading or subheading of the HTS.

3 (3) In applying subsection (a)(4), the deter4 mination of whether a heading or subheading under

5 the HTS provides for and specifically describes both

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

7 the nomenclature of the heading or subheading, the

8 rules of interpretation, or notes of the HTS.

9 (4) In applying the Customs Valuation Code—

10 (A) the principles of the Customs Valu11 ation Code shall apply to domestic transactions,

12 with such modifications as may be required by

13 the circumstances, as would apply to inter14 national transactions;

15 (B) the provisions of this section shall take

16 precedence over the Customs Valuation Code to

17 the extent of any difference; and

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

19 take precedence over the definitions in the Cus20 toms Valuation Code to the extent of any dif21 ference.

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

23 recorded and maintained in accordance with the

24 Generally Accepted Accounting Principles applicable
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1 in the territory of the NAFTA country in which the

2 good is produced.

3 (n) ORIGIN OF AUTOMATIC DATA PROCESSING

4 GOODS.—Notwithstanding any other provision of this sec5 tion, when the NAFTA countries apply the most-favored6 nation rate of duty described in paragraph 1 of section

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

8 for under the tariff provisions set out in Table 308.1.1

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

10 NAFTA country, be deemed to originate in the territory

11 of a NAFTA country for purposes of this section.

12 (o) SPECIAL RULE FOR CERTAIN AGRICULTURAL

13 PRODUCTS.—Notwithstanding any other provision of this

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

15 provided for in—

16 (1) heading 1202 that is exported from the ter17 ritory of Mexico, if the good is not wholly obtained

18 in the territory of Mexico,

19 (2) subheading 2008.11 that is exported from

20 the territory of Mexico, if any material provided for

21 in heading 1202 used in the production of that good

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

23 (3) subheading 1806.10.42 or 2106.90.12 that

24 is exported from the territory of Mexico, if any ma-
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1 terial provided for in subheading 1701.99 used in

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

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

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

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

6 meaning given such terms in paragraph 26 of section A

7 of Annex 703.2 of the Agreement.

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

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

10 ‘‘class of motor vehicles’’ means any one of the fol11 lowing categories of motor vehicles:

12 (A) Motor vehicles provided for in sub13 heading 8701.20, subheading 8704.10,

14 8704.22, 8704.23, 8704.32, or 8704.90, or

15 heading 8705 or 8706, or motor vehicles de16 signed for the transport of 16 or more persons

17 provided for in subheading 8702.10.00 or

18 8702.90.00.

19 (B) Motor vehicles provided for in sub20 heading 8701.10, or subheadings 8701.30

21 through 8701.90.

22 (C) Motor vehicles for the transport of 15

23 or fewer persons provided for in subheading

24 8702.10.00 or 8702.90.00, or motor vehicles

25 provided for in subheading 8704.21 or 8704.31.
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1 (D) Motor vehicles provided for in sub2 headings 8703.21 through 8703.90.

3 (2) CUSTOMS VALUATION CODE.—The term

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

5 Implementation of Article VII of the General Agree6 ment on Tariffs and Trade, including its interpreta7 tive notes.

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

9 board, regardless of the mode of transportation, at

10 the point of direct shipment by the seller to the

11 buyer.

12 (4) FUNGIBLE GOODS AND FUNGIBLE MATE13 RIALS.—The terms ‘‘fungible goods’’ and ‘‘fungible

14 materials’’ mean goods or materials that are inter15 changeable for commercial purposes and whose prop16 erties are essentially identical.

17 (5) GENERALLY ACCEPTED ACCOUNTING PRIN18 CIPLES.—The term ‘‘Generally Accepted Accounting

19 Principles’’ means the recognized consensus or sub20 stantial authoritative support in the territory of a

21 NAFTA country with respect to the recording of

22 revenues, expenses, costs, assets and liabilities, dis23 closure of information, and preparation of financial

24 statements. These standards may be broad guide-
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1 lines of general application as well as detailed stand2 ards, practices, or procedures.

3 (6) GOODS WHOLLY OBTAINED OR PRODUCED

4 ENTIRELY IN THE TERRITORY OF ONE OR MORE OF

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

6 obtained or produced entirely in the territory of one

7 or more of the NAFTA countries’’ means—

8 (A) mineral goods extracted in the terri9 tory of one or more of the NAFTA countries;

10 (B) vegetable goods harvested in the terri11 tory of one or more of the NAFTA countries;

12 (C) live animals born and raised in the ter13 ritory of one or more of the NAFTA countries;

14 (D) goods obtained from hunting, trap15 ping, or fishing in the territory of one or more

16 of the NAFTA countries;

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

18 other marine life) taken from the sea by vessels

19 registered or recorded with a NAFTA country

20 and flying its flag;

21 (F) goods produced on board factory ships

22 from the goods referred to in subparagraph

23 (E), if such factory ships are registered or re24 corded with that NAFTA country and fly its

25 flag;
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1 (G) goods taken by a NAFTA country or

2 a person of a NAFTA country from the seabed

3 or beneath the seabed outside territorial waters,

4 provided that a NAFTA country has rights to

5 exploit such seabed;

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

7 goods are obtained by a NAFTA country or a

8 person of a NAFTA country and not processed

9 in a country other than a NAFTA country;

10 (I) waste and scrap derived from—

11 (i) production in the territory of one

12 or more of the NAFTA countries; or

13 (ii) used goods collected in the terri14 tory of one or more of the NAFTA coun15 tries, if such goods are fit only for the re16 covery of raw materials; and

17 (J) goods produced in the territory of one

18 or more of the NAFTA countries exclusively

19 from goods referred to in subparagraphs (A)

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

21 stage of production.

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

23 ‘‘identical or similar goods’’ means ‘‘identical goods’’

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

25 Customs Valuation Code.
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1 (8) INDIRECT MATERIAL.—

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

3 good—

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

5 inspection of a good but not physically in6 corporated into the good, or

7 (ii) used in the maintenance of build8 ings or the operation of equipment associ9 ated with the production of a good,

10 in the territory of one or more of the NAFTA

11 countries.

12 (B) When used for a purpose described in

13 subparagraph (A), the following materials are

14 among those considered to be indirect mate15 rials:

16 (i) Fuel and energy.

17 (ii) Tools, dies, and molds.

18 (iii) Spare parts and materials used in

19 the maintenance of equipment and build20 ings.

21 (iv) Lubricants, greases, compounding

22 materials, and other materials used in pro23 duction or used to operate equipment and

24 buildings.
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1 (v) Gloves, glasses, footwear, clothing,

2 safety equipment, and supplies.

3 (vi) Equipment, devices, and supplies

4 used for testing or inspecting the goods.

5 (vii) Catalysts and solvents.

6 (viii) Any other goods that are not in7 corporated into the good, if the use of such

8 goods in the production of the good can

9 reasonably be demonstrated to be a part of

10 that production.

11 (9) INTERMEDIATE MATERIAL.—The term ‘‘in12 termediate material’’ means a material that is self13 produced, used in the production of a good, and des14 ignated pursuant to subsection (b)(10).

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

16 trade name used by a separate marketing division of

17 a motor vehicle assembler.

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

19 a good that is used in the production of another

20 good and includes a part or an ingredient.

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

22 means a group of motor vehicles having the same

23 platform or model name.

24 (13) MOTOR VEHICLE ASSEMBLER.—The term

25 ‘‘motor vehicle assembler’’ means a producer of
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1 motor vehicles and any related persons or joint ven2 tures in which the producer participates.

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

4 country’’ means the United States, Canada or Mex5 ico for such time as the Agreement is in force with

6 respect to Canada or Mexico, and the United States

7 applies the Agreement to Canada or Mexico.

8 (15) NEW BUILDING.—The term ‘‘new build9 ing’’ means a new construction, including at least

10 the pouring or construction of new foundation and

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

12 installation of new plumbing, electrical, and other

13 utilities to house a complete vehicle assembly proc14 ess.

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

16 total cost less sales promotion, marketing and after17 sales service costs, royalties, shipping and packing

18 costs, and nonallowable interest costs that are in19 cluded in the total cost.

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

21 cost of a good’’ means the net cost that can be rea22 sonably allocated to a good using one of the methods

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

24 (18) NONALLOWABLE INTEREST COSTS.—The

25 term ‘‘nonallowable interest costs’’ means interest
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1 costs incurred by a producer as a result of an inter2 est rate that exceeds the applicable federal govern3 ment interest rate for comparable maturities by

4 more than 700 basis points, determined pursuant to

5 regulations implementing this section.

6 (19) NONORIGINATING GOOD; NONORIGINATING

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

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

9 that does not qualify as an originating good or mate10 rial under the rules of origin set out in this section.

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

12 means qualifying under the rules of origin set out in

13 this section.

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

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

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

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

18 means growing, mining, harvesting, fishing, trap19 ping, hunting, manufacturing, processing, or assem20 bling a good.

21 (23) REASONABLY ALLOCATE.—The term ‘‘rea22 sonably allocate’’ means to apportion in a manner

23 appropriate to the circumstances.
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1 (24) REFIT.—The term ‘‘refit’’ means a plant

2 closure, for purposes of plant conversion or retool3 ing, that lasts at least 3 months.

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

5 persons’’ means persons specified in any of the fol6 lowing subparagraphs:

7 (A) Persons who are officers or directors

8 of one another’s businesses.

9 (B) Persons who are legally recognized

10 partners in business.

11 (C) Persons who are employer and em12 ployee.

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

14 or holds 25 percent or more of the outstanding

15 voting stock or shares of the other.

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

17 outstanding voting stock or shares of each of

18 them is directly or indirectly owned, controlled,

19 or held by a third person.

20 (F) Persons one of whom is directly or in21 directly controlled by the other.

22 (G) Persons who are directly or indirectly

23 controlled by a third person.

24 (H) Persons who are members of the same

25 family.
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1 For purposes of this paragraph, the term ‘‘members

2 of the same family’’ means natural or adoptive chil3 dren, brothers, sisters, parents, grandparents, or

4 spouses.

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

6 payments of any kind, including payments under

7 technical assistance or similar agreements, made as

8 consideration for the use or right to use any copy9 right, literary, artistic, or scientific work, patent,

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

11 process. It does not include payments under tech12 nical assistance or similar agreements that can be

13 related to specific services such as—

14 (A) personnel training, without regard to

15 where performed; and

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

17 more of the NAFTA countries, engineering,

18 tooling, die-setting, software design and similar

19 computer services, or other services.

20 (27) SALES PROMOTION, MARKETING, AND

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

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

23 means the costs related to sales promotion, market24 ing, and after-sales service for the following:
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1 (A) Sales and marketing promotion, media

2 advertising, advertising and market research,

3 promotional and demonstration materials, ex4 hibits, sales conferences, trade shows, conven5 tions, banners, marketing displays, free sam6 ples, sales, marketing and after-sales service lit7 erature (product brochures, catalogs, technical

8 literature, price lists, service manuals, sales aid

9 information), establishment and protection of

10 logos and trademarks, sponsorships, wholesale

11 and retail restocking charges, and entertain12 ment.

13 (B) Sales and marketing incentives,

14 consumer, retailer, or wholesaler rebates, and

15 merchandise incentives.

16 (C) Salaries and wages, sales commissions,

17 bonuses, benefits (such as medical, insurance,

18 and pension), traveling and living expenses, and

19 membership and professional fees for sales pro20 motion, marketing, and after-sales service per21 sonnel.

22 (D) Recruiting and training of sales pro23 motion, marketing, and after-sales service per24 sonnel, and after-sales training of customers’

25 employees, where such costs are identified sepa-
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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 (E) Product liability insurance.

5 (F) Office supplies for sales promotion,

6 marketing, and after-sales service of goods,

7 where such costs are identified separately for

8 sales promotion, marketing, and after-sales

9 service of goods on the financial statements or

10 cost accounts of the producer.

11 (G) Telephone, mail, and other commu12 nications, where such costs are identified sepa13 rately for sales promotion, marketing, and

14 after-sales service of goods on the financial

15 statements or cost accounts of the producer.

16 (H) Rent and depreciation of sales pro17 motion, marketing, and after-sales service of18 fices and distribution centers.

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

20 repair and maintenance of sales promotion,

21 marketing, and after-sales service offices and

22 distribution centers, where such costs are iden23 tified separately for sales promotion, marketing,

24 and after-sales service of goods on the financial

25 statements or cost accounts of the producer.
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1 (J) Payments by the producer to other

2 persons for warranty repairs.

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

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

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

6 production of that good.

7 (29) SHIPPING AND PACKING COSTS.—The

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

9 incurred in packing a good for shipment and ship10 ping the good from the point of direct shipment to

11 the buyer, but does not include the costs of prepar12 ing and packaging the good for retail sale.

13 (30) SIZE CATEGORY.—The term ‘‘size cat14 egory’’ means with respect to a motor vehicle identi15 fied in subsection (c)(1)(A)—

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

17 luggage interior volume;

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

19 100 cubic feet, of passenger and luggage inte20 rior volume;

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

22 than 110 cubic feet, of passenger and luggage

23 interior volume;
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1 (D) more than 110 cubic feet, but less

2 than 120 cubic feet, of passenger and luggage

3 interior volume; and

4 (E) 120 cubic feet or more of passenger

5 and luggage interior volume.

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

7 a territory described in Annex 201.1 of the Agree8 ment.

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

10 means all product costs, period costs, and other

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

12 NAFTA countries.

13 (33) TRANSACTION VALUE.—Except as pro14 vided in subsection (c)(1) or (c)(2)(A), the term

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

16 payable for a good or material with respect to a

17 transaction of the producer of the good, adjusted in

18 accordance with the principles of paragraphs 1, 3,

19 and 4 of Article 8 of the Customs Valuation Code

20 and determined without regard to whether the good

21 or material is sold for export.

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

23 means the floor pan of a motor vehicle.

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

25 consumed in the production of goods.
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1 (q) PRESIDENTIAL PROCLAMATION AUTHORITY.—

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

3 to proclaim, as a part of the HTS—

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

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

6 Annex 403.2, and Annex 403.3, of the Agree7 ment, and

8 (B) any additional subordinate category

9 necessary to carry out this title consistent with

10 the Agreement.

11 (2) MODIFICATIONS.—Subject to the consulta12 tion and layover requirements of section 103, the

13 President may proclaim—

14 (A) modifications to the provisions pro15 claimed under the authority of paragraph

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

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

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

19 and

20 (B) a modified version of the definition of

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

22 modified version of the definition shall super23 sede the version in subsection (p)), but only if

24 the modified version reflects solely those modi25 fications to the same term in article 415 of the
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1 Agreement that are agreed to by the NAFTA

2 countries before the 1st anniversary of the date

3 of the enactment of this Act.

4 (3) SPECIAL RULES FOR TEXTILES.—Notwith5 standing the provisions of paragraph (2)(A), and

6 subject to the consultation and layover requirements

7 of section 103, the President may proclaim—

8 (A) modifications to the provisions pro9 claimed under the authority of paragraph

10 (1)(A) as are necessary to implement an agree11 ment with one or more of the NAFTA countries

12 pursuant to paragraph 2 of section 7 of Annex

13 300–B of the Agreement, and

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

15 of the enactment of this Act, modifications to

16 correct any typographical, clerical, or other

17 nonsubstantive technical error regarding the

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

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

20 Agreement.

21 SEC. 203. DRAWBACK.

22 (a) DEFINITION OF A GOOD SUBJECT TO NAFTA

23 DRAWBACK.—For purposes of this Act and the amend24 ments made by subsection (b), the term ‘‘good subject to
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1 NAFTA drawback’’ means any imported good other than

2 the following:

3 (1) A good entered under bond for transpor4 tation and exportation to a NAFTA country.

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

6 the same condition as when imported into the Unit7 ed States. For purposes of this paragraph—

8 (A) processes such as testing, cleaning, re9 packing, or inspecting a good, or preserving it

10 in its same condition, shall not be considered to

11 change the condition of the good, and

12 (B) except for a good referred to in para13 graph 12 of section A of Annex 703.2 of the

14 Agreement that is exported to Mexico, if a good

15 described in the first sentence of this paragraph

16 is commingled with fungible goods and exported

17 in the same condition, the origin of the good

18 may be determined on the basis of the inventory

19 methods provided for in the regulations imple20 menting this title.

21 (3) A good—

22 (A) that is—

23 (i) deemed to be exported from the

24 United States,
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1 (ii) used as a material in the produc2 tion of another good that is deemed to be

3 exported to a NAFTA country, or

4 (iii) substituted for by a good of the

5 same kind and quality that is used as a

6 material in the production of another good

7 that is deemed to be exported to a NAFTA

8 country, and

9 (B) that is delivered—

10 (i) to a duty-free shop,

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

12 ships or aircraft, or

13 (iii) for use in a project undertaken

14 jointly by the United States and a NAFTA

15 country and destined to become the prop16 erty of the United States.

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

18 which a refund of customs duties is granted by rea19 son of—

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

21 sample or specification, or

22 (B) the shipment of the good without the

23 consent of the consignee.

24 (5) A good that qualifies under the rules of ori25 gin set out in section 202 that is—
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1 (A) exported to a NAFTA country,

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

3 another good that is exported to a NAFTA

4 country, or

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

6 kind and quality that is used as a material in

7 the production of another good that is exported

8 to a NAFTA country.

9 (6) A good provided for in subheading

10 1701.11.02 of the HTS that is—

11 (A) used as a material, or

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

13 kind and quality that is used as a material,

14 in the production of a good provided for in existing

15 Canadian tariff item 1701.99.00 or existing Mexican

16 tariff item 1701.99.01 or 1701.99.99 (relating to re17 fined sugar).

18 (7) A citrus product that is exported to Can19 ada.

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

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

22 used as a material, in the production of—

23 (A) apparel, or

24 (B) a good provided for in subheading

25 6307.90.99 (insofar as it relates to furniture
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1 moving pads), 5811.00.20, or 5811.00.30 of the

2 HTS,

3 that is exported to Canada and that is subject to

4 Canada’s most-favored-nation rate of duty upon im5 portation into Canada.

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

7 is described in parentheses following the item, the descrip8 tion is provided for purposes of reference only.

9 (b) CONSEQUENTIAL AMENDMENTS WITH DELAYED

10 EFFECT.—

11 (1) BONDED MANUFACTURING WAREHOUSES.—

12 The last paragraph of section 311 of the Tariff Act

13 of 1930 (19 U.S.C. 1311) is amended to read as fol14 lows:

15 ‘‘No article manufactured in a bonded warehouse

16 from materials that are goods subject to NAFTA draw17 back, as defined in section 203(a) of the North American

18 Free Trade Agreement Implementation Act, may be with19 drawn from warehouse for exportation to a NAFTA coun20 try, as defined in section 2(4) of that Act, without assess21 ment of a duty on the materials in their condition and

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

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

24 61st day after the date of exportation, except that upon

25 the presentation, before such 61st day, of satisfactory evi-
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1 dence of the amount of any customs duties paid to the

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

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

4 amount that does not exceed the lesser of—

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

6 owed on the materials on importation into the Unit7 ed States, or

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

9 the article to the NAFTA country.

10 If Canada ceases to be a NAFTA country and the suspen11 sion of the operation of the United States-Canada Free12 Trade Agreement thereafter terminates, no article manu13 factured in a bonded warehouse, except to the extent that

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

15 eligible good under section 204(a) of the United States16 Canada Free-Trade Agreement Implementation Act of

17 1988, may be withdrawn from such warehouse for expor18 tation to Canada during the period such Agreement is in

19 operation without payment of a duty on such imported

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

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

22 (2) BONDED SMELTING AND REFINING WARE23 HOUSES.—Section 312 of the Tariff Act of 1930 (19

24 U.S.C. 1312) is amended—
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1 (A) in paragraphs (1) and (4) of sub2 section (b), by striking out the parenthetical

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

4 the end the following:

5 ‘‘; except that in the case of a withdrawal for expor6 tation of such a product to a NAFTA country, as

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

8 Trade Agreement Implementation Act, if any of the

9 imported metal-bearing materials are goods subject

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

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

12 paid, and the charges against the bond canceled, be13 fore the 61st day after the date of exportation; but

14 upon the presentation, before such 61st day, of sat15 isfactory evidence of the amount of any customs du16 ties paid to the NAFTA country on the product, the

17 duties on the materials may be waived or reduced

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

19 does not exceed the lesser of—

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

21 owed on the materials on importation into the

22 United States, or

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

24 paid to the NAFTA country on the product,

25 or’’;
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1 (B) by adding at the end of subsection (b)

2 the following new flush sentence.

3 ‘‘If Canada ceases to be a NAFTA country and the sus4 pension of the operation of the United States-Canada

5 Free-Trade Agreement thereafter terminates, no charges

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

7 an exportation to Canada under paragraph (1) or (4) dur8 ing the period such Agreement is in operation except to

9 the extent that the metal-bearing materials were of Cana10 dian origin as determined in accordance with section 202

11 of the United States-Canada Free-Trade Agreement Im12 plementation Act of 1988.’’; and

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

14 parenthetical matter and by inserting before the

15 period the following:

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

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

18 North American Free Trade Agreement Implementation

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

20 goods subject to NAFTA drawback, as defined in section

21 203(a) of that Act, charges against the bond shall be paid

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

23 the presentation, before such 61st day, of satisfactory evi24 dence of the amount of any customs duties paid to the

25 NAFTA country on the product, the bond shall be credited
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1 (subject to section 508(b)(2)(B)) in an amount not to ex2 ceed the lesser of—

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

4 owed on the materials on importation into the Unit5 ed States, or

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

7 the NAFTA country on the product.

8 If Canada ceases to be a NAFTA country and the suspen9 sion of the operation of the United States-Canada Free10 Trade Agreement thereafter terminates, no bond shall be

11 credited under this subsection with respect to an expor12 tation of a product to Canada during the period such

13 Agreement is in operation except to the extent that the

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

15 of the United States-Canada Free Trade Agreement Im16 plementation Act of 1988’’.

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

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

19 1313(n) and (o)) are amended to read as follows:

20 ‘‘(n)(1) For purposes of this subsection and sub21 section (o)—

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

23 American Free Trade Agreement Implementation

24 Act;
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1 ‘‘(B) the terms ‘NAFTA country’ and ‘good

2 subject to NAFTA drawback’ have the same respec3 tive meanings that are given such terms in sections

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

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

6 under paragraph (2) of this subsection or paragraph

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

8 508(b)(2)(B).

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

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

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

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

13 amount that exceeds the lesser of—

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

15 owed on the good on importation into the United

16 States, or

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

18 on the good to the NAFTA country.

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

20 the suspension of the operation of the United States-Can21 ada Free-Trade Agreement thereafter terminates, then for

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

23 the shipment to Canada during the period such Agreement

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

25 as appropriate, a drawback eligible good under section
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1 204(a) of the United States-Canada Free-Trade Imple2 mentation Act of 1988 does not constitute an exportation.

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

4 ‘‘(A) a vessel is built for the account and own5 ership of a resident of a NAFTA country or the gov6 ernment of a NAFTA country, and

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

8 construction and equipment of the vessel are goods

9 subject to NAFTA drawback,

10 the amount of customs duties refunded, waived, or re11 duced on such materials may not exceed the lesser of the

12 total amount of customs duties paid or owed on the mate13 rials on importation into the United States or the total

14 amount of customs duties paid on the vessel to the

15 NAFTA country.

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

17 the suspension of the operation of the United States-Can18 ada Free-Trade Agreement thereafter terminates, then for

19 purposes of subsection (g), vessels built for Canadian ac20 count and ownership, or for the Government of Canada,

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

22 and ownership, or for the government of any foreign coun23 try, except to the extent that the materials in such vessels

24 are drawback eligible goods under section 204(a) of the
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1 United States-Canada Free-Trade Implementation Act of

2 1988.’’.

3 (4) MANIPULATION IN WAREHOUSE.—Section

4 562 of the Tariff Act of 1930 (19 U.S.C. 1562) is

5 amended—

6 (A) in the second sentence by striking out

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

8 dash;

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

10 and (3) and inserting the following:

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

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

13 the North American Free Trade Agreement Imple14 mentation Act, if the merchandise is of a kind de15 scribed in any of paragraphs (1) through (8) of sec16 tion 203(a) of that Act;

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

18 merchandise consists of goods subject to NAFTA

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

20 except that—

21 ‘‘(A) the merchandise may not be with22 drawn from warehouse without assessment of a

23 duty on the merchandise in its condition and

24 quantity, and at its weight, at the time of with25 drawal from the warehouse with such additions
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1 to or deductions from the final appraised value

2 as may be necessary by reason of change in

3 condition, and

4 ‘‘(B) duty shall be paid on the merchan5 dise before the 61st day after the date of expor6 tation, but upon the presentation, before such

7 61st day, of satisfactory evidence of the amount

8 of any customs duties paid to the NAFTA

9 country on the merchandise, the customs duty

10 may be waived or reduced (subject to section

11 508(b)(2)(B)) in an amount that does not ex12 ceed the lesser of—

13 ‘‘(i) the total amount of customs du14 ties paid or owed on the merchandise on

15 importation into the United States, or

16 ‘‘(ii) the total amount of customs du17 ties paid on the merchandise to the

18 NAFTA country;

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

20 to any foreign country other than to a NAFTA

21 country or to Canada when exports to that country

22 are subject to paragraph (4);

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

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

25 country and the suspension of the operation of the
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1 United States-Canada Free-Trade Agreement there2 after terminates), but the exemption from the pay3 ment of duties under this paragraph applies only in

4 the case of an exportation during the period such

5 Agreement is in operation of merchandise that—

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

7 a bonded warehouse, or

8 ‘‘(B) is a drawback eligible good under sec9 tion 204(a) of the United States-Canada Free10 Trade Agreement Implementation Act of 1988;

11 and

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

13 the Virgin Islands, American Samoa, Wake Island,

14 Midway Island, Kingman Reef, Johnston Island or

15 the island of Guam.’’; and

16 (B) in the third sentence by striking out

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

18 inserting ‘‘paragraph (4) of the preceding sen19 tence’’.

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

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

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

23 amended—

24 (A) in the last proviso—
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1 (i) by inserting after ‘‘That’’ the fol2 lowing: ‘‘, if Canada ceases to be a

3 NAFTA country and the suspension of the

4 operation of the United States-Canada

5 Free-Trade Agreement thereafter termi6 nates,’’; and

7 (ii) by striking out ‘‘on or after Janu8 ary 1, 1994, or such later date as may be

9 proclaimed by the President under section

10 204(b)(2)(B) of such Act of 1988,’’ and

11 inserting ‘‘during the period such Agree12 ment is in operation’’; and

13 (B) by inserting before such last proviso

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

15 That no merchandise that consists of goods

16 subject to NAFTA drawback, as defined in sec17 tion 203(a) of the North American Free Trade

18 Agreement Implementation Act, that is manu19 factured or otherwise changed in condition shall

20 be exported to a NAFTA country, as defined in

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

22 of a duty on the merchandise in its condition

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

24 its exportation (or if the privilege in the first

25 proviso to this subsection was requested, an as-
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1 sessment of a duty on the merchandise in its

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

3 time of its admission into the zone) and the

4 payment of the assessed duty before the 61st

5 day after the date of exportation of the article,

6 except that upon the presentation, before such

7 61st day, of satisfactory evidence of the amount

8 of any customs duties paid or owed to the

9 NAFTA country on the article, the customs

10 duty may be waived or reduced (subject to sec11 tion 508(b)(2)(B) of the Tariff Act of 1930) in

12 an amount that does not exceed the lesser of

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

14 owed on the merchandise on importation into

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

16 customs duties paid on the article to the

17 NAFTA country:’’.

18 (c) CONSEQUENTIAL AMENDMENT WITH IMMEDIATE

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

20 U.S.C. 1313(j)) is amended—

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

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

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

24 paragraph:
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1 ‘‘(4) Effective upon the entry into force of the

2 North American Free Trade Agreement, the expor3 tation to a NAFTA country, as defined in section

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

5 Implementation Act, of merchandise that is fungible

6 with and substituted for imported merchandise,

7 other than merchandise described in paragraphs (1)

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

9 constitute an exportation for purposes of paragraph

10 (2).’’.

11 (d) ELIMINATION OF DRAWBACK FOR SECTION 22

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

13 Secretary of the Treasury may not, on condition of export,

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

15 the Agricultural Adjustment Act (7 U.S.C. 624) with re16 spect to goods included under subsection (a) that are ex17 ported to—

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

19 long as it is a NAFTA country; or

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

21 long as it is a NAFTA country.

22 (e) INAPPLICABILITY TO COUNTERVAILING AND

23 ANTIDUMPING DUTIES.—Nothing in this section or the

24 amendments made by it shall be considered to authorize
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1 the refund, waiver, or reduction of countervailing duties

2 or antidumping duties imposed on an imported good.

3 SEC. 204. CUSTOMS USER FEES.

4 Paragraph (10) of section 13031(b) of the Consoli5 dated Omnibus Budget Reconciliation Act of 1985 (19

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

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

8 (10) with respect to goods of Canadian origin (as deter9 mined under section 202 of the United States-Canada

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

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

12 with section 403 of that Agreement.

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

14 set out in section 202 of the North American Free Trade

15 Agreement Implementation Act, the fee under subsection

16 (a)(9) or (10)—

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

18 that qualify to be marked as goods of Canada pursu19 ant to Annex 311 of the North American Free

20 Trade Agreement, for such time as Canada is a

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

22 Implementation Act; and

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

24 1993, and may not be charged after June 29, 1999,

25 with respect to goods that qualify to be marked as
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1 goods of Mexico pursuant to such Annex 311, for

2 such time as Mexico is a NAFTA country.

3 Any service for which an exemption from such fee is pro4 vided by reason of this paragraph may not be funded with

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

6 SEC. 205. ENFORCEMENT.

7 (a) RECORDKEEPING REQUIREMENTS.—Section 508

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

9 as follows:

10 (1) Subsection (b) is amended to read as fol11 lows:

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

13 ‘‘(1) DEFINITIONS.—As used in this sub14 section—

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

16 in regard to an exported good under paragraph

17 (2), records associated with—

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

19 and payment for, the good;

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

21 and payment for, all material, including in22 direct materials, used in the production of

23 the good; and

24 ‘‘(iii) the production of the good.
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1 For purposes of this subparagraph, the terms

2 ‘indirect material,’ ‘material,’ ‘preferential tariff

3 treatment,’ ‘used,’ and ‘value’ have the respec4 tive meanings given them in articles 415 and

5 514 of the North American Free Trade Agree6 ment.

7 ‘‘(B) The term ‘NAFTA Certificate of Ori8 gin’ means the certification, established under

9 article 501 of the North American Free Trade

10 Agreement, that a good qualifies as an originat11 ing good under such Agreement.

12 ‘‘(2) EXPORTS TO NAFTA COUNTRIES.—

13 ‘‘(A) IN GENERAL.—Any person who com14 pletes and signs a NAFTA Certificate of Origin

15 for a good for which preferential treatment

16 under the North American Free Trade Agree17 ment is claimed shall make, keep, and render

18 for examination and inspection all records relat19 ing to the origin of the good (including the Cer20 tificate or copies thereof) and the associated

21 records.

22 ‘‘(B) CLAIMS FOR CERTAIN WAIVERS, RE23 DUCTIONS, OR REFUNDS OF DUTIES OR FOR

24 CREDIT AGAINST BONDS.—
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1 ‘‘(i) IN GENERAL.—Any person that

2 claims with respect to an article—

3 ‘‘(I) a waiver or reduction of

4 duty under the last paragraph of sec5 tion 311, section 312(b)(1) or (4),

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

7 section 3(a) of the Foreign Trade

8 Zones Act;

9 ‘‘(II) a credit against a bond

10 under section 312(d); or

11 ‘‘(III) a refund, waiver, or reduc12 tion of duty under section 313(n)(2)

13 or (o)(1);

14 must disclose to the Customs Service the

15 information described in clause (ii).

16 ‘‘(ii) INFORMATION REQUIRED.—

17 Within 30 days after making a claim de18 scribed in clause (i) with respect to an ar19 ticle, the person making the claim must

20 disclose to the Customs Service whether

21 that person has prepared, or has knowl22 edge that another person has prepared, a

23 NAFTA Certificate of Origin for the arti24 cle. If after such 30-day period the person

25 making the claim either—
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1 ‘‘(I) prepares a NAFTA Certifi2 cate of Origin for the article; or

3 ‘‘(II) learns of the existence of

4 such a Certificate for the article;

5 that person, within 30 days after the oc6 currence described in subclause (I) or (II),

7 must disclose the occurrence to the Cus8 toms Service.

9 ‘‘(iii) ACTION ON CLAIM.—If the Cus10 toms Service determines that a NAFTA

11 Certificate of Origin has been prepared

12 with respect to an article for which a claim

13 described in clause (i) is made, the Cus14 toms Service may make such adjustments

15 regarding the previous customs treatment

16 of the article as may be warranted.

17 ‘‘(3) EXPORTS UNDER THE CANADIAN AGREE18 MENT.—Any person who exports, or who knowingly

19 causes to be exported, any merchandise to Canada

20 during such time as the United States-Canada Free21 Trade Agreement is in force with respect to, and the

22 United States applies that Agreement to, Canada

23 shall make, keep, and render for examination and

24 inspection such records (including certifications of
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1 origin or copies thereof) which pertain to the expor2 tations.’’.

3 (2) Subsection (c) is amended to read as fol4 lows:

5 ‘‘(c) PERIOD OF TIME.—The records required by sub6 sections (a) and (b) shall be kept for such periods of time

7 as the Secretary shall prescribe; except that—

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

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

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

11 as appropriate;

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

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

14 least 5 years from the date of signature of the

15 NAFTA Certificate of Origin; and

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

17 kept until the 3rd anniversary of the date of pay18 ment of the claim.’’.

19 (3) Subsection (e) is amended to read as fol20 lows:

21 ‘‘(e) SUBSECTION (b) PENALTIES.—

22 ‘‘(1) RELATING TO NAFTA EXPORTS.—Any per23 son who fails to retain records required by para24 graph (2) of subsection (b) or the regulations issued

25 to implement that paragraph shall be liable for—
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1 ‘‘(A) a civil penalty not to exceed $10,000;

2 or

3 ‘‘(B) the general recordkeeping penalty

4 that applies under the customs laws;

5 whichever penalty is higher.

6 ‘‘(2) RELATING TO CANADIAN AGREEMENT EX7 PORTS.—Any person who fails to retain the records

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

9 regulations issued to implement that paragraph shall

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

11 (b) CONFORMING AMENDMENT.—Section

12 509(a)(2)(A)(ii) of the Tariff Act of 1930 (19 U.S.C.

13 1509(a)(2)(A)(ii)) is amended to read as follows:

14 ‘‘(ii) exported merchandise, or know15 ingly caused merchandise to be exported,

16 to a NAFTA country (as defined in section

17 2(4) of the North American Free Trade

18 Agreement Implementation Act) or to Can19 ada during such time as the United States20 Canada Free-Trade Agreement is in force

21 with respect to, and the United States ap22 plies that Agreement to, Canada,’’.

23 (c) DISCLOSURE OF INCORRECT INFORMATION.—

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

25 is amended—
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1 (1) in subsection (c)—

2 (A) by redesignating paragraph (5) as

3 paragraph (6); and

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

5 following new paragraph:

6 ‘‘(5) PRIOR DISCLOSURE REGARDING NAFTA

7 CLAIMS.—An importer shall not be subject to pen8 alties under subsection (a) for making an incorrect

9 claim for preferential tariff treatment under section

10 202 of the North American Free Trade Agreement

11 Implementation Act if the importer—

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

13 NAFTA Certificate of Origin (as defined in sec14 tion 508(b)(1)) on which the claim was based

15 contains incorrect information; and

16 ‘‘(B) in accordance with regulations issued

17 by the Secretary, voluntarily and promptly

18 makes a corrected declaration and pays any du19 ties owing.’’; and

20 (2) by adding at the end the following new sub21 section:

22 ‘‘(f) FALSE CERTIFICATIONS REGARDING EXPORTS

23 TO NAFTA COUNTRIES.—

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

25 it is unlawful for any person to certify falsely, by
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1 fraud, gross negligence, or negligence, in a NAFTA

2 Certificate of Origin (as defined in section

3 508(b)(1)) that a good to be exported to a NAFTA

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

5 American Free Trade Agreement Implementation

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

7 section 202 of that Act.

8 ‘‘(2) APPLICABLE PROVISIONS.—The proce9 dures and penalties of this section that apply to a

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

11 of paragraph (1), except that—

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

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

14 person voluntarily and promptly provides, to all

15 persons to whom the person provided the

16 NAFTA Certificate of Origin, written notice of

17 the falsity of the Certificate.

18 ‘‘(3) EXCEPTION.—A person may not be consid19 ered to have violated paragraph (1) if—

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

21 time it was provided in a NAFTA Certificate of

22 Origin but was later rendered incorrect due to

23 a change in circumstances; and

24 ‘‘(B) the person voluntarily and promptly

25 provides written notice of the change to all per-
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1 sons to whom the person provided the Certifi2 cate of Origin.’’.

3 SEC. 206. RELIQUIDATION OF ENTRIES FOR NAFTA-ORIGIN

4 GOODS.

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

6 1520) is amended by adding at the end the following new

7 subsection:

8 ‘‘(d) Notwithstanding the fact that a valid protest

9 was not filed, the Customs Service may, in accordance

10 with regulations prescribed by the Secretary, reliquidate

11 an entry to refund any excess duties paid on a good quali12 fying under the rules of origin set out in section 202 of

13 the North American Free Trade Agreement Implementa14 tion Act for which no claim for preferential tariff treat15 ment was made at the time of importation if the importer,

16 within 1 year after the date of importation, files, in ac17 cordance with those regulations, a claim that includes—

18 ‘‘(1) a written declaration that the good quali19 fied under those rules at the time of importation;

20 ‘‘(2) copies of all applicable NAFTA Certifi21 cates of Origin (as defined in section 508(b)(1));

22 and

23 ‘‘(3) such other documentation relating to the

24 importation of the goods as the Customs Service

25 may require.’’.
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1 SEC. 207. COUNTRY OF ORIGIN MARKING OF NAFTA GOODS.

2 (a) AMENDMENTS TO TARIFF ACT OF 1930.—Sec3 tion 304 of the Tariff Act of 1930 (19 U.S.C. 1304) is

4 amended—

5 (1) in subsection (c)(1), by striking ‘‘or engrav6 ing’’ and inserting ‘‘engraving, or continuous paint

7 stenciling’’;

8 (2) in subsection (c)(2)—

9 (A) by striking ‘‘four’’ and inserting

10 ‘‘five’’; and

11 (B) by striking ‘‘such as paint stenciling’’;

12 (3) in subsection (e), by striking ‘‘or engraving’’

13 and inserting ‘‘engraving, or an equally permanent

14 method of marking’’;

15 (4) by redesignating subsection (h) as sub16 section (i); and

17 (5) by inserting after subsection (g) the follow18 ing new subsection:

19 ‘‘(h) TREATMENT OF GOODS OF A NAFTA COUN20 TRY.—

21 ‘‘(1) APPLICATION OF SECTION.—In applying

22 this section to an article that qualifies as a good of

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

24 North American Free Trade Agreement Implemen25 tation Act) under the regulations issued by the Sec-
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1 retary to implement Annex 311 of the North Amer2 ican Free Trade Agreement—

3 ‘‘(A) the exemption under subsection

4 (a)(3)(H) shall be applied by substituting ‘rea5 sonably know’ for ‘necessarily know’;

6 ‘‘(B) the Secretary shall exempt the good

7 from the requirements for marking under sub8 section (a) if the good—

9 ‘‘(i) is an original work of art, or

10 ‘‘(ii) is provided for under subheading

11 6904.10, heading 8541, or heading 8542

12 of the Harmonized Tariff Schedule of the

13 United States; and

14 ‘‘(C) subsection (b) does not apply to the

15 usual container of any good described in sub16 section (a)(3)(E) or (I) or subparagraph (B)(i)

17 or (ii) of this paragraph.

18 ‘‘(2) PETITION RIGHTS OF NAFTA EXPORTERS

19 AND PRODUCERS REGARDING MARKING DETERMINA20 TIONS.—

21 ‘‘(A) DEFINITIONS.—For purposes of this

22 paragraph:

23 ‘‘(i) The term ‘adverse marking deci24 sion’ means a determination by the Cus25 toms Service which an exporter or pro-
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1 ducer of merchandise believes to be con2 trary to Annex 311 of the North American

3 Free Trade Agreement.

4 ‘‘(ii) A person may not be treated as

5 the exporter or producer of merchandise

6 regarding which an adverse marking deci7 sion was made unless such person—

8 ‘‘(I) if claiming to be the ex9 porter, is located in a NAFTA coun10 try and is required to maintain

11 records in that country regarding ex12 portations to NAFTA countries; or

13 ‘‘(II) if claiming to be the pro14 ducer, grows, mines, harvests, fishes,

15 traps, hunts, manufactures, processes,

16 or assembles such merchandise in a

17 NAFTA country.

18 ‘‘(B) INTERVENTION OR PETITION RE19 GARDING ADVERSE MARKING DECISIONS.—If

20 the Customs Service makes an adverse marking

21 decision regarding any merchandise, the Cus22 toms Service shall, upon written request by the

23 exporter or producer of the merchandise, pro24 vide to the exporter or producer a statement of

25 the basis for the decision. If the exporter or
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1 producer believes that the decision is not cor2 rect, it may intervene in any protest proceeding

3 initiated by the importer of the merchandise. If

4 the importer does not file a protest with regard

5 to the decision, the exporter or producer may

6 file a petition with the Customs Service setting

7 forth—

8 ‘‘(i) a description of the merchandise;

9 and

10 ‘‘(ii) the basis for its claim that the

11 merchandise should be marked as a good

12 of a NAFTA country.

13 ‘‘(C) EFFECT OF DETERMINATION RE14 GARDING DECISION.—If, after receipt and con15 sideration of a petition filed by an exporter or

16 producer under subparagraph (B), the Customs

17 Service determines that the adverse marking

18 decision—

19 ‘‘(i) is not correct, the Customs Serv20 ice shall notify the petitioner of the deter21 mination and all merchandise entered, or

22 withdrawn from warehouse for consump23 tion, more than 30 days after the date that

24 notice of the determination under this

25 clause is published in the weekly Custom
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1 Bulletin shall be marked in conformity

2 with the determination; or

3 ‘‘(ii) is correct, the Customs Service

4 shall notify the petitioner that the petition

5 is denied.

6 ‘‘(D) JUDICIAL REVIEW.—For purposes of

7 judicial review, the denial of a petition under

8 subparagraph (C)(ii) shall be treated as if it

9 were a denial of a petition of an interested

10 party under section 516 regarding an issue

11 arising under any of the preceding provisions of

12 this section.’’.

13 (b) COORDINATION WITH 1988 ACT REGARDING

14 CERTAIN ARTICLES.—Articles that qualify as goods of a

15 NAFTA country under regulations issued by the Secretary

16 in accordance with Annex 311 of the Agreement are ex17 empt from the marking requirements promulgated by the

18 Secretary of the Treasury under section 1907(c) of the

19 Omnibus Trade and Competitiveness Act of 1988 (Public

20 Law 100–418), but are subject to the requirements of sec21 tion 304 of the Tariff Act of 1930 (19 U.S.C. 1304).

22 SEC. 208. PROTESTS AGAINST ADVERSE ORIGIN DETER23 MINATIONS.

24 Section 514 of the Tariff Act of 1930 (19 U.S.C.

25 1514) is amended—
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1 (1) in subsection (c)(1) by inserting ‘‘, or with

2 respect to a determination of origin under section

3 202 of the North American Free Trade Agreement

4 Implementation Act,’’ after ‘‘with respect to any one

5 category of merchandise’’ in the fourth sentence;

6 (2) in subsection (c)(2)—

7 (A) by striking out ‘‘or’’ at the end of sub8 paragraph (D);

9 (B) by redesignating subparagraph (E) as

10 subparagraph (F);

11 (C) by inserting after subparagraph (D)

12 the following new subparagraph:

13 ‘‘(E) with respect to a determination of or14 igin under section 202 of the North American

15 Free Trade Agreement Implementation Act,

16 any exporter or producer of the merchandise

17 subject to that determination, if the exporter or

18 producer completed and signed a NAFTA Cer19 tificate of Origin covering the merchandise; or’’;

20 and

21 (D) by striking ‘‘clauses (A) through (D)’’

22 in subparagraph (F) (as redesignated by sub23 paragraph (B)), and inserting ‘‘clauses (A)

24 through (E)’’; and
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1 (3) by adding at the end the following new sub2 sections:

3 ‘‘(e) ADVANCE NOTICE OF CERTAIN DETERMINA4 TIONS.—Except as provided in subsection (f), an exporter

5 or producer referred to in subsection (c)(2)(E) shall be

6 provided notice in advance of an adverse determination of

7 origin under section 202 of the North American Free

8 Trade Agreement Implementation Act. The Secretary

9 may, by regulations, prescribe the time period in which

10 such advance notice shall be issued and authorize the Cus11 toms Service to provide in the notice the entry number

12 and any other entry information considered necessary to

13 allow the exporter or producer to exercise the rights pro14 vided by this section.

15 ‘‘(f) DENIAL OF PREFERENTIAL TREATMENT.—If

16 the Customs Service finds indications of a pattern of con17 duct by an exporter or producer of false or unsupported

18 representations that goods qualify under the rules of ori19 gin set out in section 202 of the North American Free

20 Trade Agreement Implementation Act—

21 ‘‘(1) the Customs Service, in accordance with

22 regulations issued by the Secretary, may deny pref23 erential tariff treatment to entries of identical goods

24 exported or produced by that person; and
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1 ‘‘(2) the advance notice requirement in sub2 section (e) shall not apply to that person;

3 until the person establishes to the satisfaction of the Cus4 toms Service that its representations are in conformity

5 with section 202.’’.

6 SEC. 209. EXCHANGE OF INFORMATION.

7 Section 628 of the Tariff Act of 1930 (19 U.S.C.

8 1628) is amended by adding at the end the following new

9 subsection:

10 ‘‘(c) The Secretary may authorize the Customs Serv11 ice to exchange information with any government agency

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

13 North American Free Trade Agreement Implementation

14 Act, if the Secretary—

15 ‘‘(1) reasonably believes the exchange of infor16 mation is necessary to implement chapter 3, 4, or 5

17 of the North American Free Trade Agreement, and

18 ‘‘(2) obtains assurances from such country that

19 the information will be held in confidence and used

20 only for governmental purposes.’’.

21 SEC. 210. PROHIBITION ON DRAWBACK FOR TELEVISION

22 PICTURE TUBES.

23 Notwithstanding any other provision of law, no cus24 toms duties may be refunded, waived, or reduced on color

25 cathode-ray television picture tubes, including video mon-
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1 itor cathode-ray tubes (provided for in subheading

2 8540.11.00 of the HTS), that are nonoriginating goods

3 under section 202(p)(19) and are—

4 (A) exported to a NAFTA country;

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

6 other goods that are exported to a NAFTA country;

7 or

8 (C) substituted for by goods of the same kind

9 and quality used as a material in the production of

10 other goods that are exported to a NAFTA country.

11 SEC. 211. MONITORING OF TELEVISION AND PICTURE TUBE

12 IMPORTS.

13 (a) MONITORING.—Beginning on the date the Agree14 ment enters into force with respect to the United States,

15 the United States Customs Service shall, for a period of

16 5 years, monitor imports into the United States of articles

17 described in subheading 8528.10 of the HTS from

18 NAFTA countries and shall take action to exercise all

19 rights of the United States under chapter 5 of the Agree20 ment with respect to such imports. The United States

21 Customs Service shall take appropriate action under chap22 ter 5 of the Agreement with respect to such imports, in23 cluding verifications to ensure that the rules of origin

24 under the Agreement are fully complied with and that the

25 duty drawback obligations contained in article 303 and
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1 Annex 303.8 of the Agreement are fully implemented and

2 duties are correctly assessed.

3 (b) REPORT TO TRADE REPRESENTATIVE.—The

4 United States Customs Service shall make the results of

5 the monitoring and verification required by subsection (a)

6 available to the President and the Trade Representative.

7 If, based on such information, the President has reason

8 to believe that articles described in subheading 8540.11

9 of the HTS, intended for ultimate consumption in the

10 United States, are entering the territory of a NAFTA

11 country inconsistent with the provisions of the Agreement,

12 or have been undervalued in a manner that may raise con13 cerns under United States trade laws, the President shall

14 promptly take such action as may be appropriate under

15 all relevant provisions of the Agreement, including article

16 317 and chapter 20, and under applicable United States

17 trade statutes.

18 SEC. 212. TITLE VI AMENDMENTS.

19 Any amendment in this title to a law that is also

20 amended under title VI shall be made after the title VI

21 amendment is executed.

22 SEC. 213. EFFECTIVE DATES.

23 (a) PROVISIONS EFFECTIVE ON DATE OF ENACT24 MENT.—Section 212 and this section take effect on the

25 date of the enactment of this Act.
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1 (b) PROVISIONS EFFECTIVE WHEN AGREEMENT EN2 TERS INTO FORCE.—Section 201, section 202, section

3 203(a), (d), and (e), section 210 and section 211, the

4 amendment made by section 203(c), and the amendments

5 made by sections 204 through 209 take effect on the date

6 the Agreement enters into force with respect to the United

7 States.

8 (c) PROVISIONS WITH DELAYED EFFECTIVE

9 DATES.—The amendments made by section 203(b)

10 apply—

11 (1) with respect to exports from the United

12 States to Canada—

13 (A) on January 1, 1996, if Canada is a

14 NAFTA country on that date, and

15 (B) after such date for so long as Canada

16 continues to be a NAFTA country; and

17 (2) with respect to exports from the United

18 States to Mexico—

19 (A) on January 1, 2001, if Mexico is a

20 NAFTA country on that date; and

21 (B) after such date for so long as Mexico

22 continues to be a NAFTA country.
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1 TITLE III—APPLICATION OF

2 AGREEMENT TO SECTORS

3 AND SERVICES

4 Subtitle A—Safeguards

5 PART 1—RELIEF FROM IMPORTS BENEFITING

6 FROM THE AGREEMENT

7 SEC. 301. DEFINITIONS.

8 As used in this part:

9 (1) CANADIAN ARTICLE.—The term ‘‘Canadian

10 article’’ means an article that—

11 (A) is an originating good under chapter 4

12 of the Agreement; and

13 (B) qualifies under the Agreement to be

14 marked as a good of Canada.

15 (2) MEXICAN ARTICLE.—The term ‘‘Mexican

16 article’’ means an article that—

17 (A) is an originating good under chapter 4

18 of the Agreement; and

19 (B) qualifies under the Agreement to be

20 marked as a good of Mexico.

21 SEC. 302. COMMENCING OF ACTION FOR RELIEF.

22 (a) FILING OF PETITION.—

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

24 under this part for the purpose of adjusting to the

25 obligations of the United States under the Agree-
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1 ment may be filed with the International Trade

2 Commission by an entity, including a trade associa3 tion, firm, certified or recognized union, or group of

4 workers, that is representative of an industry. The

5 International Trade Commission shall transmit a

6 copy of any petition filed under this subsection to

7 the Trade Representative.

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

9 petition under this subsection may request that pro10 visional relief be provided as if the petition had been

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

12 (3) CRITICAL CIRCUMSTANCES.—An allegation

13 that critical circumstances exist must be included in

14 the petition or made on or before the 90th day after

15 the date on which the investigation is initiated under

16 subsection (b).

17 (b) INVESTIGATION AND DETERMINATION.—Upon

18 the filing of a petition under subsection (a), the Inter19 national Trade Commission, unless subsection (d) applies,

20 shall promptly initiate an investigation to determine

21 whether, as a result of the reduction or elimination of a

22 duty provided for under the Agreement, a Canadian article

23 or a Mexican article, as the case may be, is being imported

24 into the United States in such increased quantities (in ab-
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1 solute terms) and under such conditions so that imports

2 of the article, alone, constitute a substantial cause of—

3 (1) serious injury; or

4 (2) except in the case of a Canadian article, a

5 threat of serious injury;

6 to the domestic industry producing an article that is like,

7 or directly competitive with, the imported article.

8 (c) APPLICABLE PROVISIONS.—The provisions of—

9 (1) paragraphs (1)(B), (3) (except subpara10 graph (A)), and (4) of subsection (b);

11 (2) subsection (c); and

12 (3) subsection (d),

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

14 apply with respect to any investigation initiated under

15 subsection (b).

16 (d) ARTICLES EXEMPT FROM INVESTIGATION.—No

17 investigation may be initiated under this section with re18 spect to—

19 (1) any Canadian article or Mexican article if

20 import relief has been provided under this part with

21 respect to that article; or

22 (2) any textile or apparel article set out in Ap23 pendix 1.1 of Annex 300–B of the Agreement.
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1 SEC. 303. INTERNATIONAL TRADE COMMISSION ACTION ON

2 PETITION.

3 (a) DETERMINATION.—By no later than 120 days

4 after the date on which an investigation is initiated under

5 section 302(b) with respect to a petition, the International

6 Trade Commission shall—

7 (1) make the determination required under that

8 section; and

9 (2) if the determination referred to in para10 graph (1) is affirmative and an allegation regarding

11 critical circumstances was made under section

12 302(a), make a determination regarding that allega13 tion.

14 (b) ADDITIONAL FINDING AND RECOMMENDATION IF

15 DETERMINATION AFFIRMATIVE.—If the determination

16 made by the International Trade Commission under sub17 section (a) with respect to imports of an article is affirma18 tive, the International Trade Commission shall find, and

19 recommend to the President in the report required under

20 subsection (c), the amount of import relief that is nec21 essary to remedy or, except in the case of imports of a

22 Canadian article, prevent the injury found by the Inter23 national Trade Commission in the determination. The im24 port relief recommended by the International Trade Com25 mission under this subsection shall be limited to that de26 scribed in section 304(c).
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1 (c) REPORT TO PRESIDENT.—No later than the date

2 that is 30 days after the date on which a determination

3 is made under subsection (a) with respect to an investiga4 tion, the International Trade Commission shall submit to

5 the President a report that shall include—

6 (1) a statement of the basis for the determina7 tion;

8 (2) dissenting and separate views; and

9 (3) any finding made under subsection (b) re10 garding import relief.

11 (d) PUBLIC NOTICE.—Upon submitting a report to

12 the President under subsection (c), the International

13 Trade Commission shall promptly make public such report

14 (with the exception of information which the International

15 Trade Commission determines to be confidential) and

16 shall cause a summary thereof to be published in the Fed17 eral Register.

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

19 part, the provisions of paragraphs (1), (2), and (3) of sec20 tion 330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d))

21 shall be applied with respect to determinations and find22 ings made under this section as if such determinations and

23 findings were made under section 202 of the Trade Act

24 of 1974 (19 U.S.C. 2252).
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1 SEC. 304. PROVISION OF RELIEF.

2 (a) IN GENERAL.—No later than the date that is 30

3 days after the date on which the President receives the

4 report of the International Trade Commission containing

5 an affirmative determination of the International Trade

6 Commission under section 303(a), the President, subject

7 to subsection (b), shall provide relief from imports of the

8 article that is the subject of such determination to the ex9 tent that the President determines necessary to remedy

10 or, except in the case of imports of a Canadian article,

11 prevent the injury found by the International Trade

12 Commission.

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

14 provide import relief under this section if the President

15 determines that the provision of the import relief will not

16 provide greater economic and social benefits than costs.

17 (c) NATURE OF RELIEF.—The import relief (includ18 ing provisional relief) that the President is authorized to

19 provide under this part is as follows:

20 (1) In the case of imports of a Canadian arti21 cle—

22 (A) the suspension of any further reduc23 tion provided for under Annex 401.2 of the

24 United States-Canada Free-Trade Agreement

25 in the duty imposed on such article;
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1 (B) an increase in the rate of duty im2 posed on such article to a level that does not

3 exceed the lesser of—

4 (i) the column 1 general rate of duty

5 imposed under the HTS on like articles at

6 the time the import relief is provided, or

7 (ii) the column 1 general rate of duty

8 imposed on like articles on December 31,

9 1988; or

10 (C) in the case of a duty applied on a sea11 sonal basis to such article, an increase in the

12 rate of duty imposed on the article to a level

13 that does not exceed the column 1 general rate

14 of duty imposed on the article for the cor15 responding season occurring immediately before

16 January 1, 1989.

17 (2) In the case of imports of a Mexican arti18 cle—

19 (A) the suspension of any further reduc20 tion provided for under the United States

21 Schedule to Annex 302.2 of the Agreement in

22 the duty imposed on such article;

23 (B) an increase in the rate of duty im24 posed on such article to a level that does not

25 exceed the lesser of—
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1 (i) the column 1 general rate of duty

2 imposed under the HTS on like articles at

3 the time the import relief is provided, or

4 (ii) the column 1 general rate of duty

5 imposed under the HTS on like articles on

6 the day before the date on which the

7 Agreement enters into force; or

8 (C) in the case of a duty applied on a sea9 sonal basis to such article, an increase in the

10 rate of duty imposed on the article to a level

11 that does not exceed the column 1 general rate

12 of duty imposed under the HTS on the article

13 for the corresponding season immediately occur14 ring before the date on which the Agreement

15 enters into force.

16 (d) PERIOD OF RELIEF.—The import relief that the

17 President is authorized to provide under this section may

18 not exceed 3 years, except that, if a Canadian article or

19 Mexican article which is the subject of the action—

20 (1) is provided for in an item for which the

21 transition period of tariff elimination set out in the

22 United States Schedule to Annex 302.2 of the

23 Agreement is greater than 10 years; and
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1 (2) the President determines that the affected

2 industry has undertaken adjustment and requires an

3 extension of the period of the import relief;

4 the President, after obtaining the advice of the Inter5 national Trade Commission, may extend the period of the

6 import relief for not more than 1 year, if the duty applied

7 during the initial period of the relief is substantially re8 duced at the beginning of the extension period.

9 (e) RATE ON MEXICAN ARTICLES AFTER TERMI10 NATION OF IMPORT RELIEF.—When import relief under

11 this part is terminated with respect to a Mexican article—

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

13 termination and on or before December 31 of the

14 year in which termination occurs shall be the rate

15 that, according to the United States Schedule to

16 Annex 302.2 of the Agreement for the staged elimi17 nation of the tariff, would have been in effect 1 year

18 after the initiation of the import relief action under

19 section 302; and

20 (2) the tariff treatment for that article after

21 December 31 of the year in which termination oc22 curs shall be, at the discretion of the President, ei23 ther—
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1 (A) the rate of duty conforming to the ap2 plicable rate set out in the United States

3 Schedule to Annex 302.2; or

4 (B) the rate of duty resulting from the

5 elimination of the tariff in equal annual stages

6 ending on the date set out in the United States

7 Schedule to Annex 302.2 for the elimination of

8 the tariff.

9 SEC. 305. TERMINATION OF RELIEF AUTHORITY.

10 (a) GENERAL RULE.—Except as provided in sub11 section (b), no import relief may be provided under this

12 part—

13 (1) in the case of a Canadian article, after De14 cember 31, 1998; or

15 (2) in the case of a Mexican article, after the

16 date that is 10 years after the date on which the

17 Agreement enters into force;

18 unless the article against which the action is taken is an

19 item for which the transition period for tariff elimination

20 set out in the United States Schedule to Annex 302.2 of

21 the Agreement is greater than 10 years, in which case the

22 period during which relief may be granted shall be the pe23 riod of staged tariff elimination for that article.

24 (b) EXCEPTION.—Import relief may be provided

25 under this part in the case of a Canadian article or Mexi-
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1 can article after the date on which such relief would, but

2 for this subsection, terminate under subsection (a), but

3 only if the Government of Canada or Mexico, as the case

4 may be, consents to such provision.

5 SEC. 306. COMPENSATION AUTHORITY.

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

7 (19 U.S.C. 2133), any import relief provided by the Presi8 dent under section 304 shall be treated as action taken

9 under chapter I of title II of such Act.

10 SEC. 307. SUBMISSION OF PETITIONS.

11 A petition for import relief may be submitted to the

12 International Trade Commission under—

13 (1) this part;

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

15 1974; or

16 (3) under both this part and such chapter 1 at

17 the same time, in which case the International

18 Trade Commission shall consider such petitions

19 jointly.

20 SEC. 308. SPECIAL TARIFF PROVISIONS FOR CANADIAN

21 FRESH FRUITS AND VEGETABLES.

22 (a) IN GENERAL.—Section 301(a) of the United

23 States-Canada Free-Trade Agreement Implementation

24 Act of 1988 (19 U.S.C. 2112 note) is amended—
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1 (1) in paragraph (1), by striking ‘‘promptly’’ in

2 the flush sentence at the end thereof and inserting

3 ‘‘immediately’’,

4 (2) by redesignating paragraphs (2) through

5 (9) as paragraphs (3) through (10), respectively,

6 (3) by inserting after paragraph (1) the follow7 ing new paragraph:

8 ‘‘(2) No later than 6 days after publication in

9 the Federal Register of the notice described in para10 graph (1), the Secretary shall decide whether to rec11 ommend the imposition of a temporary duty to the

12 President, and if the Secretary decides to make such

13 a recommendation, the recommendation shall be for14 warded immediately to the President.’’,

15 (4) in paragraph (5), as redesignated by para16 graph (2), by striking ‘‘paragraph (3)’’ and inserting

17 ‘‘paragraph (4)’’, and

18 (5) by amending paragraph (9), as redesignated

19 by paragraph (2), to read as follows:

20 ‘‘(9) For purposes of assisting the Secretary in

21 carrying out this subsection—

22 ‘‘(A) the Commissioner of Customs and

23 the Director of the Bureau of Census shall co24 operate in providing the Secretary with timely

25 information and data relating to the importa-
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1 tion of Canadian fresh fruits and vegetables,

2 and

3 ‘‘(B) importers shall report such informa4 tion relating to Canadian fresh fruits and vege5 tables to the Commissioner of Customs at such

6 time and in such manner as the Commissioner

7 requires.’’.

8 (b) EFFECTIVE DATE.—The amendments made by

9 subsection (a) take effect on the date of the enactment

10 of this Act.

11 SEC. 309. PRICE-BASED SNAPBACK FOR FROZEN CON12 CENTRATED ORANGE JUICE.

13 (a) TRIGGER PRICE DETERMINATION.—

14 (1) IN GENERAL.—The Secretary shall deter15 mine—

16 (A) each period of 5 consecutive business

17 days in which the daily price for frozen con18 centrated orange juice is less than the trigger

19 price; and

20 (B) for each period determined under sub21 paragraph (A), the first period occurring there22 after of 5 consecutive business days in which

23 the daily price for frozen concentrated orange

24 juice is greater than the trigger price.
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1 (2) NOTICE OF DETERMINATIONS.—The Sec2 retary shall immediately notify the Commissioner of

3 Customs and publish notice in the Federal Register

4 of any determination under paragraph (1), and the

5 date of such publication shall be the determination

6 date for that determination.

7 (b) IMPORTS OF MEXICAN ARTICLES.—Whenever

8 after any determination date for a determination under

9 subsection (a)(1)(A), the quantity of Mexican articles of

10 frozen concentrated orange juice that is entered exceeds—

11 (1) 264,978,000 liters (single strength equiva12 lent) in any of calendar years 1994 through 2002;

13 or

14 (2) 340,560,000 liters (single strength equiva15 lent) in any of calendar years 2003 through 2007;

16 the rate of duty on Mexican articles of frozen concentrated

17 orange juice that are entered after the date on which the

18 applicable limitation in paragraph (1) or (2) is reached

19 and before the determination date for the related deter20 mination under subsection (a)(1)(B) shall be the rate of

21 duty specified in subsection (c).

22 (c) RATE OF DUTY.—The rate of duty specified for

23 purposes of subsection (b) for articles entered on any day

24 is the rate in the HTS that is the lower of—
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1 (1) the column 1–General rate of duty in effect

2 for such articles on July 1, 1991; or

3 (2) the column 1–General rate of duty in effect

4 on that day.

5 (d) DEFINITIONS.—For purposes of this section—

6 (1) The term ‘‘daily price’’ means the daily

7 closing price of the New York Cotton Exchange, or

8 any successor as determined by the Secretary, for

9 the closest month in which contracts for frozen con10 centrated orange juice are being traded on the Ex11 change.

12 (2) The term ‘‘business day’’ means a day in

13 which contracts for frozen concentrated orange juice

14 are being traded on the New York Cotton Exchange,

15 or any successor as determined by the Secretary.

16 (3) The term ‘‘entered’’ means entered or with17 drawn from warehouse for consumption, in the cus18 toms territory of the United States.

19 (4) The term ‘‘frozen concentrated orange

20 juice’’ means all products classifiable under sub21 heading 2009.11.00 of the HTS.

22 (5) The term ‘‘Secretary’’ means the Secretary

23 of Agriculture.

24 (6) The term ‘‘trigger price’’ means the average

25 daily closing price of the New York Cotton Ex-
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1 change, or any successor as determined by the Sec2 retary, for the corresponding month during the pre3 vious 5-year period, excluding the year with the

4 highest average price for the corresponding month

5 and the year with the lowest average price for the

6 corresponding month.

7 PART 2—RELIEF FROM IMPORTS FROM ALL

8 COUNTRIES

9 SEC. 311. NAFTA ARTICLE IMPACT IN IMPORT RELIEF

10 CASES UNDER THE TRADE ACT OF 1974.

11 (a) IN GENERAL.—If, in any investigation initiated

12 under chapter 1 of title II of the Trade Act of 1974, the

13 International Trade Commission makes an affirmative de14 termination (or a determination which the President may

15 treat as an affirmative determination under such chapter

16 by reason of section 330(d) of the Tariff Act of 1930),

17 the International Trade Commission shall also find (and

18 report to the President at the time such injury determina19 tion is submitted to the President) whether—

20 (1) imports of the article from a NAFTA coun21 try, considered individually, account for a substan22 tial share of total imports; and

23 (2) imports of the article from a NAFTA coun24 try, considered individually or, in exceptional cir25 cumstances, imports from NAFTA countries consid-
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1 ered collectively, contribute importantly to the seri2 ous injury, or threat thereof, caused by imports.

3 (b) FACTORS.—

4 (1) SUBSTANTIAL IMPORT SHARE.—In deter5 mining whether imports from a NAFTA country,

6 considered individually, account for a substantial

7 share of total imports, such imports normally shall

8 not be considered to account for a substantial share

9 of total imports if that country is not among the top

10 5 suppliers of the article subject to the investigation,

11 measured in terms of import share during the most

12 recent 3-year period.

13 (2) APPLICATION OF ‘‘CONTRIBUTE IMPOR14 TANTLY’’ STANDARD.—In determining whether im15 ports from a NAFTA country or countries contrib16 ute importantly to the serious injury, or threat

17 thereof, the International Trade Commission shall

18 consider such factors as the change in the import

19 share of the NAFTA country or countries, and the

20 level and change in the level of imports of such

21 country or countries. In applying the preceding sen22 tence, imports from a NAFTA country or countries

23 normally shall not be considered to contribute impor24 tantly to serious injury, or the threat thereof, if the

25 growth rate of imports from such country or coun-
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1 tries during the period in which an injurious in2 crease in imports occurred is appreciably lower than

3 the growth rate of total imports from all sources

4 over the same period.

5 (c) DEFINITION.—For purposes of this section and

6 section 312(a), the term ‘‘contribute importantly’’ refers

7 to an important cause, but not necessarily the most impor8 tant cause.

9 SEC. 312. PRESIDENTIAL ACTION REGARDING NAFTA IM10 PORTS.

11 (a) IN GENERAL.—In determining whether to take

12 action under chapter 1 of title II of the Trade Act of 1974

13 with respect to imports from a NAFTA country, the Presi14 dent shall determine whether—

15 (1) imports from such country, considered indi16 vidually, account for a substantial share of total im17 ports; or

18 (2) imports from a NAFTA country, considered

19 individually, or in exceptional circumstances imports

20 from NAFTA countries considered collectively, con21 tribute importantly to the serious injury, or threat

22 thereof, found by the International Trade Commis23 sion.

24 (b) EXCLUSION OF NAFTA IMPORTS.—In determin25 ing the nature and extent of action to be taken under
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1 chapter 1 of title II of the Trade Act of 1974, the Presi2 dent shall exclude from such action imports from a

3 NAFTA country if the President makes a negative deter4 mination under subsection (a)(1) or (2) with respect to

5 imports from such country.

6 (c) ACTION AFTER EXCLUSION OF NAFTA COUN7 TRY IMPORTS.—

8 (1) IN GENERAL.—If the President, under sub9 section (b), excludes imports from a NAFTA coun10 try or countries from action under chapter 1 of title

11 II of the Trade Act of 1974 but thereafter deter12 mines that a surge in imports from that country or

13 countries is undermining the effectiveness of the ac14 tion—

15 (A) the President may take appropriate ac16 tion under such chapter 1 to include those im17 ports in the action; and

18 (B) any entity that is representative of an

19 industry for which such action is being taken

20 may request the International Trade Commis21 sion to conduct an investigation of the surge in

22 such imports.

23 (2) INVESTIGATION.—Upon receiving a request

24 under paragraph (1)(B), the International Trade

25 Commission shall conduct an investigation to deter-
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1 mine whether a surge in such imports undermines

2 the effectiveness of the action. The International

3 Trade Commission shall submit the findings of its

4 investigation to the President no later than 30 days

5 after the request is received by the International

6 Trade Commission.

7 (3) DEFINITION.—For purposes of this sub8 section, the term ‘‘surge’’ means a significant in9 crease in imports over the trend for a recent rep10 resentative base period.

11 (d) CONDITION APPLICABLE TO QUANTITATIVE RE12 STRICTIONS.—Any action taken under this section pro13 claiming a quantitative restriction shall permit the impor14 tation of a quantity or value of the article which is not

15 less than the quantity or value of such article imported

16 into the United States during the most recent period that

17 is representative of imports of such article, with allowance

18 for reasonable growth.

19 PART 3—GENERAL PROVISIONS

20 SEC. 315. PROVISIONAL RELIEF.

21 Section 202(d) of the Trade Act of 1974 (19 U.S.C.

22 2252(d)) is amended—

23 (1) in paragraph (1)(A) by inserting ‘‘or citrus

24 product’’ after ‘‘agricultural product’’ each place it

25 appears;
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1 (2) in the text of paragraph (1)(C) that appears

2 before subclauses (I) and (II)—

3 (A) by inserting ‘‘or citrus product’’ after

4 ‘‘agricultural product’’ each place it appears,

5 and

6 (B) by inserting ‘‘or citrus product’’ after

7 ‘‘perishable product’’;

8 (3) by redesignating subparagraphs (A) and

9 (B) of paragraph (5) as subparagraphs (B) and (C);

10 and

11 (4) by inserting a new subparagraph (A) in

12 paragraph (5) to read as follows:

13 ‘‘(A) The term ‘citrus product’ means any

14 processed oranges or grapefruit, or any orange

15 or grapefruit juice, including concentrate.’’.

16 SEC. 316. MONITORING.

17 For purposes of expediting an investigation concern18 ing provisional relief under this subtitle or section 202 of

19 the Trade Act of 1974 regarding—

20 (1) fresh or chilled tomatoes provided for in

21 subheading 0702.00.00 of the HTS; and

22 (2) fresh or chilled peppers, other than chili

23 peppers provided for in subheading 0709.60.00 of

24 the HTS;
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1 the International Trade Commission, until January 1,

2 2009, shall monitor imports of such goods as if proper

3 requests for such monitoring had been made under sub4 section 202(d)(1)(C)(i) of such section 202. At the request

5 of the International Trade Commission, the Secretary of

6 Agriculture and the Commissioner of Customs shall pro7 vide to the International Trade Commission information

8 relevant to the monitoring carried out under this section.

9 SEC. 317. PROCEDURES CONCERNING THE CONDUCT OF

10 INTERNATIONAL TRADE COMMISSION INVES11 TIGATIONS.

12 (a) PROCEDURES AND RULES.—The International

13 Trade Commission shall adopt such procedures and rules

14 and regulations as are necessary to bring its procedures

15 into conformity with chapter 8 of the Agreement.

16 (b) CONFORMING AMENDMENT.—Section 202(a) of

17 the Trade Act of 1974 is amended by adding at the end

18 thereof the following:

19 ‘‘(8) The procedures concerning the release of

20 confidential business information set forth in section

21 332(g) of the Tariff Act of 1930 shall apply with re22 spect to information received by the Commission in

23 the course of investigations conducted under this

24 chapter and part 1 of title III of the North Amer25 ican Free Trade Agreement Implementation Act.’’.
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1 SEC. 318. EFFECTIVE DATE.

2 Except as provided in section 308(b), the provisions

3 of this subtitle take effect on the date the Agreement en4 ters into force with respect to the United States.

5 Subtitle B—Agriculture

6 SEC. 321. AGRICULTURE.

7 (a) MEAT IMPORT ACT OF 1979.—The Meat Import

8 Act of 1979 (19 U.S.C. 2253 note) is amended—

9 (1) in subsection (b)—

10 (A) by striking the last sentence in para11 graph (2),

12 (B) by redesignating paragraph (3) as

13 paragraph (4) and inserting after paragraph

14 (2) the following new paragraph:

15 ‘‘(3) The term ‘meat articles’ does not include

16 any article described in paragraph (2) that—

17 ‘‘(A) originates in a NAFTA country (as

18 determined in accordance with section 202 of

19 the NAFTA Act), or

20 ‘‘(B) originates in Canada (as determined

21 in accordance with section 202 of the United

22 States-Canada Free-Trade Agreement Imple23 mentation Act of 1988) during such time as the

24 United States-Canada Free-Trade Agreement is

25 in force with respect to, and the United States

26 applies such Agreement to, Canada.’’; and
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1 (C) by inserting after paragraph (4) (as

2 redesignated by subparagraph (B) of this para3 graph) the following new paragraphs:

4 ‘‘(5) The term ‘NAFTA Act’ means the North

5 American Free Trade Agreement Implementation

6 Act.

7 ‘‘(6) The term ‘NAFTA country’ has the mean8 ing given such term in section 2(4) of the NAFTA

9 Act.’’;

10 (2) in subsection (f)(1), by striking the end pe11 riod and inserting ‘‘, except that the President may

12 exclude any such article originating in a NAFTA

13 country (as determined in accordance with section

14 202 of the NAFTA Act) or, if paragraph (3)(B) ap15 plies, any such article originating in Canada as de16 termined in accordance with such paragraph

17 (3)(B).’’; and

18 (3) in subsection (i), by inserting ‘‘and Mexico’’

19 after ‘‘Canada’’ each place it appears.

20 (b) SECTION 22 OF THE AGRICULTURAL ADJUST21 MENT ACT.—

22 (1) IN GENERAL.—The President may, pursu23 ant to article 309 and Annex 703.2 of the Agree24 ment, exempt from any quantitative limitation or fee

25 imposed pursuant to section 22 of the Agricultural
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1 Adjustment Act (7 U.S.C. 624), reenacted with

2 amendments by the Agricultural Marketing Agree3 ment Act of 1937, any article which originates in

4 Mexico, if Mexico is a NAFTA country.

5 (2) QUALIFICATION OF ARTICLES.—The deter6 mination of whether an article originates in Mexico

7 shall be made in accordance with section 202, except

8 that operations performed in, or materials obtained

9 from, any country other than the United States or

10 Mexico shall be treated as if performed in or ob11 tained from a country other than a NAFTA country.

12 (c) TARIFF RATE QUOTAS.—In implementing the

13 tariff rate quotas set out in the United States Schedule

14 to Annex 302.2 of the Agreement, the President shall take

15 such action as may be necessary to ensure that imports

16 of agricultural goods do not disrupt the orderly marketing

17 of commodities in the United States.

18 (d) PEANUTS.—

19 (1) EFFECT OF THE AGREEMENT.—

20 (A) IN GENERAL.—Nothing in the Agree21 ment or this Act reduces or eliminates—

22 (i) any penalty required under section

23 358e(d) of the Agricultural Adjustment

24 Act of 1938 (7 U.S.C. 1359a(d)); or
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1 (ii) any requirement under Marketing

2 Agreement No. 146, Regulating the Qual3 ity of Domestically Produced Peanuts, on

4 peanuts in the domestic market, pursuant

5 to section 108B(f) of the Agricultural Act

6 of 1949 (7 U.S.C. 1445c–3(f)).

7 (B) REENTRY OF EXPORTED PEANUTS.—

8 Paragraph (6) of section 358e(d) of the Agri9 cultural Adjustment Act of 1938 (7 U.S.C.

10 1359a(d)(6)) is amended to read as follows:

11 ‘‘(6) REENTRY OF EXPORTED PEANUTS.—

12 ‘‘(A) PENALTY.—If any additional peanuts

13 exported by a handler are reentered into the

14 United States in commercial quantities as de15 termined by the Secretary, the importer of the

16 peanuts shall be subject to a penalty at a rate

17 equal to 140 percent of the loan level for quota

18 peanuts on the quantity of peanuts reentered.

19 ‘‘(B) RECORDS.—Each person, firm, or

20 handler who imports peanuts into the United

21 States shall maintain such records and docu22 ments as are required by the Secretary to en23 sure compliance with this subsection.’’.

24 (2) CONSULTATIONS ON IMPORTS.—It is the

25 sense of Congress that the United States should re-
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1 quest consultations in the Working Group on Emer2 gency Action, established in the Understanding Be3 tween the Parties to the North American Free

4 Trade Agreement Concerning Chapter Eight—

5 Emergency Action, if imports of peanuts exceed the

6 in-quota quantity under a tariff rate quota set out

7 in the United States Schedule to Annex 302.2 of the

8 Agreement concerning whether—

9 (A) the increased imports of peanuts con10 stitute a substantial cause of, or contribute im11 portantly to, serious injury, or threat of serious

12 injury, to the domestic peanut industry; and

13 (B) recourse under Chapter Eight of the

14 Agreement or Article XIX of the General

15 Agreement on Tariffs and Trade is appropriate.

16 (e) FRESH FRUITS, VEGETABLES, AND CUT FLOW17 ERS.—

18 (1) IN GENERAL.—The Secretary of Agriculture

19 shall collect and compile the information specified

20 under paragraph (3), if reasonably available, from

21 appropriate Federal departments and agencies and

22 the relevant counterpart ministries of the Govern23 ment of Mexico.

24 (2) DESIGNATION OF AN OFFICE.—The Sec25 retary of Agriculture shall designate an office within
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1 the United States Department of Agriculture to be

2 responsible for maintaining and disseminating, in a

3 timely manner, the data accumulated for verifying

4 citrus, fruit, vegetable, and cut flower trade between

5 the United States and Mexico. The information shall

6 be made available to the public and the NAFTA Ag7 riculture Committee Working Groups.

8 (3) INFORMATION COLLECTED.—The informa9 tion to be collected, if reasonably available, in10 cludes—

11 (A) monthly fresh fruit, fresh vegetable,

12 fresh citrus, and processed citrus product im13 port and export data;

14 (B) monthly citrus juice production and

15 export data;

16 (C) data on inspections of shipments of cit17 rus, vegetables, and cut flowers entering the

18 United States from Mexico; and

19 (D) in the case of fruits, vegetables, and

20 cut flowers entering the United States from

21 Mexico, data regarding—

22 (i) planted and harvested acreage; and

23 (ii) wholesale prices, quality, and

24 grades.

25 (f) END-USE CERTIFICATES.—
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1 (1) IN GENERAL.—The Secretary of Agriculture

2 (referred to in this subsection as the ‘‘Secretary’’)

3 shall implement, in coordination with the Commis4 sioner of Customs, a program requiring that end-use

5 certificates be included in the documentation cover6 ing the entry into, or the withdrawal from a ware7 house for consumption in, the customs territory of

8 the United States—

9 (A) of any wheat that is a product of any

10 foreign country or instrumentality that re11 quires, as of the effective date of this sub12 section, end-use certificates for imports of

13 wheat that is a product of the United States

14 (referred to in this subsection as ‘‘United

15 States-produced wheat’’); and

16 (B) of any barley that is a product of any

17 foreign country or instrumentality that re18 quires, as of the effective date of this sub19 section, end-use certificates for imports of bar20 ley that is a product of the United States (re21 ferred to in this subsection as ‘‘United States22 produced barley’’).

23 (2) REGULATIONS.—The Secretary shall pre24 scribe by regulation such requirements regarding the

25 information to be included in end-use certificates as
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1 may be necessary and appropriate to carry out this

2 subsection.

3 (3) PRODUCER PROTECTION DETERMINA4 TION.—At any time after the effective date of the

5 requirements established under paragraph (1), the

6 Secretary may, subject to paragraph (5), suspend

7 the requirements when making a determination,

8 after consultation with domestic producers, that the

9 program implemented under this subsection has di10 rectly resulted in—

11 (A) the reduction of income to the United

12 States producers of agricultural commodities; or

13 (B) the reduction of the competitiveness of

14 United States agricultural commodities in the

15 world export markets.

16 (4) SUSPENSION OF REQUIREMENTS.—

17 (A) WHEAT.—If a foreign country or in18 strumentality that requires end-use certificates

19 for imports of United States-produced wheat as

20 of the effective date of the requirement under

21 paragraph (1)(A) eliminates the requirement,

22 the Secretary shall suspend the requirement

23 under paragraph (1)(A) beginning 30 calendar

24 days after suspension by the foreign country or

25 instrumentality.
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1 (B) BARLEY.—If a foreign country or in2 strumentality that requires end-use certificates

3 for imports of United States-produced barley as

4 of the effective date of the requirement under

5 paragraph (1)(B) eliminates the requirement,

6 the Secretary shall suspend the requirement

7 under paragraph (1)(B) beginning 30 calendar

8 days after suspension by the foreign country or

9 instrumentality.

10 (5) REPORT TO CONGRESS.—The Secretary

11 shall not suspend the requirements established under

12 paragraph (1) under circumstances identified in

13 paragraph (3) before the Secretary submits a report

14 to Congress detailing the determination made under

15 paragraph (3) and the reasons for making the deter16 mination.

17 (6) COMPLIANCE.—It shall be a violation of

18 section 1001 of title 18, United States Code, for a

19 person to engage in fraud or knowingly violate this

20 subsection or a regulation implementing this sub21 section.

22 (7) EFFECTIVE DATE.—This subsection shall

23 become effective on the date that is 120 days after

24 the date of enactment of this Act.
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1 (g) AGRICULTURAL FELLOWSHIP PROGRAM.—Sec2 tion 1542(d) of the Food, Agriculture, Conservation, and

3 Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 5622

4 note) is amended by adding at the end the following new

5 paragraph:

6 ‘‘(3) AGRICULTURAL FELLOWSHIPS FOR NAFTA

7 COUNTRIES.—

8 ‘‘(A) IN GENERAL.—The Secretary shall

9 grant fellowships to individuals from countries

10 that are parties to the North American Free

11 Trade Agreement (referred to in this paragraph

12 as ‘NAFTA’) to study agriculture in the United

13 States, and to individuals in the United States

14 to study agriculture in other NAFTA countries.

15 ‘‘(B) PURPOSE.—The purpose of fellow16 ships granted under this paragraph is—

17 ‘‘(i) to allow the recipients to expand

18 their knowledge and understanding of agri19 cultural systems and practices in other

20 NAFTA countries;

21 ‘‘(ii) to facilitate the improvement of

22 agricultural systems in NAFTA countries;

23 and
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1 ‘‘(iii) to establish and expand agricul2 tural trade linkages between the United

3 States and other NAFTA countries.

4 ‘‘(C) ELIGIBLE RECIPIENTS.—The Sec5 retary may provide fellowships under this para6 graph to agricultural producers and consult7 ants, government officials, and other individuals

8 from the private and public sectors.

9 ‘‘(D) ACCEPTANCE OF GIFTS.—The Sec10 retary may accept money, funds, property, and

11 services of every kind by gift, devise, bequest,

12 grant, or otherwise, and may in any manner,

13 dispose of all of the holdings and use the re14 ceipts generated from the disposition to carry

15 out this paragraph. Receipts under this para16 graph shall remain available until expended.

17 ‘‘(E) AUTHORIZATION OF APPROPRIA18 TION.—There are authorized to be appropriated

19 such sums as are necessary to carry out this

20 paragraph.’’.

21 (h) ASSISTANCE FOR AFFECTED FARMWORKERS.—

22 (1) IN GENERAL.—Subject to paragraph (3), if

23 at any time the Secretary of Agriculture determines

24 that the implementation of the Agreement has

25 caused low-income migrant or seasonal farmworkers
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1 to lose income, the Secretary may make available

2 grants, not to exceed $20,000,000 for any fiscal

3 year, to public agencies or private organizations with

4 tax-exempt status under section 501(c)(3) of the In5 ternal Revenue Code of 1986, that have experience

6 in providing emergency services to low-income mi7 grant or seasonal farmworkers. Emergency services

8 to be provided with assistance received under this

9 subsection may include such types of assistance as

10 the Secretary determines to be necessary and appro11 priate.

12 (2) DEFINITION.—As used in this subsection,

13 the term ‘‘low-income migrant or seasonal farm14 worker’’ shall have the same meaning as provided in

15 section 2281(b) of the Food, Agriculture, Conserva16 tion, and Trade Act of 1990 (42 U.S.C. 5177a(b)).

17 (3) AUTHORIZATION OF APPROPRIATIONS.—

18 There are authorized to be appropriated

19 $20,000,000 for each fiscal year to carry out this

20 subsection.

21 (i) BIENNIAL REPORT ON EFFECTS OF THE AGREE22 MENT ON AMERICAN AGRICULTURE.—

23 (1) IN GENERAL.—The Secretary of Agriculture

24 shall prepare a biennial report on the effects of the

25 Agreement on United States producers of agricul-
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1 tural commodities and on rural communities located

2 in the United States.

3 (2) CONTENTS OF REPORT.—The report re4 quired under this subsection shall include—

5 (A) an assessment of the effects of imple6 menting the Agreement on the various agricul7 tural commodities affected by the Agreement,

8 on a commodity-by-commodity basis;

9 (B) an assessment of the effects of imple10 menting the Agreement on investments made in

11 United States agriculture and on rural commu12 nities located in the United States;

13 (C) an assessment of the effects of imple14 menting the Agreement on employment in Unit15 ed States agriculture, including any gains or

16 losses of jobs in businesses directly or indirectly

17 related to United States agriculture; and

18 (D) such other information and data as

19 the Secretary determines appropriate.

20 (3) SUBMISSION OF REPORT.—The Secretary

21 shall furnish the report required under this sub22 section to the Committee on Agriculture, Nutrition,

23 and Forestry of the Senate and to the Committee on

24 Agriculture of the House of Representatives. The re25 port shall be due every 2 years and shall be submit-
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1 ted by March 1 of the year in which the report is

2 due. The first report shall be due by March 1, 1997,

3 and the final report shall be due by March 1, 2011.

4 Subtitle C—Intellectual Property

5 SEC. 331. TREATMENT OF INVENTIVE ACTIVITY.

6 Section 104 of title 35, United States Code, is

7 amended to read as follows:

8 ‘‘§ 104. Invention made abroad

9 ‘‘(a) IN GENERAL.—In proceedings in the Patent and

10 Trademark Office, in the courts, and before any other

11 competent authority, an applicant for a patent, or a pat12 entee, may not establish a date of invention by reference

13 to knowledge or use thereof, or other activity with respect

14 thereto, in a foreign country other than a NAFTA coun15 try, except as provided in sections 119 and 365 of this

16 title. Where an invention was made by a person, civil or

17 military, while domiciled in the United States or a

18 NAFTA country and serving in any other country in con19 nection with operations by or on behalf of the United

20 States or a NAFTA country, the person shall be entitled

21 to the same rights of priority in the United States with

22 respect to such invention as if such invention had been

23 made in the United States or a NAFTA country. To the

24 extent that any information in a NAFTA country concern25 ing knowledge, use, or other activity relevant to proving
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1 or disproving a date of invention has not been made avail2 able for use in a proceeding in the Office, a court, or any

3 other competent authority to the same extent as such in4 formation could be made available in the United States,

5 the Commissioner, court, or such other authority shall

6 draw appropriate inferences, or take other action per7 mitted by statute, rule, or regulation, in favor of the party

8 that requested the information in the proceeding.

9 ‘‘(b) DEFINITION.—As used in this section, the term

10 ‘NAFTA country’ has the meaning given that term in sec11 tion 2(4) of the North American Free Trade Agreement

12 Implementation Act.’’.

13 SEC. 332. RENTAL RIGHTS IN SOUND RECORDINGS.

14 Section 4 of the Record Rental Amendment of 1984

15 (17 U.S.C. 109 note) is amended by striking out sub16 section (c).

17 SEC. 333. NONREGISTRABILITY OF MISLEADING GEO18 GRAPHIC INDICATIONS.

19 (a) MARKS NOT REGISTRABLE ON THE PRINCIPAL

20 REGISTER.—Section 2 of the Act entitled ‘‘An Act to pro21 vide for the registration and protection of trademarks used

22 in commerce, to carry out the provisions of certain inter23 national conventions, and for other purposes’’, approved

24 July 5, 1946, commonly referred to as the Trademark Act

25 of 1946 (15 U.S.C. 1052(e)), is amended—
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1 (1) by amending subsection (e) to read as fol2 lows:

3 ‘‘(e) Consists of a mark which (1) when used on or

4 in connection with the goods of the applicant is merely

5 descriptive or deceptively misdescriptive of them, (2) when

6 used on or in connection with the goods of the applicant

7 is primarily geographically descriptive of them, except as

8 indications of regional origin may be registrable under sec9 tion 4, (3) when used on or in connection with the goods

10 of the applicant is primarily geographically deceptively

11 misdescriptive of them, or (4) is primarily merely a sur12 name.’’; and

13 (2) in subsection (f)—

14 (A) by striking out ‘‘and (d)’’ and insert15 ing ‘‘(d), and (e)(3)’’; and

16 (B) by adding at the end the following new

17 sentence: ‘‘Nothing in this section shall prevent

18 the registration of a mark which, when used on

19 or in connection with the goods of the appli20 cant, is primarily geographically deceptively

21 misdescriptive of them, and which became dis22 tinctive of the applicant’s goods in commerce

23 before the date of the enactment of the North

24 American Free Trade Agreement Implementa25 tion Act.’’.
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1 (b) SUPPLEMENTAL REGISTER.—Section 23(a) of

2 the Trademark Act of 1946 (15 U.S.C. 1091(a)) is

3 amended—

4 (1) by striking out ‘‘and (d)’’ and inserting

5 ‘‘(d), and (e)(3)’’; and

6 (2) by adding at the end the following new sen7 tence: ‘‘Nothing in this section shall prevent the reg8 istration on the supplemental register of a mark, ca9 pable of distinguishing the applicant’s goods or serv10 ices and not registrable on the principal register

11 under this Act, that is declared to be unregistrable

12 under section 2(e)(3), if such mark has been in law13 ful use in commerce by the owner thereof, on or in

14 connection with any goods or services, since before

15 the date of the enactment of the North American

16 Free Trade Agreement Implementation Act.’’.

17 SEC. 334. MOTION PICTURES IN THE PUBLIC DOMAIN.

18 (a) IN GENERAL.—Chapter 1 of title 17, United

19 States Code, is amended by inserting after section 104 the

20 following new section:

21 ‘‘§ 104A. Copyright in certain motion pictures

22 ‘‘(a) RESTORATION OF COPYRIGHT.—Subject to sub23 sections (b) and (c)—

24 ‘‘(1) any motion picture that is first fixed or

25 published in the territory of a NAFTA country as
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1 defined in section 2(4) of the North American Free

2 Trade Agreement Implementation Act to which

3 Annex 1705.7 of the North American Free Trade

4 Agreement applies, and

5 ‘‘(2) any work included in such motion picture

6 that is first fixed in or published with such motion

7 picture,

8 that entered the public domain in the United States be9 cause it was first published on or after January 1, 1978,

10 and before March 1, 1989, without the notice required by

11 section 401, 402, or 403 of this title, the absence of which

12 has not been excused by the operation of section 405 of

13 this title, as such sections were in effect during that pe14 riod, shall have copyright protection under this title for

15 the remainder of the term of copyright protection to which

16 it would have been entitled in the United States had it

17 been published with such notice.

18 ‘‘(b) EFFECTIVE DATE OF PROTECTION.—The pro19 tection provided under subsection (a) shall become effec20 tive, with respect to any motion picture or work included

21 in such motion picture meeting the criteria of that sub22 section, 1 year after the date on which the North Amer23 ican Free Trade Agreement enters into force with respect

24 to, and the United States applies the Agreement to, the

25 country in whose territory the motion picture was first
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1 fixed or published if, before the end of that 1-year period,

2 the copyright owner in the motion picture or work files

3 with the Copyright Office a statement of intent to have

4 copyright protection restored under subsection (a). The

5 Copyright Office shall publish in the Federal Register

6 promptly after that effective date a list of motion pictures,

7 and works included in such motion pictures, for which pro8 tection is provided under subsection (a).

9 ‘‘(c) USE OF PREVIOUSLY OWNED COPIES.—A na10 tional or domiciliary of the United States who, before the

11 date of the enactment of the North American Free Trade

12 Agreement Implementation Act, made or acquired copies

13 of a motion picture, or other work included in such motion

14 picture, that is subject to protection under subsection (a),

15 may sell or distribute such copies or continue to perform

16 publicly such motion picture and other work without liabil17 ity for such sale, distribution, or performance, for a period

18 of 1 year after the date on which the list of motion pic19 tures, and works included in such motion pictures, that

20 are subject to protection under subsection (a) is published

21 in the Federal Register under subsection (b).’’.

22 (b) CONFORMING AMENDMENT.—The table of sec23 tions at the beginning of chapter 1 of title 17, United

24 States Code, is amended by inserting after the item relat25 ing to section 104 the following new item:

‘‘104A. Copyright in certain motion pictures.’’.
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1 SEC. 335. EFFECTIVE DATES.

2 (a) IN GENERAL.—Subject to subsections (b) and (c),

3 the amendments made by this subtitle take effect on the

4 date the Agreement enters into force with respect to the

5 United States.

6 (b) SECTION 331.—The amendments made by sec7 tion 331 shall apply to all patent applications that are

8 filed on or after the date of the enactment of this Act:

9 Provided, That an applicant for a patent, or a patentee,

10 may not establish a date of invention by reference to

11 knowledge or use thereof, or other activity with respect

12 thereto, in a NAFTA country, except as provided in sec13 tions 119 and 365 of title 35, United States Code, that

14 is earlier than the date of the enactment of this Act.

15 (c) SECTION 333.—The amendments made by section

16 333 shall apply only to trademark applications filed on

17 or after the date of the enactment of this Act.

18 Subtitle D—Temporary Entry of

19 Business Persons

20 SEC. 341. TEMPORARY ENTRY.

21 (a) NONIMMIGRANT TRADERS AND INVESTORS.—

22 Upon a basis of reciprocity secured by the Agreement, an

23 alien who is a citizen of Canada or Mexico, and the spouse

24 and children of any such alien if accompanying or follow25 ing to join such alien, may, if otherwise eligible for a visa

26 and if otherwise admissible into the United States under
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1 the Immigration and Nationality Act (8 U.S.C. 1101 et

2 seq.), be considered to be classifiable as a nonimmigrant

3 under section 101(a)(15)(E) of such Act (8 U.S.C.

4 1101(a)(15)(E)) if entering solely for a purpose specified

5 in Section B of Annex 1603 of the Agreement, but only

6 if any such purpose shall have been specified in such

7 Annex on the date of entry into force of the Agreement.

8 For purposes of this section, the term ‘‘citizen of Mexico’’

9 means ‘‘citizen’’ as defined in Annex 1608 of the Agree10 ment.

11 (b) NONIMMIGRANT PROFESSIONALS AND ANNUAL

12 NUMERICAL LIMIT.—Section 214 of the Immigration and

13 Nationality Act (8 U.S.C. 1184) is amended by redesig14 nating subsection (e) as paragraph (1) of subsection (e)

15 and adding after such paragraph (1), as redesignated, the

16 following new paragraphs:

17 ‘‘(2) An alien who is a citizen of Canada or Mexico,

18 and the spouse and children of any such alien if accom19 panying or following to join such alien, who seeks to enter

20 the United States under and pursuant to the provisions

21 of Section D of Annex 1603 of the North American Free

22 Trade Agreement (in this subsection referred to as

23 ‘NAFTA’) to engage in business activities at a profes24 sional level as provided for in such Annex, may be admit25 ted for such purpose under regulations of the Attorney
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1 General promulgated after consultation with the Secretar2 ies of State and Labor. For purposes of this Act, including

3 the issuance of entry documents and the application of

4 subsection (b), such alien shall be treated as if seeking

5 classification, or classifiable, as a nonimmigrant under

6 section 101(a)(15). The admission of an alien who is a

7 citizen of Mexico shall be subject to paragraphs (3), (4),

8 and (5). For purposes of this paragraph and paragraphs

9 (3), (4), and (5), the term ‘citizen of Mexico’ means ‘citi10 zen’ as defined in Annex 1608 of NAFTA.

11 ‘‘(3) The Attorney General shall establish an annual

12 numerical limit on admissions under paragraph (2) of

13 aliens who are citizens of Mexico, as set forth in Appendix

14 1603.D.4 of Annex 1603 of the NAFTA. Subject to para15 graph (4), the annual numerical limit—

16 ‘‘(A) beginning with the second year that

17 NAFTA is in force, may be increased in accordance

18 with the provisions of paragraph 5(a) of Section D

19 of such Annex, and

20 ‘‘(B) shall cease to apply as provided for in

21 paragraph 3 of such Appendix.

22 ‘‘(4) The annual numerical limit referred to in para23 graph (3) may be increased or shall cease to apply (other

24 than by operation of paragraph 3 of such Appendix) only

25 if—
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1 ‘‘(A) the President has obtained advice regard2 ing the proposed action from the appropriate advi3 sory committees established under section 135 of the

4 Trade Act of 1974 (19 U.S.C. 2155);

5 ‘‘(B) the President has submitted a report to

6 the Committee on the Judiciary of the Senate and

7 the Committee on the Judiciary of the House of

8 Representatives that sets forth—

9 ‘‘(i) the action proposed to be taken and

10 the reasons therefor, and

11 ‘‘(ii) the advice obtained under subpara12 graph (A);

13 ‘‘(C) a period of at least 60 calendar days that

14 begins on the first day on which the President has

15 met the requirements of subparagraphs (A) and (B)

16 with respect to such action has expired; and

17 ‘‘(D) the President has consulted with such

18 committees regarding the proposed action during the

19 period referred to in subparagraph (C).

20 ‘‘(5) During the period that the provisions of Appen21 dix 1603.D.4 of Annex 1603 of the NAFTA apply, the

22 entry of an alien who is a citizen of Mexico under and

23 pursuant to the provisions of Section D of Annex 1603

24 of NAFTA shall be subject to the attestation requirement

25 of section 212(m), in the case of a registered nurse, or
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1 the application requirement of section 212(n), in the case

2 of all other professions set out in Appendix 1603.D.1 of

3 Annex 1603 of NAFTA, and the petition requirement of

4 subsection (c), to the extent and in the manner prescribed

5 in regulations promulgated by the Secretary of Labor,

6 with respect to sections 212(m) and 212(n), and the At7 torney General, with respect to subsection (c).’’.

8 (c) LABOR DISPUTES.—Section 214 of the Immigra9 tion and Nationality Act (8 U.S.C. 1184) is amended by

10 adding at the end the following new subsection:

11 ‘‘(j) Notwithstanding any other provision of this Act,

12 an alien who is a citizen of Canada or Mexico who seeks

13 to enter the United States under and pursuant to the pro14 visions of Section B, Section C, or Section D of Annex

15 1603 of the North American Free Trade Agreement, shall

16 not be classified as a nonimmigrant under such provisions

17 if there is in progress a strike or lockout in the course

18 of a labor dispute in the occupational classification at the

19 place or intended place of employment, unless such alien

20 establishes, pursuant to regulations promulgated by the

21 Attorney General, that the alien’s entry will not affect ad22 versely the settlement of the strike or lockout or the em23 ployment of any person who is involved in the strike or

24 lockout. Notice of a determination under this subsection

25 shall be given as may be required by paragraph 3 of article
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1 1603 of such Agreement. For purposes of this subsection,

2 the term ‘citizen of Mexico’ means ‘citizen’ as defined in

3 Annex 1608 of such Agreement.’’.

4 SEC. 342. EFFECTIVE DATE.

5 The provisions of this subtitle take effect on the date

6 the Agreement enters into force with respect to the United

7 States.

8 Subtitle E—Standards

9 PART 1—STANDARDS AND MEASURES

10 SEC. 351. STANDARDS AND SANITARY AND PHYTOSANITARY

11 MEASURES.

12 (a) IN GENERAL.—Title IV of the Trade Agreements

13 Act of 1979 (19 U.S.C. 2531 et seq.) is amended by in14 serting at the end the following new subtitle:

15 ‘‘Subtitle E—Standards and Meas16 ures Under the North American

17 Free Trade Agreement

18 ‘‘CHAPTER 1—SANITARY AND

19 PHYTOSANITARY MEASURES

20 ‘‘SEC. 461. GENERAL.

21 ‘‘Nothing in this chapter may be construed—

22 ‘‘(1) to prohibit a Federal agency or State

23 agency from engaging in activity related to sanitary

24 or phytosanitary measures to protect human, ani25 mal, or plant life or health; or
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1 ‘‘(2) to limit the authority of a Federal agency

2 or State agency to determine the level of protection

3 of human, animal, or plant life or health the agency

4 considers appropriate.

5 ‘‘SEC. 462. INQUIRY POINT.

6 ‘‘The standards information center maintained under

7 section 414 shall, in addition to the functions specified

8 therein, make available to the public relevant documents,

9 at such reasonable fees as the Secretary of Commerce may

10 prescribe, and information regarding—

11 ‘‘(1) any sanitary or phytosanitary measure of

12 general application, including any control or inspec13 tion procedure or approval procedure proposed,

14 adopted, or maintained by a Federal or State agen15 cy;

16 ‘‘(2) the procedures of a Federal or State agen17 cy for risk assessment, and factors the agency con18 siders in conducting the assessment and in establish19 ing the levels of protection that the agency considers

20 appropriate;

21 ‘‘(3) the membership and participation of the

22 Federal Government and State governments in inter23 national and regional sanitary and phytosanitary or24 ganizations and systems, and in bilateral and multi25 lateral arrangements regarding sanitary and
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1 phytosanitary measures, and the provisions of those

2 systems and arrangements; and

3 ‘‘(4) the location of notices of the type required

4 under article 719 of the NAFTA, or where the infor5 mation contained in such notices can be obtained.

6 ‘‘SEC. 463. CHAPTER DEFINITIONS.

7 ‘‘Notwithstanding section 451, for purposes of this

8 chapter—

9 ‘‘(1) ANIMAL.—The term ‘animal’ includes fish,

10 bees, and wild fauna.

11 ‘‘(2) APPROVAL PROCEDURE.—The term ‘ap12 proval procedure’ means any registration, notifica13 tion, or other mandatory administrative procedure

14 for—

15 ‘‘(A) approving the use of an additive for

16 a stated purpose or under stated conditions, or

17 ‘‘(B) establishing a tolerance for a stated

18 purpose or under stated conditions for a con19 taminant,

20 in a food, beverage, or feedstuff prior to permitting

21 the use of the additive or the marketing of a food,

22 beverage, or feedstuff containing the additive or con23 taminant.
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1 ‘‘(3) CONTAMINANT.—The term ‘contaminant’

2 includes pesticide and veterinary drug residues and

3 extraneous matter.

4 ‘‘(4) CONTROL OR INSPECTION PROCEDURE.—

5 The term ‘control or inspection procedure’ means

6 any procedure used, directly or indirectly, to deter7 mine that a sanitary or phytosanitary measure is

8 fulfilled, including sampling, testing, inspection,

9 evaluation, verification, monitoring, auditing, assur10 ance of conformity, accreditation, registration, cer11 tification, or other procedure involving the physical

12 examination of a good, of the packaging of a good,

13 or of the equipment or facilities directly related to

14 production, marketing, or use of a good, but does

15 not mean an approval procedure.

16 ‘‘(5) PLANT.—The term ‘plant’ includes wild

17 flora.

18 ‘‘(6) RISK ASSESSMENT.—The term ‘risk as19 sessment’ means an evaluation of—

20 ‘‘(A) the potential for the introduction, es21 tablishment or spread of a pest or disease and

22 associated biological and economic con23 sequences; or

24 ‘‘(B) the potential for adverse effects on

25 human or animal life or health arising from the
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1 presence of an additive, contaminant, toxin or

2 disease-causing organism in a food, beverage, or

3 feedstuff.

4 ‘‘(7) SANITARY OR PHYTOSANITARY MEAS5 URE.—

6 ‘‘(A) IN GENERAL.—The term ‘sanitary or

7 phytosanitary measure’ means a measure to—

8 ‘‘(i) protect animal or plant life or

9 health in the United States from risks

10 arising from the introduction, establish11 ment, or spread of a pest or disease;

12 ‘‘(ii) protect human or animal life or

13 health in the United States from risks

14 arising from the presence of an additive,

15 contaminant, toxin, or disease-causing or16 ganism in a food, beverage, or feedstuff;

17 ‘‘(iii) protect human life or health in

18 the United States from risks arising from

19 a disease-causing organism or pest carried

20 by an animal or plant, or a product there21 of; or

22 ‘‘(iv) prevent or limit other damage in

23 the United States arising from the intro24 duction, establishment, or spread of a pest.
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1 ‘‘(B) FORM.—The form of a sanitary or

2 phytosanitary measure includes—

3 ‘‘(i) end product criteria;

4 ‘‘(ii) a product-related processing or

5 production method;

6 ‘‘(iii) a testing, inspection, certifi7 cation, or approval procedure;

8 ‘‘(iv) a relevant statistical method;

9 ‘‘(v) a sampling procedure;

10 ‘‘(vi) a method of risk assessment;

11 ‘‘(vii) a packaging and labeling re12 quirement directly related to food safety;

13 and

14 ‘‘(viii) a quarantine treatment, such

15 as a relevant requirement associated with

16 the transportation of animals or plants or

17 with material necessary for their survival

18 during transportation.

19 ‘‘CHAPTER 2—STANDARDS-RELATED

20 MEASURES

21 ‘‘SEC. 471. GENERAL.

22 ‘‘(a) NO BAR TO ENGAGING IN STANDARDS ACTIV23 ITY.—Nothing in this chapter shall be construed—

24 ‘‘(1) to prohibit a Federal agency from engag25 ing in activity related to standards-related measures,
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1 including any such measure relating to safety, the

2 protection of human, animal, or plant life or health,

3 the environment or consumers; or

4 ‘‘(2) to limit the authority of a Federal agency

5 to determine the level it considers appropriate of

6 safety or of protection of human, animal, or plant

7 life or health, the environment or consumers.

8 ‘‘(b) EXCLUSION.—This chapter does not apply to—

9 ‘‘(1) technical specifications prepared by a Fed10 eral agency for production or consumption require11 ments of the agency; or

12 ‘‘(2) sanitary or phytosanitary measures under

13 chapter 1.

14 ‘‘SEC. 472. INQUIRY POINT.

15 ‘‘The standards information center maintained under

16 section 414 shall, in addition to the functions specified

17 therein, make available to the public relevant documents,

18 at such reasonable fees as the Secretary of Commerce may

19 prescribe, and information regarding—

20 ‘‘(1) the membership and participation of the

21 Federal Government, State governments, and rel22 evant nongovernmental bodies in the United States

23 in international and regional standardizing bodies

24 and conformity assessment systems, and in bilateral

25 and multilateral arrangements regarding standards-
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1 related measures, and the provisions of those sys2 tems and arrangements;

3 ‘‘(2) the location of notices of the type required

4 under article 909 of the NAFTA, or where the infor5 mation contained in such notice can be obtained;

6 and

7 ‘‘(3) the Federal agency procedures for assess8 ment of risk, and factors the agency considers in

9 conducting the assessment and establishing the lev10 els of protection that the agency considers appro11 priate.

12 ‘‘SEC. 473. CHAPTER DEFINITIONS.

13 ‘‘Notwithstanding section 451, for purposes of this

14 chapter—

15 ‘‘(1) APPROVAL PROCEDURE.—The term ‘ap16 proval procedure’ means any registration, notifica17 tion, or other mandatory administrative procedure

18 for granting permission for a good or service to be

19 produced, marketed, or used for a stated purpose or

20 under stated conditions.

21 ‘‘(2) CONFORMITY ASSESSMENT PROCEDURE.—

22 The term ‘conformity assessment procedure’ means

23 any procedure used, directly or indirectly, to deter24 mine that a technical regulation or standard is ful25 filled, including sampling, testing, inspection, evalua-
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1 tion, verification, monitoring, auditing, assurance of

2 conformity, accreditation, registration, or approval

3 used for such a purpose, but does not mean an ap4 proval procedure.

5 ‘‘(3) OBJECTIVE.—The term ‘objective’ in6 cludes—

7 ‘‘(A) safety,

8 ‘‘(B) protection of human, animal, or plant

9 life or health, the environment or consumers,

10 including matters relating to quality and iden11 tifiability of goods or services, and

12 ‘‘(C) sustainable development,

13 but does not include the protection of domestic pro14 duction.

15 ‘‘(4) SERVICE.—The term ‘service’ means a

16 land transportation service or a telecommunications

17 service.

18 ‘‘(5) STANDARD.—The term ‘standard’

19 means—

20 ‘‘(A) characteristics for a good or a service,

21 ‘‘(B) characteristics, rules, or guidelines

22 for—

23 ‘‘(i) processes or production methods

24 relating to such good, or
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1 ‘‘(ii) operating methods relating to

2 such service, and

3 ‘‘(C) provisions specifying terminology,

4 symbols, packaging, marking, or labelling for—

5 ‘‘(i) a good or its related process or

6 production methods, or

7 ‘‘(ii) a service or its related operating

8 methods,

9 for common and repeated use, including explan10 atory and other related provisions set out in a

11 document approved by a standardizing body,

12 with which compliance is not mandatory.

13 ‘‘(6) STANDARDS-RELATED MEASURE.—The

14 term ‘standards-related measure’ means a standard,

15 technical regulation, or conformity assessment proce16 dure.

17 ‘‘(7) TECHNICAL REGULATION.—The term

18 ‘technical regulation’ means—

19 ‘‘(A) characteristics or their related proc20 esses and production methods for a good,

21 ‘‘(B) characteristics for a service or its re22 lated operating methods, or

23 ‘‘(C) provisions specifying terminology,

24 symbols, packaging, marking, or labelling for—
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1 ‘‘(i) a good or its related process or

2 production method, or

3 ‘‘(ii) a service or its related operating

4 method,

5 set out in a document, including applicable adminis6 trative, explanatory, and other related provisions,

7 with which compliance is mandatory.

8 ‘‘(8) TELECOMMUNICATIONS SERVICE.—The

9 term ‘telecommunications service’ means a service

10 provided by means of the transmission and reception

11 of signals by any electromagnetic means, but does

12 not mean the cable, broadcast, or other electro13 magnetic distribution of radio or television program14 ming to the public generally.

15 ‘‘CHAPTER 3—SUBTITLE DEFINITIONS

16 ‘‘SEC. 481. DEFINITIONS.

17 ‘‘Notwithstanding section 451, for purposes of this

18 subtitle—

19 ‘‘(1) NAFTA.—The term ‘NAFTA’ means the

20 North American Free Trade Agreement.

21 ‘‘(2) STATE.—The term ‘State’ means any of

22 the several States, the District of Columbia, and the

23 Commonwealth of Puerto Rico.’’.

24 (b) TECHNICAL AMENDMENTS.—
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1 (1) DEFINITION OF TRADE REPRESENTA2 TIVE.—Section 451(12) of the Trade Agreements

3 Act of 1979 is amended to read as follows:

4 ‘‘(12) TRADE REPRESENTATIVE.—The term

5 ‘Trade Representative’ means the United States

6 Trade Representative.’’.

7 (2) CONFORMING AMENDMENTS.—Title IV of

8 the Trade Agreement Act of 1979 is further amend9 ed—

10 (A) by striking out ‘‘Special Representa11 tive’’ each place it appears and inserting

12 ‘‘Trade Representative’’; and

13 (B) in the section heading to section 411,

14 by striking out ‘‘SPECIAL REPRESENTATIVE’’

15 and inserting ‘‘TRADE REPRESENTATIVE’’.

16 SEC. 352. TRANSPORTATION.

17 No regulation issued by the Secretary of Transpor18 tation implementing a recommendation of the Land

19 Transportation Standards Subcommittee established

20 under article 913(5)(a)(i) of the Agreement may take ef21 fect before the date 90 days after the date of issuance.
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1 PART 2—AGRICULTURAL STANDARDS

2 SEC. 361. AGRICULTURAL TECHNICAL AND CONFORMING

3 AMENDMENTS.

4 (a) FEDERAL SEED ACT.—Section 302(e)(1) of the

5 Federal Seed Act (7 U.S.C. 1582(e)(1)) is amended by

6 inserting ‘‘or Mexico’’ after ‘‘Canada’’.

7 (b) IMPORTATION OF ANIMALS.—The first sentence

8 of section 6 of the Act of August 30, 1890 (26 Stat. 416,

9 chapter 839; 21 U.S.C. 104), is amended by striking ‘‘:

10 Provided’’ and all that follows through the period at the

11 end of the sentence and inserting ‘‘, except that the Sec12 retary of Agriculture, in accordance with such regulations

13 as the Secretary may issue, may (1) permit the importa14 tion of cattle, sheep, or other ruminants, and swine, from

15 Canada or Mexico, and (2) permit the importation from

16 the British Virgin Islands into the Virgin Islands of the

17 United States, for slaughter only, of cattle that have been

18 infested with or exposed to ticks on being freed from the

19 ticks.’’.

20 (c) INSPECTION OF ANIMALS.—Section 10 of the Act

21 of August 30, 1890 (26 Stat. 417, chapter 839; 21 U.S.C.

22 105), is amended—

23 (1) by inserting above ‘‘SEC. 10.’’ the following

24 new section heading:
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1 ‘‘SEC. 10. INSPECTION OF ANIMALS.’’;

2 (2) by striking ‘‘SEC. 10. That the Secretary of

3 Agriculture shall’’ and inserting ‘‘(a) IN GEN4 ERAL.—Except as provided in subsection (b), the

5 Secretary of Agriculture shall’’; and

6 (3) by adding at the end the following new sub7 section:

8 ‘‘(b) EXCEPTION.—The Secretary of Agriculture, in

9 accordance with such regulations as the Secretary may

10 issue, may waive any provision of subsection (a) in the

11 case of shipments between the United States and Canada

12 or Mexico.’’.

13 (d) DISEASE-FREE COUNTRIES OR REGIONS.—

14 (1) TARIFF ACT OF 1930.—Section 306 of the

15 Tariff Act of 1930 (19 U.S.C. 1306) is amended—

16 (A) in subsection (a), by striking ‘‘RIN17 DERPEST AND FOOT-AND-MOUTH DISEASE.—If

18 the Secretary of Agriculture’’ and inserting ‘‘IN

19 GENERAL.—Except as provided in subsection

20 (b), if the Secretary of Agriculture’’; and

21 (B) by striking subsection (b) and insert22 ing the following new subsection:

23 ‘‘(b) EXCEPTION.—The Secretary of Agriculture may

24 permit, subject to such terms and conditions as the Sec25 retary determines appropriate, the importation of cattle,

26 sheep, other ruminants, or swine (including embryos of the
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1 animals), or the fresh, chilled, or frozen meat of the ani2 mals, from a region if the Secretary determines that the

3 region from which the animal or meat originated is, and

4 is likely to remain, free from rinderpest and foot-and5 mouth disease.’’.

6 (2) HONEYBEE ACT.—The first section of the

7 Act of August 31, 1922 (commonly known as the

8 ‘‘Honeybee Act’’) (42 Stat. 833, chapter 301; 7

9 U.S.C. 281), is amended—

10 (A) in subsection (a)—

11 (i) by striking ‘‘, or’’ at the end of

12 paragraph (1) and inserting a semicolon;

13 (ii) by striking the period at the end

14 of paragraph (2) and inserting ‘‘; or’’; and

15 (iii) by adding at the end the follow16 ing new paragraph:

17 ‘‘(3) from Canada or Mexico, subject to such

18 terms and conditions as the Secretary of Agriculture

19 determines appropriate, if the Secretary determines

20 that the region of Canada or Mexico from which the

21 honeybees originated is, and is likely to remain, free

22 of diseases or parasites harmful to honeybees, and

23 undesirable species or subspecies of honeybees.’’; and

24 (B) in subsection (b)—
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1 (i) by inserting ‘‘(1)’’ after ‘‘imported

2 into the United States only from’’; and

3 (ii) by inserting before the period the

4 following: ‘‘, or (2) Canada or Mexico, if

5 the Secretary of Agriculture determines

6 that the region of Canada or Mexico from

7 which the imports originate is, and is likely

8 to remain, free of undesirable species or

9 subspecies of honeybees’’.

10 (e) POULTRY PRODUCTS INSPECTION ACT.—Section

11 17(d) of the Poultry Products Inspection Act (21 U.S.C.

12 466(d)) is amended—

13 (1) in paragraph (1), by inserting after ‘‘Not14 withstanding any other provision of law,’’ the follow15 ing: ‘‘except as provided in paragraph (2),’’;

16 (2) by redesignating paragraphs (2) and (3) as

17 paragraphs (3) and (4), respectively; and

18 (3) by inserting after paragraph (1) the follow19 ing new paragraph:

20 ‘‘(2)(A) Notwithstanding any other provision of law,

21 all poultry, or parts or products of poultry, capable of use

22 as human food offered for importation into the United

23 States from Canada and Mexico shall—

24 ‘‘(i) comply with paragraph (1); or
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1 ‘‘(ii)(I) be subject to inspection, sanitary, qual2 ity, species verification, and residue standards that

3 are equivalent to United States standards; and

4 ‘‘(II) have been processed in facilities and

5 under conditions that meet standards that are equiv6 alent to United States standards.

7 ‘‘(B) The Secretary may treat as equivalent to a

8 United States standard a standard of Canada or Mexico

9 described in subparagraph (A)(ii) if the exporting country

10 provides the Secretary with scientific evidence or other in11 formation, in accordance with risk assessment methodolo12 gies agreed to by the Secretary and the exporting country,

13 to demonstrate that the standard of the exporting country

14 achieves the level of protection that the Secretary consid15 ers appropriate.

16 ‘‘(C) The Secretary may—

17 ‘‘(i) determine, on a scientific basis, that the

18 standard of the exporting country does not achieve

19 the level of protection that the Secretary considers

20 appropriate; and

21 ‘‘(ii) provide the basis for the determination in

22 writing to the exporting country on request.’’.

23 (f) FEDERAL MEAT INSPECTION ACT.—Section

24 20(e) of the Federal Meat Inspection Act (21 U.S.C.

25 620(e)) is amended—
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1 (1) by striking ‘‘not be limited to—’’ and in2 serting ‘‘not be limited to the following:’’;

3 (2) by striking paragraph (1);

4 (3) by redesignating paragraphs (2) through

5 (6) as paragraphs (3) through (7), respectively;

6 (4) by inserting after ‘‘not be limited to the fol7 lowing:’’ (as amended by paragraph (1)) the follow8 ing new paragraphs:

9 ‘‘(1)(A) Subject to subparagraphs (B) and (C),

10 a certification by the Secretary that foreign plants

11 in Canada and Mexico that export carcasses or meat

12 or meat products referred to in subsection (a) have

13 complied with paragraph (2) or with requirements

14 that are equivalent to United States requirements

15 with regard to all inspection and building construc16 tion standards, and all other provisions of this Act

17 and regulations issued under this Act.

18 ‘‘(B) Subject to subparagraph (C), the Sec19 retary may treat as equivalent to a United States re20 quirement a requirement described in subparagraph

21 (A) if the exporting country provides the Secretary

22 with scientific evidence or other information, in ac23 cordance with risk assessment methodologies agreed

24 to by the Secretary and the exporting country, to

25 demonstrate that the requirement or standard of the
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1 exporting country achieves the level of protection

2 that the Secretary considers appropriate.

3 ‘‘(C) The Secretary may—

4 ‘‘(i) determine, on a scientific basis, that a

5 requirement of an exporting country does not

6 achieve the level of protection that the Sec7 retary considers appropriate; and

8 ‘‘(ii) provide the basis for the determina9 tion to the exporting country in writing on re10 quest.

11 ‘‘(2) A certification by the Secretary that, ex12 cept as provided in paragraph (1), foreign plants

13 that export carcasses or meat or meat products re14 ferred to in subsection (a) have complied with re15 quirements that are at least equal to all inspection

16 and building construction standards and all other

17 provisions of this Act and regulations issued under

18 this Act.’’;

19 (5) in paragraphs (3) through (7) (as redesig20 nated by paragraph (3)), by striking ‘‘the’’ the first

21 place it appears in each paragraph and inserting

22 ‘‘The’’;

23 (6) in paragraphs (3) through (5) (as so redes24 ignated), by striking the semicolon at the end of

25 each paragraph and inserting a period; and
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1 (7) in paragraph (6) (as so redesignated), by

2 striking ‘‘; and’’ at the end and inserting a period.

3 (g) PEANUT BUTTER AND PEANUT PASTE.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), all peanut butter and peanut paste in the

6 United States domestic market shall be processed

7 from peanuts that meet the quality standards estab8 lished for peanuts under Marketing Agreement No.

9 146.

10 (2) IMPORTS.—Peanut butter and peanut paste

11 imported into the United States shall comply with

12 paragraph (1) or with sanitary measures that

13 achieve at least the same level of sanitary protection.

14 (h) ANIMAL HEALTH BIOCONTAINMENT FACILITY.—

15 (1) GRANT FOR CONSTRUCTION.—The Sec16 retary of Agriculture shall make a grant to a land

17 grant college or university described in paragraph

18 (2) for the construction of a facility at the college

19 or university for the conduct of research in animal

20 health, disease-transmitting insects, and toxic chemi21 cals that requires the use of biocontainment facilities

22 and equipment. The facility to be constructed with

23 the grant shall be known as the ‘‘Southwest Re24 gional Animal Health Biocontainment Facility’’.
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1 (2) GRANT RECIPIENT DESCRIBED.—To be eli2 gible for the grant under paragraph (1), a land

3 grant college or university must be—

4 (A) located in a State adjacent to the

5 international border with Mexico; and

6 (B) determined by the Secretary of Agri7 culture to have an established program in ani8 mal health research and education and to have

9 a collaborative relationship with one or more

10 colleges of veterinary medicine or universities

11 located in Mexico.

12 (3) ACTIVITIES OF THE FACILITY.—The facility

13 constructed using the grant made under paragraph

14 (1) shall be used for conducting the following activi15 ties:

16 (A) The biocontainment facility shall offer

17 the ability to organize multidisciplinary inter18 national teams working on basic and applied re19 search on diagnostic method development and

20 disease control strategies, including develop21 ment of vaccines.

22 (B) The biocontainment facility shall sup23 port research that will improve the scientific

24 basis for regulatory activities, decreasing the
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1 need for new regulatory programs and enhanc2 ing international trade.

3 (C) The biocontainment facility shall allow

4 academic institutions, governmental agencies,

5 and the private sector to conduct research in

6 basic and applied research biology, epidemiol7 ogy, pathogenesis, host response, and diagnostic

8 methods, on disease agents that threaten the

9 livestock industries of the United States and

10 Mexico.

11 (D) The biocontainment facility may be

12 used to support research involving food safety,

13 toxicology, environmental pollutants,

14 radioisotopes, recombinant microorganisms, and

15 selected naturally resistant or transgenic ani16 mals.

17 (4) AUTHORIZATION OF APPROPRIATIONS.—

18 There are authorized to be appropriated for each fis19 cal year such sums as are necessary to carry out this

20 subsection.

21 (i) REPORTS ON INSPECTION OF IMPORTED MEAT,

22 POULTRY, OTHER FOODS, ANIMALS, AND PLANTS.—

23 (1) DEFINITIONS.—As used in this subsection:

24 (A) IMPORTS.—The term ‘‘imports’’ means

25 any meat, poultry, other food, animal, or plant
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1 that is imported into the United States in com2 mercially significant quantities.

3 (B) SECRETARY.—The term ‘‘Secretary’’

4 means the Secretary of Agriculture.

5 (2) IN GENERAL.—In consultation with rep6 resentatives of other appropriate agencies, the Sec7 retary shall prepare an annual report on the impact

8 of the Agreement on the inspection of imports.

9 (3) CONTENTS OF REPORTS.—The report re10 quired under this subsection shall, to the maximum

11 extent practicable, include a description of—

12 (A) the quantity or, with respect to the

13 Customs Service, the number of shipments, of

14 imports from a NAFTA country that are in15 spected at the borders of the United States with

16 Canada and Mexico during the prior year;

17 (B) any change in the level or types of in18 spections of imports in each NAFTA country

19 during the prior year;

20 (C) in any case in which the Secretary has

21 determined that the inspection system of an22 other NAFTA country is equivalent to the in23 spection system of the United States, the rea24 sons supporting the determination of the Sec25 retary;
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1 (D) the incidence of violations of inspec2 tion requirements by imports from NAFTA

3 countries during the prior year—

4 (i) at the borders of the United States

5 with Mexico or Canada; or

6 (ii) at the last point of inspection in

7 a NAFTA country prior to shipment to the

8 United States if the agency accepts inspec9 tion in that country;

10 (E) the incidence of violations of inspection

11 requirements of imports to the United States

12 from Mexico or Canada prior to the implemen13 tation of the Agreement;

14 (F) any additional cost associated with

15 maintaining an adequate inspection system of

16 imports as a result of the implementation of the

17 Agreement;

18 (G) any incidence of transshipment of im19 ports—

20 (i) that originate in a country other

21 than a NAFTA country;

22 (ii) that are shipped to the United

23 States through a NAFTA country during

24 the prior year; and
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1 (iii) that are incorrectly represented

2 by the importer to qualify for preferential

3 treatment under the Agreement;

4 (H) the quantity and results of any mon5 itoring by the United States of equivalent in6 spection systems of imports in other NAFTA

7 countries during the prior year;

8 (I) the use by other NAFTA countries of

9 sanitary and phytosanitary measures (as de10 fined in the Agreement) to limit exports of

11 United States meat, poultry, other foods, ani12 mals, and plants to the countries during the

13 prior year; and

14 (J) any other information the Secretary

15 determines to be appropriate.

16 (4) FREQUENCY OF REPORTS.—The Secretary

17 shall submit—

18 (A) the initial report required under this

19 subsection not later than January 31, 1995;

20 and

21 (B) an annual report required under this

22 subsection not later than 1 year after the date

23 of the submission of the initial report and the

24 end of each 1-year period thereafter through

25 calendar year 2004.
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1 (5) REPORT TO CONGRESS.—The Secretary

2 shall prepare and submit the report required under

3 this subsection to the Committee on Agriculture of

4 the House of Representatives and the Committee on

5 Agriculture, Nutrition, and Forestry of the Senate.

6 Subtitle F—Corporate Average

7 Fuel Economy

8 SEC. 371. CORPORATE AVERAGE FUEL ECONOMY.

9 (a) IN GENERAL.—Section 503(b)(2) of the Motor

10 Vehicle Information and Cost Savings Act (15 U.S.C.

11 2003(b)(2)) is amended by adding at the end the following

12 new subparagraph:

13 ‘‘(G)(i) In accordance with the schedule set out

14 in clause (ii), an automobile shall be considered do15 mestically manufactured in a model year if at least

16 75 percent of the cost to the manufacturer of the

17 automobile is attributable to value added in the

18 United States, Canada, or Mexico, unless the assem19 bly of the automobile is completed in Canada or

20 Mexico and the automobile is not imported into the

21 United States prior to the expiration of 30 days fol22 lowing the end of that model year.

23 ‘‘(ii) Clause (i) shall apply to all automobiles

24 manufactured by a manufacturer and sold in the
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1 United States, wherever assembled, in accordance

2 with the following schedule:

3 ‘‘(I) With respect to a manufacturer that

4 initiated the assembly of automobiles in Mexico

5 before model year 1992, the manufacturer may

6 elect, at any time between January 1, 1997,

7 and January 1, 2004, to have clause (i) apply

8 to all automobiles it manufactures, beginning

9 with the model year commencing after the date

10 of such election.

11 ‘‘(II) With respect to a manufacturer initi12 ating the assembly of automobiles in Mexico

13 after model year 1991, clause (i) shall apply to

14 all automobiles it manufactures, beginning with

15 the model year commencing after January 1,

16 1994, or the model year commencing after the

17 date that the manufacturer initiates the assem18 bly of automobiles in Mexico, whichever is later.

19 ‘‘(III) With respect to a manufacturer not

20 described by subclause (I) or (II) assembling

21 automobiles in the United States or Canada but

22 not in Mexico, the manufacturer may elect, at

23 any time between January 1, 1997, and Janu24 ary 1, 2004, to have clause (i) apply to all auto25 mobiles it manufactures, beginning with the
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1 model year commencing after the date of such

2 election, except that if such manufacturer initi3 ates the assembly of automobiles in Mexico be4 fore making such election, this subclause shall

5 not apply and the manufacturer shall be subject

6 to clause (II).

7 ‘‘(IV) With respect to a manufacturer not

8 assembling automobiles in the United States,

9 Canada, or Mexico, clause (i) shall apply to all

10 automobiles it manufactures, beginning with the

11 model year commencing after January 1, 1994.

12 ‘‘(V) With respect to a manufacturer au13 thorized to make an election under subclause

14 (I) or (III) which has not made that election

15 within the specified period, clause (i) shall

16 apply to all automobiles it manufactures, begin17 ning with the model year commencing after

18 January 1, 2004.

19 ‘‘(iii) The Secretary shall prescribe reasonable

20 procedures for elections under this subparagraph,

21 and the EPA Administrator may prescribe rules for

22 purposes of carrying out this subparagraph.’’.

23 (b) CONFORMING AMENDMENTS.—The first sentence

24 of section 503(b)(2)(E) of the Motor Vehicle Information
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1 and Cost Savings Act (15 U.S.C. 2003(b)(2)(E)) is

2 amended—

3 (1) by striking ‘‘An’’ and inserting ‘‘Except as

4 provided in subparagraph (G), an’’, and

5 (2) in the last sentence, by striking ‘‘this sub6 paragraph’’ and inserting ‘‘this subparagraph and

7 subparagraph (G)’’.

8 Subtitle G—Government

9 Procurement

10 SEC. 381. GOVERNMENT PROCUREMENT.

11 (a) IN GENERAL.—Section 301 of the Trade Agree12 ments Act of 1979 (19 U.S.C. 2511) is amended—

13 (1) in subsection (a) by striking ‘‘The Presi14 dent’’ and inserting ‘‘Subject to subsection (f) of

15 this section, the President’’;

16 (2) by inserting ‘‘or the North American Free

17 Trade Agreement’’ after ‘‘the Agreement’’ in para18 graph (1) of subsection (b); and

19 (3) by adding at the end the following new sub20 sections:

21 ‘‘(e) PROCUREMENT PROCEDURES BY CERTAIN FED22 ERAL AGENCIES.—Notwithstanding any other provision of

23 law, the President may direct any agency of the United

24 States listed in Annex 1001.1a–2 of the North American

25 Free Trade Agreement to procure eligible products in
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1 compliance with the procedural provisions of chapter 10

2 of such Agreement.

3 ‘‘(f) SMALL BUSINESS AND MINORITY PREF4 ERENCES.—The authority of the President under sub5 section (a) of this section to waive any law, regulation,

6 procedure, or practice regarding Government procurement

7 does not authorize the waiver of any small business or mi8 nority preference.’’.

9 (b) RECIPROCAL COMPETITIVE PROCUREMENT

10 PRACTICES.—Section 302(a) of such Act (19 U.S.C.

11 2512(a)) is amended by striking ‘‘would otherwise be eligi12 ble products’’ in paragraph (1) and inserting ‘‘are prod13 ucts covered under the Agreement for procurement by the

14 United States’’.

15 (c) DEFINITION OF ELIGIBLE PRODUCT.—Section

16 308(4)(A) of such Act (19 U.S.C. 2518(4)(A)) is amended

17 to read as follows:

18 ‘‘(A) IN GENERAL.—The term ‘eligible

19 product’ means, with respect to any foreign

20 country or instrumentality that is—

21 ‘‘(i) a party to the Agreement, a prod22 uct or service of that country or instru23 mentality which is covered under the

24 Agreement for procurement by the United

25 States; or
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1 ‘‘(ii) a party to the North American

2 Free Trade Agreement, a product or serv3 ice of that country or instrumentality

4 which is covered under the North Amer5 ican Free Trade Agreement for procure6 ment by the United States.’’.

7 (d) CONFORMING AMENDMENTS.—Section 401 of the

8 Rural Electrification Act of 1938 (7 U.S.C. 903 note) is

9 amended by inserting ‘‘, Mexico, or Canada’’ after ‘‘the

10 United States’’ each place it appears.

11 (e) EFFECTIVE DATE.—The provisions of this sub12 title take effect on the date the Agreement enters into

13 force with respect to the United States.
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1 TITLE IV—DISPUTE SETTLE2 MENT IN ANTIDUMPING AND

3 COUNTERVAILING DUTY

4 CASES

5 Subtitle A—Organizational, Admin6 istrative, and Procedural Provi7 sions Regarding the Implemen8 tation of Chapter 19 of the

9 Agreement

10 SEC. 401. REFERENCES IN SUBTITLE.

11 Any reference in this subtitle to an Annex, chapter,

12 or article shall be considered to be a reference to the re13 spective Annex, chapter, or article of the Agreement.

14 SEC. 402. ORGANIZATIONAL AND ADMINISTRATIVE PROVI15 SIONS.

16 (a) CRITERIA FOR SELECTION OF INDIVIDUALS TO

17 SERVE ON PANELS AND COMMITTEES.—

18 (1) IN GENERAL.—The selection of individuals

19 under this section for—

20 (A) placement on lists prepared by the

21 interagency group under subsection (c)(2)(B)(i)

22 and (ii);

23 (B) placement on preliminary candidate

24 lists under subsection (c)(3)(A);
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1 (C) placement on final candidate lists

2 under subsection (c)(4)(A);

3 (D) placement by the Trade Representative

4 on the rosters described in paragraph 1 of

5 Annex 1901.2 and paragraph 1 of Annex

6 1904.13; and

7 (E) appointment by the Trade Representa8 tive for service on the panels and committees

9 convened under chapter 19;

10 shall be made on the basis of the criteria provided

11 in paragraph 1 of Annex 1901.2 and paragraph 1 of

12 Annex 1904.13 and shall be made without regard to

13 political affiliation.

14 (2) ADDITIONAL CRITERIA FOR ROSTER PLACE15 MENTS AND APPOINTMENTS UNDER PARAGRAPH 1

16 OF ANNEX 1901.2.—Rosters described in paragraph 1

17 of Annex 1901.2 shall include, to the fullest extent

18 practicable, judges and former judges who meet the

19 criteria referred to in paragraph (1). The Trade

20 Representative shall, subject to subsection (b), ap21 point judges to binational panels convened under

22 chapter 19, extraordinary challenge committees con23 vened under chapter 19, and special committees es24 tablished under article 1905, where such judges

25 offer and are available to serve and such service is
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1 authorized by the chief judge of the court on which

2 they sit.

3 (b) SELECTION OF CERTAIN JUDGES TO SERVE ON

4 PANELS AND COMMITTEES.—

5 (1) APPLICABILITY.—This subsection applies

6 only with respect to the selection of individuals for

7 binational panels convened under chapter 19, ex8 traordinary challenge committees convened under

9 chapter 19, and special committees established

10 under article 1905, who are judges of courts created

11 under article III of the Constitution of the United

12 States.

13 (2) CONSULTATION WITH CHIEF JUDGES.—The

14 Trade Representative shall consult, from time to

15 time, with the chief judges of the Federal judicial

16 circuits regarding the interest in, and availability

17 for, participation in binational panels, extraordinary

18 challenge committees, and special committees, of

19 judges within their respective circuits. If the chief

20 judge of a Federal judicial circuit determines that it

21 is appropriate for one or more judges within that

22 circuit to be included on a roster described in sub23 section (a)(1)(D), the chief judge shall identify all

24 such judges for the Chief Justice of the United

25 States who may, upon his or her approval, submit
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1 the names of such judges to the Trade Representa2 tive. The Trade Representative shall include the

3 names of such judges on the roster.

4 (3) SUBMISSION OF LISTS TO CONGRESS.—The

5 Trade Representative shall submit to the Committee

6 on the Judiciary and the Committee on Ways and

7 Means of the House of Representatives and to the

8 Committee on Finance and the Committee on the

9 Judiciary of the Senate a list of all judges included

10 on a roster under paragraph (2). Such list shall be

11 submitted at the same time as the final candidate

12 lists are submitted under subsection (c)(4)(A) and

13 the final forms of amendments are submitted under

14 subsection (c)(4)(C)(iv).

15 (4) APPOINTMENT OF JUDGES TO PANELS OR

16 COMMITTEES.—At such time as the Trade Rep17 resentative proposes to appoint a judge described in

18 paragraph (1) to a binational panel, an extraor19 dinary challenge committee, or a special committee,

20 the Trade Representative shall consult with that

21 judge in order to ascertain whether the judge is

22 available for such appointment.

23 (c) SELECTION OF OTHER CANDIDATES.—

24 (1) APPLICABILITY.—This subsection applies

25 only with respect to the selection of individuals for
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1 binational panels convened under chapter 19, ex2 traordinary challenge committees convened under

3 chapter 19, and special committees established

4 under article 1905, other than those individuals to

5 whom subsection (b) applies.

6 (2) INTERAGENCY GROUP.—

7 (A) ESTABLISHMENT.—There is estab8 lished within the interagency organization es9 tablished under section 242 of the Trade Ex10 pansion Act of 1962 (19 U.S.C. 1872) an inter11 agency group which shall—

12 (i) be chaired by the Trade Represent13 ative; and

14 (ii) consist of such officers (or the

15 designees thereof) of the United States

16 Government as the Trade Representative

17 considers appropriate.

18 (B) FUNCTIONS.—The interagency group

19 established under subparagraph (A) shall, in a

20 manner consistent with chapter 19—

21 (i) prepare by January 3 of each cal22 endar year—

23 (I) a list of individuals who are

24 qualified to serve as members of bina-
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1 tional panels convened under chapter

2 19; and

3 (II) a list of individuals who are

4 qualified to serve on extraordinary

5 challenge committees convened under

6 chapter 19 and special committees es7 tablished under article 1905;

8 (ii) if the Trade Representative makes

9 a request under paragraph (4)(C)(i) with

10 respect to a final candidate list during any

11 calendar year, prepare by July 1 of such

12 calendar year a list of those individuals

13 who are qualified to be added to that final

14 candidate list;

15 (iii) exercise oversight of the adminis16 tration of the United States Section that is

17 authorized to be established under section

18 105; and

19 (iv) make recommendations to the

20 Trade Representative regarding the con21 vening of extraordinary challenge commit22 tees and special committees under chapter

23 19.

24 (3) PRELIMINARY CANDIDATE LISTS.—
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1 (A) IN GENERAL.—The Trade Representa2 tive shall select individuals from the respective

3 lists prepared by the interagency group under

4 paragraph (2)(B)(i) for placement on—

5 (i) a preliminary candidate list of indi6 viduals eligible to serve as members of bi7 national panels under Annex 1901.2; and

8 (ii) a preliminary candidate list of in9 dividuals eligible for selection as members

10 of extraordinary challenge committees

11 under Annex 1904.13 and special commit12 tees under article 1905.

13 (B) SUBMISSION OF LISTS TO CONGRES14 SIONAL COMMITTEES.—

15 (i) IN GENERAL.—No later than Jan16 uary 3 of each calendar year, the Trade

17 Representative shall submit to the Com18 mittee on Finance of the Senate and the

19 Committee on Ways and Means of the

20 House of Representatives (hereafter in this

21 section referred to as the ‘‘appropriate

22 Congressional Committees’’) the prelimi23 nary candidate lists of those individuals se24 lected by the Trade Representative under

25 subparagraph (A) to be candidates eligible
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1 to serve on panels or committees convened

2 pursuant to chapter 19 during the 1-year

3 period beginning on April 1 of such cal4 endar year.

5 (ii) ADDITIONAL INFORMATION.—At

6 the time the candidate lists are submitted

7 under clause (i), the Trade Representative

8 shall submit for each individual on the list

9 a statement of professional qualifications.

10 (C) CONSULTATION.—Upon submission of

11 the preliminary candidate lists under subpara12 graph (B) to the appropriate Congressional

13 Committees, the Trade Representative shall

14 consult with such Committees with regard to

15 the individuals included on the preliminary can16 didate lists.

17 (D) REVISION OF LISTS.—The Trade Rep18 resentative may add and delete individuals from

19 the preliminary candidate lists submitted under

20 subparagraph (B) after consultation with the

21 appropriate Congressional Committees regard22 ing the additions and deletions. The Trade Rep23 resentative shall provide to the appropriate

24 Congressional Committees written notice of any

25 addition or deletion of an individual from the
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1 preliminary candidate lists, along with the in2 formation described in subparagraph (B)(ii)

3 with respect to any proposed addition.

4 (4) FINAL CANDIDATE LISTS.—

5 (A) SUBMISSION OF LISTS TO CONGRES6 SIONAL COMMITTEES.—No later than March 31

7 of each calendar year, the Trade Representative

8 shall submit to the appropriate Congressional

9 Committees the final candidate lists of those in10 dividuals selected by the Trade Representative

11 to be candidates eligible to serve on panels and

12 committees convened under chapter 19 during

13 the 1-year period beginning on April 1 of such

14 calendar year. An individual may be included on

15 a final candidate list only if such individual was

16 included in the preliminary candidate list or if

17 written notice of the addition of such individual

18 to the preliminary candidate list was submitted

19 to the appropriate Congressional Committees at

20 least 15 days before the date on which that

21 final candidate list is submitted to such Com22 mittees under this subparagraph.

23 (B) FINALITY OF LISTS.—Except as pro24 vided in subparagraph (C), no additions may be

25 made to the final candidate lists after the final
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1 candidate lists are submitted to the appropriate

2 Congressional Committees under subparagraph

3 (A).

4 (C) AMENDMENT OF LISTS.—

5 (i) IN GENERAL.—If, after the Trade

6 Representative has submitted the final

7 candidate lists to the appropriate Congres8 sional Committees under subparagraph (A)

9 for a calendar year and before July 1 of

10 such calendar year, the Trade Representa11 tive determines that additional individuals

12 need to be added to a final candidate list,

13 the Trade Representative shall—

14 (I) request the interagency group

15 established under paragraph (2)(A) to

16 prepare a list of individuals who are

17 qualified to be added to such can18 didate list;

19 (II) select individuals from the

20 list prepared by the interagency group

21 under paragraph (2)(B)(ii) to be in22 cluded in a proposed amendment to

23 such final candidate list; and

24 (III) by no later than July 1 of

25 such calendar year, submit to the ap-
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1 propriate Congressional Committees

2 the proposed amendments to such

3 final candidate list developed by the

4 Trade Representative under subclause

5 (II), along with the information de6 scribed in paragraph (3)(B)(ii).

7 (ii) CONSULTATION WITH CONGRES8 SIONAL COMMITTEES.—Upon submission

9 of a proposed amendment under clause

10 (i)(III) to the appropriate Congressional

11 Committees, the Trade Representative

12 shall consult with the appropriate Congres13 sional Committees with regard to the indi14 viduals included in the proposed amend15 ment.

16 (iii) ADJUSTMENT OF PROPOSED

17 AMENDMENT.—The Trade Representative

18 may add and delete individuals from any

19 proposed amendment submitted under

20 clause (i)(III) after consulting with the ap21 propriate Congressional Committees with

22 regard to the additions and deletions. The

23 Trade Representative shall provide to the

24 appropriate Congressional Committees

25 written notice of any addition or deletion
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1 of an individual from the proposed amend2 ment.

3 (iv) FINAL AMENDMENT.—

4 (I) IN GENERAL.—If the Trade

5 Representative submits under clause

6 (i)(III) in any calendar year a pro7 posed amendment to a final candidate

8 list, the Trade Representative shall,

9 no later than September 30 of such

10 calendar year, submit to the appro11 priate Congressional Committees the

12 final form of such amendment. On

13 October 1 of such calendar year, such

14 amendment shall take effect and, sub15 ject to subclause (II), the individuals

16 included in the final form of such

17 amendment shall be added to the final

18 candidate list.

19 (II) INCLUSION OF INDIVID20 UALS.—An individual may be included

21 in the final form of an amendment

22 submitted under subclause (I) only if

23 such individual was included in the

24 proposed form of such amendment or

25 if written notice of the addition of
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1 such individual to the proposed form

2 of such amendment was submitted to

3 the appropriate Congressional Com4 mittees at least 15 days before the

5 date on which the final form of such

6 amendment is submitted to such Com7 mittees under subclause (I).

8 (III) ELIGIBILITY FOR SERV9 ICE.—Individuals added to a final

10 candidate list under subclause (I)

11 shall be eligible to serve on panels or

12 committees convened under chapter

13 19 during the 6-month period begin14 ning on October 1 of the calendar

15 year in which such addition occurs.

16 (IV) FINALITY OF AMEND17 MENT.—No additions may be made to

18 the final form of an amendment de19 scribed in subclause (I) after the final

20 form of such amendment is submitted

21 to the appropriate Congressional

22 Committees under subclause (I).

23 (5) TREATMENT OF RESPONSES.—For purposes

24 of applying section 1001 of title 18, United States

25 Code, the written or oral responses of individuals to
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1 inquiries of the interagency group established under

2 paragraph (2)(A) or of the Trade Representative re3 garding their personal and professional qualifica4 tions, and financial and other relevant interests, that

5 bear on their suitability for the placements and ap6 pointments described in subsection (a)(1), shall be

7 treated as matters within the jurisdiction of an

8 agency of the United States.

9 (d) SELECTION AND APPOINTMENT.—

10 (1) AUTHORITY OF TRADE REPRESENTATIVE.—

11 The Trade Representative is the only officer of the

12 United States Government authorized to act on be13 half of the United States Government in making any

14 selection or appointment of an individual to—

15 (A) the rosters described in paragraph 1 of

16 Annex 1901.2 and paragraph 1 of Annex

17 1904.13; or

18 (B) the panels or committees convened

19 under chapter 19;

20 that is to be made solely or jointly by the United

21 States Government under the terms of the Agree22 ment.

23 (2) RESTRICTIONS ON SELECTION AND AP24 POINTMENT.—Except as provided in paragraph

25 (3)—
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1 (A) the Trade Representative may—

2 (i) select an individual for placement

3 on the rosters described in paragraph 1 of

4 Annex 1901.2 and paragraph 1 of Annex

5 1904.13 during the 1-year period begin6 ning on April 1 of any calendar year;

7 (ii) appoint an individual to serve as

8 one of those members of any panel or com9 mittee convened under chapter 19 during

10 such 1-year period who, under the terms of

11 the Agreement, are to be appointed solely

12 by the United States Government; or

13 (iii) act to make a joint appointment

14 with the Government of a NAFTA coun15 try, under the terms of the Agreement, of

16 any individual who is a citizen or national

17 of the United States to serve as any other

18 member of such a panel or committee;

19 only if such individual is on the appropriate

20 final candidate list that was submitted to the

21 appropriate Congressional Committees under

22 subsection (c)(4)(A) during such calendar year

23 or on such list as it may be amended under

24 subsection (c)(4)(C)(iv)(I), or on the list sub25 mitted under subsection (b)(3) to the congres-
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1 sional committees referred to in such sub2 section; and

3 (B) no individual may—

4 (i) be selected by the United States

5 Government for placement on the rosters

6 described in paragraph 1 of Annex 1901.2

7 and paragraph 1 of Annex 1904.13; or

8 (ii) be appointed solely or jointly by

9 the United States Government to serve as

10 a member of a panel or committee con11 vened under chapter 19;

12 during the 1-year period beginning on April 1

13 of any calendar year for which the Trade Rep14 resentative has not met the requirements of

15 subsection (a), and of subsection (b) or (c) (as

16 the case may be).

17 (3) EXCEPTIONS.—Notwithstanding subsection

18 (c)(3) (other than subparagraph (B)), (c)(4), or

19 paragraph (2)(A) of this subsection, individuals in20 cluded on the preliminary candidate lists submitted

21 to the appropriate Congressional Committees under

22 subsection (c)(3)(B) may—

23 (A) be selected by the Trade Representa24 tive for placement on the rosters described in

25 paragraph 1 of Annex 1901.2 and paragraph 1
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1 of Annex 1904.13 during the 3-month period

2 beginning on the date on which the Agreement

3 enters into force with respect to the United

4 States; and

5 (B) be appointed solely or jointly by the

6 Trade Representative under the terms of the

7 Agreement to serve as members of panels or

8 committees that are convened under chapter 19

9 during such 3-month period.

10 (e) TRANSITION.—If the Agreement enters into force

11 between the United States and a NAFTA country after

12 January 3, 1994, the provisions of subsection (c) shall be

13 applied with respect to the calendar year in which such

14 entering into force occurs—

15 (1) by substituting ‘‘the date that is 30 days

16 after the date on which the Agreement enters into

17 force with respect to the United States’’ for ‘‘Janu18 ary 3 of each calendar year’’ in subsections

19 (c)(2)(B)(i) and (c)(3)(B)(i); and

20 (2) by substituting ‘‘the date that is 3 months

21 after the date on which the Agreement enters into

22 force with respect to the United States’’ for ‘‘March

23 31 of each calendar year’’ in subsection (c)(4)(A).

24 (f) IMMUNITY.—With the exception of acts described

25 in section 777(f)(3) of the Tariff Act of 1930 (19 U.S.C.
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1 1677f(f)(3)), individuals serving on panels or committees

2 convened pursuant to chapter 19, and individuals des3 ignated to assist the individuals serving on such panels

4 or committees, shall be immune from suit and legal proc5 ess relating to acts performed by such individuals in their

6 official capacity and within the scope of their functions

7 as such panelists or committee members or assistants to

8 such panelists or committee members.

9 (g) REGULATIONS.—The administering authority

10 under title VII of the Tariff Act of 1930, the International

11 Trade Commission, and the Trade Representative may

12 promulgate such regulations as are necessary or appro13 priate to carry out actions in order to implement their re14 spective responsibilities under chapter 19. Initial regula15 tions to carry out such functions shall be issued before

16 the date on which the Agreement enters into force with

17 respect to the United States.

18 (h) REPORT TO CONGRESS.—At such time as the

19 final candidate lists are submitted under subsection

20 (c)(4)(A) and the final forms of amendments are submit21 ted under subsection (c)(4)(C)(iv), the Trade Representa22 tive shall submit to the Committee on the Judiciary and

23 the Committee on Ways and Means of the House of Rep24 resentatives, and to the Committee on Finance and the

25 Committee on the Judiciary of the Senate, a report re-
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1 garding the efforts made to secure the participation of

2 judges and former judges on binational panels, extraor3 dinary challenge committees, and special committees es4 tablished under chapter 19.

5 SEC. 403. TESTIMONY AND PRODUCTION OF PAPERS IN EX6 TRAORDINARY CHALLENGES.

7 (a) AUTHORITY OF EXTRAORDINARY CHALLENGE

8 COMMITTEE TO OBTAIN INFORMATION.—If an extraor9 dinary challenge committee (hereafter in this section re10 ferred to as the ‘‘committee’’) is convened under para11 graph 13 of article 1904, and the allegations before the

12 committee include a matter referred to in paragraph

13 13(a)(i) of article 1904, for the purposes of carrying out

14 its functions and duties under Annex 1904.13, the com15 mittee—

16 (1) shall have access to, and the right to copy,

17 any document, paper, or record pertinent to the sub18 ject matter under consideration, in the possession of

19 any individual, partnership, corporation, association,

20 organization, or other entity;

21 (2) may summon witnesses, take testimony, and

22 administer oaths;

23 (3) may require any individual, partnership,

24 corporation, association, organization, or other entity
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1 to produce documents, books, or records relating to

2 the matter in question; and

3 (4) may require any individual, partnership,

4 corporation, association, organization, or other entity

5 to furnish in writing, in such detail and in such form

6 as the committee may prescribe, information in its

7 possession pertaining to the matter.

8 Any member of the committee may sign subpoenas, and

9 members of the committee, when authorized by the com10 mittee, may administer oaths and affirmations, examine

11 witnesses, take testimony, and receive evidence.

12 (b) WITNESSES AND EVIDENCE.—The attendance of

13 witnesses who are authorized to be summoned, and the

14 production of documentary evidence authorized to be or15 dered, under subsection (a) may be required from any

16 place in the United States at any designated place of hear17 ing. In the case of disobedience to a subpoena authorized

18 under subsection (a), the committee may request the At19 torney General of the United States to invoke the aid of

20 any district or territorial court of the United States in

21 requiring the attendance and testimony of witnesses and

22 the production of documentary evidence. Such court, with23 in the jurisdiction of which such inquiry is carried on,

24 may, in case of contumacy or refusal to obey a subpoena

25 issued to any individual, partnership, corporation, associa-
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1 tion, organization, or other entity, issue an order requiring

2 such individual or entity to appear before the committee,

3 or to produce documentary evidence if so ordered or to

4 give evidence concerning the matter in question. Any fail5 ure to obey such order of the court may be punished by

6 such court as a contempt thereof.

7 (c) MANDAMUS.—Any court referred to in subsection

8 (b) shall have jurisdiction to issue writs of mandamus

9 commanding compliance with the provisions of this section

10 or any order of the committee made in pursuance thereof.

11 (d) DEPOSITIONS.—The committee may order testi12 mony to be taken by deposition at any stage of the com13 mittee review. Such deposition may be taken before any

14 person designated by the committee and having power to

15 administer oaths. Such testimony shall be reduced to writ16 ing by the person taking the deposition, or under the di17 rection of such person, and shall then be subscribed by

18 the deponent. Any individual, partnership, corporation, as19 sociation, organization, or other entity may be compelled

20 to appear and be deposed and to produce documentary evi21 dence in the same manner as witnesses may be compelled

22 to appear and testify and produce documentary evidence

23 before the committee, as provided in this section.
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1 SEC. 404. REQUESTS FOR REVIEW OF DETERMINATIONS BY

2 COMPETENT INVESTIGATING AUTHORITIES

3 OF NAFTA COUNTRIES.

4 (a) DEFINITIONS.—As used in this section:

5 (1) COMPETENT INVESTIGATING AUTHORITY.—

6 The term ‘‘competent investigating authority’’

7 means the competent investigating authority, as de8 fined in article 1911, of a NAFTA country.

9 (2) UNITED STATES SECRETARY.—The term

10 ‘‘United States Secretary’’ means that officer of the

11 United States referred to in article 1908.

12 (b) REQUESTS FOR REVIEW BY THE UNITED

13 STATES.—In the case of a final determination of a com14 petent investigating authority, requests by the United

15 States for binational panel review of such determination

16 under article 1904 shall be made by the United States

17 Secretary.

18 (c) REQUESTS FOR REVIEW BY A PERSON.—In the

19 case of a final determination of a competent investigating

20 authority, a person, within the meaning of paragraph 5

21 of article 1904, may request a binational panel review of

22 such determination by filing such a request with the

23 United States Secretary within the time limit provided for

24 in paragraph 4 of article 1904. The receipt of such request

25 by the United States Secretary shall be deemed to be a

26 request for binational panel review within the meaning of
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1 article 1904. The request for such panel review shall be

2 without prejudice to any challenge before a binational

3 panel of the basis for a particular request for review.

4 (d) SERVICE OF REQUEST FOR REVIEW.—Whenever

5 binational panel review of a final determination made by

6 a competent investigating authority is requested under

7 this section, the United States Secretary shall serve a copy

8 of the request on all persons who would otherwise be enti9 tled under the law of the importing country to commence

10 proceedings for judicial review of the determination.

11 SEC. 405. RULES OF PROCEDURE FOR PANELS AND COM12 MITTEES.

13 (a) RULES OF PROCEDURE FOR BINATIONAL PAN14 ELS.—The administering authority shall prescribe rules,

15 negotiated in accordance with paragraph 14 of article

16 1904, governing, with respect to binational panel re17 views—

18 (1) requests for such reviews, complaints, other

19 pleadings, and other papers;

20 (2) the amendment, filing, and service of such

21 pleadings and papers;

22 (3) the joinder, suspension, and termination of

23 such reviews; and

24 (4) other appropriate procedural matters.
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1 (b) RULES OF PROCEDURE FOR EXTRAORDINARY

2 CHALLENGE COMMITTEES.—The administering authority

3 shall prescribe rules, negotiated in accordance with para4 graph 2 of Annex 1904.13, governing the procedures for

5 reviews by extraordinary challenge committees.

6 (c) RULES OF PROCEDURE FOR SAFEGUARDING THE

7 PANEL REVIEW SYSTEM.—The administering authority

8 shall prescribe rules, negotiated in accordance with Annex

9 1905.6, governing the procedures for special committees

10 described in such Annex.

11 (d) PUBLICATION OF RULES.—The rules prescribed

12 under subsections (a), (b), and (c) shall be published in

13 the Federal Register.

14 (e) ADMINISTERING AUTHORITY.—As used in this

15 section, the term ‘‘administering authority’’ has the mean16 ing given such term in section 771(1) of the Tariff Act

17 of 1930 (19 U.S.C. 1677(1)).

18 SEC. 406. SUBSIDY NEGOTIATIONS.

19 In the case of any trade agreement which may be en20 tered into by the President with a NAFTA country, the

21 negotiating objectives of the United States with respect

22 to subsidies shall include—

23 (1) achievement of increased discipline on do24 mestic subsidies provided by a foreign government,

25 including—
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1 (A) the provision of capital, loans, or loan

2 guarantees on terms inconsistent with commer3 cial considerations;

4 (B) the provision of goods or services at

5 preferential rates;

6 (C) the granting of funds or forgiveness of

7 debt to cover operating losses sustained by a

8 specific industry; and

9 (D) the assumption of any costs or ex10 penses of manufacture, production, or distribu11 tion;

12 (2) achievement of increased discipline on ex13 port subsidies provided by a foreign government,

14 particularly with respect to agricultural products;

15 and

16 (3) maintenance of effective remedies against

17 subsidized imports, including, where appropriate,

18 countervailing duties.

19 SEC. 407. IDENTIFICATION OF INDUSTRIES FACING SUB20 SIDIZED IMPORTS.

21 (a) PETITIONS.—Any entity, including a trade asso22 ciation, firm, certified or recognized union, or group of

23 workers, that is representative of a United States industry

24 and has reason to believe—

25 (1) that—
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1 (A) as a result of implementation of provi2 sions of the Agreement, the industry is likely to

3 face increased competition from subsidized im4 ports, from a NAFTA country, with which it di5 rectly competes; or

6 (B) the industry is likely to face increased

7 competition from subsidized imports with which

8 it directly competes from any other country des9 ignated by the President, following consulta10 tions with the Congress, as benefiting from a

11 reduction of tariffs or other trade barriers

12 under a trade agreement that enters into force

13 with respect to the United States after January

14 1, 1994; and

15 (2) that the industry is likely to experience a

16 deterioration of its competitive position before more

17 effective rules and disciplines relating to the use of

18 government subsidies have been developed with re19 spect to the country concerned;

20 may file with the Trade Representative a petition that

21 such industry be identified under this section.

22 (b) IDENTIFICATION OF INDUSTRY.—Within 90 days

23 after receipt of a petition under subsection (a), the Trade

24 Representative, in consultation with the Secretary of Com25 merce, shall decide whether to identify the industry on the
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1 basis that there is a reasonable likelihood that the industry

2 may face both the subsidization described in subsection

3 (a)(1) and the deterioration described in subsection (a)(2).

4 (c) ACTION AFTER IDENTIFICATION.—At the request

5 of an entity that is representative of an industry identified

6 under subsection (b), the Trade Representative shall—

7 (1) compile and make available to the industry

8 information under section 308 of the Trade Act of

9 1974;

10 (2) recommend to the President that an inves11 tigation by the International Trade Commission be

12 requested under section 332 of the Tariff Act of

13 1930; or

14 (3) take actions described in both paragraphs

15 (1) and (2).

16 The industry may request the Trade Representative to

17 take appropriate action to update (as often as annually)

18 any information obtained under paragraph (1) or (2), or

19 both, as the case may be, until an agreement on more ef20 fective rules and disciplines relating to government sub21 sidies is reached between the United States and the

22 NAFTA countries.

23 (d) INITIATION OF ACTION UNDER OTHER LAW.—

24 (1) IN GENERAL.—The Trade Representative

25 and the Secretary of Commerce shall review infor-
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1 mation obtained under subsection (c) and consult

2 with the industry identified under subsection (b)

3 with a view to deciding whether any action is appro4 priate—

5 (A) under section 301 of the Trade Act of

6 1974, including the initiation of an investiga7 tion under section 302(c) of that Act (in the

8 case of the Trade Representative); or

9 (B) under subtitle A of title VII of the

10 Tariff Act of 1930, including the initiation of

11 an investigation under section 702(a) of that

12 Act (in the case of the Secretary of Commerce).

13 (2) CRITERIA FOR INITIATION.—In determining

14 whether to initiate any investigation under section

15 301 of the Trade Act of 1974 or any other trade

16 law, other than title VII of the Tariff Act of 1930,

17 the Trade Representative, after consultation with

18 the Secretary of Commerce—

19 (A) shall seek the advice of the advisory

20 committees established under section 135 of the

21 Trade Act of 1974;

22 (B) shall consult with the Committee on

23 Finance of the Senate and the Committee on

24 Ways and Means of the House of Representa25 tives;
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1 (C) shall coordinate with the interagency

2 organization established under section 242 of

3 the Trade Expansion Act of 1962; and

4 (D) may ask the President to request ad5 vice from the International Trade Commission.

6 (3) TITLE III ACTIONS.—In the event an inves7 tigation is initiated under section 302(c) of the

8 Trade Act of 1974 as a result of a review under this

9 subsection and the Trade Representative, following

10 such investigation (including any applicable dispute

11 settlement proceedings under the Agreement or any

12 other trade agreement), determines to take action

13 under section 301(a) of such Act, the Trade Rep14 resentative shall give preference to actions that most

15 directly affect the products that benefit from govern16 mental subsidies and were the subject of the inves17 tigation, unless there are no significant imports of

18 such products or the Trade Representative otherwise

19 determines that application of the action to other

20 products would be more effective.

21 (e) EFFECT OF DECISIONS.—Any decision, whether

22 positive or negative, or any action by the Trade Represent23 ative or the Secretary of Commerce under this section

24 shall not in any way—
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1 (1) prejudice the right of any industry to file a

2 petition under any trade law;

3 (2) prejudice, affect, or substitute for, any pro4 ceeding, investigation, determination, or action by

5 the Secretary of Commerce, the International Trade

6 Commission, or the Trade Representative pursuant

7 to such a petition, or

8 (3) prejudice, affect, substitute for, or obviate

9 any proceeding, investigation, or determination

10 under section 301 of the Trade Act of 1974, title

11 VII of the Tariff Act of 1930, or any other trade

12 law.

13 (f) STANDING.—Nothing in this section may be con14 strued to alter in any manner the requirements in effect

15 before the date of the enactment of this Act for standing

16 under any law of the United States or to add any addi17 tional requirements for standing under any law of the

18 United States.

19 SEC. 408. TREATMENT OF AMENDMENTS TO ANTIDUMPING

20 AND COUNTERVAILING DUTY LAW.

21 Any amendment enacted after the Agreement enters

22 into force with respect to the United States that is made

23 to—

24 (1) section 303 or title VII of the Tariff Act of

25 1930, or any successor statute, or
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1 (2) any other statute which—

2 (A) provides for judicial review of final de3 terminations under such section, title, or suc4 cessor statute, or

5 (B) indicates the standard of review to be

6 applied,

7 shall apply to goods from a NAFTA country only to the

8 extent specified in the amendment.

9 Subtitle B—Conforming

10 Amendments and Provisions

11 SEC. 411. JUDICIAL REVIEW IN ANTIDUMPING DUTY AND

12 COUNTERVAILING DUTY CASES.

13 Section 516A of the Tariff Act of 1930 (19 U.S.C.

14 1516a) is amended as follows:

15 (1) Subsection (a)(5) (relating to time limits for

16 commencing review) is amended to read as follows:

17 ‘‘(5) TIME LIMITS IN CASES INVOLVING MER18 CHANDISE FROM FREE TRADE AREA COUNTRIES.—

19 Notwithstanding any other provision of this sub20 section, in the case of a determination to which the

21 provisions of subsection (g) apply, an action under

22 this subsection may not be commenced, and the time

23 limits for commencing an action under this sub24 section shall not begin to run, until the day specified

25 in whichever of the following subparagraphs applies:
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1 ‘‘(A) For a determination described in

2 paragraph (1)(B) or clause (i), (ii) or (iii) of

3 paragraph (2)(B), the 31st day after the date

4 on which notice of the determination is pub5 lished in the Federal Register.

6 ‘‘(B) For a determination described in

7 clause (vi) of paragraph (2)(B), the 31st day

8 after the date on which the government of the

9 relevant FTA country receives notice of the de10 termination.

11 ‘‘(C) For a determination with respect to

12 which binational panel review has commenced

13 in accordance with subsection (g)(8), the day

14 after the date as of which—

15 ‘‘(i) the binational panel has dismissed

16 binational panel review of the determina17 tion for lack of jurisdiction, and

18 ‘‘(ii) any interested party seeking re19 view of the determination under paragraph

20 (1), (2), or (3) of this subsection has pro21 vided timely notice under subsection

22 (g)(3)(B).

23 If such an interested party files a summons and

24 complaint under this subsection after dismissal

25 by the binational panel, and if a request for an
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1 extraordinary challenge committee is made with

2 respect to the decision by the binational panel

3 to dismiss—

4 ‘‘(I) judicial review under this sub5 section shall be stayed during consider6 ation by the committee of the request, and

7 ‘‘(II) the United States Court of

8 International Trade shall dismiss the ac9 tion if the committee vacates or remands

10 the binational panel decision to dismiss.

11 ‘‘(D) For a determination for which review

12 by the United States Court of International

13 Trade is provided for—

14 ‘‘(i) under subsection (g)(12)(B), the

15 day after the date of publication in the

16 Federal Register of notice that article

17 1904 of the NAFTA has been suspended,

18 or

19 ‘‘(ii) under subsection (g)(12)(D), the

20 day after the date that notice of settlement

21 is published in the Federal Register.’’.

22 (2) Subsection (b)(3) (relating to the standards

23 of review) is amended—

24 (A) by inserting ‘‘NAFTA OR’’ after ‘‘DECI25 SIONS BY’’ in the heading; and
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1 (B) by inserting ‘‘of the NAFTA or’’ after

2 ‘‘article 1904’’.

3 (3) Subsection (f) (relating to definitions) is

4 amended—

5 (A) by amending paragraphs (6) and (7)

6 to read as follows:

7 ‘‘(6) UNITED STATES SECRETARY.—The term

8 ‘United States Secretary’ means—

9 ‘‘(A) the secretary for the United States

10 Section referred to in article 1908 of the

11 NAFTA, and

12 ‘‘(B) the secretary of the United States

13 Section provided for in article 1909 of the

14 Agreement.

15 ‘‘(7) RELEVANT FTA SECRETARY.—The term

16 ‘relevant FTA Secretary’ means the Secretary—

17 ‘‘(A) referred to in article 1908 of the

18 NAFTA, or

19 ‘‘(B) provided for in paragraph 5 of article

20 1909 of the Agreement,

21 of the relevant FTA country.’’; and

22 (B) by adding at the end the following new

23 paragraphs:

24 ‘‘(8) NAFTA.—The term ‘NAFTA’ means the

25 North American Free Trade Agreement.
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1 ‘‘(9) RELEVANT FTA COUNTRY.—The term ‘rel2 evant FTA country’ means the free trade area coun3 try to which an antidumping or countervailing duty

4 proceeding pertains.

5 ‘‘(10) FREE TRADE AREA COUNTRY.—The term

6 ‘free trade area country’ means the following:

7 ‘‘(A) Canada for such time as the NAFTA

8 is in force with respect to, and the United

9 States applies the NAFTA to, Canada.

10 ‘‘(B) Mexico for such time as the NAFTA

11 is in force with respect to, and the United

12 States applies the NAFTA to, Mexico.

13 ‘‘(C) Canada for such time as—

14 ‘‘(i) it is not a free trade area country

15 under subparagraph (A); and

16 ‘‘(ii) the Agreement is in force with

17 respect to, and the United States applies

18 the Agreement to, Canada.’’.

19 (4) Subsection (g) (relating to review of coun20 tervailing and antidumping duty determinations) is

21 amended as follows:

22 (A) The subsection heading is amended by

23 striking out ‘‘CANADIAN MERCHANDISE’’ and

24 inserting ‘‘FREE TRADE AREA COUNTRY MER25 CHANDISE’’.
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1 (B) Paragraph (1) is amended by striking

2 out ‘‘Canadian merchandise’’ and inserting

3 ‘‘free trade area country merchandise’’.

4 (C) Paragraph (2) is amended by inserting

5 ‘‘of the NAFTA or’’ after ‘‘article 1904’’.

6 (D) Paragraph (3)(A) is amended—

7 (i) by striking out ‘‘nor Canada’’ and

8 inserting ‘‘nor the relevant FTA country’’

9 in each of clauses (i) and (ii);

10 (ii) by inserting ‘‘of the NAFTA or’’

11 before ‘‘of the Agreement’’ in each of

12 clauses (i) and (iii);

13 (iii) by striking out ‘‘or’’ at the end of

14 clause (iii);

15 (iv) by amending clause (iv)—

16 (I) by striking out ‘‘under para17 graph (2)(A)’’; and

18 (II) by striking out the period

19 and inserting a comma; and

20 (v) by adding at the end of subpara21 graph (A) the following:

22 ‘‘(v) a determination as to which bina23 tional panel review has terminated pursu24 ant to paragraph 12 of article 1905 of the

25 NAFTA, or
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1 ‘‘(vi) a determination as to which ex2 traordinary challenge committee review has

3 terminated pursuant to paragraph 12 of

4 article 1905 of the NAFTA.’’.

5 (E) The first and second sentences of

6 paragraph (3)(B) are amended to read as fol7 lows: ‘‘A determination described in subpara8 graph (A)(i) or (iv) is reviewable under sub9 section (a) only if the party seeking to com10 mence review has provided timely notice of its

11 intent to commence such review to—

12 ‘‘(i) the United States Secretary and

13 the relevant FTA Secretary;

14 ‘‘(ii) all interested parties who were

15 parties to the proceeding in connection

16 with which the matter arises; and

17 ‘‘(iii) the administering authority or

18 the Commission, as appropriate.

19 Such notice is timely provided if the notice is

20 delivered no later than the date that is 20 days

21 after the date described in subparagraph (A) or

22 (B) of subsection (a)(5) that is applicable to

23 such determination, except that, if the time for

24 requesting binational panel review is suspended

25 under paragraph (8)(A)(ii) of this subsection,
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1 any unexpired time for providing notice of in2 tent to commence judicial review shall, during

3 the pendency of any such suspension, also be

4 suspended.’’.

5 (F) Paragraph (4)(A) is amended—

6 (i) in the first sentence—

7 (I) by inserting ‘‘the North

8 American Free Trade Agreement Im9 plementation Act implementing the bi10 national dispute settlement system

11 under chapter 19 of the NAFTA, or’’

12 after ‘‘or amendment made by,’’;

13 (II) by inserting a comma before

14 ‘‘violates’’;

15 (III) by inserting ‘‘only’’ after

16 ‘‘may be brought’’; and

17 (IV) by inserting ‘‘, which shall

18 have jurisdiction of such action’’ after

19 ‘‘Circuit’’; and

20 (ii) by striking the last sentence.

21 (G) Paragraph (5) is amended—

22 (i) by inserting ‘‘of the NAFTA or’’

23 after ‘‘article 1904’’ in each of subpara24 graphs (A), (B), and (C)(i);
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1 (ii) by striking out ‘‘, the Canadian

2 Secretary,’’ in subparagraph (C)(ii) and in3 serting ‘‘, the relevant FTA Secretary,’’;

4 and

5 (iii) by inserting ‘‘of the NAFTA or’’

6 after ‘‘chapter 19’’ in subparagraph

7 (C)(iii).

8 (H) Paragraph (6) is amended by inserting

9 ‘‘of the NAFTA or’’ after ‘‘article 1904’’.

10 (I) Paragraph (7) is amended—

11 (i) by inserting ‘‘OF THE NAFTA OR

12 THE AGREEMENT’’ before the period in the

13 paragraph heading;

14 (ii) by striking out ‘‘IN GENERAL.—’’

15 in the heading to subparagraph (A) and in16 serting ‘‘ACTION UPON REMAND.—’’; and

17 (iii) by inserting ‘‘the NAFTA or’’ be18 fore ‘‘the Agreement’’ in subparagraph

19 (A).

20 (J) Paragraph (8)(A) is amended—

21 (i) by inserting ‘‘(i) GENERAL

22 RULE.—’’ before ‘‘An interested party’’;

23 (ii) by inserting ‘‘of the NAFTA or’’

24 after ‘‘article 1904(4)’’;
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1 (iii) by indenting the text so as to

2 align it with new clause (ii) (as added by

3 clause (iv) of this subparagraph); and

4 (iv) by adding at the end the following

5 new clause:

6 ‘‘(ii) SUSPENSION OF TIME TO RE7 QUEST BINATIONAL PANEL REVIEW UNDER

8 THE NAFTA.—Notwithstanding clause (i),

9 the time for requesting binational panel re10 view shall be suspended during the pend11 ency of any stay of binational panel review

12 that is issued pursuant to paragraph 11(a)

13 of article 1905 of the NAFTA.’’.

14 (K) Paragraph (8)(B)(ii) is amended by

15 striking out ‘‘Canadian Secretary,’’ and insert16 ing ‘‘relevant FTA Secretary,’’.

17 (L) Paragraph (8)(C) is amended by strik18 ing out ‘‘under article 1904 of the Agreement

19 of a determination’’ and inserting ‘‘of a deter20 mination under article 1904 of the NAFTA or

21 the Agreement’’.

22 (M) Paragraph (9) is amended by inserting

23 ‘‘of the NAFTA or’’ after ‘‘chapter 19’’.

24 (N) Paragraph (10) is amended by striking

25 out ‘‘Government of Canada’’ and all that fol-
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1 lows thereafter and inserting ‘‘Government of

2 the relevant FTA country received notice of the

3 determination under paragraph 4 of article

4 1904 of the NAFTA or the Agreement.’’.

5 (O) The following new paragraphs are

6 added at the end:

7 ‘‘(11) SUSPENSION AND TERMINATION OF SUS8 PENSION OF ARTICLE 1904 OF THE NAFTA.—

9 ‘‘(A) SUSPENSION OF ARTICLE 1904.—If a

10 special committee established under article

11 1905 of the NAFTA issues an affirmative find12 ing, the Trade Representative may, in accord13 ance with paragraph 8(a) or 9, as appropriate,

14 of article 1905 of the NAFTA, suspend the op15 eration of article 1904 of the NAFTA.

16 ‘‘(B) TERMINATION OF SUSPENSION OF

17 ARTICLE 1904.—If a special committee is recon18 vened and makes an affirmative determination

19 described in paragraph 10(b) of article 1905 of

20 the NAFTA, any suspension of the operation of

21 article 1904 of the NAFTA shall terminate.

22 ‘‘(12) JUDICIAL REVIEW UPON TERMINATION

23 OF BINATIONAL PANEL OR COMMITTEE REVIEW

24 UNDER THE NAFTA.—
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1 ‘‘(A) NOTICE OF SUSPENSION OR TERMI2 NATION OF SUSPENSION OF ARTICLE 1904.—

3 ‘‘(i) Upon notification by the Trade

4 Representative or the Government of a

5 country described in subsection (f)(10)(A)

6 or (B) that the operation of article 1904 of

7 the NAFTA has been suspended in accord8 ance with paragraph 8(a) or 9 of article

9 1905 of the NAFTA, the United States

10 Secretary shall publish in the Federal Reg11 ister a notice of suspension of article 1904

12 of the NAFTA.

13 ‘‘(ii) Upon notification by the Trade

14 Representative or the Government of a

15 country described in subsection (f)(10)(A)

16 or (B) that the suspension of the operation

17 of article 1904 of the NAFTA is termi18 nated in accordance with paragraph 10 of

19 article 1905 of the NAFTA, the United

20 States Secretary shall publish in the Fed21 eral Register a notice of termination of

22 suspension of article 1904 of the NAFTA.

23 ‘‘(B) TRANSFER OF FINAL DETERMINA24 TIONS FOR JUDICIAL REVIEW UPON SUSPEN25 SION OF ARTICLE 1904.—If the operation of ar-
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1 ticle 1904 of the NAFTA is suspended in ac2 cordance with paragraph 8(a) or 9 of article

3 1905 of the NAFTA—

4 ‘‘(i) upon the request of an authorized

5 person described in subparagraph (C), any

6 final determination that is the subject of a

7 binational panel review or an extraordinary

8 challenge committee review shall be trans9 ferred to the United States Court of Inter10 national Trade (in accordance with rules

11 issued by the Court) for review under sub12 section (a); or

13 ‘‘(ii) in a case in which—

14 ‘‘(I) a binational panel review

15 was completed fewer than 30 days be16 fore the suspension, and

17 ‘‘(II) extraordinary challenge

18 committee review has not been re19 quested,

20 upon the request of an authorized person

21 described in subparagraph (C) which is

22 made within 60 days after the completion

23 of the binational panel review, the final de24 termination that was the subject of the bi25 national panel review shall be transferred
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1 to the United States Court of International

2 Trade (in accordance with rules issued by

3 the Court) for review under subsection (a).

4 ‘‘(C) PERSONS AUTHORIZED TO REQUEST

5 TRANSFER OF FINAL DETERMINATIONS FOR JU6 DICIAL REVIEW.—A request that a final deter7 mination be transferred to the Court of Inter8 national Trade under subparagraph (B) may be

9 made by—

10 ‘‘(i) if the United States made an alle11 gation under paragraph 1 of article 1905

12 of the NAFTA and the operation of article

13 1904 of the NAFTA was suspended pursu14 ant to paragraph 8(a) of article 1905 of

15 the NAFTA—

16 ‘‘(I) the government of the rel17 evant country described in subsection

18 (f)(10)(A) or (B),

19 ‘‘(II) an interested party that

20 was a party to the panel or committee

21 review, or

22 ‘‘(III) an interested party that

23 was a party to the proceeding in con24 nection with which panel review was

25 requested, but only if the time period
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1 for filing notices of appearance in the

2 panel review has not expired, or

3 ‘‘(ii) if a country described in sub4 section (f)(10)(A) or (B) made an allega5 tion under paragraph 1 of article 1905 of

6 the NAFTA and the operation of article

7 1904 of the NAFTA was suspended pursu8 ant to paragraph 9 of article 1905 of the

9 NAFTA—

10 ‘‘(I) the government of that

11 country,

12 ‘‘(II) an interested party that is

13 a person of that country and that was

14 a party to the panel or committee re15 view, or

16 ‘‘(III) an interested party that is

17 a person of that country and that was

18 a party to the proceeding in connec19 tion with which panel review was re20 quested, but only if the time period

21 for filing notices of appearance in the

22 panel review has not expired.

23 ‘‘(D)(i) TRANSFER FOR JUDICIAL REVIEW

24 UPON SETTLEMENT.—If the Trade Representa25 tive achieves a settlement with the government
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1 of a country described in subsection (f)(10)(A)

2 or (B) pursuant to paragraph 7 of article 1905

3 of the NAFTA, and referral for judicial review

4 is among the terms of such settlement, any

5 final determination that is the subject of a bi6 national panel review or an extraordinary chal7 lenge committee review shall, upon a request

8 described in clause (ii), be transferred to the

9 United States Court of International Trade (in

10 accordance with rules issued by the Court) for

11 review under subsection (a).

12 ‘‘(ii) A request referred to in clause (i) is

13 a request made by—

14 ‘‘(I) the country referred to in clause

15 (i),

16 ‘‘(II) an interested party that was a

17 party to the panel or committee review, or

18 ‘‘(III) an interested party that was a

19 party to the proceeding in connection with

20 which panel review was requested, but only

21 if the time for filing notices of appearance

22 in the panel review has not expired.’’.
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1 SEC. 412. CONFORMING AMENDMENTS TO OTHER PROVI2 SIONS OF THE TARIFF ACT OF 1930.

3 (a) REGULATIONS FOR APPRAISEMENT AND CLASSI4 FICATION; FINALITY AND DECISION.—Sections 502(b)

5 and 514(b) of the Tariff Act of 1930 (19 U.S.C. 1502(b)

6 and 1514(b)) are each amended by inserting ‘‘the North

7 American Free Trade Agreement or’’ before ‘‘the United

8 States-Canada Free-Trade Agreement’’.

9 (b) DEFINITION.—Section 771 of the Tariff Act of

10 1930 (19 U.S.C. 1677) is amended—

11 (1) by redesignating as paragraph (21) (and

12 placing in numerical sequence) the second paragraph

13 that is designated as paragraph (18) (relating to the

14 definition of the United States-Canada Agreement)

15 in such section; and

16 (2) by inserting after paragraph (21) (as redes17 ignated by paragraph (1) of this subsection) the fol18 lowing new paragraph:

19 ‘‘(22) NAFTA.—The term ‘NAFTA’ means the

20 North American Free Trade Agreement.’’.

21 (c) DISCLOSURE OF PROPRIETARY INFORMATION IN

22 TITLE VII PROCEEDINGS.—Section 777(f) of the Tariff

23 Act of 1930 (19 U.S.C. 1677f(f)) is amended—

24 (1) by inserting ‘‘THE NORTH AMERICAN FREE

25 TRADE AGREEMENT OR’’ before ‘‘THE UNITED

26 STATES-CANADA AGREEMENT’’ in the heading;
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1 (2) by inserting ‘‘the NAFTA or’’ before ‘‘the

2 United States-Canada Agreement’’ each place it ap3 pears in paragraph (1)(A);

4 (3) in the second sentence of paragraph

5 (1)(A)—

6 (A) by inserting ‘‘or extraordinary chal7 lenge committee’’ after ‘‘binational panel’’; and

8 (B) by inserting ‘‘or committee’’ after ‘‘the

9 panel’’;

10 (4) in paragraph (1)(B)—

11 (A) by inserting ‘‘the NAFTA or’’ before

12 ‘‘the Agreement’’ in clauses (iii) and (iv); and

13 (B) by striking out ‘‘Government of Can14 ada designated by an authorized agency of Can15 ada’’ in clause (iv) and inserting ‘‘Government

16 of a free trade area country (as defined in sec17 tion 516A(f)(10)) designated by an authorized

18 agency of such country’’;

19 (5) in paragraph (2) by inserting ‘‘, including

20 any extraordinary challenge,’’ after ‘‘binational panel

21 proceeding’’;

22 (6) in paragraph (3)—

23 (A) by inserting ‘‘or extraordinary chal24 lenge committee’’ after ‘‘binational panel’’, and
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1 (B) by inserting ‘‘the NAFTA or’’ before

2 ‘‘the United States-Canada Agreement’’;

3 (7) by striking out ‘‘agency of Canada’’ in each

4 of paragraphs (3) and (4) and inserting ‘‘agency of

5 a free trade area country (as defined in section

6 516A(f)(10))’’; and

7 (8) in the first sentence of paragraph (4) by in8 serting ‘‘, except a judge appointed to a binational

9 panel or an extraordinary challenge committee under

10 section 402(b) of the North American Free Trade

11 Agreement Implementation Act,’’ after ‘‘Any per12 son’’.

13 SEC. 413. CONSEQUENTIAL AMENDMENT TO FREE-TRADE

14 AGREEMENT ACT OF 1988.

15 Section 410(a) of the United States-Canada Free16 Trade Agreement Implementation Act of 1988 (19 U.S.C.

17 2112 note) is amended by adding at the end the following

18 new sentence: ‘‘In calculating the 7-year period referred

19 to in paragraph (1), any time during which Canada is a

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

21 American Free Trade Agreement Implementation Act)

22 shall be disregarded.’’.
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1 SEC. 414. CONFORMING AMENDMENTS TO TITLE 28, UNITED

2 STATES CODE.

3 (a) COURT OF INTERNATIONAL TRADE.—Chapter 95

4 of title 28, United States Code, is amended—

5 (1) in section 1581(i) by inserting ‘‘the North

6 American Free Trade Agreement or’’ before ‘‘the

7 United States-Canada Free-Trade Agreement’’;

8 (2) in section 1584—

9 (A) by amending the section heading to

10 read as follows:

11 ‘‘§ 1584. Civil actions under the North American Free

12 Trade Agreement or the United States13 Canada Free-Trade Agreement’’; and

14 (B) by striking out ‘‘777(d)’’ and inserting

15 ‘‘777(f)’’; and

16 (3) in the table of contents for such chapter by

17 amending the entry for section 1584 to read as fol18 lows:

‘‘1584. Civil actions under the North American Free Trade Agreement or the

United States-Canada Free-Trade Agreement.’’.

19 (b) PARTICULAR PROCEEDINGS.—Sections 2201(a)

20 and 2643(c)(5) of title 28, United States Code, are each

21 amended by striking out ‘‘Canadian merchandise,’’ and in22 serting ‘‘merchandise of a free trade area country (as de23 fined in section 516A(f)(10) of the Tariff Act of 1930),’’.
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1 SEC. 415. EFFECT OF TERMINATION OF NAFTA COUNTRY

2 STATUS.

3 (a) IN GENERAL.—Except as provided in subsection

4 (b), on the date on which a country ceases to be a NAFTA

5 country, the provisions of this title (other than this sec6 tion) and the amendments made by this title shall cease

7 to have effect with respect to that country.

8 (b) TRANSITION PROVISIONS.—

9 (1) PROCEEDINGS REGARDING PROTECTIVE OR10 DERS AND UNDERTAKINGS.—If on the date on which

11 a country ceases to be a NAFTA country an inves12 tigation or enforcement proceeding concerning the

13 violation of a protective order issued under section

14 777(f) of the Tariff Act of 1930 (as amended by

15 this subtitle) or an undertaking of the Government

16 of that country is pending, the investigation or pro17 ceeding shall continue, and sanctions may continue

18 to be imposed, in accordance with the provisions of

19 such section 777(f).

20 (2) BINATIONAL PANEL AND EXTRAORDINARY

21 CHALLENGE COMMITTEE REVIEWS.—If on the date

22 on which a country ceases to be a NAFTA coun23 try—

24 (A) a binational panel review under article

25 1904 of the Agreement is pending, or has been

26 requested; or
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1 (B) an extraordinary challenge committee

2 review under article 1904 of the Agreement is

3 pending, or has been requested;

4 with respect to a determination which involves a

5 class or kind of merchandise and to which section

6 516A(g)(2) of the Tariff Act of 1930 applies, such

7 determination shall be reviewable under section

8 516A(a) of the Tariff Act of 1930. In the case of

9 a determination to which the provisions of this para10 graph apply, the time limits for commencing an ac11 tion under 516A(a) of the Tariff Act of 1930 shall

12 not begin to run until the date on which the Agree13 ment ceases to be in force with respect to that coun14 try.

15 SEC. 416. EFFECTIVE DATE.

16 The provisions of this title and the amendments made

17 by this title take effect on the date the Agreement enters

18 into force with respect to the United States, but shall not

19 apply—

20 (1) to any final determination described in

21 paragraph (1)(B), or (2)(B)(i), (ii), or (iii), of sec22 tion 516A(a) of the Tariff Act of 1930 notice of

23 which is published in the Federal Register before

24 such date, or to a determination described in para25 graph (2)(B)(vi) of section 516A(a) of such Act no-
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1 tice of which is received by the Government of Can2 ada or Mexico before such date; or

3 (2) to any binational panel review under the

4 United States-Canada Free-Trade Agreement, or

5 any extraordinary challenge arising out of any such

6 review, that was commenced before such date.

7 TITLE V—NAFTA TRANSITIONAL

8 ADJUSTMENT ASSISTANCE

9 AND OTHER PROVISIONS

10 Subtitle A—NAFTA Transitional

11 Adjustment Assistance Program

12 SEC. 501. SHORT TITLE.

13 This subtitle may be cited as the ‘‘NAFTA Worker

14 Security Act’’.

15 SEC. 502. ESTABLISHMENT OF NAFTA TRANSITIONAL AD16 JUSTMENT ASSISTANCE PROGRAM.

17 Chapter 2 of title II of the Trade Act of 1974 (19

18 U.S.C. 2271 et seq.) is amended by adding at the end

19 the following new subchapter:

20 ‘‘Subchapter D—NAFTA Transitional

21 Adjustment Assistance Program

22 ‘‘SEC. 250. ESTABLISHMENT OF TRANSITIONAL PROGRAM.

23 ‘‘(a) GROUP ELIGIBILITY REQUIREMENTS.—

24 ‘‘(1) CRITERIA.—A group of workers (including

25 workers in any agricultural firm or subdivision of an
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1 agricultural firm) shall be certified as eligible to

2 apply for adjustment assistance under this sub3 chapter pursuant to a petition filed under subsection

4 (b) if the Secretary determines that a significant

5 number or proportion of the workers in such work6 ers’ firm or an appropriate subdivision of the firm

7 have become totally or partially separated, or are

8 threatened to become totally or partially separated,

9 and either—

10 ‘‘(A) that—

11 ‘‘(i) the sales or production, or both,

12 of such firm or subdivision have decreased

13 absolutely,

14 ‘‘(ii) imports from Mexico or Canada

15 of articles like or directly competitive with

16 articles produced by such firm or subdivi17 sion have increased, and

18 ‘‘(iii) the increase in imports under

19 clause (ii) contributed importantly to such

20 workers’ separation or threat of separation

21 and to the decline in the sales or produc22 tion of such firm or subdivision; or

23 ‘‘(B) that there has been a shift in produc24 tion by such workers’ firm or subdivision to

25 Mexico or Canada of articles like or directly
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1 competitive with articles which are produced by

2 the firm or subdivision.

3 ‘‘(2) DEFINITION OF CONTRIBUTED IMPOR4 TANTLY.—The term ‘contributed importantly’, as

5 used in paragraph (1)(A)(iii), means a cause which

6 is important but not necessarily more important

7 than any other cause.

8 ‘‘(3) REGULATIONS.—The Secretary shall issue

9 regulations relating to the application of the criteria

10 described in paragraph (1) in making preliminary

11 findings under subsection (b) and determinations

12 under subsection (c).

13 ‘‘(b) PRELIMINARY FINDINGS AND BASIC ASSIST14 ANCE.—

15 ‘‘(1) FILING OF PETITIONS.—A petition for cer16 tification of eligibility to apply for adjustment assist17 ance under this subchapter may be filed by a group

18 of workers (including workers in any agricultural

19 firm or subdivision of an agricultural firm) or by

20 their certified or recognized union or other duly au21 thorized representative with the Governor of the

22 State in which such workers’ firm or subdivision

23 thereof is located.
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1 ‘‘(2) FINDINGS AND ASSISTANCE.—Upon re2 ceipt of a petition under paragraph (1), the Gov3 ernor shall—

4 ‘‘(A) notify the Secretary that the Gov5 ernor has received the petition;

6 ‘‘(B) within 10 days after receiving the pe7 tition—

8 ‘‘(i) make a preliminary finding as to

9 whether the petition meets the criteria de10 scribed in subsection (a)(1) (and for pur11 poses of this clause the criteria described

12 under subparagraph (A)(iii) of such sub13 section shall be disregarded), and

14 ‘‘(ii) transmit the petition, together

15 with a statement of the finding under

16 clause (i) and reasons therefor, to the Sec17 retary for action under subsection (c); and

18 ‘‘(C) if the preliminary finding under sub19 paragraph (B)(i) is affirmative, ensure that

20 rapid response and basic readjustment services

21 authorized under other Federal law are made

22 available to the workers.

23 ‘‘(c) REVIEW OF PETITIONS BY SECRETARY; CER24 TIFICATIONS.—
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1 ‘‘(1) IN GENERAL.—The Secretary, within 30

2 days after receiving a petition under subsection (b),

3 shall determine whether the petition meets the cri4 teria described in subsection (a)(1). Upon a deter5 mination that the petition meets such criteria, the

6 Secretary shall issue to workers covered by the peti7 tion a certification of eligibility to apply for assist8 ance described in subsection (d).

9 ‘‘(2) DENIAL OF CERTIFICATION.—Upon denial

10 of certification with respect to a petition under para11 graph (1), the Secretary shall review the petition in

12 accordance with the requirements of subchapter A to

13 determine if the workers may be certified under such

14 subchapter.

15 ‘‘(d) COMPREHENSIVE ASSISTANCE.—Workers cov16 ered by certification issued by the Secretary under sub17 section (c) shall be provided, in the same manner and to

18 the same extent as workers covered under a certification

19 under subchapter A, the following:

20 ‘‘(1) Employment services described in section

21 235.

22 ‘‘(2) Training described in section 236, except

23 that notwithstanding the provisions of section

24 236(a)(2)(A), the total amount of payments for
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1 training under this subchapter for any fiscal year

2 shall not exceed $30,000,000.

3 ‘‘(3) Trade readjustment allowances described

4 in sections 231 through 234, except that—

5 ‘‘(A) the provisions of sections

6 231(a)(5)(C) and 231(c), authorizing the pay7 ment of trade readjustment allowances upon a

8 finding that it is not feasible or appropriate to

9 approve a training program for a worker, shall

10 not be applicable to payment of such allowances

11 under this subchapter; and

12 ‘‘(B) notwithstanding the provisions of sec13 tion 233(b), in order for a worker to qualify for

14 trade readjustment allowances under this sub15 chapter, the worker shall be enrolled in a train16 ing program approved by the Secretary under

17 section 236(a) by the later of—

18 ‘‘(i) the last day of the 16th week of

19 such worker’s initial unemployment com20 pensation benefit period, or

21 ‘‘(ii) the last day of the 6th week after

22 the week in which the Secretary issues a

23 certification covering such worker.

24 In cases of extenuating circumstances relating to en25 rollment in a training program, the Secretary may
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1 extend the time for enrollment for a period not to

2 exceed 30 days .

3 ‘‘(4) Job search allowances described in section

4 237.

5 ‘‘(5) Relocation allowances described in section

6 238.

7 ‘‘(e) ADMINISTRATION.—The provisions of sub8 chapter C shall apply to the administration of the program

9 under this subchapter in the same manner and to the

10 same extent as such provisions apply to the administration

11 of the program under subchapters A and B, except that

12 the agreement between the Secretary and the States de13 scribed in section 239 shall specify the procedures that

14 will be used to carry out the certification process under

15 subsection (c) and the procedures for providing relevant

16 data by the Secretary to assist the States in making pre17 liminary findings under subsection (b).’’.

18 SEC. 503. CONFORMING AMENDMENTS.

19 (a) REFERENCES.—Sections 221(a), 222(a), and

20 223(a) of the Trade Act of 1974 (19 U.S.C. 2271(a),

21 2272(a), and 2273(a)) are each amended by striking out

22 ‘‘assistance under this chapter’’ and inserting ‘‘assistance

23 under this subchapter’’.

24 (b) BENEFIT INFORMATION.—Section 225(b) of the

25 Trade Act of 1974 (19 U.S.C. 2275(b)) is amended by
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1 inserting ‘‘or subchapter D’’ after ‘‘subchapter A’’ each

2 place it appears.

3 (c) NONDUPLICATION OF ASSISTANCE.—Subchapter

4 C of chapter 2 of title II of the Trade Act of 1974 is

5 amended by adding at the end the following new section:

6 ‘‘SEC. 249A. NONDUPLICATION OF ASSISTANCE.

7 ‘‘No worker may receive assistance relating to a sepa8 ration pursuant to certifications under both subchapters

9 A and D of this chapter.’’.

10 (d) JUDICIAL REVIEW.—Section 284(a) of the Trade

11 Act of 1974 (19 U.S.C. 2395(a)) is amended by inserting

12 ‘‘or section 250(c)’’ after ‘‘section 223’’.

13 (e) TABLE OF CONTENTS.—The table of contents for

14 chapter 2 of title II of the Trade Act of 1974 is amend15 ed—

16 (1) by inserting after the item relating to sec17 tion 249 the following new item:

‘‘Sec. 249A. Nonduplication of assistance.’’;

18 and

19 (2) by adding at the end thereof the following

20 new items:

‘‘SUBCHAPTER D—NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM

‘‘Sec. 250. Establishment of transitional program.’’.

21 SEC. 504. AUTHORIZATION OF APPROPRIATIONS.

22 Section 245 of the Trade Act of 1974 (19 U.S.C.

23 2317) is amended—
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1 (1) by striking ‘‘There’’ and inserting ‘‘(a) IN

2 GENERAL.—There’’,

3 (2) by inserting ‘‘, other than subchapter D’’

4 after ‘‘chapter’’, and

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

7 ‘‘(b) SUBCHAPTER D.—There are authorized to be

8 appropriated to the Department of Labor, for each of fis9 cal years 1994, 1995, 1996, 1997, and 1998, such sums

10 as may be necessary to carry out the purposes of sub11 chapter D of this chapter.’’.

12 SEC. 505. TERMINATION OF TRANSITION PROGRAM.

13 Subsection (c) of section 285 of the Trade Act of

14 1974 (19 U.S.C. 2271 preceding note) is amended—

15 (1) by striking ‘‘No’’ and inserting ‘‘(1) Except

16 as provided in paragraph (2), no’’; and

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

18 paragraph:

19 ‘‘(2)(A) Except as provided in subparagraph (B), no

20 assistance, vouchers, allowances, or other payments may

21 be provided under subchapter D of chapter 2 after the

22 day that is the earlier of—

23 ‘‘(i) September 30, 1998, or

24 ‘‘(ii) the date on which legislation, establishing

25 a program providing dislocated workers with com-
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1 prehensive assistance substantially similar to the as2 sistance provided by such subchapter D, becomes ef3 fective.

4 ‘‘(B) Notwithstanding subparagraph (A), if, on or be5 fore the day described in subparagraph (A), a worker—

6 ‘‘(i) is certified as eligible to apply for assist7 ance, under subchapter D of chapter 2; and

8 ‘‘(ii) is otherwise eligible to receive assistance in

9 accordance with section 250,

10 such worker shall continue to be eligible to receive such

11 assistance for any week for which the worker meets the

12 eligibility requirements of such section.’’.

13 SEC. 506. EFFECTIVE DATE.

14 (a) IN GENERAL.—The amendments made by sec15 tions 501, 502, 503, 504, and 505 shall take effect on

16 the date the Agreement enters into force with respect to

17 the United States.

18 (b) COVERED WORKERS.—

19 (1) GENERAL RULE.—Except as provided in

20 paragraph (2), no worker shall be certified as eligi21 ble to receive assistance under subchapter D of

22 chapter 2 of title II of the Trade Act of 1974 (as

23 added by this subtitle) whose last total or partial

24 separation from a firm (or appropriate subdivision of

25 a firm) occurred before such date of entry into force.
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1 (2) REACHBACK.—Notwithstanding paragraph

2 (1), any worker—

3 (A) whose last total or partial separation

4 from a firm (or appropriate subdivision of a

5 firm) occurs—

6 (i) after the date of the enactment of

7 this Act, and

8 (ii) before such date of entry into

9 force, and

10 (B) who would otherwise be eligible to re11 ceive assistance under subchapter D of chapter

12 2 of title II of the Trade Act of 1974,

13 shall be eligible to receive such assistance in the

14 same manner as if such separation occurred on or

15 after such date of entry into force.

16 SEC. 507. TREATMENT OF SELF-EMPLOYMENT ASSISTANCE

17 PROGRAMS.

18 (a) GENERAL RULE.—Section 3306 of the Internal

19 Revenue Code of 1986 is amended by adding at the end

20 the following new subsection:

21 ‘‘(t) SELF-EMPLOYMENT ASSISTANCE PROGRAM.—

22 For the purposes of this chapter, the term ‘self-employ23 ment assistance program’ means a program under

24 which—
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1 ‘‘(1) individuals who meet the requirements de2 scribed in paragraph (3) are eligible to receive an al3 lowance in lieu of regular unemployment compensa4 tion under the State law for the purpose of assisting

5 such individuals in establishing a business and be6 coming self-employed;

7 ‘‘(2) the allowance payable to individuals pursu8 ant to paragraph (1) is payable in the same amount,

9 at the same interval, on the same terms, and subject

10 to the same conditions, as regular unemployment

11 compensation under the State law, except that—

12 ‘‘(A) State requirements relating to avail13 ability for work, active search for work, and re14 fusal to accept work are not applicable to such

15 individuals;

16 ‘‘(B) State requirements relating to dis17 qualifying income are not applicable to income

18 earned from self-employment by such individ19 uals; and

20 ‘‘(C) such individuals are considered to be

21 unemployed for the purposes of Federal and

22 State laws applicable to unemployment com23 pensation,

24 as long as such individuals meet the requirements

25 applicable under this subsection;
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1 ‘‘(3) individuals may receive the allowance

2 described in paragraph (1) if such individuals—

3 ‘‘(A) are eligible to receive regular unem4 ployment compensation under the State law, or

5 would be eligible to receive such compensation

6 except for the requirements described in sub7 paragraph (A) or (B) of paragraph (2);

8 ‘‘(B) are identified pursuant to a State

9 worker profiling system as individuals likely to

10 exhaust regular unemployment compensation;

11 and

12 ‘‘(C) are participating in self-employment

13 assistance activities which—

14 ‘‘(i) include entrepreneurial training,

15 business counseling, and technical assist16 ance; and

17 ‘‘(ii) are approved by the State agen18 cy; and

19 ‘‘(D) are actively engaged on a full-time

20 basis in activities (which may include training)

21 relating to the establishment of a business and

22 becoming self-employed;

23 ‘‘(4) the aggregate number of individuals receiv24 ing the allowance under the program does not at any

25 time exceed 5 percent of the number of individuals
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1 receiving regular unemployment compensation under

2 the State law at such time;

3 ‘‘(5) the program does not result in any cost to

4 the Unemployment Trust Fund (established by sec5 tion 904(a) of the Social Security Act) in excess of

6 the cost that would be incurred by such State and

7 charged to such Fund if the State had not partici8 pated in such program; and

9 ‘‘(6) the program meets such other require10 ments as the Secretary of Labor determines to be

11 appropriate.’’.

12 (b) CONFORMING AMENDMENTS.—

13 (1) Section 3304(a)(4) of such Code is amend14 ed—

15 (A) in subparagraph (D), by striking ‘‘;

16 and’’ and inserting a semicolon;

17 (B) in subparagraph (E), by striking the

18 semicolon and inserting ‘‘; and’’; and

19 (C) by adding at the end the following new

20 subparagraph:

21 ‘‘(F) amounts may be withdrawn for the

22 payment of allowances under a self-employment

23 assistance program (as defined in section

24 3306(t));’’.

25 (2) Section 3306(f) of such Code is amended—
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1 (A) in paragraph (3), by striking ‘‘; and’’

2 and inserting a semicolon;

3 (B) in paragraph (4), by striking the pe4 riod and inserting ‘‘; and’’; and

5 (C) by adding at the end the following new

6 paragraph:

7 ‘‘(5) amounts may be withdrawn for the pay8 ment of allowances under a self-employment assist9 ance program (as defined in subsection (t)).’’.

10 (3) Section 303(a)(5) of the Social Security Act

11 (42 U.S.C. 503(a)(5)) is amended by striking ‘‘;

12 and’’ and inserting ‘‘: Provided further, That

13 amounts may be withdrawn for the payment of al14 lowances under a self-employment assistance pro15 gram (as defined in section 3306(t) of the Internal

16 Revenue Code of 1986); and’’.

17 (c) STATE REPORTS.—Any State operating a self-em18 ployment program authorized by the Secretary of Labor

19 under this section shall report annually to the Secretary

20 on the number of individuals who participate in the self21 employment assistance program, the number of individ22 uals who are able to develop and sustain businesses, the

23 operating costs of the program, compliance with program

24 requirements, and any other relevant aspects of program

25 operations requested by the Secretary.
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1 (d) REPORT TO CONGRESS.—Not later than 4 years

2 after the date of the enactment of this Act, the Secretary

3 of Labor shall submit a report to the Congress with re4 spect to the operation of the program authorized under

5 this section. Such report shall be based on the reports re6 ceived from the States pursuant to subsection (c) and in7 clude such other information as the Secretary of Labor

8 determines is appropriate.

9 (e) EFFECTIVE DATE; SUNSET.—

10 (1) EFFECTIVE DATE.—The provisions of this

11 section and the amendments made by this section

12 shall take effect on the date of the enactment of this

13 Act.

14 (2) SUNSET.—The authority provided by this

15 section, and the amendments made by this section,

16 shall terminate 5 years after the date of the enact17 ment of this Act.

18 Subtitle B—Provisions Relating to

19 Performance Under the Agreement

20 SEC. 511. DISCRIMINATORY TAXES.

21 It is the sense of the Congress that when a State,

22 province, or other governmental entity of a NAFTA coun23 try discriminatorily enforces sales or other taxes so as to

24 afford protection to domestic production or domestic serv25 ice providers, such enforcement is in violation of the terms
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1 of the Agreement. When such discriminatory enforcement

2 adversely affects United States producers of goods or

3 United States service providers, the Trade Representative

4 should pursue all appropriate remedies to obtain removal

5 of such discriminatory enforcement, including invocation

6 of the provisions of the Agreement.

7 SEC. 512. REVIEW OF THE OPERATION AND EFFECTS OF

8 THE AGREEMENT.

9 (a) STUDY.—By not later than July 1, 1997, the

10 President shall provide to the Congress a comprehensive

11 study on the operation and effects of the Agreement. The

12 study shall include an assessment of the following factors:

13 (1) The net effect of the Agreement on the

14 economy of the United States, including with respect

15 to the United States gross national product, employ16 ment, balance of trade, and current account balance.

17 (2) The industries (including agricultural indus18 tries) in the United States that have significantly in19 creased exports to Mexico or Canada as a result of

20 the Agreement, or in which imports into the United

21 States from Mexico or Canada have increased sig22 nificantly as a result of the Agreement, and the ex23 tent of any change in the wages, employment, or

24 productivity in each such industry as a result of the

25 Agreement.
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1 (3) The extent to which investment in new or

2 existing production or other operations in the United

3 States has been redirected to Mexico as a result of

4 the Agreement, and the effect on United States em5 ployment of such redirection.

6 (4) The extent of any increase in investment,

7 including foreign direct investment and increased in8 vestment by United States investors, in new or exist9 ing production or other operations in the United

10 States as a result of the Agreement, and the effect

11 on United States employment of such investment.

12 (5) The extent to which the Agreement has con13 tributed to—

14 (A) improvement in real wages and work15 ing conditions in Mexico,

16 (B) effective enforcement of labor and en17 vironmental laws in Mexico, and

18 (C) the reduction or abatement of pollution

19 in the region of the United States-Mexico bor20 der.

21 (b) SCOPE.—In assessing the factors listed in sub22 section (a), to the extent possible, the study shall distin23 guish between the consequences of the Agreement and

24 events that likely would have occurred without the Agree25 ment. In addition, the study shall evaluate the effects of
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1 the Agreement relative to aggregate economic changes

2 and, to the extent possible, relative to the effects of other

3 factors, including—

4 (1) international competition,

5 (2) reductions in defense spending,

6 (3) the shift from traditional manufacturing to

7 knowledge and information based economic activity,

8 and

9 (4) the Federal debt burden.

10 (c) RECOMMENDATIONS OF THE PRESIDENT.—The

11 study shall include any appropriate recommendations by

12 the President with respect to the operation and effects of

13 the Agreement, including recommendations with respect to

14 the specific factors listed in subsection (a).

15 (d) RECOMMENDATIONS OF CERTAIN COMMIT16 TEES.—The President shall provide the study to the Com17 mittee on Ways and Means of the House of Representa18 tives and the Committee on Finance of the Senate and

19 any other committee that has jurisdiction over any provi20 sion of United States law that was either enacted or

21 amended by the North American Free Trade Agreement

22 Implementation Act. Each such committee may hold hear23 ings and make recommendations to the President with re24 spect to the operation and effects of the Agreement.
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1 SEC. 513. ACTIONS AFFECTING UNITED STATES CULTURAL

2 INDUSTRIES.

3 Section 182 of the Trade Act of 1974 (19 U.S.C.

4 2242) is amended by adding at the end the following new

5 subsection:

6 ‘‘(f) SPECIAL RULE FOR ACTIONS AFFECTING UNIT7 ED STATES CULTURAL INDUSTRIES.—

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

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

10 report is submitted to Congressional committees

11 under section 181(b), the Trade Representative shall

12 identify any act, policy, or practice of Canada

13 which—

14 ‘‘(A) affects cultural industries,

15 ‘‘(B) is adopted or expanded after Decem16 ber 17, 1992, and

17 ‘‘(C) is actionable under article 2106 of

18 the North American Free Trade Agreement.

19 ‘‘(2) SPECIAL RULES FOR IDENTIFICATIONS.—

20 For purposes of section 302(b)(2)(A), an act, policy,

21 or practice identified under this subsection shall be

22 treated as an act, policy, or practice that is the basis

23 for identification of a country under subsection

24 (a)(2), unless the United States has already taken

25 action pursuant to article 2106 of the North Amer26 ican Free Trade Agreement in response to such act,
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1 policy, or practice. In deciding whether to identify

2 an act, policy, or practice under paragraph (1), the

3 Trade Representative shall—

4 ‘‘(A) consult with and take into account

5 the views of representatives of the relevant do6 mestic industries, appropriate committees es7 tablished pursuant to section 135, and appro8 priate officers of the Federal Government, and

9 ‘‘(B) take into account the information

10 from such sources as may be available to the

11 Trade Representative and such information as

12 may be submitted to the Trade Representative

13 by interested persons, including information

14 contained in reports submitted under section

15 181(b).

16 ‘‘(3) CULTURAL INDUSTRIES.—For purposes of

17 this subsection, the term ‘cultural industries’ means

18 persons engaged in any of the following activities:

19 ‘‘(A) The publication, distribution, or sale

20 of books, magazines, periodicals, or newspapers

21 in print or machine readable form but not in22 cluding the sole activity of printing or type23 setting any of the foregoing.

24 ‘‘(B) The production, distribution, sale, or

25 exhibition of film or video recordings.
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1 ‘‘(C) The production, distribution, sale, or

2 exhibition of audio or video music recordings.

3 ‘‘(D) The publication, distribution, or sale

4 of music in print or machine readable form.

5 ‘‘(E) Radio communications in which the

6 transmissions are intended for direct reception

7 by the general public, and all radio, television,

8 and cable broadcasting undertakings and all

9 satellite programming and broadcast network

10 services.’’.

11 SEC. 514. REPORT ON IMPACT OF NAFTA ON MOTOR VEHI12 CLE EXPORTS TO MEXICO.

13 (a) FINDINGS.—The Congress makes the following

14 findings:

15 (1 ) Trade in motor vehicles and motor vehicle

16 parts is one of the most restricted areas of trade be17 tween the United States and Mexico.

18 (2) The elimination of Mexico’s restrictive bar19 riers to trade in motor vehicles and motor vehicle

20 parts over a 10-year period under the Agreement

21 should increase substantially United States exports

22 of such products to Mexico.

23 (3) The Department of Commerce estimates

24 that the Agreement provides the opportunity to in25 crease United States exports of motor vehicles and
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1 motor vehicle parts by $1,000,000,000 during the

2 first year of the Agreement’s implementation with

3 the potential for additional increases over the 10-

4 year transition period.

5 (4) The United States automotive industry has

6 estimated that United States exports of motor vehi7 cles to Mexico should increase to more than 60,000

8 units during the first year of the Agreement’s imple9 mentation, which is substantially above the current

10 level of 4,000 units.

11 (b) TRADE REPRESENTATIVE REPORT.—No later

12 than July 1, 1995, and annually thereafter through 1999,

13 the Trade Representative shall submit a report to the

14 Committee on Finance of the Senate and the Committee

15 on Ways and Means of the House of Representatives on

16 how effective the provisions of the Agreement are with re17 spect to increasing United States exports of motor vehicles

18 and motor vehicle parts to Mexico. Each report shall iden19 tify and determine the following:

20 (1) The patterns of trade in motor vehicles and

21 motor vehicle parts between the United States and

22 Mexico during the preceding 12-month period.

23 (2) The level of tariff and nontariff barriers

24 that were in force during the preceding 12-month

25 period.
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1 (3) The amount by which United States exports

2 of motor vehicles and motor vehicle parts to Mexico

3 have increased from the preceding 12-month period

4 as a result of the elimination of Mexican tariff and

5 nontariff barriers under the Agreement.

6 (4) Whether any such increase in United States

7 exports meets the levels of new export opportunities

8 anticipated under the Agreement.

9 (5) If the anticipated levels of new United

10 States export opportunities are not reached, what

11 actions the Trade Representative is prepared to take

12 to realize the benefits anticipated under the Agree13 ment, including possible initiation of additional ne14 gotiations with Mexico for the purpose of seeking

15 modifications of the Agreement.

16 SEC. 515. CENTER FOR THE STUDY OF WESTERN HEMI17 SPHERIC TRADE.

18 (a) AMENDMENT TO THE CBI.—The Caribbean

19 Basin Economic Recovery Act (19 U.S.C. 2701 et seq.)

20 is amended by inserting after section 218 the following

21 new section:

22 ‘‘SEC. 219. CENTER FOR THE STUDY OF WESTERN HEMI23 SPHERIC TRADE.

24 ‘‘(a) ESTABLISHMENT.—The Commissioner of Cus25 toms, after consultation with appropriate officials in the
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1 State of Texas, is authorized and directed to make grants

2 to an institution (or a consortium of such institutions) to

3 assist such institution in planning, establishing, and oper4 ating a Center for the Study of Western Hemispheric

5 Trade (hereafter in this section referred to as the ‘Cen6 ter’). The Commissioner of Customs shall make the first

7 grant not later than December 1, 1994, and the Center

8 shall be established not later than February 1, 1995.

9 ‘‘(b) SCOPE OF THE CENTER.—The Center shall be

10 a year-round program operated by an institution located

11 in the State of Texas (or a consortium of such institu12 tions), the purpose of which is to promote and study trade

13 between and among Western Hemisphere countries. The

14 Center shall conduct activities designed to examine—

15 ‘‘(1) the impact of the NAFTA on the econo16 mies in, and trade within, the Western Hemisphere,

17 ‘‘(2) the negotiation of any future free trade

18 agreements, including possible accessions to the

19 NAFTA; and

20 ‘‘(3) adjusting tariffs, reducing nontariff bar21 riers, improving relations among customs officials,

22 and promoting economic relations among countries

23 in the Western Hemisphere.

24 ‘‘(c) CONSULTATION; SELECTION CRITERIA.—The

25 Commissioner of Customs shall consult with appropriate
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1 officials of the State of Texas and private sector authori2 ties with respect to selecting, planning, and establishing

3 the Center. In selecting the appropriate institution, the

4 Commissioner of Customs shall give consideration to—

5 ‘‘(1) the institution’s ability to carry out the

6 programs and activities described in this section;

7 and

8 ‘‘(2) any resources the institution can provide

9 the Center in addition to Federal funds provided

10 under this program.

11 ‘‘(d) PROGRAMS AND ACTIVITIES.—The Center shall

12 conduct the following activities:

13 ‘‘(1) Provide forums for international discussion

14 and debate for representatives from countries in the

15 Western Hemisphere regarding issues which affect

16 trade and other economic relations within the hemi17 sphere, including the impact of the NAFTA on indi18 vidual economies and the desirability and feasibility

19 of possible accessions to the NAFTA by such coun20 tries.

21 ‘‘(2) Conduct studies and research projects on

22 subjects which affect Western Hemisphere trade, in23 cluding tariffs, customs, regional and national eco24 nomics, business development and finance, produc25 tion and personnel management, manufacturing, ag-
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1 riculture, engineering, transportation, immigration,

2 telecommunications, medicine, science, urban stud3 ies, border demographics, social anthropology, and

4 population.

5 ‘‘(3) Publish materials, disseminate informa6 tion, and conduct seminars and conferences to sup7 port and educate representatives from countries in

8 the Western Hemisphere who seek to do business

9 with or invest in other Western Hemisphere coun10 tries.

11 ‘‘(4) Provide grants, fellowships, endowed

12 chairs, and financial assistance to outstanding schol13 ars and authorities from Western Hemisphere coun14 tries.

15 ‘‘(5) Provide grants, fellowships, and other fi16 nancial assistance to qualified graduate students,

17 from Western Hemisphere countries, to study at the

18 Center.

19 ‘‘(6) Implement academic exchange programs

20 and other cooperative research and instructional

21 agreements with the complementary North/South

22 Center at the University of Miami at Coral Gables.

23 ‘‘(e) DEFINITIONS.—For purposes of this section—

24 ‘‘(1) NAFTA.—The term ‘NAFTA’ means the

25 North American Free Trade Agreement.
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1 ‘‘(2) WESTERN HEMISPHERE COUNTRIES.—The

2 terms ‘Western Hemisphere countries’, ‘countries in

3 the Western Hemisphere’, and ‘Western Hemi4 sphere’ mean Canada, the United States, Mexico,

5 countries located in South America, beneficiary

6 countries (as defined by section 212), the Common7 wealth of Puerto Rico, and the United States Virgin

8 Islands.

9 ‘‘(f) FEES FOR SEMINARS AND PUBLICATIONS.—

10 Notwithstanding any other provision of law, a grant made

11 under this section may provide that the Center may charge

12 a reasonable fee for attendance at seminars and con13 ferences and for copies of publications, studies, reports,

14 and other documents the Center publishes. The Center

15 may waive such fees in any case in which it determines

16 imposing a fee would impose a financial hardship and the

17 purposes of the Center would be served by granting such

18 a waiver.

19 ‘‘(g) DURATION OF GRANT.—The Commissioner of

20 Customs is directed to make grants to any institution or

21 institutions selected as the Center for fiscal years 1994,

22 1995, 1996, and 1997.

23 ‘‘(h) REPORT.—The Commissioner of Customs shall,

24 no later than July 1, 1994, and annually thereafter for

25 years for which grants are made, submit a written report
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1 to the Committee on Finance of the Senate and the Com2 mittee on Ways and Means of the House of Representa3 tives. The first report shall include—

4 ‘‘(1) a statement identifying the institution or

5 institutions selected as the Center,

6 ‘‘(2) the reasons for selecting the institution or

7 institutions as the Center, and

8 ‘‘(3) the plan of such institution or institutions

9 for operating the Center.

10 Each subsequent report shall include information with re11 spect to the operations of the Center, the collaboration of

12 the Center with, and dissemination of information to, Gov13 ernment policymakers and the business community with

14 respect to the study of Western Hemispheric trade by the

15 Center, and the plan and efforts of the Center to continue

16 operations after grants under this section have expired.’’.

17 (b) AUTHORIZATION OF APPROPRIATIONS.—There

18 are authorized to be appropriated $10,000,000 for fiscal

19 year 1994, and such sums as may be necessary in the 3

20 succeeding fiscal years to carry out the purposes of section

21 219 of the Caribbean Basin Economic Recovery Act (as

22 added by subsection (a)).

23 SEC. 516. EFFECTIVE DATE.

24 (a) IN GENERAL.—Except as provided in subsection

25 (b), the provisions of this subtitle shall take effect on the
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1 date the Agreement enters into force with respect to the

2 United States.

3 (b) EXCEPTION.—Section 515 shall take effect on the

4 date of the enactment of this Act.

5 Subtitle C—Funding

6 PART 1—CUSTOMS USER FEES

7 SEC. 521. FEES FOR CERTAIN CUSTOMS SERVICES.

8 (a) IN GENERAL.—Section 13031 of the Consolidated

9 Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.

10 58c) is amended—

11 (1) by amending paragraph (5) of subsection

12 (a) to read as follows:

13 ‘‘(5)(A) For fiscal years 1994, 1995, 1996, and

14 1997, for the arrival of each passenger aboard a

15 commercial vessel or commercial aircraft from out16 side the customs territory of the United States,

17 $6.50.

18 ‘‘(B) For fiscal year 1998 and each fiscal year

19 thereafter, for the arrival of each passenger aboard

20 a commercial vessel or commercial aircraft from a

21 place outside the United States (other than a place

22 referred to in subsection (b)(1)(A) of this section),

23 $5.’’

24 (2) by adding at the end of paragraph (1) of

25 subsection (b), the following flush sentence:
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1 ‘‘Subparagraph (A) shall not apply to fiscal years

2 1994, 1995, 1996, and 1997.’’,

3 (3) in subsection (f)—

4 (A) in paragraph (1), by striking ‘‘except’’

5 and all that follows through the end period and

6 inserting: ‘‘except—

7 ‘‘(A) the portion of such fees that is re8 quired under paragraph (3) for the direct reim9 bursement of appropriations, and

10 ‘‘(B) the portion of such fees that is deter11 mined by the Secretary to be excess fees under

12 paragraph (5).’’,

13 (B) in paragraph (3)(A), by striking the

14 first parenthetical and inserting ‘‘(other than

15 the fees under subsection (a) (9) and (10) and

16 the excess fees determined by the Secretary

17 under paragraph (5))’’,

18 (C) in paragraph (4), by striking ‘‘under

19 subsection (a)’’ and inserting ‘‘under subsection

20 (a) (other than the excess fees determined by

21 the Secretary under paragraph (5))’’, and

22 (D) by adding at the end thereof the fol23 lowing new paragraph:

24 ‘‘(5) At the close of each of fiscal years 1994,

25 1995, 1996, and 1997, the Secretary of the Treas-
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1 ury shall determine the amount of the fees collected

2 under paragraph (5)(A) of subsection (a) for that

3 fiscal year that exceeds the amount of such fees that

4 would have been collected for such fiscal year if the

5 fees that were in effect on the day before the effec6 tive date of this paragraph applied to such fiscal

7 year. The amount of the excess fees determined

8 under the preceding sentence shall be deposited in

9 the Customs User Fee Account and shall be avail10 able for reimbursement of inspectional costs (includ11 ing passenger processing costs) not otherwise reim12 bursed under this section, and shall be available only

13 to the extent provided in appropriations Acts.’’, and

14 (4) in paragraph (3) of subsection (j), by strik15 ing ‘‘September 30, 1998’’ and inserting ‘‘September

16 30, 2003’’.

17 (b) EFFECTIVE DATE.—The amendments made by

18 this section shall take effect on the date the Agreement

19 enters into force with respect to the United States.
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1 PART 2—INTERNAL REVENUE CODE

2 AMENDMENTS

3 SEC. 522. AUTHORITY TO DISCLOSE CERTAIN TAX INFOR4 MATION TO THE UNITED STATES CUSTOMS

5 SERVICE.

6 (a) IN GENERAL.—Subsection (l) of section 6103 of

7 the Internal Revenue Code of 1986 (relating to confiden8 tiality and disclosure of returns and return information)

9 is amended by adding at the end thereof the following new

10 paragraph:

11 ‘‘(14) DISCLOSURE OF RETURN INFORMATION

12 TO UNITED STATES CUSTOMS SERVICE.—The Sec13 retary may, upon written request from the Commis14 sioner of the United States Customs Service, dis15 close to officers and employees of the Department of

16 the Treasury such return information with respect

17 to taxes imposed by chapters 1 and 6 as the Sec18 retary may prescribe by regulations, solely for the

19 purpose of, and only to the extent necessary in—

20 ‘‘(A) ascertaining the correctness of any

21 entry in audits as provided for in section 509

22 of the Tariff Act of 1930 (19 U.S.C. 1509), or

23 ‘‘(B) other actions to recover any loss of

24 revenue, or to collect duties, taxes, and fees, de25 termined to be due and owing pursuant to such

26 audits.’’
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1 (b) CONFORMING AMENDMENTS.—Paragraphs

2 (3)(A) and (4) of section 6103(p) of such Code are each

3 amended by striking ‘‘or (13)’’ each place it appears and

4 inserting ‘‘(13), or (14)’’.

5 (c) EFFECTIVE DATE.—

6 (1) IN GENERAL.—The amendments made by

7 this section shall take effect on the date the Agree8 ment enters into force with respect to the United

9 States.

10 (2) REGULATIONS.—Not later than 90 days

11 after the date of the enactment of this Act, the Sec12 retary of the Treasury or his delegate shall issue

13 temporary regulations to carry out section

14 6103(l)(14) of the Internal Revenue Code of 1986,

15 as added by this section.

16 SEC. 523. USE OF ELECTRONIC FUND TRANSFER SYSTEM

17 FOR COLLECTION OF CERTAIN TAXES.

18 (a) GENERAL RULE.—Section 6302 of the Internal

19 Revenue Code of 1986 (relating to mode or time of collec20 tion) is amended by redesignating subsection (h) as sub21 section (i) and by inserting after subsection (g) the follow22 ing new subsection:

23 ‘‘(h) USE OF ELECTRONIC FUND TRANSFER SYSTEM

24 FOR COLLECTION OF CERTAIN TAXES.—

25 ‘‘(1) ESTABLISHMENT OF SYSTEM.—
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1 ‘‘(A) IN GENERAL.—The Secretary shall

2 prescribe such regulations as may be necessary

3 for the development and implementation of an

4 electronic fund transfer system which is re5 quired to be used for the collection of deposi6 tory taxes. Such system shall be designed in

7 such manner as may be necessary to ensure

8 that such taxes are credited to the general ac9 count of the Treasury on the date on which

10 such taxes would otherwise have been required

11 to be deposited under the Federal tax deposit

12 system.

13 ‘‘(B) EXEMPTIONS.—The regulations pre14 scribed under subparagraph (A) may contain

15 such exemptions as the Secretary may deem

16 appropriate.

17 ‘‘(2) PHASE-IN REQUIREMENTS.—

18 ‘‘(A) IN GENERAL.—Except as provided in

19 subparagraph (B), the regulations referred to in

20 paragraph (1)—

21 ‘‘(i) shall contain appropriate proce22 dures to assure that an orderly conversion

23 from the Federal tax deposit system to the

24 electronic fund transfer system is accom25 plished, and
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1 ‘‘(ii) may provide for a phase-in of

2 such electronic fund transfer system by

3 classes of taxpayers based on the aggre4 gate undeposited taxes of such taxpayers

5 at the close of specified periods and any

6 other factors the Secretary may deem ap7 propriate.

8 ‘‘(B) PHASE-IN REQUIREMENTS.—The

9 phase-in of the electronic fund transfer system

10 shall be designed in such manner as may be

11 necessary to ensure that—

12 ‘‘(i) during each fiscal year beginning

13 after September 30, 1993, at least the ap14 plicable required percentage of the total

15 depository taxes imposed by chapters 21,

16 22, and 24 shall be collected by means of

17 electronic fund transfer, and

18 ‘‘(ii) during each fiscal year beginning

19 after September 30, 1993, at least the ap20 plicable required percentage of the total

21 other depository taxes shall be collected by

22 means of electronic fund transfer.

23 ‘‘(C) APPLICABLE REQUIRED PERCENT24 AGE.—
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1 ‘‘(i) In the case of the depository

2 taxes imposed by chapters 21, 22, and 24,

3 the applicable required percentage is—

4 ‘‘(I) 3 percent for fiscal year

5 1994,

6 ‘‘(II) 16.9 percent for fiscal year

7 1995,

8 ‘‘(III) 20.1 percent for fiscal year

9 1996,

10 ‘‘(IV) 58.3 percent for fiscal

11 years 1997 and 1998, and

12 ‘‘(V) 94 percent for fiscal year

13 1999 and all fiscal years thereafter.

14 ‘‘(ii) In the case of other depository

15 taxes, the applicable required percentage

16 is—

17 ‘‘(I) 3 percent for fiscal year

18 1994,

19 ‘‘(II) 20 percent for fiscal year

20 1995,

21 ‘‘(III) 30 percent for fiscal year

22 1996,

23 ‘‘(IV) 60 percent for fiscal years

24 1997 and 1998, and
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1 ‘‘(V) 94 percent for fiscal year

2 1999 and all fiscal years thereafter.

3 ‘‘(3) DEFINITIONS.—For purposes of this sub4 section—

5 ‘‘(A) DEPOSITORY TAX.—The term ‘depos6 itory tax’ means any tax if the Secretary is au7 thorized to require deposits of such tax.

8 ‘‘(B) ELECTRONIC FUND TRANSFER.—The

9 term ‘electronic fund transfer’ means any trans10 fer of funds, other than a transaction originated

11 by check, draft, or similar paper instrument,

12 which is initiated through an electronic termi13 nal, telephonic instrument, or computer or mag14 netic tape so as to order, instruct, or authorize

15 a financial institution or other financial

16 intermediary to debit or credit an account.

17 ‘‘(4) COORDINATION WITH OTHER ELECTRONIC

18 FUND TRANSFER REQUIREMENTS.—

19 ‘‘(A) COORDINATION WITH CERTAIN EX20 CISE TAXES.—In determining whether the re21 quirements of subparagraph (B) of paragraph

22 (2) are met, taxes required to be paid by elec23 tronic fund transfer under sections 5061(e) and

24 5703(b) shall be disregarded.
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1 ‘‘(B) ADDITIONAL REQUIREMENT.—Under

2 regulations, any tax required to be paid by elec3 tronic fund transfer under section 5061(e) or

4 5703(b) shall be paid in such a manner as to

5 ensure that the requirements of the second sen6 tence of paragraph (1)(A) of this subsection are

7 satisfied.’’

8 (b) EFFECTIVE DATE.—

9 (1) IN GENERAL.—The amendments made by

10 this section shall take effect on the date the Agree11 ment enters into force with respect to the United

12 States.

13 (2) REGULATIONS.—Not later than 210 days

14 after the date of enactment of this Act, the Sec15 retary of the Treasury or his delegate shall prescribe

16 temporary regulations under section 6302(h) of the

17 Internal Revenue Code of 1986 (as added by this

18 section).

19 Subtitle D—Implementation of

20 NAFTA Supplemental Agreements

21 PART 1—AGREEMENTS RELATING TO LABOR AND

22 ENVIRONMENT

23 SEC. 531. AGREEMENT ON LABOR COOPERATION.

24 (a) COMMISSION FOR LABOR COOPERATION.—
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1 (1) MEMBERSHIP.—The United States is au2 thorized to participate in the Commission for Labor

3 Cooperation in accordance with the North American

4 Agreement on Labor 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 $2,000,000 for each of fiscal years 1994 and 1995

9 for United States contributions to the annual budget

10 of the Commission for Labor Cooperation pursuant

11 to Article 43 of the North American Agreement on

12 Labor Cooperation. Funds authorized to be appro13 priated for such contributions by this paragraph are

14 in addition to any funds otherwise available for such

15 contributions. Funds authorized to be appropriated

16 by this paragraph are authorized to be made avail17 able until expended.

18 (b) DEFINITIONS.—As used in this section—

19 (1) the term ‘‘Commission for Labor Coopera20 tion’’ means the commission established by Part

21 Three of the North American Agreement on Labor

22 Cooperation; and

23 (2) the term ‘‘North American Agreement on

24 Labor Cooperation’’ means the North American

25 Agreement on Labor Cooperation Between the Gov-
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1 ernment of the United States of America, the Gov2 ernment of Canada, and the Government of the

3 United Mexican States (signed at Mexico City,

4 Washington, and Ottawa on September 8, 9, 12, and

5 14, 1993).

6 SEC. 532. AGREEMENT ON ENVIRONMENTAL COOPERA7 TION.

8 (a) COMMISSION FOR ENVIRONMENTAL COOPERA9 TION.—

10 (1) MEMBERSHIP.—The United States is au11 thorized to participate in the Commission for Envi12 ronmental Cooperation in accordance with the North

13 American Agreement on Environmental Cooperation.

14 (2) CONTRIBUTIONS TO BUDGET.—There are

15 authorized to be appropriated to the President (or

16 such agency as the President may designate)

17 $5,000,000 for each of fiscal years 1994 and 1995

18 for United States contributions to the annual budget

19 of the Commission for Environmental Cooperation

20 pursuant to Article 43 of the North American

21 Agreement on Environmental Cooperation. Funds

22 authorized to be appropriated for such contributions

23 by this paragraph are in addition to any funds oth24 erwise available for such contributions. Funds au-
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1 thorized to be appropriated by this paragraph are

2 authorized to be made available until expended.

3 (b) DEFINITIONS.—As used in this section—

4 (1) the term ‘‘Commission for Environmental

5 Cooperation’’ means the commission established by

6 Part Three of the North American Agreement on

7 Environmental Cooperation; and

8 (2) the term ‘‘North American Agreement on

9 Environmental Cooperation’’ means the North

10 American Agreement on Environmental Cooperation

11 Between the Government of the United States of

12 America, the Government of Canada, and the Gov13 ernment of the United Mexican States (signed at

14 Mexico City, Washington, and Ottawa on September

15 8, 9, 12, and 14, 1993).

16 SEC. 533. AGREEMENT ON BORDER ENVIRONMENT CO17 OPERATION COMMISSION.

18 (a) BORDER ENVIRONMENT COOPERATION COMMIS19 SION.—

20 (1) MEMBERSHIP.—The United States is au21 thorized to participate in the Border Environment

22 Cooperation Commission in accordance with the

23 Border Environment Cooperation Agreement.

24 (2) CONTRIBUTIONS TO THE COMMISSION

25 BUDGET.—There are authorized to be appropriated
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1 to the President (or such agency as the President

2 may designate) $5,000,000 for fiscal year 1994 and

3 each fiscal year thereafter for United States con4 tributions to the budget of the Border Environment

5 Cooperation Commission pursuant to section 7 of

6 Article III of Chapter I of the Border Environment

7 Cooperation Agreement. Funds authorized to be ap8 propriated for such contributions by this paragraph

9 are in addition to any funds otherwise available for

10 such contributions. Funds authorized to be appro11 priated by this paragraph are authorized to be made

12 available until expended.

13 (b) CIVIL ACTIONS INVOLVING THE COMMISSION.—

14 For the purpose of any civil action which may be brought

15 within the United States by or against the Border Envi16 ronment Cooperation Commission in accordance with the

17 Border Environment Cooperation Agreement (including

18 an action brought to enforce an arbitral award against the

19 Commission), the Commission shall be deemed to be an

20 inhabitant of the Federal judicial district in which its prin21 cipal office within the United States, or its agent ap22 pointed for the purpose of accepting service or notice of

23 service, is located. Any such action to which the Commis24 sion is a party shall be deemed to arise under the laws

25 of the United States, and the district courts of the United
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1 States (including the courts enumerated in section 460 of

2 title 28, United States Code) shall have original jurisdic3 tion of any such action. When the Commission is a defend4 ant in any action in a State court, it may at any time

5 before trial remove the action into the appropriate district

6 court of the United States by following the procedure for

7 removal provided in section 1446 of title 28, United States

8 Code.

9 (c) DEFINITIONS.—As used in this section—

10 (1) the term ‘‘Border Environment Cooperation

11 Agreement’’ means the November 1993 Agreement

12 Between the Government of the United States of

13 America and the Government of the United Mexican

14 States Concerning the Establishment of a Border

15 Environment Cooperation Commission and a North

16 American Development Bank;

17 (2) the terms ‘‘Border Environment Coopera18 tion Commission’’ and ‘‘Commission’’ mean the com19 mission established pursuant to Chapter I of the

20 Border Environment Cooperation Agreement; and

21 (3) the term ‘‘United States’’ means the United

22 States, its territories and possessions, and the Com23 monwealth of Puerto Rico.
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1 PART 2—NORTH AMERICAN DEVELOPMENT

2 BANK AND RELATED PROVISIONS

3 SEC. 541. NORTH AMERICAN DEVELOPMENT BANK.

4 (a) ACCEPTANCE OF MEMBERSHIP.—The President

5 is hereby authorized to accept membership for the United

6 States in the North American Development Bank (here7 after in this part referred to as the ‘‘Bank’’) provided for

8 in Chapter II of the Border Environment Cooperation

9 Agreement (hereafter in this part referred to as the ‘‘Co10 operation Agreement’’).

11 (b) SUBSCRIPTION OF STOCK.—

12 (1) SUBSCRIPTION AUTHORITY.—

13 (A) IN GENERAL.—The Secretary of the

14 Treasury may subscribe on behalf of the United

15 States up to 150,000 shares of the capital stock

16 of the Bank.

17 (B) EFFECTIVENESS OF SUBSCRIPTION.—

18 Except as provided in paragraph (3), any such

19 subscription shall be effective only to such ex20 tent or in such amounts as are provided in ad21 vance in appropriations Acts.

22 (2) LIMITATIONS ON AUTHORIZATION OF AP23 PROPRIATIONS.—For payment by the Secretary of

24 the Treasury of the subscription of the United

25 States for shares described in paragraph (1), there

26 are authorized to be appropriated $1,500,000,000
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1 ($225,000,000 of which may be used for paid-in

2 capital and $1,275,000,000 of which may be used

3 for callable capital) without fiscal year limitation.

4 (3) FUNDING; LIMITATION ON CALLABLE CAP5 ITAL SUBSCRIPTIONS.—

6 (A) FUNDING.—For fiscal year 1995, the

7 Secretary of the Treasury shall pay to the Bank

8 out of any sums in the Treasury not otherwise

9 appropriated the sum of $56,250,000 for the

10 paid-in portion of the United States share of

11 the capital stock of the Bank, 10 percent of

12 which may be transferred by the Bank to the

13 President pursuant to section 543 to pay for

14 the cost of direct and guaranteed Federal loans.

15 (B) LIMITATION ON CALLABLE CAPITAL

16 SUBSCRIPTIONS.—For fiscal year 1995, the

17 Secretary of the Treasury shall subscribe to the

18 callable capital portion of the United States

19 share of the capital stock of the Bank in an

20 amount not to exceed $318,750,000.

21 (4) DISPOSITION OF NET INCOME DISTRIBUTED

22 BY THE FACILITY.—Any payment made to the

23 United States by the Bank as a distribution of net

24 income shall be covered into the Treasury as a mis25 cellaneous receipt.
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1 (c) COMPENSATION OF BOARD MEMBERS.—No per2 son shall be entitled to receive any salary or other com3 pensation from the Bank or the United States for services

4 as a Board member.

5 (d) APPLICABILITY OF BRETTON WOODS AGREE6 MENTS ACT.—The provisions of section 4 of the Bretton

7 Woods Agreements Act shall apply with respect to the

8 Bank to the same extent as with respect to the Inter9 national Bank for Reconstruction and Development and

10 the International Monetary Fund.

11 (e) RESTRICTIONS.—Unless authorized by law, nei12 ther the President nor any person or agency shall, on be13 half of the United States—

14 (1) subscribe to additional shares of stock of

15 the Bank;

16 (2) vote for or agree to any amendment of the

17 Cooperation Agreement which increases the obliga18 tions of the United States, or which changes the

19 purpose or functions of the Bank; or

20 (3) make a loan or provide other financing to

21 the Bank.

22 (f) FEDERAL RESERVE BANKS AS DEPOSITORIES.—

23 Any Federal Reserve bank that is requested to do so by

24 the Bank shall act as its depository or as its fiscal agent,

25 and the Board of Governors of the Federal Reserve Sys-
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1 tem shall supervise and direct the carrying out of these

2 functions by the Federal Reserve banks.

3 (g) JURISDICTION OF UNITED STATES COURTS AND

4 ENFORCEMENT OF ARBITRAL AWARDS.—For the purpose

5 of any civil action which may be brought within the United

6 States, its territories or possessions, or the Commonwealth

7 of Puerto Rico, by or against the Bank in accordance with

8 the Cooperation Agreement, including an action brought

9 to enforce an arbitral award against the Bank, the Bank

10 shall be deemed to be an inhabitant of the Federal judicial

11 district in which its principal office within the United

12 States or its agency appointed for the purpose of accepting

13 service or notice of service is located, and any such action

14 to which the Bank shall be a party shall be deemed to

15 arise under the laws of the United States, and the district

16 courts of the United States, including the courts enumer17 ated in section 460 of title 28, United States Code, shall

18 have original jurisdiction of any such action. When the

19 Bank is a defendant in any action in a State court, it may

20 at any time before trial remove the action into the appro21 priate district court of the United States by following the

22 procedure for removal provided in section 1446 of title 28,

23 United States Code.
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1 (h) EXEMPTION FROM SECURITIES LAWS FOR CER2 TAIN SECURITIES ISSUED BY THE BANK; REPORTS RE3 QUIRED.—

4 (1) EXEMPTIONS FROM LIMITATIONS AND RE5 STRICTIONS ON THE POWER OF NATIONAL BANKING

6 ASSOCIATIONS TO DEAL IN AND UNDERWRITE IN7 VESTMENT SECURITIES OF THE BANK.—The seventh

8 sentence of the seventh undesignated paragraph of

9 section 5136 of the Revised Statutes of the United

10 States (12 U.S.C. 24), is amended by inserting ‘‘the

11 North American Development Bank,’’ after ‘‘Inter12 American Development Bank,’’.

13 (2) EXEMPTION FROM SECURITIES LAWS FOR

14 CERTAIN SECURITIES ISSUED BY THE BANK; RE15 PORTS REQUIRED.—Any securities issued by the

16 Bank (including any guarantee by the Bank, wheth17 er or not limited in scope) in connection with the

18 raising of funds for inclusion in the Bank’s capital

19 resources as defined in Section 4 of Article II of

20 Chapter II of the Cooperation Agreement, and any

21 securities guaranteed by the Bank as to both the

22 principal and interest to which the commitment in

23 Section 3(d) of Article II of Chapter II of the Co24 operation Agreement is expressly applicable, shall be

25 deemed to be exempted securities within the mean-
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1 ing of section 3(a)(2) of the Securities Act of 1933

2 (15 U.S.C. 77c), and section 3(a)(12) of the Securi3 ties Exchange Act of 1934 (15 U.S.C. 78c). The

4 Bank shall file with the Securities and Exchange

5 Commission such annual and other reports with re6 gard to such securities as the Commission shall de7 termine to be appropriate in view of the special char8 acter of the Bank and its operations and necessary

9 in the public interest or for the protection of inves10 tors.

11 (3) AUTHORITY OF SECURITIES AND EXCHANGE

12 COMMISSION TO SUSPEND EXEMPTION; REPORTS TO

13 THE CONGRESS.—The Securities and Exchange

14 Commission, acting in consultation with the Na15 tional Advisory Council on International Monetary

16 and Financial Problems, is authorized to suspend

17 the provisions of paragraph (2) at any time as to

18 any or all securities issued or guaranteed by the

19 Bank during the period of such suspension. The

20 Commission shall include in its annual reports to

21 Congress such information as it shall deem advisable

22 with regard to the operations and effect of this sub23 section and in connection therewith shall include any

24 views submitted for such purpose by any association

25 of dealers registered with the Commission.
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1 SEC. 542. STATUS, IMMUNITIES, AND PRIVILEGES.

2 Article VIII of Chapter II of the Cooperation Agree3 ment shall have full force and effect in the United States,

4 its territories and possessions, and the Commonwealth of

5 Puerto Rico, upon entry into force of the Cooperation

6 Agreement.

7 SEC. 543. COMMUNITY ADJUSTMENT AND INVESTMENT

8 PROGRAM.

9 (a) THE PRESIDENT.—(1) The President may enter

10 into an agreement with the Bank that facilitates imple11 mentation by the President of a program for community

12 adjustment and investment in support of the Agreement

13 pursuant to chapter II of the Cooperation Agreement

14 (hereafter in this section referred to as the ‘‘community

15 adjustment and investment program’’).

16 (2) The President may receive from the Bank 10 per17 cent of the paid-in capital actually paid to the Bank by

18 the United States for the President to carry out, without

19 further appropriations, through Federal agencies and

20 their loan and loan guarantee programs, the community

21 adjustment and investment program, pursuant to an

22 agreement between the President and the Bank.

23 (3) The President may select one or more Federal

24 agencies that make loans or guarantees the repayment of

25 loans to assist in carrying out the community adjustment

26 and investment program, and may transfer the funds re-
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1 ceived from the Bank to such agency or agencies for the

2 purpose of assisting in carrying out the community adjust3 ment and investment program.

4 (4)(A) Each Federal agency selected by the President

5 to assist in carrying out the community adjustment and

6 investment program shall use the funds transferred to it

7 by the President from the Bank to pay for the costs of

8 direct and guaranteed loans, as defined in section 502 of

9 the Congressional Budget Act of 1974, and, as appro10 priate, other costs associated with such loans, all subject

11 to the restrictions and limitations that apply to such agen12 cy’s existing loan or loan guarantee program.

13 (B) Funds transferred to an agency under subpara14 graph (A) shall be in addition to the amount of funds au15 thorized in any appropriations Act to be expended by that

16 agency for its loan or loan guarantee program.

17 (5) The President shall—

18 (A) establish guidelines for the loans and loan

19 guarantees to be made under the community adjust20 ment and investment program;

21 (B) endorse the grants made by the Bank for

22 the community adjustment and investment program,

23 as provided in Article I, section 1(b), and Article III,

24 section 11(a), of Chapter II of the Cooperation

25 Agreement; and
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1 (C) endorse any loans or guarantees made by

2 the Bank for the community adjustment and invest3 ment program, as provided in Article I, section 1(b),

4 and Article III, section 6(a) and (c) of Chapter II

5 of the Cooperation Agreement.

6 (b) ADVISORY COMMITTEE.—

7 (1) ESTABLISHMENT.—The President shall es8 tablish an advisory committee to be known as the

9 Community Adjustment and Investment Program

10 Advisory Committee (in this section referred to as

11 the ‘‘Advisory Committee’’) in accordance with the

12 provisions of the Federal Advisory Committee Act.

13 (2) MEMBERSHIP.—

14 (A) IN GENERAL.—The Advisory Commit15 tee shall consist of 9 members of the public, ap16 pointed by the President, who, collectively, rep17 resent—

18 (i) community groups whose constitu19 encies include low-income families;

20 (ii) any scientific, professional, busi21 ness, nonprofit, or public interest organiza22 tion or association which is neither affili23 ated with, nor under the direction of, a

24 government;

25 (iii) for-profit business interests; and
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1 (iv) other appropriate entities with

2 relevant expertise.

3 (B) REPRESENTATION.—Each of the cat4 egories described in clauses (i) through (iv) of

5 subparagraph (A) shall be represented by no

6 fewer than 1 and no more than 3 members of

7 the Advisory Committee.

8 (3) FUNCTION.—It shall be the function of the

9 Advisory Committee—

10 (A) to provide advice to the President re11 garding the implementation of the community

12 adjustment and investment program, including

13 advice on the guidelines to be established by the

14 President for the loans and loan guarantees to

15 be made pursuant to subsection (a)(4), advice

16 on identifying the needs for adjustment assist17 ance and investment in support of the goals and

18 objectives of the Agreement, taking into ac19 count economic and geographic considerations,

20 and advice on such other matters as may be re21 quested by the President; and

22 (B) to review on a regular basis the oper23 ation of the community adjustment and invest24 ment program and provide the President with

25 the conclusions of its review.
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1 (4) TERMS OF MEMBERS.—

2 (A) IN GENERAL.—Each member of the

3 Advisory Committee shall serve at the pleasure

4 of the President.

5 (B) CHAIRPERSON.—The President shall

6 appoint a chairperson from among the members

7 of the Advisory Committee.

8 (C) MEETINGS.—The Advisory Committee

9 shall meet at least annually and at such other

10 times as requested by the President or the

11 chairperson. A majority of the members of the

12 Advisory Committee shall constitute a quorum.

13 (D) REIMBURSEMENT FOR EXPENSES.—

14 The members of the Advisory Committee may

15 receive reimbursement for travel, per diem, and

16 other necessary expenses incurred in the per17 formance of their duties, in accordance with the

18 Federal Advisory Committee Act.

19 (E) STAFF AND FACILITIES.—The Advi20 sory Committee may utilize the facilities and

21 services of employees of any Federal agency

22 without cost to the Advisory Committee, and

23 any such agency is authorized to provide serv24 ices as requested by the Committee.
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1 (c) OMBUDSMAN.—The President shall appoint an

2 ombudsman to provide the public with an opportunity to

3 participate in the carrying out of the community adjust4 ment and investment program.

5 (1) FUNCTION.—It shall be the function of the

6 ombudsman—

7 (A) to establish procedures for receiving

8 comments from the general public on the oper9 ation of the community adjustment and invest10 ment program, to receive such comments, and

11 to provide the President with summaries of the

12 public comments; and

13 (B) to perform an independent inspection

14 and programmatic audit of the operation of the

15 community adjustment and investment program

16 and to provide the President with the conclu17 sions of its investigation and audit.

18 (2) AUTHORIZATION OF APPROPRIATIONS.—

19 There are authorized to be appropriated to the

20 President, or such agency as the President may des21 ignate, $25,000 for fiscal year 1995 and for each

22 fiscal year thereafter, for the costs of the ombuds23 man.

24 (d) REPORTING REQUIREMENT.—The President

25 shall submit to the appropriate congressional committees
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1 an annual report on the community adjustment and in2 vestment program (if any) that is carried out pursuant

3 to this section. Each report shall state the amount of the

4 loans made or guaranteed during the 12-month period

5 ending on the day before the date of the report.

6 SEC. 544. DEFINITION.

7 For purposes of this part, the term ‘‘Border Environ8 ment Cooperation Agreement’’ (referred to in this part as

9 the ‘‘Cooperation Agreement’’) means the November 1993

10 Agreement Between the Government of the United States

11 of America and the Government of the United Mexican

12 States Concerning the Establishment of a Border Envi13 ronment Cooperation Commission and a North American

14 Development Bank.

15 TITLE VI—CUSTOMS

16 MODERNIZATION

17 SEC. 601. REFERENCE.

18 Whenever in subtitle A, B, or C an amendment or

19 repeal is expressed in terms of an amendment to, or repeal

20 of, a part, section, subsection, or other provision, the ref21 erence shall be considered to be made a part, section, sub22 section, or other provision of the Tariff Act of 1930 (19

23 U.S.C. 1202 et seq.).
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1 Subtitle A—Improvements in

2 Customs Enforcement

3 SEC. 611. PENALTIES FOR VIOLATIONS OF ARRIVAL, RE4 PORTING, ENTRY, AND CLEARANCE REQUIRE5 MENTS.

6 Section 436 (19 U.S.C. 1436) is amended—

7 (1) by amending subsection (a)—

8 (A) by striking out ‘‘433’’ in paragraph (1)

9 and inserting ‘‘431, 433, or 434 of this Act or

10 section 4197 of the Revised Statutes of the

11 United States (46 U.S.C. App. 91)’’,

12 (B) by amending paragraph (2) to read as

13 follows:

14 ‘‘(2) to present or transmit, electronically or

15 otherwise, any forged, altered, or false document,

16 paper, information, data or manifest to the Customs

17 Service under section 431(e), 433(d), or 434 of this

18 Act or section 4197 of the Revised Statutes of the

19 United States (46 U.S.C. App. 91) without revealing

20 the facts; or’’, and

21 (C) by amending paragraph (3) to read as

22 follows:

23 ‘‘(3) to fail to make entry or to obtain clearance

24 as required by section 434 or 644 of this Act, sec25 tion 4197 of the Revised Statutes of the United
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1 States (46 U.S.C. App. 91), or section 1109 of the

2 Federal Aviation Act of 1958 (49 U.S.C. App.

3 1509); or’’; and

4 (2) by striking out ‘‘AND ENTRY’’ in the sec5 tion heading and inserting ‘‘ENTRY, AND CLEAR6 ANCE’’.

7 SEC. 612. FAILURE TO DECLARE.

8 Section 497(a) (19 U.S.C. 1497(a)) is amended—

9 (1) by inserting ‘‘or transmitted’’ after ‘‘made’’

10 in paragraph (1)(A); and

11 (2) by amending paragraph (2)(A) to read as

12 follows:

13 ‘‘(A) if the article is a controlled sub14 stance, either $500 or an amount equal to

15 1,000 percent of the value of the article, which16 ever amount is greater; and’’.

17 SEC. 613. CUSTOMS TESTING LABORATORIES; DETENTION

18 OF MERCHANDISE.

19 (a) AMENDMENT.—Section 499 (19 U.S.C. 1499) is

20 amended to read as follows:

21 ‘‘SEC. 499. EXAMINATION OF MERCHANDISE.

22 ‘‘(a) ENTRY EXAMINATION.—

23 ‘‘(1) IN GENERAL.—Imported merchandise that

24 is required by law or regulation to be inspected, ex25 amined, or appraised shall not be delivered from cus-
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1 toms custody (except under such bond or other secu2 rity as may be prescribed by the Secretary to assure

3 compliance with all applicable laws, regulations, and

4 instructions which the Secretary or the Customs

5 Service is authorized to enforce) until the merchan6 dise has been inspected, appraised, or examined and

7 is reported by the Customs Service to have been

8 truly and correctly invoiced and found to comply

9 with the requirements of the laws of the United

10 States.

11 ‘‘(2) EXAMINATION.—The Customs Service—

12 ‘‘(A) shall designate the packages or quan13 tities of merchandise covered by any invoice or

14 entry which are to be opened and examined for

15 the purpose of appraisement or otherwise;

16 ‘‘(B) shall order such packages or quan17 tities to be sent to such place as is designated

18 by the Secretary by regulation for such pur19 pose;

20 ‘‘(C) may require such additional packages

21 or quantities as the Secretary considers nec22 essary for such purpose; and

23 ‘‘(D) shall inspect a sufficient number of

24 shipments, and shall examine a sufficient num-
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1 ber of entries, to ensure compliance with the

2 laws enforced by the Customs Service.

3 ‘‘(3) UNSPECIFIED ARTICLES.—If any package

4 contains any article not specified in the invoice or

5 entry and, in the opinion of the Customs Service, the

6 article was omitted from the invoice or entry—

7 ‘‘(A) with fraudulent intent on the part of

8 the seller, shipper, owner, agent, importer of

9 record, or entry filer, the contents of the entire

10 package in which such article is found shall be

11 subject to seizure; or

12 ‘‘(B) without fraudulent intent, the value

13 of the article shall be added to the entry and

14 the duties, fees, and taxes thereon paid accord15 ingly.

16 ‘‘(4) DEFICIENCY.—If a deficiency is found in

17 quantity, weight, or measure in the examination of

18 any package, the person finding the deficiency shall

19 make a report thereof to the Customs Service. The

20 Customs Service shall make allowance for the defi21 ciency in the liquidation of duties.

22 ‘‘(5) INFORMATION REQUIRED FOR RELEASE.—

23 If an examination is conducted, any information re24 quired for release shall be provided, either electroni25 cally or in paper form, to the Customs Service at the
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1 port of examination. The absence of such informa2 tion does not limit the authority of the Customs

3 Service to conduct an examination.

4 ‘‘(b) TESTING LABORATORIES.—

5 ‘‘(1) ACCREDITATION OF PRIVATE TESTING

6 LABORATORIES.—The Customs Service shall estab7 lish and implement a procedure, under regulations

8 promulgated by the Secretary, for accrediting pri9 vate laboratories within the United States which

10 may be used to perform tests (that would otherwise

11 be performed by Customs Service laboratories) to es12 tablish the characteristics, quantities, or composition

13 of imported merchandise. Such regulations—

14 ‘‘(A) shall establish the conditions required

15 for the laboratories to receive and maintain ac16 creditation for purposes of this subsection;

17 ‘‘(B) shall establish the conditions regard18 ing the suspension and revocation of accredita19 tion, which may include the imposition of a

20 monetary penalty not to exceed $100,000 and

21 such penalty is in addition to the recovery, from

22 a gauger or laboratory accredited under para23 graph (1), of any loss of revenue that may have

24 occurred, but the Customs Service—
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1 ‘‘(i) may seek to recover lost revenue

2 only in cases where the gauger or labora3 tory intentionally falsified the analysis or

4 gauging report in collusion with the im5 porter; and

6 ‘‘(ii) shall neither assess penalties nor

7 seek to recover lost revenue because of a

8 good faith difference of professional opin9 ion; and

10 ‘‘(C) may provide for the imposition of a

11 reasonable charge for accreditation and periodic

12 reaccreditation.

13 The collection of any charge for accreditation and

14 reaccreditation under this section is not prohibited

15 by section 13031(e)(6) of the Consolidated Omnibus

16 Budget Reconciliation Act of 1985 (19 U.S.C.

17 58c(e)(6)).

18 ‘‘(2) APPEAL OF ADVERSE ACCREDITATION DE19 CISIONS.—A laboratory applying for accreditation,

20 or that is accredited, under this section may contest

21 any decision or order of the Customs Service deny22 ing, suspending, or revoking accreditation, or impos23 ing a monetary penalty, by commencing an action in

24 accordance with chapter 169 of title 28, United

25 States Code, in the Court of International Trade
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1 within 60 days after issuance of the decision or

2 order.

3 ‘‘(3) TESTING BY ACCREDITED LABORA4 TORIES.—When requested by an importer of record

5 of merchandise, the Customs Service shall authorize

6 the release to the importer of a representative sam7 ple of the merchandise for testing, at the expense of

8 the importer, by a laboratory accredited under para9 graph (1). The testing results from a laboratory ac10 credited under paragraph (1) that are submitted by

11 an importer of record with respect to merchandise in

12 an entry shall, in the absence of testing results ob13 tained from a Customs Service laboratory, be accept14 ed by the Customs Service if the importer of record

15 certifies that the sample tested was taken from the

16 merchandise in the entry. Nothing in this subsection

17 shall be construed to limit in any way or preclude

18 the authority of the Customs Service to test or ana19 lyze any sample or merchandise independently.

20 ‘‘(4) AVAILABILITY OF TESTING PROCEDURE,

21 METHODOLOGIES, AND INFORMATION.—Testing pro22 cedures and methodologies used by the Customs

23 Service, and information resulting from any testing

24 conducted by the Customs Service, shall be made

25 available as follows:
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1 ‘‘(A) Testing procedures and methodologies

2 shall be made available upon request to any

3 person unless the procedures or methodologies

4 are—

5 ‘‘(i) proprietary to the holder of a

6 copyright or patent related to such proce7 dures or methodologies, or

8 ‘‘(ii) developed by the Customs Serv9 ice for enforcement purposes.

10 ‘‘(B) Information resulting from testing

11 shall be made available upon request to the im12 porter of record and any agent thereof unless

13 the information reveals information which is—

14 ‘‘(i) proprietary to the holder of a

15 copyright or patent; or

16 ‘‘(ii) developed by the Customs Serv17 ice for enforcement purposes.

18 ‘‘(5) MISCELLANEOUS PROVISIONS.—For pur19 poses of this subsection—

20 ‘‘(A) any reference to a private laboratory

21 includes a reference to a private gauger; and

22 ‘‘(B) accreditation of private laboratories

23 extends only to the performance of functions by

24 such laboratories that are within the scope of

25 those responsibilities for determinations of the
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1 elements relating to admissibility, quantity,

2 composition, or characteristics of imported mer3 chandise that are vested in, or delegated to, the

4 Customs Service.

5 ‘‘(c) DETENTIONS.—Except in the case of merchan6 dise with respect to which the determination of admissibil7 ity is vested in an agency other than the Customs Service,

8 the following apply:

9 ‘‘(1) IN GENERAL.—Within the 5-day period

10 (excluding weekends and holidays) following the date

11 on which merchandise is presented for customs ex12 amination, the Customs Service shall decide whether

13 to release or detain the merchandise. Merchandise

14 which is not released within such 5-day period shall

15 be considered to be detained merchandise.

16 ‘‘(2) NOTICE OF DETENTION.—The Customs

17 Service shall issue a notice to the importer or other

18 party having an interest in detained merchandise no

19 later than 5 days, excluding weekends and holidays,

20 after the decision to detain the merchandise is made.

21 The notice shall advise the importer or other inter22 ested party of—

23 ‘‘(A) the initiation of the detention;

24 ‘‘(B) the specific reason for the detention;
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1 ‘‘(C) the anticipated length of the deten2 tion;

3 ‘‘(D) the nature of the tests or inquiries to

4 be conducted; and

5 ‘‘(E) the nature of any information which,

6 if supplied to the Customs Service, may acceler7 ate the disposition of the detention.

8 ‘‘(3) TESTING RESULTS.—Upon request by the

9 importer or other party having an interest in de10 tained merchandise, the Customs Service shall pro11 vide the party with copies of the results of any test12 ing conducted by the Customs Service on the mer13 chandise and a description of the testing procedures

14 and methodologies (unless such procedures or meth15 odologies are proprietary to the holder of a copyright

16 or patent or were developed by the Customs Service

17 for enforcement purposes). The results and test de18 scription shall be in sufficient detail to permit the

19 duplication and analysis of the testing and the re20 sults.

21 ‘‘(4) SEIZURE AND FORFEITURE.—If otherwise

22 provided by law, detained merchandise may be seized

23 and forfeited.

24 ‘‘(5) EFFECT OF FAILURE TO MAKE DETER25 MINATION.—
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1 ‘‘(A) The failure by the Customs Service to

2 make a final determination with respect to the

3 admissibility of detained merchandise within 30

4 days after the merchandise has been presented

5 for customs examination, or such longer period

6 if specifically authorized by law, shall be treated

7 as a decision of the Customs Service to exclude

8 the merchandise for purposes of section

9 514(a)(4).

10 ‘‘(B) For purposes of section 1581 of title

11 28, United States Code, a protest against the

12 decision to exclude the merchandise which has

13 not been allowed or denied in whole or in part

14 before the 30th day after the day on which the

15 protest was filed shall be treated as having been

16 denied on such 30th day.

17 ‘‘(C) Notwithstanding section 2639 of title

18 28, United States Code, once an action respect19 ing a detention is commenced, unless the Cus20 toms Service establishes by a preponderance of

21 the evidence that an admissibility decision has

22 not been reached for good cause, the court shall

23 grant the appropriate relief which may include,

24 but is not limited to, an order to cancel the de25 tention and release the merchandise.’’.
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1 (b) EXISTING LABORATORIES.—Accreditation under

2 section 499(b) of the Tariff Act of 1930 (as added by sub3 section (a)) is not required for any private laboratory (in4 cluding any gauger) that was accredited or approved by

5 the Customs Service as of the day before the date of the

6 enactment of this Act; but any such laboratory is subject

7 to reaccreditation under the provisions of such section and

8 the regulations promulgated thereunder.

9 SEC. 614. RECORDKEEPING.

10 Section 508 (19 U.S.C. 1508) is amended—

11 (1) by amending subsection (a) to read as fol12 lows:

13 ‘‘(a) REQUIREMENTS.—Any—

14 ‘‘(1) owner, importer, consignee, importer of

15 record, entry filer, or other party who—

16 ‘‘(A) imports merchandise into the customs

17 territory of the United States, files a drawback

18 claim, or transports or stores merchandise car19 ried or held under bond, or

20 ‘‘(B) knowingly causes the importation or

21 transportation or storage of merchandise car22 ried or held under bond into or from the cus23 toms territory of the United States;

24 ‘‘(2) agent of any party described in paragraph

25 (1); or
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1 ‘‘(3) person whose activities require the filing of

2 a declaration or entry, or both;

3 shall make, keep, and render for examination and inspec4 tion records (which for purposes of this section include,

5 but are not limited to, statements, declarations, docu6 ments and electronically generated or machine readable

7 data) which—

8 ‘‘(A) pertain to any such activity, or to the in9 formation contained in the records required by this

10 Act in connection with any such activity; and

11 ‘‘(B) are normally kept in the ordinary course

12 of business.’’; and

13 (2) by amending subsection (c) to read as fol14 lows:

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

17 not to exceed 5 years from the date of entry or expor18 tation, as appropriate, as the Secretary shall prescribe; ex19 cept that records for any drawback claim shall be kept

20 until the 3rd anniversary of the date of payment of the

21 claim.’’.

22 SEC. 615. EXAMINATION OF BOOKS AND WITNESSES.

23 Section 509 (19 U.S.C. 1509) is amended as follows:

24 (1) Subsection (a) is amended—
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1 (A) by striking out ‘‘and taxes’’ wherever

2 it appears and inserting ‘‘, fees and taxes’’;

3 (B) by amending paragraph (1) to read as

4 follows:

5 ‘‘(1) examine, or cause to be examined, upon

6 reasonable notice, any record (which for purposes of

7 this section, includes, but is not limited to, any

8 statement, declaration, document, or electronically

9 generated or machine readable data) described in

10 the notice with reasonable specificity, which may be

11 relevant to such investigation or inquiry, except

12 that—

13 ‘‘(A) if such record is required by law or

14 regulation for the entry of the merchandise

15 (whether or not the Customs Service required

16 its presentation at the time of entry) it shall be

17 provided to the Customs Service within a rea18 sonable time after demand for its production is

19 made, taking into consideration the number,

20 type, and age of the item demanded; and

21 ‘‘(B) if a person of whom demand is made

22 under subparagraph (A) fails to comply with

23 the demand, the person may be subject to pen24 alty under subsection (g);’’;
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1 (C) by amending that part of paragraph

2 (2) that precedes subparagraph (D) to read as

3 follows:

4 ‘‘(2) summon, upon reasonable notice—

5 ‘‘(A) the person who—

6 ‘‘(i) imported, or knowingly caused to

7 be imported, merchandise into the customs

8 territory of the United States,

9 ‘‘(ii) exported merchandise, or know10 ingly caused merchandise to be exported,

11 to Canada,

12 ‘‘(iii) transported or stored merchan13 dise that was or is carried or held under

14 customs bond, or knowingly caused such

15 transportation or storage, or

16 ‘‘(iv) filed a declaration, entry, or

17 drawback claim with the Customs Service;

18 ‘‘(B) any officer, employee, or agent of any

19 person described in subparagraph (A);

20 ‘‘(C) any person having possession, custody

21 or care of records relating to the importation or

22 other activity described in subparagraph (A);

23 or’’; and

24 (D) by striking out the comma at the end

25 of subparagraph (D) and inserting a semicolon.
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1 (2) Subsections (b) and (c) are redesignated as

2 subsections (c) and (d), respectively.

3 (3) The following new subsection is inserted

4 after subsection (a):

5 ‘‘(b) REGULATORY AUDIT PROCEDURES.—

6 ‘‘(1) In conducting a regulatory audit under

7 this section (which does not include a quantity ver8 ification for a customs bonded warehouse or general

9 purpose foreign trade zone), the Customs Service

10 auditor shall provide the person being audited, in

11 advance of the audit, with a reasonable estimate of

12 the time to be required for the audit. If in the

13 course of an audit it becomes apparent that addi14 tional time will be required, the Customs Service

15 auditor shall immediately provide a further estimate

16 of such additional time.

17 ‘‘(2) Before commencing an audit, the Customs

18 Service auditor shall inform the party to be audited

19 of his right to an entry conference at which time the

20 purpose will be explained and an estimated termi21 nation date set. Upon completion of on-site audit ac22 tivities, the Customs Service auditor shall schedule a

23 closing conference to explain the preliminary results

24 of the audit.
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1 ‘‘(3) Except as provided in paragraph (5), if the

2 estimated or actual termination date for an audit

3 passes without the Customs Service auditor provid4 ing a closing conference to explain the results of the

5 audit, the person being audited may petition in writ6 ing for such a conference to the appropriate regional

7 commissioner, who, upon receipt of such a request,

8 shall provide for such a conference to be held within

9 15 days after the date of receipt.

10 ‘‘(4) Except as provided in paragraph (5), the

11 Customs Service auditor shall complete the formal

12 written audit report within 90 days following the

13 closing conference unless the appropriate regional

14 commissioner provides written notice to the person

15 being audited of the reason for any delay and the

16 anticipated completion date. After application of any

17 exemption contained in section 552 of title 5, United

18 States Code, a copy of the formal written audit re19 port shall be sent to the person audited no later

20 than 30 days following completion of the report.

21 ‘‘(5) Paragraphs (3) and (4) shall not apply

22 after the Customs Service commences a formal in23 vestigation with respect to the issue involved.’’.

24 (4) Subsection (d) (as redesignated by para25 graph (2)) is amended—
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1 (A) by striking out ‘‘statements, declara2 tions, or documents’’ in paragraph (1)(A) and

3 inserting ‘‘those’’;

4 (B) by inserting ‘‘, unless such custom5 house broker is the importer of record on an

6 entry’’ after ‘‘broker’’ in paragraph (1)(C)(i);

7 (C) by striking out ‘‘import’’ in each of

8 paragraphs (2)(B) and (4)(B);

9 (D) by inserting ‘‘described in section

10 508’’ after ‘‘transactions’’ in each of para11 graphs (2)(B) and (4)(B); and

12 (E) by inserting ‘‘, fees,’’ after ‘‘duties’’ in

13 paragraph (4)(A).

14 (5) The following new subsections are added at

15 the end thereof:

16 ‘‘(e) LIST OF RECORDS AND INFORMATION.—The

17 Customs Service shall identify and publish a list of the

18 records or entry information that is required to be main19 tained and produced under subsection (a)(1)(A).

20 ‘‘(f) RECORDKEEPING COMPLIANCE PROGRAM.—

21 ‘‘(1) IN GENERAL.—After consultation with the

22 importing community, the Customs Service shall by

23 regulation establish a recordkeeping compliance pro24 gram which the parties listed in section 508(a) may

25 participate in after being certified by the Customs
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1 Service under paragraph (2). Participation in the

2 recordkeeping compliance program by recordkeepers

3 is voluntary.

4 ‘‘(2) CERTIFICATION.—A recordkeeper may be

5 certified as a participant in the recordkeeping com6 pliance program after meeting the general record7 keeping requirements established under the program

8 or after negotiating an alternative program suited to

9 the needs of the recordkeeper and the Customs Serv10 ice. Certification requirements shall take into ac11 count the size and nature of the importing business

12 and the volume of imports. In order to be certified,

13 the recordkeeper must be able to demonstrate that

14 it—

15 ‘‘(A) understands the legal requirements

16 for recordkeeping, including the nature of the

17 records required to be maintained and produced

18 and the time periods involved;

19 ‘‘(B) has in place procedures to explain the

20 recordkeeping requirements to those employees

21 who are involved in the preparation, mainte22 nance, and production of required records;

23 ‘‘(C) has in place procedures regarding the

24 preparation and maintenance of required
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1 records, and the production of such records to

2 the Customs Service;

3 ‘‘(D) has designated a dependable individ4 ual or individuals to be responsible for record5 keeping compliance under the program and

6 whose duties include maintaining familiarity

7 with the recordkeeping requirements of the

8 Customs Service;

9 ‘‘(E) has a record maintenance procedure

10 approved by the Customs Service for original

11 records, or, if approved by the Customs Service,

12 for alternative records or recordkeeping formats

13 other than the original records; and

14 ‘‘(F) has procedures for notifying the Cus15 toms Service of occurrences of variances to, and

16 violations of, the requirements of the record17 keeping compliance program or the negotiated

18 alternative programs, and for taking corrective

19 action when notified by the Customs Service of

20 violations or problems regarding such program.

21 ‘‘(g) PENALTIES.—

22 ‘‘(1) DEFINITION.—For purposes of this sub23 section, the term ‘information’ means any record,

24 statement, declaration, document, or electronically
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1 stored or transmitted information or data referred to

2 in subsection (a)(1)(A).

3 ‘‘(2) EFFECTS OF FAILURE TO COMPLY WITH

4 DEMAND.—Except as provided in paragraph (4), if

5 a person fails to comply with a lawful demand for

6 information under subsection (a)(1)(A) the following

7 provisions apply:

8 ‘‘(A) If the failure to comply is a result of

9 the willful failure of the person to maintain,

10 store, or retrieve the demanded information,

11 such person shall be subject to a penalty, for

12 each release of merchandise, not to exceed

13 $100,000, or an amount equal to 75 percent of

14 the appraised value of the merchandise, which15 ever amount is less.

16 ‘‘(B) If the failure to comply is a result of

17 the negligence of the person in maintaining,

18 storing, or retrieving the demanded informa19 tion, such person shall be subject to a penalty,

20 for each release of merchandise, not to exceed

21 $10,000, or an amount equal to 40 percent of

22 the appraised value of the merchandise, which23 ever amount is less.

24 ‘‘(C) In addition to any penalty imposed

25 under subparagraph (A) or (B) regarding de-
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1 manded information, if such information related

2 to the eligibility of merchandise for a column 1

3 special rate of duty under title I, the entry of

4 such merchandise—

5 ‘‘(i) if unliquidated, shall be liquidated

6 at the applicable column 1 general rate of

7 duty; or

8 ‘‘(ii) if liquidated within the 2-year

9 period preceding the date of the demand,

10 shall be reliquidated, notwithstanding the

11 time limitation in section 514 or 520, at

12 the applicable column 1 general rate of

13 duty;

14 except that any liquidation or reliquidation

15 under clause (i) or (ii) shall be at the applicable

16 column 2 rate of duty if the Customs Service

17 demonstrates that the merchandise should be

18 dutiable at such rate.

19 ‘‘(3) AVOIDANCE OF PENALTY.—No penalty

20 may be assessed under this subsection if the person

21 can show—

22 ‘‘(A) that the loss of the demanded infor23 mation was the result of an act of God or other

24 natural casualty or disaster beyond the fault of

25 such person or an agent of the person;
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1 ‘‘(B) on the basis of other evidence satis2 factory to the Customs Service, that the de3 mand was substantially complied with; or

4 ‘‘(C) the information demanded was pre5 sented to and retained by the Customs Service

6 at the time of entry or submitted in response to

7 an earlier demand.

8 ‘‘(4) PENALTIES NOT EXCLUSIVE.—Any penalty

9 imposed under this subsection shall be in addition to

10 any other penalty provided by law except for—

11 ‘‘(A) a penalty imposed under section 592

12 for a material omission of the demanded infor13 mation, or

14 ‘‘(B) disciplinary action taken under sec15 tion 641.

16 ‘‘(5) REMISSION OR MITIGATION.—A penalty

17 imposed under this section may be remitted or miti18 gated under section 618.

19 ‘‘(6) CUSTOMS SUMMONS.—Nothing in this sub20 section shall limit or preclude the Customs Service

21 from issuing, or seeking the enforcement of, a cus22 toms summons.

23 ‘‘(7) ALTERNATIVES TO PENALTIES.—

24 ‘‘(A) IN GENERAL.—When a recordkeeper

25 who—
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1 ‘‘(i) has been certified as a participant

2 in the recordkeeping compliance program

3 under subsection (f); and

4 ‘‘(ii) is generally in compliance with

5 the appropriate procedures and require6 ments of the program;

7 does not produce a demanded record or infor8 mation for a specific release or provide the in9 formation by acceptable alternative means, the

10 Customs Service, in the absence of willfulness

11 or repeated violations, shall issue a written no12 tice of the violation to the recordkeeper in lieu

13 of a monetary penalty. Repeated violations by

14 the recordkeeper may result in the issuance of

15 penalties and removal of certification under the

16 program until corrective action, satisfactory to

17 the Customs Service, is taken.

18 ‘‘(B) CONTENTS OF NOTICE.—A notice of

19 violation issued under subparagraph (A) shall—

20 ‘‘(i) state that the recordkeeper has

21 violated the recordkeeping requirements;

22 ‘‘(ii) indicate the record or informa23 tion which was demanded; and

24 ‘‘(iii) warn the recordkeeper that fu25 ture failures to produce demanded records
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1 or information may result in the imposition

2 of monetary penalties.

3 ‘‘(C) RESPONSE TO NOTICE.—Within a

4 reasonable time after receiving written notice

5 under subparagraph (A), the recordkeeper shall

6 notify the Customs Service of the steps it has

7 taken to prevent a recurrence of the violation.

8 ‘‘(D) REGULATIONS.—The Secretary shall

9 promulgate regulations to implement this para10 graph. Such regulations may specify the time

11 periods for compliance with a demand for infor12 mation and provide guidelines which define re13 peated violations for purposes of this para14 graph. Any penalty issued for a recordkeeping

15 violation shall take into account the degree of

16 compliance compared to the total number of im17 portations, the nature of the demanded records

18 and the recordkeeper’s cooperation.’’.

19 SEC. 616. JUDICIAL ENFORCEMENT.

20 The second sentence of section 510(a) (19 U.S.C.

21 1510(a)) is amended by inserting ‘‘and such court may

22 assess a monetary penalty’’ after ‘‘as a contempt thereof’’.

23 SEC. 617. REVIEW OF PROTESTS.

24 Section 515 (19 U.S.C. 1515) is amended by insert25 ing at the end the following new subsections:
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1 ‘‘(c) If a protesting party believes that an application

2 for further review was erroneously or improperly denied

3 or was denied without authority for such action, it may

4 file with the Commissioner of Customs a written request

5 that the denial of the application for further review be set

6 aside. Such request must be filed within 60 days after the

7 date of the notice of the denial. The Commissioner of Cus8 toms may review such request and, based solely on the

9 information before the Customs Service at the time the

10 application for further review was denied, may set aside

11 the denial of the application for further review and void

12 the denial of protest, if appropriate. If the Commissioner

13 of Customs fails to act within 60 days after the date of

14 the request, the request shall be considered denied. All de15 nials of protests are effective from the date of original de16 nial for purposes of section 2636 of title 28, United States

17 Code. If an action is commenced in the Court of Inter18 national Trade that arises out of a protest or an applica19 tion for further review, all administrative action pertaining

20 to such protest or application shall terminate and any ad21 ministrative action taken subsequent to the commence22 ment of the action is null and void.

23 ‘‘(d) If a protest is timely and properly filed, but is

24 denied contrary to proper instructions, the Customs Serv25 ice may on its own initiative, or pursuant to a written re-
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1 quest by the protesting party filed with the appropriate

2 district director within 90 days after the date of the pro3 test denial, void the denial of the protest.’’.

4 SEC. 618. REPEAL OF PROVISION RELATING TO RELIQUIDA5 TION ON ACCOUNT OF FRAUD.

6 Section 521 (19 U.S.C. 1521) is repealed.

7 SEC. 619. PENALTIES RELATING TO MANIFESTS.

8 Section 584 (19 U.S.C. 1584) is amended—

9 (1) by amending subsection (a)—

10 (A) by striking out ‘‘appropriate customs

11 officer’’ wherever it appears and inserting

12 ‘‘Customs Service’’,

13 (B) by striking out ‘‘officer demanding the

14 same’’ in paragraph (1) and inserting ‘‘officer

15 (whether of the Customs Service or the Coast

16 Guard) demanding the same’’, and

17 (C) by inserting ‘‘(electronically or other18 wise)’’ after ‘‘submission’’ in the last sentence

19 of paragraph (1); and

20 (2) by amending subsection (b)—

21 (A) by striking out ‘‘the appropriate cus22 toms officer’’, ‘‘he’’ (except in paragraph

23 (1)(F)), and ‘‘such officer’’ wherever they ap24 pear and inserting ‘‘the Customs Service’’,
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1 (B) by striking out ‘‘written’’ wherever it

2 appears (other than paragraph (1)(F)),

3 (C) by inserting ‘‘or electronically trans4 mit’’ after ‘‘issue’’ wherever it appears, and

5 (D) by striking out ‘‘his intention’’ in the

6 first sentence of paragraph (1) and inserting

7 ‘‘intent’’.

8 SEC. 620. UNLAWFUL UNLADING OR TRANSSHIPMENT.

9 Section 586 (19 U.S.C. 1586) is amended—

10 (1) by inserting ‘‘, or of a hovering vessel which

11 has received or delivered merchandise while outside

12 the territorial sea,’’ after ‘‘from a foreign port or

13 place’’ wherever it appears; and

14 (2) by amending subsection (f)—

15 (A) by striking out ‘‘the appropriate cus16 toms officer of the’’ and ‘‘the appropriate cus17 toms officer within the’’ and inserting ‘‘the

18 Customs Service at the’’; and

19 (B) by striking out ‘‘the appropriate cus20 toms officer is’’ and inserting ‘‘the Customs

21 Service is’’.

22 SEC. 621. PENALTIES FOR FRAUD, GROSS NEGLIGENCE,

23 AND NEGLIGENCE; PRIOR DISCLOSURE.

24 Section 592 (19 U.S.C. 1592) is amended—
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1 (1) by inserting ‘‘or electronically transmitted

2 data or information’’ after ‘‘document’’ in subsection

3 (a)(1)(A)(i);

4 (2) by inserting ‘‘The mere nonintentional rep5 etition by an electronic system of an initial clerical

6 error does not constitute a pattern of negligent con7 duct.’’ at the end of subsection (a)(2);

8 (3) by amending subsection (b)—

9 (A) by amending the first sentence of

10 paragraph (1)(A)—

11 (i) by striking out ‘‘the appropriate

12 customs officer’’ and inserting ‘‘the Cus13 toms Service’’,

14 (ii) by striking out ‘‘he’’ and inserting

15 ‘‘it’’, and

16 (iii) by striking out ‘‘his’’ and insert17 ing ‘‘its’’, and

18 (B) by amending paragraph (2)—

19 (i) by striking out ‘‘the appropriate

20 customs officer’’ wherever it appears and

21 inserting ‘‘the Customs Service’’,

22 (ii) by striking out ‘‘such officer’’

23 wherever it appears and inserting ‘‘the

24 Customs Service’’, and
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1 (iii) by striking out ‘‘he’’ wherever it

2 appears and inserting ‘‘it’’;

3 (4) by amending subsection (c)(4)—

4 (A) by striking ‘‘time of disclosure or with5 in thirty days, or such longer period as the ap6 propriate customs officer may provide, after no7 tice by the appropriate customs officer of his’’

8 in subparagraph (A)(i) and by striking out

9 ‘‘time of disclosure in 30 days, or such longer

10 period as the appropriate customs officer may

11 provide, after notice by the appropriate customs

12 officer of his’’ in subparagraph (B), and insert13 ing in each place ‘‘time of disclosure, or within

14 30 days (or such longer period as the Customs

15 Service may provide) after notice by the Cus16 toms Service of its’’; and

17 (B) by inserting after the last sentence the

18 following: ‘‘For purposes of this section, a for19 mal investigation of a violation is considered to

20 be commenced with regard to the disclosing

21 party and the disclosed information on the date

22 recorded in writing by the Customs Service as

23 the date on which facts and circumstances were

24 discovered or information was received which

25 caused the Customs Service to believe that a
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1 possibility of a violation of subsection (a) ex2 isted.’’; and

3 (5) by amending subsection (d)—

4 (A) by striking out ‘‘the appropriate cus5 toms officer’’ and inserting ‘‘the Customs Serv6 ice’’,

7 (B) by striking out ‘‘duties’’ wherever it

8 appears and inserting ‘‘duties, taxes, or fees’’,

9 and

10 (C) by inserting ‘‘, TAXES OR FEES’’ after

11 ‘‘DUTIES’’ in the sideheading.

12 SEC. 622. PENALTIES FOR FALSE DRAWBACK CLAIMS.

13 (a) AMENDMENT.—Part V of title IV is amended by

14 inserting after section 593 the following new section:

15 ‘‘SEC. 593A. PENALTIES FOR FALSE DRAWBACK CLAIMS.

16 ‘‘(a) PROHIBITION.—

17 ‘‘(1) GENERAL RULE.—No person, by fraud, or

18 negligence—

19 ‘‘(A) may seek, induce or affect, or at20 tempt to seek, induce, or affect, the payment or

21 credit to that person or others of any drawback

22 claim by means of—

23 ‘‘(i) any document, written or oral

24 statement, or electronically transmitted
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1 data or information, or act which is mate2 rial and false, or

3 ‘‘(ii) any omission which is material;

4 or

5 ‘‘(B) may aid or abet any other person to

6 violate subparagraph (A).

7 ‘‘(2) EXCEPTION.—Clerical errors or mistakes

8 of fact are not violations of paragraph (1) unless

9 they are part of a pattern of negligent conduct. The

10 mere nonintentional repetition by an electronic sys11 tem of an initial clerical error does not constitute a

12 pattern of negligent conduct.

13 ‘‘(b) PROCEDURES.—

14 ‘‘(1) PREPENALTY NOTICE.—

15 ‘‘(A) IN GENERAL.—If the Customs Serv16 ice has reasonable cause to believe that there

17 has been a violation of subsection (a) and deter18 mines that further proceedings are warranted,

19 the Customs Service shall issue to the person

20 concerned a written notice of intent to issue a

21 claim for a monetary penalty. Such notice

22 shall—

23 ‘‘(i) identify the drawback claim;

24 ‘‘(ii) set forth the details relating to

25 the seeking, inducing, or affecting, or the
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1 attempted seeking, inducing, or affecting,

2 or the aiding or procuring of, the drawback

3 claim;

4 ‘‘(iii) specify all laws and regulations

5 allegedly violated;

6 ‘‘(iv) disclose all the material facts

7 which establish the alleged violation;

8 ‘‘(v) state whether the alleged viola9 tion occurred as a result of fraud or neg10 ligence;

11 ‘‘(vi) state the estimated actual or po12 tential loss of revenue due to the drawback

13 claim, and, taking into account all cir14 cumstances, the amount of the proposed

15 monetary penalty; and

16 ‘‘(vii) inform such person that he shall

17 have a reasonable opportunity to make rep18 resentations, both oral and written, as to

19 why a claim for a monetary penalty should

20 not be issued in the amount stated.

21 ‘‘(B) EXCEPTIONS.—The Customs Service

22 may not issue a prepenalty notice if the amount

23 of the penalty in the penalty claim issued under

24 paragraph (2) is $1,000 or less. In such cases,
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1 the Customs Service may proceed directly with

2 a penalty claim.

3 ‘‘(C) PRIOR APPROVAL.—No prepenalty

4 notice in which the alleged violation occurred as

5 a result of fraud shall be issued without the

6 prior approval of Customs Headquarters.

7 ‘‘(2) PENALTY CLAIM.—After considering rep8 resentations, if any, made by the person concerned

9 pursuant to the notice issued under paragraph (1),

10 the Customs Service shall determine whether any

11 violation of subsection (a), as alleged in the notice,

12 has occurred. If the Customs Service determines

13 that there was no violation, the Customs Service

14 shall promptly issue a written statement of the de15 termination to the person to whom the notice was

16 sent. If the Customs Service determines that there

17 was a violation, Customs shall issue a written pen18 alty claim to such person. The written penalty claim

19 shall specify all changes in the information provided

20 under clauses (i) through (vii) of paragraph (1)(A).

21 Such person shall have a reasonable opportunity

22 under section 618 to make representations, both oral

23 and written, seeking remission or mitigation of the

24 monetary penalty. At the conclusion of any proceed25 ing under section 618, the Customs Service shall
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1 provide to the person concerned a written statement

2 which sets forth the final determination, and the

3 findings of fact and conclusions of law on which

4 such determination is based.

5 ‘‘(c) MAXIMUM PENALTIES.—

6 ‘‘(1) FRAUD.—A fraudulent violation of sub7 section (a) of this section is punishable by a civil

8 penalty in an amount not to exceed 3 times the ac9 tual or potential loss of revenue.

10 ‘‘(2) NEGLIGENCE.—

11 ‘‘(A) IN GENERAL.—A negligent violation

12 of subsection (a) is punishable by a civil penalty

13 in an amount not to exceed 20 percent of the

14 actual or potential loss of revenue for the 1st

15 violation.

16 ‘‘(B) REPETITIVE VIOLATIONS.—If the

17 Customs Service determines that a repeat neg18 ligent violation occurs relating to the same

19 issue, the penalty amount for the 2d violation

20 shall be in an amount not to exceed 50 percent

21 of the total actual or potential loss of revenue.

22 The penalty amount for each succeeding repet23 itive negligent violation shall be in an amount

24 not to exceed the actual or potential loss of rev25 enue. If the same party commits a nonrepetitive
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1 violation, that violation shall be subject to a

2 penalty not to exceed 20 percent of the actual

3 or potential loss of revenue.

4 ‘‘(3) PRIOR DISCLOSURE.—

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), if the person concerned discloses the

7 circumstances of a violation of subsection (a)

8 before, or without knowledge of the commence9 ment of, a formal investigation of such viola10 tion, the monetary penalty assessed under this

11 subsection may not exceed—

12 ‘‘(i) if the violation resulted from

13 fraud, an amount equal to the actual or

14 potential revenue of which the United

15 States is or may be deprived as a result of

16 overpayment of the claim; or

17 ‘‘(ii) if the violation resulted from

18 negligence, an amount equal to the interest

19 computed on the basis of the prevailing

20 rate of interest applied under section 6621

21 of the Internal Revenue Code of 1986 on

22 the amount of actual revenue of which the

23 United States is or may be deprived during

24 the period that—
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1 ‘‘(I) begins on the date of the

2 overpayment of the claim; and

3 ‘‘(II) ends on the date on which

4 the person concerned tenders the

5 amount of the overpayment.

6 ‘‘(B) CONDITION AFFECTING PENALTY

7 LIMITATIONS.—The limitations in subparagraph

8 (A) on the amount of the monetary penalty to

9 be assessed under subsection (c) apply only if

10 the person concerned tenders the amount of the

11 overpayment made on the claim at the time of

12 disclosure, or within 30 days (or such longer

13 period as the Customs Service may provide),

14 after notice by the Customs Service of its cal15 culation of the amount of the overpayment.

16 ‘‘(C) BURDEN OF PROOF.—The person as17 serting lack of knowledge of the commencement

18 of a formal investigation has the burden of

19 proof in establishing such lack of knowledge.

20 ‘‘(4) COMMENCEMENT OF INVESTIGATION.—

21 For purposes of this section, a formal investigation

22 of a violation is considered to be commenced with re23 gard to the disclosing party and the disclosed infor24 mation on the date recorded in writing by the Cus25 toms Service as the date on which facts and cir-
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1 cumstances were discovered or information was re2 ceived which caused the Customs Service to believe

3 that a possibility of a violation of subsection (a) ex4 isted.

5 ‘‘(5) EXCLUSIVITY.—Penalty claims under this

6 section shall be the exclusive civil remedy for any

7 drawback related violation of subsection (a).

8 ‘‘(d) DEPRIVATION OF LAWFUL REVENUE.—Not9 withstanding section 514, if the United States has been

10 deprived of lawful duties and taxes resulting from a viola11 tion of subsection (a), the Customs Service shall require

12 that such duties and taxes be restored whether or not a

13 monetary penalty is assessed.

14 ‘‘(e) DRAWBACK COMPLIANCE PROGRAM.—

15 ‘‘(1) IN GENERAL.—After consultation with the

16 drawback trade community, the Customs Service

17 shall establish a drawback compliance program in

18 which claimants and other parties in interest may

19 participate after being certified by the Customs

20 Service under paragraph (2). Participation in the

21 drawback compliance program is voluntary.

22 ‘‘(2) CERTIFICATION.—A party may be certified

23 as a participant in the drawback compliance pro24 gram after meeting the general requirements estab25 lished under the program or after negotiating an al-
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1 ternative program suited to the needs of the party

2 and the Customs Service. Certification requirements

3 shall take into account the size and nature of the

4 party’s drawback program and the volume of claims.

5 In order to be certified, the participant must be able

6 to demonstrate that it—

7 ‘‘(A) understands the legal requirements

8 for filing claims, including the nature of the

9 records required to be maintained and produced

10 and the time periods involved;

11 ‘‘(B) has in place procedures to explain the

12 Customs Service requirements to those employ13 ees that are involved in the preparation of

14 claims, and the maintenance and production of

15 required records;

16 ‘‘(C) has in place procedures regarding the

17 preparation of claims and maintenance of re18 quired records, and the production of such

19 records to the Customs Service;

20 ‘‘(D) has designated a dependable individ21 ual or individuals to be responsible for compli22 ance under the program and whose duties in23 clude maintaining familiarity with the drawback

24 requirements of the Customs Service;
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1 ‘‘(E) has a record maintenance procedure

2 approved by the Customs Service for original

3 records, or, if approved by the Customs Service,

4 for alternate records or recordkeeping formats

5 other than the original records; and

6 ‘‘(F) has procedures for notifying the Cus7 toms Service of variances to, and violations of,

8 the requirements of the drawback compliance

9 program or any negotiated alternative pro10 grams, and for taking corrective action when

11 notified by the Customs Service for violations or

12 problems regarding such program.

13 ‘‘(f) ALTERNATIVES TO PENALTIES.—

14 ‘‘(1) IN GENERAL.—When a party that—

15 ‘‘(A) has been certified as a participant in

16 the drawback compliance program under sub17 section (e); and

18 ‘‘(B) is generally in compliance with the

19 appropriate procedures and requirements of the

20 program;

21 commits a violation of subsection (a), the Customs

22 Service, shall, in the absence of fraud or repeated

23 violations, and in lieu of a monetary penalty, issue

24 a written notice of the violation to the party. Re25 peated violations by a party may result in the issu-
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1 ance of penalties and removal of certification under

2 the program until corrective action, satisfactory to

3 the Customs Service, is taken.

4 ‘‘(2) CONTENTS OF NOTICE.—A notice of viola5 tion issued under paragraph (1) shall—

6 ‘‘(A) state that the party has violated sub7 section (a);

8 ‘‘(B) explain the nature of the violation;

9 and

10 ‘‘(C) warn the party that future violations

11 of subsection (a) may result in the imposition

12 of monetary penalties.

13 ‘‘(3) RESPONSE TO NOTICE.—Within a reason14 able time after receiving written notice under para15 graph (1), the party shall notify the Customs Service

16 of the steps it has taken to prevent a recurrence of

17 the violation.

18 ‘‘(g) REPETITIVE VIOLATIONS.—

19 ‘‘(1) A party who has been issued a written no20 tice under subsection (f)(1) and subsequently com21 mits a repeat negligent violation involving the same

22 issue is subject to the following monetary penalties:

23 ‘‘(A) 2D VIOLATION.—An amount not to

24 exceed 20 percent of the loss of revenue.
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1 ‘‘(B) 3RD VIOLATION.—An amount not to

2 exceed 50 percent of the loss of revenue.

3 ‘‘(C) 4TH AND SUBSEQUENT VIOLA4 TIONS.—An amount not to exceed 100 percent

5 of the loss of revenue.

6 ‘‘(2) If a party that has been certified as a par7 ticipant in the drawback compliance program under

8 subsection (e) commits an alleged violation which

9 was not repetitive, the party shall be issued a ‘warn10 ing letter’, and, for any subsequent violation, shall

11 be subject to the same maximum penalty amounts

12 stated in paragraph (1).

13 ‘‘(h) REGULATION.—The Secretary shall promulgate

14 regulations and guidelines to implement this section. Such

15 regulations shall specify that for purposes of subsection

16 (g), a repeat negligent violation involving the same issue

17 shall be treated as a repetitive violation for a maximum

18 period of 3 years.

19 ‘‘(i) COURT OF INTERNATIONAL TRADE PROCEED20 INGS.—Notwithstanding any other provision of law, in any

21 proceeding commenced by the United States in the Court

22 of International Trade for the recovery of any monetary

23 penalty claimed under this section—

24 ‘‘(1) all issues, including the amount of the pen25 alty, shall be tried de novo;
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1 ‘‘(2) if the monetary penalty is based on fraud,

2 the United States shall have the burden of proof to

3 establish the alleged violation by clear and convinc4 ing evidence; and

5 ‘‘(3) if the monetary penalty is based on neg6 ligence, the United States shall have the burden of

7 proof to establish the act or omission constituting

8 the violation, and the alleged violator shall have the

9 burden of providing evidence that the act or omis10 sion did not occur as a result of negligence.’’.

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

12 subsection (a) applies to drawback claims filed on and

13 after the nationwide operational implementation of an

14 automated drawback selectivity program by the Customs

15 Service. The Customs Service shall publish notice of this

16 date in the Customs Bulletin.

17 SEC. 623. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC

18 INFORMATION.

19 Section 625 (19 U.S.C. 1625) is amended to read as

20 follows:

21 ‘‘SEC. 625. INTERPRETIVE RULINGS AND DECISIONS; PUB22 LIC INFORMATION.

23 ‘‘(a) PUBLICATION.—Within 90 days after the date

24 of issuance of any interpretive ruling (including any ruling

25 letter, or internal advice memorandum) or protest review
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1 decision under this chapter with respect to any customs

2 transaction, the Secretary shall have such ruling or deci3 sion published in the Customs Bulletin or shall otherwise

4 make such ruling or decision available for public

5 inspection.

6 ‘‘(b) APPEALS.—A person may appeal an adverse in7 terpretive ruling and any interpretation of any regulation

8 prescribed to implement such ruling to a higher level of

9 authority within the Customs Service for de novo review.

10 Upon a reasonable showing of business necessity, any such

11 appeal shall be considered and decided no later than 60

12 days following the date on which the appeal is filed. The

13 Secretary shall issue regulations to implement this sub14 section.

15 ‘‘(c) MODIFICATION AND REVOCATION.—A proposed

16 interpretive ruling or decision which would—

17 ‘‘(1) modify (other than to correct a clerical

18 error) or revoke a prior interpretive ruling or deci19 sion which has been in effect for at least 60 days;

20 or

21 ‘‘(2) have the effect of modifying the treatment

22 previously accorded by the Customs Service to sub23 stantially identical transactions;

24 shall be published in the Customs Bulletin. The Secretary

25 shall give interested parties an opportunity to submit, dur-
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1 ing not less than the 30-day period after the date of such

2 publication, comments on the correctness of the proposed

3 ruling or decision. After consideration of any comments

4 received, the Secretary shall publish a final ruling or deci5 sion in the Customs Bulletin within 30 days after the clos6 ing of the comment period. The final ruling or decision

7 shall become effective 60 days after the date of its

8 publication.

9 ‘‘(d) PUBLICATION OF CUSTOMS DECISIONS THAT

10 LIMIT COURT DECISIONS.—A decision that proposes to

11 limit the application of a court decision shall be published

12 in the Customs Bulletin together with notice of oppor13 tunity for public comment thereon prior to a final decision.

14 ‘‘(e) PUBLIC INFORMATION.—The Secretary may

15 make available in writing or through electronic media, in

16 an efficient, comprehensive and timely manner, all infor17 mation, including directives, memoranda, electronic mes18 sages and telexes which contain instructions, require19 ments, methods or advice necessary for importers and ex20 porters to comply with the Customs laws and regulations.

21 All information which may be made available pursuant to

22 this subsection shall be subject to any exemption from dis23 closure provided by section 552 of title 5, United States

24 Code.’’.
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1 SEC. 624. SEIZURE AUTHORITY.

2 Section 596(c) (19 U.S.C. 1595a(c)) is amended to

3 read as follows:

4 ‘‘(c) Merchandise which is introduced or attempted

5 to be introduced into the United States contrary to law

6 shall be treated as follows:

7 ‘‘(1) The merchandise shall be seized and for8 feited if it—

9 ‘‘(A) is stolen, smuggled, or clandestinely

10 imported or introduced;

11 ‘‘(B) is a controlled substance, as defined

12 in the Controlled Substances Act (21 U.S.C.

13 801 et seq.), and is not imported in accordance

14 with applicable law; or

15 ‘‘(C) is a contraband article, as defined in

16 section 1 of the Act of August 9, 1939 (49

17 U.S.C. App. 781).

18 ‘‘(2) The merchandise may be seized and for19 feited if—

20 ‘‘(A) its importation or entry is subject to

21 any restriction or prohibition which is imposed

22 by law relating to health, safety, or conserva23 tion and the merchandise is not in compliance

24 with the applicable rule, regulation, or statute;

25 ‘‘(B) its importation or entry requires a li26 cense, permit or other authorization of an agen-
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1 cy of the United States Government and the

2 merchandise is not accompanied by such li3 cense, permit, or authorization;

4 ‘‘(C) it is merchandise or packaging in

5 which copyright, trademark, or trade name pro6 tection violations are involved (including, but

7 not limited to, violations of section 42, 43, or

8 45 of the Act of July 5, 1946 (15 U.S.C. 1124,

9 1125, or 1127), section 506 or 509 of title 17,

10 United States Code, or section 2318 or 2320 of

11 title 18, United States Code);

12 ‘‘(D) it is trade dress merchandise involved

13 in the violation of a court order citing section

14 43 of such Act of July 5, 1946 (15 U.S.C.

15 1125);

16 ‘‘(E) it is merchandise which is marked in17 tentionally in violation of section 304; or

18 ‘‘(F) it is merchandise for which the im19 porter has received written notices that previous

20 importations of identical merchandise from the

21 same supplier were found to have been marked

22 in violation of section 304.

23 ‘‘(3) If the importation or entry of the mer24 chandise is subject to quantitative restrictions re25 quiring a visa, permit, license, or other similar docu-
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1 ment, or stamp from the United States Government

2 or from a foreign government or issuing authority

3 pursuant to a bilateral or multilateral agreement,

4 the merchandise shall be subject to detention in ac5 cordance with section 499 unless the appropriate

6 visa, license, permit, or similar document or stamp

7 is presented to the Customs Service; but if the visa,

8 permit, license, or similar document or stamp which

9 is presented in connection with the importation or

10 entry of the merchandise is counterfeit, the mer11 chandise may be seized and forfeited.

12 ‘‘(4) If the merchandise is imported or intro13 duced contrary to a provision of law which governs

14 the classification or value of merchandise and there

15 are no issues as to the admissibility of the merchan16 dise into the United States, it shall not be seized ex17 cept in accordance with section 592.

18 ‘‘(5) In any case where the seizure and forfeit19 ure of merchandise are required or authorized by

20 this section, the Secretary may—

21 ‘‘(A) remit the forfeiture under section

22 618, or

23 ‘‘(B) permit the exportation of the mer24 chandise, unless its release would adversely af25 fect health, safety, or conservation or be in con-
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1 travention of a bilateral or multilateral agree2 ment or treaty.’’.

3 Subtitle B—National Customs

4 Automation Program

5 SEC. 631. NATIONAL CUSTOMS AUTOMATION PROGRAM.

6 Part I of title IV is amended—

7 (1) by striking out

8 ‘‘PART I—DEFINITIONS

9 and inserting

10 ‘‘PART I—DEFINITIONS AND NATIONAL CUSTOMS

11 AUTOMATION PROGRAM

12 ‘‘Subpart A—Definitions’’;

13 and

14 (2) by inserting after section 402 the following:

15 ‘‘Subpart B—National Customs Automation Program

16 ‘‘SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.

17 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab18 lish the National Customs Automation Program (herein19 after in this subpart referred to as the ‘Program’) which

20 shall be an automated and electronic system for processing

21 commercial importations and shall include the following

22 existing and planned components:

23 ‘‘(1) Existing components:

24 ‘‘(A) The electronic entry of merchandise.
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1 ‘‘(B) The electronic entry summary of re2 quired information.

3 ‘‘(C) The electronic transmission of invoice

4 information.

5 ‘‘(D) The electronic transmission of mani6 fest information.

7 ‘‘(E) Electronic payments of duties, fees,

8 and taxes.

9 ‘‘(F) The electronic status of liquidation

10 and reliquidation.

11 ‘‘(G) The electronic selection of high risk

12 entries for examination (cargo selectivity and

13 entry summary selectivity).

14 ‘‘(2) Planned components:

15 ‘‘(A) The electronic filing and status of

16 protests.

17 ‘‘(B) The electronic filing (including re18 mote filing under section 414) of entry informa19 tion with the Customs Service at any location.

20 ‘‘(C) The electronic filing of import activity

21 summary statements and reconciliation.

22 ‘‘(D) The electronic filing of bonds.

23 ‘‘(E) The electronic penalty process.

24 ‘‘(F) The electronic filing of drawback

25 claims, records, or entries.
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1 ‘‘(G) Any other component initiated by the

2 Customs Service to carry out the goals of this

3 subpart.

4 ‘‘(b) PARTICIPATION IN PROGRAM.—The Secretary

5 shall by regulation prescribe the eligibility criteria for par6 ticipation in the Program. Participation in the Program

7 is voluntary.

8 ‘‘SEC. 412. PROGRAM GOALS.

9 ‘‘The goals of the Program are to ensure that all reg10 ulations and rulings that are administered or enforced by

11 the Customs Service are administered and enforced in a

12 manner that—

13 ‘‘(1) is uniform and consistent;

14 ‘‘(2) is as minimally intrusive upon the normal

15 flow of business activity as practicable; and

16 ‘‘(3) improves compliance.

17 ‘‘SEC. 413. IMPLEMENTATION AND EVALUATION OF PRO18 GRAM.

19 ‘‘(a) OVERALL PROGRAM PLAN.—

20 ‘‘(1) IN GENERAL.—Before the 180th day after

21 the date of the enactment of this Act, the Secretary

22 shall develop and transmit to the Committees an

23 overall plan for the Program. The overall Program

24 plan shall set forth—
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1 ‘‘(A) a general description of the ultimate

2 configuration of the Program;

3 ‘‘(B) a description of each of the existing

4 components of the Program listed in section

5 411(a)(1); and

6 ‘‘(C) estimates regarding the stages on

7 which planned components of the Program list8 ed in section 411(a)(2) will be brought on-line.

9 ‘‘(2) ADDITIONAL INFORMATION.—In addition

10 to the information required under paragraph (1), the

11 overall Program plan shall include a statement re12 garding—

13 ‘‘(A) the extent to which the existing com14 ponents of the Program currently meet, and the

15 planned components will meet, the Program

16 goals set forth in section 412; and

17 ‘‘(B) the effects that the existing compo18 nents are currently having, and the effects that

19 the planned components will likely have, on—

20 ‘‘(i) importers, brokers, and other

21 users of the Program, and

22 ‘‘(ii) Customs Service occupations, op23 erations, processes, and systems.

24 ‘‘(b) IMPLEMENTATION PLAN, TESTING, AND EVAL25 UATION.—
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1 ‘‘(1) IMPLEMENTATION PLAN.—For each of the

2 planned components of the Program listed in section

3 411(a)(2), the Secretary shall—

4 ‘‘(A) develop an implementation plan;

5 ‘‘(B) test the component in order to assess

6 its viability;

7 ‘‘(C) evaluate the component in order to

8 assess its contribution toward achieving the

9 program goals; and

10 ‘‘(D) transmit to the Committees the im11 plementation plan, the testing results, and an

12 evaluation report.

13 In developing an implementation plan under sub14 paragraph (A) and evaluating components under

15 subparagraph (C), the Secretary shall publish a re16 quest for comments in the Customs Bulletin and

17 shall consult with the trade community, including

18 importers, brokers, shippers, and other affected

19 parties.

20 ‘‘(2) IMPLEMENTATION.—

21 ‘‘(A) The Secretary may implement on a

22 permanent basis any Program component re23 ferred to in paragraph (1) on or after the date

24 which is 30 days after paragraph (1)(D) is

25 complied with.
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1 ‘‘(B) For purposes of subparagraph (A),

2 the 30 days shall be computed by excluding—

3 ‘‘(i) the days either House is not in

4 session because of an adjournment of more

5 than 3 days to a day certain or an ad6 journment of the Congress sine die, and

7 ‘‘(ii) any Saturday and Sunday, not

8 excluded under clause (i), when either

9 House is not in session.

10 ‘‘(3) EVALUATION AND REPORT.—The Sec11 retary shall—

12 ‘‘(A) develop a user satisfaction survey of

13 parties participating in the Program;

14 ‘‘(B) evaluate the results of the user satis15 faction survey on a biennial basis (fiscal years)

16 and transmit a report to the Committees on the

17 evaluation by no later than the 90th day after

18 the close of each 2d fiscal year;

19 ‘‘(C) with respect to the existing Program

20 component listed in section 411(a)(1)(G) trans21 mit to the Committees—

22 ‘‘(i) a written evaluation of such com23 ponent before the 180th day after the date

24 of the enactment of this section and before

25 the implementation of the planned Pro-
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1 gram components listed in section

2 411(a)(2) (B) and (C), and

3 ‘‘(ii) a report on such component for

4 each of the 3 full fiscal years occurring

5 after the date of the enactment of this sec6 tion, which report shall be transmitted not

7 later than the 90th day after the close of

8 each such year; and

9 ‘‘(D) not later than the 90th day after the

10 close of fiscal year 1994, and annually there11 after through fiscal year 2000, transmit to the

12 Committees a written evaluation with respect to

13 the implementation and effect on users of each

14 of the planned Program components listed in

15 section 411(a)(2).

16 In carrying out the provisions of this paragraph, the

17 Secretary shall publish requests for comments in the

18 Customs Bulletin and shall consult with the trade

19 community, including importers, brokers, shippers,

20 and other affected parties.

21 ‘‘(c) COMMITTEES.—For purposes of this section, the

22 term ‘Committees’ means the Committee on Ways and

23 Means of the House of Representatives and the Committee

24 on Finance of the Senate.
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1 ‘‘SEC. 414. REMOTE LOCATION FILING.

2 ‘‘(a) CORE ENTRY INFORMATION.—

3 ‘‘(1) IN GENERAL.—A Program participant

4 may file electronically an entry of merchandise with

5 the Customs Service from a location other than the

6 district designated in the entry for examination

7 (hereafter in this section referred to as a ‘remote lo8 cation’) if—

9 ‘‘(A) the Customs Service is satisfied that

10 the participant has the capabilities referred to

11 in paragraph (2)(A) regarding such method of

12 filing; and

13 ‘‘(B) the participant elects to file from the

14 remote location.

15 ‘‘(2) REQUIREMENTS.—

16 ‘‘(A) IN GENERAL.—In order to qualify for

17 filing from a remote location, a Program partic18 ipant must have the capability to provide, on an

19 entry-by-entry basis, for the following:

20 ‘‘(i) The electronic entry of merchan21 dise.

22 ‘‘(ii) The electronic entry summary of

23 required information.

24 ‘‘(iii) The electronic transmission of

25 invoice information (when required by the

26 Customs Service).
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1 ‘‘(iv) The electronic payment of du2 ties, fees, and taxes.

3 ‘‘(v) Such other electronic capabilities

4 within the existing or planned components

5 of the Program as the Secretary shall by

6 regulation require.

7 ‘‘(B) RESTRICTION ON EXEMPTION FROM

8 REQUIREMENTS.—The Customs Service may

9 not permit any exemption or waiver from the

10 requirements established by this section for par11 ticipation in remote entry filing.

12 ‘‘(3) CONDITIONS ON FILING UNDER THIS SEC13 TION.—The Secretary may prohibit a Program par14 ticipant from participating in remote location filing,

15 and may remove a Program participant from partici16 pation in remote location filing, if the participant—

17 ‘‘(i) fails to meet all the compliance re18 quirements and operational standards of remote

19 location filing; or

20 ‘‘(ii) fails to adhere to all applicable laws

21 and regulations.

22 ‘‘(4) ALTERNATIVE FILING.—Any Program par23 ticipant that is eligible to file entry information elec24 tronically from a remote location but chooses not to

25 do so in the case of any entry must file any paper
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1 documentation for the entry at the designated loca2 tion referred to in subsection (d).

3 ‘‘(b) ADDITIONAL ENTRY INFORMATION.—

4 ‘‘(1) IN GENERAL.—A Program participant that

5 is eligible under subsection (a) to file entry informa6 tion from a remote location may, if the Customs

7 Service is satisfied that the participant meets the re8 quirements under paragraph (2), also electronically

9 file from the remote location additional information

10 that is required by the Customs Service to be pre11 sented before the acceptance of entry summary in12 formation and at the time of acceptance of entry

13 summary information.

14 ‘‘(2) REQUIREMENTS.—The Secretary shall

15 publish, and periodically update, a list of those capa16 bilities within the existing and planned components

17 of the Program that a Program participant must

18 have for purposes of this subsection.

19 ‘‘(3) FILING OF ADDITIONAL INFORMATION.—

20 ‘‘(A) IF INFORMATION ELECTRONICALLY

21 ACCEPTABLE.—A Program participant that is

22 eligible under paragraph (1) to file additional

23 information from a remote location shall elec24 tronically file all such information that the Cus25 toms Service can accept electronically.
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1 ‘‘(B) ALTERNATIVE FILING.—If the Cus2 toms Service cannot accept additional informa3 tion electronically, the Program participant

4 shall file the paper documentation with respect

5 to the information at the appropriate filing lo6 cation.

7 ‘‘(C) APPROPRIATE LOCATION.—For pur8 poses of subparagraph (B), the ‘appropriate lo9 cation’ is—

10 ‘‘(i) before January 1, 1999, a des11 ignated location; and

12 ‘‘(ii) after December 31, 1998—

13 ‘‘(I) if the paper documentation

14 is required for release, a designated

15 location; or

16 ‘‘(II) if the paper documentation

17 is not required for release, a remote

18 location designated by the Customs

19 Service or a designated location.

20 ‘‘(D) OTHER.—A Program participant that

21 is eligible under paragraph (1) to file additional

22 information electronically from a remote loca23 tion but chooses not to do so must file the

24 paper documentation with respect to the infor25 mation at a designated location.
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1 ‘‘(c) POST-ENTRY SUMMARY INFORMATION.—A Pro2 gram participant that is eligible to file electronically entry

3 information under subsection (a) and additional informa4 tion under subsection (b) from a remote location may file

5 at any remote location designated by the Customs Service

6 any information required by the Customs Service after

7 entry summary.

8 ‘‘(d) DEFINITIONS.—As used in this section:

9 ‘‘(1) The term ‘designated location’ means a

10 customs office located in the customs district des11 ignated by the entry filer for purposes of customs

12 examination of the merchandise.

13 ‘‘(2) The term ‘Program participant’ means,

14 with respect to an entry of merchandise, any party

15 entitled to make the entry under section

16 484(a)(2)(B).’’.

17 SEC. 632. DRAWBACK AND REFUNDS.

18 (a) AMENDMENTS.—Section 313 (19 U.S.C. 1313) is

19 amended as follows:

20 (1) Subsection (a) is amended—

21 (A) by inserting ‘‘or destruction under cus22 toms supervision’’ after ‘‘Upon the expor23 tation’’;

24 (B) by inserting ‘‘provided that those arti25 cles have not been used prior to such expor-
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1 tation or destruction,’’ after ‘‘manufactured or

2 produced in the United States with the use of

3 imported merchandise,’’;

4 (C) by inserting ‘‘or destruction’’ after ‘‘re5 funded upon the exportation’’; and

6 (D) by striking out ‘‘wheat imported after

7 ninety days after the date of the enactment of

8 this Act’’ and inserting ‘‘imported wheat’’.

9 (2) Subsection (b) is amended—

10 (A) by striking out ‘‘duty-free or domestic

11 merchandise’’ and inserting ‘‘any other mer12 chandise (whether imported or domestic)’’;

13 (B) by inserting ‘‘, or destruction under

14 customs supervision,’’ after ‘‘there shall be al15 lowed upon the exportation’’;

16 (C) by inserting ‘‘or destroyed’’ after ‘‘not17 withstanding the fact that none of the imported

18 merchandise may actually have been used in the

19 manufacture or production of the exported’’;

20 (D) by inserting ‘‘, but only if those arti21 cles have not been used prior to such expor22 tation or destruction’’ after ‘‘an amount of

23 drawback equal to that which would have been

24 allowable had the merchandise used therein

25 been imported’’; and
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1 (E) by inserting ‘‘or destruction under cus2 toms supervision’’ after ‘‘but the total amount

3 of drawback allowed upon the exportation’’.

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

6 ‘‘(c) MERCHANDISE NOT CONFORMING TO SAMPLE

7 OR SPECIFICATIONS.—Upon the exportation, or destruc8 tion under the supervision of the Customs Service, of mer9 chandise—

10 ‘‘(1) not conforming to sample or specifications,

11 shipped without the consent of the consignee, or de12 termined to be defective as of the time of importa13 tion;

14 ‘‘(2) upon which the duties have been paid;

15 ‘‘(3) which has been entered or withdrawn for

16 consumption; and

17 ‘‘(4) which, within 3 years after release from

18 the custody of the Customs Service, has been re19 turned to the custody of the Customs Service for ex20 portation or destruction under the supervision of the

21 Customs Service;

22 the full amount of the duties paid upon such merchandise,

23 less 1 percent, shall be refunded as drawback.’’.

24 (4) Subsection (j) is amended to read as fol25 lows:
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1 ‘‘(j) UNUSED MERCHANDISE DRAWBACK.—

2 ‘‘(1) If imported merchandise, on which was

3 paid any duty, tax, or fee imposed under Federal

4 law because of its importation—

5 ‘‘(A) is, before the close of the 3-year pe6 riod beginning on the date of importation—

7 ‘‘(i) exported, or

8 ‘‘(ii) destroyed under customs super9 vision; and

10 ‘‘(B) is not used within the United States

11 before such exportation or destruction;

12 then upon such exportation or destruction 99 per13 cent of the amount of each duty, tax, or fee so paid

14 shall be refunded as drawback. The exporter (or de15 stroyer) has the right to claim drawback under this

16 paragraph, but may endorse such right to the im17 porter or any intermediate party.

18 ‘‘(2) If there is, with respect to imported mer19 chandise on which was paid any duty, tax, or fee im20 posed under Federal law because of its importation,

21 any other merchandise (whether imported or domes22 tic), that—

23 ‘‘(A) is commercially interchangeable with

24 such imported merchandise;
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1 ‘‘(B) is, before the close of the 3-year pe2 riod beginning on the date of importation of the

3 imported merchandise, either exported or de4 stroyed under customs supervision; and

5 ‘‘(C) before such exportation or destruc6 tion—

7 ‘‘(i) is not used within the United

8 States, and

9 ‘‘(ii) is in the possession of, including

10 ownership while in bailment, in leased fa11 cilities, in transit to, or in any other man12 ner under the operational control of, the

13 party claiming drawback under this para14 graph, if that party—

15 ‘‘(I) is the importer of the im16 ported merchandise, or

17 ‘‘(II) received from the person

18 who imported and paid any duty due

19 on the imported merchandise a certifi20 cate of delivery transferring to the

21 party the imported merchandise, com22 mercially interchangeable merchan23 dise, or any combination of imported

24 and commercially interchangeable

25 merchandise (and any such trans-
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1 ferred merchandise, regardless of its

2 origin, will be treated as the imported

3 merchandise and any retained mer4 chandise will be treated as domestic

5 merchandise);

6 then upon the exportation or destruction of

7 such other merchandise the amount of each

8 such duty, tax, and fee paid regarding the im9 ported merchandise shall be refunded as draw10 back, but in no case may the total drawback on

11 the imported merchandise, whether available

12 under this paragraph or any other provision of

13 law or any combination thereof, exceed 99 per14 cent of that duty, tax, or fee.

15 ‘‘(3) The performing of any operation or com16 bination of operations (including, but not limited to,

17 testing, cleaning, repacking, inspecting, sorting, re18 furbishing, freezing, blending, repairing, reworking,

19 cutting, slitting, adjusting, replacing components,

20 relabeling, disassembling, and unpacking), not

21 amounting to manufacture or production for draw22 back purposes under the preceding provisions of this

23 section on—

24 ‘‘(A) the imported merchandise itself in

25 cases to which paragraph (1) applies, or
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1 ‘‘(B) the commercially interchangeable

2 merchandise in cases to which paragraph (2)

3 applies,

4 shall not be treated as a use of that merchandise for

5 purposes of applying paragraph (1)(B) or (2)(C).’’.

6 (5) Subsection (l) is amended by striking out

7 ‘‘the fixing of a time limit within which drawback

8 entries or entries for refund under any of the provi9 sions of this section or section 309(b) shall be filed

10 and completed,’’ and inserting ‘‘the authority for the

11 electronic submission of drawback entries’’.

12 (6) Subsection (p) is amended to read as fol13 lows:

14 ‘‘(p) SUBSTITUTION OF FINISHED PETROLEUM DE15 RIVATIVES.—

16 ‘‘(1) IN GENERAL.—Notwithstanding any other

17 provision of this section, if—

18 ‘‘(A) an article (hereafter referred to in

19 this subsection as the ‘exported article’) of the

20 same kind and quality as a qualified article is

21 exported;

22 ‘‘(B) the requirements set forth in para23 graph (2) are met; and

24 ‘‘(C) a drawback claim is filed regarding

25 the exported article;
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1 the amount of the duties paid on, or attributable to,

2 such qualified article shall be refunded as drawback

3 to the drawback claimant.

4 ‘‘(2) REQUIREMENTS.—The requirements re5 ferred to in paragraph (1) are as follows:

6 ‘‘(A) The exporter of the exported article—

7 ‘‘(i) manufactured or produced the

8 qualified article in a quantity equal to or

9 greater than the quantity of the exported

10 article,

11 ‘‘(ii) purchased or exchanged, directly

12 or indirectly, the qualified article from a

13 manufacturer or producer described in

14 subsection (a) or (b) in a quantity equal to

15 or greater than the quantity of the ex16 ported article,

17 ‘‘(iii) imported the qualified article in

18 a quantity equal to or greater than the

19 quantity of the exported article, or

20 ‘‘(iv) purchased or exchanged, directly

21 or indirectly, an imported qualified article

22 from an importer in a quantity equal to or

23 greater than the quantity of the exported

24 article.
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1 ‘‘(B) In the case of the requirement de2 scribed in subparagraph (A)(ii), the manufac3 turer or producer produced the qualified article

4 in a quantity equal to or greater than the quan5 tity of the exported article.

6 ‘‘(C) In the case of the requirement of sub7 paragraph (A)(i) or (A)(ii), the exported article

8 is exported during the period that the qualified

9 article described in subparagraph (A)(i) or

10 (A)(ii) (whichever is applicable) is manufac11 tured or produced, or within 180 days after the

12 close of such period.

13 ‘‘(D) In the case of the requirement of

14 subparagraph (A)(i) or (A)(ii), the specific pe15 troleum refinery or production facility which

16 made the qualified article concerned is identi17 fied.

18 ‘‘(E) In the case of the requirement of sub19 paragraph (A)(iii) or (A)(iv), the exported arti20 cle is exported within 180 days after the date

21 of entry of an imported qualified article de22 scribed in subparagraph (A)(iii) or (A)(iv)

23 (whichever is applicable).

24 ‘‘(F) Except as otherwise specifically pro25 vided in this subsection, the drawback claimant
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1 complies with all requirements of this section,

2 including providing certificates which establish

3 the drawback eligibility of articles for which

4 drawback is claimed.

5 ‘‘(G) The manufacturer, producer, im6 porter, exporter, and drawback claimant of the

7 qualified article and the exported article main8 tain all records required by regulation.

9 ‘‘(3) DEFINITION OF QUALIFIED ARTICLE,

10 ETC.—For purposes of this subsection—

11 ‘‘(A) The term ‘qualified article’ means an

12 article—

13 ‘‘(i) described in—

14 ‘‘(I) headings 2707, 2708, 2710,

15 2711, 2712, 2713, 2714, 2715, 2901,

16 and 2902 of the Harmonized Tariff

17 Schedule of the United States, or

18 ‘‘(II) headings 3901 through

19 3914 of such Schedule (as such head20 ings apply to liquids, pastes, powders,

21 granules, and flakes), and

22 ‘‘(ii) which is—

23 ‘‘(I) manufactured or produced

24 as described in subsection (a) or (b)
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1 from crude petroleum or a petroleum

2 derivative, or

3 ‘‘(II) imported duty-paid.

4 ‘‘(B) An exported article is of the same

5 kind and quality as the qualified article for

6 which it is substituted under this subsection if

7 it is a product that is commercially interchange8 able with or referred to under the same eight9 digit classification of the Harmonized Tariff

10 Schedule of the United States as the qualified

11 article.

12 ‘‘(C) The term ‘drawback claimant’ means

13 the exporter of the exported article or the re14 finer, producer, or importer of such article. Any

15 person eligible to file a drawback claim under

16 this subparagraph may designate another per17 son to file such claim.

18 ‘‘(4) LIMITATION ON DRAWBACK.—The amount

19 of drawback payable under this subsection shall not

20 exceed the amount of drawback that would be attrib21 utable to the article—

22 ‘‘(A) manufactured or produced under sub23 section (a) or (b) by the manufacturer or pro24 ducer described in clause (i) or (ii) of para25 graph (2)(A), or
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1 ‘‘(B) imported under clause (iii) or (iv) of

2 paragraph (2)(A).’’.

3 (7) The following new subsections are inserted

4 after subsection (p):

5 ‘‘(q) PACKAGING MATERIAL.—Packaging material,

6 when used on or for articles or merchandise exported or

7 destroyed under subsection (a), (b), (c), or (j), shall be

8 eligible under such subsection for refund, as drawback, of

9 99 percent of any duty, tax, or fee imposed under Federal

10 law on the importation of such material.

11 ‘‘(r) FILING DRAWBACK CLAIMS.—

12 ‘‘(1) A drawback entry and all documents nec13 essary to complete a drawback claim, including those

14 issued by the Customs Service, shall be filed or ap15 plied for, as applicable, within 3 years after the date

16 of exportation or destruction of the articles on which

17 drawback is claimed, except that any landing certifi18 cate required by regulation shall be filed within the

19 time limit prescribed in such regulation. Claims not

20 completed within the 3-year period shall be consid21 ered abandoned. No extension will be granted unless

22 it is established that the Customs Service was re23 sponsible for the untimely filing.

24 ‘‘(2) A drawback entry for refund filed pursu25 ant to any subsection of this section shall be deemed
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1 filed pursuant to any other subsection of this section

2 should it be determined that drawback is not allow3 able under the entry as originally filed but is allow4 able under such other subsection.

5 ‘‘(s) DESIGNATION OF MERCHANDISE BY SUCCES6 SOR.—

7 ‘‘(1) For purposes of subsection (b), a draw8 back successor may designate imported merchandise

9 used by the predecessor before the date of succession

10 as the basis for drawback on articles manufactured

11 by the drawback successor after the date of succes12 sion.

13 ‘‘(2) For purposes of subsection (j)(2), a draw14 back successor may designate—

15 ‘‘(A) imported merchandise which the

16 predecessor, before the date of succession, im17 ported; or

18 ‘‘(B) imported merchandise, commercially

19 interchangeable merchandise, or any combina20 tion of imported and commercially interchange21 able merchandise for which the successor re22 ceived, before the date of succession, from the

23 person who imported and paid any duty due on

24 the imported merchandise a certificate of deliv-
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1 ery transferring to the successor such merchan2 dise;

3 as the basis for drawback on merchandise possessed

4 by the drawback successor after the date of succes5 sion.

6 ‘‘(3) For purposes of this subsection, the term

7 ‘drawback successor’ means an entity to which an8 other entity (in this subsection referred to as the

9 ‘predecessor’) has transferred by written agreement,

10 merger, or corporate resolution—

11 ‘‘(A) all or substantially all of the rights,

12 privileges, immunities, powers, duties, and li13 abilities of the predecessor; or

14 ‘‘(B) the assets and other business inter15 ests of a division, plant, or other business unit

16 of such predecessor, but only if in such transfer

17 the value of the transferred realty, personalty,

18 and intangibles (other than drawback rights, in19 choate or otherwise) exceeds the value of all

20 transferred drawback rights, inchoate or other21 wise.

22 ‘‘(4) No drawback shall be paid under this sub23 section until either the predecessor or the drawback

24 successor (who shall also certify that it has the pred25 ecessor’s records) certifies that—
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1 ‘‘(A) the transferred merchandise was not

2 and will not be claimed by the predecessor, and

3 ‘‘(B) the predecessor did not and will not

4 issue any certificate to any other person that

5 would enable that person to claim drawback.

6 ‘‘(t) DRAWBACK CERTIFICATES.—Any person who is7 sues a certificate which would enable another person to

8 claim drawback shall be subject to the recordkeeping pro9 visions of this chapter, with the retention period beginning

10 on the date that such certificate is issued.

11 ‘‘(u) ELIGIBILITY OF ENTERED OR WITHDRAWN

12 MERCHANDISE.—Imported merchandise that has not been

13 regularly entered or withdrawn for consumption shall not

14 satisfy any requirement for use, exportation, or destruc15 tion under this section.

16 ‘‘(v) MULTIPLE DRAWBACK CLAIMS.—Merchandise

17 that is exported or destroyed to satisfy any claim for draw18 back shall not be the basis of any other claim for draw19 back; except that appropriate credit and deductions for

20 claims covering components or ingredients of such mer21 chandise shall be made in computing drawback pay22 ments.’’.

23 (b) APPLICATION OF AMENDMENT TO FINISHED PE24 TROLEUM DERIVATIVES.—Notwithstanding section 514 of

25 the Tariff Act of 1930 (19 U.S.C. 1514) or any other pro-
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1 vision of law, the amendment made by paragraph (6) of

2 subsection (a) shall apply to—

3 (1) claims filed or liquidated on or after Janu4 ary 1, 1988, and

5 (2) claims that are unliquidated, under protest,

6 or in litigation on the date of the enactment of this

7 Act.

8 SEC. 633. EFFECTIVE DATE OF RATES OF DUTY.

9 Section 315 (19 U.S.C. 1315) is amended—

10 (1) by striking out ‘‘appropriate customs officer

11 in the form and manner prescribed by regulations of

12 the Secretary of the Treasury,’’ in the first sentence

13 of subsection (a) and inserting ‘‘Customs Service by

14 written, electronic or such other means as the Sec15 retary by regulation shall prescribe,’’;

16 (2) by striking out ‘‘customs custody’’ in the

17 first sentence of subsection (b) and inserting ‘‘cus18 tody of the Customs Service’’; and

19 (3) by striking out ‘‘paragraph 813’’ in sub20 section (c) and inserting ‘‘chapter 98 of the Har21 monized Tariff Schedule of the United States’’.

22 SEC. 634. DEFINITIONS.

23 Section 401 (19 U.S.C. 1401) is amended—

24 (1) by amending subsection (k) to read as fol25 lows:
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1 ‘‘(k) The term ‘hovering vessel’ means—

2 ‘‘(1) any vessel which is found or kept off the

3 coast of the United States within or without the cus4 toms waters, if, from the history, conduct, character,

5 or location of the vessel, it is reasonable to believe

6 that such vessel is being used or may be used to in7 troduce or promote or facilitate the introduction or

8 attempted introduction of merchandise into the

9 United States in violation of the laws of the United

10 States; and

11 ‘‘(2) any vessel which has visited a vessel de12 scribed in paragraph (1).’’; and

13 (2) by inserting at the end thereof the following

14 new subsections:

15 ‘‘(n) The term ‘electronic transmission’ means the

16 transfer of data or information through an authorized

17 electronic data interchange system consisting of, but not

18 limited to, computer modems and computer networks.

19 ‘‘(o) The term ‘electronic entry’ means the electronic

20 transmission to the Customs Service of—

21 ‘‘(1) entry information required for the entry of

22 merchandise, and

23 ‘‘(2) entry summary information required for

24 the classification and appraisement of the merchan-
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1 dise, the verification of statistical information, and

2 the determination of compliance with applicable law.

3 ‘‘(p) The term ‘electronic data interchange system’

4 means any established mechanism approved by the Com5 missioner of Customs through which information can be

6 transferred electronically.

7 ‘‘(q) The term ‘National Customs Automation Pro8 gram’ means the program established under section 411.

9 ‘‘(r) The term ‘import activity summary statement’

10 refers to data or information transmitted electronically to

11 the Customs Service, in accordance with such regulations

12 as the Secretary prescribes, at the end of a specified pe13 riod of time which enables the Customs Service to assess

14 properly the duties, taxes and fees on merchandise im15 ported during that period, collect accurate statistics and

16 determine whether any other applicable requirement of law

17 (other than a requirement relating to release from customs

18 custody) is met.

19 ‘‘(s) The term ‘reconciliation’ means an electronic

20 process, initiated at the request of an importer, under

21 which the elements of an entry, other than those elements

22 related to the admissibility of the merchandise, that are

23 undetermined at the time of entry summary are provided

24 to the Customs Service at a later time. A reconciliation
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1 is treated as an entry for purposes of liquidation, reliqui2 dation, and protest.’’.

3 SEC. 635. MANIFESTS.

4 Section 431 (19 U.S.C. 1431) is amended—

5 (1) by amending subsections (a) and (b) to read

6 as follows:

7 ‘‘(a) IN GENERAL.—Every vessel required to make

8 entry under section 434 or obtain clearance under section

9 4197 of the Revised Statutes of the United States (46

10 U.S.C. App. 91) shall have a manifest that complies with

11 the requirements prescribed under subsection (d).

12 ‘‘(b) PRODUCTION OF MANIFEST.—Any manifest re13 quired by the Customs Service shall be signed, produced,

14 delivered or electronically transmitted by the master or

15 person in charge of the vessel, aircraft, or vehicle, or by

16 any other authorized agent of the owner or operator of

17 the vessel, aircraft, or vehicle in accordance with the re18 quirements prescribed under subsection (d). A manifest

19 may be supplemented by bill of lading data supplied by

20 the issuer of such bill. If any irregularity of omission or

21 commission occurs in any way in respect to any manifest

22 or bill of lading data, the owner or operator of the vessel,

23 aircraft or vehicle, or any party responsible for such irreg24 ularity, shall be liable for any fine or penalty prescribed

25 by law with respect to such irregularity. The Customs
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1 Service may take appropriate action against any of the

2 parties.’’; and

3 (2) by inserting after subsection (c) the follow4 ing new subsection:

5 ‘‘(d) REGULATIONS.—

6 ‘‘(1) IN GENERAL.—The Secretary shall by reg7 ulation—

8 ‘‘(A) specify the form for, and the informa9 tion and data that must be contained in, the

10 manifest required by subsection (a);

11 ‘‘(B) allow, at the option of the individual

12 producing the manifest and subject to para13 graph (2), letters and documents shipments to

14 be accounted for by summary manifesting pro15 cedures;

16 ‘‘(C) prescribe the manner of production

17 for, and the delivery for electronic transmittal

18 of, the manifest required by subsection (a); and

19 ‘‘(D) prescribe the manner for

20 supplementing manifests with bill of lading data

21 under subsection (b).

22 ‘‘(2) LETTERS AND DOCUMENTS SHIPMENTS.—

23 For purposes of paragraph (1)(B)—

24 ‘‘(A) the Customs Service may require with

25 respect to letters and documents shipments—
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1 ‘‘(i) that they be segregated by coun2 try of origin, and

3 ‘‘(ii) additional examination proce4 dures that are not necessary for individ5 ually manifested shipments;

6 ‘‘(B) standard letter envelopes and stand7 ard document packs shall be segregated from

8 larger document shipments for purposes of cus9 toms inspections; and

10 ‘‘(C) the term ‘letters and documents’

11 means—

12 ‘‘(i) data described in General Head13 note 4(c) of the Harmonized Tariff Sched14 ule of the United States,

15 ‘‘(ii) securities and similar evidences

16 of value described in heading 4907 of such

17 Schedule, but not monetary instruments

18 defined pursuant to chapter 53 of title 31,

19 United States Code, and

20 ‘‘(iii) personal correspondence, wheth21 er on paper, cards, photographs, tapes, or

22 other media.’’.

23 SEC. 636. INVOICE CONTENTS.

24 Section 481 (19 U.S.C. 1481) is amended—

25 (1) by amending subsection (a)—
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1 (A) by amending the matter preceding

2 paragraph (1) to read as follows: ‘‘IN GEN3 ERAL.—All invoices of merchandise to be im4 ported into the United States and any elec5 tronic equivalent thereof considered acceptable

6 by the Secretary in regulations prescribed under

7 this section shall set forth, in written, elec8 tronic, or such other form as the Secretary

9 shall prescribe, the following:’’,

10 (B) by amending paragraph (3) to read as

11 follows:

12 ‘‘(3) A detailed description of the merchandise,

13 including the commercial name by which each item

14 is known, the grade or quality, and the marks, num15 bers, or symbols under which sold by the seller or

16 manufacturer in the country of exportation, together

17 with the marks and numbers of the packages in

18 which the merchandise is packed;’’, and

19 (C) by amending paragraph (10) to read

20 as follows:

21 ‘‘(10) Any other fact that the Secretary may by

22 regulation require as being necessary to a proper ap23 praisement, examination and classification of the

24 merchandise.’’;
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1 (2) by amending subsection (c) to read as

2 follows:

3 ‘‘(c) IMPORTER PROVISION OF INFORMATION.—Any

4 information required to be set forth on an invoice may

5 alternatively be provided by any of the parties qualifying

6 as an ‘importer of record’ under section 484(a)(2)(B) by

7 such means, in such form or manner, and within such time

8 as the Secretary shall by regulation prescribe.’’; and

9 (3) by inserting before the period at the end of

10 subsection (d) the following: ‘‘and may allow for the

11 submission or electronic transmission of partial in12 voices, electronic equivalents of invoices, bills, or

13 other documents or parts thereof, required under

14 this section’’.

15 SEC. 637. ENTRY OF MERCHANDISE.

16 (a) AMENDMENTS TO SECTION 484.—Section 484

17 (19 U.S.C. 1484) is amended to read as follows:

18 ‘‘SEC. 484. ENTRY OF MERCHANDISE.

19 ‘‘(a) REQUIREMENT AND TIME.—

20 ‘‘(1) Except as provided in sections 490, 498,

21 552, 553, and 336(j), one of the parties qualifying

22 as ‘importer of record’ under paragraph (2)(B), ei23 ther in person or by an agent authorized by the

24 party in writing, shall, using reasonable care—
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1 ‘‘(A) make entry therefor by filing with the

2 Customs Service—

3 ‘‘(i) such documentation or, pursuant

4 to an electronic data interchange system,

5 such information as is necessary to enable

6 the Customs Service to determine whether

7 the merchandise may be released from cus8 toms custody, and

9 ‘‘(ii) notification whether an import

10 activity summary statement will be filed;

11 and

12 ‘‘(B) complete the entry by filing with the

13 Customs Service the declared value, classifica14 tion and rate of duty applicable to the merchan15 dise, and such other documentation or, pursu16 ant to an electronic data interchange system,

17 such other information as is necessary to enable

18 the Customs Service to—

19 ‘‘(i) properly assess duties on the mer20 chandise,

21 ‘‘(ii) collect accurate statistics with re22 spect to the merchandise, and

23 ‘‘(iii) determine whether any other ap24 plicable requirement of law (other than a
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1 requirement relating to release from cus2 toms custody) is met.

3 ‘‘(2)(A) The documentation or information re4 quired under paragraph (1) with respect to any im5 ported merchandise shall be filed or transmitted in

6 such manner and within such time periods as the

7 Secretary shall by regulation prescribe. Such regula8 tions shall provide for the filing of import activity

9 summary statements, covering entries or warehouse

10 withdrawals made during a calendar month, within

11 such time period as is prescribed in regulations but

12 not to exceed the 20th day following such calendar

13 month.

14 ‘‘(B) When an entry of merchandise is made

15 under this section, the required documentation or in16 formation shall be filed or electronically transmitted

17 either by the owner or purchaser of the merchandise

18 or, when appropriately designated by the owner, pur19 chaser, or consignee of the merchandise, a person

20 holding a valid license under section 641. When a

21 consignee declares on entry that he is the owner or

22 purchaser of merchandise the Customs Service may,

23 without liability, accept the declaration. For the pur24 poses of this Act, the importer of record must be one
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1 of the parties who is eligible to file the documenta2 tion or information required by this section.

3 ‘‘(C) The Secretary, in prescribing regulations

4 to carry out this subsection, shall establish proce5 dures which insure the accuracy and timeliness of

6 import statistics, particularly statistics relevant to

7 the classification and valuation of imports. Correc8 tions of errors in such statistical data shall be trans9 mitted immediately to the Director of the Bureau of

10 the Census, who shall make corrections in the statis11 tics maintained by the Bureau. The Secretary shall

12 also provide, to the maximum extent practicable, for

13 the protection of the revenue, the enforcement of

14 laws governing the importation and exportation of

15 merchandise, the facilitation of the commerce of the

16 United States, and the equal treatment of all im17 porters of record of imported merchandise.

18 ‘‘(b) RECONCILIATION.—

19 ‘‘(1) IN GENERAL.—A party that electronically

20 transmits an entry summary or import activity sum21 mary statement may at the time of filing such sum22 mary or statement notify the Customs Service of his

23 intention to file a reconciliation pursuant to such

24 regulations as the Secretary may prescribe. Such

25 reconciliation must be filed by the importer of record
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1 within such time period as is prescribed by regula2 tion but no later than 15 months following the filing

3 of the entry summary or import activity summary

4 statement; except that the prescribed time period for

5 reconciliation issues relating to the assessment of

6 antidumping and countervailing duties shall require

7 filing no later than 90 days after the Customs Serv8 ice advises the importer that a period of review for

9 antidumping or countervailing duty purposes has

10 been completed. Before filing a reconciliation, an im11 porter of record shall post bond or other security

12 pursuant to such regulations as the Secretary may

13 prescribe.

14 ‘‘(2) REGULATIONS REGARDING AD/CV DU15 TIES.—The Secretary shall prescribe, in consultation

16 with the Secretary of Commerce, such regulations as

17 are necessary to adapt the reconciliation process for

18 use in the collection of antidumping and countervail19 ing duties.

20 ‘‘(c) RELEASE OF MERCHANDISE.—The Customs

21 Service may permit the entry and release of merchandise

22 from customs custody in accordance with such regulations

23 as the Secretary may prescribe. No officer of the Customs

24 Service shall be liable to any person with respect to the
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1 delivery of merchandise released from customs custody in

2 accordance with such regulations.

3 ‘‘(d) SIGNING AND CONTENTS.—Entries shall be

4 signed by the importer of record, or his agent, unless filed

5 pursuant to an electronic data interchange system. If elec6 tronically filed, each transmission of data shall be certified

7 by an importer of record or his agent, one of whom shall

8 be resident in the United States for purposes of receiving

9 service of process, as being true and correct to the best

10 of his knowledge and belief, and such transmission shall

11 be binding in the same manner and to the same extent

12 as a signed document. The entry shall set forth such facts

13 in regard to the importation as the Secretary may require

14 and shall be accompanied by such invoices, bills of lading,

15 certificates, and documents, or their electronically submit16 ted equivalents, as are required by regulation.

17 ‘‘(e) PRODUCTION OF INVOICE.—The Secretary may

18 provide by regulation for the production of an invoice,

19 parts thereof, or the electronic equivalents thereof, in such

20 manner and form, and under such terms and conditions,

21 as the Secretary considers necessary.

22 ‘‘(f) STATISTICAL ENUMERATION.—The Secretary,

23 the Secretary of Commerce, and the United States Inter24 national Trade Commission shall establish from time to

25 time for statistical purposes an enumeration of articles in
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1 such detail as in their judgment may be necessary, com2 prehending all merchandise imported into the United

3 States and exported from the United States, and shall

4 seek, in conjunction with statistical programs for domestic

5 production and programs for achieving international har6 monization of trade statistics, to establish the comparabil7 ity thereof with such enumeration of articles. All import

8 entries and export declarations shall include or have at9 tached thereto an accurate statement specifying, in terms

10 of such detailed enumeration, the kinds and quantities of

11 all merchandise imported and exported and the value of

12 the total quantity of each kind of article.

13 ‘‘(g) STATEMENT OF COST OF PRODUCTION.—Under

14 such regulations as the Secretary may prescribe, the Cus15 toms Service may require a verified statement from the

16 manufacturer or producer showing the cost of producing

17 the imported merchandise, if the Customs Service consid18 ers such verification necessary for the appraisement of

19 such merchandise.

20 ‘‘(h) ADMISSIBILITY OF DATA ELECTRONICALLY

21 TRANSMITTED.—Any entry or other information transmit22 ted by means of an authorized electronic data interchange

23 system shall be admissible in any and all administrative

24 and judicial proceedings as evidence of such entry or infor25 mation.’’.
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1 (b) AMENDMENT TO SECTION 771.—Section 771 (19

2 U.S.C. 1677) is amended by adding at the end the follow3 ing new paragraph:

4 ‘‘(23) ENTRY.—The term ‘entry’ includes, in

5 appropriate circumstances as determined by the ad6 ministering authority, a reconciliation entry created

7 under a reconciliation process, defined in section

8 401(s), that is initiated by an importer. The liability

9 of an importer under an antidumping or countervail10 ing duty proceeding for entries of merchandise sub11 ject to the proceeding will attach to the correspond12 ing reconciliation entry or entries. Suspension of liq13 uidation of the reconciliation entry or entries, for the

14 purpose of enforcing this title, is equivalent to the

15 suspension of liquidation of the corresponding indi16 vidual entries; but the suspension of liquidation of

17 the reconciliation entry or entries for such purpose

18 does not preclude liquidation for any other pur19 pose.’’.

20 SEC. 638. APPRAISEMENT AND OTHER PROCEDURES.

21 Section 500 (19 U.S.C. 1500) is amended—

22 (1) by striking out ‘‘The appropriate customs

23 officer’’ and inserting ‘‘The Customs Service’’;

24 (2) by striking out ‘‘appraise’’ in subsection (a)

25 and inserting ‘‘fix the final appraisement of’’;
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1 (3) by striking out ‘‘ascertain the’’ in sub2 section (b) and inserting ‘‘fix the final’’;

3 (4) by amending subsection (c)—

4 (A) by inserting ‘‘final’’ after ‘‘fix the’’,

5 and

6 (B) by inserting ‘‘, taxes, and fees’’ after

7 ‘‘duties’’ wherever it appears; and

8 (5) by amending subsections (d) and (e) to read

9 as follows:

10 ‘‘(d) liquidate the entry and reconciliation, if

11 any, of such merchandise; and

12 ‘‘(e) give or transmit, pursuant to an electronic

13 data interchange system, notice of such liquidation

14 to the importer, his consignee, or agent in such form

15 and manner as the Secretary shall by regulation pre16 scribe.’’.

17 SEC. 639. VOLUNTARY RELIQUIDATIONS.

18 Section 501 (19 U.S.C. 1501) is amended—

19 (1) by striking out ‘‘the appropriate customs of20 ficer on his own initiative’’ and inserting ‘‘the Cus21 toms Service’’;

22 (2) by inserting ‘‘or transmitted’’ after ‘‘given’’

23 wherever it appears; and

24 (3) by amending the section heading to read as

25 follows:
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1 ‘‘SEC. 501. VOLUNTARY RELIQUIDATIONS BY THE CUSTOMS

2 SERVICE.’’.

3 SEC. 640. APPRAISEMENT REGULATIONS.

4 Section 502 (19 U.S.C. 1502) is amended—

5 (1) by amending subsection (a)—

6 (A) by inserting ‘‘(including regulations es7 tablishing procedures for the issuance of bind8 ing rulings prior to the entry of the merchan9 dise concerned)’’ after ‘‘law’’,

10 (B) by striking out ‘‘ports of entry, and’’

11 inserting ‘‘ports of entry. The Secretary’’,

12 (C) by inserting ‘‘or classifying’’ after ‘‘ap13 praising’’ wherever it appears, and

14 (D) by striking out ‘‘such port’’ and insert15 ing ‘‘any port, and may direct any customs offi16 cer at any port to review entries of merchandise

17 filed at any other port’’; and

18 (2) by striking out subsection (b) and redesig19 nating subsection (c) as subsection (b).

20 SEC. 641. LIMITATION ON LIQUIDATION.

21 Section 504 (19 U.S.C. 1504) is amended—

22 (1) by amending subsection (a)—

23 (A) by striking out ‘‘Except as provided in

24 subsection (b),’’ and inserting ‘‘Unless an entry

25 is extended under subsection (b) or suspended

26 as required by statute or court order,’’,
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1 (B) by striking out ‘‘or’’ at the end of

2 paragraph (2),

3 (C) by inserting ‘‘or’’ after the semicolon

4 at the end of paragraph (3), and

5 (D) by inserting the following new para6 graph after paragraph (3):

7 ‘‘(4) if a reconciliation is filed, or should have

8 been filed, the date of the filing under section 484

9 or the date the reconciliation should have been

10 filed;’’; and

11 (2) by amending subsections (b), (c), and (d) to

12 read as follows:

13 ‘‘(b) EXTENSION.—The Secretary may extend the pe14 riod in which to liquidate an entry if—

15 ‘‘(1) the information needed for the proper ap16 praisement or classification of the merchandise, or

17 for insuring compliance with applicable law, is not

18 available to the Customs Service; or

19 ‘‘(2) the importer of record requests such exten20 sion and shows good cause therefor.

21 The Secretary shall give notice of an extension under this

22 subsection to the importer of record and the surety of such

23 importer of record. Notice shall be in such form and man24 ner (which may include electronic transmittal) as the Sec25 retary shall by regulation prescribe. Any entry the liquida-
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1 tion of which is extended under this subsection shall be

2 treated as having been liquidated at the rate of duty,

3 value, quantity, and amount of duty asserted at the time

4 of entry by the importer of record at the expiration of 4

5 years from the applicable date specified in subsection (a).

6 ‘‘(c) NOTICE OF SUSPENSION.—If the liquidation of

7 any entry is suspended, the Secretary shall by regulation

8 require that notice of the suspension be provided, in such

9 manner as the Secretary considers appropriate, to the im10 porter of record and to any authorized agent and surety

11 of such importer of record.

12 ‘‘(d) REMOVAL OF SUSPENSION.—When a suspension

13 required by statute or court order is removed, the Customs

14 Service shall liquidate the entry within 6 months after re15 ceiving notice of the removal from the Department of

16 Commerce, other agency, or a court with jurisdiction over

17 the entry. Any entry not liquidated by the Customs Service

18 within 6 months after receiving such notice shall be treat19 ed as having been liquidated at the rate of duty, value,

20 quantity, and amount of duty asserted at the time of entry

21 by the importer of record.’’.

22 SEC. 642. PAYMENT OF DUTIES AND FEES.

23 (a) AMENDMENT TO SECTION 505.—Section 505

24 (U.S.C. 1505) is amended to read as follows:
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1 ‘‘SEC. 505. PAYMENT OF DUTIES AND FEES.

2 ‘‘(a) DEPOSIT OF ESTIMATED DUTIES, FEES, AND

3 INTEREST.—Unless merchandise is entered for warehouse

4 or transportation, or under bond, the importer of record

5 shall deposit with the Customs Service at the time of mak6 ing entry, or at such later time as the Secretary may pre7 scribe by regulation, the amount of duties and fees esti8 mated to be payable thereon. Such regulations may pro9 vide that estimated duties and fees shall be deposited be10 fore or at the time an import activity summary statement

11 is filed. If an import activity summary statement is filed,

12 the estimated duties and fees shall be deposited together

13 with interest, at a rate determined by the Secretary, ac14 cruing from the first date of the month the statement is

15 required to be filed until the date such statement is actu16 ally filed.

17 ‘‘(b) COLLECTION OR REFUND OF DUTIES, FEES,

18 AND INTEREST DUE UPON LIQUIDATION OR RELIQUIDA19 TION.—The Customs Service shall collect any increased or

20 additional duties and fees due, together with interest

21 thereon, or refund any excess moneys deposited, together

22 with interest thereon, as determined on a liquidation or

23 reliquidation. Duties, fees, and interest determined to be

24 due upon liquidation or reliquidation are due 30 days after

25 issuance of the bill for such payment. Refunds of excess
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1 moneys deposited, together with interest thereon, shall be

2 paid within 30 days of liquidation or reliquidation.

3 ‘‘(c) INTEREST.—Interest assessed due to an

4 underpayment of duties, fees, or interest shall accrue, at

5 a rate determined by the Secretary, from the date the im6 porter of record is required to deposit estimated duties,

7 fees, and interest to the date of liquidation or reliquidation

8 of the applicable entry or reconciliation. Interest on excess

9 moneys deposited shall accrue, at a rate determined by

10 the Secretary, from the date the importer of record depos11 its estimated duties, fees, and interest to the date of liq12 uidation or reliquidation of the applicable entry or rec13 onciliation.

14 ‘‘(d) DELINQUENCY.—If duties, fees, and interest de15 termined to be due or refunded are not paid in full within

16 the 30-day period specified in subsection (b), any unpaid

17 balance shall be considered delinquent and bear interest

18 by 30-day periods, at a rate determined by the Secretary,

19 from the date of liquidation or reliquidation until the full

20 balance is paid. No interest shall accrue during the 30-

21 day period in which payment is actually made.’’.

22 (b) CONFORMING AMENDMENT.—Subsection (d) of

23 section 520 (19 U.S.C. 1520(d)) is repealed.

24 SEC. 643. ABANDONMENT AND DAMAGE.

25 Section 506 (19 U.S.C. 1506) is amended—
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1 (1) by striking out ‘‘the appropriate customs of2 ficer’’ and ‘‘such customs officer’’ wherever they ap3 pear and inserting ‘‘the Customs Service’’;

4 (2) by amending paragraph (1)—

5 (A) by striking out ‘‘not sent to the ap6 praiser’s stores for’’ and inserting ‘‘released

7 without an’’,

8 (B) by striking out ‘‘of the examination

9 packages or quantities of merchandise’’,

10 (C) by striking out ‘‘the appraiser’s stores’’

11 and inserting ‘‘the Customs Service’’, and

12 (D) by inserting ‘‘or entry’’ after ‘‘in13 voice’’, and

14 (3) by amending paragraph (2)—

15 (A) by inserting ‘‘, electronically or other16 wise,’’ after ‘‘files’’, and

17 (B) by striking out ‘‘written’’.

18 SEC. 644. CUSTOMS OFFICER’S IMMUNITY.

19 Section 513 (19 U.S.C. 1513) is amended to read as

20 follows:

21 ‘‘SEC. 513. CUSTOMS OFFICER’S IMMUNITY.

22 ‘‘No customs officer shall be liable in any way to any

23 person for or on account of—

24 ‘‘(1) any ruling or decision regarding the ap25 praisement or the classification of any imported
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1 merchandise or regarding the duties, fees, and taxes

2 charged thereon,

3 ‘‘(2) the collection of any dues, charges, duties,

4 fees, and taxes on or on account of any imported

5 merchandise, or

6 ‘‘(3) any other matter or thing as to which any

7 person might under this Act be entitled to protest or

8 appeal from the decision of such officer.’’.

9 SEC. 645. PROTESTS.

10 Section 514 (19 U.S.C. 1514) is amended—

11 (1) by amending subsection (a)—

12 (A) by striking out ‘‘appropriate customs

13 officer’’ in the text preceding paragraph (1) and

14 inserting ‘‘Customs Service’’,

15 (B) by inserting ‘‘or reconciliation as to

16 the issues contained therein,’’ after ‘‘entry,’’ in

17 paragraph (5),

18 (C) by striking out ‘‘and’’ and inserting

19 ‘‘or’’ at the end of paragraph (6),

20 (D) by striking out the comma at the end

21 of paragraph (7) and inserting a semicolon, and

22 (E) by striking out ‘‘appropriate customs

23 officer, who’’ in the text following paragraph

24 (7) and inserting ‘‘Customs Service, which’’;
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1 (2) by amending subsection (b) by striking out

2 ‘‘appropriate customs officer’’ and inserting ‘‘Cus3 toms Service’’;

4 (3) by amending the first sentence of subsection

5 (c)(1) to read as follows: ‘‘A protest of a decision

6 made under subsection (a) shall be filed in writing,

7 or transmitted electronically pursuant to an elec8 tronic data interchange system, in accordance with

9 regulations prescribed by the Secretary. A protest

10 must set forth distinctly and specifically—

11 ‘‘(A) each decision described in subsection

12 (a) as to which protest is made;

13 ‘‘(B) each category of merchandise affected

14 by each decision set forth under paragraph (1);

15 ‘‘(C) the nature of each objection and the

16 reasons therefor; and

17 ‘‘(D) any other matter required by the Sec18 retary by regulation.’’;

19 (4) by redesignating paragraph (2) of sub20 section (c) as paragraph (3) and by striking out

21 ‘‘such customs officer’’ in such redesignated para22 graph and inserting ‘‘the Customs Service’’;

23 (5) by designating the last sentence of para24 graph (1) of subsection (c) as paragraph (2);
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1 (6) by striking out ‘‘customs officer’’ in sub2 section (d) and inserting ‘‘Customs Service’’; and

3 (7) by amending the section heading to read as

4 follows:

5 ‘‘SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS

6 SERVICE.’’.

7 SEC. 646. REFUNDS AND ERRORS.

8 Section 520 (19 U.S.C. 1520) is amended—

9 (1) by inserting ‘‘or reconciliation’’ after

10 ‘‘entry’’ in paragraphs (1) and (4) of subsection (a);

11 and

12 (2) by amending subsection (c)—

13 (A) by striking out ‘‘appropriate customs

14 officer’’ wherever it appears and inserting

15 ‘‘Customs Service’’,

16 (B) by inserting ‘‘or reconciliation’’ after

17 ‘‘reliquidate an entry’’, and

18 (C) by inserting ‘‘, whether or not result19 ing from or contained in electronic trans20 mission,’’ after ‘‘inadvertence’’ the first place it

21 appears in paragraph (1).

22 SEC. 647. BONDS AND OTHER SECURITY.

23 Section 623 (19 U.S.C. 1623) is amended—

24 (1) by inserting ‘‘and the manner in which the

25 bond may be filed with or, pursuant to an author-
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1 ized electronic data interchange system, transmitted

2 to the Customs Service’’ after ‘‘form of such bond’’

3 in subsection (b)(1); and

4 (2) by inserting at the end of subsection (d) the

5 following new sentence: ‘‘Any bond transmitted to

6 the Customs Service pursuant to an authorized elec7 tronic data interchange system shall have the same

8 force and effect and be binding upon the parties

9 thereto as if such bond were manually executed,

10 signed, and filed.’’.

11 SEC. 648. CUSTOMHOUSE BROKERS.

12 Section 641 (19 U.S.C. 1641) is amended—

13 (1) by adding at the end of subsection (a)(2)

14 the following new sentence: ‘‘It also includes the

15 preparation of documents or forms in any format

16 and the electronic transmission of documents, in17 voices, bills, or parts thereof, intended to be filed

18 with the Customs Service in furtherance of such ac19 tivities, whether or not signed or filed by the pre20 parer, or activities relating to such preparation, but

21 does not include the mere electronic transmission of

22 data received for transmission to Customs.’’;

23 (2) by amending subsection (c)(1) to read as

24 follows:
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1 ‘‘(1) IN GENERAL.—Each person granted a cus2 toms broker’s license under subsection (b) shall be

3 issued, in accordance with such regulations as the

4 Secretary shall prescribe, either or both of the

5 following:

6 ‘‘(A) A national permit for the conduct of

7 such customs business as the Secretary pre8 scribes by regulation.

9 ‘‘(B) A permit for each customs district in

10 which that person conducts customs business

11 and, except as provided in paragraph (2), regu12 larly employs at least 1 individual who is li13 censed under subsection (b)(2) to exercise re14 sponsible supervision and control over the cus15 toms business conducted by that person in that

16 district.’’;

17 (3) by inserting at the end of subsection (c) the

18 following new paragraph:

19 ‘‘(4) APPOINTMENT OF SUBAGENTS.—Notwith20 standing subsection (c)(1), upon the implementation

21 by the Secretary under section 413(b)(2) of the com22 ponent of the National Customs Automation Pro23 gram referred to in section 411(a)(2)(B), a licensed

24 broker may appoint another licensed broker holding

25 a permit in a customs district to act on its behalf
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1 as its subagent in that district if such activity re2 lates to the filing of information that is permitted by

3 law or regulation to be filed electronically. A licensed

4 broker appointing a subagent pursuant to this para5 graph shall remain liable for any and all obligations

6 arising under bond and any and all duties, taxes,

7 and fees, as well as any other liabilities imposed by

8 law, and shall be precluded from delegating to a

9 subagent such liability.’’;

10 (4) by amending subsection (d)(2)(B)—

11 (A) by striking out ‘‘appropriate customs

12 officer’’ and inserting ‘‘Customs Service’’ in the

13 first and third sentences,

14 (B) by striking out ‘‘he’’ and inserting ‘‘it’’

15 in the third sentence,

16 (C) by striking out ‘‘15 days’’ and insert17 ing ‘‘30 days’’ in the third sentence,

18 (D) by striking out ‘‘the appropriate cus19 toms officer and the customs broker; they’’ and

20 inserting ‘‘the Customs Service and the customs

21 broker; which’’ in the sixth sentence,

22 (E) by striking out ‘‘his’’ and inserting

23 ‘‘the’’ in the seventh sentence, and
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1 (F) by striking out ‘‘for his decision’’ and

2 inserting ‘‘for the decision’’ in the eighth sen3 tence; and

4 (5) by amending subsection (f) by striking out

5 ‘‘United States Customs Service.’’ and inserting

6 ‘‘Customs Service. The Secretary may not prohibit

7 customs brokers from limiting their liability to other

8 persons in the conduct of customs business. For pur9 poses of this subsection or any other provision of

10 this Act pertaining to recordkeeping, all data re11 quired to be retained by a customs broker may be

12 kept on microfilm, optical disc, magnetic tapes, disks

13 or drums, video files or any other electrically gen14 erated medium. Pursuant to such regulations as the

15 Secretary shall prescribe, the conversion of data to

16 such storage medium may be accomplished at any

17 time subsequent to the relevant customs transaction

18 and the data may be retained in a centralized basis

19 according to such broker’s business system.’’.

20 SEC. 649. CONFORMING AMENDMENTS.

21 (a) PLACE OF ENTRY AND UNLADING.—Section 447

22 (19 U.S.C. 1447) is amended by striking out ‘‘the appro23 priate customs officer shall consider’’ and inserting ‘‘the

24 Customs Service considers’’.
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1 (b) UNLADING.—Section 449 (19 U.S.C. 1449) is

2 amended by striking out ‘‘appropriate customs officer of

3 such port issues a permit for the unlading of such mer4 chandise or baggage,’’ and inserting ‘‘Customs Service is5 sues a permit for the unlading of such merchandise or

6 baggage at such port,’’.

7 Subtitle C—Miscellaneous Amend8 ments to the Tariff Act of 1930

9 SEC. 651. ADMINISTRATIVE EXEMPTIONS.

10 Section 321 (19 U.S.C. 1321) is amended—

11 (1) by amending subsection (a)(1)—

12 (A) by striking out ‘‘of less than $10’’ and

13 inserting ‘‘of an amount specified by the Sec14 retary by regulation, but not less than $20,’’,

15 (B) by inserting ‘‘, fees,’’ after ‘‘duties’’

16 wherever it appears, and

17 (C) by striking out ‘‘and’’ at the end there18 of;

19 (2) by amending subsection (a)(2)—

20 (A) by striking out ‘‘shall not exceed—’’

21 and inserting ‘‘shall not exceed an amount spec22 ified by the Secretary by regulation, but not

23 less than—’’,
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1 (B) by striking out ‘‘$50’’ and ‘‘$100’’ in

2 subparagraph (A) and inserting ‘‘$100’’ and

3 ‘‘$200’’, respectively,

4 (C) by striking out ‘‘$25’’ in subparagraph

5 (B) and inserting ‘‘$200’’,

6 (D) by striking out ‘‘$5’’ in subparagraph

7 (C) and inserting ‘‘$200’’, and

8 (E) by striking the period at the end there9 of and inserting ‘‘; and’’, and

10 (3) by inserting a new paragraph (3) at the end

11 of subsection (a) to read as follows:

12 ‘‘(3) waive the collection of duties, fees, and

13 taxes due on entered merchandise when such duties,

14 fees, or taxes are less than $20 or such greater

15 amount as may be specified by the Secretary by reg16 ulation.’’; and

17 (4) by amending subsection (b)—

18 (A) by striking out ‘‘to diminish any dollar

19 amount specified in subsection (a) and’’; and

20 (B) by striking out ‘‘such subsection’’

21 wherever it appears and inserting ‘‘subsection

22 (a)’’.

23 SEC. 652. REPORT OF ARRIVAL.

24 Section 433 (19 U.S.C. 1433) is amended—

25 (1) by amending subsection (a)(1)—
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1 (A) by striking out ‘‘or’’ at the end of sub2 paragraph (B),

3 (B) by inserting ‘‘or’’ after the semicolon

4 at the end of subparagraph (C), and

5 (C) by adding after subparagraph (C) the

6 following:

7 ‘‘(D) any vessel which has visited a hover8 ing vessel or received merchandise while outside

9 the territorial sea;’’;

10 (2) by striking out ‘‘present to customs officers

11 such’’ in subsection (d) and inserting ‘‘present, or

12 transmit pursuant to an electronic data interchange

13 system, to the Customs Service such information,

14 data,’’; and

15 (3) by amending subsection (e) to read as fol16 lows:

17 ‘‘(e) PROHIBITION ON DEPARTURES AND DIS18 CHARGE.—Unless otherwise authorized by law, a vessel,

19 aircraft or vehicle after arriving in the United States or

20 Virgin Islands may, but only in accordance with regula21 tions prescribed by the Secretary—

22 ‘‘(1) depart from the port, place, or airport of

23 arrival; or

24 ‘‘(2) discharge any passenger or merchandise

25 (including baggage).’’.
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1 SEC. 653. ENTRY OF VESSELS.

2 Section 434 (19 U.S.C. 1434) amended to read as

3 follows:

4 ‘‘SEC. 434. ENTRY; VESSELS.

5 ‘‘(a) FORMAL ENTRY.—Within 24 hours (or such

6 other period of time as may be provided under subsection

7 (c)(2)) after the arrival at any port or place in the United

8 States of—

9 ‘‘(1) any vessel from a foreign port or place;

10 ‘‘(2) any foreign vessel from a domestic port;

11 ‘‘(3) any vessel of the United States having on

12 board bonded merchandise or foreign merchandise

13 for which entry has not been made; or

14 ‘‘(4) any vessel which has visited a hovering

15 vessel or has delivered or received merchandise while

16 outside the territorial sea;

17 the master of the vessel shall, unless otherwise provided

18 by law, make formal entry at the nearest customs facility

19 or such other place as the Secretary may prescribe by

20 regulation.

21 ‘‘(b) PRELIMINARY ENTRY.—The Secretary may by

22 regulation permit the master to make preliminary entry

23 of the vessel with the Customs Service in lieu of formal

24 entry or before formal entry is made. In permitting pre25 liminary entry, the Customs Service shall board a suffi-
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1 cient number of vessels to ensure compliance with the laws

2 it enforces.

3 ‘‘(c) REGULATIONS.—The Secretary may by regula4 tion—

5 ‘‘(1) prescribe the manner and format in which

6 entry under subsection (a) or subsection (b), or

7 both, must be made, and such regulations may pro8 vide that any such entry may be made electronically

9 pursuant to an electronic data interchange system;

10 ‘‘(2) provide that—

11 ‘‘(A) formal entry must be made within a

12 greater or lesser time than 24 hours after arriv13 al, but in no case more than 48 hours after ar14 rival, and

15 ‘‘(B) formal entry may be made before ar16 rival; and

17 ‘‘(3) authorize the Customs Service to permit

18 entry or preliminary entry of any vessel to be made

19 at a place other than a designated port of entry,

20 under such conditions as may be prescribed.’’.

21 SEC. 654. UNLAWFUL RETURN OF FOREIGN VESSEL PA22 PERS.

23 Section 438 (19 U.S.C. 1438) is amended—

24 (1) by striking out ‘‘section 435’’ and inserting

25 ‘‘section 434’’;
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1 (2) by inserting ‘‘, or regulations issued there2 under,’’ after ‘‘of this Act’’; and

3 (3) by striking out ‘‘the appropriate customs of4 ficer of the port where such vessel has been en5 tered.’’ and inserting ‘‘the Customs Service in the

6 port in which such vessel has entered.’’.

7 SEC. 655. VESSELS NOT REQUIRED TO ENTER.

8 Section 441 (19 U.S.C. 1441) is amended—

9 (1) by amending the text preceding paragraph

10 (1) to read as follows: ‘‘The following vessels shall

11 not be required to make entry under section 434 or

12 to obtain clearance under section 4197 of the Re13 vised Statutes of the United States (46 U.S.C. App.

14 91):’’;

15 (2) by amending paragraph (3) to read as

16 follows:

17 ‘‘(3) Any vessel carrying passengers on excursion

18 from the United States Virgin Islands to the British Vir19 gin Islands and returning, if—

20 ‘‘(A) the vessel does not in any way violate the

21 customs or navigation laws of the United States;

22 ‘‘(B) the vessel has not visited any hovering

23 vessel; and

24 ‘‘(C) the master of the vessel, if there is on

25 board any article required by law to be entered, re-
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1 ports the article to the Customs Service immediately

2 upon arrival.’’;

3 (3) by redesignating paragraphs (4) and (5) as

4 paragraphs (5) and (6), respectively, and inserting

5 after paragraph (3) the following:

6 ‘‘(4) Any United States documented vessel with rec7 reational endorsement or any undocumented United

8 States pleasure vessel not engaged in trade, if—

9 ‘‘(A) the vessel complies with the reporting re10 quirements of section 433, and with the customs and

11 navigation laws of the United States;

12 ‘‘(B) the vessel has not visited any hovering

13 vessel; and

14 ‘‘(C) the master of, and any other person on

15 board, the vessel, if the master or such person has

16 on board any article required by law to be entered

17 or declared, reports such article to the Customs

18 Service immediately upon arrival;’’;

19 (4) by amending paragraph (6) (as so redesig20 nated) by striking out ‘‘enrolled and licensed to en21 gage in the foreign and coasting trade in the north22 ern, northeastern, and northwestern frontiers’’ and

23 inserting ‘‘documented under chapter 121 of title

24 46, United States Code, with a Great Lakes en25 dorsement’’; and
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1 (5) by amending the section heading to read as

2 follows:

3 ‘‘SEC. 441. EXCEPTIONS TO VESSEL ENTRY AND CLEAR4 ANCE REQUIREMENTS.’’.

5 SEC. 656. UNLADING.

6 Section 448(a) (19 U.S.C. 1448(a)) is amended—

7 (1) by amending the first sentence—

8 (A) by striking out ‘‘enter)’’ and inserting

9 ‘‘enter or clear)’’,

10 (B) by striking out ‘‘or vehicle arriving

11 from a foreign port or place’’ and inserting ‘‘re12 quired to make entry under section 434, or ve13 hicle required to report arrival under section

14 433,’’,

15 (C) by inserting ‘‘or transmitted pursuant

16 to an electronic data interchange system’’ after

17 ‘‘issued’’, and

18 (D) by striking out the colon after ‘‘offi19 cer’’ and the proviso and inserting a period;

20 (2) by amending the second sentence—

21 (A) by striking out ‘‘, preliminary or other22 wise,’’, and

23 (B) by inserting ‘‘, electronically pursuant

24 to an authorized electronic data interchange
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1 system or otherwise,’’ after ‘‘may issue a per2 mit’’;

3 (3) by striking out the last sentence and insert4 ing the following: ‘‘The owner or master of any ves5 sel or vehicle, or agent thereof, shall notify the Cus6 toms Service of any merchandise or baggage so un7 laden for which entry is not made within the time

8 prescribed by law or regulation. The Secretary shall

9 by regulation prescribe administrative penalties not

10 to exceed $1,000 for each bill of lading for which no11 tice is not given. Any such administrative penalty

12 shall be subject to mitigation and remittance under

13 section 618. Such unentered merchandise or bag14 gage shall be the responsibility of the master or per15 son in charge of the importing vessel or vehicle, or

16 agent thereof, until it is removed from the carrier’s

17 control in accordance with section 490.’’; and

18 (4) by striking out ‘‘the appropriate customs of19 ficer’’ and ‘‘such customs officer’’ wherever they ap20 pear and inserting ‘‘the Customs Service’’.

21 SEC. 657. DECLARATIONS.

22 Section 485 (19 U.S.C. 1485) is amended—

23 (1) by amending subsection (a)—

24 (A) by inserting ‘‘or transmit electroni25 cally’’ after ‘‘file’’, and
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1 (B) by inserting ‘‘and manner’’ after

2 ‘‘form’’;

3 (2) by amending subsection (d)—

4 (A) by striking out ‘‘A importer’’ and in5 serting ‘‘An importer’’, and

6 (B) by striking out ‘‘a importer’’ and in7 serting ‘‘an importer’’; and

8 (3) by inserting after subsection (f) the follow9 ing new subsection:

10 ‘‘(g) EXPORTED MERCHANDISE RETURNED AS

11 UNDELIVERABLE.—With respect to any importation of

12 merchandise to which General Headnote 4(e) of the Har13 monized Tariff Schedule of the United States applies, any

14 person who gained any benefit from, or met any obligation

15 to, the United States as a result of the prior exportation

16 of such merchandise shall, in accordance with regulations

17 prescribed by the Secretary, within a reasonable time in18 form the Customs Service of the return of the merchan19 dise.’’.

20 SEC. 658. GENERAL ORDERS.

21 Section 490 (19 U.S.C. 1490) is amended—

22 (1) by amending subsection (a) to read as fol23 lows:

24 ‘‘(a) INCOMPLETE ENTRY.—

25 ‘‘(1) Whenever—
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1 ‘‘(A) the entry of any imported merchan2 dise is not made within the time provided by

3 law or by regulation prescribed by the Sec4 retary;

5 ‘‘(B) the entry of imported merchandise is

6 incomplete because of failure to pay the esti7 mated duties, fees, or interest;

8 ‘‘(C) in the opinion of the Customs Serv9 ice, the entry of imported merchandise cannot

10 be made for want of proper documents or other

11 cause; or

12 ‘‘(D) the Customs Service believes that any

13 merchandise is not correctly and legally

14 invoiced;

15 the carrier (unless subject to subsection (c)) shall

16 notify the bonded warehouse of such unentered mer17 chandise.

18 ‘‘(2) After notification under paragraph (1), the

19 bonded warehouse shall arrange for the transpor20 tation and storage of the merchandise at the risk

21 and expense of the consignee. The merchandise shall

22 remain in the bonded warehouse until—

23 ‘‘(A) entry is made or completed and the

24 proper documents are produced;
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1 ‘‘(B) the information and data necessary

2 for entry are transmitted to the Customs Serv3 ice pursuant to an authorized electronic data

4 interchange system; or

5 ‘‘(C) a bond is given for the production of

6 documents or the transmittal of data.’’;

7 (2) by amending subsection (b)—

8 (A) by amending the heading for sub9 section (b) to read as follows:

10 ‘‘(b) REQUEST FOR POSSESSION BY CUSTOMS.—’’,

11 and

12 (B) by striking out ‘‘appropriate customs

13 officer’’ and inserting ‘‘Customs Service’’; and

14 (3) by adding at the end the following new sub15 section:

16 ‘‘(c) GOVERNMENT MERCHANDISE.—Any imported

17 merchandise that—

18 ‘‘(1) is described in any of paragraphs (1)

19 through (4) of subsection (a); and

20 ‘‘(2) is consigned to, or owned by, the United

21 States Government;

22 shall be stored and disposed of in accordance with such

23 rules and procedures as the Secretary shall by regulation

24 prescribe.’’.
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1 SEC. 659. UNCLAIMED MERCHANDISE.

2 Section 491 (19 U.S.C. 1491) is amended—

3 (1) by amending subsection (a)—

4 (A) by striking out ‘‘customs custody for

5 one year’’ in the first sentence and inserting ‘‘in

6 a bonded warehouse pursuant to section 490 for

7 6 months’’,

8 (B) by striking out ‘‘public store or bonded

9 warehouse for a period of one year’’ in the sec10 ond sentence and inserting ‘‘pursuant to section

11 490 in a bonded warehouse for 6 months’’,

12 (C) by striking out ‘‘estimated duties and

13 storage’’ in the first sentence and inserting ‘‘es14 timated duties, taxes, fees, interest, storage,’’,

15 (D) by inserting ‘‘taxes, fees, interest,’’

16 after ‘‘duties,’’ wherever it appears, and

17 (E) by striking out ‘‘duties’’ in the last

18 sentence and inserting ‘‘duties, taxes, interest,

19 and fees’’; and

20 (2) by redesignating subsection (b) as sub21 section (e) and inserting after subsection (a) the fol22 lowing new subsections:

23 ‘‘(b) NOTICE OF TITLE VESTING IN THE UNITED

24 STATES.—At the end of the 6-month period referred to

25 in subsection (a), the Customs Service may, in lieu of sale

26 of the merchandise, provide notice to all known interested
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1 parties that the title to such merchandise shall be consid2 ered to vest in the United States free and clear of any

3 liens or encumbrances, on the 30th day after the date of

4 the notice unless, before such 30th day—

5 ‘‘(1) the subject merchandise is entered or with6 drawn for consumption; and

7 ‘‘(2) payment is made of all duties, taxes, fees,

8 transfer and storage charges, and other expenses

9 that may have accrued thereon.

10 ‘‘(c) RETENTION, TRANSFER, DESTRUCTION, OR

11 OTHER DISPOSITION.—If title to any merchandise vests

12 in the United States by operation of subsection (b), such

13 merchandise may be retained by the Customs Service for

14 official use, transferred to any other Federal agency or

15 to any State or local agency, destroyed, or otherwise dis16 posed of in accordance with such regulations as the Sec17 retary shall prescribe. All transfer and storage charges or

18 expenses accruing on retained or transferred merchandise

19 shall be paid by the receiving agency.

20 ‘‘(d) PETITION.—Whenever any party, having lost a

21 substantial interest in merchandise by virtue of title vest22 ing in the United States under subsection (b), can estab23 lish such title or interest to the satisfaction of the Sec24 retary within 30 days after the day on which title vests

25 in the United States under subsection (b), or can establish
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1 to the satisfaction of the Secretary that the party did not

2 receive notice under subsection (b), the Secretary may,

3 upon receipt of a timely and proper petition and upon

4 finding that the facts and circumstances warrant, pay

5 such party out of the Treasury of the United States the

6 amount the Secretary believes the party would have re7 ceived under section 493 had the merchandise been sold

8 and a proper claim filed. The decision of the Secretary

9 with respect to any such petition is final and conclusive

10 on all parties.’’; and

11 (3) by amending subsection (e) (as so redesig12 nated) by striking out ‘‘appropriate customs officer’’

13 in paragraph (3) and inserting ‘‘Customs Service’’.

14 SEC. 660. DESTRUCTION OF MERCHANDISE.

15 Section 492 (19 U.S.C. 1492) is amended—

16 (1) by inserting ‘‘, retained for official use, or

17 otherwise disposed of’’ after ‘‘destroyed’’; and

18 (2) by striking out ‘‘appropriate customs offi19 cer’’ and inserting ‘‘Customs Service’’.

20 SEC. 661. PROCEEDS OF SALE.

21 Section 493 (19 U.S.C. 1493) is amended—

22 (1) by inserting ‘‘taxes, and fees,’’ after ‘‘du23 ties,’’;

24 (2) by striking out ‘‘by the appropriate customs

25 officer’’; and
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1 (3) by striking out ‘‘such customs officer’’ and

2 inserting ‘‘the Customs Service’’.

3 SEC. 662. ENTRY UNDER REGULATIONS.

4 Section 498(a) (19 U.S.C. 1498(a)) is amended—

5 (1) by amending paragraph (1) to read as fol6 lows:

7 ‘‘(1) Merchandise, when—

8 ‘‘(A) the aggregate value of the shipment

9 does not exceed an amount specified by the Sec10 retary by regulation, but not more than $2,500;

11 or

12 ‘‘(B) different commercial facilitation and

13 risk considerations that may vary for different

14 classes or kinds of merchandise or different

15 classes of transactions may dictate;’’; and

16 (2) by striking out ‘‘$10,000’’ in paragraph (2)

17 and inserting ‘‘such amounts as the Secretary may

18 prescribe’’.

19 SEC. 663. AMERICAN TRADEMARKS.

20 Section 526(e)(3) (19 U.S.C. 1526(e)(3)) is amend21 ed—

22 (1) by striking out ‘‘1 year’’ and inserting ‘‘90

23 days’’; and

24 (2) by striking out ‘‘appropriate customs offi25 cers’’ and inserting ‘‘the Customs Service’’.
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1 SEC. 664. SIMPLIFIED RECORDKEEPING FOR MERCHAN2 DISE TRANSPORTED BY PIPELINE.

3 Part IV of title IV is amended by inserting after sec4 tion 553 the following new section:

5 ‘‘SEC. 553A. RECORDKEEPING FOR MERCHANDISE TRANS6 PORTED BY PIPELINE.

7 ‘‘Merchandise in Customs custody that is transported

8 by pipeline may be accounted for on a quantitative basis,

9 based on the bill of lading, or equivalent document of re10 ceipt, issued by the pipeline carrier. Unless the Customs

11 Service has reasonable cause to suspect fraud, the Cus12 toms Service may accept the bill of lading, or equivalent

13 document of receipt, issued by the pipeline carrier to the

14 shipper and accepted by the consignee to maintain iden15 tity. The shipper, pipeline operator, and consignee shall

16 be subject to the recordkeeping requirements of sections

17 508 and 509.’’.

18 SEC. 665. ENTRY FOR WAREHOUSE.

19 Section 557(a) (19 U.S.C. 1557(a)) is amended—

20 (1) by designating the first 2 sentences of such

21 subsection as paragraph (1);

22 (2) by striking out in such paragraph (1) (as so

23 designated) ‘‘: Provided, That the total period of

24 time for which such merchandise may remain in

25 bonded warehouse shall not exceed 5 years from the
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1 date of importation.’’ and inserting the following: ‘‘;

2 except that—

3 ‘‘(A) the total period of time for which such

4 merchandise may remain in bonded warehouse shall

5 not exceed 5 years from the date of importation; and

6 ‘‘(B) turbine fuel may be withdrawn for use

7 under section 309 without the payment of duty if an

8 amount equal to the quantity of fuel withdrawn is

9 shown to be used within 30 days after the day of

10 withdrawal, but duties (together with interest pay11 able from the date of the withdrawal at the rate of

12 interest established under section 6621 of title 26,

13 United States Code) shall be deposited by the 40th

14 day after the day of withdrawal on fuel that was

15 withdrawn in excess of the quantity shown to have

16 been so used during such 30-day period.’’; and

17 (3) by designating the remaining sentences of

18 such subsection as paragraph (2).

19 SEC. 666. CARTAGE.

20 The first sentence of section 565 (19 U.S.C. 1565)

21 is amended to read as follows: ‘‘The cartage of merchan22 dise entered for warehouse shall be done by—

23 ‘‘(1) cartmen appointed and licensed by the

24 Customs Service; or
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1 ‘‘(2) carriers designated under section 551 to

2 carry bonded merchandise;

3 who shall give bond, in a penal sum to be fixed by the

4 Customs Service, for the protection of the Government

5 against any loss of, or damage to, the merchandise while

6 being so carted.’’.

7 SEC. 667. SEIZURE.

8 Section 612 (19 U.S.C. 1612) is amended—

9 (1) by amending subsection (a)—

10 (A) by striking out ‘‘the appropriate cus11 toms officer’’, ‘‘such officer’’ and ‘‘the customs

12 officer’’ wherever they appear and inserting

13 ‘‘the Customs Service’’, and

14 (B) by striking out ‘‘the appraiser’s return

15 and his’’ and inserting ‘‘its’’; and

16 (2) by amending subsection (b) to read as fol17 lows:

18 ‘‘(b) If the Customs Service determines that the ex19 pense of keeping the vessel, vehicle, aircraft, merchandise,

20 or baggage is disproportionate to the value thereof, the

21 Customs Service may promptly order the destruction or

22 other appropriate disposition of such property under regu23 lations prescribed by the Secretary. No customs officer

24 shall be liable for the destruction or other disposition of

25 property made pursuant to this section.’’.
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1 SEC. 668. LIMITATION ON ACTIONS.

2 Section 621 (19 U.S.C. 1621) is amended—

3 (1) by inserting ‘‘any duty under section

4 592(d), 593A(d), or’’ before ‘‘any pecuniary pen5 alty’’; and

6 (2) by striking out ‘‘discovered:’’ and all that

7 follows thereafter and inserting the follow8 ing: ‘‘discovered; except that—

9 ‘‘(1) in the case of an alleged violation of sec10 tion 592 or 593A, no suit or action (including a suit

11 or action for restoration of lawful duties under sub12 section (d) of such sections) may be instituted unless

13 commenced within 5 years after the date of the al14 leged violation or, if such violation arises out of

15 fraud, within 5 years after the date of discovery of

16 fraud, and

17 ‘‘(2) the time of the absence from the United

18 States of the person subject to the penalty or forfeit19 ure, or of any concealment or absence of the prop20 erty, shall not be reckoned within the 5-year period

21 of limitation.’’.

22 SEC. 669. COLLECTION OF FEES ON BEHALF OF OTHER

23 AGENCIES.

24 The Tariff Act of 1930 is amended by inserting after

25 section 528 the following new section:
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1 ‘‘SEC. 529. COLLECTION OF FEES ON BEHALF OF OTHER

2 AGENCIES.

3 ‘‘The Customs Service shall be reimbursed from the

4 fees collected for the cost and expense, administrative and

5 otherwise, incurred in collecting any fees on behalf of any

6 government agency for any reason.’’.

7 SEC. 670. AUTHORITY TO SETTLE CLAIMS.

8 The Tariff Act of 1930 is amended by inserting after

9 section 629 the following new section:

10 ‘‘SEC. 630. AUTHORITY TO SETTLE CLAIMS.

11 ‘‘(a) IN GENERAL.—With respect to a claim that can12 not be settled under chapter 171 of title 28, United States

13 Code, the Secretary may settle, for not more than $50,000

14 in any one case, a claim for damage to, or loss of, privately

15 owned property caused by an investigative or law enforce16 ment officer (as defined in section 2680(h) of title 28,

17 United States Code) who is employed by the Customs

18 Service and acting within the scope of his or her employ19 ment.

20 ‘‘(b) LIMITATIONS.—The Secretary may not pay a

21 claim under subsection (a) that—

22 ‘‘(1) concerns commercial property;

23 ‘‘(2) is presented to the Secretary more than 1

24 year after it occurs; or
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1 ‘‘(3) is presented by an officer or employee of

2 the United States Government and arose within the

3 scope of employment.

4 ‘‘(c) FINAL SETTLEMENT.—A claim may be paid

5 under this section only if the claimant accepts the amount

6 of settlement in complete satisfaction of the claim.’’.

7 SEC. 671. USE OF PRIVATE COLLECTION AGENCIES.

8 The Tariff Act of 1930 is amended by inserting after

9 section 630 the following new section:

10 ‘‘SEC. 631. USE OF PRIVATE COLLECTION AGENCIES.

11 ‘‘(a) IN GENERAL.—Notwithstanding any other pro12 vision of law, the Secretary, under such terms and condi13 tions as the Secretary considers appropriate, shall enter

14 into contracts and incur obligations with one or more per15 sons for collection services to recover indebtedness arising

16 under the customs laws and owed the United States Gov17 ernment, but only after the Customs Service has ex18 hausted all administrative efforts, including all claims

19 against applicable surety bonds, to collect the indebted20 ness.

21 ‘‘(b) CONTRACT REQUIREMENTS.—Any contract en22 tered into under subsection (a) shall provide that—

23 ‘‘(1) the Secretary retains the authority to re24 solve a dispute, compromise a claim, end collection
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1 action, and refer a matter to the Attorney General

2 to bring a civil action; and

3 ‘‘(2) the person is subject to—

4 ‘‘(A) section 552a of title 5, United States

5 Code, to the extent provided in subsection (m)

6 of such section; and

7 ‘‘(B) laws and regulations of the United

8 States Government and State governments re9 lated to debt collection practices.’’.

10 Subtitle D—Miscellaneous Provi11 sions and Consequential and

12 Conforming Amendments to

13 Other Laws

14 SEC. 681. AMENDMENTS TO THE HARMONIZED TARIFF

15 SCHEDULE.

16 (a) RETURN SHIPMENTS.—General Note 4 of the

17 Harmonized Tariff Schedule of the United States is

18 amended—

19 (1) by striking out ‘‘and’’ at the end of subdivi20 sion (c);

21 (2) by inserting ‘‘and’’ after ‘‘1930,’’ in subdivi22 sion (d);

23 (3) by inserting after subdivision (d) the

24 following:
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1 ‘‘(e) articles exported from the United States

2 which are returned within 45 days after such expor3 tation from the United States as undeliverable and

4 which have not left the custody of the carrier or for5 eign customs service,’’; and

6 (4) by adding at the end the following new sen7 tence: ‘‘No exportation referred to in subdivision (e)

8 may be treated as satisfying any requirement for ex9 portation in order to receive a benefit from, or meet

10 an obligation to, the United States as a result of

11 such exportation.’’.

12 (b) ENTRY NOT REQUIRED FOR LOCOMOTIVES AND

13 RAILWAY FREIGHT CARS.—

14 (1) The Notes to chapter 86 of such Schedule

15 are amended by inserting after note 3 the following

16 new note:

17 ‘‘4. Railway locomotives (provided for in headings 8601

18 and 8602) and railway freight cars (provided for in head19 ing 8606) on which no duty is owed are not subject to

20 the entry or release requirements for imported merchan21 dise set forth in sections 448 and 484 of the Tariff Act

22 of 1930. The Secretary of the Treasury may by regulation

23 establish appropriate reporting requirements, including

24 the requirement that a bond be posted to ensure compli25 ance.’’.
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1 (2) The U.S. Notes to subchapter V of chapter

2 99 of such Schedule are amended by inserting after

3 note 8 the following new note:

4 ‘‘9. Railway freight cars provided for in subheadings

5 9905.86.05 and 9905.86.10 are not subject to the entry

6 or release requirements for imported merchandise set

7 forth in sections 448 and 484 of the Tariff Act of 1930.

8 The Secretary of the Treasury may by regulation establish

9 appropriate reporting requirements, including the require10 ment that a bond be posted to ensure compliance.’’.

11 (c) INSTRUMENTS OF INTERNATIONAL TRAFFIC.—

12 The U.S. Notes to subchapter III of chapter 98 of such

13 Schedule is amended by inserting after note 3 the follow14 ing new note:

15 ‘‘4. Instruments of international traffic, such as contain16 ers, lift vans, rail cars and locomotives, truck cabs and

17 trailers, etc. are exempt from formal entry procedures but

18 are required to be accounted for when imported and ex19 ported into and out of the United States, respectively,

20 through the manifesting procedures required for all inter21 national carriers by the United States Customs Service.

22 Fees associated with the importation of such instruments

23 of international traffic shall be reported and paid on a

24 periodic basis as required by regulations issued by the Sec25 retary of the Treasury and in accordance with 1956 Cus-
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1 toms Convention on Containers (20 UST 30; TIAS

2 6634).’’.

3 SEC. 682. CUSTOMS PERSONNEL AIRPORT WORK SHIFT

4 REGULATION.

5 Section 13031(g) of the Consolidated Omnibus

6 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(g)) is

7 amended—

8 (1) by striking out ‘‘In addition to the regula9 tions required under paragraph (2), the’’ and insert10 ing ‘‘The’’;

11 (2) by striking out paragraph (2); and

12 (3) by redesignating paragraph (3) as para13 graph (2).

14 SEC. 683. USE OF HARBOR MAINTENANCE TRUST FUND

15 AMOUNTS FOR ADMINISTRATIVE EXPENSES.

16 (a) IN GENERAL.—Paragraph (3) of section 9505(c)

17 of the Internal Revenue Code of 1986 (relating to expendi18 tures from Harbor Maintenance Trust Fund) is amended

19 to read as follows:

20 ‘‘(3) for the payment of all expenses of adminis21 tration incurred by the Department of the Treasury,

22 the Army Corps of Engineers, and the Department

23 of Commerce related to the administration of sub24 chapter A of chapter 36 (relating to harbor mainte-
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1 nance tax), but not in excess of $5,000,000 for any

2 fiscal year.’’.

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

4 subsection (a) shall apply to fiscal years beginning after

5 the date of the enactment of this Act.

6 SEC. 684. AMENDMENTS TO TITLE 28, UNITED STATES

7 CODE.

8 (a) AMENDMENTS RELATING TO ACCREDITATION OF

9 PRIVATE LABORATORIES.—Title 28 of the United States

10 Code is amended as follows:

11 (1) Section 1581(g) is amended by—

12 (A) striking out ‘‘and’’ at the end of para13 graph (1);

14 (B) by striking out the period at the end

15 of paragraph (2) and inserting ‘‘; and’’; and

16 (C) by adding at the end the following:

17 ‘‘(3) any decision or order of the Customs Serv18 ice to deny, suspend, or revoke accreditation of a

19 private laboratory under section 499(b) of the Tariff

20 Act of 1930.’’.

21 (2) Section 2631(g) is amended by inserting at

22 the end the following new paragraph:

23 ‘‘(3) A civil action to review any decision or order

24 of the Customs Service to deny, suspend, or revoke accred25 itation of a private laboratory under section 499(b) of the
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1 Tariff Act of 1930 may be commenced in the Court of

2 International Trade by the person whose accreditation was

3 denied, suspended, or revoked.’’.

4 (3) Section 2636 is amended—

5 (A) by redesignating subsection (h) as sub6 section (i); and

7 (B) by inserting after subsection (g) the

8 following new subsection:

9 ‘‘(h) A civil action contesting the denial, suspension,

10 or revocation by the Customs Service of a private labora11 tory’s accreditation under section 499(b) of the Tariff Act

12 of 1930 is barred unless commenced in accordance with

13 the rules of the Court of International Trade within 60

14 days after the date of the decision or order of the Customs

15 Service.’’.

16 (4) Section 2640 is amended—

17 (A) by redesignating subsection (d) as sub18 section (e); and

19 (B) by inserting after subsection (c) the

20 following new subsection:

21 ‘‘(d) In any civil action commenced to review any

22 order or decision of the Customs Service under section

23 499(b) of the Tariff Act of 1930, the court shall review

24 the action on the basis of the record before the Customs

25 Service at the time of issuing such decision or order.’’.
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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
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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
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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
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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;
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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;
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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
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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
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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’’.
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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).
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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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