Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56715 

§ 1206.7 Delinquent payment. 

The Director may assess interest and 

penalties on any delinquent semiannual 

payment or other payment assessed 

under this part in accordance with 31 

U.S.C. 3717 (interest and penalty on 

claims) and part 1704 of this title (debt 

collection). 

§ 1206.8 Enforcement of payment. 

The Director may enforce the payment 

of any assessment under 12 U.S.C. 4631 

(cease-and-desist proceedings), 12 

U.S.C. 4632 (temporary cease-and-desist 

orders), and 12 U.S.C. 4626 (civil money 

penalties). 

Chapter XVII—Office of Federal Housing 

Enterprise Oversight, Department of 

Housing and Urban Development 

PART 1701—[REMOVED] 

■ 4. Remove part 1701. 

Dated: September 25, 2008. 

James B. Lockhart III, 

Director, Federal Housing Finance Agency. 

[FR Doc. E8–23046 Filed 9–26–08; 4:15 pm] 

BILLING CODE 4220–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Bureau of Customs and Border 

Protection 

DEPARTMENT OF THE TREASURY 

19 CFR Parts 10, 163, and 178 

[Docket No. USCBP–2007–0062; CBP Dec. 

08–24] 

RIN 1505–AB82 

Haitian Hemispheric Opportunity 

Through Partnership Encouragement 

Acts of 2006 and 2008 

AGENCIES: Customs and Border 

Protection, Department of Homeland 

Security; Department of the Treasury. 

ACTION: Final rule. 

SUMMARY: This document adopts as a 

final rule, with some changes, interim 

amendments to title 19 of the Code of 

Federal Regulations which were 

published in the Federal Register on 

June 22, 2007, as CBP Dec. 07–43 to 

implement the duty-free provisions of 

the Haitian Hemispheric Opportunity 

through Partnership Encouragement 

(‘‘HOPE I’’) Act of 2006. The regulatory 

amendments adopted as a final rule in 

this document include changes 

necessitated by enactment of the Haitian 

Hemispheric Opportunity through 

Partnership Encouragement (‘‘HOPE II’’) 

Act of 2008. 

DATES: This final rule is effective on 

September 30, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Textile Operational Aspects: Robert 

Abels, Office of International Trade, 

(202) 863–6503. 

Other Operational Aspects: Heather 

Sykes, Office of International Trade, 

(202) 863–6099. 

Legal Aspects: Cynthia Reese, Office 

of International Trade, (202) 572–8812, 

or Craig Walker, Office of International 

Trade, (202) 572–8836. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 22, 2007, interim regulations 

were promulgated to implement the 

duty-free provisions of the Haitian 

Hemispheric Opportunity through 

Partnership Encouragement (‘‘HOPE I’’) 

Act of 2006. The regulatory 

amendments adopted as a final rule in 

this document include changes 

necessitated by the June 18, 2008 

enactment of the Haitian Hemispheric 

Opportunity through Partnership 

Encouragement (‘‘HOPE II’’) Act of 

2008. Detailed information on both the 

HOPE I and HOPE II Acts follows. 

Haitian Hemispheric Opportunity 

Through Partnership Encouragement 

Act of 2006 

On December 20, 2006, the President 

signed into law the Tax Relief and 

Health Care Act of 2006 (‘‘the 2006 

Act’’), Public Law 109–432, 120 Stat. 

2922. Title V of the Act concerns the 

extension of certain trade benefits to 

Haiti and is referred to in the Act as the 

‘‘Haitian Hemispheric Opportunity 

through Partnership Encouragement Act 

of 2006’’ (‘‘HOPE I Act’’). 

Section 5002 of the Act amended the 

Caribbean Basin Economic Recovery Act 

(the CBERA, also referred to as the 

Caribbean Basin Initiative, or CBI, 

statute codified at 19 U.S.C. 2701–2707) 

by adding a new section 213A, entitled 

‘‘Special Rules for Haiti’’ and codified at 

19 U.S.C. 2703A, to authorize the 

President to extend additional trade 

benefits to Haiti for a five-year period 

(ending on December 19, 2011) if the 

President determines that the country 

meets certain specified eligibility 

conditions and requirements. As created 

by the HOPE I Act, section 213A of the 

CBERA consisted of six principal 

subsections, each of which is 

summarized below. 

Subsection (a) of section 213A of the 

CBERA set forth definitions of several 

terms used in section 213A. Subsection 

(b) of section 213A specified the 

conditions and requirements that must 

be met for certain apparel articles from 

Haiti to receive duty-free treatment. 

Subsection (c) of section 213A of the 

CBERA provided for the duty-free 

treatment of any article classifiable in 

subheading 8544.30.00 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS) (wiring sets), as 

in effect on December 20, 2006, that is 

the product or manufacture of Haiti and 

is imported directly from Haiti into the 

customs territory of the United States, 

provided a specified value-content 

requirement is met. 

Subsection (d) of section 213A set 

forth certain eligibility requirements 

that Haiti must meet as a prerequisite 

for articles to receive duty-free 

treatment under this section. This 

subsection required that the President 

determine whether Haiti met these 

requirements within 90 days after the 

date of enactment of the HOPE Act (or 

by March 20, 2007). 

Subsection (e) of section 213A 

(redesignated as subsection (f) by HOPE 

II Act) provided that preferential tariff 

treatment for apparel articles under this 

section shall not apply unless the 

President certifies to Congress that Haiti 

is meeting certain conditions, such as 

the adoption of an effective visa system, 

that are primarily intended to avoid 

illegal transshipment situations. 

Subsection (f) of section 213A 

(redesignated as subsection (g) by HOPE 

II Act) provided that the President shall 

issue regulations to carry out this 

section not later than 180 days after the 

date of enactment of the HOPE Act. 

Section 213A(f) further provided that 

the President shall consult with the 

Committee on Ways and Means of the 

House of Representatives and the 

Committee on Finance of the Senate in 

preparing such regulations. CBP 

consulted with the Committee on Ways 

and Means and the Committee on 

Finance regarding the implementing 

interim regulations. 

For a more detailed description of the 

statutory provisions set forth in the 

HOPE I Act, please see CBP Dec. 07–43. 

On March 19, 2007, the President 

signed Proclamation 8114 to implement 

the provisions of the HOPE I Act, among 

other purposes. The Proclamation, 

which was published in the Federal 

Register on March 22, 2007 (72 FR 

13655), included determinations by the 

President that Haiti (1) meets the 

eligibility requirements set forth in 

section 213A(d) of the CBERA and (2) is 

meeting the conditions set forth in 

section 213A(e) (redesignated as section 

213A(f) by HOPE II). The Proclamation 

also modified subchapter XX of Chapter 

98 of the Harmonized Tariff Schedule of 

the United States (‘‘HTSUS’’) as set forth 

in Annex 1 to the Proclamation. The 


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modifications to the HTSUS included 

the creation of new subheadings 

encompassing the various articles that 

are eligible for duty-free treatment 

under the HOPE Act. 

On June 22, 2007, Customs and 

Border Protection (‘‘CBP’’) published in 

the Federal Register (72 FR 34365) as 

CBP Dec. 07–43 an interim rule setting 

forth amendments to title 19 of the Code 

of Federal Regulations (‘‘CFR’’) to 

implement the duty-free provisions of 

the HOPE I Act set forth in subsections 

(a) through (c) of section 213A of the 

CBERA. As the HOPE Act was signed on 

December 20, 2006, implementing 

regulations were due on June 20, 2007 

by subsection (f) of section 213A of the 

CBERA. In order to provide 

transparency and facilitate their use, the 

interim implementing regulations were 

included within new subpart O in part 

10 of the CBP regulations (19 CFR part 

10, subpart O). Action to adopt these 

interim regulations as a final rule was 

withheld pending anticipated action on 

the part of Congress to amend the 

underlying statutory provisions in the 

Food, Conservation and Energy Act of 

2008 (Haiti HOPE II Act). 

Although the interim regulatory 

amendments were promulgated without 

prior public notice and comment 

procedures and took effect on June 22, 

2007, CBP Dec. 07–43 provided for the 

submission of public comments that 

would be considered before adopting 

the interim regulations as a final rule. 

The prescribed public comment period 

closed on August 21, 2007. A discussion 

of the comments received by CBP is set 

forth below. 

Haitian Hemispheric Opportunity 

Through Partnership Encouragement 

Act of 2008 

On May 21, 2008, the Food, 

Conservation and Energy Act of 2008 

(Pub. L. 110–234) (‘‘2008 Act’’) became 

law when Congress overrode the 

President’s veto of this legislation. Part 

I, Subtitle D, Title XV of the 2008 Act, 

referred to in the Act as the Haitian 

Hemispheric Opportunity through 

Partnership Encouragement Act of 2008 

(HOPE II Act), amended certain 

provisions of section 213A of the 

CBERA. The HOPE II Act amendments 

that require implementation through 

regulation by CBP are set forth in 

section 15402 of the 2008 Act, which 

amended subsections (a) and (b) of 

section 213A of the CBERA concerning 

the textile and apparel articles to which 

preferential tariff treatment applies 

under this program. A summary of the 

principal substantive amendments to 

section 213A(b) effected by section 

15402 of the 2008 Act are set forth 

below. 

1. Section 213A(a) was amended by 

adding definitions of the terms 

‘‘imported directly from Haiti or the 

Dominican Republic’’, ‘‘knit-to-shape’’, 

and ‘‘wholly assembled’’. It is noted that 

the statutory ‘‘knit-to-shape’’ definition 

requires no change to the interim 

regulatory text as this definition is 

nearly identical to the definition of the 

same term set forth in the interim 

regulations (see 19 CFR 10.842(j)). The 

remaining two new statutory definitions 

referenced above require changes to the 

interim regulatory text. 

2. Re-designated section 

213A(b)(1)(A) (formerly 231A(b)(1) 

under the HOPE I Act) was amended to 

provide that apparel articles of a 

producer or entity controlling 

production may be imported directly 

from Haiti or the Dominican Republic. 

Under the HOPE I Act, such articles 

were required to be imported directly 

from Haiti. 

3. Re-designated section 

213A(b)(1)(B)(iv)(IV) (formerly 

213A(b)(2)(D)(iv) under the HOPE I 

Act), was amended by deleting 

references to specific apparel articles 

(i.e., woven articles and brassieres) that 

may or may not be included in the 

annual aggregation calculation for 

purposes of meeting the applicable 

value-content requirement for apparel 

articles of a producer or entity 

controlling production. This provision 

now states, more generally, that entries 

of apparel articles receiving preferential 

treatment under any provision of law 

(other than under section 213A(b)(1)) or 

are subject to the ‘‘General’’ subcolumn 

of column 1 of the HTSUS are not 

included in the annual aggregation 

calculation unless the producer or entity 

controlling production elects to include 

those entries. 

4. Re-designated section 213A(b)(1)(C) 

(formerly section 213A(b)(3) under the 

HOPE I Act), was amended by revising 

the annual quantitative limits for the 

third through the fifth applicable 1-year 

periods that apply to apparel articles of 

a producer or entity controlling 

production. The amendments to this 

provision do not require changes to the 

interim regulatory text. 

5. Former section 213A(b)(4), which 

set forth the conditions and 

requirements that must be met for 

certain woven apparel articles of 

chapter 62 of the HTSUS from Haiti to 

receive duty-free treatment, was 

removed and a new section 213A(b)(2) 

was added. This new provision provides 

for the duty-free treatment of any knit 

article of chapter 61 (subject to certain 

exclusions) or any woven article of 

chapter 62 of the HTSUS that is wholly 

assembled, or knit-to-shape, in Haiti 

from any combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns and is imported directly from 

Haiti or the Dominican Republic, 

without regard to the source of the 

fabric, fabric components, components 

knit-to-shape, or yarns from which the 

article is made, subject to certain 

specified quantitative limitations. The 

exclusions from the special rule for 

articles of chapter 61 of the HTSUS 

include certain T-shirts, singlets, 

sweatshirts, and pullovers for men or 

boys. The duty-free treatment provided 

for in new section 213A(b)(2) is effective 

from October 1, 2008, through 

September 30, 2018. 

6. Former section 213A(b)(5), which 

set forth the conditions and 

requirements that must be met for 

articles of subheading 6212.10, HTSUS 

(brassieres), to receive duty-free 

treatment was removed and a new 

section 213A(b)(3) was added, which 

provides for the duty-free treatment of 

certain apparel articles (including 

brassieres) and other articles set forth 

below. The duty-free treatment provided 

for in new section 213A(b)(3) is effective 

from October 1, 2008, through 

September 30, 2018, and is not subject 

to quantitative limitations. The articles 

to which this provision applies are as 

follows: 

a. Articles of subheading 6212.10, 

HTSUS (brassieres), that are wholly 

assembled, or knit-to-shape, in Haiti 

from any combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns and are imported directly from 

Haiti or the Dominican Republic, 

without regard to the source of the 

fabric, fabric components, components 

knit-to-shape, or yarns from which the 

article is made; 

b. Any of the following apparel 

articles that is wholly assembled, or 

knit-to-shape, in Haiti from any 

combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns and is imported directly from 

Haiti or the Dominican Republic, 

without regard to the source of the 

fabric, fabric components, components 

knit-to-shape, or yarns from which the 

article is made: 

(i) Any apparel article that is of a type 

listed in chapter rule 3, 4, or 5 for 

chapter 61 of the HTSUS (as such 

chapter rules are contained in section A 

of the Annex to Presidential 

Proclamation 8213 of December 20, 

2007) as being excluded from the scope 

of such chapter rule, except that, for 

purposes of this provision, reference in 

such chapter rules to subheading 


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Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56717 

6104.12.00, HTSUS, is deemed to refer 

to subheading 6104.19.60, HTSUS; and 

(ii) Any apparel article (other than 

articles of subheading 6212.10 of the 

HTSUS) that is of a type listed in 

chapter rule 3(a), 4(a), or 5(a) for chapter 

62 of the HTSUS, as such chapter rules 

are contained in paragraph 9 of section 

A of the Annex to Presidential 

Proclamation 8213 of December 20, 

2007; 

c. Articles of subheading 4202.12, 

4202.22, 4202.32, or 4202.92, HTSUS 

that are wholly assembled in Haiti and 

are imported directly from Haiti or the 

Dominican Republic, without regard to 

the source of the fabric, components, or 

materials from which the article is 

made; 

d. Articles of heading 6501, 6502, or 

6504, or subheading 6505.90, HTSUS, 

that are wholly assembled, knit-toshape, or formed in Haiti from any 

combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns and are imported directly from 

Haiti or the Dominican Republic, 

without regard to the source of the 

fabric, fabric components, components 

knit-to-shape, or yarns from which the 

article is made; and 

e. Any of the following apparel 

articles that is wholly assembled, or 

knit-to-shape, in Haiti from any 

combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns and is imported directly from 

Haiti or the Dominican Republic, 

without regard to the source of the 

fabric, fabric components, components 

knit-to-shape, or yarns from which the 

article is made: 

(i) Pajama bottoms and other 

sleepwear for women and girls, of 

cotton, of subheading 6208.91.30, 

HTSUS, or of man-made fibers, of 

subheading 6208.92.00, HTSUS; and 

(ii) Pajama bottoms and other 

sleepwear for girls, of other textile 

materials, of subheading 6208.99.20 

HTSUS. 

7. Section 213A(b) was amended by 

adding a new paragraph (4) which 

provides for the duty-free treatment of 

apparel articles that are wholly 

assembled, or knit-to-shape, in Haiti 

from any combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns, without regard to the source of 

the fabric, fabric components, 

components knit-to-shape, or yarns from 

which the articles are made, if such 

apparel articles are accompanied by an 

earned import allowance certificate 

issued by the Department of Commerce 

reflecting the amount of credits equal to 

the total square meter equivalents of 

such apparel articles and the articles are 

imported directly from Haiti or the 

Dominican Republic. The duty-free 

treatment provided for in new section 

213A(b)(4) is effective from October 1, 

2008, through September 30, 2018, and 

is not subject to quantitative limitations. 

8. Section 213A(b) was further 

amended by adding a new paragraph (5) 

that provides for the duty-free treatment 

of apparel articles that are wholly 

assembled, or knit-to-shape, in Haiti 

from any combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns, without regard to the source of 

the fabrics, fabric components, 

components knit-to-shape, or yarns from 

which the article is made, if the fabrics, 

fabric components, components knit-toshape, or yarns comprising the 

component that determines the tariff 

classification of the article are of any of 

the fabrics or yarns set forth below and 

the articles are imported directly from 

Haiti or the Dominican Republic. The 

duty-free treatment provided for in new 

section 213A(b)(5) is effective from 

October 1, 2008, through September 30, 

2018, and is not subject to quantitative 

limitations. 

a. Fabrics or yarns, to the extent that 

apparel articles of such fabrics or yarns 

would be eligible for preferential 

treatment, without regard to the source 

of the fabrics or yarns, under Annex 401 

of the North American Free Trade 

Agreement (NAFTA); or 

b. Fabrics or yarns, to the extent that 

such fabrics or yarns are designated as 

not being available in commercial 

quantities for purposes of: 

(i) Section 213(b)(2)(A)(v) of the 

CBERA (19 U.S.C. 2703(b)(2)(A)(v)); 

(ii) Section 112(b)(5) of the African 

Growth and Opportunity Act (19 U.S.C. 

3721(b)(5)); 

(iii) Section 204(b)(3)(B)(i)(III) or 

204(b)(3)(B)(ii) of the Andean Trade 

Preference Act (19 U.S.C. 

3203(b)(3)(B)(i)(II) or 3203(b)(3)(B)(ii)); 

or 

(iv) Any other provision, relating to 

determining whether a textile or apparel 

article is an originating good eligible for 

preferential treatment, of a law that 

implements a free trade agreement 

entered into by the United States that is 

in effect at the time the claim for 

preferential tariff treatment is made. 

Regulatory Amendments To Reflect 

Changes Made by the HOPE II Act 

As noted earlier, this final rule 

incorporates in the regulatory text 

certain statutory changes made to 

section 213A of the CBERA by the 

HOPE II Act. Because these changes to 

the interim regulatory text, described 

below, are not interpretative in nature 

but closely reflect the language of the 

statute, they are included in this final 

rule without need for comment. Section 

15407 of the 2008 Act provides that 

regulations necessary to carry out 

section 15402 must be issued not later 

than September 30, 2008, and section 

15412 of the 2008 Act provides that 

section 15402 shall take effect on 

October 1, 2008, and shall apply to 

articles entered, or withdrawn from 

warehouse for consumption, on or after 

that date. 

1. The heading to 19 CFR part 10, 

subpart O has been revised to add a 

reference to the HOPE II Act; 

2. Section 10.841, regarding the 

applicability of subpart O, has been 

revised to add a reference to the HOPE 

II Act; 

3. In § 10.842(p), the definition of 

‘‘wholly assembled in Haiti’’ has been 

revised to conform to the statutory 

definition of the term set forth in the 

HOPE II Act; 

4. As a result of the amendments to 

section 213A of the CBERA effected by 

the HOPE II Act, all of the textile and 

apparel articles to which duty-free 

treatment applies under this program 

must be ‘‘imported directly from Haiti 

or the Dominican Republic.’’ Under the 

HOPE I Act, all eligible articles were 

required to be ‘‘imported directly from 

Haiti’’. However, no change was made 

by the HOPE II Act to the ‘‘imported 

directly’’ requirement for articles 

eligible for duty-free treatment under 

section 213A(c) of the CBERA (wiring 

sets). Therefore, those articles must 

continue to be ‘‘imported directly from 

Haiti’’. Accordingly, the introductory 

text to § 10.843, which sets forth a list 

of the articles to which duty-free 

treatment applies under this program, 

has been revised to reflect this disparity 

in treatment between textile and apparel 

articles on the one hand and wiring sets 

on the other with regard to the 

‘‘imported directly’’ requirement; 

5. Section 10.843 has been further 

amended to reflect the new and revised 

categories of textile and apparel articles 

that are eligible for duty-free treatment 

under the HOPE II Act; 

6. In § 10.844, relating to the valuecontent requirement for apparel articles 

of a producer or entity controlling 

production: 

a. Paragraph (a)(2)(iii) has been 

revised to reflect the new statutory 

language (see section 

213A(b)(1)(B)(iv)(IV) of the CBERA) 

concerning exclusions from the annual 

aggregation calculation; 

b. Paragraph (a)(5)(ii)(D) has been 

revised to replace the words ‘‘under the 

Bipartisan Trade Promotion Authority 

Act of 2002’’ with the words ‘‘with 

respect to the United States’’ to conform 

to an amendment to re-designated 


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56718 Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 

section 213A(b)(1)(B)(vii)(I)(bb)(DD) of 

the CBERA (formerly section 

213A(b)(2)(G)(i)(II)(dd)) by the HOPE II 

Act; and 

c. Paragraph (c)(2) has been revised to 

replace the words ‘‘under the Bipartisan 

Trade Promotion Authority Act of 2002 

(19 U.S.C. 3801 et seq.)’’ with the word 

‘‘thereafter’’ to conform to an 

amendment to re-designated section 

213A(b)(1)(B)(iii)(II) of the CBERA 

(formerly section 213A(b)(2)(C)(ii)) by 

the HOPE II Act; 

7. Section 10.846, relating to the 

‘‘imported directly’’ requirement, has 

been revised to reflect the statutory 

definition of the term ‘‘imported 

directly from Haiti or the Dominican 

Republic’’ created by the HOPE II Act 

(see section 213A(a)(3) of the CBERA). 

As noted previously, while the 

‘‘imported directly from Haiti or the 

Dominican Republic’’ requirement 

applies to all textile and apparel articles 

eligible for duty-free treatment under 

this program, it does not apply to 

articles eligible for duty-free treatment 

under section 213A(c) of the CBERA 

(wiring sets). Those articles must 

continue to be ‘‘imported directly from 

Haiti’’. Therefore, § 10.846 has been 

further revised to clarify that wiring sets 

are subject to the ‘‘imported directly 

from Haiti’’ requirement, as those words 

are currently defined in § 10.846 of the 

interim rule. However, consistent with 

the statutory definition of ‘‘imported 

directly from Haiti or the Dominican 

Republic’’, the definition of ‘‘imported 

directly from Haiti’’ has been altered by 

removing the words ‘‘provided that the 

articles are imported as a result of the 

original commercial transaction 

between the importer and the producer 

or the producer’s sales agent’’, as set 

forth in current § 10.846(a)(3)(ii) of the 

interim rule; and 

8. Section 10.847(a), concerning the 

filing of claims for duty-free treatment 

for articles described in § 10.843, has 

been revised to set forth the new 

subheadings within Subchapter XX of 

Chapter 98 of the HTSUS under which 

the new categories of textile and apparel 

articles created by HOPE II are 

classified. 

This final rule document addresses 

the comments submitted in response to 

the interim rulemaking published as 

CBP Dec. 07–43 and adopts, as a final 

rule, the HOPE I Act implementing 

regulations contained in the interim rule 

document with changes reflecting the 

statutory amendments made by the 

HOPE II Act as well as other changes 

identified below in the discussion of 

public comments received. 

Discussion of Comments in Response to 

CBP Dec. 07–43 

A total of 8 commenters responded to 

the solicitation of public comments on 

the interim regulations set forth in CBP 

Dec. 07–43. It is noted that these 

comments were received prior to the 

recent statutory changes effected by the 

HOPE II Act. To the extent that the 

comments received were unaffected by 

these subsequent changes, CBP has 

responded. References in this comment 

discussion to the ‘‘HOPE Act’’ are 

intended to refer to the HOPE program 

in general. 

General Comments Regarding 

Interpretation and Implementation of 

the HOPE Act 

1. Comment: Five commenters 

pointed out that section 5004 of the Act 

expresses the ‘‘sense of the Congress 

that the executive branch * * * should 

interpret, implement, and enforce’’ the 

preference provisions under the HOPE 

Act for textile and apparel articles 

‘‘broadly in order to expand trade by 

maximizing opportunities for imports of 

such articles from Haiti.’’ In view of this 

statement of the intent of Congress, 

these commenters urged that the HOPE 

Act final regulations be interpreted and 

issued in a manner that will expand, 

and not restrict, trade with Haiti. 

CBP’s Response: CBP is cognizant of 

Congressional desire that the HOPE Act 

benefit Haiti to the maximum extent 

possible and that the executive branch, 

in matters subject to interpretation, 

choose the interpretation most 

beneficial to Haiti that is legally 

supportable. CBP endeavored to adhere 

to this mandate while drafting 

regulations to implement the specific 

language of the statute which created 

special tariff preference provisions for 

Haiti within the existing framework of 

the Caribbean Basin Economic Recovery 

Act (CBERA) (19 U.S.C. 2701 et seq.). 

2. Comment: One commenter 

indicated that as ‘‘the textile and 

apparel trade has the highest fraud 

content of any manufactured good’’, it is 

imperative that the regulations 

implementing the HOPE Act be written 

in a way that provides for meaningful 

and effective customs enforcement 

while allowing for the flow of legitimate 

trade. The commenter stated that the 

interim regulations are a reasonable 

approach to achieving this objective and 

commended CBP for its efforts in this 

regard. This commenter also stated that 

it was very encouraged to see an 

emphasis on importer requirements 

throughout the HOPE regulations as 

importers of textile products should be 

held more accountable for their 

transactions and the preference claims 

made on goods they import into the 

United States. In addition, this 

commenter expressed strong support for 

the ‘‘penalty provisions’’ set forth in the 

HOPE I Act implementing regulations 

(e.g., denial of duty-free treatment for 

failure to meet applicable requirements 

and the imposition of an increased 

value-content percentage requirement 

under certain circumstances) and stated 

that, through these provisions, CBP has 

built in very strong incentives for 

compliance. 

CBP’s Response: CBP appreciates the 

comment as it always strives to balance 

the goals of effective enforcement while 

facilitating the flow of legitimate 

commerce. 

3. Comment: One commenter noted 

that the interim regulations were issued 

some months after the commencement 

of the first statutory applicable year and 

urged CBP to issue the final regulations 

on an expeditious basis so that 

companies may rely on clear, 

transparent, and predictable rules to 

conduct business with Haiti. 

CBP’s Response: CBP notes that the 

date of enactment of the HOPE I Act 

(December 20, 2006) marked the 

beginning of the first of five one-year 

periods during which certain apparel 

articles from Haiti may be eligible for 

duty-free treatment under the Act. 

However, the Haiti Act preference 

program for apparel articles was 

implemented by Presidential 

Proclamation effective with respect to 

goods entered, or withdrawn from 

warehouse, on or after March 20, 2007 

(see Proclamation 8114 dated March 19, 

2007, published in the Federal Register 

on March 22, 2007 (72 FR 13655)). CBP 

awaited the publication of Presidential 

Proclamation 8114 so that its interim 

regulations would be complete. The 

interim regulations implementing the 

HOPE I Act were required to be issued 

not later than 180 days after December 

20, 2006, and the interim regulations 

were published in the Federal Register 

on June 22, 2007. 

CBP notes that issuance of this final 

rule was delayed pending anticipated 

action on the part of Congress to amend 

the underlying statutory provisions 

which resulted in the HOPE II Act. 

4. Comment: One commenter urged 

that the visa system for the HOPE 

program be deployed in such a way that 

it facilitates trade and does not impose 

additional hurdles or burdens for 

Haitian exporters or U.S. importers. 

This commenter indicated that it had 

heard reports that, due to problems in 

the administration of the visa system, 

several companies have been unable to 

export goods to the United States. 


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CBP’s Response: The HOPE Act 

requires the establishment of a visa 

system to ensure that only those apparel 

articles that meet the applicable 

requirements for preferential tariff 

treatment under the Act receive the 

benefits of that treatment. An effective 

visa system affords Haiti the ability to 

administer and enforce the program 

with respect to exports of apparel 

articles to the United States and allows 

the United States to monitor imports of 

such articles from that country. CBP 

does not believe that the HOPE Act visa 

system currently in place is too complex 

or imposes unreasonable burdens on 

Haitian exporters or U.S. importers. It is 

noted that the Haitian government has 

not communicated to CBP that it is 

experiencing difficulties in 

implementing the visa system. 

Definitions 

5. Comment: Six of the commenters 

asserted that the definition of ‘‘wholly 

assembled in Haiti’’ set forth in 

§ 10.842(p) of the interim regulations is 

overly restrictive in that it requires that 

all of the components of the article 

(including minor components) be joined 

together in Haiti. Five of these 

commenters stated that this phrase must 

be read in the light of the clear intent 

of the legislation to provide for nonorigin conferring events and operations 

to be performed within HOPE Act 

eligible countries. Four commenters 

suggested that the definition of the 

phrase should follow the more liberal 

definition set forth in § 102.21(b)(6) of 

the CBP regulations, which would allow 

minor parts to be added in eligible 

countries other than Haiti. One of these 

commenters recommended that the 

HOPE Act preference provisions be 

more broadly applied to textile and 

apparel articles from Haiti or the 

designated beneficiary countries as long 

as the key assembly operations are 

performed in Haiti. 

CBP’s Response: The definition of 

‘‘wholly assembled in Haiti’’ set forth in 

§ 10.842(p) has been revised in this final 

rule document to conform to the 

statutory definition of that term set forth 

in the HOPE II Act (see section 

213A(a)(5) of the CBERA). CBP believes 

that this statutory and resulting 

regulatory change addresses these 

commenters’ concerns. 

6. Comment: One commenter stated 

that the definitions should make clear 

that not all cutting and sewing is 

required in Haiti and that, specifically, 

cutting and sewing operations 

performed in the United States would 

not disqualify a garment. 

CBP’s Response: Although the HOPE 

Act requires apparel articles of a 

producer or entity controlling 

production to be wholly assembled or 

knit-to-shape in Haiti (as those terms are 

defined in section 213A(a) of the 

CBERA), it allows the materials (e.g., 

fabric components) from which the 

articles are made to be produced 

anywhere. See section 

213A(b)(1)(B)(i)(I) and section 

213A(b)(1)(B)(ii)((I) of the CBERA. 

‘‘Fabric component’’ is defined in 

§ 10.842(g) of the HOPE Act 

implementing regulations as ‘‘a 

component cut from fabric to the shape 

or form of the component as it is used 

in the apparel article.’’ Therefore, CBP 

believes it is clear from the statute and 

the implementing regulations that 

cutting operations may be performed 

outside of Haiti. 

In regard to sewing, CBP believes that 

the revised definition of ‘‘wholly 

assembled in Haiti’’ set forth in 

§ 10.842(p) of this final rule document, 

which conforms to the statutory 

definition of that term set forth in the 

HOPE II Act, addresses the commenter’s 

concerns. 

Annual Aggregation 

7. Comment: Five commenters stated 

that the final regulations should clarify, 

through the use of specific examples, 

the application of the annual 

aggregation method in meeting the 

value-content requirement for apparel 

articles that are wholly assembled or 

knit-to-shape in Haiti. Three of these 

commenters raised certain specific 

issues regarding the annual aggregation 

method by offering the exact same 

scenarios and questions as follows: 

a. Haitian Producer A elects to use the 

annual aggregation method in the initial 

applicable one-year period, and also 

elects, pursuant to § 10.844(a)(2)(iii)(C) 

of the interim regulations, to include in 

the aggregation calculation entries of 

apparel articles receiving preferential 

tariff treatment under other preference 

programs as well as articles subject to a 

Normal Trade Relations (NTR) rate of 

duty. Producer A ships to the United 

States four shipments during the initial 

applicable one-year period (all are 

entered during that period). The first 

shipment of apparel (qualifying for 

preference under the Caribbean Basin 

Trade Partnership Act (CBTPA)) has an 

appraised value of $100,000 and meets 

a value-content percentage (under 

§ 10.844(a)) of 80%. The second 

shipment of apparel is wholly 

assembled in Haiti, has an appraised 

value of $100,000, and meets a valuecontent percentage of 40%. The third 

shipment is wholly assembled in Haiti, 

has an appraised value of $50,000, and 

meets a value-content percentage of 0%. 

The last shipment is wholly assembled 

in Haiti, has an appraised value of 

$20,000, and meets a value-content 

requirement of 80%. Taken together, the 

four shipments have an appraised value 

of $270,000 and meet a value-content 

percentage of 50.4%. Will all apparel 

goods that are shipped to the U.S. in the 

last three shipments by Producer A 

qualify for duty-free treatment under the 

HOPE Act? 

b. Importer D, an entity controlling 

production, purchases apparel articles 

that are wholly assembled in Haiti from 

Producers A, B, and C and enters those 

articles during the initial applicable 

one-year period. Importer D elects to use 

the annual aggregation method during 

that period. The three producers also 

produce apparel for other U.S. importers 

and each producer elects to use the 

annual aggregation method. The total 

appraised value of the apparel 

purchased by Importer D from the three 

producers and entered during the initial 

applicable one-year period is $300,000, 

and these shipments meet a valuecontent percentage of 51.7%. However, 

the value-content percentage met by all 

the apparel that is wholly assembled in 

Haiti by Producer C and entered 

(including the apparel imported by 

Importer D) during the initial applicable 

one-year period is 49%. Does the failure 

of Producer C to meet the applicable 

value-content requirement for the 

apparel that it produces during this 

period affect the preferential status of 

the apparel articles produced by 

Producer C and imported by Importer 

D? 

CBP’s Response: Based on the facts 

presented in the first scenario, the 

apparel articles that were wholly 

assembled in Haiti and shipped to the 

U.S. in the last three shipments by 

Producer A would qualify for duty-free 

treatment under the HOPE Act, as the 

applicable value-content requirement 

for the initial applicable one-year period 

(50%) would be met. This conclusion 

assumes that: (1) The CBTPA-eligible 

apparel articles in the first shipment 

(that were included in the annual 

aggregation calculation at the election of 

the producer) were wholly assembled or 

knit-to-shape in Haiti, as required by 

§ 10.844(a)(2)(iii)(C); and (2) the articles 

in the last three shipments satisfy all 

other applicable requirements set forth 

in subpart O, part 10, CBP regulations 

(e.g., declaration of compliance and 

‘‘imported directly’’ requirements). 

In regard to the facts set forth in the 

second scenario, pursuant to section 

213A(b)(1)(iv)(I) of the CBERA and 

§ 10.844(a)(2)(i) of the interim 

regulations, in determining whether 

apparel articles of a producer or entity 


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controlling production that are entered 

under the annual aggregation method in 

the initial applicable one-year period 

satisfy the applicable value-content 

requirement (50%) in that period, ‘‘all 

apparel articles of that producer or 

entity controlling production that are 

wholly assembled or knit-to-shape in 

Haiti and are entered in the initial 

applicable one-year period’’ must be 

considered. Thus, for the entity 

controlling production in this scenario 

(Importer D), the apparel articles that 

must be considered are those that are 

purchased by Importer D from 

Producers A, B, and C and entered 

during the initial applicable one-year 

period. As all of the articles, in the 

aggregate, purchased by Importer D from 

the three producers and entered during 

the initial applicable one-year period 

satisfy the 50% value-content 

requirement, all of these articles are 

entitled to duty-free treatment under the 

HOPE Act, assuming all other 

applicable requirements are met. 

With respect to Producer C, the 

apparel articles that must be considered 

in determining compliance with the 

50% value-content requirement under 

the annual aggregation method are all 

those articles that are wholly assembled 

or knit-to-shape in Haiti by Producer C 

and entered in the initial applicable 

one-year period. In this scenario, all of 

the articles, in the aggregate, that are 

wholly assembled by Producer C and 

entered during the initial applicable 

one-year period (including the articles 

sold to Importer D) do not satisfy the 

50% value-content requirement. 

However, the failure of Producer C to 

meet the value-content requirement 

under these circumstances should not 

and will not affect the duty-free status 

of the articles purchased by Importer D 

from Producer C since, as noted above, 

the cumulative total of all of the articles 

whose production is controlled by 

Importer D (an entity controlling 

production) meets the 50% valuecontent requirement. Therefore, the 

consequences of Producer C’s failure to 

meet the 50% value-content 

requirement include the denial of dutyfree treatment for all articles that are 

wholly assembled by Producer C and 

entered during the initial applicable 

one-year period, except for those articles 

sold by Producer C to Importer D. CBP 

is amending § 10.844(a)(4) in this final 

rule to clarify the circumstances under 

which this exception applies by adding 

a new paragraph (a)(4)(iii) to § 10.844, 

resulting in the re-designation of current 

paragraphs (a)(4)(iii) through (a)(4)(v) as 

paragraphs (a)(4)(iv) through (a)(4)(vi), 

respectively. 

CBP notes that, pursuant to 

§ 10.844(a)(4)(i)(C), an additional 

consequence of Producer C’s failure to 

meet the value-content requirement in 

the initial applicable one-year period 

would be that articles wholly assembled 

by Producer C and entered during 

succeeding applicable one-year periods 

will be ineligible for duty-free treatment 

until the appropriate increased valuecontent requirement has been met, 

except to the extent the articles 

retroactively qualify for preference 

under § 10.845. 

CBP agrees with the commenters that 

additional examples should be included 

in the HOPE Act implementing 

regulations to clarify the application of 

the annual aggregation method. 

Therefore, CBP is amending paragraph 

(a)(2)(iii) and new paragraph (a)(4)(iii) of 

§ 10.844 by adding two examples (one 

in each paragraph) patterned after the 

two scenarios presented by the 

commenters. 

8. Comment: Three commenters stated 

that the interim regulations 

(specifically, § 10.844(a)) are unclear 

regarding whether a producer or entity 

controlling production may elect to use 

the individual entry method during an 

applicable one-year period and then 

switch to the annual aggregation method 

for the following year. Assuming that a 

producer or entity controlling 

production may use the individual entry 

method during the first applicable oneyear period and then elect to use the 

annual aggregation method during the 

second applicable one-year period, two 

of these commenters asked whether it 

would be necessary to submit a 

declaration of compliance following the 

end of the first applicable one-year 

period. One commenter stated that 

§ 10.844(a)(3) ‘‘seems to imply’’ that 

once an election is made to use the 

annual aggregation method, use of the 

individual entry method is foreclosed 

for any subsequent one-year period. 

CBP’s Response: There is nothing in 

the HOPE Act or the implementing 

interim regulations (including 

§ 10.844(a)(3)) that would preclude a 

producer or entity controlling 

production from electing to use either 

the annual aggregation or individual 

entry method during one applicable 

one-year period and then switching to 

the other method during the subsequent 

one-year period. This assumes, of 

course, that all applicable requirements 

are met during the applicable one-year 

period preceding the period in which 

the switch is to be made. The 

underlying purpose of § 10.844(a)(3), as 

set forth in the interim rule, is to make 

it clear that, regardless of the method 

chosen for a particular period, that 

method must be used for all articles of 

a producer or entity controlling 

production during that period. As 

recommended by these commenters, 

CBP is amending § 10.844(a)(3) in this 

final rule document to clarify that a 

producer or entity controlling 

production may elect to use the 

individual entry or annual aggregation 

method in any applicable one-year 

period and then switch to the other 

method during the next one-year period. 

In response to the question posed by 

two of the commenters, CBP believes 

that a declaration of compliance must be 

submitted following the end of any 

applicable one-year period in which the 

individual entry method is used if an 

election is made to use the annual 

aggregation method during the next 

applicable one-year period. As section 

203A(b)(1)(B)(iv)(II) of the CBERA and 

§ 10.844(a)(2)(ii) of the interim 

regulations make clear, an election to 

use the annual aggregation method in 

the second, third, fourth, or fifth 

applicable one-year period is 

conditioned on compliance with the 

applicable value-content requirement by 

all apparel articles of the producer or 

entity controlling production, in the 

aggregate, that are entered during the 

previous applicable one-year period. 

Thus, an importer may enter articles 

under the annual aggregation method in 

each of the second through fifth 

applicable one-year periods only if it 

can assure CBP through the submission 

of a declaration of compliance, as set 

forth in § 10.848, that the aggregate total 

of all apparel articles of the producer or 

entity controlling production met the 

applicable value-content requirement 

during the previous applicable one-year 

period. This is true even if all articles 

of the producer or entity controlling 

production were entered under the 

individual entry method during that 

previous applicable one-year period. 

CBP is amending § 10.848 in this final 

rule document to specifically address 

this issue. 

9. Comment: Five commenters noted 

that § 10.844(a)(2)(iii)(C) of the interim 

regulations permits apparel articles 

receiving preferential tariff treatment 

under any provision of law other than 

the HOPE Act to be included in the 

annual aggregation calculation (at the 

election of the producer or entity 

controlling production). However, these 

commenters objected to the requirement 

in the regulation that the apparel 

articles must be ‘‘wholly assembled’’ in 

Haiti. According to the commenters, this 

is an impermissible expansion of the 

statutory language ‘‘that sets another 

hurdle for Haitian goods for 

qualification of merchandise otherwise 


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Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56721 

produced in Haiti.’’ Several of these 

commenters stated that this additional 

requirement seems excessive 

considering that these other preference 

programs (e.g., CBTPA) do not require 

‘‘such a wholly assembled definition.’’ 

CBP’s Response: CBP notes initially 

that § 10.844(a)(2)(iii) has been amended 

in this final rule document to conform 

to an amendment to section 

213A(b)(1)(B)(iv)(IV) of the CBERA by 

the HOPE II Act (deleting specific 

references to woven apparel articles and 

brassieres). However, amended 

§ 10.844(a)(2)(iii) continues to require 

that the referenced apparel articles must 

be ‘‘wholly assembled or knit-to-shape’’ 

in Haiti. 

CBP maintains that if the statute is 

read as a whole, the rationale for the 

‘‘wholly assembled or knit-to-shape’’ 

requirement in § 10.844(a)(2)(iii) 

becomes clear. Annual aggregation 

applies to apparel articles of a producer 

or entity controlling production that 

enter during an applicable one-year 

period and is calculated by aggregating 

certain costs incurred with respect to all 

apparel articles of that producer or 

entity controlling production that are 

wholly assembled, or knit-to-shape, in 

Haiti and entered during the first year 

of the program or, for subsequent years, 

entered during the preceding year. See 

section 213A(b)(1)(B)(iv)(I) and (II) of 

the CBERA. Paragraph (IV) of section 

213A(b)(1)(B)(iv) clarifies that the 

universe of apparel articles wholly 

assembled, or knit-to-shape, in Haiti to 

be included in the calculation of all 

apparel articles so produced in Haiti 

and entered during the year under 

consideration is not to include entries of 

apparel articles receiving preferential 

treatment under any provision of law 

other than section 213A(b)(1) or entries 

of apparel articles subject to the Normal 

Trade Relations ‘‘general’’ rate of duty, 

unless the producer or entity controlling 

production elects to include such 

entries. In other words, the phrase ‘‘all 

apparel articles’’ for purposes of section 

213A(b)(1)(B)(iv)(I) and (II) is defined in 

section 213A(b)(1)(B)(iv)(IV). Defining 

the scope of ‘‘all apparel articles’’ does 

not relieve the articles from the 

requirements of section 

213A(b)(1)(B)(iv)(I) and (II) that they be 

wholly assembled, or knit-to-shape in 

Haiti. The commenters are mistaken in 

their belief that CBP is expanding the 

statutory language to construct a 

‘‘hurdle’’ for Haitian goods. CBP is 

merely reading the statute as a whole 

and recognizes that section 

213A(b)(1)(B)(iv)(IV) serves to clarify 

Congressional intent regarding the scope 

of the words ‘‘all apparel articles’’, as 

used in section 213A(b)(1)(B)(iv)(I) and 

(II). 

10. Comment: One commenter stated 

that the final regulations should make it 

clear that an entity controlling 

production and a manufacturer will not 

both be penalized if one of the parties 

fails to meet its annual aggregation 

percentage requirement and they are not 

exclusively producing for or importing 

from each other. Another commenter 

indicated that the failure of a producer 

(electing to use the annual aggregation 

method) to meet the applicable valuecontent requirement in a particular year 

should not be ‘‘transferred’’ to U.S. 

importers who take appropriate steps to 

ensure that their imported goods satisfy 

the value-content requirement. 

CBP’s Response: CBP has previously 

addressed in this comment discussion 

the circumstances under which the 

failure of an entity controlling 

production and/or a producer to meet 

the applicable value-content 

requirement under the annual 

aggregation method in a particular oneyear period will affect the duty-free 

status of the apparel articles that they 

control or produce in situations in 

which they do not exclusively produce 

for or import from each other. As 

previously indicated, CBP is amending 

§ 10.844(a)(4) in this final rule to clarify 

this matter. 

CBP disagrees with the second 

commenter’s assertion that the failure of 

a producer to meet the applicable valuecontent requirement under the annual 

aggregation method should not be 

‘‘transferred’’ to U.S. importers who take 

appropriate steps to ensure that their 

imported goods satisfy the value-content 

requirement. All U.S. importers of 

apparel articles for which preferential 

tariff treatment is sought under the 

HOPE Act are required to exercise 

reasonable care to ensure that those 

articles are in fact entitled to such 

treatment. Thus, if a producer fails to 

meet the applicable value-content 

percentage in a particular one-year 

period, all importers who purchase 

apparel articles from that producer will 

be subject to rate advances due to the 

failure of the articles to satisfy the 

applicable HOPE Act requirements. 

11. Comment: One commenter stated 

that it was unable to find any 

Congressional intent or statutory 

language that supports the requirement 

in § 10.844(c) of the interim regulations 

that there be an ‘‘irreversible election’’ 

to use the annual aggregation method. It 

was this commenter’s understanding, as 

the HOPE I Act bill was being drafted, 

that a producer or entity controlling 

production could choose to use the 

aggregate or individual entry method in 

such a way and at such time as to 

maximize the duty-free benefit of the 

program. In addition, this commenter 

complained that the interim regulations 

provide no information as to how such 

an election is to be made so that it may 

take legal effect, and that the regulations 

do not make clear that CBTPA-type 

operations count toward the aggregate 

value-content requirement, assuming 

the apparel product is wholly assembled 

in Haiti. 

CBP’s Response: CBP disagrees with 

the commenter’s assertion that there is 

no statutory authority for the 

requirement in § 10.844(c) that a 

producer or entity controlling 

production that elects to use the annual 

aggregation method during an 

applicable one-year period must 

continue to use that method for all its 

qualifying apparel articles throughout 

that period. Section 203A(b)(1)(B)(iv) of 

the CBERA provides that the use of the 

annual aggregation method in an 

applicable one-year period involves 

aggregating costs with respect to ‘‘all 

apparel articles’’ of the producer or 

entity controlling production that are 

entered during the applicable one-year 

period (initial period for an election in 

that period and preceding period for an 

election in subsequent periods). 

Consequently, allowing a producer or 

entity controlling production to elect to 

use the annual aggregation method for 

some of its apparel articles that are 

entered during an applicable one-year 

period and use the individual entry 

method for other articles entered during 

the same period would be inconsistent 

with the clear wording of the statute. 

Regarding the other points made by 

the commenter, paragraphs (a)(2) and (b) 

of § 10.847 set forth the procedure for 

filing a claim for duty-free treatment for 

apparel articles described in § 10.843(a) 

when an election has been made by the 

producer or entity controlling 

production (through the use of a 

certification to that effect) to use the 

annual aggregation method. Section 

10.844(a)(2)(iii) addresses an election to 

include in the annual aggregation 

calculation an entry of apparel articles 

receiving duty-free treatment under 

another preference program (such as the 

CBTPA), provided the articles are 

wholly assembled or knit-to-shape in 

Haiti. 

Increased Value-Content Percentage 

12. Comment: Three commenters 

objected to CBP’s interpretation and 

application of the statutory increased 

value-content percentage requirement 

(see section 213A(b)(1)(B)(vi)(II) of the 

CBERA), as reflected in 

§ 10.844(a)(4)(iii) of the interim 


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regulations (now § 10.844(a)(4)(iv)) and 

Example 1 under § 10.844(a)(4)(iv) (now 

§ 10.844(a)(4)(v)). These commenters 

contend that the words ‘‘plus ten 

percent’’ in the statute mean that ten 

percent is to be applied against the 

applicable percentage to arrive at the 

increased value-content percentage (e.g., 

50% + 10% of 50%= 55%). According 

to these commenters, CBP has adopted 

a more strict (and, in fact, an erroneous) 

interpretation of the words ‘‘plus ten 

percent’’ by actually adding 10 

percentage points to the applicable 

percentage (e.g., 50% + 10%= 60%) in 

calculating the increased value-content 

percentage. Another commenter alleges, 

without further elaboration, that 

§ 10.844(a)(4)(iii) (now 

§ 10.844(a)(4)(iv)) is inconsistent in 

delineating the increased value-content 

percentages. 

CBP’s Response: CBP disagrees with 

the commenters’ interpretation of 

section 213A(b)(1)(B)(vi)(II) of the 

CBERA, which sets forth the increasedvalue content percentage requirement. 

This provision states, in pertinent part, 

that if a producer or entity controlling 

production is not in compliance with 

the statutory requirements in an 

applicable one-year period, then apparel 

articles of that producer or entity 

controlling production shall be 

ineligible for preferential treatment 

during any succeeding period until the 

sum of the relevant costs ‘‘is not less 

than the applicable percentage under 

clause (v)(I), plus 10 percent, of the 

aggregate declared customs value of all 

apparel articles of that producer or 

entity controlling production * * *.’’ 

The words ‘‘plus 10 percent’’ are set off 

by commas and clearly refer to the 

words ‘‘the aggregate declared customs 

value’’—not ‘‘the applicable 

percentage.’’ Therefore, in CBP’s 

opinion, § 10.844(a)(4)(iii) (now 

§ 10.844(a)(4)(iv)) and Example 1 under 

§ 10.844(a)(4)(iv) (now § 10.844(a)(4)(v)) 

are correct in requiring that the 

increased value content percentage be 

determined by adding 10 percent to the 

applicable percentage—not by applying 

10 percent against the applicable 

percentage and then adding that result 

to the applicable percentage. Had 

Congress intended the latter meaning, 

CBP believes that Congress would have 

used statutory language to clearly 

accomplish that intent. 

In regard to the assertion that 

§ 10.844(a)(4)(iii) (now 

§ 10.844(a)(4)(iv)) is ‘‘inconsistent in 

delineating the increased value-content 

percentages’’, CBP cannot discern any 

inconsistency in this provision, which 

CBP notes closely follows the statutory 

language in § 213A(b)(1)(B)(vi)(II) of the 

CBERA. 

New Producer or Entity Controlling 

Production 

13. Comment: Five commenters 

disagreed with the requirement in 

§ 10.844(a)(4)(iv) of the interim 

regulations (now § 10.844(a)(4)(v)) that a 

new producer or entity controlling 

production (one who did not participate 

in the program during the preceding 

applicable one-year period) that elects 

to use the annual aggregation method 

must first meet an increased valuecontent percentage during the first year 

of participation before beginning to 

receive duty-free treatment during the 

next applicable one-year period. These 

commenters maintained that this 

requirement unjustifiably and unfairly 

penalizes new entrants to the program 

and is inconsistent with the language 

and goals of the HOPE Act. 

CBP’s Response: CBP believes it is 

constrained by the statutory language to 

require that new entrants to the program 

(in the second through fifth applicable 

one-year periods) that elect to use the 

annual aggregation method must first 

meet an increased value-content 

percentage during the first year of 

participation before becoming eligible 

for preference during the next 

applicable one-year period. As noted 

previously in this comment discussion, 

section 213A(b)(1)(B)(vi)(II) of the 

CBERA conditions use of the annual 

aggregation method during each of the 

second through fifth applicable one-year 

periods on compliance with the 

applicable value-content requirement by 

all qualifying apparel articles of the 

producer or entity controlling 

production that are entered during the 

previous applicable one-year period. A 

new entrant obviously cannot meet the 

applicable value-content requirement 

during the previous applicable one-year 

period if there was no production (and 

therefore no entries) during that 

previous year. As a result of a new 

entrant’s inability to meet the applicable 

value-content requirement during the 

previous year, section 

213A(b)(1)(B)(vi)(II) of the CBERA 

requires that apparel articles of the 

producer or entity controlling 

production be treated as ineligible for 

preferential treatment until the year 

after those articles meet the increased 

value-content percentage requirement. 

The statute sets forth no exception to 

the increased value-content percentage 

requirement for articles of a new 

producer or entity controlling 

production. 

CBP notes that in the context of 

somewhat similar statutory language in 

section 213(b)(2)(A)(iv)(II) and (III) of 

the CBERA (19 U.S.C. 

2703(b)(2)(A)(iv)(II) and (III)), relating to 

the preferential treatment of brassieres 

from designated Caribbean Basin 

countries under the United StatesCaribbean Basin Trade Partnership Act 

(CBTPA), CBP determined that a new 

producer or entity controlling 

production must first establish 

compliance with a higher value-content 

percentage (85% rather than 75%) as a 

prerequisite to receiving preferential 

treatment (see § 10.228(b)(2)(i)(G) and 

Example 7 under § 10.228(b)(2)(ii) of the 

CBP regulations (19 CFR 

10.228(b)(2)(i)(G) and 10.228(b)(2)(ii))). 

Thus, § 10.844(a)(4)(iv) of the HOPE I 

Act implementing regulations (now 

§ 10.844(a)(4)(v)) and § 10.228(b)(2)(i)(G) 

of the CBTPA implementing regulations 

are consistent in their treatment of new 

producers and entities controlling 

production under those programs. 

14. Comment: One commenter stated 

that in the final regulations, 

§ 10.844(a)(4)(iv) (now § 10.844(a)(4)(v)) 

should clarify that a new producer or 

entity controlling production that elects 

to use the individual entry method is 

not subject to an increased valuecontent percentage requirement. 

CBP’s Response: Although Example 2 

under § 10.844(a)(4)(iv) (now 

§ 10.844(a)(4)(v)) indirectly addresses 

this issue, CBP agrees with the 

commenter that the text of the 

regulation itself should be amended to 

reflect that apparel articles of a new 

producer or entity controlling 

production electing to use the 

individual entry method are not subject 

to the requirement of first meeting the 

increased value-content percentage as a 

prerequisite to receiving preferential 

treatment during the first year of 

participation in the program or in 

succeeding years. Therefore, 

§ 10.844(a)(4)(iv) (now § 10.844(a)(4)(v)) 

is being amended in this final rule 

document to clarify this point. 

Eligible Countries 

15. Comment: Four commenters 

suggested that § 10.844(c)(3) of the 

interim regulations should specify the 

designated beneficiary countries (under 

the Andean Trade Preference Act, 

African Growth and Opportunity Act, 

and Caribbean Basin Trade Partnership 

Act) that qualify as ‘‘eligible countries’’ 

for purposes of the HOPE program, 

rather than merely referring the reader 

to the HTSUS General Notes under 

which the designated beneficiary 

countries are listed. In addition, these 

commenters stated that this regulation 

should clarify whether qualifying inputs 

from these designated beneficiary 


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Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56723 

countries will continue to be eligible 

under the HOPE program should these 

other preference programs subsequently 

expire. 

CBP’s Response: Section 

213A(b)(1)(B)(iii) of the CBERA 

specifies that certain material and 

processing costs incurred in the 

following countries may be counted 

toward meeting the applicable valuecontent percentage requirement: (1) The 

United States; (2) any country that is a 

party to a free trade agreement with the 

United States that is in effect on the date 

of the enactment of the HOPE Act, or 

that enters into force thereafter; (3) any 

country designated as a beneficiary 

country under the CBTPA; (4) any 

country designated as a beneficiary 

country under the African Growth and 

Opportunity Act (AGOA); and (5) any 

country designated as a beneficiary 

country under the Andean Trade 

Preference Act (ATPA). 

Only the countries referenced in (2) 

above (parties to a free trade agreement 

in effect as of the date of enactment of 

the HOPE Act) are subject to a specific 

effective date insofar as determining 

whether qualifying material or 

processing costs from such countries 

may be counted under the HOPE Act. 

As the countries referenced in (3), (4), 

and (5) above (relating to CBTPA, 

AGOA, and ATPA) are not subject to an 

effective date, CBP believes it was the 

intent of Congress that a determination 

regarding a country’s status as a 

beneficiary country under these 

programs should be made at the time a 

claim for preferential tariff treatment is 

filed under the HOPE Act. For example, 

if a country loses its designated 

beneficiary country status under one of 

these programs as of July 1, 2008, 

material and processing costs incurred 

in that country may no longer be 

counted toward meeting the applicable 

HOPE Act value-content requirement 

effective for apparel articles entered on 

or after that date. 

With respect to these commenters’ 

suggestion that § 10.844(c)(3) of the 

HOPE I Act implementing regulations 

should specify the designated 

beneficiary countries under the CBTPA, 

AGOA, and ATPA, CBP prefers not to 

identify each of these countries in this 

regulatory provision as changes in their 

status as beneficiary countries would 

require repeated amendments to the 

regulation. CBP believes that the 

regulation’s cross-reference to the 

listings of designated beneficiary 

countries in General Notes 11 (ATPA), 

16 (AGOA), and 17 (CBTPA) of the 

HTSUS is sufficient as these listings are 

easily accessible at http:// 

www.usitc.gov/tata/hts/bychapter/ 

0800gntoc.htm. 

Direct Costs of Processing Operations 

16. Comment: One commenter stated 

that § 10.844(e) of the interim 

regulations should be amended to 

include as a ‘‘direct cost of processing 

operation’’ the cost of packaging 

materials (such as labels, hangtags, and 

bags) if such materials are required to be 

included with the article. This 

commenter also asked that ‘‘direct costs 

of processing operations’’ include the 

cost of any post production procedures, 

such as mending or finishing that may 

be needed to present the finished article 

for sale. According to this commenter, 

the definition of the term ‘‘wholly 

assembled’’ in § 10.842(p) of the interim 

regulations could be interpreted as 

precluding such operations, contrary to 

the intent of the statute. 

CBP’s Response: Because the HOPE 

Act includes no definition of the words 

‘‘direct costs of processing operations’’, 

CBP based the definition set forth in 

§ 10.844(e) of the interim regulations on 

the definition of the same term found in 

section 213(a)(3) of the CBERA (19 

U.S.C. 2703(a)(3)) and § 10.197 of the 

CBP’s CBERA implementing regulations 

(19 CFR 10.197). CBP believes that 

determinations regarding whether 

specific costs not mentioned in 

§ 10.844(e), such as those referenced by 

the commenter, qualify as ‘‘direct cost of 

processing operations’’ should best be 

made on a case-by-case basis pursuant 

to CBP’s administrative rulings program 

(see part 177 of the CBP regulations (19 

CFR part 177)). 

Imported Directly 

17. Comment: Six commenters 

maintained that § 10.846 of the interim 

regulations sets forth an unnecessarily 

strict construction of the statutory 

‘‘imported directly’’ requirement, 

thereby placing untenable restrictions 

on the process of shipping goods to the 

United States via intermediary 

countries, contrary to the intent of 

Congress. Five of these commenters 

noted that the ‘‘imported directly’’ rules 

set forth in § 10.846 are similar to rules 

applied to certain other preference 

programs, and that interpretative rulings 

issued by CBP have concluded that the 

prohibition relating to the ‘‘entry into 

commerce’’ of an intermediate country 

means that the goods may not be 

‘‘manipulated’’ in that country. These 

commenters stated that, by so doing, 

CBP has not permitted operations (other 

than loading or unloading or other 

activities necessary to preserve the 

goods in good condition) even in a 

bonded warehouse and even where ‘‘the 

invoices, bills of lading, and other 

shipping documents show the United 

States as the final destination.’’ 

According to these commenters, this is 

an incorrect interpretation under the 

other preference programs and would be 

particularly so under the HOPE 

program. 

CBP’s Response: Although the HOPE 

I Act included no definition of the term 

‘‘imported directly’’, the HOPE II Act 

included a definition of ‘‘imported 

directly from Haiti or the Dominican 

Republic’’ (see section 213A(a)(3) of the 

CBERA). Section 10.846 has been 

amended to conform to this statutory 

definition. 

With respect to the concerns 

expressed by some of the commenters 

regarding the correctness of certain 

administrative rulings issued by CBP 

interpreting the ‘‘imported directly’’ 

requirement under the CBERA and other 

preference programs, CBP does not 

believe it is appropriate to address these 

concerns in the context of the HOPE Act 

implementing regulations. In CBP’s 

opinion, these concerns should properly 

be addressed through the CBP 

administrative rulings process (see part 

177 of the CBP regulations (19 CFR part 

177)). 

18. Comment: Three commenters 

urged that CBP broaden the ‘‘imported 

directly’’ concept, at least with respect 

to apparel articles subject to valueadded provisions, to permit passage 

through, and permit operations in, the 

territory of other HOPE ‘‘eligible 

countries’’(as enumerated in 

§ 10.844(a)), as long as the originconferring operations are performed in 

Haiti. These commenters indicated that 

Congress’s intent in setting up this 

program was to create linkages between 

Haiti and other HOPE ‘‘eligible 

countries.’’ Two of these commenters 

stated that, alternatively, CBP should 

permit HOPE eligible goods to be 

exported from the Dominican Republic 

because of its geographic proximity to, 

and existing co-production agreements 

with, Haiti. As an example, one 

commenter stated that § 10.846 should 

not be interpreted as prohibiting 

activities such as screen printing, 

repairing, and embellishing articles, as 

well as ‘‘warehouse/pack/sticker’’ 

activities in the Dominican Republic. 

CBP’s Response: The HOPE II Act 

amended the HOPE program to allow 

eligible textile and apparel articles to be 

imported directly from Haiti or the 

Dominican Republic. CBP believes that 

this change, along with the statutory 

definition of ‘‘wholly assembled in 

Haiti’’ included in the HOPE II Act, 

addresses these commenters’ concerns. 


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Declaration of Compliance 

19. Comment: Four commenters 

complained that the declaration of 

compliance requirement in § 10.848 of 

the interim regulations is overly 

restrictive in that it requires that value 

information be provided with line 

number and line value specificity. 

These commenters allege that this is 

unduly burdensome for the producer 

when it is filing its own declaration of 

compliance as the entity controlling 

production. 

CBP’s Response: Under the HOPE Act 

preference program relating to certain 

apparel articles, meeting the applicable 

value-content requirement is a 

prerequisite to qualifying for duty-free 

treatment. For CBP to be able to 

properly verify that a producer or entity 

controlling production has met the 

applicable value-content requirement 

when the annual aggregation method is 

used, it is critical that CBP have access 

to pertinent value information with 

respect to all affected entries (and all 

affected apparel articles covered by 

those entries) that are filed during the 

applicable one-year period. Without the 

information required by the declaration 

of compliance (e.g., entry numbers, line 

number and value), CBP would be 

unable to determine, on the basis of 

submitted documentation, that an 

annual aggregation calculation satisfies 

the applicable value-content 

requirement. If a producer or entity 

controlling production finds that 

providing the information required by 

the declaration of compliance is unduly 

burdensome, the entry-by-entry method 

may be used for purposes of satisfying 

the value-content requirement. 

20. Comment: One commenter stated 

that the requirement in § 10.848 that the 

declaration of compliance be filed with 

CBP within 30 days of the end of the 

applicable one-year period is overly 

restrictive. This commenter maintained 

that it will be extremely difficult to 

obtain actual values within the 30-day 

time period with respect to entries 

subject to reconciliation, especially 

when a fiscal year fails to coincide with 

the end of the applicable one-year 

period. Therefore, this commenter asked 

that § 10.848 include an exception or 

provisional treatment for filing the 

declaration of compliance for entries 

that are subject to reconciliation. 

CBP’s Response: CBP recognizes that 

there may be situations in which an 

importer may not have access to actual 

values within the 30-day period 

required for submission of the 

declaration of compliance in § 10.848(a) 

of the HOPE Act implementing 

regulations. In these situations, the 

declaration of compliance filed with 

CBP during the 30-day period may 

reflect estimated values until more 

accurate value-content figures are 

known, at which time the importer may 

amend the declaration. Again, if a 

producer or entity controlling 

production finds that providing the 

information necessary for the 

submission of a declaration of 

compliance is unduly burdensome, the 

entry-by-entry method is available as an 

alternative to the annual aggregation 

method. 

21. Comment: One commenter was 

troubled that § 10.848 places the 

responsibility for submitting the 

declaration of compliance on the 

importer, considering that compliance is 

measured at the level of the producer or 

entity controlling production. This 

commenter indicated that it could 

envision a situation in which an 

importer is required to certify 

compliance for a producer ‘‘when the 

producer’s total production is not 

compliant but when the product the 

importer bought from the producer is.’’ 

This commenter inquired regarding 

what CBP would do if the producer 

elected to use the individual entry 

method but the importer used the 

annual aggregation method, or viceversa. The commenter urged that CBP 

shift the responsibility for preparing and 

filing the declaration of compliance on 

the producer or entity controlling 

production ‘‘so the importer has greater 

certainty he is relying upon a known 

quantity.’’ 

CBP’s Response: The commenter is 

correct that, under the HOPE Act, 

compliance with the requirements for 

preferential treatment for apparel 

articles is addressed in the context of 

the producer or entity controlling 

production. However, as is the case with 

respect to all preferential tariff treatment 

programs, it is the responsibility of the 

U.S. importer of the articles for which 

preference is sought to file the entry 

with CBP and to make the claim for 

duty-free treatment under the HOPE Act 

(see § 10.847 of the HOPE Act 

implementing regulations). 

Consequently, it is the importer’s 

responsibility to file the declaration of 

compliance with CBP under the 

circumstances set forth in § 10.848 of 

the implementing regulations. 

In regard to the situation envisioned 

by the commenter in which a producer’s 

total production is not in compliance 

with the applicable value-content 

requirement although the portion 

purchased by the importer is, 

§ 10.848(c)(2)(v) requires that the 

declaration of compliance include ‘‘[t]he 

value-content percentage that was met 

during the applicable one-year period 

with respect to each producer or entity 

controlling production.’’ Thus, the 

importer must obtain and provide to 

CBP information regarding the valuecontent percentage that was met with 

respect to all apparel articles of each 

producer or entity controlling 

production that were entered during the 

applicable one-year period—not just the 

articles purchased by the importer. 

In answer to the commenter’s 

question concerning what CBP would 

do if the producer elects to use one 

method for purposes of meeting the 

value-content requirement but the 

importer uses the other method, 

§ 10.847(b) of the interim regulations 

was drafted to prevent such an 

occurrence. Under this provision, an 

importer may enter articles using the 

annual aggregation method only if the 

importer is in possession of a copy of a 

certification by the producer or entity 

controlling production setting forth its 

election to use the annual aggregation 

method. In the absence of such a 

certification, the importer is required to 

enter the articles using the individual 

entry method. 

22. Comment: One commenter 

expressed concern that, as currently 

written, §§ 10.848 and 10.849 would 

impose upon a customs broker serving 

as nominal importer of record the 

responsibility for certifying the 

eligibility of articles for duty-free 

treatment under the HOPE Act. 

According to this commenter, a broker 

acting as nominal importer of record 

would be unable to certify or verify the 

accuracy of the information provided. 

The commenter stated that the actual 

importer is the party most 

knowledgeable regarding the facts and 

circumstances of the importation and, as 

such, should be solely responsible for 

making HOPE Act claims and 

submitting the declaration of 

compliance. The commenter 

recommended that CBP clarify the 

regulations to distinguish between a 

broker serving as a nominal importer of 

record in an import transaction and the 

actual importer. 

CBP’s Response: As indicated 

previously in this comment discussion, 

it is the responsibility of the importer of 

record of articles for which preference is 

sought under the HOPE Act to obtain 

sufficient information concerning the 

transaction to know whether the articles 

meet all applicable requirements and, 

therefore, are entitled to duty-free 

treatment. If the importer does not 

possess that information, no claim for 

preference under the HOPE Act should 

be made. In a situation in which a 

broker serves as nominal importer of 


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Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56725 

record, the broker should either obtain 

all necessary information from the 

consignee or other parties regarding 

whether the articles qualify for 

preference under the HOPE Act or insist 

that the owner or producer of the goods 

act as importer of record for the 

transaction and be the party responsible 

for certifying that the articles qualify for 

preference. 

Conclusion 

Accordingly, based on the analysis of 

comments received as set forth above 

and the additional considerations 

discussed above, CBP is adopting as a 

final rule the interim regulations 

published as CBP Dec. 07–43 with 

certain changes as discussed above and 

as set forth below. 

Inapplicability of Delayed Effective 

Date Requirement 

Section 553(d)(3) of the 

Administrative Procedure Act (‘‘APA’’) 

(5 U.S.C. 553(d)(3)), permits agencies to 

make a rule effective less than 30 days 

after publication if the rule grants or 

recognizes an exemption or relieves a 

restriction, or when the agency finds 

that good cause exists for dispensing 

with a delayed effective date. As these 

regulations implement the tariff 

preference provisions of the HOPE Act 

and thus grant an exemption from 

normal duty rates for qualifying articles, 

a delayed effective date is not required. 

Moreover, for this reason, CBP finds that 

good cause exists to make these 

regulations effective without a delayed 

effective date. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This document does not meet the 

criteria for a ‘‘significant regulatory 

action’’ as specified in Executive Order 

12866 of September 30, 1993 (58 FR 

51735, October 1993). In addition, 

because a notice of proposed 

rulemaking is not required under 

section 553(b) of the APA for the 

reasons described above, CBP notes that 

the provisions of the Regulatory 

Flexibility Act, as amended (5 U.S.C. 

601 et seq.), do not apply to this 

rulemaking. Accordingly, CBP also 

notes that this rule is not subject to the 

regulatory analysis requirements or 

other requirements of 5 U.S.C. 603 and 

604. 

Paperwork Reduction Act 

The collections of information 

contained in these regulations have 

previously been reviewed and approved 

by the Office of Management and 

Budget in accordance with the 

requirements of the Paperwork 

Reduction Act (44 U.S.C. 3507) under 

control number 1651–0129. 

The collections of information in 

these regulations are in § 10.847 (claim 

for duty-free treatment) and 

§§ 10.844(a)(4)(vi) and 10.848 

(declaration of compliance). This 

information is required in connection 

with certain claims for duty-free 

treatment under the HOPE Act and will 

be used by CBP to determine eligibility 

for preferential tariff treatment under 

that Act. The likely respondents are 

business organizations including 

importers, exporters and manufacturers. 

The estimated average annual burden 

associated with the collection of 

information in this final rule is 39.2 

hours per respondent or record keeper. 

Under the Paperwork Reduction Act, an 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless it 

displays a valid OMB control number. 

Signing Authority 

This document is being issued in 

accordance with § 0.1(a)(1) of the CBP 

regulations (19 CFR 0.1(a)(1)) pertaining 

to the authority of the Secretary of the 

Treasury (or his/her delegate) to 

approve regulations related to certain 

customs revenue functions. 

List of Subjects 

19 CFR Part 10 

Customs duties and inspection, 

Imports, Preference programs, Reporting 

and recordkeeping requirements. 

19 CFR Part 163 

Administrative practice and 

procedure, Customs duties and 

inspection, Imports, Reporting and 

recordkeeping requirements. 

19 CFR Part 178 

Administrative practice and 

procedure, Collections of information, 

Imports, Reporting and recordkeeping 

requirements. 

Amendments to the CBP Regulations 

■ Accordingly, the interim rule 

amending parts 10, 163, and 178 of the 

CBP regulations (19 CFR parts 10, 163, 

and 178), which was published at 72 FR 

34365 on June 22, 2007, is adopted as 

a final rule with certain changes as 

discussed above and set forth below. 

PART 10—ARTICLES CONDITIONALLY 

FREE, SUBJECT TO A REDUCED 

RATE, ETC. 

■ 1. The general authority citation for 

part 10, CBP regulations, and the 

specific authority for subpart O 

(§§ 10.841 through 10.850) continue to 

read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i), Harmonized Tariff Schedule of the 

United States), 1321, 1481, 1484, 1498, 1508, 

1623, 1624, 3314; 

* * * * * 

Sections 10.841 through 10.850 also issued 

under 19 U.S.C. 2703A. 

■ 2. The subpart O heading is amended 

by removing the words ‘‘Act of 2006’’ 

and adding in its place the words ‘‘Acts 

of 2006 and 2008’’. 

■ 3. Section 10.841 is revised to read as 

follows: 

§ 10.841 Applicability. 

Title V of Public Law 109–432, 

entitled the Haitian Hemispheric 

Opportunity through Partnership 

Encouragement Act of 2006 (HOPE I 

Act), amended the Caribbean Basin 

Economic Recovery Act (the CBERA, 19 

U.S.C. 2701–2707) by adding a new 

section 213A (19 U.S.C. 2703A) to 

authorize the President to extend 

additional trade benefits to Haiti. Part I, 

Subtitle D, Title XV of Public Law 110– 

234, entitled the Haitian Hemispheric 

Opportunity through Partnership 

Encouragement Act of 2008 (HOPE II 

Act) amended certain provisions within 

section 213A. Section 213A of the 

CBERA provides for the duty-free 

treatment of certain apparel articles and 

certain wiring sets from Haiti. The 

provisions of this subpart set forth the 

legal requirements and procedures that 

apply for purposes of obtaining dutyfree treatment pursuant to CBERA 

section 213A. 

■ 4. In § 10.842, paragraph (p) is revised 

to read as follows: 

§ 10.842 Definitions. 

* * * * * 

(p) Wholly assembled in Haiti. 

‘‘Wholly assembled in Haiti’’ means that 

all components, of which there must be 

at least two, pre-existed in essentially 

the same condition as found in the 

finished good and were combined to 

form the finished good in Haiti. Minor 

attachments and minor embellishments 

(for example, applique ́s, beads, 

spangles, embroidery, and buttons) not 

appreciably affecting the identity of the 

good, and minor subassemblies (for 

example, collars, cuffs, plackets, and 

pockets), will not affect the 

determination of whether a good is 

‘‘wholly assembled in Haiti’’. 

* * * * * 

■ 5. Section 10.843 is amended by 

revising the introductory text and 

paragraphs (b) through (d), and adding 

paragraphs (e) through (k) to read as 

follows: 


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56726 Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 

§ 10.843 Articles eligible for duty-free 

treatment. 

The duty-free treatment referred to in 

§ 10.841 of this subpart applies to the 

articles described in paragraphs (a) 

through (j) of this section that are 

imported directly from Haiti or the 

Dominican Republic into the customs 

territory of the United States and to the 

articles described in paragraph (k) of 

this section that are imported directly 

from Haiti into the customs territory of 

the United States. 

* * * * * 

(b) Certain woven apparel articles. 

Apparel articles classifiable in Chapter 

62 of the HTSUS that are wholly 

assembled or knit-to-shape in Haiti from 

any combination of fabrics, fabric 

components, components knit-to-shape, 

and yarns, without regard to the source 

of the fabric, fabric components, 

components knit-to-shape, or yarns from 

which the article is made, subject to the 

applicable quantitative limits set forth 

in U.S. Note 6(h), Subchapter XX, 

Chapter 98, HTSUS. 

(c) Brassieres. Apparel articles 

classifiable in subheading 6212.10 of the 

HTSUS that are wholly assembled or 

knit-to-shape in Haiti from any 

combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns, without regard to the source of 

the fabric, fabric components, 

components knit-to-shape, or yarns from 

which the article is made. 

(d) Certain knit apparel articles—(1) 

General. Apparel articles classifiable in 

Chapter 61 of the HTSUS (other than 

those described in paragraph (d)(2) of 

this section) that are wholly assembled 

or knit-to-shape in Haiti from any 

combination of fabrics, fabric 

components, components, components 

knit-to-shape, or yarns, without regard 

to the source of the fabric, fabric 

components, components knit-to-shape, 

or yarns from which the article is made, 

subject to the applicable quantitative 

limits set forth in U.S. Note 6(j), 

Subchapter XX, Chapter 98, HTSUS. 

(2) Exclusions. Duty-free treatment for 

the articles described in paragraph (d)(1) 

of this section will not apply to the 

following: 

(i) The following apparel articles of 

cotton, for men or boys, that are 

classifiable in subheading 6109.10.00 of 

the HTSUS: 

(A) All white T-shirts, with short 

hemmed sleeves and hemmed bottom, 

with crew or round neckline or with Vneck and with a mitered seam at the 

center of the V, and without pockets, 

trim, or embroidery; 

(B) All white singlets, without 

pockets, trim, or embroidery; and 

(C) Other T-shirts, but not including 

thermal undershirts; 

(ii) T-shirts for men or boys that are 

classifiable in subheading 6109.90.10 of 

the HTSUS; 

(iii) The following apparel articles of 

cotton, for men or boys, that are 

classifiable in subheading 6110.20.20 of 

the HTSUS: 

(A) Sweatshirts; and 

(B) Pullovers, other than sweaters, 

vests, or garments imported as part of 

playsuits; or 

(iv) Sweatshirts for men or boys, of 

man-made fibers and containing less 

than 65 percent by weight of man-made 

fibers, that are classifiable in 

subheading 6110.30.30 of the HTSUS. 

(e) Other apparel articles. Any of the 

following apparel articles that is wholly 

assembled or knit-to-shape in Haiti from 

any combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns, without regard to the source of 

the fabric, fabric components, 

components knit-to-shape, or yarns from 

which the article is made: 

(1) Any apparel article that is of a type 

listed in chapter rule 3, 4, or 5 for 

chapter 61 of the HTSUS (as such 

chapter rules are contained in section A 

of the Annex to Presidential 

Proclamation 8213 of December 20, 

2007) as being excluded from the scope 

of such chapter rule, when such chapter 

rule is applied to determine whether an 

apparel article is an originating good for 

purposes of General Note 29(n), HTSUS, 

except that, for purposes of this 

provision, reference in such chapter 

rules to subheading 6104.12.00 of the 

HTSUS is deemed to refer to subheading 

6104.19.60 of the HTSUS; or 

(2) Any apparel article (other than 

articles to which paragraph (c) of this 

section applies (brassieres)) that is of a 

type listed in chapter rule 3(a), 4(a), or 

5(a) for chapter 62 of the HTSUS, as 

such chapter rules are contained in 

paragraph 9 of section A of the Annex 

to Presidential Proclamation 8213 of 

December 20, 2007. 

(f) Luggage and similar items. Articles 

classifiable in subheading 4202.12, 

4202.22, 4202.32, or 4202.92 of the 

HTSUS that are wholly assembled in 

Haiti, without regard to the source of the 

fabric, components, or materials from 

which the article is made. 

(g) Headgear. Articles classifiable in 

heading 6501, 6502, or 6504, or 

subheading 6505.90 of the HTSUS that 

are wholly assembled, knit-to-shape, or 

formed in Haiti from any combination of 

fabrics, fabric components, components 

knit-to-shape, or yarns, without regard 

to the source of the fabric, fabric 

components, components knit-to-shape, 

or yarns from which the article is made. 

(h) Certain sleepwear. Any of the 

following apparel articles that is wholly 

assembled or knit-to-shape in Haiti from 

any combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns, without regard to the source of 

the fabric, fabric components, 

components knit-to-shape, or yarns from 

which the article is made: 

(1) Pajama bottoms and other 

sleepwear for women and girls, of 

cotton, that are classifiable in 

subheading 6208.91.30, HTSUS, or of 

man-made fibers, that are classifiable in 

subheading 6208.92.00, HTSUS; or 

(2) Pajama bottoms and other 

sleepwear for girls, of other textile 

materials, that are classifiable in 

subheading 6208.99.20, HTSUS. 

(i) Earned import allowance rule. 

Apparel articles wholly assembled or 

knit-to-shape in Haiti from any 

combination of fabrics, fabric 

components, components knit-to-shape, 

or yarns, without regard to the source of 

the fabric, fabric components, 

components knit-to-shape, or yarns from 

which the articles are made, if such 

apparel articles are accompanied by an 

earned import allowance certificate 

issued by the Department of Commerce 

that reflects the amount of credits equal 

to the total square meter equivalents of 

such apparel articles, in accordance 

with the earned import allowance 

program established by the Secretary of 

Commerce pursuant to 19 U.S.C. 

2703A(b)(4)(B). 

(j) Apparel articles of short supply 

materials. Apparel articles that are 

wholly assembled or knit-to-shape in 

Haiti from any combination of fabrics, 

fabric components, components knit-toshape, or yarns, without regard to the 

source of the fabrics, fabric components, 

components knit-to-shape, or yarns from 

which the article is made, if the fabrics, 

fabric components, components knit-toshape, or yarns comprising the 

component that determines the tariff 

classification of the article are of any of 

the following: 

(1) Fabrics or yarns, to the extent that 

apparel articles of such fabrics or yarns 

would be eligible for preferential 

treatment, without regard to the source 

of the fabrics or yarns, under Annex 401 

of the North American Free Trade 

Agreement (NAFTA); or 

(2) Fabrics or yarns, to the extent that 

such fabrics or yarns are designated as 

not being available in commercial 

quantities for purposes of: 

(i) Section 213(b)(2)(A)(v) of the 

CBERA (19 U.S.C. 2703(b)(2)(A)(v)); 

(ii) Section 112(b)(5) of the African 

Growth and Opportunity Act (19 U.S.C. 

3721(b)(5)); 


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Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56727 

(iii) Section 204(b)(3)(B)(i)(III) or 

204(b)(3)(B)(ii) of the Andean Trade 

Preference Act (19 U.S.C. 

3203(b)(3)(B)(i)(II) or 3203(b)(3)(B)(ii)); 

or 

(iv) Any other provision, relating to 

determining whether a textile or apparel 

article is an originating good eligible for 

preferential treatment, of a law that 

implements a free trade agreement 

entered into by the United States that is 

in effect at the time the claim for 

preferential tariff treatment is made 

under § 10.847 of this subpart. 

(k) Wiring sets. Any article classifiable 

in subheading 8544.30.00 of the HTSUS, 

as in effect on December 20, 2006, that 

is the product or manufacture of Haiti, 

provided the article satisfies the valuecontent requirement set forth in 

§ 10.844(b) of this subpart. For purposes 

of this paragraph, the term ‘‘product or 

manufacture of Haiti’’ refers to an article 

that is either: 

(1) Wholly the growth, product, or 

manufacture of Haiti; or 

(2) A new or different article of 

commerce that has been grown, 

produced, or manufactured in Haiti. 

■ 6. In § 10.844: 

■ a. Paragraphs (a)(2)(iii), (a)(3), and the 

introductory text of paragraphs (a)(4)(i) 

and (a)(4)(ii) are revised; 

■ b. Paragraphs (a)(4)(iii), (a)(4)(iv), and 

(a)(4)(v) are re-designated as paragraphs 

(a)(4)(iv), (a)(4)(v), and (a)(4)(vi), 

respectively, and a new paragraph 

(a)(4)(iii) is added; 

■ c. The introductory text of redesignated paragraph (a)(4)(v) is revised; 

■ d. Re-designated paragraph (a)(4)(vi) 

is amended by removing the reference to 

‘‘(a)(4)(iii)’’ and adding in its place 

‘‘(a)(4)(iv)’’, and by removing the 

reference to ‘‘(a)(4)(iv)’’ and adding in 

its place ‘‘(a)(4)(v)’’; 

■ e. Paragraph (a)(5)(ii)(D) is amended 

by removing the words ‘‘under the 

Bipartisan Trade Promotion Authority 

Act of 2002’’ and adding in their place 

the words ‘‘with respect to the United 

States’’; and 

■ f. Paragraph (c)(2) is amended by 

removing the words ‘‘under the 

Bipartisan Trade Promotion Authority 

Act of 2002 (19 U.S.C. 3801 et seq.)’’ 

and adding in their place the word 

‘‘thereafter’’. 

The revisions read as follows: 

§ 10.844 Value-content requirement. 

(a) * * * 

(2) * * * 

(iii) Exclusions from annual 

aggregation calculation. The entry of an 

apparel article that is wholly assembled 

or knit-to-shape in Haiti and is receiving 

preferential tariff treatment under any 

provision of law other than section 

213A(b)(1) of the CBERA (19 U.S.C. 

2703A(b)(1)) or is subject to the 

‘‘General’’ subcolumn of column 1 of 

the HTSUS will only be included in an 

annual aggregation under paragraph 

(a)(2)(i) or (a)(2)(ii) of this section if the 

producer or entity controlling 

production elects, at the time the annual 

aggregation calculation is made, to 

include such entry in the aggregation. 

Example. A Haitian producer elects to use 

the annual aggregation method in the initial 

applicable one-year period, and also elects to 

include in the aggregation calculation an 

entry of apparel articles receiving preferential 

tariff treatment under another preference 

program. The producer ships to the United 

States four shipments during the initial 

applicable one-year period and all are 

entered during that period. The first 

shipment of apparel (qualifying for and 

receiving preference under the Caribbean 

Basin Trade Partnership Act (CBTPA)) has an 

appraised value of $100,000 and meets a 

value-content percentage (under § 10.844(a) 

of this section) of 80%. The second shipment 

of apparel is wholly assembled in Haiti, has 

an appraised value of $100,000, and meets a 

value-content percentage of 40%. The third 

shipment is wholly assembled in Haiti, has 

an appraised value of $50,000, and meets a 

value-content percentage of 0%. The last 

shipment is wholly assembled in Haiti, has 

an appraised value of $20,000, and meets a 

value-content requirement of 80%. Taken 

together, the four shipments have an 

appraised value of $270,000 and meet a 

value-content percentage of 50.4%. The 

apparel articles shipped to the United States 

in the last three shipments would qualify for 

duty-free treatment under section 213A(b)(1) 

of the CBERA and § 10.843(a) of this subpart 

as the applicable value-content requirement 

for the initial applicable one-year period (50 

%) is satisfied. This conclusion assumes that: 

The CBTPA-eligible apparel articles in the 

first shipment (that were included in the 

annual aggregation calculation at the election 

of the producer) were wholly assembled or 

knit-to-shape in Haiti, as required in 

§ 10.844(a)(2)(iii) of this section; and the 

articles in the last three shipments that were 

wholly assembled in Haiti satisfy all other 

applicable requirements set forth in this 

subpart. 

(3) Election to use the annual 

aggregation method for an applicable 

one-year period. A producer or entity 

controlling production may elect to use 

the individual entry or annual 

aggregation method in any applicable 

one-year period and then elect to use 

the other method during the subsequent 

applicable one-year period, provided 

that all applicable requirements are met 

during the applicable one-year period 

preceding the period in which the 

switch is made. If a producer or entity 

controlling production using the 

individual entry method in an 

applicable one-year period elects to use 

the annual aggregation method during 

the subsequent applicable one-year 

period, the declaration of compliance 

described in § 10.848 of this subpart 

must be submitted to CBP within 30 

days following the end of the applicable 

one-year period in which the individual 

entry method was used. 

(4) Failure to meet applicable 

requirements—(i) Initial applicable oneyear period. Except as provided in 

paragraph (a)(4)(iii) of this section, if 

CBP determines that apparel articles of 

a producer or entity controlling 

production that are entered as articles 

described in § 10.843(a) of this subpart 

during the initial applicable one-year 

period have not met the requirements of 

§ 10.843(a) of this subpart or the 

applicable value-content requirement 

set forth in paragraph (a)(1) of this 

section, then: 

* * * * * 

(ii) Other applicable one-year periods. 

Except as provided in paragraph 

(a)(4)(iii) of this section, if CBP 

determines that apparel articles of a 

producer or entity controlling 

production that are entered as articles 

described in § 10.843(a) of this subpart 

during any applicable one-year period 

following the initial applicable one-year 

period have not met the requirements of 

§ 10.843(a) or the applicable valuecontent requirement set forth in 

paragraph (a) of this section, then: 

* * * * * 

(iii) Entity controlling production of 

apparel articles of a producer also 

producing for its own account. Where 

an entity controlling production 

controls the production of apparel 

articles, as described in § 10.843(a) of 

this subpart, of a producer that also 

produces for its own account, the failure 

of apparel articles of that producer to 

meet the requirements of § 10.843(a) of 

this subpart or the applicable valuecontent requirement set forth in 

paragraph (a) of this section in an 

applicable one-year period, either under 

the annual aggregation method or the 

individual entry method, will not affect 

the eligibility for duty-free treatment 

under § 10.843(a) of this subpart of 

those apparel articles of that producer 

which are part of a claim for such 

treatment made on behalf of the entity 

controlling production. 

Example. Importer D, an entity controlling 

production, purchases apparel articles that 

meet the description in § 10.843(a) of this 

subpart from Haitian Producers A, B, and C 

and enters those articles during the initial 

applicable one-year period. Importer D elects 

to use the annual aggregation method during 

that period. The three producers also 

produce apparel for other U.S. importers and 

each producer elects to use the annual 

aggregation method. The apparel articles 


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56728 Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 

purchased by Importer D from the three 

producers and entered during the initial 

applicable one-year period meet a valuecontent percentage of 51.7%. However, the 

value-content percentage met by all the 

apparel that is wholly assembled in Haiti by 

Producer C and entered (including the 

apparel imported by Importer D) during the 

initial applicable one-year period is 49%. As 

all of the articles, in the aggregate, purchased 

by Importer D from the three producers and 

entered during the initial applicable one-year 

period satisfy the applicable value-content 

requirement (50%), all of these articles are 

entitled to duty-free treatment under section 

213A(b)(1) of the CBERA and § 10.843(a) of 

this subpart, assuming all other applicable 

requirements are met. The failure of Producer 

C to meet the 50% value-content requirement 

with respect to all of the articles that it 

wholly assembled in Haiti and entered 

during the initial applicable one-year period 

will not prevent duty-free status being 

claimed for the articles purchased by 

Importer D from Producer C. Therefore, the 

consequences of Producer C’s failure to meet 

the 50% value-content requirement include 

the denial of preferential tariff treatment for 

all articles that are wholly assembled in Haiti 

by Producer C and entered during the initial 

applicable one-year period, except for those 

articles sold by Producer C to Importer D. An 

additional consequence of Producer C’s 

failure to meet the value-content requirement 

in the initial applicable one-year period is 

that articles wholly assembled in Haiti by 

Producer C and entered during succeeding 

applicable one-year periods will be ineligible 

for duty-free treatment until the appropriate 

increased value-content requirement has 

been met (see § 10.844(a)(4)(i)(C) of this 

subpart), except to the extent the articles 

qualify for preference under § 10.845 of this 

subpart. 

* * * * * 

(v) Articles of a new producer or 

entity controlling production. Apparel 

articles of a new producer or entity 

controlling production electing to use 

the annual aggregation method for 

purposes of meeting the applicable 

value-content requirement must first 

meet the increased value-content 

percentage specified in paragraph 

(a)(4)(iv) of this section as a prerequisite 

to receiving duty-free treatment during 

a succeeding applicable one-year 

period. Apparel articles of a new 

producer or entity controlling 

production electing to use the 

individual entry method are not subject 

to the requirement of first meeting the 

increased value-content percentage as a 

prerequisite to receiving duty-free 

treatment during the first year of 

participation or in any succeeding 

applicable one-year period. For 

purposes of this paragraph, a ‘‘new 

producer or entity controlling 

production’’ is a producer or entity 

controlling production that did not 

produce or control production of 

articles that were entered as articles 

pursuant to § 10.843(a) of this subpart 

during the immediately preceding 

applicable one-year period. 

* * * * * 

■ 7. Section 10.846 is revised to read as 

follows: 

§ 10.846 Imported directly. 

(a) Textile and apparel articles. To be 

eligible for duty-free treatment under 

this subpart, textile and apparel articles 

described in paragraphs (a) through (j) 

of § 10.843 of this subpart must be 

imported directly from Haiti or the 

Dominican Republic into the customs 

territory of the United States. For 

purposes of this requirement, the words 

‘‘imported directly from Haiti or the 

Dominican Republic’’ mean: 

(1) Direct shipment from Haiti or the 

Dominican Republic to the United 

States without passing through the 

territory of any intermediate country; 

(2) If shipment is from Haiti or the 

Dominican Republic to the United 

States through the territory of an 

intermediate country, the articles in the 

shipment do not enter into the 

commerce of the intermediate country 

and the invoices, bills of lading, and 

other shipping documents show the 

United States as the final destination; or 

(3) If shipment is through an 

intermediate country and the invoices 

and other documents do not show the 

United States as the final destination, 

the articles in the shipment are 

imported directly only if they: 

(i) Remained under the control of the 

customs authority in the intermediate 

country; 

(ii) Did not enter into the commerce 

of the intermediate country except for 

the purpose of a sale other than at retail; 

and 

(iii) Have not been subjected to 

operations other than loading and 

unloading, and other activities 

necessary to preserve the articles in 

good condition. 

(b) Wiring sets. To be eligible for dutyfree treatment under this subpart, 

articles described in paragraph (k) of 

§ 10.843 of this subpart must be 

imported directly from Haiti into the 

customs territory of the United States. 

For purposes of this requirement, the 

words ‘‘imported directly from Haiti’’ 

mean: 

(1) Direct shipment from Haiti to the 

United States without passing through 

the territory of any intermediate 

country; 

(2) If shipment is from Haiti to the 

United States through the territory of an 

intermediate country, the articles in the 

shipment do not enter into the 

commerce of the intermediate country 

and the invoices, bills of lading, and 

other shipping documents show the 

United States as the final destination; or 

(3) If shipment is through an 

intermediate country and the invoices 

and other documents do not show the 

United States as the final destination, 

the articles in the shipment are 

imported directly only if they: 

(i) Remained under the control of the 

customs authority in the intermediate 

country; 

(ii) Did not enter into the commerce 

of the intermediate country except for 

the purpose of a sale other than at retail; 

and 

(iii) Have not been subjected to 

operations other than loading and 

unloading, and other activities 

necessary to preserve the articles in 

good condition. 

(c) Documentary evidence. An 

importer making a claim for duty-free 

treatment under § 10.847 of this subpart 

may be required to demonstrate, to 

CBP’s satisfaction, that the articles were 

‘‘imported directly’’ as that term is 

defined in paragraphs (a) and (b) of this 

section. An importer may demonstrate 

compliance with this section by 

submitting documentary evidence. Such 

evidence may include, but is not limited 

to, bills of lading, airway bills, packing 

lists, commercial invoices, receiving 

and inventory records, and customs 

entry and exit documents. 

■ 8. Section 10.847 is amended by 

revising paragraphs (a)(1) through (5) 

and adding paragraphs (a)(6) through 

(12) to read as follows: 

§ 10.847 Filing of claim for duty-free 

treatment. 

(a) * * * 

(1) Subheading 9820.61.25 for apparel 

articles described in § 10.843(a) of this 

subpart for which the individual entry 

method is used for purposes of meeting 

the applicable value-content 

requirement set forth in § 10.844(a) of 

this subpart; 

(2) Subheading 9820.61.30 for apparel 

articles described in § 10.843(a) of this 

subpart for which the annual 

aggregation method is used for purposes 

of meeting the applicable value-content 

requirement set forth in § 10.844(a) of 

this subpart; 

(3) Subheading 9820.62.05 for apparel 

articles described in § 10.843(b) of this 

subpart; 

(4) Subheading 9820.62.12 for 

brassieres described in § 10.843(c) of 

this subpart; 

(5) Subheading 9820.61.35 for apparel 

articles described in § 10.843(d) of this 

subpart; 

(6) Subheading 9820.61.40 for apparel 

articles described in § 10.843(e) of this 

subpart; 


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Federal Register / Vol. 73, No. 190 / Tuesday, September 30, 2008 / Rules and Regulations 56729 

(7) Subheading 9820.42.05 for articles 

described in § 10.843(f) of this subpart; 

(8) Subheading 9820.65.05 for articles 

described in § 10.843(g) of this subpart; 

(9) Subheading 9820.62.20 for articles 

described in § 10.843(h) of this subpart; 

(10) Subheading 9820.62.25 for 

articles described in § 10.843(i) of this 

subpart; 

(11) Subheading 9820.62.30 for 

articles described in § 10.843(j) of this 

subpart; and 

(12) Subheading 9820.85.44 for wiring 

sets described in § 10.843(k) of this 

subpart. 

* * * * * 

Jayson P. Ahern, 

Acting Commissioner, Customs and Border 

Protection. 

Approved: September 25, 2008. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury. 

[FR Doc. E8–23008 Filed 9–29–08; 8:45 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF STATE 

22 CFR Part 41 

[Public Notice 6378] 

Visas: Documentation of 

Nonimmigrants Under the Immigration 

and Nationality Act, as Amended 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: This rule establishes 

regulatory exceptions to travel 

restrictions, established in the Tom 

Lantos Block Burmese JADE Act, that 

were put in place for Burmese nationals. 

The rule allows the Department to 

exempt certain Burmese diplomats and 

officials from the travel restrictions. 

DATES: Effective Date: This rule is 

effective September 30, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Lawrence B. Kurland, Jr., Legislation 

and Regulations Division, Visa Services, 

Department of State, 2401 E Street, NW., 

Room L–603D, Washington, DC 20520– 

0106, (202) 663–1202, e-mail 

(KurlandLB@state.gov). 

SUPPLEMENTARY INFORMATION: On July 

29, 2008, the President signed into law 

the Tom Lantos Block Burmese JADE 

(Junta’s Anti-Democratic Efforts) Act of 

2008, Public Law 110–286, authorizing 

a broad range of new measures against 

the Burmese regime. Among these 

measures is a new category of visa 

inadmissibility, detailed in Section 5(a) 

of the Act. However, the Act permits the 

Secretary of State to issue, by regulation, 

exceptions to Section 5(a), in order for 

the United States and Burma to operate 

their diplomatic missions, to allow 

United States citizens to visit Burma, to 

permit authorized Burmese to conduct 

business at the United Nations, or as 

required by other applicable 

international agreements. Since 

diplomatic travel must often be 

approved in a short time frame, it would 

be impractical to issue a new regulation 

for each instance of Burmese diplomatic 

travel. This rule, then, will allow the 

Secretary to comply with the regulatory 

requirement set out in Section 5(f)(2) of 

the Act while making exceptions to 

Section 5(a) in accordance with 

Department of State regulations. 

Regulatory Findings 

Administrative Procedure Act 

This regulation involves a foreign 

affairs function of the United States and, 

therefore, in accordance with 5 U.S.C. 

553(a)(1), is not subject to the rule 

making procedures set forth in 5 U.S.C. 

553. 

Regulatory Flexibility Act/Executive 

Order 13272: Small Business 

Because this final rule is exempt from 

notice and comment rulemaking under 

5 U.S.C. 553, it is exempt from the 

regulatory flexibility analysis 

requirements set forth at sections 603 

and 604 of the Regulatory Flexibility 

Act (5 U.S.C. 603 and 604). Nonetheless, 

consistent with section 605(b) of the 

Regulatory Flexibility Act (5 U.S.C. 

605(b)), the Department certifies that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities. This rule 

regulates individual aliens who seek 

consideration for nonimmigrant visas 

and does not affect any small entities, as 

defined in 5 U.S.C. 601(6). 

The Unfunded Mandates Reform Act of 

1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UFMA), 

2 U.S.C. 1532, generally requires 

agencies to prepare a statement before 

proposing any rule that may result in an 

annual expenditure of $100 million or 

more by State, local, or tribal 

governments, or by the private sector. 

This rule will not result in any such 

expenditure, nor will it significantly or 

uniquely affect small governments. 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 

This rule is not a major rule as 

defined by 5 U.S.C. 804, for purposes of 

congressional review of agency 

rulemaking under the Small Business 

Regulatory Enforcement Fairness Act of 

1996, Public Law 104–121. This rule 

will not result in an annual effect on the 

economy of $100 million or more; a 

major increase in costs or prices; or 

adverse effects on competition, 

employment, investment, productivity, 

innovation, or the ability of United 

States-based companies to compete with 

foreign based companies in domestic 

and import markets. 

Executive Order 12866 

Although this rule is not subject to 

Executive Order 12866, the Department 

has reviewed it to ensure its consistency 

with the regulatory philosophy and 

principles set forth in the Executive 

Order, and has determined that the 

benefits of the rule justify its costs. 

Executive Orders 12372 and 13132: 

Federalism 

This regulation will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or the 

distribution of power and 

responsibilities among the various 

levels of government. Nor will the rule 

have federalism implications warranting 

the application of Executive Orders No. 

12372 and No. 13132. 

Paperwork Reduction Act 

This rule does not impose information 

collection requirements under the 

provisions of the Paperwork Reduction 

Act, 44 U.S.C., Chapter 35. 

List of Subjects in 22 CFR Part 41 

Aliens, Foreign officials, Immigration, 

Nonimmigrants, Visas. 

■ Accordingly, for the reasons set forth 

above, 22 CFR part 41 is amended as 

follows: 

PART 41—[AMENDED] 

■ 1. The authority citation for part 41 

continues to read as follows: 

Authority: 8 U.S.C. 1104; Pub. L. 105–277, 

112 Stat. 2681–795 through 2681–801; 8 

U.S.C. 1185 note (section 7209 of Pub. L. 

108–458). 

■ 2. Section 41.21 is amended by adding 

paragraph (d)(4): 

§ 41.21 Foreign officials—general. 

(d) * * * 

(4) Notwithstanding the provisions of 

Section 5(a) and consistent with Section 

5(f)(2) of the Tom Lantos Block Burmese 

JADE (Junta’s Anti-Democratic Efforts) 

Act of 2008, Public Law 110–286, visas 

may be issued to visa applicants who 

are otherwise ineligible for a visa to 

travel to the United States under section 

5(a)(1) of the Act: 

(i) To permit the United States and 

Burma to operate their diplomatic 


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