[Federal Register Volume 74, Number 98 (Friday, May 22, 2009)]
[Rules and Regulations]
[Pages 23949-23951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11986]


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DEPARTMENT OF HOMELAND SECURITY

Customs and Border Protection Bureau

DEPARTMENT OF THE TREASURY

19 CFR Part 10

[Docket No. USCBP-2009-0015; CBP Dec. 09-17]
RIN 1505-AC13


Imported Directly Requirement Under the United States-Bahrain 
Free Trade Agreement

AGENCY: Customs and Border Protection, Department of Homeland Security; 
Department of the Treasury.

ACTION: Interim final rule; solicitation of comments.

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SUMMARY: This document amends the U.S. Customs and Border Protection 
(CBP) regulations in title 19 of the Code of Federal Regulations (19 
CFR) on an interim basis to change certain provisions relating to the 
requirement under the United States-Bahrain Free Trade Agreement (BFTA) 
that a good must be ``imported directly'' from one

[[Page 23950]]

BFTA Party to the other Party to qualify for preferential tariff 
treatment. The change involves removing the condition that a good 
passing through the territory of an intermediate country while en route 
from a Party to the other Party must remain under the control of the 
customs authority of the intermediate country. This change more closely 
conforms these regulatory provisions to the BFTA and the BFTA 
implementing statute.

DATES: This interim final rule is effective May 22, 2009. Comments must 
be received on or before July 21, 2009.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2009-0015.
    <bullet> Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of International Trade, U.S. Customs and Border 
Protection, 799 9th Street, NW., 5th Floor, Washington, DC 20229-1179.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may be inspected during regular business days between the hours of 9 
a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of International Trade, U.S. Customs 
and Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Mr. Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Karen Greene, Regulations and Rulings, 
Office of International Trade, (202) 325-0041.

SUPPLEMENTARY INFORMATION:

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
interim final rule. CBP also invites comments that relate to the 
economic, environmental, or federalism effects that might result from 
this interim final rule. Comments that will provide the most assistance 
to CBP will reference a specific portion of the interim final rule, 
explain the reason for any recommended change, and include data, 
information, or authority that support such recommended change. See 
ADDRESSES above for information on how to submit comments.

Background

    On September 14, 2004, the United States and the Kingdom of Bahrain 
(the Parties) signed the U.S.-Bahrain Free Trade Agreement (BFTA). The 
provisions of the BFTA were adopted by the United States with the 
enactment on January 11, 2006, of the United States-Bahrain Free Trade 
Area Implementation Act (the Act), Public Law 109-169, 119 Stat. 3581 
(19 U.S.C. 3805 note).
    On October 16, 2007, CBP published CBP Dec. 07-81 in the Federal 
Register (72 FR 58511), setting forth interim amendments to implement 
the preferential tariff treatment and customs-related provisions of the 
BFTA. The majority of the BFTA implementing regulations were included 
within new subpart N in part 10 of the CBP regulations (19 CFR subpart 
N, part 10). In CBP Dec. 08-23, published in the Federal Register on 
July 23, 2008 (73 FR 42679), CBP adopted the interim regulations set 
forth in CBP Dec. 07-81 as a final rule with two technical corrections.
    Section 10.817(a) of the CBP regulations implementing the BFTA sets 
forth the basic requirement, found in Article 4.1 of the BFTA, that a 
good must be ``imported directly'' from the territory of a Party into 
the territory of the other Party to qualify as an originating good 
under the BFTA. In circumstances in which a shipment passes through the 
territory of a non-Party, Sec.  10.817(a)(2) provides that a good will 
be considered to be ``imported directly'' only if the good: (i) 
Remained under the control of the customs authority of the non-Party; 
and (ii) did not undergo production, manufacturing, or any other 
operation outside the territories of the Parties, other than certain 
specified minor operations. Nearly identical language to that found in 
Sec.  10.817(a) appears in Sec.  10.822(a), relating to the application 
of the ``imported directly'' requirement to certain non-originating 
textile and apparel goods that qualify for preferential tariff 
treatment under an applicable tariff preference level (TPL).
    Article 4.9 of the BFTA provides that a good shall not be 
considered to be ``imported directly'' from the territory of the other 
Party if the good undergoes subsequent production, manufacturing, or 
any other operation outside the territories of the Parties, other than 
unloading, reloading, or any other operation necessary to preserve it 
in good condition or to transport the good to the territory of the 
other Party. Section 202(g) of the Act mirrors the language in Article 
4.9 of the Agreement. Neither the BFTA nor the Act includes a 
requirement that a good must remain under the control of the customs 
authority of a non-Party to qualify as having met the ``imported 
directly'' requirement when the good passes through the territory of a 
non-Party.

Explanation of Amendments

    It has been brought to the attention of CBP that there is no 
explicit requirement in the BFTA or the Act that a good must remain 
under the control of the customs authority of a non-Party to qualify as 
having been ``imported directly'' from a Party. Therefore, to more 
closely conform paragraph (a)(2) of Sec. Sec.  10.817 and 10.822 to the 
Agreement and the Act, these regulatory provisions have been revised in 
this interim rule document to remove the ``customs control'' 
requirement. Specifically, paragraph (a)(2)(i) of Sec. Sec.  10.817 and 
10.822 has been removed and text of current paragraph (a)(2)(ii) of 
Sec. Sec.  10.817 and 10.822 has been incorporated into the paragraph 
(a)(2) introductory text of these sections.
    CBP notes that these changes provide consistency between the BFTA 
implementing regulations and the CBP regulations implementing the 
United States-Morocco Free Trade Agreement (MFTA) relating to the 
``imported directly'' requirement under these two FTAs. The language in 
the BFTA and MFTA and the two implementing statutes are nearly 
identical in regard to this requirement.

Inapplicability of Notice and Delayed Effective Date Requirements

    Under the Administrative Procedure Act (APA) (5 U.S.C. 553), 
agencies generally are required to publish a notice of proposed 
rulemaking in the Federal Register that solicits public comment on the 
proposed regulatory amendments, consider public comments in deciding on 
the content of the final amendments, and publish the final amendments 
at least 30 days prior to their effective date. However, section 
553(a)(1) of the APA provides that the standard prior notice and 
comment

[[Page 23951]]

procedures do not apply to an agency rulemaking to the extent that it 
involves a foreign affairs function of the United States. CBP has 
determined that these interim amendments involve a foreign affairs 
function of the United States because they modify regulatory provisions 
that implement preferential tariff treatment provisions under the BFTA. 
Therefore, the rulemaking requirements under the APA do not apply and 
this interim rule will be effective upon publication. However, CBP is 
soliciting comments in this interim rule and will consider all comments 
received before issuing a final rule.

Executive Order 12866

    CBP has determined that this document is not a regulation or rule 
subject to the provisions of Executive Order 12866 of September 30, 
1993 (58 FR 51735, October 1993), because it pertains to a foreign 
affairs function of the United States and, therefore, is specifically 
exempted by section 3(d)(2) of Executive Order 12866.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required under the APA 
for the reasons described above, the provisions of the Regulatory 
Flexibility Act, as amended (5 U.S.C. 601 et seq.), do not apply to 
this rulemaking. Accordingly, this final rule is not subject to the 
regulatory analysis requirements or other requirements of 5 U.S.C. 603 
and 604.

Signing Authority

    This document is being issued in accordance with Sec.  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 in 19 CFR Part 10

    Customs duties and inspection, Exports, Imports, Preference 
programs, Trade agreements.

Amendments to the CBP Regulations

0
Accordingly, chapter I of title 19, Code of Federal Regulations (19 CFR 
chapter I), is amended as set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

0
1. The general authority citation for part 10 and the specific 
authority for subpart N 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;
* * * * *
    Section 10.801 through 10.829 also issued under 19 U.S.C. 1202 
(General Note 30, HTSUS) and Pub. L. 109-169, 119 Stat. 3581 (19 
U.S.C. 3805 note).

0
2. Section 10.817 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  10.817   Imported directly.

    (a) * * *
    (2) If the shipment passed through the territory of a non-Party, 
the good, upon arrival in the territory of a Party, will be considered 
to be ``imported directly'' only if the good did not undergo 
production, manufacturing, or any other operation outside the 
territories of the Parties, other than unloading, reloading, or any 
other operation necessary to preserve the good in good condition or to 
transport the good to the territory of a Party. Operations that may be 
performed outside the territories of the Parties include inspection, 
removal of dust that accumulates during shipment, ventilation, 
spreading out or drying, chilling, replacing salt, sulfur dioxide, or 
aqueous solutions, replacing damaged packing materials and containers, 
and removal of units of the good that are spoiled or damaged and 
present a danger to the remaining units of the good, or to transport 
the good to the territory of a Party.
* * * * *
0
3. Section 10.822 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  10.822   Transshipment of non-originating fabric or apparel 
goods.

    (a) * * *
    (2) If the shipment passed through the territory of a non-Party, 
the good, upon arrival in the territory of a Party, will be considered 
to be ``imported directly'' only if the good did not undergo 
production, manufacturing, or any other operation outside the 
territories of the Parties, other than unloading, reloading, or any 
other operation necessary to preserve the good in good condition or to 
transport the good to the territory of a Party. Operations that may be 
performed outside the territories of the Parties include inspection, 
removal of dust that accumulates during shipment, ventilation, 
spreading out or drying, chilling, replacing salt, sulfur dioxide, or 
aqueous solutions, replacing damaged packing materials and containers, 
and removal of units of the good that are spoiled or damaged and 
present a danger to the remaining units of the good, or to transport 
the good to the territory of a Party.
* * * * *

     Approved: May 19, 2009.
Jayson P. Ahern,
Acting Commissioner, U.S. Customs and Border Protection.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. E9-11986 Filed 5-21-09; 8:45 am]
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