190
ucts covered under the Agreement for procurement by the
United States’’.
(c) DEFINITION OF ELIGIBLE PRODUCT.—Section
308(4)(A) of such Act (19 U.S.C. 2518(4)(A)) is amended
to read as follows:
‘‘(A) IN
GENERAL.—The term ‘eligible
product’ means, with respect to any foreign
country or instrumentality that is—
‘‘(i) a party to the Agreement, a prod-
uct or service of that country or instru-
mentality which is covered under the
Agreement for procurement by the United
States; or
‘‘(ii) a party to the North American
Free Trade Agreement, a product or serv-
ice of that country or instrumentality
which is covered under the North Amer-
ican Free Trade Agreement for procure-
ment by the United States.’’.
(d) CONFORMING AMENDMENTS.—Section 401 of the
Rural Electrification Act of 1938 (7 U.S.C. 903 note) is
amended by inserting ‘‘, Mexico, or Canada’’ after ‘‘the
United States’’ each place it appears.
191
(e) EFFECTIVE DATE.—The provisions of this sub-
title take effect on the date the Agreement enters into
force with respect to the United States.
TITLE 
IV—DISPUTE 
SETTLE-
MENT IN ANTIDUMPING AND
COUNTERVAILING 
DUTY
CASES
Subtitle A—Organizational, Admin-
istrative, and Procedural Provi-
sions Regarding the Implemen-
tation of Chapter 19 of the
Agreement
SEC. 401. REFERENCES IN SUBTITLE.
Any reference in this subtitle to an Annex, chapter,
or article shall be considered to be a reference to the re-
spective Annex, chapter, or article of the Agreement.
SEC. 402. ORGANIZATIONAL AND ADMINISTRATIVE PROVI-
SIONS.
(a) CRITERIA FOR SELECTION OF INDIVIDUALS TO
SERVE ON PANELS AND COMMITTEES.—
(1) IN GENERAL.—The selection of individuals
under this section for—
(A) placement on lists prepared by the
interagency group under subsection (c)(2)(B)(i)
and (ii);
192
(B) placement on preliminary candidate
lists under subsection (c)(3)(A);
(C) placement on final candidate lists
under subsection (c)(4)(A);
(D) placement by the Trade Representative
on the rosters described in paragraph 1 of
Annex 1901.2 and paragraph 1 of Annex
1904.13; and
(E) appointment by the Trade Representa-
tive for service on the panels and committees
convened under chapter 19;
shall be made on the basis of the criteria provided
in paragraph 1 of Annex 1901.2 and paragraph 1 of
Annex 1904.13 and shall be made without regard to
political affiliation.
(2) ADDITIONAL CRITERIA FOR ROSTER PLACE-
MENTS AND APPOINTMENTS UNDER PARAGRAPH 1
OF ANNEX 1901.2.—Rosters described in paragraph 1
of Annex 1901.2 shall include, to the fullest extent
practicable, judges and former judges who meet the
criteria referred to in paragraph (1). The Trade
Representative shall, subject to subsection (b), ap-
point judges to binational panels convened under
chapter 19, extraordinary challenge committees con-
vened under chapter 19, and special committees es-
193
tablished under article 1905, where such judges
offer and are available to serve and such service is
authorized by the chief judge of the court on which
they sit.
(b) SELECTION OF CERTAIN JUDGES TO SERVE ON
PANELS AND COMMITTEES.—
(1) APPLICABILITY.—This subsection applies
only with respect to the selection of individuals for
binational panels convened under chapter 19, ex-
traordinary challenge committees convened under
chapter 19, and special committees established
under article 1905, who are judges of courts created
under article III of the Constitution of the United
States.
(2) CONSULTATION WITH CHIEF JUDGES.—The
Trade Representative shall consult, from time to
time, with the chief judges of the Federal judicial
circuits regarding the interest in, and availability
for, participation in binational panels, extraordinary
challenge committees, and special committees, of
judges within their respective circuits. If the chief
judge of a Federal judicial circuit determines that it
is appropriate for one or more judges within that
circuit to be included on a roster described in sub-
section (a)(1)(D), the chief judge shall identify all
194
such judges for the Chief Justice of the United
States who may, upon his or her approval, submit
the names of such judges to the Trade Representa-
tive. The Trade Representative shall include the
names of such judges on the roster.
(3) SUBMISSION OF LISTS TO CONGRESS.—The
Trade Representative shall submit to the Committee
on the Judiciary and the Committee on Ways and
Means of the House of Representatives and to the
Committee on Finance and the Committee on the
Judiciary of the Senate a list of all judges included
on a roster under paragraph (2). Such list shall be
submitted at the same time as the final candidate
lists are submitted under subsection (c)(4)(A) and
the final forms of amendments are submitted under
subsection (c)(4)(C)(iv).
(4) APPOINTMENT OF JUDGES TO PANELS OR
COMMITTEES.—At such time as the Trade Rep-
resentative proposes to appoint a judge described in
paragraph (1) to a binational panel, an extraor-
dinary challenge committee, or a special committee,
the Trade Representative shall consult with that
judge in order to ascertain whether the judge is
available for such appointment.
(c) SELECTION OF OTHER CANDIDATES.—
195
(1) APPLICABILITY.—This subsection applies
only with respect to the selection of individuals for
binational panels convened under chapter 19, ex-
traordinary challenge committees convened under
chapter 19, and special committees established
under article 1905, other than those individuals to
whom subsection (b) applies.
(2) INTERAGENCY GROUP.—
(A) ESTABLISHMENT.—There is estab-
lished within the interagency organization es-
tablished under section 242 of the Trade Ex-
pansion Act of 1962 (19 U.S.C. 1872) an inter-
agency group which shall—
(i) be chaired by the Trade Represent-
ative; and
(ii) consist of such officers (or the
designees thereof) of the United States
Government as the Trade Representative
considers appropriate.
(B) FUNCTIONS.—The interagency group
established under subparagraph (A) shall, in a
manner consistent with chapter 19—
(i) prepare by January 3 of each cal-
endar year—
196
(I) a list of individuals who are
qualified to serve as members of bina-
tional panels convened under chapter
19; and
(II) a list of individuals who are
qualified to serve on extraordinary
challenge committees convened under
chapter 19 and special committees es-
tablished under article 1905;
(ii) if the Trade Representative makes
a request under paragraph (4)(C)(i) with
respect to a final candidate list during any
calendar year, prepare by July 1 of such
calendar year a list of those individuals
who are qualified to be added to that final
candidate list;
(iii) exercise oversight of the adminis-
tration of the United States Section that is
authorized to be established under section
105; and
(iv) make recommendations to the
Trade Representative regarding the con-
vening of extraordinary challenge commit-
tees and special committees under chapter
19.
197
(3) PRELIMINARY CANDIDATE LISTS.—
(A) IN GENERAL.—The Trade Representa-
tive shall select individuals from the respective
lists prepared by the interagency group under
paragraph (2)(B)(i) for placement on—
(i) a preliminary candidate list of indi-
viduals eligible to serve as members of bi-
national panels under Annex 1901.2; and
(ii) a preliminary candidate list of in-
dividuals eligible for selection as members
of 
extraordinary 
challenge 
committees
under Annex 1904.13 and special commit-
tees under article 1905.
(B) SUBMISSION OF LISTS TO CONGRES-
SIONAL COMMITTEES.—
(i) IN GENERAL.—No later than Jan-
uary 3 of each calendar year, the Trade
Representative shall submit to the Com-
mittee on Finance of the Senate and the
Committee on Ways and Means of the
House of Representatives (hereafter in this
section referred to as the ‘‘appropriate
Congressional Committees’’) the prelimi-
nary candidate lists of those individuals se-
lected by the Trade Representative under
198
subparagraph (A) to be candidates eligible
to serve on panels or committees convened
pursuant to chapter 19 during the 1-year
period beginning on April 1 of such cal-
endar year.
(ii) ADDITIONAL
INFORMATION.—At
the time the candidate lists are submitted
under clause (i), the Trade Representative
shall submit for each individual on the list
a statement of professional qualifications.
(C) CONSULTATION.—Upon submission of
the preliminary candidate lists under subpara-
graph (B) to the appropriate Congressional
Committees, the Trade Representative shall
consult with such Committees with regard to
the individuals included on the preliminary can-
didate lists.
(D) REVISION OF LISTS.—The Trade Rep-
resentative may add and delete individuals from
the preliminary candidate lists submitted under
subparagraph (B) after consultation with the
appropriate Congressional Committees regard-
ing the additions and deletions. The Trade Rep-
resentative shall provide to the appropriate
Congressional Committees written notice of any
199
addition or deletion of an individual from the
preliminary candidate lists, along with the in-
formation described in subparagraph (B)(ii)
with respect to any proposed addition.
(4) FINAL CANDIDATE LISTS.—
(A) SUBMISSION OF LISTS TO CONGRES-
SIONAL COMMITTEES.—No later than March 31
of each calendar year, the Trade Representative
shall submit to the appropriate Congressional
Committees the final candidate lists of those in-
dividuals selected by the Trade Representative
to be candidates eligible to serve on panels and
committees convened under chapter 19 during
the 1-year period beginning on April 1 of such
calendar year. An individual may be included on
a final candidate list only if such individual was
included in the preliminary candidate list or if
written notice of the addition of such individual
to the preliminary candidate list was submitted
to the appropriate Congressional Committees at
least 15 days before the date on which that
final candidate list is submitted to such Com-
mittees under this subparagraph.
(B) FINALITY OF LISTS.—Except as pro-
vided in subparagraph (C), no additions may be
200
made to the final candidate lists after the final
candidate lists are submitted to the appropriate
Congressional Committees under subparagraph
(A).
(C) AMENDMENT OF LISTS.—
(i) IN GENERAL.—If, after the Trade
Representative has submitted the final
candidate lists to the appropriate Congres-
sional Committees under subparagraph (A)
for a calendar year and before July 1 of
such calendar year, the Trade Representa-
tive determines that additional individuals
need to be added to a final candidate list,
the Trade Representative shall—
(I) request the interagency group
established under paragraph (2)(A) to
prepare a list of individuals who are
qualified to be added to such can-
didate list;
(II) select individuals from the
list prepared by the interagency group
under paragraph (2)(B)(ii) to be in-
cluded in a proposed amendment to
such final candidate list; and
201
(III) by no later than July 1 of
such calendar year, submit to the ap-
propriate Congressional Committees
the proposed amendments to such
final candidate list developed by the
Trade Representative under subclause
(II), along with the information de-
scribed in paragraph (3)(B)(ii).
(ii) CONSULTATION
WITH
CONGRES-
SIONAL
COMMITTEES.—Upon submission
of a proposed amendment under clause
(i)(III) to the appropriate Congressional
Committees, the Trade Representative
shall consult with the appropriate Congres-
sional Committees with regard to the indi-
viduals included in the proposed amend-
ment.
(iii) 
ADJUSTMENT
OF
PROPOSED
AMENDMENT.—The Trade Representative
may add and delete individuals from any
proposed amendment submitted under
clause (i)(III) after consulting with the ap-
propriate Congressional Committees with
regard to the additions and deletions. The
Trade Representative shall provide to the
202
appropriate 
Congressional 
Committees
written notice of any addition or deletion
of an individual from the proposed amend-
ment.
(iv) FINAL AMENDMENT.—
(I) IN GENERAL.—If the Trade
Representative submits under clause
(i)(III) in any calendar year a pro-
posed amendment to a final candidate
list, the Trade Representative shall,
no later than September 30 of such
calendar year, submit to the appro-
priate Congressional Committees the
final form of such amendment. On
October 1 of such calendar year, such
amendment shall take effect and, sub-
ject to subclause (II), the individuals
included in the final form of such
amendment shall be added to the final
candidate list.
(II) 
INCLUSION
OF
INDIVID-
UALS.—An individual may be included
in the final form of an amendment
submitted under subclause (I) only if
such individual was included in the
203
proposed form of such amendment or
if written notice of the addition of
such individual to the proposed form
of such amendment was submitted to
the appropriate Congressional Com-
mittees at least 15 days before the
date on which the final form of such
amendment is submitted to such Com-
mittees under subclause (I).
(III) ELIGIBILITY
FOR
SERV-
ICE.—Individuals added to a final
candidate list under subclause (I)
shall be eligible to serve on panels or
committees convened under chapter
19 during the 6-month period begin-
ning on October 1 of the calendar
year in which such addition occurs.
(IV) 
FINALITY
OF
AMEND-
MENT.—No additions may be made to
the final form of an amendment de-
scribed in subclause (I) after the final
form of such amendment is submitted
to 
the 
appropriate 
Congressional
Committees under subclause (I).
204
(5) TREATMENT OF RESPONSES.—For purposes
of applying section 1001 of title 18, United States
Code, the written or oral responses of individuals to
inquiries of the interagency group established under
paragraph (2)(A) or of the Trade Representative re-
garding their personal and professional qualifica-
tions, and financial and other relevant interests, that
bear on their suitability for the placements and ap-
pointments described in subsection (a)(1), shall be
treated as matters within the jurisdiction of an
agency of the United States.
(d) SELECTION AND APPOINTMENT.—
(1) AUTHORITY OF TRADE REPRESENTATIVE.—
The Trade Representative is the only officer of the
United States Government authorized to act on be-
half of the United States Government in making any
selection or appointment of an individual to—
(A) the rosters described in paragraph 1 of
Annex 1901.2 and paragraph 1 of Annex
1904.13; or
(B) the panels or committees convened
under chapter 19;
that is to be made solely or jointly by the United
States Government under the terms of the Agree-
ment.
205
(2) RESTRICTIONS
ON
SELECTION
AND
AP-
POINTMENT.—Except as provided in paragraph
(3)—
(A) the Trade Representative may—
(i) select an individual for placement
on the rosters described in paragraph 1 of
Annex 1901.2 and paragraph 1 of Annex
1904.13 during the 1-year period begin-
ning on April 1 of any calendar year;
(ii) appoint an individual to serve as
one of those members of any panel or com-
mittee convened under chapter 19 during
such 1-year period who, under the terms of
the Agreement, are to be appointed solely
by the United States Government; or
(iii) act to make a joint appointment
with the Government of a NAFTA coun-
try, under the terms of the Agreement, of
any individual who is a citizen or national
of the United States to serve as any other
member of such a panel or committee;
only if such individual is on the appropriate
final candidate list that was submitted to the
appropriate Congressional Committees under
subsection (c)(4)(A) during such calendar year
206
or on such list as it may be amended under
subsection (c)(4)(C)(iv)(I), or on the list sub-
mitted under subsection (b)(3) to the congres-
sional committees referred to in such sub-
section; and
(B) no individual may—
(i) be selected by the United States
Government for placement on the rosters
described in paragraph 1 of Annex 1901.2
and paragraph 1 of Annex 1904.13; or
(ii) be appointed solely or jointly by
the United States Government to serve as
a member of a panel or committee con-
vened under chapter 19;
during the 1-year period beginning on April 1
of any calendar year for which the Trade Rep-
resentative has not met the requirements of
subsection (a), and of subsection (b) or (c) (as
the case may be).
(3) EXCEPTIONS.—Notwithstanding subsection
(c)(3) (other than subparagraph (B)), (c)(4), or
paragraph (2)(A) of this subsection, individuals in-
cluded on the preliminary candidate lists submitted
to the appropriate Congressional Committees under
subsection (c)(3)(B) may—
207
(A) be selected by the Trade Representa-
tive for placement on the rosters described in
paragraph 1 of Annex 1901.2 and paragraph 1
of Annex 1904.13 during the 3-month period
beginning on the date on which the Agreement
enters into force with respect to the United
States; and
(B) be appointed solely or jointly by the
Trade Representative under the terms of the
Agreement to serve as members of panels or
committees that are convened under chapter 19
during such 3-month period.
(e) TRANSITION.—If the Agreement enters into force
between the United States and a NAFTA country after
January 3, 1994, the provisions of subsection (c) shall be
applied with respect to the calendar year in which such
entering into force occurs—
(1) by substituting ‘‘the date that is 30 days
after the date on which the Agreement enters into
force with respect to the United States’’ for ‘‘Janu-
ary 3 of each calendar year’’ in subsections
(c)(2)(B)(i) and (c)(3)(B)(i); and
(2) by substituting ‘‘the date that is 3 months
after the date on which the Agreement enters into
208
force with respect to the United States’’ for ‘‘March
31 of each calendar year’’ in subsection (c)(4)(A).
(f) IMMUNITY.—With the exception of acts described
in section 777(f)(3) of the Tariff Act of 1930 (19 U.S.C.
1677f(f)(3)), individuals serving on panels or committees
convened pursuant to chapter 19, and individuals des-
ignated to assist the individuals serving on such panels
or committees, shall be immune from suit and legal proc-
ess relating to acts performed by such individuals in their
official capacity and within the scope of their functions
as such panelists or committee members or assistants to
such panelists or committee members.
(g) REGULATIONS.—The administering authority
under title VII of the Tariff Act of 1930, the International
Trade Commission, and the Trade Representative may
promulgate such regulations as are necessary or appro-
priate to carry out actions in order to implement their re-
spective responsibilities under chapter 19. Initial regula-
tions to carry out such functions shall be issued before
the date on which the Agreement enters into force with
respect to the United States.
(h) REPORT TO CONGRESS.—At such time as the
final candidate lists are submitted under subsection
(c)(4)(A) and the final forms of amendments are submit-
ted under subsection (c)(4)(C)(iv), the Trade Representa-
209
tive shall submit to the Committee on the Judiciary and
the Committee on Ways and Means of the House of Rep-
resentatives, and to the Committee on Finance and the
Committee on the Judiciary of the Senate, a report re-
garding the efforts made to secure the participation of
judges and former judges on binational panels, extraor-
dinary challenge committees, and special committees es-
tablished under chapter 19.
SEC. 403. TESTIMONY AND PRODUCTION OF PAPERS IN EX-
TRAORDINARY CHALLENGES.
(a) AUTHORITY
OF EXTRAORDINARY CHALLENGE
COMMITTEE TO OBTAIN INFORMATION.—If an extraor-
dinary challenge committee (hereafter in this section re-
ferred to as the ‘‘committee’’) is convened under para-
graph 13 of article 1904, and the allegations before the
committee include a matter referred to in paragraph
13(a)(i) of article 1904, for the purposes of carrying out
its functions and duties under Annex 1904.13, the com-
mittee—
(1) shall have access to, and the right to copy,
any document, paper, or record pertinent to the sub-
ject matter under consideration, in the possession of
any individual, partnership, corporation, association,
organization, or other entity;
210
(2) may summon witnesses, take testimony, and
administer oaths;
(3) may require any individual, partnership,
corporation, association, organization, or other entity
to produce documents, books, or records relating to
the matter in question; and
(4) may require any individual, partnership,
corporation, association, organization, or other entity
to furnish in writing, in such detail and in such form
as the committee may prescribe, information in its
possession pertaining to the matter.
Any member of the committee may sign subpoenas, and
members of the committee, when authorized by the com-
mittee, may administer oaths and affirmations, examine
witnesses, take testimony, and receive evidence.
(b) WITNESSES AND EVIDENCE.—The attendance of
witnesses who are authorized to be summoned, and the
production of documentary evidence authorized to be or-
dered, under subsection (a) may be required from any
place in the United States at any designated place of hear-
ing. In the case of disobedience to a subpoena authorized
under subsection (a), the committee may request the At-
torney General of the United States to invoke the aid of
any district or territorial court of the United States in
requiring the attendance and testimony of witnesses and
211
the production of documentary evidence. Such court, with-
in the jurisdiction of which such inquiry is carried on,
may, in case of contumacy or refusal to obey a subpoena
issued to any individual, partnership, corporation, associa-
tion, organization, or other entity, issue an order requiring
such individual or entity to appear before the committee,
or to produce documentary evidence if so ordered or to
give evidence concerning the matter in question. Any fail-
ure to obey such order of the court may be punished by
such court as a contempt thereof.
(c) MANDAMUS.—Any court referred to in subsection
(b) shall have jurisdiction to issue writs of mandamus
commanding compliance with the provisions of this section
or any order of the committee made in pursuance thereof.
(d) DEPOSITIONS.—The committee may order testi-
mony to be taken by deposition at any stage of the com-
mittee review. Such deposition may be taken before any
person designated by the committee and having power to
administer oaths. Such testimony shall be reduced to writ-
ing by the person taking the deposition, or under the di-
rection of such person, and shall then be subscribed by
the deponent. Any individual, partnership, corporation, as-
sociation, organization, or other entity may be compelled
to appear and be deposed and to produce documentary evi-
dence in the same manner as witnesses may be compelled
212
to appear and testify and produce documentary evidence
before the committee, as provided in this section.
SEC. 404. REQUESTS FOR REVIEW OF DETERMINATIONS BY
COMPETENT INVESTIGATING AUTHORITIES
OF NAFTA COUNTRIES.
(a) DEFINITIONS.—As used in this section:
(1) COMPETENT INVESTIGATING AUTHORITY.—
The term ‘‘competent investigating authority’’
means the competent investigating authority, as de-
fined in article 1911, of a NAFTA country.
(2) UNITED
STATES
SECRETARY.—The term
‘‘United States Secretary’’ means that officer of the
United States referred to in article 1908.
(b) REQUESTS
FOR
REVIEW
BY
THE
UNITED
STATES.—In the case of a final determination of a com-
petent investigating authority, requests by the United
States for binational panel review of such determination
under article 1904 shall be made by the United States
Secretary.
(c) REQUESTS FOR REVIEW BY A PERSON.—In the
case of a final determination of a competent investigating
authority, a person, within the meaning of paragraph 5
of article 1904, may request a binational panel review of
such determination by filing such a request with the
United States Secretary within the time limit provided for
213
in paragraph 4 of article 1904. The receipt of such request
by the United States Secretary shall be deemed to be a
request for binational panel review within the meaning of
article 1904. The request for such panel review shall be
without prejudice to any challenge before a binational
panel of the basis for a particular request for review.
(d) SERVICE OF REQUEST FOR REVIEW.—Whenever
binational panel review of a final determination made by
a competent investigating authority is requested under
this section, the United States Secretary shall serve a copy
of the request on all persons who would otherwise be enti-
tled under the law of the importing country to commence
proceedings for judicial review of the determination.
SEC. 405. RULES OF PROCEDURE FOR PANELS AND COM-
MITTEES.
(a) RULES OF PROCEDURE FOR BINATIONAL PAN-
ELS.—The administering authority shall prescribe rules,
negotiated in accordance with paragraph 14 of article
1904, governing, with respect to binational panel re-
views—
(1) requests for such reviews, complaints, other
pleadings, and other papers;
(2) the amendment, filing, and service of such
pleadings and papers;
214
(3) the joinder, suspension, and termination of
such reviews; and
(4) other appropriate procedural matters.
(b) RULES OF PROCEDURE FOR EXTRAORDINARY
CHALLENGE COMMITTEES.—The administering authority
shall prescribe rules, negotiated in accordance with para-
graph 2 of Annex 1904.13, governing the procedures for
reviews by extraordinary challenge committees.
(c) RULES OF PROCEDURE FOR SAFEGUARDING THE
PANEL REVIEW SYSTEM.—The administering authority
shall prescribe rules, negotiated in accordance with Annex
1905.6, governing the procedures for special committees
described in such Annex.
(d) PUBLICATION OF RULES.—The rules prescribed
under subsections (a), (b), and (c) shall be published in
the Federal Register.
(e) ADMINISTERING AUTHORITY.—As used in this
section, the term ‘‘administering authority’’ has the mean-
ing given such term in section 771(1) of the Tariff Act
of 1930 (19 U.S.C. 1677(1)).
SEC. 406. SUBSIDY NEGOTIATIONS.
In the case of any trade agreement which may be en-
tered into by the President with a NAFTA country, the
negotiating objectives of the United States with respect
to subsidies shall include—
215
(1) achievement of increased discipline on do-
mestic subsidies provided by a foreign government,
including—
(A) the provision of capital, loans, or loan
guarantees on terms inconsistent with commer-
cial considerations;
(B) the provision of goods or services at
preferential rates;
(C) the granting of funds or forgiveness of
debt to cover operating losses sustained by a
specific industry; and
(D) the assumption of any costs or ex-
penses of manufacture, production, or distribu-
tion;
(2) achievement of increased discipline on ex-
port subsidies provided by a foreign government,
particularly with respect to agricultural products;
and
(3) maintenance of effective remedies against
subsidized imports, including, where appropriate,
countervailing duties.
SEC. 407. IDENTIFICATION OF INDUSTRIES FACING SUB-
SIDIZED IMPORTS.
(a) PETITIONS.—Any entity, including a trade asso-
ciation, firm, certified or recognized union, or group of
217
(b) IDENTIFICATION OF INDUSTRY.—Within 90 days
after receipt of a petition under subsection (a), the Trade
Representative, in consultation with the Secretary of Com-
merce, shall decide whether to identify the industry on the
basis that there is a reasonable likelihood that the industry
may face both the subsidization described in subsection
(a)(1) and the deterioration described in subsection (a)(2).
(c) ACTION AFTER IDENTIFICATION.—At the request
of an entity that is representative of an industry identified
under subsection (b), the Trade Representative shall—
(1) compile and make available to the industry
information under section 308 of the Trade Act of
1974;
(2) recommend to the President that an inves-
tigation by the International Trade Commission be
requested under section 332 of the Tariff Act of
1930; or
(3) take actions described in both paragraphs
(1) and (2).
The industry may request the Trade Representative to
take appropriate action to update (as often as annually)
any information obtained under paragraph (1) or (2), or
both, as the case may be, until an agreement on more ef-
fective rules and disciplines relating to government sub-
218
sidies is reached between the United States and the
NAFTA countries.
(d) INITIATION OF ACTION UNDER OTHER LAW.—
(1) IN
GENERAL.—The Trade Representative
and the Secretary of Commerce shall review infor-
mation obtained under subsection (c) and consult
with the industry identified under subsection (b)
with a view to deciding whether any action is appro-
priate—
(A) under section 301 of the Trade Act of
1974, including the initiation of an investiga-
tion under section 302(c) of that Act (in the
case of the Trade Representative); or
(B) under subtitle A of title VII of the
Tariff Act of 1930, including the initiation of
an investigation under section 702(a) of that
Act (in the case of the Secretary of Commerce).
(2) CRITERIA FOR INITIATION.—In determining
whether to initiate any investigation under section
301 of the Trade Act of 1974 or any other trade
law, other than title VII of the Tariff Act of 1930,
the Trade Representative, after consultation with
the Secretary of Commerce—
219
(A) shall seek the advice of the advisory
committees established under section 135 of the
Trade Act of 1974;
(B) shall consult with the Committee on
Finance of the Senate and the Committee on
Ways and Means of the House of Representa-
tives;
(C) shall coordinate with the interagency
organization established under section 242 of
the Trade Expansion Act of 1962; and
(D) may ask the President to request ad-
vice from the International Trade Commission.
(3) TITLE III ACTIONS.—In the event an inves-
tigation is initiated under section 302(c) of the
Trade Act of 1974 as a result of a review under this
subsection and the Trade Representative, following
such investigation (including any applicable dispute
settlement proceedings under the Agreement or any
other trade agreement), determines to take action
under section 301(a) of such Act, the Trade Rep-
resentative shall give preference to actions that most
directly affect the products that benefit from govern-
mental subsidies and were the subject of the inves-
tigation, unless there are no significant imports of
such products or the Trade Representative otherwise
220
determines that application of the action to other
products would be more effective.
(e) EFFECT OF DECISIONS.—Any decision, whether
positive or negative, or any action by the Trade Represent-
ative or the Secretary of Commerce under this section
shall not in any way—
(1) prejudice the right of any industry to file a
petition under any trade law;
(2) prejudice, affect, or substitute for, any pro-
ceeding, investigation, determination, or action by
the Secretary of Commerce, the International Trade
Commission, or the Trade Representative pursuant
to such a petition, or
(3) prejudice, affect, substitute for, or obviate
any proceeding, investigation, or determination
under section 301 of the Trade Act of 1974, title
VII of the Tariff Act of 1930, or any other trade
law.
(f) STANDING.—Nothing in this section may be con-
strued to alter in any manner the requirements in effect
before the date of the enactment of this Act for standing
under any law of the United States or to add any addi-
tional requirements for standing under any law of the
United States.
221
SEC. 408. TREATMENT OF AMENDMENTS TO ANTIDUMPING
AND COUNTERVAILING DUTY LAW.
Any amendment enacted after the Agreement enters
into force with respect to the United States that is made
to—
(1) section 303 or title VII of the Tariff Act of
1930, or any successor statute, or
(2) any other statute which—
(A) provides for judicial review of final de-
terminations under such section, title, or suc-
cessor statute, or
(B) indicates the standard of review to be
applied,
shall apply to goods from a NAFTA country only to the
extent specified in the amendment.
Subtitle B—Conforming
Amendments and Provisions
SEC. 411. JUDICIAL REVIEW IN ANTIDUMPING DUTY AND
COUNTERVAILING DUTY CASES.
Section 516A of the Tariff Act of 1930 (19 U.S.C.
1516a) is amended as follows:
(1) Subsection (a)(5) (relating to time limits for
commencing review) is amended to read as follows:
‘‘(5) TIME LIMITS IN CASES INVOLVING MER-
CHANDISE FROM FREE TRADE AREA COUNTRIES.—
Notwithstanding any other provision of this sub-
222
section, in the case of a determination to which the
provisions of subsection (g) apply, an action under
this subsection may not be commenced, and the time
limits for commencing an action under this sub-
section shall not begin to run, until the day specified
in whichever of the following subparagraphs applies:
‘‘(A) For a determination described in
paragraph (1)(B) or clause (i), (ii) or (iii) of
paragraph (2)(B), the 31st day after the date
on which notice of the determination is pub-
lished in the Federal Register.
‘‘(B) For a determination described in
clause (vi) of paragraph (2)(B), the 31st day
after the date on which the government of the
relevant FTA country receives notice of the de-
termination.
‘‘(C) For a determination with respect to
which binational panel review has commenced
in accordance with subsection (g)(8), the day
after the date as of which—
‘‘(i) the binational panel has dismissed
binational panel review of the determina-
tion for lack of jurisdiction, and
‘‘(ii) any interested party seeking re-
view of the determination under paragraph
223
(1), (2), or (3) of this subsection has pro-
vided 
timely 
notice 
under 
subsection
(g)(3)(B).
If such an interested party files a summons and
complaint under this subsection after dismissal
by the binational panel, and if a request for an
extraordinary challenge committee is made with
respect to the decision by the binational panel
to dismiss—
‘‘(I) judicial review under this sub-
section shall be stayed during consider-
ation by the committee of the request, and
‘‘(II) the United States Court of
International Trade shall dismiss the ac-
tion if the committee vacates or remands
the binational panel decision to dismiss.
‘‘(D) For a determination for which review
by the United States Court of International
Trade is provided for—
‘‘(i) under subsection (g)(12)(B), the
day after the date of publication in the
Federal Register of notice that article
1904 of the NAFTA has been suspended,
or
224
‘‘(ii) under subsection (g)(12)(D), the
day after the date that notice of settlement
is published in the Federal Register.’’.
(2) Subsection (b)(3) (relating to the standards
of review) is amended—
(A) by inserting ‘‘NAFTA OR’’ after ‘‘DECI-
SIONS BY’’ in the heading; and
(B) by inserting ‘‘of the NAFTA or’’ after
‘‘article 1904’’.
(3) Subsection (f) (relating to definitions) is
amended—
(A) by amending paragraphs (6) and (7)
to read as follows:
‘‘(6) UNITED STATES SECRETARY.—The term
‘United States Secretary’ means—
‘‘(A) the secretary for the United States
Section referred to in article 1908 of the
NAFTA, and
‘‘(B) the secretary of the United States
Section provided for in article 1909 of the
Agreement.
‘‘(7) RELEVANT
FTA
SECRETARY.—The term
‘relevant FTA Secretary’ means the Secretary—
‘‘(A) referred to in article 1908 of the
NAFTA, or
225
‘‘(B) provided for in paragraph 5 of article
1909 of the Agreement,
of the relevant FTA country.’’; and
(B) by adding at the end the following new
paragraphs:
‘‘(8) NAFTA.—The term ‘NAFTA’ means the
North American Free Trade Agreement.
‘‘(9) RELEVANT FTA COUNTRY.—The term ‘rel-
evant FTA country’ means the free trade area coun-
try to which an antidumping or countervailing duty
proceeding pertains.
‘‘(10) FREE TRADE AREA COUNTRY.—The term
‘free trade area country’ means the following:
‘‘(A) Canada for such time as the NAFTA
is in force with respect to, and the United
States applies the NAFTA to, Canada.
‘‘(B) Mexico for such time as the NAFTA
is in force with respect to, and the United
States applies the NAFTA to, Mexico.
‘‘(C) Canada for such time as—
‘‘(i) it is not a free trade area country
under subparagraph (A); and
‘‘(ii) the Agreement is in force with
respect to, and the United States applies
the Agreement to, Canada.’’.
226
(4) Subsection (g) (relating to review of coun-
tervailing and antidumping duty determinations) is
amended as follows:
(A) The subsection heading is amended by
striking out ‘‘CANADIAN MERCHANDISE’’ and
inserting ‘‘FREE TRADE AREA COUNTRY MER-
CHANDISE’’.
(B) Paragraph (1) is amended by striking
out ‘‘Canadian merchandise’’ and inserting
‘‘free trade area country merchandise’’.
(C) Paragraph (2) is amended by inserting
‘‘of the NAFTA or’’ after ‘‘article 1904’’.
(D) Paragraph (3)(A) is amended—
(i) by striking out ‘‘nor Canada’’ and
inserting ‘‘nor the relevant FTA country’’
in each of clauses (i) and (ii);
(ii) by inserting ‘‘of the NAFTA or’’
before ‘‘of the Agreement’’ in each of
clauses (i) and (iii);
(iii) by striking out ‘‘or’’ at the end of
clause (iii);
(iv) by amending clause (iv)—
(I) by striking out ‘‘under para-
graph (2)(A)’’; and
227
(II) by striking out the period
and inserting a comma; and
(v) by adding at the end of subpara-
graph (A) the following:
‘‘(v) a determination as to which bina-
tional panel review has terminated pursu-
ant to paragraph 12 of article 1905 of the
NAFTA, or
‘‘(vi) a determination as to which ex-
traordinary challenge committee review has
terminated pursuant to paragraph 12 of
article 1905 of the NAFTA.’’.
(E) The first and second sentences of
paragraph (3)(B) are amended to read as fol-
lows: ‘‘A determination described in subpara-
graph (A)(i) or (iv) is reviewable under sub-
section (a) only if the party seeking to com-
mence review has provided timely notice of its
intent to commence such review to—
‘‘(i) the United States Secretary and
the relevant FTA Secretary;
‘‘(ii) all interested parties who were
parties to the proceeding in connection
with which the matter arises; and
228
‘‘(iii) the administering authority or
the Commission, as appropriate.
Such notice is timely provided if the notice is
delivered no later than the date that is 20 days
after the date described in subparagraph (A) or
(B) of subsection (a)(5) that is applicable to
such determination, except that, if the time for
requesting binational panel review is suspended
under paragraph (8)(A)(ii) of this subsection,
any unexpired time for providing notice of in-
tent to commence judicial review shall, during
the pendency of any such suspension, also be
suspended.’’.
(F) Paragraph (4)(A) is amended—
(i) in the first sentence—
(I) by inserting ‘‘the North
American Free Trade Agreement Im-
plementation Act implementing the bi-
national dispute settlement system
under chapter 19 of the NAFTA, or’’
after ‘‘or amendment made by,’’;
(II) by inserting a comma before
‘‘violates’’;
(III) by inserting ‘‘only’’ after
‘‘may be brought’’; and
229
(IV) by inserting ‘‘, which shall
have jurisdiction of such action’’ after
‘‘Circuit’’; and
(ii) by striking the last sentence.
(G) Paragraph (5) is amended—
(i) by inserting ‘‘of the NAFTA or’’
after ‘‘article 1904’’ in each of subpara-
graphs (A), (B), and (C)(i);
(ii) by striking out ‘‘, the Canadian
Secretary,’’ in subparagraph (C)(ii) and in-
serting ‘‘, the relevant FTA Secretary,’’;
and
(iii) by inserting ‘‘of the NAFTA or’’
after 
‘‘chapter 
19’’ 
in 
subparagraph
(C)(iii).
(H) Paragraph (6) is amended by inserting
‘‘of the NAFTA or’’ after ‘‘article 1904’’.
(I) Paragraph (7) is amended—
(i) by inserting ‘‘OF THE NAFTA OR
THE AGREEMENT’’ before the period in the
paragraph heading;
(ii) by striking out ‘‘IN GENERAL.—’’
in the heading to subparagraph (A) and in-
serting ‘‘ACTION UPON REMAND.—’’; and
230
(iii) by inserting ‘‘the NAFTA or’’ be-
fore ‘‘the Agreement’’ in subparagraph
(A).
(J) Paragraph (8)(A) is amended—
(i) 
by 
inserting 
‘‘(i) 
GENERAL
RULE.—’’ before ‘‘An interested party’’;
(ii) by inserting ‘‘of the NAFTA or’’
after ‘‘article 1904(4)’’;
(iii) by indenting the text so as to
align it with new clause (ii) (as added by
clause (iv) of this subparagraph); and
(iv) by adding at the end the following
new clause:
‘‘(ii) SUSPENSION
OF
TIME
TO
RE-
QUEST BINATIONAL PANEL REVIEW UNDER
THE NAFTA.—Notwithstanding clause (i),
the time for requesting binational panel re-
view shall be suspended during the pend-
ency of any stay of binational panel review
that is issued pursuant to paragraph 11(a)
of article 1905 of the NAFTA.’’.
(K) Paragraph (8)(B)(ii) is amended by
striking out ‘‘Canadian Secretary,’’ and insert-
ing ‘‘relevant FTA Secretary,’’.
231
(L) Paragraph (8)(C) is amended by strik-
ing out ‘‘under article 1904 of the Agreement
of a determination’’ and inserting ‘‘of a deter-
mination under article 1904 of the NAFTA or
the Agreement’’.
(M) Paragraph (9) is amended by inserting
‘‘of the NAFTA or’’ after ‘‘chapter 19’’.
(N) Paragraph (10) is amended by striking
out ‘‘Government of Canada’’ and all that fol-
lows thereafter and inserting ‘‘Government of
the relevant FTA country received notice of the
determination under paragraph 4 of article
1904 of the NAFTA or the Agreement.’’.
(O) The following new paragraphs are
added at the end:
‘‘(11) SUSPENSION AND TERMINATION OF SUS-
PENSION OF ARTICLE 1904 OF THE NAFTA.—
‘‘(A) SUSPENSION OF ARTICLE 1904.—If a
special committee established under article
1905 of the NAFTA issues an affirmative find-
ing, the Trade Representative may, in accord-
ance with paragraph 8(a) or 9, as appropriate,
of article 1905 of the NAFTA, suspend the op-
eration of article 1904 of the NAFTA.
232
‘‘(B) TERMINATION
OF
SUSPENSION
OF
ARTICLE 1904.—If a special committee is recon-
vened and makes an affirmative determination
described in paragraph 10(b) of article 1905 of
the NAFTA, any suspension of the operation of
article 1904 of the NAFTA shall terminate.
‘‘(12) JUDICIAL
REVIEW
UPON
TERMINATION
OF
BINATIONAL
PANEL
OR
COMMITTEE
REVIEW
UNDER THE NAFTA.—
‘‘(A) NOTICE OF SUSPENSION OR TERMI-
NATION OF SUSPENSION OF ARTICLE 1904.—
‘‘(i) Upon notification by the Trade
Representative or the Government of a
country described in subsection (f)(10)(A)
or (B) that the operation of article 1904 of
the NAFTA has been suspended in accord-
ance with paragraph 8(a) or 9 of article
1905 of the NAFTA, the United States
Secretary shall publish in the Federal Reg-
ister a notice of suspension of article 1904
of the NAFTA.
‘‘(ii) Upon notification by the Trade
Representative or the Government of a
country described in subsection (f)(10)(A)
or (B) that the suspension of the operation
233
of article 1904 of the NAFTA is termi-
nated in accordance with paragraph 10 of
article 1905 of the NAFTA, the United
States Secretary shall publish in the Fed-
eral Register a notice of termination of
suspension of article 1904 of the NAFTA.
‘‘(B) TRANSFER
OF
FINAL
DETERMINA-
TIONS
FOR
JUDICIAL
REVIEW
UPON
SUSPEN-
SION OF ARTICLE 1904.—If the operation of ar-
ticle 1904 of the NAFTA is suspended in ac-
cordance with paragraph 8(a) or 9 of article
1905 of the NAFTA—
‘‘(i) upon the request of an authorized
person described in subparagraph (C), any
final determination that is the subject of a
binational panel review or an extraordinary
challenge committee review shall be trans-
ferred to the United States Court of Inter-
national Trade (in accordance with rules
issued by the Court) for review under sub-
section (a); or
‘‘(ii) in a case in which—
‘‘(I) a binational panel review
was completed fewer than 30 days be-
fore the suspension, and
234
‘‘(II) 
extraordinary 
challenge
committee review has not been re-
quested,
upon the request of an authorized person
described in subparagraph (C) which is
made within 60 days after the completion
of the binational panel review, the final de-
termination that was the subject of the bi-
national panel review shall be transferred
to the United States Court of International
Trade (in accordance with rules issued by
the Court) for review under subsection (a).
‘‘(C) PERSONS AUTHORIZED TO REQUEST
TRANSFER OF FINAL DETERMINATIONS FOR JU-
DICIAL REVIEW.—A request that a final deter-
mination be transferred to the Court of Inter-
national Trade under subparagraph (B) may be
made by—
‘‘(i) if the United States made an alle-
gation under paragraph 1 of article 1905
of the NAFTA and the operation of article
1904 of the NAFTA was suspended pursu-
ant to paragraph 8(a) of article 1905 of
the NAFTA—
235
‘‘(I) the government of the rel-
evant country described in subsection
(f)(10)(A) or (B),
‘‘(II) an interested party that
was a party to the panel or committee
review, or
‘‘(III) an interested party that
was a party to the proceeding in con-
nection with which panel review was
requested, but only if the time period
for filing notices of appearance in the
panel review has not expired, or
‘‘(ii) if a country described in sub-
section (f)(10)(A) or (B) made an allega-
tion under paragraph 1 of article 1905 of
the NAFTA and the operation of article
1904 of the NAFTA was suspended pursu-
ant to paragraph 9 of article 1905 of the
NAFTA—
‘‘(I) the government of that
country,
‘‘(II) an interested party that is
a person of that country and that was
a party to the panel or committee re-
view, or
236
‘‘(III) an interested party that is
a person of that country and that was
a party to the proceeding in connec-
tion with which panel review was re-
quested, but only if the time period
for filing notices of appearance in the
panel review has not expired.
‘‘(D)(i) TRANSFER FOR JUDICIAL REVIEW
UPON SETTLEMENT.—If the Trade Representa-
tive achieves a settlement with the government
of a country described in subsection (f)(10)(A)
or (B) pursuant to paragraph 7 of article 1905
of the NAFTA, and referral for judicial review
is among the terms of such settlement, any
final determination that is the subject of a bi-
national panel review or an extraordinary chal-
lenge committee review shall, upon a request
described in clause (ii), be transferred to the
United States Court of International Trade (in
accordance with rules issued by the Court) for
review under subsection (a).
‘‘(ii) A request referred to in clause (i) is
a request made by—
‘‘(I) the country referred to in clause
(i),
237
‘‘(II) an interested party that was a
party to the panel or committee review, or
‘‘(III) an interested party that was a
party to the proceeding in connection with
which panel review was requested, but only
if the time for filing notices of appearance
in the panel review has not expired.’’.
SEC. 412. CONFORMING AMENDMENTS TO OTHER PROVI-
SIONS OF THE TARIFF ACT OF 1930.
(a) REGULATIONS FOR APPRAISEMENT AND CLASSI-
FICATION; FINALITY
AND DECISION.—Sections 502(b)
and 514(b) of the Tariff Act of 1930 (19 U.S.C. 1502(b)
and 1514(b)) are each amended by inserting ‘‘the North
American Free Trade Agreement or’’ before ‘‘the United
States-Canada Free-Trade Agreement’’.
(b) DEFINITION.—Section 771 of the Tariff Act of
1930 (19 U.S.C. 1677) is amended—
(1) by redesignating as paragraph (21) (and
placing in numerical sequence) the second paragraph
that is designated as paragraph (18) (relating to the
definition of the United States-Canada Agreement)
in such section; and
(2) by inserting after paragraph (21) (as redes-
ignated by paragraph (1) of this subsection) the fol-
lowing new paragraph:
238
‘‘(22) NAFTA.—The term ‘NAFTA’ means the
North American Free Trade Agreement.’’.
(c) DISCLOSURE OF PROPRIETARY INFORMATION IN
TITLE VII PROCEEDINGS.—Section 777(f) of the Tariff
Act of 1930 (19 U.S.C. 1677f(f)) is amended—
(1) by inserting ‘‘THE NORTH AMERICAN FREE
TRADE
AGREEMENT
OR’’ before ‘‘THE
UNITED
STATES-CANADA AGREEMENT’’ in the heading;
(2) by inserting ‘‘the NAFTA or’’ before ‘‘the
United States-Canada Agreement’’ each place it ap-
pears in paragraph (1)(A);
(3) in the second sentence of paragraph
(1)(A)—
(A) by inserting ‘‘or extraordinary chal-
lenge committee’’ after ‘‘binational panel’’; and
(B) by inserting ‘‘or committee’’ after ‘‘the
panel’’;
(4) in paragraph (1)(B)—
(A) by inserting ‘‘the NAFTA or’’ before
‘‘the Agreement’’ in clauses (iii) and (iv); and
(B) by striking out ‘‘Government of Can-
ada designated by an authorized agency of Can-
ada’’ in clause (iv) and inserting ‘‘Government
of a free trade area country (as defined in sec-
239
tion 516A(f)(10)) designated by an authorized
agency of such country’’;
(5) in paragraph (2) by inserting ‘‘, including
any extraordinary challenge,’’ after ‘‘binational panel
proceeding’’;
(6) in paragraph (3)—
(A) by inserting ‘‘or extraordinary chal-
lenge committee’’ after ‘‘binational panel’’, and
(B) by inserting ‘‘the NAFTA or’’ before
‘‘the United States-Canada Agreement’’;
(7) by striking out ‘‘agency of Canada’’ in each
of paragraphs (3) and (4) and inserting ‘‘agency of
a free trade area country (as defined in section
516A(f)(10))’’; and
(8) in the first sentence of paragraph (4) by in-
serting ‘‘, except a judge appointed to a binational
panel or an extraordinary challenge committee under
section 402(b) of the North American Free Trade
Agreement Implementation Act,’’ after ‘‘Any per-
son’’.
SEC. 413. CONSEQUENTIAL AMENDMENT TO FREE-TRADE
AGREEMENT ACT OF 1988.
Section 410(a) of the United States-Canada Free-
Trade Agreement Implementation Act of 1988 (19 U.S.C.
2112 note) is amended by adding at the end the following
240
new sentence: ‘‘In calculating the 7-year period referred
to in paragraph (1), any time during which Canada is a
NAFTA country (as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act)
shall be disregarded.’’.
SEC. 414. CONFORMING AMENDMENTS TO TITLE 28, UNITED
STATES CODE.
(a) COURT OF INTERNATIONAL TRADE.—Chapter 95
of title 28, United States Code, is amended—
(1) in section 1581(i) by inserting ‘‘the North
American Free Trade Agreement or’’ before ‘‘the
United States-Canada Free-Trade Agreement’’;
(2) in section 1584—
(A) by amending the section heading to
read as follows:
‘‘§ 1584. Civil actions under the North American Free
Trade Agreement or the United States-
Canada Free-Trade Agreement’’; and
(B) by striking out ‘‘777(d)’’ and inserting
‘‘777(f)’’; and
(3) in the table of contents for such chapter by
amending the entry for section 1584 to read as fol-
lows:
‘‘1584. Civil actions under the North American Free Trade Agreement or the
United States-Canada Free-Trade Agreement.’’.
241
(b) PARTICULAR PROCEEDINGS.—Sections 2201(a)
and 2643(c)(5) of title 28, United States Code, are each
amended by striking out ‘‘Canadian merchandise,’’ and in-
serting ‘‘merchandise of a free trade area country (as de-
fined in section 516A(f)(10) of the Tariff Act of 1930),’’.
SEC. 415. EFFECT OF TERMINATION OF NAFTA COUNTRY
STATUS.
(a) IN GENERAL.—Except as provided in subsection
(b), on the date on which a country ceases to be a NAFTA
country, the provisions of this title (other than this sec-
tion) and the amendments made by this title shall cease
to have effect with respect to that country.
(b) TRANSITION PROVISIONS.—
(1) PROCEEDINGS REGARDING PROTECTIVE OR-
DERS AND UNDERTAKINGS.—If on the date on which
a country ceases to be a NAFTA country an inves-
tigation or enforcement proceeding concerning the
violation of a protective order issued under section
777(f) of the Tariff Act of 1930 (as amended by
this subtitle) or an undertaking of the Government
of that country is pending, the investigation or pro-
ceeding shall continue, and sanctions may continue
to be imposed, in accordance with the provisions of
such section 777(f).
242
(2) BINATIONAL PANEL AND EXTRAORDINARY
CHALLENGE COMMITTEE REVIEWS.—If on the date
on which a country ceases to be a NAFTA coun-
try—
(A) a binational panel review under article
1904 of the Agreement is pending, or has been
requested; or
(B) an extraordinary challenge committee
review under article 1904 of the Agreement is
pending, or has been requested;
with respect to a determination which involves a
class or kind of merchandise and to which section
516A(g)(2) of the Tariff Act of 1930 applies, such
determination shall be reviewable under section
516A(a) of the Tariff Act of 1930. In the case of
a determination to which the provisions of this para-
graph apply, the time limits for commencing an ac-
tion under 516A(a) of the Tariff Act of 1930 shall
not begin to run until the date on which the Agree-
ment ceases to be in force with respect to that coun-
try.
SEC. 416. EFFECTIVE DATE.
The provisions of this title and the amendments made
by this title take effect on the date the Agreement enters
243
into force with respect to the United States, but shall not
apply—
(1) to any final determination described in
paragraph (1)(B), or (2)(B)(i), (ii), or (iii), of sec-
tion 516A(a) of the Tariff Act of 1930 notice of
which is published in the Federal Register before
such date, or to a determination described in para-
graph (2)(B)(vi) of section 516A(a) of such Act no-
tice of which is received by the Government of Can-
ada or Mexico before such date; or
(2) to any binational panel review under the
United States-Canada Free-Trade Agreement, or
any extraordinary challenge arising out of any such
review, that was commenced before such date.
TITLE V—NAFTA TRANSITIONAL
ADJUSTMENT 
ASSISTANCE
AND OTHER PROVISIONS
Subtitle A—NAFTA Transitional
Adjustment Assistance Program
SEC. 501. SHORT TITLE.
This subtitle may be cited as the ‘‘NAFTA Worker
Security Act’’.
244
SEC. 502. ESTABLISHMENT OF NAFTA TRANSITIONAL AD-
JUSTMENT ASSISTANCE PROGRAM.
Chapter 2 of title II of the Trade Act of 1974 (19
U.S.C. 2271 et seq.) is amended by adding at the end
the following new subchapter:
‘‘Subchapter D—NAFTA Transitional
Adjustment Assistance Program
‘‘SEC. 250. ESTABLISHMENT OF TRANSITIONAL PROGRAM.
‘‘(a) GROUP ELIGIBILITY REQUIREMENTS.—
‘‘(1) CRITERIA.—A group of workers (including
workers in any agricultural firm or subdivision of an
agricultural firm) shall be certified as eligible to
apply for adjustment assistance under this sub-
chapter pursuant to a petition filed under subsection
(b) if the Secretary determines that a significant
number or proportion of the workers in such work-
ers’ firm or an appropriate subdivision of the firm
have become totally or partially separated, or are
threatened to become totally or partially separated,
and either—
‘‘(A) that—
‘‘(i) the sales or production, or both,
of such firm or subdivision have decreased
absolutely,
‘‘(ii) imports from Mexico or Canada
of articles like or directly competitive with
245
articles produced by such firm or subdivi-
sion have increased, and
‘‘(iii) the increase in imports under
clause (ii) contributed importantly to such
workers’ separation or threat of separation
and to the decline in the sales or produc-
tion of such firm or subdivision; or
‘‘(B) that there has been a shift in produc-
tion by such workers’ firm or subdivision to
Mexico or Canada of articles like or directly
competitive with articles which are produced by
the firm or subdivision.
‘‘(2) DEFINITION
OF
CONTRIBUTED
IMPOR-
TANTLY.—The term ‘contributed importantly’, as
used in paragraph (1)(A)(iii), means a cause which
is important but not necessarily more important
than any other cause.
‘‘(3) REGULATIONS.—The Secretary shall issue
regulations relating to the application of the criteria
described in paragraph (1) in making preliminary
findings under subsection (b) and determinations
under subsection (c).
‘‘(b) PRELIMINARY FINDINGS AND BASIC ASSIST-
ANCE.—
246
‘‘(1) FILING OF PETITIONS.—A petition for cer-
tification of eligibility to apply for adjustment assist-
ance under this subchapter may be filed by a group
of workers (including workers in any agricultural
firm or subdivision of an agricultural firm) or by
their certified or recognized union or other duly au-
thorized representative with the Governor of the
State in which such workers’ firm or subdivision
thereof is located.
‘‘(2) FINDINGS
AND
ASSISTANCE.—Upon re-
ceipt of a petition under paragraph (1), the Gov-
ernor shall—
‘‘(A) notify the Secretary that the Gov-
ernor has received the petition;
‘‘(B) within 10 days after receiving the pe-
tition—
‘‘(i) make a preliminary finding as to
whether the petition meets the criteria de-
scribed in subsection (a)(1) (and for pur-
poses of this clause the criteria described
under subparagraph (A)(iii) of such sub-
section shall be disregarded), and
‘‘(ii) transmit the petition, together
with a statement of the finding under
247
clause (i) and reasons therefor, to the Sec-
retary for action under subsection (c); and
‘‘(C) if the preliminary finding under sub-
paragraph (B)(i) is affirmative, ensure that
rapid response and basic readjustment services
authorized under other Federal law are made
available to the workers.
‘‘(c) REVIEW OF PETITIONS BY SECRETARY; CER-
TIFICATIONS.—
‘‘(1) IN GENERAL.—The Secretary, within 30
days after receiving a petition under subsection (b),
shall determine whether the petition meets the cri-
teria described in subsection (a)(1). Upon a deter-
mination that the petition meets such criteria, the
Secretary shall issue to workers covered by the peti-
tion a certification of eligibility to apply for assist-
ance described in subsection (d).
‘‘(2) DENIAL OF CERTIFICATION.—Upon denial
of certification with respect to a petition under para-
graph (1), the Secretary shall review the petition in
accordance with the requirements of subchapter A to
determine if the workers may be certified under such
subchapter.
‘‘(d) COMPREHENSIVE ASSISTANCE.—Workers cov-
ered by certification issued by the Secretary under sub-
248
section (c) shall be provided, in the same manner and to
the same extent as workers covered under a certification
under subchapter A, the following:
‘‘(1) Employment services described in section
235.
‘‘(2) Training described in section 236, except
that notwithstanding the provisions of section
236(a)(2)(A), the total amount of payments for
training under this subchapter for any fiscal year
shall not exceed $30,000,000.
‘‘(3) Trade readjustment allowances described
in sections 231 through 234, except that—
‘‘(A) 
the 
provisions 
of 
sections
231(a)(5)(C) and 231(c), authorizing the pay-
ment of trade readjustment allowances upon a
finding that it is not feasible or appropriate to
approve a training program for a worker, shall
not be applicable to payment of such allowances
under this subchapter; and
‘‘(B) notwithstanding the provisions of sec-
tion 233(b), in order for a worker to qualify for
trade readjustment allowances under this sub-
chapter, the worker shall be enrolled in a train-
ing program approved by the Secretary under
section 236(a) by the later of—
249
‘‘(i) the last day of the 16th week of
such worker’s initial unemployment com-
pensation benefit period, or
‘‘(ii) the last day of the 6th week after
the week in which the Secretary issues a
certification covering such worker.
In cases of extenuating circumstances relating to en-
rollment in a training program, the Secretary may
extend the time for enrollment for a period not to
exceed 30 days .
‘‘(4) Job search allowances described in section
237.
‘‘(5) Relocation allowances described in section
238.
‘‘(e) ADMINISTRATION.—The provisions of sub-
chapter C shall apply to the administration of the program
under this subchapter in the same manner and to the
same extent as such provisions apply to the administration
of the program under subchapters A and B, except that
the agreement between the Secretary and the States de-
scribed in section 239 shall specify the procedures that
will be used to carry out the certification process under
subsection (c) and the procedures for providing relevant
data by the Secretary to assist the States in making pre-
liminary findings under subsection (b).’’.
250
SEC. 503. CONFORMING AMENDMENTS.
(a) REFERENCES.—Sections 221(a), 222(a), and
223(a) of the Trade Act of 1974 (19 U.S.C. 2271(a),
2272(a), and 2273(a)) are each amended by striking out
‘‘assistance under this chapter’’ and inserting ‘‘assistance
under this subchapter’’.
(b) BENEFIT INFORMATION.—Section 225(b) of the
Trade Act of 1974 (19 U.S.C. 2275(b)) is amended by
inserting ‘‘or subchapter D’’ after ‘‘subchapter A’’ each
place it appears.
(c) NONDUPLICATION OF ASSISTANCE.—Subchapter
C of chapter 2 of title II of the Trade Act of 1974 is
amended by adding at the end the following new section:
‘‘SEC. 249A. NONDUPLICATION OF ASSISTANCE.
‘‘No worker may receive assistance relating to a sepa-
ration pursuant to certifications under both subchapters
A and D of this chapter.’’.
(d) JUDICIAL REVIEW.—Section 284(a) of the Trade
Act of 1974 (19 U.S.C. 2395(a)) is amended by inserting
‘‘or section 250(c)’’ after ‘‘section 223’’.
(e) TABLE OF CONTENTS.—The table of contents for
chapter 2 of title II of the Trade Act of 1974 is amend-
ed—
(1) by inserting after the item relating to sec-
tion 249 the following new item:
‘‘Sec. 249A. Nonduplication of assistance.’’;
251
and
(2) by adding at the end thereof the following
new items:
‘‘SUBCHAPTER D—NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM
‘‘Sec. 250. Establishment of transitional program.’’.
SEC. 504. AUTHORIZATION OF APPROPRIATIONS.
Section 245 of the Trade Act of 1974 (19 U.S.C.
2317) is amended—
(1) by striking ‘‘There’’ and inserting ‘‘(a) IN
GENERAL.—There’’,
(2) by inserting ‘‘, other than subchapter D’’
after ‘‘chapter’’, and
(3) by adding at the end the following new sub-
section:
‘‘(b) SUBCHAPTER D.—There are authorized to be
appropriated to the Department of Labor, for each of fis-
cal years 1994, 1995, 1996, 1997, and 1998, such sums
as may be necessary to carry out the purposes of sub-
chapter D of this chapter.’’.
SEC. 505. TERMINATION OF TRANSITION PROGRAM.
Subsection (c) of section 285 of the Trade Act of
1974 (19 U.S.C. 2271 preceding note) is amended—
(1) by striking ‘‘No’’ and inserting ‘‘(1) Except
as provided in paragraph (2), no’’; and
(2) by adding at the end the following new
paragraph:
252
‘‘(2)(A) Except as provided in subparagraph (B), no
assistance, vouchers, allowances, or other payments may
be provided under subchapter D of chapter 2 after the
day that is the earlier of—
‘‘(i) September 30, 1998, or
‘‘(ii) the date on which legislation, establishing
a program providing dislocated workers with com-
prehensive assistance substantially similar to the as-
sistance provided by such subchapter D, becomes ef-
fective.
‘‘(B) Notwithstanding subparagraph (A), if, on or be-
fore the day described in subparagraph (A), a worker—
‘‘(i) is certified as eligible to apply for assist-
ance, under subchapter D of chapter 2; and
‘‘(ii) is otherwise eligible to receive assistance in
accordance with section 250,
such worker shall continue to be eligible to receive such
assistance for any week for which the worker meets the
eligibility requirements of such section.’’.
SEC. 506. EFFECTIVE DATE.
(a) IN GENERAL.—The amendments made by sec-
tions 501, 502, 503, 504, and 505 shall take effect on
the date the Agreement enters into force with respect to
the United States.
(b) COVERED WORKERS.—
253
(1) GENERAL
RULE.—Except as provided in
paragraph (2), no worker shall be certified as eligi-
ble to receive assistance under subchapter D of
chapter 2 of title II of the Trade Act of 1974 (as
added by this subtitle) whose last total or partial
separation from a firm (or appropriate subdivision of
a firm) occurred before such date of entry into force.
(2) REACHBACK.—Notwithstanding paragraph
(1), any worker—
(A) whose last total or partial separation
from a firm (or appropriate subdivision of a
firm) occurs—
(i) after the date of the enactment of
this Act, and
(ii) before such date of entry into
force, and
(B) who would otherwise be eligible to re-
ceive assistance under subchapter D of chapter
2 of title II of the Trade Act of 1974,
shall be eligible to receive such assistance in the
same manner as if such separation occurred on or
after such date of entry into force.
254
SEC. 507. TREATMENT OF SELF-EMPLOYMENT ASSISTANCE
PROGRAMS.
(a) GENERAL RULE.—Section 3306 of the Internal
Revenue Code of 1986 is amended by adding at the end
the following new subsection:
‘‘(t) SELF-EMPLOYMENT ASSISTANCE PROGRAM.—
For the purposes of this chapter, the term ‘self-employ-
ment assistance program’ means a program under
which—
‘‘(1) individuals who meet the requirements de-
scribed in paragraph (3) are eligible to receive an al-
lowance in lieu of regular unemployment compensa-
tion under the State law for the purpose of assisting
such individuals in establishing a business and be-
coming self-employed;
‘‘(2) the allowance payable to individuals pursu-
ant to paragraph (1) is payable in the same amount,
at the same interval, on the same terms, and subject
to the same conditions, as regular unemployment
compensation under the State law, except that—
‘‘(A) State requirements relating to avail-
ability for work, active search for work, and re-
fusal to accept work are not applicable to such
individuals;
‘‘(B) State requirements relating to dis-
qualifying income are not applicable to income
255
earned from self-employment by such individ-
uals; and
‘‘(C) such individuals are considered to be
unemployed for the purposes of Federal and
State laws applicable to unemployment com-
pensation,
as long as such individuals meet the requirements
applicable under this subsection;
‘‘(3) individuals may receive the allowance
described in paragraph (1) if such individuals—
‘‘(A) are eligible to receive regular unem-
ployment compensation under the State law, or
would be eligible to receive such compensation
except for the requirements described in sub-
paragraph (A) or (B) of paragraph (2);
‘‘(B) are identified pursuant to a State
worker profiling system as individuals likely to
exhaust regular unemployment compensation;
and
‘‘(C) are participating in self-employment
assistance activities which—
‘‘(i) include entrepreneurial training,
business counseling, and technical assist-
ance; and
256
‘‘(ii) are approved by the State agen-
cy; and
‘‘(D) are actively engaged on a full-time
basis in activities (which may include training)
relating to the establishment of a business and
becoming self-employed;
‘‘(4) the aggregate number of individuals receiv-
ing the allowance under the program does not at any
time exceed 5 percent of the number of individuals
receiving regular unemployment compensation under
the State law at such time;
‘‘(5) the program does not result in any cost to
the Unemployment Trust Fund (established by sec-
tion 904(a) of the Social Security Act) in excess of
the cost that would be incurred by such State and
charged to such Fund if the State had not partici-
pated in such program; and
‘‘(6) the program meets such other require-
ments as the Secretary of Labor determines to be
appropriate.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 3304(a)(4) of such Code is amend-
ed—
(A) in subparagraph (D), by striking ‘‘;
and’’ and inserting a semicolon;
257
(B) in subparagraph (E), by striking the
semicolon and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(F) amounts may be withdrawn for the
payment of allowances under a self-employment
assistance program (as defined in section
3306(t));’’.
(2) Section 3306(f) of such Code is amended—
(A) in paragraph (3), by striking ‘‘; and’’
and inserting a semicolon;
(B) in paragraph (4), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following new
paragraph:
‘‘(5) amounts may be withdrawn for the pay-
ment of allowances under a self-employment assist-
ance program (as defined in subsection (t)).’’.
(3) Section 303(a)(5) of the Social Security Act
(42 U.S.C. 503(a)(5)) is amended by striking ‘‘;
and’’ and inserting ‘‘: Provided further, That
amounts may be withdrawn for the payment of al-
lowances under a self-employment assistance pro-
gram (as defined in section 3306(t) of the Internal
Revenue Code of 1986); and’’.
258
(c) STATE REPORTS.—Any State operating a self-em-
ployment program authorized by the Secretary of Labor
under this section shall report annually to the Secretary
on the number of individuals who participate in the self-
employment assistance program, the number of individ-
uals who are able to develop and sustain businesses, the
operating costs of the program, compliance with program
requirements, and any other relevant aspects of program
operations requested by the Secretary.
(d) REPORT TO CONGRESS.—Not later than 4 years
after the date of the enactment of this Act, the Secretary
of Labor shall submit a report to the Congress with re-
spect to the operation of the program authorized under
this section. Such report shall be based on the reports re-
ceived from the States pursuant to subsection (c) and in-
clude such other information as the Secretary of Labor
determines is appropriate.
(e) EFFECTIVE DATE; SUNSET.—
(1) EFFECTIVE DATE.—The provisions of this
section and the amendments made by this section
shall take effect on the date of the enactment of this
Act.
(2) SUNSET.—The authority provided by this
section, and the amendments made by this section,
259
shall terminate 5 years after the date of the enact-
ment of this Act.
Subtitle B—Provisions Relating to
Performance Under the Agreement
SEC. 511. DISCRIMINATORY TAXES.
It is the sense of the Congress that when a State,
province, or other governmental entity of a NAFTA coun-
try discriminatorily enforces sales or other taxes so as to
afford protection to domestic production or domestic serv-
ice providers, such enforcement is in violation of the terms
of the Agreement. When such discriminatory enforcement
adversely affects United States producers of goods or
United States service providers, the Trade Representative
should pursue all appropriate remedies to obtain removal
of such discriminatory enforcement, including invocation
of the provisions of the Agreement.
SEC. 512. REVIEW OF THE OPERATION AND EFFECTS OF
THE AGREEMENT.
(a) STUDY.—By not later than July 1, 1997, the
President shall provide to the Congress a comprehensive
study on the operation and effects of the Agreement. The
study shall include an assessment of the following factors:
(1) The net effect of the Agreement on the
economy of the United States, including with respect
260
to the United States gross national product, employ-
ment, balance of trade, and current account balance.
(2) The industries (including agricultural indus-
tries) in the United States that have significantly in-
creased exports to Mexico or Canada as a result of
the Agreement, or in which imports into the United
States from Mexico or Canada have increased sig-
nificantly as a result of the Agreement, and the ex-
tent of any change in the wages, employment, or
productivity in each such industry as a result of the
Agreement.
(3) The extent to which investment in new or
existing production or other operations in the United
States has been redirected to Mexico as a result of
the Agreement, and the effect on United States em-
ployment of such redirection.
(4) The extent of any increase in investment,
including foreign direct investment and increased in-
vestment by United States investors, in new or exist-
ing production or other operations in the United
States as a result of the Agreement, and the effect
on United States employment of such investment.
(5) The extent to which the Agreement has con-
tributed to—
261
(A) improvement in real wages and work-
ing conditions in Mexico,
(B) effective enforcement of labor and en-
vironmental laws in Mexico, and
(C) the reduction or abatement of pollution
in the region of the United States-Mexico bor-
der.
(b) SCOPE.—In assessing the factors listed in sub-
section (a), to the extent possible, the study shall distin-
guish between the consequences of the Agreement and
events that likely would have occurred without the Agree-
ment. In addition, the study shall evaluate the effects of
the Agreement relative to aggregate economic changes
and, to the extent possible, relative to the effects of other
factors, including—
(1) international competition,
(2) reductions in defense spending,
(3) the shift from traditional manufacturing to
knowledge and information based economic activity,
and
(4) the Federal debt burden.
(c) RECOMMENDATIONS OF THE PRESIDENT.—The
study shall include any appropriate recommendations by
the President with respect to the operation and effects of
262
the Agreement, including recommendations with respect to
the specific factors listed in subsection (a).
(d) RECOMMENDATIONS
OF
CERTAIN
COMMIT-
TEES.—The President shall provide the study to the Com-
mittee on Ways and Means of the House of Representa-
tives and the Committee on Finance of the Senate and
any other committee that has jurisdiction over any provi-
sion of United States law that was either enacted or
amended by the North American Free Trade Agreement
Implementation Act. Each such committee may hold hear-
ings and make recommendations to the President with re-
spect to the operation and effects of the Agreement.
SEC. 513. ACTIONS AFFECTING UNITED STATES CULTURAL
INDUSTRIES.
Section 182 of the Trade Act of 1974 (19 U.S.C.
2242) is amended by adding at the end the following new
subsection:
‘‘(f) SPECIAL RULE FOR ACTIONS AFFECTING UNIT-
ED STATES CULTURAL INDUSTRIES.—
‘‘(1) IN GENERAL.—By no later than the date
that is 30 days after the date on which the annual
report is submitted to Congressional committees
under section 181(b), the Trade Representative shall
identify any act, policy, or practice of Canada
which—
263
‘‘(A) affects cultural industries,
‘‘(B) is adopted or expanded after Decem-
ber 17, 1992, and
‘‘(C) is actionable under article 2106 of
the North American Free Trade Agreement.
‘‘(2) SPECIAL RULES FOR IDENTIFICATIONS.—
For purposes of section 302(b)(2)(A), an act, policy,
or practice identified under this subsection shall be
treated as an act, policy, or practice that is the basis
for identification of a country under subsection
(a)(2), unless the United States has already taken
action pursuant to article 2106 of the North Amer-
ican Free Trade Agreement in response to such act,
policy, or practice. In deciding whether to identify
an act, policy, or practice under paragraph (1), the
Trade Representative shall—
‘‘(A) consult with and take into account
the views of representatives of the relevant do-
mestic industries, appropriate committees es-
tablished pursuant to section 135, and appro-
priate officers of the Federal Government, and
‘‘(B) take into account the information
from such sources as may be available to the
Trade Representative and such information as
may be submitted to the Trade Representative
264
by interested persons, including information
contained in reports submitted under section
181(b).
‘‘(3) CULTURAL INDUSTRIES.—For purposes of
this subsection, the term ‘cultural industries’ means
persons engaged in any of the following activities:
‘‘(A) The publication, distribution, or sale
of books, magazines, periodicals, or newspapers
in print or machine readable form but not in-
cluding the sole activity of printing or type-
setting any of the foregoing.
‘‘(B) The production, distribution, sale, or
exhibition of film or video recordings.
‘‘(C) The production, distribution, sale, or
exhibition of audio or video music recordings.
‘‘(D) The publication, distribution, or sale
of music in print or machine readable form.
‘‘(E) Radio communications in which the
transmissions are intended for direct reception
by the general public, and all radio, television,
and cable broadcasting undertakings and all
satellite programming and broadcast network
services.’’.
266
(b) TRADE REPRESENTATIVE REPORT.—No later
than July 1, 1995, and annually thereafter through 1999,
the Trade Representative shall submit a report to the
Committee on Finance of the Senate and the Committee
on Ways and Means of the House of Representatives on
how effective the provisions of the Agreement are with re-
spect to increasing United States exports of motor vehicles
and motor vehicle parts to Mexico. Each report shall iden-
tify and determine the following:
(1) The patterns of trade in motor vehicles and
motor vehicle parts between the United States and
Mexico during the preceding 12-month period.
(2) The level of tariff and nontariff barriers
that were in force during the preceding 12-month
period.
(3) The amount by which United States exports
of motor vehicles and motor vehicle parts to Mexico
have increased from the preceding 12-month period
as a result of the elimination of Mexican tariff and
nontariff barriers under the Agreement.
(4) Whether any such increase in United States
exports meets the levels of new export opportunities
anticipated under the Agreement.
(5) If the anticipated levels of new United
States export opportunities are not reached, what
267
actions the Trade Representative is prepared to take
to realize the benefits anticipated under the Agree-
ment, including possible initiation of additional ne-
gotiations with Mexico for the purpose of seeking
modifications of the Agreement.
SEC. 515. CENTER FOR THE STUDY OF WESTERN HEMI-
SPHERIC TRADE.
(a) AMENDMENT
TO
THE CBI.—The Caribbean
Basin Economic Recovery Act (19 U.S.C. 2701 et seq.)
is amended by inserting after section 218 the following
new section:
‘‘SEC. 219. CENTER FOR THE STUDY OF WESTERN HEMI-
SPHERIC TRADE.
‘‘(a) ESTABLISHMENT.—The Commissioner of Cus-
toms, after consultation with appropriate officials in the
State of Texas, is authorized and directed to make grants
to an institution (or a consortium of such institutions) to
assist such institution in planning, establishing, and oper-
ating a Center for the Study of Western Hemispheric
Trade (hereafter in this section referred to as the ‘Cen-
ter’). The Commissioner of Customs shall make the first
grant not later than December 1, 1994, and the Center
shall be established not later than February 1, 1995.
‘‘(b) SCOPE OF THE CENTER.—The Center shall be
a year-round program operated by an institution located
268
in the State of Texas (or a consortium of such institu-
tions), the purpose of which is to promote and study trade
between and among Western Hemisphere countries. The
Center shall conduct activities designed to examine—
‘‘(1) the impact of the NAFTA on the econo-
mies in, and trade within, the Western Hemisphere,
‘‘(2) the negotiation of any future free trade
agreements, including possible accessions to the
NAFTA; and
‘‘(3) adjusting tariffs, reducing nontariff bar-
riers, improving relations among customs officials,
and promoting economic relations among countries
in the Western Hemisphere.
‘‘(c) CONSULTATION; SELECTION CRITERIA.—The
Commissioner of Customs shall consult with appropriate
officials of the State of Texas and private sector authori-
ties with respect to selecting, planning, and establishing
the Center. In selecting the appropriate institution, the
Commissioner of Customs shall give consideration to—
‘‘(1) the institution’s ability to carry out the
programs and activities described in this section;
and
‘‘(2) any resources the institution can provide
the Center in addition to Federal funds provided
under this program.
269
‘‘(d) PROGRAMS AND ACTIVITIES.—The Center shall
conduct the following activities:
‘‘(1) Provide forums for international discussion
and debate for representatives from countries in the
Western Hemisphere regarding issues which affect
trade and other economic relations within the hemi-
sphere, including the impact of the NAFTA on indi-
vidual economies and the desirability and feasibility
of possible accessions to the NAFTA by such coun-
tries.
‘‘(2) Conduct studies and research projects on
subjects which affect Western Hemisphere trade, in-
cluding tariffs, customs, regional and national eco-
nomics, business development and finance, produc-
tion and personnel management, manufacturing, ag-
riculture, engineering, transportation, immigration,
telecommunications, medicine, science, urban stud-
ies, border demographics, social anthropology, and
population.
‘‘(3) Publish materials, disseminate informa-
tion, and conduct seminars and conferences to sup-
port and educate representatives from countries in
the Western Hemisphere who seek to do business
with or invest in other Western Hemisphere coun-
tries.
270
‘‘(4) Provide grants, fellowships, endowed
chairs, and financial assistance to outstanding schol-
ars and authorities from Western Hemisphere coun-
tries.
‘‘(5) Provide grants, fellowships, and other fi-
nancial assistance to qualified graduate students,
from Western Hemisphere countries, to study at the
Center.
‘‘(6) Implement academic exchange programs
and other cooperative research and instructional
agreements with the complementary North/South
Center at the University of Miami at Coral Gables.
‘‘(e) DEFINITIONS.—For purposes of this section—
‘‘(1) NAFTA.—The term ‘NAFTA’ means the
North American Free Trade Agreement.
‘‘(2) WESTERN HEMISPHERE COUNTRIES.—The
terms ‘Western Hemisphere countries’, ‘countries in
the Western Hemisphere’, and ‘Western Hemi-
sphere’ mean Canada, the United States, Mexico,
countries located in South America, beneficiary
countries (as defined by section 212), the Common-
wealth of Puerto Rico, and the United States Virgin
Islands.
‘‘(f) FEES
FOR SEMINARS
AND PUBLICATIONS.—
Notwithstanding any other provision of law, a grant made
271
under this section may provide that the Center may charge
a reasonable fee for attendance at seminars and con-
ferences and for copies of publications, studies, reports,
and other documents the Center publishes. The Center
may waive such fees in any case in which it determines
imposing a fee would impose a financial hardship and the
purposes of the Center would be served by granting such
a waiver.
‘‘(g) DURATION OF GRANT.—The Commissioner of
Customs is directed to make grants to any institution or
institutions selected as the Center for fiscal years 1994,
1995, 1996, and 1997.
‘‘(h) REPORT.—The Commissioner of Customs shall,
no later than July 1, 1994, and annually thereafter for
years for which grants are made, submit a written report
to the Committee on Finance of the Senate and the Com-
mittee on Ways and Means of the House of Representa-
tives. The first report shall include—
‘‘(1) a statement identifying the institution or
institutions selected as the Center,
‘‘(2) the reasons for selecting the institution or
institutions as the Center, and
‘‘(3) the plan of such institution or institutions
for operating the Center.
272
Each subsequent report shall include information with re-
spect to the operations of the Center, the collaboration of
the Center with, and dissemination of information to, Gov-
ernment policymakers and the business community with
respect to the study of Western Hemispheric trade by the
Center, and the plan and efforts of the Center to continue
operations after grants under this section have expired.’’.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated $10,000,000 for fiscal
year 1994, and such sums as may be necessary in the 3
succeeding fiscal years to carry out the purposes of section
219 of the Caribbean Basin Economic Recovery Act (as
added by subsection (a)).
SEC. 516. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b), the provisions of this subtitle shall take effect on the
date the Agreement enters into force with respect to the
United States.
(b) EXCEPTION.—Section 515 shall take effect on the
date of the enactment of this Act.
273
Subtitle C—Funding
PART 1—CUSTOMS USER FEES
SEC. 521. FEES FOR CERTAIN CUSTOMS SERVICES.
(a) IN GENERAL.—Section 13031 of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.
58c) is amended—
(1) by amending paragraph (5) of subsection
(a) to read as follows:
‘‘(5)(A) For fiscal years 1994, 1995, 1996, and
1997, for the arrival of each passenger aboard a
commercial vessel or commercial aircraft from out-
side the customs territory of the United States,
$6.50.
‘‘(B) For fiscal year 1998 and each fiscal year
thereafter, for the arrival of each passenger aboard
a commercial vessel or commercial aircraft from a
place outside the United States (other than a place
referred to in subsection (b)(1)(A) of this section),
$5.’’
(2) by adding at the end of paragraph (1) of
subsection (b), the following flush sentence:
‘‘Subparagraph (A) shall not apply to fiscal years
1994, 1995, 1996, and 1997.’’,
(3) in subsection (f)—
274
(A) in paragraph (1), by striking ‘‘except’’
and all that follows through the end period and
inserting: ‘‘except—
‘‘(A) the portion of such fees that is re-
quired under paragraph (3) for the direct reim-
bursement of appropriations, and
‘‘(B) the portion of such fees that is deter-
mined by the Secretary to be excess fees under
paragraph (5).’’,
(B) in paragraph (3)(A), by striking the
first parenthetical and inserting ‘‘(other than
the fees under subsection (a) (9) and (10) and
the excess fees determined by the Secretary
under paragraph (5))’’,
(C) in paragraph (4), by striking ‘‘under
subsection (a)’’ and inserting ‘‘under subsection
(a) (other than the excess fees determined by
the Secretary under paragraph (5))’’, and
(D) by adding at the end thereof the fol-
lowing new paragraph:
‘‘(5) At the close of each of fiscal years 1994,
1995, 1996, and 1997, the Secretary of the Treas-
ury shall determine the amount of the fees collected
under paragraph (5)(A) of subsection (a) for that
fiscal year that exceeds the amount of such fees that
275
would have been collected for such fiscal year if the
fees that were in effect on the day before the effec-
tive date of this paragraph applied to such fiscal
year. The amount of the excess fees determined
under the preceding sentence shall be deposited in
the Customs User Fee Account and shall be avail-
able for reimbursement of inspectional costs (includ-
ing passenger processing costs) not otherwise reim-
bursed under this section, and shall be available only
to the extent provided in appropriations Acts.’’, and
(4) in paragraph (3) of subsection (j), by strik-
ing ‘‘September 30, 1998’’ and inserting ‘‘September
30, 2003’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date the Agreement
enters into force with respect to the United States.
PART 2—INTERNAL REVENUE CODE
AMENDMENTS
SEC. 522. AUTHORITY TO DISCLOSE CERTAIN TAX INFOR-
MATION TO THE UNITED STATES CUSTOMS
SERVICE.
(a) IN GENERAL.—Subsection (l) of section 6103 of
the Internal Revenue Code of 1986 (relating to confiden-
tiality and disclosure of returns and return information)
276
is amended by adding at the end thereof the following new
paragraph:
‘‘(14) DISCLOSURE OF RETURN INFORMATION
TO UNITED STATES CUSTOMS SERVICE.—The Sec-
retary may, upon written request from the Commis-
sioner of the United States Customs Service, dis-
close to officers and employees of the Department of
the Treasury such return information with respect
to taxes imposed by chapters 1 and 6 as the Sec-
retary may prescribe by regulations, solely for the
purpose of, and only to the extent necessary in—
‘‘(A) ascertaining the correctness of any
entry in audits as provided for in section 509
of the Tariff Act of 1930 (19 U.S.C. 1509), or
‘‘(B) other actions to recover any loss of
revenue, or to collect duties, taxes, and fees, de-
termined to be due and owing pursuant to such
audits.’’
(b) 
CONFORMING
AMENDMENTS.—Paragraphs
(3)(A) and (4) of section 6103(p) of such Code are each
amended by striking ‘‘or (13)’’ each place it appears and
inserting ‘‘(13), or (14)’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall take effect on the date the Agree-
277
ment enters into force with respect to the United
States.
(2) REGULATIONS.—Not later than 90 days
after the date of the enactment of this Act, the Sec-
retary of the Treasury or his delegate shall issue
temporary 
regulations 
to 
carry 
out 
section
6103(l)(14) of the Internal Revenue Code of 1986,
as added by this section.
SEC. 523. USE OF ELECTRONIC FUND TRANSFER SYSTEM
FOR COLLECTION OF CERTAIN TAXES.
(a) GENERAL RULE.—Section 6302 of the Internal
Revenue Code of 1986 (relating to mode or time of collec-
tion) is amended by redesignating subsection (h) as sub-
section (i) and by inserting after subsection (g) the follow-
ing new subsection:
‘‘(h) USE OF ELECTRONIC FUND TRANSFER SYSTEM
FOR COLLECTION OF CERTAIN TAXES.—
‘‘(1) ESTABLISHMENT OF SYSTEM.—
‘‘(A) IN
GENERAL.—The Secretary shall
prescribe such regulations as may be necessary
for the development and implementation of an
electronic fund transfer system which is re-
quired to be used for the collection of deposi-
tory taxes. Such system shall be designed in
such manner as may be necessary to ensure
278
that such taxes are credited to the general ac-
count of the Treasury on the date on which
such taxes would otherwise have been required
to be deposited under the Federal tax deposit
system.
‘‘(B) EXEMPTIONS.—The regulations pre-
scribed under subparagraph (A) may contain
such exemptions as the Secretary may deem
appropriate.
‘‘(2) PHASE-IN REQUIREMENTS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the regulations referred to in
paragraph (1)—
‘‘(i) shall contain appropriate proce-
dures to assure that an orderly conversion
from the Federal tax deposit system to the
electronic fund transfer system is accom-
plished, and
‘‘(ii) may provide for a phase-in of
such electronic fund transfer system by
classes of taxpayers based on the aggre-
gate undeposited taxes of such taxpayers
at the close of specified periods and any
other factors the Secretary may deem ap-
propriate.
279
‘‘(B) 
PHASE-IN
REQUIREMENTS.—The
phase-in of the electronic fund transfer system
shall be designed in such manner as may be
necessary to ensure that—
‘‘(i) during each fiscal year beginning
after September 30, 1993, at least the ap-
plicable required percentage of the total
depository taxes imposed by chapters 21,
22, and 24 shall be collected by means of
electronic fund transfer, and
‘‘(ii) during each fiscal year beginning
after September 30, 1993, at least the ap-
plicable required percentage of the total
other depository taxes shall be collected by
means of electronic fund transfer.
‘‘(C) APPLICABLE
REQUIRED
PERCENT-
AGE.—
‘‘(i) In the case of the depository
taxes imposed by chapters 21, 22, and 24,
the applicable required percentage is—
‘‘(I) 3 percent for fiscal year
1994,
‘‘(II) 16.9 percent for fiscal year
1995,
280
‘‘(III) 20.1 percent for fiscal year
1996,
‘‘(IV) 58.3 percent for fiscal
years 1997 and 1998, and
‘‘(V) 94 percent for fiscal year
1999 and all fiscal years thereafter.
‘‘(ii) In the case of other depository
taxes, the applicable required percentage
is—
‘‘(I) 3 percent for fiscal year
1994,
‘‘(II) 20 percent for fiscal year
1995,
‘‘(III) 30 percent for fiscal year
1996,
‘‘(IV) 60 percent for fiscal years
1997 and 1998, and
‘‘(V) 94 percent for fiscal year
1999 and all fiscal years thereafter.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) DEPOSITORY TAX.—The term ‘depos-
itory tax’ means any tax if the Secretary is au-
thorized to require deposits of such tax.
281
‘‘(B) ELECTRONIC FUND TRANSFER.—The
term ‘electronic fund transfer’ means any trans-
fer of funds, other than a transaction originated
by check, draft, or similar paper instrument,
which is initiated through an electronic termi-
nal, telephonic instrument, or computer or mag-
netic tape so as to order, instruct, or authorize
a financial institution or other financial
intermediary to debit or credit an account.
‘‘(4) COORDINATION WITH OTHER ELECTRONIC
FUND TRANSFER REQUIREMENTS.—
‘‘(A) COORDINATION
WITH
CERTAIN
EX-
CISE TAXES.—In determining whether the re-
quirements of subparagraph (B) of paragraph
(2) are met, taxes required to be paid by elec-
tronic fund transfer under sections 5061(e) and
5703(b) shall be disregarded.
‘‘(B) ADDITIONAL REQUIREMENT.—Under
regulations, any tax required to be paid by elec-
tronic fund transfer under section 5061(e) or
5703(b) shall be paid in such a manner as to
ensure that the requirements of the second sen-
tence of paragraph (1)(A) of this subsection are
satisfied.’’
(b) EFFECTIVE DATE.—
282
(1) IN GENERAL.—The amendments made by
this section shall take effect on the date the Agree-
ment enters into force with respect to the United
States.
(2) REGULATIONS.—Not later than 210 days
after the date of enactment of this Act, the Sec-
retary of the Treasury or his delegate shall prescribe
temporary regulations under section 6302(h) of the
Internal Revenue Code of 1986 (as added by this
section).
Subtitle D—Implementation of
NAFTA Supplemental Agreements
PART 1—AGREEMENTS RELATING TO LABOR AND
ENVIRONMENT
SEC. 531. AGREEMENT ON LABOR COOPERATION.
(a) COMMISSION FOR LABOR COOPERATION.—
(1) MEMBERSHIP.—The United States is au-
thorized to participate in the Commission for Labor
Cooperation in accordance with the North American
Agreement on Labor Cooperation.
(2) CONTRIBUTIONS
TO
BUDGET.—There are
authorized to be appropriated to the President (or
such agency as the President may designate)
$2,000,000 for each of fiscal years 1994 and 1995
for United States contributions to the annual budget
283
of the Commission for Labor Cooperation pursuant
to Article 43 of the North American Agreement on
Labor Cooperation. Funds authorized to be appro-
priated for such contributions by this paragraph are
in addition to any funds otherwise available for such
contributions. Funds authorized to be appropriated
by this paragraph are authorized to be made avail-
able until expended.
(b) DEFINITIONS.—As used in this section—
(1) the term ‘‘Commission for Labor Coopera-
tion’’ means the commission established by Part
Three of the North American Agreement on Labor
Cooperation; and
(2) the term ‘‘North American Agreement on
Labor Cooperation’’ means the North American
Agreement on Labor Cooperation Between the Gov-
ernment of the United States of America, the Gov-
ernment of Canada, and the Government of the
United Mexican States (signed at Mexico City,
Washington, and Ottawa on September 8, 9, 12, and
14, 1993).
SEC. 532. AGREEMENT ON ENVIRONMENTAL COOPERA-
TION.
(a) COMMISSION
FOR ENVIRONMENTAL COOPERA-
TION.—
284
(1) MEMBERSHIP.—The United States is au-
thorized to participate in the Commission for Envi-
ronmental Cooperation in accordance with the North
American Agreement on Environmental Cooperation.
(2) CONTRIBUTIONS
TO
BUDGET.—There are
authorized to be appropriated to the President (or
such agency as the President may designate)
$5,000,000 for each of fiscal years 1994 and 1995
for United States contributions to the annual budget
of the Commission for Environmental Cooperation
pursuant to Article 43 of the North American
Agreement on Environmental Cooperation. Funds
authorized to be appropriated for such contributions
by this paragraph are in addition to any funds oth-
erwise available for such contributions. Funds au-
thorized to be appropriated by this paragraph are
authorized to be made available until expended.
(b) DEFINITIONS.—As used in this section—
(1) the term ‘‘Commission for Environmental
Cooperation’’ means the commission established by
Part Three of the North American Agreement on
Environmental Cooperation; and
(2) the term ‘‘North American Agreement on
Environmental Cooperation’’ means the North
American Agreement on Environmental Cooperation
285
Between the Government of the United States of
America, the Government of Canada, and the Gov-
ernment of the United Mexican States (signed at
Mexico City, Washington, and Ottawa on September
8, 9, 12, and 14, 1993).
SEC. 533. AGREEMENT ON BORDER ENVIRONMENT CO-
OPERATION COMMISSION.
(a) BORDER ENVIRONMENT COOPERATION COMMIS-
SION.—
(1) MEMBERSHIP.—The United States is au-
thorized to participate in the Border Environment
Cooperation Commission in accordance with the
Border Environment Cooperation Agreement.
(2) CONTRIBUTIONS
TO
THE
COMMISSION
BUDGET.—There are authorized to be appropriated
to the President (or such agency as the President
may designate) $5,000,000 for fiscal year 1994 and
each fiscal year thereafter for United States con-
tributions to the budget of the Border Environment
Cooperation Commission pursuant to section 7 of
Article III of Chapter I of the Border Environment
Cooperation Agreement. Funds authorized to be ap-
propriated for such contributions by this paragraph
are in addition to any funds otherwise available for
such contributions. Funds authorized to be appro-
286
priated by this paragraph are authorized to be made
available until expended.
(b) CIVIL ACTIONS INVOLVING THE COMMISSION.—
For the purpose of any civil action which may be brought
within the United States by or against the Border Envi-
ronment Cooperation Commission in accordance with the
Border Environment Cooperation Agreement (including
an action brought to enforce an arbitral award against the
Commission), the Commission shall be deemed to be an
inhabitant of the Federal judicial district in which its prin-
cipal office within the United States, or its agent ap-
pointed for the purpose of accepting service or notice of
service, is located. Any such action to which the Commis-
sion is a party shall be deemed to arise under the laws
of the United States, and the district courts of the United
States (including the courts enumerated in section 460 of
title 28, United States Code) shall have original jurisdic-
tion of any such action. When the Commission is a defend-
ant in any action in a State court, it may at any time
before trial remove the action into the appropriate district
court of the United States by following the procedure for
removal provided in section 1446 of title 28, United States
Code.
(c) DEFINITIONS.—As used in this section—
287
(1) the term ‘‘Border Environment Cooperation
Agreement’’ means the November 1993 Agreement
Between the Government of the United States of
America and the Government of the United Mexican
States Concerning the Establishment of a Border
Environment Cooperation Commission and a North
American Development Bank;
(2) the terms ‘‘Border Environment Coopera-
tion Commission’’ and ‘‘Commission’’ mean the com-
mission established pursuant to Chapter I of the
Border Environment Cooperation Agreement; and
(3) the term ‘‘United States’’ means the United
States, its territories and possessions, and the Com-
monwealth of Puerto Rico.
PART 2—NORTH AMERICAN DEVELOPMENT
BANK AND RELATED PROVISIONS
SEC. 541. NORTH AMERICAN DEVELOPMENT BANK.
(a) ACCEPTANCE OF MEMBERSHIP.—The President
is hereby authorized to accept membership for the United
States in the North American Development Bank (here-
after in this part referred to as the ‘‘Bank’’) provided for
in Chapter II of the Border Environment Cooperation
Agreement (hereafter in this part referred to as the ‘‘Co-
operation Agreement’’).
(b) SUBSCRIPTION OF STOCK.—
288
(1) SUBSCRIPTION AUTHORITY.—
(A) IN GENERAL.—The Secretary of the
Treasury may subscribe on behalf of the United
States up to 150,000 shares of the capital stock
of the Bank.
(B) EFFECTIVENESS OF SUBSCRIPTION.—
Except as provided in paragraph (3), any such
subscription shall be effective only to such ex-
tent or in such amounts as are provided in ad-
vance in appropriations Acts.
(2) LIMITATIONS ON AUTHORIZATION OF AP-
PROPRIATIONS.—For payment by the Secretary of
the Treasury of the subscription of the United
States for shares described in paragraph (1), there
are authorized to be appropriated $1,500,000,000
($225,000,000 of which may be used for paid-in
capital and $1,275,000,000 of which may be used
for callable capital) without fiscal year limitation.
(3) FUNDING; LIMITATION ON CALLABLE CAP-
ITAL SUBSCRIPTIONS.—
(A) FUNDING.—For fiscal year 1995, the
Secretary of the Treasury shall pay to the Bank
out of any sums in the Treasury not otherwise
appropriated the sum of $56,250,000 for the
paid-in portion of the United States share of
289
the capital stock of the Bank, 10 percent of
which may be transferred by the Bank to the
President pursuant to section 543 to pay for
the cost of direct and guaranteed Federal loans.
(B) LIMITATION
ON
CALLABLE
CAPITAL
SUBSCRIPTIONS.—For fiscal year 1995, the
Secretary of the Treasury shall subscribe to the
callable capital portion of the United States
share of the capital stock of the Bank in an
amount not to exceed $318,750,000.
(4) DISPOSITION OF NET INCOME DISTRIBUTED
BY
THE
FACILITY.—Any payment made to the
United States by the Bank as a distribution of net
income shall be covered into the Treasury as a mis-
cellaneous receipt.
(c) COMPENSATION OF BOARD MEMBERS.—No per-
son shall be entitled to receive any salary or other com-
pensation from the Bank or the United States for services
as a Board member.
(d) APPLICABILITY
OF BRETTON WOODS AGREE-
MENTS ACT.—The provisions of section 4 of the Bretton
Woods Agreements Act shall apply with respect to the
Bank to the same extent as with respect to the Inter-
national Bank for Reconstruction and Development and
the International Monetary Fund.
290
(e) RESTRICTIONS.—Unless authorized by law, nei-
ther the President nor any person or agency shall, on be-
half of the United States—
(1) subscribe to additional shares of stock of
the Bank;
(2) vote for or agree to any amendment of the
Cooperation Agreement which increases the obliga-
tions of the United States, or which changes the
purpose or functions of the Bank; or
(3) make a loan or provide other financing to
the Bank.
(f) FEDERAL RESERVE BANKS AS DEPOSITORIES.—
Any Federal Reserve bank that is requested to do so by
the Bank shall act as its depository or as its fiscal agent,
and the Board of Governors of the Federal Reserve Sys-
tem shall supervise and direct the carrying out of these
functions by the Federal Reserve banks.
(g) JURISDICTION OF UNITED STATES COURTS AND
ENFORCEMENT OF ARBITRAL AWARDS.—For the purpose
of any civil action which may be brought within the United
States, its territories or possessions, or the Commonwealth
of Puerto Rico, by or against the Bank in accordance with
the Cooperation Agreement, including an action brought
to enforce an arbitral award against the Bank, the Bank
shall be deemed to be an inhabitant of the Federal judicial
291
district in which its principal office within the United
States or its agency appointed for the purpose of accepting
service or notice of service is located, and any such action
to which the Bank shall be a party shall be deemed to
arise under the laws of the United States, and the district
courts of the United States, including the courts enumer-
ated in section 460 of title 28, United States Code, shall
have original jurisdiction of any such action. When the
Bank is a defendant in any action in a State court, it may
at any time before trial remove the action into the appro-
priate district court of the United States by following the
procedure for removal provided in section 1446 of title 28,
United States Code.
(h) EXEMPTION FROM SECURITIES LAWS FOR CER-
TAIN SECURITIES ISSUED BY THE BANK; REPORTS RE-
QUIRED.—
(1) EXEMPTIONS FROM LIMITATIONS AND RE-
STRICTIONS ON THE POWER OF NATIONAL BANKING
ASSOCIATIONS TO DEAL IN AND UNDERWRITE IN-
VESTMENT SECURITIES OF THE BANK.—The seventh
sentence of the seventh undesignated paragraph of
section 5136 of the Revised Statutes of the United
States (12 U.S.C. 24), is amended by inserting ‘‘the
North American Development Bank,’’ after ‘‘Inter-
American Development Bank,’’.
292
(2) EXEMPTION FROM SECURITIES LAWS FOR
CERTAIN
SECURITIES
ISSUED
BY
THE
BANK; RE-
PORTS
REQUIRED.—Any securities issued by the
Bank (including any guarantee by the Bank, wheth-
er or not limited in scope) in connection with the
raising of funds for inclusion in the Bank’s capital
resources as defined in Section 4 of Article II of
Chapter II of the Cooperation Agreement, and any
securities guaranteed by the Bank as to both the
principal and interest to which the commitment in
Section 3(d) of Article II of Chapter II of the Co-
operation Agreement is expressly applicable, shall be
deemed to be exempted securities within the mean-
ing of section 3(a)(2) of the Securities Act of 1933
(15 U.S.C. 77c), and section 3(a)(12) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c). The
Bank shall file with the Securities and Exchange
Commission such annual and other reports with re-
gard to such securities as the Commission shall de-
termine to be appropriate in view of the special char-
acter of the Bank and its operations and necessary
in the public interest or for the protection of inves-
tors.
(3) AUTHORITY OF SECURITIES AND EXCHANGE
COMMISSION TO SUSPEND EXEMPTION; REPORTS TO
293
THE
CONGRESS.—The Securities and Exchange
Commission, acting in consultation with the Na-
tional Advisory Council on International Monetary
and Financial Problems, is authorized to suspend
the provisions of paragraph (2) at any time as to
any or all securities issued or guaranteed by the
Bank during the period of such suspension. The
Commission shall include in its annual reports to
Congress such information as it shall deem advisable
with regard to the operations and effect of this sub-
section and in connection therewith shall include any
views submitted for such purpose by any association
of dealers registered with the Commission.
SEC. 542. STATUS, IMMUNITIES, AND PRIVILEGES.
Article VIII of Chapter II of the Cooperation Agree-
ment shall have full force and effect in the United States,
its territories and possessions, and the Commonwealth of
Puerto Rico, upon entry into force of the Cooperation
Agreement.
SEC. 543. COMMUNITY ADJUSTMENT AND INVESTMENT
PROGRAM.
(a) THE PRESIDENT.—(1) The President may enter
into an agreement with the Bank that facilitates imple-
mentation by the President of a program for community
adjustment and investment in support of the Agreement
294
pursuant to chapter II of the Cooperation Agreement
(hereafter in this section referred to as the ‘‘community
adjustment and investment program’’).
(2) The President may receive from the Bank 10 per-
cent of the paid-in capital actually paid to the Bank by
the United States for the President to carry out, without
further appropriations, through Federal agencies and
their loan and loan guarantee programs, the community
adjustment and investment program, pursuant to an
agreement between the President and the Bank.
(3) The President may select one or more Federal
agencies that make loans or guarantees the repayment of
loans to assist in carrying out the community adjustment
and investment program, and may transfer the funds re-
ceived from the Bank to such agency or agencies for the
purpose of assisting in carrying out the community adjust-
ment and investment program.
(4)(A) Each Federal agency selected by the President
to assist in carrying out the community adjustment and
investment program shall use the funds transferred to it
by the President from the Bank to pay for the costs of
direct and guaranteed loans, as defined in section 502 of
the Congressional Budget Act of 1974, and, as appro-
priate, other costs associated with such loans, all subject
295
to the restrictions and limitations that apply to such agen-
cy’s existing loan or loan guarantee program.
(B) Funds transferred to an agency under subpara-
graph (A) shall be in addition to the amount of funds au-
thorized in any appropriations Act to be expended by that
agency for its loan or loan guarantee program.
(5) The President shall—
(A) establish guidelines for the loans and loan
guarantees to be made under the community adjust-
ment and investment program;
(B) endorse the grants made by the Bank for
the community adjustment and investment program,
as provided in Article I, section 1(b), and Article III,
section 11(a), of Chapter II of the Cooperation
Agreement; and
(C) endorse any loans or guarantees made by
the Bank for the community adjustment and invest-
ment program, as provided in Article I, section 1(b),
and Article III, section 6(a) and (c) of Chapter II
of the Cooperation Agreement.
(b) ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—The President shall es-
tablish an advisory committee to be known as the
Community Adjustment and Investment Program
Advisory Committee (in this section referred to as
296
the ‘‘Advisory Committee’’) in accordance with the
provisions of the Federal Advisory Committee Act.
(2) MEMBERSHIP.—
(A) IN GENERAL.—The Advisory Commit-
tee shall consist of 9 members of the public, ap-
pointed by the President, who, collectively, rep-
resent—
(i) community groups whose constitu-
encies include low-income families;
(ii) any scientific, professional, busi-
ness, nonprofit, or public interest organiza-
tion or association which is neither affili-
ated with, nor under the direction of, a
government;
(iii) for-profit business interests; and
(iv) other appropriate entities with
relevant expertise.
(B) REPRESENTATION.—Each of the cat-
egories described in clauses (i) through (iv) of
subparagraph (A) shall be represented by no
fewer than 1 and no more than 3 members of
the Advisory Committee.
(3) FUNCTION.—It shall be the function of the
Advisory Committee—
297
(A) to provide advice to the President re-
garding the implementation of the community
adjustment and investment program, including
advice on the guidelines to be established by the
President for the loans and loan guarantees to
be made pursuant to subsection (a)(4), advice
on identifying the needs for adjustment assist-
ance and investment in support of the goals and
objectives of the Agreement, taking into ac-
count economic and geographic considerations,
and advice on such other matters as may be re-
quested by the President; and
(B) to review on a regular basis the oper-
ation of the community adjustment and invest-
ment program and provide the President with
the conclusions of its review.
(4) TERMS OF MEMBERS.—
(A) IN GENERAL.—Each member of the
Advisory Committee shall serve at the pleasure
of the President.
(B) CHAIRPERSON.—The President shall
appoint a chairperson from among the members
of the Advisory Committee.
(C) MEETINGS.—The Advisory Committee
shall meet at least annually and at such other
298
times as requested by the President or the
chairperson. A majority of the members of the
Advisory Committee shall constitute a quorum.
(D) REIMBURSEMENT
FOR
EXPENSES.—
The members of the Advisory Committee may
receive reimbursement for travel, per diem, and
other necessary expenses incurred in the per-
formance of their duties, in accordance with the
Federal Advisory Committee Act.
(E) STAFF
AND
FACILITIES.—The Advi-
sory Committee may utilize the facilities and
services of employees of any Federal agency
without cost to the Advisory Committee, and
any such agency is authorized to provide serv-
ices as requested by the Committee.
(c) OMBUDSMAN.—The President shall appoint an
ombudsman to provide the public with an opportunity to
participate in the carrying out of the community adjust-
ment and investment program.
(1) FUNCTION.—It shall be the function of the
ombudsman—
(A) to establish procedures for receiving
comments from the general public on the oper-
ation of the community adjustment and invest-
ment program, to receive such comments, and
299
to provide the President with summaries of the
public comments; and
(B) to perform an independent inspection
and programmatic audit of the operation of the
community adjustment and investment program
and to provide the President with the conclu-
sions of its investigation and audit.
(2) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to the
President, or such agency as the President may des-
ignate, $25,000 for fiscal year 1995 and for each
fiscal year thereafter, for the costs of the ombuds-
man.
(d) REPORTING
REQUIREMENT.—The President
shall submit to the appropriate congressional committees
an annual report on the community adjustment and in-
vestment program (if any) that is carried out pursuant
to this section. Each report shall state the amount of the
loans made or guaranteed during the 12-month period
ending on the day before the date of the report.
SEC. 544. DEFINITION.
For purposes of this part, the term ‘‘Border Environ-
ment Cooperation Agreement’’ (referred to in this part as
the ‘‘Cooperation Agreement’’) means the November 1993
Agreement Between the Government of the United States
300
of America and the Government of the United Mexican
States Concerning the Establishment of a Border Envi-
ronment Cooperation Commission and a North American
Development Bank.
TITLE VI—CUSTOMS
MODERNIZATION
SEC. 601. REFERENCE.
Whenever in subtitle A, B, or C an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a part, section, subsection, or other provision, the ref-
erence shall be considered to be made a part, section, sub-
section, or other provision of the Tariff Act of 1930 (19
U.S.C. 1202 et seq.).
Subtitle A—Improvements in
Customs Enforcement
SEC. 611. PENALTIES FOR VIOLATIONS OF ARRIVAL, RE-
PORTING, ENTRY, AND CLEARANCE REQUIRE-
MENTS.
Section 436 (19 U.S.C. 1436) is amended—
(1) by amending subsection (a)—
(A) by striking out ‘‘433’’ in paragraph (1)
and inserting ‘‘431, 433, or 434 of this Act or
section 4197 of the Revised Statutes of the
United States (46 U.S.C. App. 91)’’,
301
(B) by amending paragraph (2) to read as
follows:
‘‘(2) to present or transmit, electronically or
otherwise, any forged, altered, or false document,
paper, information, data or manifest to the Customs
Service under section 431(e), 433(d), or 434 of this
Act or section 4197 of the Revised Statutes of the
United States (46 U.S.C. App. 91) without revealing
the facts; or’’, and
(C) by amending paragraph (3) to read as
follows:
‘‘(3) to fail to make entry or to obtain clearance
as required by section 434 or 644 of this Act, sec-
tion 4197 of the Revised Statutes of the United
States (46 U.S.C. App. 91), or section 1109 of the
Federal Aviation Act of 1958 (49 U.S.C. App.
1509); or’’; and
(2) by striking out ‘‘AND ENTRY’’ in the sec-
tion heading and inserting ‘‘ENTRY, AND CLEAR-
ANCE’’.
SEC. 612. FAILURE TO DECLARE.
Section 497(a) (19 U.S.C. 1497(a)) is amended—
(1) by inserting ‘‘or transmitted’’ after ‘‘made’’
in paragraph (1)(A); and
302
(2) by amending paragraph (2)(A) to read as
follows:
‘‘(A) if the article is a controlled sub-
stance, either $500 or an amount equal to
1,000 percent of the value of the article, which-
ever amount is greater; and’’.
SEC. 613. CUSTOMS TESTING LABORATORIES; DETENTION
OF MERCHANDISE.
(a) AMENDMENT.—Section 499 (19 U.S.C. 1499) is
amended to read as follows:
‘‘SEC. 499. EXAMINATION OF MERCHANDISE.
‘‘(a) ENTRY EXAMINATION.—
‘‘(1) IN GENERAL.—Imported merchandise that
is required by law or regulation to be inspected, ex-
amined, or appraised shall not be delivered from cus-
toms custody (except under such bond or other secu-
rity as may be prescribed by the Secretary to assure
compliance with all applicable laws, regulations, and
instructions which the Secretary or the Customs
Service is authorized to enforce) until the merchan-
dise has been inspected, appraised, or examined and
is reported by the Customs Service to have been
truly and correctly invoiced and found to comply
with the requirements of the laws of the United
States.
303
‘‘(2) EXAMINATION.—The Customs Service—
‘‘(A) shall designate the packages or quan-
tities of merchandise covered by any invoice or
entry which are to be opened and examined for
the purpose of appraisement or otherwise;
‘‘(B) shall order such packages or quan-
tities to be sent to such place as is designated
by the Secretary by regulation for such pur-
pose;
‘‘(C) may require such additional packages
or quantities as the Secretary considers nec-
essary for such purpose; and
‘‘(D) shall inspect a sufficient number of
shipments, and shall examine a sufficient num-
ber of entries, to ensure compliance with the
laws enforced by the Customs Service.
‘‘(3) UNSPECIFIED ARTICLES.—If any package
contains any article not specified in the invoice or
entry and, in the opinion of the Customs Service, the
article was omitted from the invoice or entry—
‘‘(A) with fraudulent intent on the part of
the seller, shipper, owner, agent, importer of
record, or entry filer, the contents of the entire
package in which such article is found shall be
subject to seizure; or
304
‘‘(B) without fraudulent intent, the value
of the article shall be added to the entry and
the duties, fees, and taxes thereon paid accord-
ingly.
‘‘(4) DEFICIENCY.—If a deficiency is found in
quantity, weight, or measure in the examination of
any package, the person finding the deficiency shall
make a report thereof to the Customs Service. The
Customs Service shall make allowance for the defi-
ciency in the liquidation of duties.
‘‘(5) INFORMATION REQUIRED FOR RELEASE.—
If an examination is conducted, any information re-
quired for release shall be provided, either electroni-
cally or in paper form, to the Customs Service at the
port of examination. The absence of such informa-
tion does not limit the authority of the Customs
Service to conduct an examination.
‘‘(b) TESTING LABORATORIES.—
‘‘(1) ACCREDITATION
OF
PRIVATE
TESTING
LABORATORIES.—The Customs Service shall estab-
lish and implement a procedure, under regulations
promulgated by the Secretary, for accrediting pri-
vate laboratories within the United States which
may be used to perform tests (that would otherwise
be performed by Customs Service laboratories) to es-
305
tablish the characteristics, quantities, or composition
of imported merchandise. Such regulations—
‘‘(A) shall establish the conditions required
for the laboratories to receive and maintain ac-
creditation for purposes of this subsection;
‘‘(B) shall establish the conditions regard-
ing the suspension and revocation of accredita-
tion, which may include the imposition of a
monetary penalty not to exceed $100,000 and
such penalty is in addition to the recovery, from
a gauger or laboratory accredited under para-
graph (1), of any loss of revenue that may have
occurred, but the Customs Service—
‘‘(i) may seek to recover lost revenue
only in cases where the gauger or labora-
tory intentionally falsified the analysis or
gauging report in collusion with the im-
porter; and
‘‘(ii) shall neither assess penalties nor
seek to recover lost revenue because of a
good faith difference of professional opin-
ion; and
‘‘(C) may provide for the imposition of a
reasonable charge for accreditation and periodic
reaccreditation.
306
The collection of any charge for accreditation and
reaccreditation under this section is not prohibited
by section 13031(e)(6) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C.
58c(e)(6)).
‘‘(2) APPEAL OF ADVERSE ACCREDITATION DE-
CISIONS.—A laboratory applying for accreditation,
or that is accredited, under this section may contest
any decision or order of the Customs Service deny-
ing, suspending, or revoking accreditation, or impos-
ing a monetary penalty, by commencing an action in
accordance with chapter 169 of title 28, United
States Code, in the Court of International Trade
within 60 days after issuance of the decision or
order.
‘‘(3) 
TESTING
BY
ACCREDITED
LABORA-
TORIES.—When requested by an importer of record
of merchandise, the Customs Service shall authorize
the release to the importer of a representative sam-
ple of the merchandise for testing, at the expense of
the importer, by a laboratory accredited under para-
graph (1). The testing results from a laboratory ac-
credited under paragraph (1) that are submitted by
an importer of record with respect to merchandise in
an entry shall, in the absence of testing results ob-
307
tained from a Customs Service laboratory, be accept-
ed by the Customs Service if the importer of record
certifies that the sample tested was taken from the
merchandise in the entry. Nothing in this subsection
shall be construed to limit in any way or preclude
the authority of the Customs Service to test or ana-
lyze any sample or merchandise independently.
‘‘(4) AVAILABILITY
OF
TESTING
PROCEDURE,
METHODOLOGIES, AND INFORMATION.—Testing pro-
cedures and methodologies used by the Customs
Service, and information resulting from any testing
conducted by the Customs Service, shall be made
available as follows:
‘‘(A) Testing procedures and methodologies
shall be made available upon request to any
person unless the procedures or methodologies
are—
‘‘(i) proprietary to the holder of a
copyright or patent related to such proce-
dures or methodologies, or
‘‘(ii) developed by the Customs Serv-
ice for enforcement purposes.
‘‘(B) Information resulting from testing
shall be made available upon request to the im-
308
porter of record and any agent thereof unless
the information reveals information which is—
‘‘(i) proprietary to the holder of a
copyright or patent; or
‘‘(ii) developed by the Customs Serv-
ice for enforcement purposes.
‘‘(5) MISCELLANEOUS
PROVISIONS.—For pur-
poses of this subsection—
‘‘(A) any reference to a private laboratory
includes a reference to a private gauger; and
‘‘(B) accreditation of private laboratories
extends only to the performance of functions by
such laboratories that are within the scope of
those responsibilities for determinations of the
elements relating to admissibility, quantity,
composition, or characteristics of imported mer-
chandise that are vested in, or delegated to, the
Customs Service.
‘‘(c) DETENTIONS.—Except in the case of merchan-
dise with respect to which the determination of admissibil-
ity is vested in an agency other than the Customs Service,
the following apply:
‘‘(1) IN
GENERAL.—Within the 5-day period
(excluding weekends and holidays) following the date
on which merchandise is presented for customs ex-
309
amination, the Customs Service shall decide whether
to release or detain the merchandise. Merchandise
which is not released within such 5-day period shall
be considered to be detained merchandise.
‘‘(2) NOTICE
OF
DETENTION.—The Customs
Service shall issue a notice to the importer or other
party having an interest in detained merchandise no
later than 5 days, excluding weekends and holidays,
after the decision to detain the merchandise is made.
The notice shall advise the importer or other inter-
ested party of—
‘‘(A) the initiation of the detention;
‘‘(B) the specific reason for the detention;
‘‘(C) the anticipated length of the deten-
tion;
‘‘(D) the nature of the tests or inquiries to
be conducted; and
‘‘(E) the nature of any information which,
if supplied to the Customs Service, may acceler-
ate the disposition of the detention.
‘‘(3) TESTING RESULTS.—Upon request by the
importer or other party having an interest in de-
tained merchandise, the Customs Service shall pro-
vide the party with copies of the results of any test-
ing conducted by the Customs Service on the mer-
310
chandise and a description of the testing procedures
and methodologies (unless such procedures or meth-
odologies are proprietary to the holder of a copyright
or patent or were developed by the Customs Service
for enforcement purposes). The results and test de-
scription shall be in sufficient detail to permit the
duplication and analysis of the testing and the re-
sults.
‘‘(4) SEIZURE AND FORFEITURE.—If otherwise
provided by law, detained merchandise may be seized
and forfeited.
‘‘(5) EFFECT OF FAILURE TO MAKE DETER-
MINATION.—
‘‘(A) The failure by the Customs Service to
make a final determination with respect to the
admissibility of detained merchandise within 30
days after the merchandise has been presented
for customs examination, or such longer period
if specifically authorized by law, shall be treated
as a decision of the Customs Service to exclude
the merchandise for purposes of section
514(a)(4).
‘‘(B) For purposes of section 1581 of title
28, United States Code, a protest against the
decision to exclude the merchandise which has
311
not been allowed or denied in whole or in part
before the 30th day after the day on which the
protest was filed shall be treated as having been
denied on such 30th day.
‘‘(C) Notwithstanding section 2639 of title
28, United States Code, once an action respect-
ing a detention is commenced, unless the Cus-
toms Service establishes by a preponderance of
the evidence that an admissibility decision has
not been reached for good cause, the court shall
grant the appropriate relief which may include,
but is not limited to, an order to cancel the de-
tention and release the merchandise.’’.
(b) EXISTING LABORATORIES.—Accreditation under
section 499(b) of the Tariff Act of 1930 (as added by sub-
section (a)) is not required for any private laboratory (in-
cluding any gauger) that was accredited or approved by
the Customs Service as of the day before the date of the
enactment of this Act; but any such laboratory is subject
to reaccreditation under the provisions of such section and
the regulations promulgated thereunder.
SEC. 614. RECORDKEEPING.
Section 508 (19 U.S.C. 1508) is amended—
(1) by amending subsection (a) to read as fol-
lows:
312
‘‘(a) REQUIREMENTS.—Any—
‘‘(1) owner, importer, consignee, importer of
record, entry filer, or other party who—
‘‘(A) imports merchandise into the customs
territory of the United States, files a drawback
claim, or transports or stores merchandise car-
ried or held under bond, or
‘‘(B) knowingly causes the importation or
transportation or storage of merchandise car-
ried or held under bond into or from the cus-
toms territory of the United States;
‘‘(2) agent of any party described in paragraph
(1); or
‘‘(3) person whose activities require the filing of
a declaration or entry, or both;
shall make, keep, and render for examination and inspec-
tion records (which for purposes of this section include,
but are not limited to, statements, declarations, docu-
ments and electronically generated or machine readable
data) which—
‘‘(A) pertain to any such activity, or to the in-
formation contained in the records required by this
Act in connection with any such activity; and
‘‘(B) are normally kept in the ordinary course
of business.’’; and
313
(2) by amending subsection (c) to read as fol-
lows:
‘‘(c) PERIOD OF TIME.—The records required by sub-
sections (a) and (b) shall be kept for such period of time,
not to exceed 5 years from the date of entry or expor-
tation, as appropriate, as the Secretary shall prescribe; ex-
cept that records for any drawback claim shall be kept
until the 3rd anniversary of the date of payment of the
claim.’’.
SEC. 615. EXAMINATION OF BOOKS AND WITNESSES.
Section 509 (19 U.S.C. 1509) is amended as follows:
(1) Subsection (a) is amended—
(A) by striking out ‘‘and taxes’’ wherever
it appears and inserting ‘‘, fees and taxes’’;
(B) by amending paragraph (1) to read as
follows:
‘‘(1) examine, or cause to be examined, upon
reasonable notice, any record (which for purposes of
this section, includes, but is not limited to, any
statement, declaration, document, or electronically
generated or machine readable data) described in
the notice with reasonable specificity, which may be
relevant to such investigation or inquiry, except
that—
314
‘‘(A) if such record is required by law or
regulation for the entry of the merchandise
(whether or not the Customs Service required
its presentation at the time of entry) it shall be
provided to the Customs Service within a rea-
sonable time after demand for its production is
made, taking into consideration the number,
type, and age of the item demanded; and
‘‘(B) if a person of whom demand is made
under subparagraph (A) fails to comply with
the demand, the person may be subject to pen-
alty under subsection (g);’’;
(C) by amending that part of paragraph
(2) that precedes subparagraph (D) to read as
follows:
‘‘(2) summon, upon reasonable notice—
‘‘(A) the person who—
‘‘(i) imported, or knowingly caused to
be imported, merchandise into the customs
territory of the United States,
‘‘(ii) exported merchandise, or know-
ingly caused merchandise to be exported,
to Canada,
‘‘(iii) transported or stored merchan-
dise that was or is carried or held under
315
customs bond, or knowingly caused such
transportation or storage, or
‘‘(iv) filed a declaration, entry, or
drawback claim with the Customs Service;
‘‘(B) any officer, employee, or agent of any
person described in subparagraph (A);
‘‘(C) any person having possession, custody
or care of records relating to the importation or
other activity described in subparagraph (A);
or’’; and
(D) by striking out the comma at the end
of subparagraph (D) and inserting a semicolon.
(2) Subsections (b) and (c) are redesignated as
subsections (c) and (d), respectively.
(3) The following new subsection is inserted
after subsection (a):
‘‘(b) REGULATORY AUDIT PROCEDURES.—
‘‘(1) In conducting a regulatory audit under
this section (which does not include a quantity ver-
ification for a customs bonded warehouse or general
purpose foreign trade zone), the Customs Service
auditor shall provide the person being audited, in
advance of the audit, with a reasonable estimate of
the time to be required for the audit. If in the
course of an audit it becomes apparent that addi-
316
tional time will be required, the Customs Service
auditor shall immediately provide a further estimate
of such additional time.
‘‘(2) Before commencing an audit, the Customs
Service auditor shall inform the party to be audited
of his right to an entry conference at which time the
purpose will be explained and an estimated termi-
nation date set. Upon completion of on-site audit ac-
tivities, the Customs Service auditor shall schedule a
closing conference to explain the preliminary results
of the audit.
‘‘(3) Except as provided in paragraph (5), if the
estimated or actual termination date for an audit
passes without the Customs Service auditor provid-
ing a closing conference to explain the results of the
audit, the person being audited may petition in writ-
ing for such a conference to the appropriate regional
commissioner, who, upon receipt of such a request,
shall provide for such a conference to be held within
15 days after the date of receipt.
‘‘(4) Except as provided in paragraph (5), the
Customs Service auditor shall complete the formal
written audit report within 90 days following the
closing conference unless the appropriate regional
commissioner provides written notice to the person
317
being audited of the reason for any delay and the
anticipated completion date. After application of any
exemption contained in section 552 of title 5, United
States Code, a copy of the formal written audit re-
port shall be sent to the person audited no later
than 30 days following completion of the report.
‘‘(5) Paragraphs (3) and (4) shall not apply
after the Customs Service commences a formal in-
vestigation with respect to the issue involved.’’.
(4) Subsection (d) (as redesignated by para-
graph (2)) is amended—
(A) by striking out ‘‘statements, declara-
tions, or documents’’ in paragraph (1)(A) and
inserting ‘‘those’’;
(B) by inserting ‘‘, unless such custom-
house broker is the importer of record on an
entry’’ after ‘‘broker’’ in paragraph (1)(C)(i);
(C) by striking out ‘‘import’’ in each of
paragraphs (2)(B) and (4)(B);
(D) by inserting ‘‘described in section
508’’ after ‘‘transactions’’ in each of para-
graphs (2)(B) and (4)(B); and
(E) by inserting ‘‘, fees,’’ after ‘‘duties’’ in
paragraph (4)(A).
318
(5) The following new subsections are added at
the end thereof:
‘‘(e) LIST OF RECORDS AND INFORMATION.—The
Customs Service shall identify and publish a list of the
records or entry information that is required to be main-
tained and produced under subsection (a)(1)(A).
‘‘(f) RECORDKEEPING COMPLIANCE PROGRAM.—
‘‘(1) IN GENERAL.—After consultation with the
importing community, the Customs Service shall by
regulation establish a recordkeeping compliance pro-
gram which the parties listed in section 508(a) may
participate in after being certified by the Customs
Service under paragraph (2). Participation in the
recordkeeping compliance program by recordkeepers
is voluntary.
‘‘(2) CERTIFICATION.—A recordkeeper may be
certified as a participant in the recordkeeping com-
pliance program after meeting the general record-
keeping requirements established under the program
or after negotiating an alternative program suited to
the needs of the recordkeeper and the Customs Serv-
ice. Certification requirements shall take into ac-
count the size and nature of the importing business
and the volume of imports. In order to be certified,
319
the recordkeeper must be able to demonstrate that
it—
‘‘(A) understands the legal requirements
for recordkeeping, including the nature of the
records required to be maintained and produced
and the time periods involved;
‘‘(B) has in place procedures to explain the
recordkeeping requirements to those employees
who are involved in the preparation, mainte-
nance, and production of required records;
‘‘(C) has in place procedures regarding the
preparation 
and 
maintenance 
of 
required
records, and the production of such records to
the Customs Service;
‘‘(D) has designated a dependable individ-
ual or individuals to be responsible for record-
keeping compliance under the program and
whose duties include maintaining familiarity
with the recordkeeping requirements of the
Customs Service;
‘‘(E) has a record maintenance procedure
approved by the Customs Service for original
records, or, if approved by the Customs Service,
for alternative records or recordkeeping formats
other than the original records; and
320
‘‘(F) has procedures for notifying the Cus-
toms Service of occurrences of variances to, and
violations of, the requirements of the record-
keeping compliance program or the negotiated
alternative programs, and for taking corrective
action when notified by the Customs Service of
violations or problems regarding such program.
‘‘(g) PENALTIES.—
‘‘(1) DEFINITION.—For purposes of this sub-
section, the term ‘information’ means any record,
statement, declaration, document, or electronically
stored or transmitted information or data referred to
in subsection (a)(1)(A).
‘‘(2) EFFECTS OF FAILURE TO COMPLY WITH
DEMAND.—Except as provided in paragraph (4), if
a person fails to comply with a lawful demand for
information under subsection (a)(1)(A) the following
provisions apply:
‘‘(A) If the failure to comply is a result of
the willful failure of the person to maintain,
store, or retrieve the demanded information,
such person shall be subject to a penalty, for
each release of merchandise, not to exceed
$100,000, or an amount equal to 75 percent of
321
the appraised value of the merchandise, which-
ever amount is less.
‘‘(B) If the failure to comply is a result of
the negligence of the person in maintaining,
storing, or retrieving the demanded informa-
tion, such person shall be subject to a penalty,
for each release of merchandise, not to exceed
$10,000, or an amount equal to 40 percent of
the appraised value of the merchandise, which-
ever amount is less.
‘‘(C) In addition to any penalty imposed
under subparagraph (A) or (B) regarding de-
manded information, if such information related
to the eligibility of merchandise for a column 1
special rate of duty under title I, the entry of
such merchandise—
‘‘(i) if unliquidated, shall be liquidated
at the applicable column 1 general rate of
duty; or
‘‘(ii) if liquidated within the 2-year
period preceding the date of the demand,
shall be reliquidated, notwithstanding the
time limitation in section 514 or 520, at
the applicable column 1 general rate of
duty;
322
except that any liquidation or reliquidation
under clause (i) or (ii) shall be at the applicable
column 2 rate of duty if the Customs Service
demonstrates that the merchandise should be
dutiable at such rate.
‘‘(3) AVOIDANCE
OF
PENALTY.—No penalty
may be assessed under this subsection if the person
can show—
‘‘(A) that the loss of the demanded infor-
mation was the result of an act of God or other
natural casualty or disaster beyond the fault of
such person or an agent of the person;
‘‘(B) on the basis of other evidence satis-
factory to the Customs Service, that the de-
mand was substantially complied with; or
‘‘(C) the information demanded was pre-
sented to and retained by the Customs Service
at the time of entry or submitted in response to
an earlier demand.
‘‘(4) PENALTIES NOT EXCLUSIVE.—Any penalty
imposed under this subsection shall be in addition to
any other penalty provided by law except for—
‘‘(A) a penalty imposed under section 592
for a material omission of the demanded infor-
mation, or
323
‘‘(B) disciplinary action taken under sec-
tion 641.
‘‘(5) REMISSION
OR
MITIGATION.—A penalty
imposed under this section may be remitted or miti-
gated under section 618.
‘‘(6) CUSTOMS SUMMONS.—Nothing in this sub-
section shall limit or preclude the Customs Service
from issuing, or seeking the enforcement of, a cus-
toms summons.
‘‘(7) ALTERNATIVES TO PENALTIES.—
‘‘(A) IN GENERAL.—When a recordkeeper
who—
‘‘(i) has been certified as a participant
in the recordkeeping compliance program
under subsection (f); and
‘‘(ii) is generally in compliance with
the appropriate procedures and require-
ments of the program;
does not produce a demanded record or infor-
mation for a specific release or provide the in-
formation by acceptable alternative means, the
Customs Service, in the absence of willfulness
or repeated violations, shall issue a written no-
tice of the violation to the recordkeeper in lieu
of a monetary penalty. Repeated violations by
324
the recordkeeper may result in the issuance of
penalties and removal of certification under the
program until corrective action, satisfactory to
the Customs Service, is taken.
‘‘(B) CONTENTS OF NOTICE.—A notice of
violation issued under subparagraph (A) shall—
‘‘(i) state that the recordkeeper has
violated the recordkeeping requirements;
‘‘(ii) indicate the record or informa-
tion which was demanded; and
‘‘(iii) warn the recordkeeper that fu-
ture failures to produce demanded records
or information may result in the imposition
of monetary penalties.
‘‘(C) RESPONSE
TO
NOTICE.—Within a
reasonable time after receiving written notice
under subparagraph (A), the recordkeeper shall
notify the Customs Service of the steps it has
taken to prevent a recurrence of the violation.
‘‘(D) REGULATIONS.—The Secretary shall
promulgate regulations to implement this para-
graph. Such regulations may specify the time
periods for compliance with a demand for infor-
mation and provide guidelines which define re-
peated violations for purposes of this para-
325
graph. Any penalty issued for a recordkeeping
violation shall take into account the degree of
compliance compared to the total number of im-
portations, the nature of the demanded records
and the recordkeeper’s cooperation.’’.
SEC. 616. JUDICIAL ENFORCEMENT.
The second sentence of section 510(a) (19 U.S.C.
1510(a)) is amended by inserting ‘‘and such court may
assess a monetary penalty’’ after ‘‘as a contempt thereof’’.
SEC. 617. REVIEW OF PROTESTS.
Section 515 (19 U.S.C. 1515) is amended by insert-
ing at the end the following new subsections:
‘‘(c) If a protesting party believes that an application
for further review was erroneously or improperly denied
or was denied without authority for such action, it may
file with the Commissioner of Customs a written request
that the denial of the application for further review be set
aside. Such request must be filed within 60 days after the
date of the notice of the denial. The Commissioner of Cus-
toms may review such request and, based solely on the
information before the Customs Service at the time the
application for further review was denied, may set aside
the denial of the application for further review and void
the denial of protest, if appropriate. If the Commissioner
of Customs fails to act within 60 days after the date of
326
the request, the request shall be considered denied. All de-
nials of protests are effective from the date of original de-
nial for purposes of section 2636 of title 28, United States
Code. If an action is commenced in the Court of Inter-
national Trade that arises out of a protest or an applica-
tion for further review, all administrative action pertaining
to such protest or application shall terminate and any ad-
ministrative action taken subsequent to the commence-
ment of the action is null and void.
‘‘(d) If a protest is timely and properly filed, but is
denied contrary to proper instructions, the Customs Serv-
ice may on its own initiative, or pursuant to a written re-
quest by the protesting party filed with the appropriate
district director within 90 days after the date of the pro-
test denial, void the denial of the protest.’’.
SEC. 618. REPEAL OF PROVISION RELATING TO RELIQUIDA-
TION ON ACCOUNT OF FRAUD.
Section 521 (19 U.S.C. 1521) is repealed.
SEC. 619. PENALTIES RELATING TO MANIFESTS.
Section 584 (19 U.S.C. 1584) is amended—
(1) by amending subsection (a)—
(A) by striking out ‘‘appropriate customs
officer’’ wherever it appears and inserting
‘‘Customs Service’’,
327
(B) by striking out ‘‘officer demanding the
same’’ in paragraph (1) and inserting ‘‘officer
(whether of the Customs Service or the Coast
Guard) demanding the same’’, and
(C) by inserting ‘‘(electronically or other-
wise)’’ after ‘‘submission’’ in the last sentence
of paragraph (1); and
(2) by amending subsection (b)—
(A) by striking out ‘‘the appropriate cus-
toms officer’’, ‘‘he’’ (except in paragraph
(1)(F)), and ‘‘such officer’’ wherever they ap-
pear and inserting ‘‘the Customs Service’’,
(B) by striking out ‘‘written’’ wherever it
appears (other than paragraph (1)(F)),
(C) by inserting ‘‘or electronically trans-
mit’’ after ‘‘issue’’ wherever it appears, and
(D) by striking out ‘‘his intention’’ in the
first sentence of paragraph (1) and inserting
‘‘intent’’.
SEC. 620. UNLAWFUL UNLADING OR TRANSSHIPMENT.
Section 586 (19 U.S.C. 1586) is amended—
(1) by inserting ‘‘, or of a hovering vessel which
has received or delivered merchandise while outside
the territorial sea,’’ after ‘‘from a foreign port or
place’’ wherever it appears; and
328
(2) by amending subsection (f)—
(A) by striking out ‘‘the appropriate cus-
toms officer of the’’ and ‘‘the appropriate cus-
toms officer within the’’ and inserting ‘‘the
Customs Service at the’’; and
(B) by striking out ‘‘the appropriate cus-
toms officer is’’ and inserting ‘‘the Customs
Service is’’.
SEC. 621. PENALTIES FOR FRAUD, GROSS NEGLIGENCE,
AND NEGLIGENCE; PRIOR DISCLOSURE.
Section 592 (19 U.S.C. 1592) is amended—
(1) by inserting ‘‘or electronically transmitted
data or information’’ after ‘‘document’’ in subsection
(a)(1)(A)(i);
(2) by inserting ‘‘The mere nonintentional rep-
etition by an electronic system of an initial clerical
error does not constitute a pattern of negligent con-
duct.’’ at the end of subsection (a)(2);
(3) by amending subsection (b)—
(A) by amending the first sentence of
paragraph (1)(A)—
(i) by striking out ‘‘the appropriate
customs officer’’ and inserting ‘‘the Cus-
toms Service’’,
329
(ii) by striking out ‘‘he’’ and inserting
‘‘it’’, and
(iii) by striking out ‘‘his’’ and insert-
ing ‘‘its’’, and
(B) by amending paragraph (2)—
(i) by striking out ‘‘the appropriate
customs officer’’ wherever it appears and
inserting ‘‘the Customs Service’’,
(ii) by striking out ‘‘such officer’’
wherever it appears and inserting ‘‘the
Customs Service’’, and
(iii) by striking out ‘‘he’’ wherever it
appears and inserting ‘‘it’’;
(4) by amending subsection (c)(4)—
(A) by striking ‘‘time of disclosure or with-
in thirty days, or such longer period as the ap-
propriate customs officer may provide, after no-
tice by the appropriate customs officer of his’’
in subparagraph (A)(i) and by striking out
‘‘time of disclosure in 30 days, or such longer
period as the appropriate customs officer may
provide, after notice by the appropriate customs
officer of his’’ in subparagraph (B), and insert-
ing in each place ‘‘time of disclosure, or within
30 days (or such longer period as the Customs
330
Service may provide) after notice by the Cus-
toms Service of its’’; and
(B) by inserting after the last sentence the
following: ‘‘For purposes of this section, a for-
mal investigation of a violation is considered to
be commenced with regard to the disclosing
party and the disclosed information on the date
recorded in writing by the Customs Service as
the date on which facts and circumstances were
discovered or information was received which
caused the Customs Service to believe that a
possibility of a violation of subsection (a) ex-
isted.’’; and
(5) by amending subsection (d)—
(A) by striking out ‘‘the appropriate cus-
toms officer’’ and inserting ‘‘the Customs Serv-
ice’’,
(B) by striking out ‘‘duties’’ wherever it
appears and inserting ‘‘duties, taxes, or fees’’,
and
(C) by inserting ‘‘, TAXES OR FEES’’ after
‘‘DUTIES’’ in the sideheading.
SEC. 622. PENALTIES FOR FALSE DRAWBACK CLAIMS.
(a) AMENDMENT.—Part V of title IV is amended by
inserting after section 593 the following new section:
331
‘‘SEC. 593A. PENALTIES FOR FALSE DRAWBACK CLAIMS.
‘‘(a) PROHIBITION.—
‘‘(1) GENERAL RULE.—No person, by fraud, or
negligence—
‘‘(A) may seek, induce or affect, or at-
tempt to seek, induce, or affect, the payment or
credit to that person or others of any drawback
claim by means of—
‘‘(i) any document, written or oral
statement, or electronically transmitted
data or information, or act which is mate-
rial and false, or
‘‘(ii) any omission which is material;
or
‘‘(B) may aid or abet any other person to
violate subparagraph (A).
‘‘(2) EXCEPTION.—Clerical errors or mistakes
of fact are not violations of paragraph (1) unless
they are part of a pattern of negligent conduct. The
mere nonintentional repetition by an electronic sys-
tem of an initial clerical error does not constitute a
pattern of negligent conduct.
‘‘(b) PROCEDURES.—
‘‘(1) PREPENALTY NOTICE.—
‘‘(A) IN GENERAL.—If the Customs Serv-
ice has reasonable cause to believe that there
332
has been a violation of subsection (a) and deter-
mines that further proceedings are warranted,
the Customs Service shall issue to the person
concerned a written notice of intent to issue a
claim for a monetary penalty. Such notice
shall—
‘‘(i) identify the drawback claim;
‘‘(ii) set forth the details relating to
the seeking, inducing, or affecting, or the
attempted seeking, inducing, or affecting,
or the aiding or procuring of, the drawback
claim;
‘‘(iii) specify all laws and regulations
allegedly violated;
‘‘(iv) disclose all the material facts
which establish the alleged violation;
‘‘(v) state whether the alleged viola-
tion occurred as a result of fraud or neg-
ligence;
‘‘(vi) state the estimated actual or po-
tential loss of revenue due to the drawback
claim, and, taking into account all cir-
cumstances, the amount of the proposed
monetary penalty; and
333
‘‘(vii) inform such person that he shall
have a reasonable opportunity to make rep-
resentations, both oral and written, as to
why a claim for a monetary penalty should
not be issued in the amount stated.
‘‘(B) EXCEPTIONS.—The Customs Service
may not issue a prepenalty notice if the amount
of the penalty in the penalty claim issued under
paragraph (2) is $1,000 or less. In such cases,
the Customs Service may proceed directly with
a penalty claim.
‘‘(C) PRIOR
APPROVAL.—No prepenalty
notice in which the alleged violation occurred as
a result of fraud shall be issued without the
prior approval of Customs Headquarters.
‘‘(2) PENALTY CLAIM.—After considering rep-
resentations, if any, made by the person concerned
pursuant to the notice issued under paragraph (1),
the Customs Service shall determine whether any
violation of subsection (a), as alleged in the notice,
has occurred. If the Customs Service determines
that there was no violation, the Customs Service
shall promptly issue a written statement of the de-
termination to the person to whom the notice was
sent. If the Customs Service determines that there
334
was a violation, Customs shall issue a written pen-
alty claim to such person. The written penalty claim
shall specify all changes in the information provided
under clauses (i) through (vii) of paragraph (1)(A).
Such person shall have a reasonable opportunity
under section 618 to make representations, both oral
and written, seeking remission or mitigation of the
monetary penalty. At the conclusion of any proceed-
ing under section 618, the Customs Service shall
provide to the person concerned a written statement
which sets forth the final determination, and the
findings of fact and conclusions of law on which
such determination is based.
‘‘(c) MAXIMUM PENALTIES.—
‘‘(1) FRAUD.—A fraudulent violation of sub-
section (a) of this section is punishable by a civil
penalty in an amount not to exceed 3 times the ac-
tual or potential loss of revenue.
‘‘(2) NEGLIGENCE.—
‘‘(A) IN GENERAL.—A negligent violation
of subsection (a) is punishable by a civil penalty
in an amount not to exceed 20 percent of the
actual or potential loss of revenue for the 1st
violation.
335
‘‘(B) REPETITIVE
VIOLATIONS.—If the
Customs Service determines that a repeat neg-
ligent violation occurs relating to the same
issue, the penalty amount for the 2d violation
shall be in an amount not to exceed 50 percent
of the total actual or potential loss of revenue.
The penalty amount for each succeeding repet-
itive negligent violation shall be in an amount
not to exceed the actual or potential loss of rev-
enue. If the same party commits a nonrepetitive
violation, that violation shall be subject to a
penalty not to exceed 20 percent of the actual
or potential loss of revenue.
‘‘(3) PRIOR DISCLOSURE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), if the person concerned discloses the
circumstances of a violation of subsection (a)
before, or without knowledge of the commence-
ment of, a formal investigation of such viola-
tion, the monetary penalty assessed under this
subsection may not exceed—
‘‘(i) if the violation resulted from
fraud, an amount equal to the actual or
potential revenue of which the United
336
States is or may be deprived as a result of
overpayment of the claim; or
‘‘(ii) if the violation resulted from
negligence, an amount equal to the interest
computed on the basis of the prevailing
rate of interest applied under section 6621
of the Internal Revenue Code of 1986 on
the amount of actual revenue of which the
United States is or may be deprived during
the period that—
‘‘(I) begins on the date of the
overpayment of the claim; and
‘‘(II) ends on the date on which
the person concerned tenders the
amount of the overpayment.
‘‘(B) CONDITION
AFFECTING
PENALTY
LIMITATIONS.—The limitations in subparagraph
(A) on the amount of the monetary penalty to
be assessed under subsection (c) apply only if
the person concerned tenders the amount of the
overpayment made on the claim at the time of
disclosure, or within 30 days (or such longer
period as the Customs Service may provide),
after notice by the Customs Service of its cal-
culation of the amount of the overpayment.
337
‘‘(C) BURDEN OF PROOF.—The person as-
serting lack of knowledge of the commencement
of a formal investigation has the burden of
proof in establishing such lack of knowledge.
‘‘(4) COMMENCEMENT
OF
INVESTIGATION.—
For purposes of this section, a formal investigation
of a violation is considered to be commenced with re-
gard to the disclosing party and the disclosed infor-
mation on the date recorded in writing by the Cus-
toms Service as the date on which facts and cir-
cumstances were discovered or information was re-
ceived which caused the Customs Service to believe
that a possibility of a violation of subsection (a) ex-
isted.
‘‘(5) EXCLUSIVITY.—Penalty claims under this
section shall be the exclusive civil remedy for any
drawback related violation of subsection (a).
‘‘(d) DEPRIVATION
OF LAWFUL REVENUE.—Not-
withstanding section 514, if the United States has been
deprived of lawful duties and taxes resulting from a viola-
tion of subsection (a), the Customs Service shall require
that such duties and taxes be restored whether or not a
monetary penalty is assessed.
‘‘(e) DRAWBACK COMPLIANCE PROGRAM.—
338
‘‘(1) IN GENERAL.—After consultation with the
drawback trade community, the Customs Service
shall establish a drawback compliance program in
which claimants and other parties in interest may
participate after being certified by the Customs
Service under paragraph (2). Participation in the
drawback compliance program is voluntary.
‘‘(2) CERTIFICATION.—A party may be certified
as a participant in the drawback compliance pro-
gram after meeting the general requirements estab-
lished under the program or after negotiating an al-
ternative program suited to the needs of the party
and the Customs Service. Certification requirements
shall take into account the size and nature of the
party’s drawback program and the volume of claims.
In order to be certified, the participant must be able
to demonstrate that it—
‘‘(A) understands the legal requirements
for filing claims, including the nature of the
records required to be maintained and produced
and the time periods involved;
‘‘(B) has in place procedures to explain the
Customs Service requirements to those employ-
ees that are involved in the preparation of
339
claims, and the maintenance and production of
required records;
‘‘(C) has in place procedures regarding the
preparation of claims and maintenance of re-
quired records, and the production of such
records to the Customs Service;
‘‘(D) has designated a dependable individ-
ual or individuals to be responsible for compli-
ance under the program and whose duties in-
clude maintaining familiarity with the drawback
requirements of the Customs Service;
‘‘(E) has a record maintenance procedure
approved by the Customs Service for original
records, or, if approved by the Customs Service,
for alternate records or recordkeeping formats
other than the original records; and
‘‘(F) has procedures for notifying the Cus-
toms Service of variances to, and violations of,
the requirements of the drawback compliance
program or any negotiated alternative pro-
grams, and for taking corrective action when
notified by the Customs Service for violations or
problems regarding such program.
‘‘(f) ALTERNATIVES TO PENALTIES.—
‘‘(1) IN GENERAL.—When a party that—
340
‘‘(A) has been certified as a participant in
the drawback compliance program under sub-
section (e); and
‘‘(B) is generally in compliance with the
appropriate procedures and requirements of the
program;
commits a violation of subsection (a), the Customs
Service, shall, in the absence of fraud or repeated
violations, and in lieu of a monetary penalty, issue
a written notice of the violation to the party. Re-
peated violations by a party may result in the issu-
ance of penalties and removal of certification under
the program until corrective action, satisfactory to
the Customs Service, is taken.
‘‘(2) CONTENTS OF NOTICE.—A notice of viola-
tion issued under paragraph (1) shall—
‘‘(A) state that the party has violated sub-
section (a);
‘‘(B) explain the nature of the violation;
and
‘‘(C) warn the party that future violations
of subsection (a) may result in the imposition
of monetary penalties.
‘‘(3) RESPONSE TO NOTICE.—Within a reason-
able time after receiving written notice under para-
341
graph (1), the party shall notify the Customs Service
of the steps it has taken to prevent a recurrence of
the violation.
‘‘(g) REPETITIVE VIOLATIONS.—
‘‘(1) A party who has been issued a written no-
tice under subsection (f)(1) and subsequently com-
mits a repeat negligent violation involving the same
issue is subject to the following monetary penalties:
‘‘(A) 2D VIOLATION.—An amount not to
exceed 20 percent of the loss of revenue.
‘‘(B) 3RD VIOLATION.—An amount not to
exceed 50 percent of the loss of revenue.
‘‘(C) 
4TH
AND
SUBSEQUENT
VIOLA-
TIONS.—An amount not to exceed 100 percent
of the loss of revenue.
‘‘(2) If a party that has been certified as a par-
ticipant in the drawback compliance program under
subsection (e) commits an alleged violation which
was not repetitive, the party shall be issued a ‘warn-
ing letter’, and, for any subsequent violation, shall
be subject to the same maximum penalty amounts
stated in paragraph (1).
‘‘(h) REGULATION.—The Secretary shall promulgate
regulations and guidelines to implement this section. Such
regulations shall specify that for purposes of subsection
342
(g), a repeat negligent violation involving the same issue
shall be treated as a repetitive violation for a maximum
period of 3 years.
‘‘(i) COURT OF INTERNATIONAL TRADE PROCEED-
INGS.—Notwithstanding any other provision of law, in any
proceeding commenced by the United States in the Court
of International Trade for the recovery of any monetary
penalty claimed under this section—
‘‘(1) all issues, including the amount of the pen-
alty, shall be tried de novo;
‘‘(2) if the monetary penalty is based on fraud,
the United States shall have the burden of proof to
establish the alleged violation by clear and convinc-
ing evidence; and
‘‘(3) if the monetary penalty is based on neg-
ligence, the United States shall have the burden of
proof to establish the act or omission constituting
the violation, and the alleged violator shall have the
burden of providing evidence that the act or omis-
sion did not occur as a result of negligence.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to drawback claims filed on and
after the nationwide operational implementation of an
automated drawback selectivity program by the Customs
343
Service. The Customs Service shall publish notice of this
date in the Customs Bulletin.
SEC. 623. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC
INFORMATION.
Section 625 (19 U.S.C. 1625) is amended to read as
follows:
‘‘SEC. 625. INTERPRETIVE RULINGS AND DECISIONS; PUB-
LIC INFORMATION.
‘‘(a) PUBLICATION.—Within 90 days after the date
of issuance of any interpretive ruling (including any ruling
letter, or internal advice memorandum) or protest review
decision under this chapter with respect to any customs
transaction, the Secretary shall have such ruling or deci-
sion published in the Customs Bulletin or shall otherwise
make such ruling or decision available for public
inspection.
‘‘(b) APPEALS.—A person may appeal an adverse in-
terpretive ruling and any interpretation of any regulation
prescribed to implement such ruling to a higher level of
authority within the Customs Service for de novo review.
Upon a reasonable showing of business necessity, any such
appeal shall be considered and decided no later than 60
days following the date on which the appeal is filed. The
Secretary shall issue regulations to implement this sub-
section.
344
‘‘(c) MODIFICATION AND REVOCATION.—A proposed
interpretive ruling or decision which would—
‘‘(1) modify (other than to correct a clerical
error) or revoke a prior interpretive ruling or deci-
sion which has been in effect for at least 60 days;
or
‘‘(2) have the effect of modifying the treatment
previously accorded by the Customs Service to sub-
stantially identical transactions;
shall be published in the Customs Bulletin. The Secretary
shall give interested parties an opportunity to submit, dur-
ing not less than the 30-day period after the date of such
publication, comments on the correctness of the proposed
ruling or decision. After consideration of any comments
received, the Secretary shall publish a final ruling or deci-
sion in the Customs Bulletin within 30 days after the clos-
ing of the comment period. The final ruling or decision
shall become effective 60 days after the date of its
publication.
‘‘(d) PUBLICATION OF CUSTOMS DECISIONS THAT
LIMIT COURT DECISIONS.—A decision that proposes to
limit the application of a court decision shall be published
in the Customs Bulletin together with notice of oppor-
tunity for public comment thereon prior to a final decision.
345
‘‘(e) PUBLIC INFORMATION.—The Secretary may
make available in writing or through electronic media, in
an efficient, comprehensive and timely manner, all infor-
mation, including directives, memoranda, electronic mes-
sages and telexes which contain instructions, require-
ments, methods or advice necessary for importers and ex-
porters to comply with the Customs laws and regulations.
All information which may be made available pursuant to
this subsection shall be subject to any exemption from dis-
closure provided by section 552 of title 5, United States
Code.’’.
SEC. 624. SEIZURE AUTHORITY.
Section 596(c) (19 U.S.C. 1595a(c)) is amended to
read as follows:
‘‘(c) Merchandise which is introduced or attempted
to be introduced into the United States contrary to law
shall be treated as follows:
‘‘(1) The merchandise shall be seized and for-
feited if it—
‘‘(A) is stolen, smuggled, or clandestinely
imported or introduced;
‘‘(B) is a controlled substance, as defined
in the Controlled Substances Act (21 U.S.C.
801 et seq.), and is not imported in accordance
with applicable law; or
346
‘‘(C) is a contraband article, as defined in
section 1 of the Act of August 9, 1939 (49
U.S.C. App. 781).
‘‘(2) The merchandise may be seized and for-
feited if—
‘‘(A) its importation or entry is subject to
any restriction or prohibition which is imposed
by law relating to health, safety, or conserva-
tion and the merchandise is not in compliance
with the applicable rule, regulation, or statute;
‘‘(B) its importation or entry requires a li-
cense, permit or other authorization of an agen-
cy of the United States Government and the
merchandise is not accompanied by such li-
cense, permit, or authorization;
‘‘(C) it is merchandise or packaging in
which copyright, trademark, or trade name pro-
tection violations are involved (including, but
not limited to, violations of section 42, 43, or
45 of the Act of July 5, 1946 (15 U.S.C. 1124,
1125, or 1127), section 506 or 509 of title 17,
United States Code, or section 2318 or 2320 of
title 18, United States Code);
‘‘(D) it is trade dress merchandise involved
in the violation of a court order citing section
347
43 of such Act of July 5, 1946 (15 U.S.C.
1125);
‘‘(E) it is merchandise which is marked in-
tentionally in violation of section 304; or
‘‘(F) it is merchandise for which the im-
porter has received written notices that previous
importations of identical merchandise from the
same supplier were found to have been marked
in violation of section 304.
‘‘(3) If the importation or entry of the mer-
chandise is subject to quantitative restrictions re-
quiring a visa, permit, license, or other similar docu-
ment, or stamp from the United States Government
or from a foreign government or issuing authority
pursuant to a bilateral or multilateral agreement,
the merchandise shall be subject to detention in ac-
cordance with section 499 unless the appropriate
visa, license, permit, or similar document or stamp
is presented to the Customs Service; but if the visa,
permit, license, or similar document or stamp which
is presented in connection with the importation or
entry of the merchandise is counterfeit, the mer-
chandise may be seized and forfeited.
‘‘(4) If the merchandise is imported or intro-
duced contrary to a provision of law which governs
348
the classification or value of merchandise and there
are no issues as to the admissibility of the merchan-
dise into the United States, it shall not be seized ex-
cept in accordance with section 592.
‘‘(5) In any case where the seizure and forfeit-
ure of merchandise are required or authorized by
this section, the Secretary may—
‘‘(A) remit the forfeiture under section
618, or
‘‘(B) permit the exportation of the mer-
chandise, unless its release would adversely af-
fect health, safety, or conservation or be in con-
travention of a bilateral or multilateral agree-
ment or treaty.’’.
Subtitle B—National Customs
Automation Program
SEC. 631. NATIONAL CUSTOMS AUTOMATION PROGRAM.
Part I of title IV is amended—
(1) by striking out
‘‘PART I—DEFINITIONS
and inserting
‘‘PART I—DEFINITIONS AND NATIONAL CUSTOMS
AUTOMATION PROGRAM
‘‘Subpart A—Definitions’’;
and
349
(2) by inserting after section 402 the following:
‘‘Subpart B—National Customs Automation Program
‘‘SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish the National Customs Automation Program (herein-
after in this subpart referred to as the ‘Program’) which
shall be an automated and electronic system for processing
commercial importations and shall include the following
existing and planned components:
‘‘(1) Existing components:
‘‘(A) The electronic entry of merchandise.
‘‘(B) The electronic entry summary of re-
quired information.
‘‘(C) The electronic transmission of invoice
information.
‘‘(D) The electronic transmission of mani-
fest information.
‘‘(E) Electronic payments of duties, fees,
and taxes.
‘‘(F) The electronic status of liquidation
and reliquidation.
‘‘(G) The electronic selection of high risk
entries for examination (cargo selectivity and
entry summary selectivity).
‘‘(2) Planned components:
350
‘‘(A) The electronic filing and status of
protests.
‘‘(B) The electronic filing (including re-
mote filing under section 414) of entry informa-
tion with the Customs Service at any location.
‘‘(C) The electronic filing of import activity
summary statements and reconciliation.
‘‘(D) The electronic filing of bonds.
‘‘(E) The electronic penalty process.
‘‘(F) The electronic filing of drawback
claims, records, or entries.
‘‘(G) Any other component initiated by the
Customs Service to carry out the goals of this
subpart.
‘‘(b) PARTICIPATION IN PROGRAM.—The Secretary
shall by regulation prescribe the eligibility criteria for par-
ticipation in the Program. Participation in the Program
is voluntary.
‘‘SEC. 412. PROGRAM GOALS.
‘‘The goals of the Program are to ensure that all reg-
ulations and rulings that are administered or enforced by
the Customs Service are administered and enforced in a
manner that—
‘‘(1) is uniform and consistent;
351
‘‘(2) is as minimally intrusive upon the normal
flow of business activity as practicable; and
‘‘(3) improves compliance.
‘‘SEC. 413. IMPLEMENTATION AND EVALUATION OF PRO-
GRAM.
‘‘(a) OVERALL PROGRAM PLAN.—
‘‘(1) IN GENERAL.—Before the 180th day after
the date of the enactment of this Act, the Secretary
shall develop and transmit to the Committees an
overall plan for the Program. The overall Program
plan shall set forth—
‘‘(A) a general description of the ultimate
configuration of the Program;
‘‘(B) a description of each of the existing
components of the Program listed in section
411(a)(1); and
‘‘(C) estimates regarding the stages on
which planned components of the Program list-
ed in section 411(a)(2) will be brought on-line.
‘‘(2) ADDITIONAL INFORMATION.—In addition
to the information required under paragraph (1), the
overall Program plan shall include a statement re-
garding—
‘‘(A) the extent to which the existing com-
ponents of the Program currently meet, and the
352
planned components will meet, the Program
goals set forth in section 412; and
‘‘(B) the effects that the existing compo-
nents are currently having, and the effects that
the planned components will likely have, on—
‘‘(i) importers, brokers, and other
users of the Program, and
‘‘(ii) Customs Service occupations, op-
erations, processes, and systems.
‘‘(b) IMPLEMENTATION PLAN, TESTING, AND EVAL-
UATION.—
‘‘(1) IMPLEMENTATION PLAN.—For each of the
planned components of the Program listed in section
411(a)(2), the Secretary shall—
‘‘(A) develop an implementation plan;
‘‘(B) test the component in order to assess
its viability;
‘‘(C) evaluate the component in order to
assess its contribution toward achieving the
program goals; and
‘‘(D) transmit to the Committees the im-
plementation plan, the testing results, and an
evaluation report.
In developing an implementation plan under sub-
paragraph (A) and evaluating components under
353
subparagraph (C), the Secretary shall publish a re-
quest for comments in the Customs Bulletin and
shall consult with the trade community, including
importers, brokers, shippers, and other affected
parties.
‘‘(2) IMPLEMENTATION.—
‘‘(A) The Secretary may implement on a
permanent basis any Program component re-
ferred to in paragraph (1) on or after the date
which is 30 days after paragraph (1)(D) is
complied with.
‘‘(B) For purposes of subparagraph (A),
the 30 days shall be computed by excluding—
‘‘(i) the days either House is not in
session because of an adjournment of more
than 3 days to a day certain or an ad-
journment of the Congress sine die, and
‘‘(ii) any Saturday and Sunday, not
excluded under clause (i), when either
House is not in session.
‘‘(3) EVALUATION
AND
REPORT.—The Sec-
retary shall—
‘‘(A) develop a user satisfaction survey of
parties participating in the Program;
354
‘‘(B) evaluate the results of the user satis-
faction survey on a biennial basis (fiscal years)
and transmit a report to the Committees on the
evaluation by no later than the 90th day after
the close of each 2d fiscal year;
‘‘(C) with respect to the existing Program
component listed in section 411(a)(1)(G) trans-
mit to the Committees—
‘‘(i) a written evaluation of such com-
ponent before the 180th day after the date
of the enactment of this section and before
the implementation of the planned Pro-
gram 
components 
listed 
in 
section
411(a)(2) (B) and (C), and
‘‘(ii) a report on such component for
each of the 3 full fiscal years occurring
after the date of the enactment of this sec-
tion, which report shall be transmitted not
later than the 90th day after the close of
each such year; and
‘‘(D) not later than the 90th day after the
close of fiscal year 1994, and annually there-
after through fiscal year 2000, transmit to the
Committees a written evaluation with respect to
the implementation and effect on users of each
355
of the planned Program components listed in
section 411(a)(2).
In carrying out the provisions of this paragraph, the
Secretary shall publish requests for comments in the
Customs Bulletin and shall consult with the trade
community, including importers, brokers, shippers,
and other affected parties.
‘‘(c) COMMITTEES.—For purposes of this section, the
term ‘Committees’ means the Committee on Ways and
Means of the House of Representatives and the Committee
on Finance of the Senate.
‘‘SEC. 414. REMOTE LOCATION FILING.
‘‘(a) CORE ENTRY INFORMATION.—
‘‘(1) IN
GENERAL.—A Program participant
may file electronically an entry of merchandise with
the Customs Service from a location other than the
district designated in the entry for examination
(hereafter in this section referred to as a ‘remote lo-
cation’) if—
‘‘(A) the Customs Service is satisfied that
the participant has the capabilities referred to
in paragraph (2)(A) regarding such method of
filing; and
‘‘(B) the participant elects to file from the
remote location.
356
‘‘(2) REQUIREMENTS.—
‘‘(A) IN GENERAL.—In order to qualify for
filing from a remote location, a Program partic-
ipant must have the capability to provide, on an
entry-by-entry basis, for the following:
‘‘(i) The electronic entry of merchan-
dise.
‘‘(ii) The electronic entry summary of
required information.
‘‘(iii) The electronic transmission of
invoice information (when required by the
Customs Service).
‘‘(iv) The electronic payment of du-
ties, fees, and taxes.
‘‘(v) Such other electronic capabilities
within the existing or planned components
of the Program as the Secretary shall by
regulation require.
‘‘(B) RESTRICTION ON EXEMPTION FROM
REQUIREMENTS.—The Customs Service may
not permit any exemption or waiver from the
requirements established by this section for par-
ticipation in remote entry filing.
‘‘(3) CONDITIONS ON FILING UNDER THIS SEC-
TION.—The Secretary may prohibit a Program par-
357
ticipant from participating in remote location filing,
and may remove a Program participant from partici-
pation in remote location filing, if the participant—
‘‘(i) fails to meet all the compliance re-
quirements and operational standards of remote
location filing; or
‘‘(ii) fails to adhere to all applicable laws
and regulations.
‘‘(4) ALTERNATIVE FILING.—Any Program par-
ticipant that is eligible to file entry information elec-
tronically from a remote location but chooses not to
do so in the case of any entry must file any paper
documentation for the entry at the designated loca-
tion referred to in subsection (d).
‘‘(b) ADDITIONAL ENTRY INFORMATION.—
‘‘(1) IN GENERAL.—A Program participant that
is eligible under subsection (a) to file entry informa-
tion from a remote location may, if the Customs
Service is satisfied that the participant meets the re-
quirements under paragraph (2), also electronically
file from the remote location additional information
that is required by the Customs Service to be pre-
sented before the acceptance of entry summary in-
formation and at the time of acceptance of entry
summary information.
358
‘‘(2) REQUIREMENTS.—The Secretary shall
publish, and periodically update, a list of those capa-
bilities within the existing and planned components
of the Program that a Program participant must
have for purposes of this subsection.
‘‘(3) FILING OF ADDITIONAL INFORMATION.—
‘‘(A) IF
INFORMATION
ELECTRONICALLY
ACCEPTABLE.—A Program participant that is
eligible under paragraph (1) to file additional
information from a remote location shall elec-
tronically file all such information that the Cus-
toms Service can accept electronically.
‘‘(B) ALTERNATIVE FILING.—If the Cus-
toms Service cannot accept additional informa-
tion electronically, the Program participant
shall file the paper documentation with respect
to the information at the appropriate filing lo-
cation.
‘‘(C) APPROPRIATE LOCATION.—For pur-
poses of subparagraph (B), the ‘appropriate lo-
cation’ is—
‘‘(i) before January 1, 1999, a des-
ignated location; and
‘‘(ii) after December 31, 1998—
359
‘‘(I) if the paper documentation
is required for release, a designated
location; or
‘‘(II) if the paper documentation
is not required for release, a remote
location designated by the Customs
Service or a designated location.
‘‘(D) OTHER.—A Program participant that
is eligible under paragraph (1) to file additional
information electronically from a remote loca-
tion but chooses not to do so must file the
paper documentation with respect to the infor-
mation at a designated location.
‘‘(c) POST-ENTRY SUMMARY INFORMATION.—A Pro-
gram participant that is eligible to file electronically entry
information under subsection (a) and additional informa-
tion under subsection (b) from a remote location may file
at any remote location designated by the Customs Service
any information required by the Customs Service after
entry summary.
‘‘(d) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘designated location’ means a
customs office located in the customs district des-
ignated by the entry filer for purposes of customs
examination of the merchandise.
360
‘‘(2) The term ‘Program participant’ means,
with respect to an entry of merchandise, any party
entitled 
to 
make 
the 
entry 
under 
section
484(a)(2)(B).’’.
SEC. 632. DRAWBACK AND REFUNDS.
(a) AMENDMENTS.—Section 313 (19 U.S.C. 1313) is
amended as follows:
(1) Subsection (a) is amended—
(A) by inserting ‘‘or destruction under cus-
toms supervision’’ after ‘‘Upon the expor-
tation’’;
(B) by inserting ‘‘provided that those arti-
cles have not been used prior to such expor-
tation or destruction,’’ after ‘‘manufactured or
produced in the United States with the use of
imported merchandise,’’;
(C) by inserting ‘‘or destruction’’ after ‘‘re-
funded upon the exportation’’; and
(D) by striking out ‘‘wheat imported after
ninety days after the date of the enactment of
this Act’’ and inserting ‘‘imported wheat’’.
(2) Subsection (b) is amended—
(A) by striking out ‘‘duty-free or domestic
merchandise’’ and inserting ‘‘any other mer-
chandise (whether imported or domestic)’’;
361
(B) by inserting ‘‘, or destruction under
customs supervision,’’ after ‘‘there shall be al-
lowed upon the exportation’’;
(C) by inserting ‘‘or destroyed’’ after ‘‘not-
withstanding the fact that none of the imported
merchandise may actually have been used in the
manufacture or production of the exported’’;
(D) by inserting ‘‘, but only if those arti-
cles have not been used prior to such expor-
tation or destruction’’ after ‘‘an amount of
drawback equal to that which would have been
allowable had the merchandise used therein
been imported’’; and
(E) by inserting ‘‘or destruction under cus-
toms supervision’’ after ‘‘but the total amount
of drawback allowed upon the exportation’’.
(3) Subsection (c) is amended to read as fol-
lows:
‘‘(c) MERCHANDISE NOT CONFORMING TO SAMPLE
OR SPECIFICATIONS.—Upon the exportation, or destruc-
tion under the supervision of the Customs Service, of mer-
chandise—
‘‘(1) not conforming to sample or specifications,
shipped without the consent of the consignee, or de-
362
termined to be defective as of the time of importa-
tion;
‘‘(2) upon which the duties have been paid;
‘‘(3) which has been entered or withdrawn for
consumption; and
‘‘(4) which, within 3 years after release from
the custody of the Customs Service, has been re-
turned to the custody of the Customs Service for ex-
portation or destruction under the supervision of the
Customs Service;
the full amount of the duties paid upon such merchandise,
less 1 percent, shall be refunded as drawback.’’.
(4) Subsection (j) is amended to read as fol-
lows:
‘‘(j) UNUSED MERCHANDISE DRAWBACK.—
‘‘(1) If imported merchandise, on which was
paid any duty, tax, or fee imposed under Federal
law because of its importation—
‘‘(A) is, before the close of the 3-year pe-
riod beginning on the date of importation—
‘‘(i) exported, or
‘‘(ii) destroyed under customs super-
vision; and
‘‘(B) is not used within the United States
before such exportation or destruction;
363
then upon such exportation or destruction 99 per-
cent of the amount of each duty, tax, or fee so paid
shall be refunded as drawback. The exporter (or de-
stroyer) has the right to claim drawback under this
paragraph, but may endorse such right to the im-
porter or any intermediate party.
‘‘(2) If there is, with respect to imported mer-
chandise on which was paid any duty, tax, or fee im-
posed under Federal law because of its importation,
any other merchandise (whether imported or domes-
tic), that—
‘‘(A) is commercially interchangeable with
such imported merchandise;
‘‘(B) is, before the close of the 3-year pe-
riod beginning on the date of importation of the
imported merchandise, either exported or de-
stroyed under customs supervision; and
‘‘(C) before such exportation or destruc-
tion—
‘‘(i) is not used within the United
States, and
‘‘(ii) is in the possession of, including
ownership while in bailment, in leased fa-
cilities, in transit to, or in any other man-
ner under the operational control of, the
364
party claiming drawback under this para-
graph, if that party—
‘‘(I) is the importer of the im-
ported merchandise, or
‘‘(II) received from the person
who imported and paid any duty due
on the imported merchandise a certifi-
cate of delivery transferring to the
party the imported merchandise, com-
mercially interchangeable merchan-
dise, or any combination of imported
and 
commercially 
interchangeable
merchandise (and any such trans-
ferred merchandise, regardless of its
origin, will be treated as the imported
merchandise and any retained mer-
chandise will be treated as domestic
merchandise);
then upon the exportation or destruction of
such other merchandise the amount of each
such duty, tax, and fee paid regarding the im-
ported merchandise shall be refunded as draw-
back, but in no case may the total drawback on
the imported merchandise, whether available
under this paragraph or any other provision of
365
law or any combination thereof, exceed 99 per-
cent of that duty, tax, or fee.
‘‘(3) The performing of any operation or com-
bination of operations (including, but not limited to,
testing, cleaning, repacking, inspecting, sorting, re-
furbishing, freezing, blending, repairing, reworking,
cutting, slitting, adjusting, replacing components,
relabeling, disassembling, and unpacking), not
amounting to manufacture or production for draw-
back purposes under the preceding provisions of this
section on—
‘‘(A) the imported merchandise itself in
cases to which paragraph (1) applies, or
‘‘(B) the commercially interchangeable
merchandise in cases to which paragraph (2)
applies,
shall not be treated as a use of that merchandise for
purposes of applying paragraph (1)(B) or (2)(C).’’.
(5) Subsection (l) is amended by striking out
‘‘the fixing of a time limit within which drawback
entries or entries for refund under any of the provi-
sions of this section or section 309(b) shall be filed
and completed,’’ and inserting ‘‘the authority for the
electronic submission of drawback entries’’.
366
(6) Subsection (p) is amended to read as fol-
lows:
‘‘(p) SUBSTITUTION OF FINISHED PETROLEUM DE-
RIVATIVES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section, if—
‘‘(A) an article (hereafter referred to in
this subsection as the ‘exported article’) of the
same kind and quality as a qualified article is
exported;
‘‘(B) the requirements set forth in para-
graph (2) are met; and
‘‘(C) a drawback claim is filed regarding
the exported article;
the amount of the duties paid on, or attributable to,
such qualified article shall be refunded as drawback
to the drawback claimant.
‘‘(2) REQUIREMENTS.—The requirements re-
ferred to in paragraph (1) are as follows:
‘‘(A) The exporter of the exported article—
‘‘(i) manufactured or produced the
qualified article in a quantity equal to or
greater than the quantity of the exported
article,
367
‘‘(ii) purchased or exchanged, directly
or indirectly, the qualified article from a
manufacturer or producer described in
subsection (a) or (b) in a quantity equal to
or greater than the quantity of the ex-
ported article,
‘‘(iii) imported the qualified article in
a quantity equal to or greater than the
quantity of the exported article, or
‘‘(iv) purchased or exchanged, directly
or indirectly, an imported qualified article
from an importer in a quantity equal to or
greater than the quantity of the exported
article.
‘‘(B) In the case of the requirement de-
scribed in subparagraph (A)(ii), the manufac-
turer or producer produced the qualified article
in a quantity equal to or greater than the quan-
tity of the exported article.
‘‘(C) In the case of the requirement of sub-
paragraph (A)(i) or (A)(ii), the exported article
is exported during the period that the qualified
article described in subparagraph (A)(i) or
(A)(ii) (whichever is applicable) is manufac-
368
tured or produced, or within 180 days after the
close of such period.
‘‘(D) In the case of the requirement of
subparagraph (A)(i) or (A)(ii), the specific pe-
troleum refinery or production facility which
made the qualified article concerned is identi-
fied.
‘‘(E) In the case of the requirement of sub-
paragraph (A)(iii) or (A)(iv), the exported arti-
cle is exported within 180 days after the date
of entry of an imported qualified article de-
scribed in subparagraph (A)(iii) or (A)(iv)
(whichever is applicable).
‘‘(F) Except as otherwise specifically pro-
vided in this subsection, the drawback claimant
complies with all requirements of this section,
including providing certificates which establish
the drawback eligibility of articles for which
drawback is claimed.
‘‘(G) The manufacturer, producer, im-
porter, exporter, and drawback claimant of the
qualified article and the exported article main-
tain all records required by regulation.
‘‘(3) DEFINITION
OF
QUALIFIED
ARTICLE,
ETC.—For purposes of this subsection—
369
‘‘(A) The term ‘qualified article’ means an
article—
‘‘(i) described in—
‘‘(I) headings 2707, 2708, 2710,
2711, 2712, 2713, 2714, 2715, 2901,
and 2902 of the Harmonized Tariff
Schedule of the United States, or
‘‘(II) headings 3901 through
3914 of such Schedule (as such head-
ings apply to liquids, pastes, powders,
granules, and flakes), and
‘‘(ii) which is—
‘‘(I) manufactured or produced
as described in subsection (a) or (b)
from crude petroleum or a petroleum
derivative, or
‘‘(II) imported duty-paid.
‘‘(B) An exported article is of the same
kind and quality as the qualified article for
which it is substituted under this subsection if
it is a product that is commercially interchange-
able with or referred to under the same eight-
digit classification of the Harmonized Tariff
Schedule of the United States as the qualified
article.
370
‘‘(C) The term ‘drawback claimant’ means
the exporter of the exported article or the re-
finer, producer, or importer of such article. Any
person eligible to file a drawback claim under
this subparagraph may designate another per-
son to file such claim.
‘‘(4) LIMITATION ON DRAWBACK.—The amount
of drawback payable under this subsection shall not
exceed the amount of drawback that would be attrib-
utable to the article—
‘‘(A) manufactured or produced under sub-
section (a) or (b) by the manufacturer or pro-
ducer described in clause (i) or (ii) of para-
graph (2)(A), or
‘‘(B) imported under clause (iii) or (iv) of
paragraph (2)(A).’’.
(7) The following new subsections are inserted
after subsection (p):
‘‘(q) PACKAGING MATERIAL.—Packaging material,
when used on or for articles or merchandise exported or
destroyed under subsection (a), (b), (c), or (j), shall be
eligible under such subsection for refund, as drawback, of
99 percent of any duty, tax, or fee imposed under Federal
law on the importation of such material.
‘‘(r) FILING DRAWBACK CLAIMS.—
371
‘‘(1) A drawback entry and all documents nec-
essary to complete a drawback claim, including those
issued by the Customs Service, shall be filed or ap-
plied for, as applicable, within 3 years after the date
of exportation or destruction of the articles on which
drawback is claimed, except that any landing certifi-
cate required by regulation shall be filed within the
time limit prescribed in such regulation. Claims not
completed within the 3-year period shall be consid-
ered abandoned. No extension will be granted unless
it is established that the Customs Service was re-
sponsible for the untimely filing.
‘‘(2) A drawback entry for refund filed pursu-
ant to any subsection of this section shall be deemed
filed pursuant to any other subsection of this section
should it be determined that drawback is not allow-
able under the entry as originally filed but is allow-
able under such other subsection.
‘‘(s) DESIGNATION OF MERCHANDISE BY SUCCES-
SOR.—
‘‘(1) For purposes of subsection (b), a draw-
back successor may designate imported merchandise
used by the predecessor before the date of succession
as the basis for drawback on articles manufactured
372
by the drawback successor after the date of succes-
sion.
‘‘(2) For purposes of subsection (j)(2), a draw-
back successor may designate—
‘‘(A) imported merchandise which the
predecessor, before the date of succession, im-
ported; or
‘‘(B) imported merchandise, commercially
interchangeable merchandise, or any combina-
tion of imported and commercially interchange-
able merchandise for which the successor re-
ceived, before the date of succession, from the
person who imported and paid any duty due on
the imported merchandise a certificate of deliv-
ery transferring to the successor such merchan-
dise;
as the basis for drawback on merchandise possessed
by the drawback successor after the date of succes-
sion.
‘‘(3) For purposes of this subsection, the term
‘drawback successor’ means an entity to which an-
other entity (in this subsection referred to as the
‘predecessor’) has transferred by written agreement,
merger, or corporate resolution—
373
‘‘(A) all or substantially all of the rights,
privileges, immunities, powers, duties, and li-
abilities of the predecessor; or
‘‘(B) the assets and other business inter-
ests of a division, plant, or other business unit
of such predecessor, but only if in such transfer
the value of the transferred realty, personalty,
and intangibles (other than drawback rights, in-
choate or otherwise) exceeds the value of all
transferred drawback rights, inchoate or other-
wise.
‘‘(4) No drawback shall be paid under this sub-
section until either the predecessor or the drawback
successor (who shall also certify that it has the pred-
ecessor’s records) certifies that—
‘‘(A) the transferred merchandise was not
and will not be claimed by the predecessor, and
‘‘(B) the predecessor did not and will not
issue any certificate to any other person that
would enable that person to claim drawback.
‘‘(t) DRAWBACK CERTIFICATES.—Any person who is-
sues a certificate which would enable another person to
claim drawback shall be subject to the recordkeeping pro-
visions of this chapter, with the retention period beginning
on the date that such certificate is issued.
374
‘‘(u) ELIGIBILITY
OF ENTERED
OR WITHDRAWN
MERCHANDISE.—Imported merchandise that has not been
regularly entered or withdrawn for consumption shall not
satisfy any requirement for use, exportation, or destruc-
tion under this section.
‘‘(v) MULTIPLE DRAWBACK CLAIMS.—Merchandise
that is exported or destroyed to satisfy any claim for draw-
back shall not be the basis of any other claim for draw-
back; except that appropriate credit and deductions for
claims covering components or ingredients of such mer-
chandise shall be made in computing drawback pay-
ments.’’.
(b) APPLICATION OF AMENDMENT TO FINISHED PE-
TROLEUM DERIVATIVES.—Notwithstanding section 514 of
the Tariff Act of 1930 (19 U.S.C. 1514) or any other pro-
vision of law, the amendment made by paragraph (6) of
subsection (a) shall apply to—
(1) claims filed or liquidated on or after Janu-
ary 1, 1988, and
(2) claims that are unliquidated, under protest,
or in litigation on the date of the enactment of this
Act.
SEC. 633. EFFECTIVE DATE OF RATES OF DUTY.
Section 315 (19 U.S.C. 1315) is amended—
375
(1) by striking out ‘‘appropriate customs officer
in the form and manner prescribed by regulations of
the Secretary of the Treasury,’’ in the first sentence
of subsection (a) and inserting ‘‘Customs Service by
written, electronic or such other means as the Sec-
retary by regulation shall prescribe,’’;
(2) by striking out ‘‘customs custody’’ in the
first sentence of subsection (b) and inserting ‘‘cus-
tody of the Customs Service’’; and
(3) by striking out ‘‘paragraph 813’’ in sub-
section (c) and inserting ‘‘chapter 98 of the Har-
monized Tariff Schedule of the United States’’.
SEC. 634. DEFINITIONS.
Section 401 (19 U.S.C. 1401) is amended—
(1) by amending subsection (k) to read as fol-
lows:
‘‘(k) The term ‘hovering vessel’ means—
‘‘(1) any vessel which is found or kept off the
coast of the United States within or without the cus-
toms waters, if, from the history, conduct, character,
or location of the vessel, it is reasonable to believe
that such vessel is being used or may be used to in-
troduce or promote or facilitate the introduction or
attempted introduction of merchandise into the
376
United States in violation of the laws of the United
States; and
‘‘(2) any vessel which has visited a vessel de-
scribed in paragraph (1).’’; and
(2) by inserting at the end thereof the following
new subsections:
‘‘(n) The term ‘electronic transmission’ means the
transfer of data or information through an authorized
electronic data interchange system consisting of, but not
limited to, computer modems and computer networks.
‘‘(o) The term ‘electronic entry’ means the electronic
transmission to the Customs Service of—
‘‘(1) entry information required for the entry of
merchandise, and
‘‘(2) entry summary information required for
the classification and appraisement of the merchan-
dise, the verification of statistical information, and
the determination of compliance with applicable law.
‘‘(p) The term ‘electronic data interchange system’
means any established mechanism approved by the Com-
missioner of Customs through which information can be
transferred electronically.
‘‘(q) The term ‘National Customs Automation Pro-
gram’ means the program established under section 411.
377
‘‘(r) The term ‘import activity summary statement’
refers to data or information transmitted electronically to
the Customs Service, in accordance with such regulations
as the Secretary prescribes, at the end of a specified pe-
riod of time which enables the Customs Service to assess
properly the duties, taxes and fees on merchandise im-
ported during that period, collect accurate statistics and
determine whether any other applicable requirement of law
(other than a requirement relating to release from customs
custody) is met.
‘‘(s) The term ‘reconciliation’ means an electronic
process, initiated at the request of an importer, under
which the elements of an entry, other than those elements
related to the admissibility of the merchandise, that are
undetermined at the time of entry summary are provided
to the Customs Service at a later time. A reconciliation
is treated as an entry for purposes of liquidation, reliqui-
dation, and protest.’’.
SEC. 635. MANIFESTS.
Section 431 (19 U.S.C. 1431) is amended—
(1) by amending subsections (a) and (b) to read
as follows:
‘‘(a) IN GENERAL.—Every vessel required to make
entry under section 434 or obtain clearance under section
4197 of the Revised Statutes of the United States (46
378
U.S.C. App. 91) shall have a manifest that complies with
the requirements prescribed under subsection (d).
‘‘(b) PRODUCTION OF MANIFEST.—Any manifest re-
quired by the Customs Service shall be signed, produced,
delivered or electronically transmitted by the master or
person in charge of the vessel, aircraft, or vehicle, or by
any other authorized agent of the owner or operator of
the vessel, aircraft, or vehicle in accordance with the re-
quirements prescribed under subsection (d). A manifest
may be supplemented by bill of lading data supplied by
the issuer of such bill. If any irregularity of omission or
commission occurs in any way in respect to any manifest
or bill of lading data, the owner or operator of the vessel,
aircraft or vehicle, or any party responsible for such irreg-
ularity, shall be liable for any fine or penalty prescribed
by law with respect to such irregularity. The Customs
Service may take appropriate action against any of the
parties.’’; and
(2) by inserting after subsection (c) the follow-
ing new subsection:
‘‘(d) REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall by reg-
ulation—
380
larger document shipments for purposes of cus-
toms inspections; and
‘‘(C) the term ‘letters and documents’
means—
‘‘(i) data described in General Head-
note 4(c) of the Harmonized Tariff Sched-
ule of the United States,
‘‘(ii) securities and similar evidences
of value described in heading 4907 of such
Schedule, but not monetary instruments
defined pursuant to chapter 53 of title 31,
United States Code, and
‘‘(iii) personal correspondence, wheth-
er on paper, cards, photographs, tapes, or
other media.’’.
SEC. 636. INVOICE CONTENTS.
Section 481 (19 U.S.C. 1481) is amended—
(1) by amending subsection (a)—
(A) by amending the matter preceding
paragraph (1) to read as follows: ‘‘IN GEN-
ERAL.—All invoices of merchandise to be im-
ported into the United States and any elec-
tronic equivalent thereof considered acceptable
by the Secretary in regulations prescribed under
this section shall set forth, in written, elec-
381
tronic, or such other form as the Secretary
shall prescribe, the following:’’,
(B) by amending paragraph (3) to read as
follows:
‘‘(3) A detailed description of the merchandise,
including the commercial name by which each item
is known, the grade or quality, and the marks, num-
bers, or symbols under which sold by the seller or
manufacturer in the country of exportation, together
with the marks and numbers of the packages in
which the merchandise is packed;’’, and
(C) by amending paragraph (10) to read
as follows:
‘‘(10) Any other fact that the Secretary may by
regulation require as being necessary to a proper ap-
praisement, examination and classification of the
merchandise.’’;
(2) by amending subsection (c) to read as
follows:
‘‘(c) IMPORTER PROVISION OF INFORMATION.—Any
information required to be set forth on an invoice may
alternatively be provided by any of the parties qualifying
as an ‘importer of record’ under section 484(a)(2)(B) by
such means, in such form or manner, and within such time
as the Secretary shall by regulation prescribe.’’; and
382
(3) by inserting before the period at the end of
subsection (d) the following: ‘‘and may allow for the
submission or electronic transmission of partial in-
voices, electronic equivalents of invoices, bills, or
other documents or parts thereof, required under
this section’’.
SEC. 637. ENTRY OF MERCHANDISE.
(a) AMENDMENTS TO SECTION 484.—Section 484
(19 U.S.C. 1484) is amended to read as follows:
‘‘SEC. 484. ENTRY OF MERCHANDISE.
‘‘(a) REQUIREMENT AND TIME.—
‘‘(1) Except as provided in sections 490, 498,
552, 553, and 336(j), one of the parties qualifying
as ‘importer of record’ under paragraph (2)(B), ei-
ther in person or by an agent authorized by the
party in writing, shall, using reasonable care—
‘‘(A) make entry therefor by filing with the
Customs Service—
‘‘(i) such documentation or, pursuant
to an electronic data interchange system,
such information as is necessary to enable
the Customs Service to determine whether
the merchandise may be released from cus-
toms custody, and
383
‘‘(ii) notification whether an import
activity summary statement will be filed;
and
‘‘(B) complete the entry by filing with the
Customs Service the declared value, classifica-
tion and rate of duty applicable to the merchan-
dise, and such other documentation or, pursu-
ant to an electronic data interchange system,
such other information as is necessary to enable
the Customs Service to—
‘‘(i) properly assess duties on the mer-
chandise,
‘‘(ii) collect accurate statistics with re-
spect to the merchandise, and
‘‘(iii) determine whether any other ap-
plicable requirement of law (other than a
requirement relating to release from cus-
toms custody) is met.
‘‘(2)(A) The documentation or information re-
quired under paragraph (1) with respect to any im-
ported merchandise shall be filed or transmitted in
such manner and within such time periods as the
Secretary shall by regulation prescribe. Such regula-
tions shall provide for the filing of import activity
summary statements, covering entries or warehouse