I 
111TH CONGRESS 
1ST SESSION H. R. 1318 
To provide duty-free treatment for certain goods from designated Reconstruc-
tion Opportunity Zones in Afghanistan and Pakistan, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 4, 2009 
Mr. VAN HOLLEN (for himself, Mr. HOEKSTRA, Mr. LEVIN, Mr. KIRK, Mr. 
BURTON of Indiana, Mr. SMITH of Washington, Mr. CROWLEY, Mr. 
MORAN of Virginia, Mr. ACKERMAN, Mr. WELCH, and Ms. JACKSON-LEE 
of Texas) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To provide duty-free treatment for certain goods from des-
ignated Reconstruction Opportunity Zones in Afghani-
stan and Pakistan, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Afghanistan-Pakistan 
Security and Prosperity Enhancement Act’’. 
SEC. 2. DEFINITIONS; PURPOSES. 
(a) DEFINITIONS.—In this Act: 
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(1) AGREEMENT
ON
TEXTILES
AND
CLOTH-
ING.—The term ‘‘Agreement on Textiles and Cloth-
ing’’ means the Agreement on Textiles and Clothing 
referred to in section 101(d)(4) of the Uruguay 
Round Agreements Act (19 U.S.C. 3511(d)(4)). 
(2) CATEGORY; TEXTILE
AND
APPAREL
CAT-
EGORY NUMBER.—The terms ‘‘category’’ and ‘‘tex-
tile and apparel category number’’ mean the number 
assigned under the U.S. Textile and Apparel Cat-
egory System of the Office of Textiles and Apparel 
of the Department of Commerce, as listed in the 
HTS under the applicable heading or subheading (as 
in effect on September 1, 2007). 
(3) CORE LABOR STANDARDS.—The term ‘‘core 
labor standards’’ means— 
(A) freedom of association; 
(B) the effective recognition of the right to 
bargain collectively; 
(C) the elimination of all forms of compul-
sory or forced labor; 
(D) the effective abolition of child labor 
and a prohibition on the worst forms of child 
labor; and 
(E) the elimination of discrimination in re-
spect of employment and occupation. 
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(4) ENTERED.—The term ‘‘entered’’ means en-
tered, or withdrawn from warehouse for consump-
tion, in the customs territory of the United States. 
(5) ENTITY.—The term ‘‘entity’’ means— 
(A) a natural person, corporation, com-
pany, business association, partnership, society, 
trust, any other nongovernmental entity, orga-
nization, or group, whether or not for profit; 
(B) any governmental entity or instrumen-
tality of a government; and 
(C) any successor, subunit, or subsidiary of 
any entity described in subparagraph (A) or 
(B). 
(6) HTS.—The term ‘‘HTS’’ means the Har-
monized Tariff Schedule of the United States. 
(7) NAFTA.—The term ‘‘NAFTA’’ means the 
North American Free Trade Agreement concluded 
between the United States, Mexico, and Canada on 
December 17, 1992. 
(8) RECONSTRUCTION
OPPORTUNITY
ZONE.— 
The term ‘‘Reconstruction Opportunity Zone’’ means 
any area that— 
(A) solely encompasses portions of the ter-
ritory of— 
(i) Afghanistan; or 
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(ii) 1 or more of the following areas of 
Pakistan: 
(I) the Federally Administered 
Tribal Areas; 
(II) areas of Pakistan-adminis-
tered Kashmir that the President de-
termines were harmed by the earth-
quake of October 8, 2005; 
(III) areas of Baluchistan that 
are within 100 miles of Pakistan’s 
border with Afghanistan; and 
(IV) the North West Frontier 
Province; 
(B) has been designated by the competent 
authorities in Afghanistan or Pakistan, as the 
case may be, as an area in which merchandise 
may be introduced without payment of duty or 
excise tax; and 
(C) has been designated by the President 
as a Reconstruction Opportunity Zone pursuant 
to section 3(a). 
(b) PURPOSES.—The purposes of this Act are— 
(1) to stimulate economic activity and develop-
ment in Afghanistan and the border region of Paki-
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stan, critical fronts in the struggle against violent 
extremism; 
(2) to reflect the strong support that the 
United States has pledged to Afghanistan and Paki-
stan for their sustained commitment in the global 
war on terrorism; 
(3) to support the 3-pronged United States 
strategy in Afghanistan and the border region of 
Pakistan that leverages political, military, and eco-
nomic tools, with Reconstruction Opportunity Zones 
as a critical part of the economic component of that 
strategy; and 
(4) to offer a vital opportunity to improve liveli-
hoods of indigenous populations of Reconstruction 
Opportunity Zones, promote good governance, im-
prove economic and commercial ties between the 
people of Afghanistan and Pakistan, and extend and 
strengthen the Governments of Afghanistan and 
Pakistan. 
SEC. 3. DESIGNATION OF RECONSTRUCTION OPPORTUNITY 
ZONES. 
(a) AUTHORITY TO DESIGNATE.—The President is 
authorized to designate an area within Afghanistan or 
Pakistan described in section 2(a)(8) (A) and (B) as a 
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Reconstruction Opportunity Zone if the President deter-
mines that— 
(1) Afghanistan or Pakistan, as the case may 
be, meets the eligibility criteria set forth in sub-
section (b); 
(2) Afghanistan or Pakistan, as the case may 
be, meets the eligibility criteria set forth in sub-
section (c) of section 502 of the Trade Act of 1974 
(19 U.S.C. 2462(c)) for designation as a beneficiary 
developing country under that section and is not in-
eligible under subsection (b) of such section; and 
(3) designation of the area as a Reconstruction 
Opportunity Zone is appropriate taking into account 
the factors listed in subsection (c). 
(b) ELIGIBILITY CRITERIA.—Afghanistan or Paki-
stan, as the case may be, meets the eligibility criteria set 
forth in this subsection if that country— 
(1) has established, or is making continual 
progress toward establishing— 
(A) a market-based economy that protects 
private property rights, incorporates an open 
rules-based trading system, and minimizes gov-
ernment interference in the economy through 
measures such as price controls, subsidies, and 
government ownership of economic assets; 
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(B) the rule of law, political pluralism, and 
the right to due process, a fair trial, and equal 
protection under the law; 
(C) economic policies to— 
(i) reduce poverty; 
(ii) increase the availability of health 
care and educational opportunities; 
(iii) expand physical infrastructure; 
(iv) promote the development of pri-
vate enterprise; and 
(v) encourage the formation of capital 
markets through microcredit or other pro-
grams; 
(D) a system to combat corruption and 
bribery, such as ratifying and implementing the 
United Nations Convention Against Corruption; 
and 
(E) protection of core labor standards; 
(2) is eliminating or has eliminated barriers to 
trade and investment, including by— 
(A) providing national treatment and 
measures to create an environment conducive to 
domestic and foreign investment; 
(B) protecting intellectual property; and 
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(C) resolving bilateral trade and invest-
ment disputes; 
(3) does not engage in activities that undermine 
United States national security or foreign policy in-
terests; 
(4) does not engage in gross violations of inter-
nationally recognized human rights; 
(5) does not provide support for acts of inter-
national terrorism; and 
(6) cooperates in international efforts to elimi-
nate human rights violations and terrorist activities. 
(c) ADDITIONAL FACTORS.—In determining whether 
to designate an area in Afghanistan or Pakistan as a Re-
construction Opportunity Zone, the President shall take 
into account— 
(1) an expression by the government of the 
country of its desire to have a particular area des-
ignated as a Reconstruction Opportunity Zone under 
this Act; 
(2) whether the government of the country has 
provided the United States with a monitoring and 
enforcement plan outlining specific steps the country 
will take to cooperate with the United States to— 
(A) facilitate legitimate cross-border com-
merce; 
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(B) ensure that articles for which duty-free 
treatment is sought pursuant to this Act satisfy 
the applicable rules of origin described in sec-
tion 4 (c) and (d) or section 5 (c) and (d), 
whichever is applicable; and 
(C) prevent unlawful transshipment, as de-
scribed in section 6(b)(4). 
(3) the potential for such designation to create 
local employment and to promote local and regional 
economic development; 
(4) the physical security of the proposed Recon-
struction Opportunity Zone; 
(5) the economic viability of the proposed Re-
construction Opportunity Zone, including— 
(A) whether there are commitments to fi-
nance economic activity proposed for the Recon-
struction Opportunity Zone; and 
(B) whether there is existing or planned 
infrastructure for power, water, transportation, 
and communications in the area; 
(6) whether such designation would be compat-
ible with and contribute to the foreign policy and na-
tional security objectives of the United States, tak-
ing into account the information provided under sub-
section (d); and 
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(7) the views of interested persons submitted 
pursuant to subsection (e). 
(d) INFORMATION RELATING
TO COMPATIBILITY 
WITH AND CONTRIBUTION TO FOREIGN POLICY AND NA-
TIONAL
SECURITY
OBJECTIVES
OF
THE
UNITED 
STATES.—In determining whether designation of a Recon-
struction Opportunity Zone would be compatible with and 
contribute to the foreign policy and national security ob-
jectives of the United States in accordance with subsection 
(c)(6), the President shall take into account whether Af-
ghanistan or Pakistan, as the case may be, has provided 
the United States with a plan outlining specific steps it 
will take to verify the ownership and nature of the activi-
ties of entities to be located in the proposed Reconstruc-
tion Opportunity Zone. The specific steps outlined in a 
country’s plan shall include a mechanism to annually reg-
ister each entity by a competent authority of the country 
and— 
(1) to collect from each entity operating in, or 
proposing to operate in, a Reconstruction Oppor-
tunity Zone, information including— 
(A) the name and address of the entity; 
(B) the name and location of all facilities 
owned or operated by the entity that are oper-
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ating in or proposed to be operating in a Recon-
struction Opportunity Zone; 
(C) the name, nationality, date and place 
of birth, and position title of each person who 
is an owner, director, or officer of the entity; 
and 
(D) the nature of the activities of each en-
tity; 
(2) to update the information required under 
paragraph (1) as changes occur; and 
(3) to provide such information promptly to the 
Secretary of State. 
(e) OPPORTUNITY FOR PUBLIC COMMENT.—Before 
the President designates an area as a Reconstruction Op-
portunity Zone pursuant to subsection (a), the President 
shall afford an opportunity for interested persons to sub-
mit their views concerning the designation. 
(f) NOTIFICATION TO CONGRESS.—Before the Presi-
dent designates an area as a Reconstruction Opportunity 
Zone pursuant to subsection (a), the President shall notify 
Congress of the President’s intention to make the designa-
tion, together with the reasons for making the designation. 
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SEC. 4. DUTY-FREE TREATMENT FOR CERTAIN NONTEX-
TILE AND NONAPPAREL ARTICLES. 
(a) IN GENERAL.—The President is authorized to 
proclaim duty-free treatment for— 
(1) any article from a Reconstruction Oppor-
tunity Zone that the President has designated as an 
eligible article under section 503(a)(1)(A) of the 
Trade Act of 1974 (19 U.S.C. 2463(a)(1)(A)); 
(2) any article from a Reconstruction Oppor-
tunity Zone located in Afghanistan that the Presi-
dent has designated as an eligible article under sec-
tion 503(a)(1)(B) of the Trade Act of 1974 (19 
U.S.C. 2463(a)(1)(B)); or 
(3) any article from a Reconstruction Oppor-
tunity Zone that is not a textile or apparel article, 
regardless of whether the article has been designated 
as an eligible article under section 503(a)(1)(A) or 
(B) of the Trade Act of 1974 (19 U.S.C. 2463(a)(1) 
(A) or (B)), if, after receiving the advice of the 
International Trade Commission pursuant to sub-
section (b), the President determines that such arti-
cle is not import-sensitive in the context of imports 
from a Reconstruction Opportunity Zone. 
(b) ADVICE CONCERNING CERTAIN ELIGIBLE ARTI-
CLES.—Before proclaiming duty-free treatment for an ar-
ticle pursuant to subsection (a)(3), the President shall 
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publish in the Federal Register and provide the Inter-
national Trade Commission a list of articles which may 
be considered for such treatment. The provisions of sec-
tions 131 through 134 of the Trade Act of 1974 (19 
U.S.C. 2151 through 2154) shall apply to any designation 
under subsection (a)(3) in the same manner as such sec-
tions apply to action taken under section 123 of the Trade 
Act of 1974 (19 U.S.C. 2133) regarding a proposed trade 
agreement. 
(c) GENERAL RULES OF ORIGIN.— 
(1) IN
GENERAL.—The duty-free treatment 
proclaimed with respect to an article described in 
paragraph (1) or (3) of subsection (a) shall apply to 
any article subject to such proclamation which is the 
growth, product, or manufacture of 1 or more Re-
construction Opportunity Zones if— 
(A) that article is imported directly from a 
Reconstruction Opportunity Zone into the cus-
toms territory of the United States; and 
(B)(i) with respect to an article that is an 
article of a Reconstruction Opportunity Zone in 
Pakistan, the sum of— 
(I) the cost or value of the materials 
produced in 1 or more Reconstruction Op-
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portunity Zones in Pakistan or Afghani-
stan, 
(II) the direct costs of processing op-
erations performed in 1 or more Recon-
struction Opportunity Zones in Pakistan or 
Afghanistan, and 
(III) the cost or value of materials 
produced in the United States, determined 
in accordance with paragraph (2), 
is not less than 35 percent of the appraised 
value of the article at the time it is entered into 
the United States; or 
(ii) with respect to an article that is an ar-
ticle of a Reconstruction Opportunity Zone in 
Afghanistan, the sum of— 
(I) the cost or value of the materials 
produced in 1 or more Reconstruction Op-
portunity Zones in Pakistan or Afghani-
stan, 
(II) the cost or value of the materials 
produced in 1 or more countries that are 
members of the South Asian Association 
for Regional Cooperation, 
(III) the direct costs of processing op-
erations performed in 1 or more Recon-
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struction Opportunity Zones in Pakistan or 
Afghanistan, and 
(IV) the cost or value of materials 
produced in the United States, determined 
in accordance with paragraph (2), 
is not less than 35 percent of the appraised 
value of the article at the time it is entered into 
the United States. 
(2) DETERMINATION OF 35 PERCENT FOR ARTI-
CLES FROM RECONSTRUCTION OPPORTUNITY ZONES 
IN
PAKISTAN
AND
AFGHANISTAN.—If the cost or 
value of materials produced in the customs territory 
of the United States is included with respect to an 
article described in paragraph (1)(B), for purposes 
of determining the 35-percent appraised value re-
quirement under clause (i) or (ii) of paragraph 
(1)(B), not more than 15 percent of the appraised 
value of the article at the time the article is entered 
into the United States may be attributable to the 
cost or value of such United States materials. 
(d) RULES OF ORIGIN FOR CERTAIN ARTICLES OF 
RECONSTRUCTION OPPORTUNITY ZONES
IN AFGHANI-
STAN.— 
(1) IN
GENERAL.—The duty-free treatment 
proclaimed with respect to an article described in 
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is not less than 35 percent of the appraised 
value of the product at the time it is entered 
into the United States. 
(2) DETERMINATION OF 35 PERCENT FOR ARTI-
CLES FROM RECONSTRUCTION OPPORTUNITY ZONES 
IN
PAKISTAN
AND
AFGHANISTAN.—If the cost or 
value of materials produced in the customs territory 
of the United States is included with respect to an 
article described in paragraph (1)(B), for purposes 
of determining the 35-percent appraised value re-
quirement under paragraph (1)(B), not more than 
15 percent of the appraised value of the article at 
the time the article is entered into the United States 
may be attributable to the cost or value of such 
United States materials. 
(e) EXCLUSIONS.—An article shall not be treated as 
the growth, product, or manufacture of 1 or more Recon-
struction Opportunity Zones, and no material shall be in-
cluded for purposes of determining the 35-percent ap-
praised value requirement under subsection (c)(1) or 
(d)(1), by virtue of having merely undergone— 
(1) simple combining or packaging operations; 
or 
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