An act to promote economic revitalization and facilitate expansion of economic opportunities in the Caribbean Basin region, to provide for backup withholding of tax from interest and dividends, and for other purposes.
PL 98-67 (H.R.2973), enacted 08/05/1983

PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 369 
Public Law 98-67 
98th Congress 
An Act 
To promote economic revitalization and facilitate expansion of economic opportuni-
ties in the Caribbean Basin region, to provide for backup withholding of tax from 
interest and dividends, and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
TITLE I—INTEREST AND DIVIDEND TAX 
COMPLIANCE 
SEC. 101. SHORT TITLE; AMENDMENT OF 1954 CODE. 
(a) SHORT TITLE.—This title may be cited as the "Interest and 
Dividend Tax Compliance Act of 1983". 
(b) AMENDMENT OF 1954 CODE.—Except as otherwise expressly 
provided, whenever in this title an amendment is expressed in terms 
of an amendment to a section or other provision, the reference shall 
be considered to be made to a section or other provision of the 
Internal Revenue Code of 1954. 
SEC. 102. REPEAL OF WITHHOLDING ON INTEREST AND DIVIDENDS. 
(a) IN GENERAL.—Subtitle A of title III of the Tax Equity and 
Fiscal Responsibility Act of 1982 (relating to withholding of tax from 
interest and dividends) is hereby repealed as of the close of June 30, 
1983. 
(b) CONFORMING AMENDMENT.—Except as provided in this section, 
the Internal Revenue Code of 1954 shall be applied and adminis-
tered as if such subtitle A (and the amendments made by such 
subtitle A) had not been enacted. 
(c) REPEAL NOT TO APPLY TO AMOUNTS DEDUCTED AND WITHHELD 
BEFORE SEPTEMBER 2, 1983.— 
(1) IN GENERAL.—If, notwithstanding the repeal made by sub-
section (a) (and the provisions of subsection (b)), an amount is 
deducted and withheld before September 2, 1983, under sub-
chapter B of chapter 24 of the Internal Revenue Code of 1954 (as 
in effect before its repeal by subsection (a)), the repeal made by 
subsection (a) (and the provisions of subsection (b)) shall not 
apply to the amount so deducted and withheld. 
(2) ELECTION TO HAVE PARAGRAPH (i) NOT APPLY.—Paragraph 
(1) shall not apply with respect to any payor who elects (at the 
time and in the manner prescribed by the Secretary of the 
Treasury or his delegate) to have paragraph (1) not apply. 
(d) ESTIMATED TAX PAYMENTS.—For purposes of determining the 
amount of any addition to tax under section 6654 of the Internal 
Revenue Code of 1954 with respect to any installment required to be 
paid before July 1, 1983, the amount of the credit allowed by section 
31 of such Code for any taxable year which includes any portion of 
the period beginning July 1, 1983, and ending December 31, 1983, 
Aug. 5, 1983 
[H.R. 2973] 
Interest and 
dividend 
withholding tax, 
repeal. 
Caribbean Basin 
economic 
revitalization. 
Interest and 
Dividend Tax 
Compliance Act 
of 1983. 
26 u s e 1 note. 
26 u s e 1 et seq. 
Effective date. 
26 u s e 3451 
note. 
96 Stat. 576. 
96 Stat. 576. 
26 u s e 3451. 
26 u s e 6654. 
96 Stat. 585. 
26 u s e 31. 
97 STAT. 370 
PUBLIC LAW 98-67—AUG. 5, 1983 
shall be increased by an amount equal to 10 percent of the aggregate 
amount of payments— 
(1) which are received during the portion of such taxable year 
after June 30, 1983, and before January 1, 1984, and 
(2) which (but for the repeal made by subsection (a)) would 
have been subject to withholding under subchapter B of chapter 
96 Stat. 576. 
24 of such Code (determined without regard to any exemption 
96 Stat. 577. 
described in section 3452 of such subchapter B). 
26 u s e 3452. 
(g) TECHNICAL AMENDMENTS.— 
96 Stat. 591. 
(1) Subsection (a) of section 6049 (relating to returns regarding 
26 use 6049. 
payments of interest) is amended— 
(A) by inserting "or" at the end of paragraph (1), 
(B) by striking out "or" at the end of paragraph (2), 
(C) by striking out paragraph (3), and 
(D) by striking out ", tax deducted and withheld, and the 
name and address of the person to whom paid or from 
whom withheld", and inserting in lieu thereof "and the 
name and address of the person to whom paid". 
(2) Subsection (b) of section 6049 (defining interest) is 
amended— 
(A) by amending subparagraph (C) of paragraph (2) to 
read as follows: 
"(C) except 
to the 
extent 
otherwise 
provided 
in 
regulations— 
"(i) any amount paid to any person described in 
paragraph (4), or 
"(ii) any amount described in paragraph (5),", and 
(B) by adding at the end thereof the following new 
paragraphs: 
"(4) PERSONS DESCRIBED IN THIS PARAGRAPH.—A person is 
described in this paragraph if such person is— 
"(A) a corporation, 
"(B) an organization exempt from taxation under section 
501(a) or an individual retirement plan, 
"(C) the United States or any wholly owned agency or 
instrumentality thereof, 
"(D) a State, the District of Columbia, a possession of the 
United States, any political subdivision of any of the forego-
ing, or any wholly owned agency or instrumentality of any 
one or more of the foregoing, 
"(E) a foreign government, a political subdivision of a 
foreign government, or any wholly owned agency or instru-
mentality of any one or more of the foregoing, 
"(F) an international organization or any wholly owned 
agency or instrumentality thereof, 
"(G) a foreign central bank of issue, 
"(H) a dealer in securities or commodities required to 
register as such under the laws of the United States or a 
State, the District of Columbia, or a possession of the 
United States, 
"(I) a real estate investment trust (as defined in section 
856), 
"(J) an entity registered at all times during the taxable 
15 use 80a-5l. 
year under the Investment Company Act of 1940, 
"(K) a common trust fund (as defined in section 584(a)), or 
"(L) any trust which— 
"(i) is exempt from tax under section 664(c), or 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 371 
"(ii) is described in section 4947(a)(1). 
"(5) AMOUNTS DESCRIBED IN THIS PARAGRAPH.—An amount is 
described in this paragraph if such amount— 
"(A) is subject to withholding under subchapter A of 
chapter 3 (relating to withholding of tax on nonresident 
26 USC 1441. 
aliens and foreign corporations) by the person paying such 
amount, or 
"(B) would be subject to withholding under subchapter A 
of chapter 3 by the person paying such amount but for the 
fact that— 
"(i) such amount is income from sources outside the 
United States, 
"(ii) the payor thereof is exempt from the application 
of section 1441(a) by reason of section 1441(c) or a tax 
treaty, or 
"(iii) such amount is original issue discount (within 
the meaning of section 1232(b)(1)).". 
(3) Paragraph (1) of section 6049(c) (relating to statements to 
96 Stat. 591. 
be furnished to persons with respect to whom information is 26 USC 6049. 
furnished) is amended— 
(A) by inserting "and" at the end of subparagraph (A), 
(B) by striking out ", and" at the end of subparagraph (B) 
and inserting in lieu thereof a period, and 
(C) by striking out subparagraph (C). 
SEC. 103. SENSE OF THE CONGRESS WITH RESPECT TO INCREASED 
APPROPRIATIONS. 
It is the sense of the Congress— 
(1) that additional amounts should be appropriated for pur-
poses of collecting tax due with respect to reportable payments 
(as defined in section 3406(b) of the Internal Revenue Code of 
1954), and 
Infra. 
(2) that— 
(A) such additional amounts should not be less than— 
(i) $15,000,000 for fiscal year 1984, and 
(ii) $300,000,000 for the period consisting of fiscal 
years 1984 through 1988, and 
(B) it would be preferable that such additional amounts 
for such period be at least $600,000,000. 
SEC. 104. BACKUP WITHHOLDING. 
(a) IN GENERAL.—Chapter 24 (relating to collection of income tax 
at source) is amended by inserting after section 3405 the following 
new section: 
"SEC. 3406. BACKUP WITHHOLDING. 
26 USC 3406. 
"(a) REQUIREMENT TO DEDUCT AND WITHHOLD.— 
"(1) IN GENERAL.—In the case of any reportable payment, if— 
"(A) the payee fails to furnish his TIN to the payor in the 
manner required, 
"(B) the Secretary notifies the payor that the TIN fur-
nished by the payee is incorrect, 
"(C) there has been a notified payee underreporting de-
scribed in subsection (c), or 
"(D) there has been a payee certification failure described 
in subsection (d), 
97 STAT. 372 
PUBLIC LAW 98-67—AUG. 5, 1983 
Ante, p. 370. 
96 Stat. 601. 
26 u s e 6041 
A. 
96 Stat. 600. 
26 u s e 6045. 
then the payor shall deduct and withhold from such payment a 
tax equal to 20 percent of such payment. 
"(2) SUBPARAGRAPHS (C) AND (D) OP PARAGRAPH (i) APPLY 
ONLY TO INTEREST AND DIVIDEND PAYMENTS.—Subparagraphs (C) 
and (D) of paragraph (1) shall apply only to reportable interest 
or dividend payments. 
"(b) REPORTABLE PAYMENT, ETC.—-For purposes of this section-
ed) REPORTABLE PAYMENT.—The term 'reportable payment' 
means— 
"(A) any reportable interest or dividend pajmient, and 
"(B) any other reportable payment. 
"(2) REPORTABLE INTEREST OR DIVIDEND PAYMENT.— 
"(A) IN GENERAL.—The term 'reportable interest or divi-
dend payment' means any payment of a kind, and to a 
payee, required to be shown on a return required under— 
"(i) section 6049(a) (relating to payments of interest), 
"(ii) section 6042(a) (relating to payments of divi-
dends), or 
"(iii) section 6044 (relating to payments of patronage 
dividends) but only to the extent such payment is in 
money. 
"(B) SPECIAL RULE FOR PATRONAGE DIVIDENDS.—For pur-
poses of subparagraphs (C) and (D) of subsection (a)(1), the 
term 'reportable interest or dividend payment' shall not 
include any payment to which section 6044 (relating to 
patronage dividends) applies unless 50 percent or more of 
such payment is in money. 
"(3) OTHER REPORTABLE PAYMENT.—The term 'other reportable 
payment' means any payment of a kind, and to a payee, 
required to be shown on a return required under— 
"(A) section 6041 (relating to certain information at 
source), 
"(B) section 6041A(a) (relating to payments of remunera-
tion for services), 
"(C) section 6045 (relating to returns of brokers), or 
"(D) section 6050A (relating to reporting requirements of 
certain fishing boat operators), but only to the extent such 
payment is in money and represents a share of the proceeds 
of the catch. 
"(4) WHETHER PAYMENT IS OF REPORTABLE KIND DETERMINED 
WITHOUT REGARD TO MINIMUM AMOUNT.—The determination of 
whether any payment is of a kind required to be shown on a 
return described in paragraph (2) or (3) shall be made without 
regard to any minimum amount which must be paid before a 
return is required. 
"(5) EXCEPTION FOR CERTAIN SMALL PAYMENTS.—TO the extent 
provided in regulations, the term 'reportable payment' shall not 
include any payment which— 
"(A) does not exceed $10, and 
"(B) if determined for a 1-year period, would not exceed 
$10. 
"(6) 
OTHER REPORTABLE PAYMENTS INCLUDE PAYMENTS DE-
SCRIBED IN SECTION 6041(a) OR 6041(A) (a) ONLY WHERE AGGRE-
GATE FOR CALENDAR Y
E
A
R IS $600 O
R MORE.—Any payment of a 
kind required to be shown on a return required under section 
6041(a) or 6041A(a) which is made during any calendar year 
shall be treated as a reportable payment only if— 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 373 
"(A) the aggregate amount of such payment and all 
previous payments described in such sections by the payor 
to the payee during such calendar year equals or exceeds 
$600, 
"(B) the payor was required under section 6041(a) or 
6041A(a) to file a return for the preceding calendar year 
with respect to payments to the payee, or 
"(C) during the preceding calendar year, the payor made 
reportable payments to the payee with respect to which 
amounts were required to be deducted and withheld under 
subsection (a). 
"(7) EXCEPTION FOR CERTAIN WINDOW PAYMENTS OF INTEREST, 
ETC.—For purposes of subparagraphs (C) and (D) of subsection 
(a)(1), the term 'reportable interest or dividend payment' shall 
not include any payment— 
"(A) in redemption of a coupon on a bearer instrument or 
in redemption of a United States savings bond, or 
"(B) to the extent provided in regulations, of interest on 
instruments similar to those described in subparagraph (A). 
The preceding sentence shall not apply for purposes of deter-
mining whether there is payee underreporting described in 
subsection (c). 
"(c) NOTIFIED PAYEE UNDERREPORTING WITH RESPECT TO INTEREST 
AND DIVIDENDS.— 
"(1) NOTIFIED PAYEE UNDERREPORTING.—If— 
"(A) the Secretary determines with respect to any payee 
that there has been payee underreporting, 
"(B) at least 4 notices have been mailed by the Secretary 
to the payee (over a period of at least 120 days) with respect 
to the underreporting, and 
"(C) in the case of any payee who has filed a return for 
the taxable year, any deficiency of tax attributable to such 
failure has been assessed, 
the Secretary may notify payors of reportable interest or divi-
dend payments with respect to such payee of the requirement to 
deduct and withhold under subsection (a)(1)(C) (but not the rea-
sons therefor). 
"(2) PAYEE UNDERREPORTING DEFINED.—For purposes of this 
section, there has been payee underreporting ijf for any taxable 
year the Secretary determines that— 
"(A) the payee failed to include in his return of tax under 
chapter 1 for such year any portion of a reportable interest 
or dividend payment required to be shown on such return, 
or 
"(B) the payee may be required to file a return for such 
year and to include a reportable interest or dividend pay-
ment in such return, but failed to file such return. 
"(3) DETERMINATION BY SECRETARY TO STOP (OR NOT TO START) 
WITHHOLDING.— 
"(A) IN GENERAL.—If the Secretary determines that— 
"(i) there was no payee underreporting, 
"(ii) any payee underreporting has been corrected 
(and any tax, penalty, or interest with respect to the 
payee underreporting has been paid), 
(iii) withholding under subsection (aXlXC) has 
caused (or would cause) undue hardship to the payee 
96 Stat. 601. 
26 u s e 6041A. 
97 STAT. 374 
PUBLIC LAW 98-67—AUG. 5, 1983 
and it is unlikely that any payee underreporting by 
such payee will occur again, or 
"(iv) there is a bona fide dispute as to whether there 
has been any payee underreporting, 
then the Secretary shall take the action described in sub-
paragraph (B). 
"(B) SECRETARY TO TAKE ACTION TO STOP (OR NOT TO START) 
WITHHOLDING.—For purposes of subparagraph (A), if at the 
time of the Secretary's determination under subparagraph 
(A)-
"(i) no notice has been given under paragraph (1) to 
any payor with respect to the underreporting, the Sec-
retary shall not give any such notice, or 
"(ii) if such notice has been given, the Secretary 
shall— 
"(I) provide the payee with a written certifica-
tion that withholding under subsection (a)(1)(C) is 
to stop, and 
"(II) notify the applicable payors (and brokers) 
that such withholding is to stop. 
"(C) TIME FOR TAKING ACTION WHERE NOTICE TO PAYOR HAS 
BEEN GIVEN.—In any case where notice has been given 
under paragraph (1) to any payor with respect to any 
underreporting, if the Secretary makes a determination 
under subparagraph (A) during the 12-month period ending 
on October 15 of any calendar year— 
"(i) except as provided in clause (ii), the Secretary 
shall take the action described in subparagraph (B)(ii) 
to bring about the stopping of withholding no later 
than December 1 of such calendar year, or 
"(ii) in the case of^ 
"(I) a no payee underreporting determination 
under clause (i) of subparagraph (A), or 
"(II) a hardship determination under clause (iii) 
of subparagraph (A), 
such action shall be taken no later than the 45th day 
after the day on which the Secretary made the determi-
nation. 
"(D) OPPORTUNITY TO REQUEST DETERMINATION.—The Sec-
retary shall prescribe procedures under which— 
"(i) a payee may request a determination under sub-
paragraph (A), and 
"(ii) the payee may provide information with respect 
to such request. 
"(4) PAYOR NOTIFIES PAYEE OF WITHHOLDING BECAUSE OF PAYEE 
UNDERREPORTING.—Any payor required to withhold any tax 
under subsection (a)(1)(C) shall, at the time such withholding 
begins, notify the payee of such withholding. 
"(5) PAYEE MAY BE REQUIRED TO NOTIFY SECRETARY WHO HIS 
PAYORS AND BROKERS ARE.—For purposes of this section, the 
Secretary may require any payee of reportable interest or divi-
dend payments who is subject to withholding under subsection 
(a)(1)(C) to notify the Secretary of^ 
"(A) all payors from whom the payee receives reportable 
interest or dividend payments, and 
"(B) all brokers with whom the payee has accounts which 
may involve reportable interest or dividend payments. 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 375 
The Secretary may notify any such broker that such payee is 
subject to withholding under subsection (aXlXC). 
"(d) INTEREST AND DIVIDEND BACKUP WITHHOLDING APPUES TO 
NEW ACCOUNTS AND INSTRUMENTS UNLESS PAYEE CERTIFIES THAT H E 
Is NOT SUBJECT TO SUCH WITHHOLDING.— 
"(1) IN GENERAL.—There is a payee certification failure unless 
the payee has certified to the payor, under penalty of perjury, 
that such payee is not subject to withholding under subsection 
(aXlXC). 
"(2) SPECIAL RULES FOR READILY TRADABLE INSTRUMENTS.— 
"(A) IN GENERAL.—Subsection (aXlXD) shsdl apply to any 
reportable interest or dividend pajmient to any payee on 
any readily tradable instrument if (and only if) no certifica-
tion was provided to the payor by the payee under para-
graph (1) and— 
"(i) the payor was notified by a broker under subpar-
agraph (B), 
"(ii) such instrument was acquired directly by the 
payee from the payor, or 
(iii) such instrument is held by the payor as nomi-
nee for the payee. 
"(B) BROKER NOTIFIES PAYOR.—If— 
"(i) a payee acquires any readily tradable instrument 
through a broker, and 
"(iiXD the payee does not provide a certification to 
such broker under subparagraph (C), or (II) such broker 
is notified by the Secretary before such acquisition that 
such payee is subject to withholding under subsection 
(aXl)(C), 
such broker shall, within 15 days after the date of the 
acquisition, notify the payor that such payee is subject to 
withholding 
under 
subsection 
(aXlXD) (or 
subsection 
(aXlXC) in the case of a notification described in clause 
(iiXID). 
"(C) 
TIME 
FOR PAYEE TO PROVIDE CERTIFICATION TO 
BROKER.—In the case of any readily tradable instrument 
acquired by a payee through a broker, the certification 
described in paragraph (1) may be provided by the payee to 
such broker— 
"(i) at any time after the payee's account with the 
broker was established and before the acquisition of 
such instrument, or 
"(ii) in connection with the acquisition of such 
instrument. 
"(3) EXCEPTION FOR EXISTING ACCOUNTS, ETC.—This subsection 
and subsection (aXlXD) shall not apply to any reportable inter-
est or dividend payment which is paid or credited— 
"(A) in the case of interest or any other amount of a kind 
reportable under section 6049, with respect to any account 96 Stat. 591. 
(whatever called) established before January 1, 1984, or 26 use 6049. 
with respect to any instrument acquired before January 1, 
1984, 
"(B) in the case of dividends or any other amount report-
able under section 6042, on any stock or other instrument 
acquired before January 1,1984, or 
"(C) in the case of patronage dividends or other amounts 
of a kind reportable under section 6044, with respect to any 
97 STAT. 376 
PUBLIC LAW 98-67—AUG. 5, 1983 
membership acquired, or contract entered into, before Jan-
uary 1,1984. 
"(4) EXCEPTION FOR READILY TRADABLE INSTRUMENTS ACQUIRED 
THROUGH EXISTING BROKERAGE ACCOUNTS.—Subparagraph (B) of 
paragraph (2) shall not apply with respect to a readily tradable 
instrument which was acquired through an account with a 
broker if— 
"(A) such account was established before January 1,1984, 
and 
"(B) during 1988, such broker bought or sold instruments 
for the payee (or acted as a nominee for the payee) through 
such account. 
The preceding sentence shall not apply with respect to any 
readily tradable instrument acquired through such account 
after the broker was notified by the Secretary that the payee is 
subject to withholding under subsection (aXlXC). 
"(e) PERIOD FOR WHICH WITHHOLDING Is IN EFFECT.— 
"(1) FAILURE TO FURNISH TIN.—In the case of any failure by a 
payee to furnish his TIN to a payor in the manner required, 
subsection (a) shall apply to any reportable payment made by 
such payor during the period during which the TIN has not 
been furnished in the manner required. 
"(2) NOTIFICATION OF INCORRECT NUMBER.—In any case in 
which the Secretary notifies the payor that the TIN furnished 
by the payee is incorrect, subsection (a) shall apply to any 
reportable pa3niient made by such payor— 
"(A) after the close of the 30th day after the day on which 
the payor received such notification, and 
"(B) before the payee furnishes another TIN in the 
manner required. 
"(3) NOTIFIED PAYEE UNDERREPORTING DESCRIBED IN SUBSEC-
TION 
(c).— 
"(A) IN GENERAL.—In the case of any notified payee 
underreporting described in subsection (c), subsection (a) 
shall apply to any reportable interest or dividend payment 
made— 
"(i) after the close of the 30th day after the day on 
which the payor received notification from the Secre-
tary of such underreporting, and 
(ii) before the stop date. 
"(B) STOP DATE.—For purposes of this subsection, the 
term 'stop date' means the determination effective date or, 
if later, the earlier of— 
"(i) the day on which the payor received notification 
from the Secretary under subsection (c)(3)(B) to stop 
withholding, or 
"(ii) the day on which the payor receives from the 
payee a certification provided by the Secretary under 
subsection (cX3XB). 
"(C) DETERMINATION EFFECTIVE DATE.—For purposes of 
this subsection— 
"(i) IN GENERAL.—Except as provided in clause (ii), 
the determination effective date of any determination 
under subsection (cX3)(A) which is made during the 12-
month period ending on October 15 of any calendar 
year shall be the first January 1 following such October 
15. 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 377 
"(ii) DETERMINATION THAT THERE WAS NO UNDERRE-
PORTING; HARDSHIP.—In the case of any determination 
under clause (i) or (iii) of subsection (c)(3)(A), the deter-
mination effective date shall be the date on which the 
Secretary's determination is made. 
"(4) FAILURE TO PROVIDE CERTIFICATION THAT PAYEE IS NOT 
SUBJECT TO WITHHOLDING.— 
"(A) IN GENERAL.—In the case of any payee certification 
failure described in subsection (d)(1), subsection (a) shall 
apply to any reportable interest or dividend payment made 
during the period during which the certification described 
in subsection (dXD has not been furnished to the payor. 
"(B) SPECIAL RULE FOR READILY TRADABLE INSTRUMENTS 
ACQUIRED THROUGH BROKER WHERE NOTIFICATION.—In 
the 
case of any readily tradable instrument acquired by the 
payee through a broker, the period described in subpara-
graph (A) shall start with payments to the payee made after 
the close of the 30th day after the payor receives notifica-
tion from a broker under subsection (d)(2)(B). 
"(5) 30-DAY GRACE PERIODS.— 
"(A) START-UP.—If the payor elects the application of this 
subparagraph with respect to the payee, subsection (a) shall 
also apply to any reportable payment made during the 30-
day period described in paragraph (2)(A), (3)(A), or (4)(B). 
"(B) STOPPING.—Unless the payor elects not to have this 
subparagraph apply with respect to the payee, subsection 
(a) shall also apply to any reportable payment made after 
the close of the period described in paragraph (1), (2), or (4) 
(as the case may be) and before the 30th day after the close 
of such period. A similar rule shall also apply with respect 
to the period described in paragraph (3)(A) where the stop 
date is determined under clause (i) or (ii) of paragraph 
(3)(B). 
"(C) ELECTION OF SHORTER GRACE PERIOD.—The payor may 
elect a period shorter than the grace period set forth in 
subparagraph (A) or (B), as the case may be. 
"(f) CONFIDENTIALITY OF INFORMATION.— 
"(1) IN GENERAL.—No person may use any information 
obtained under this section (including any failure to certify 
under subsection (d)) except for purposes of meeting any 
requirement under this section or (subject to the safeguards set 
forth in section 6103) for purposes permitted under section 6103. 26 use 6103. 
"(2) CROSS REFERENCE.— 
"For provision providing for civil damages for violation of paragraph 
(1), see section 7431. 
"(g) EXCEPTIONS.— 
"(1) PAYMENTS TO CERTAIN PAYEES.—Subsection (a) shall not 
apply to any payment made to— 
"(A) any organization or governmental unit described in 
subparagraph (B), (C), (D), (E), or (F) of section 6049(bX4), or Ante, p. 370. 
"(B) any other person specified in regulations. 
"(2) 
AMOUNTS 
FOR 
WHICH 
WITHHOLDING 
OTHERWISE 
REQUIRED.—Subsection (a) shall not apply to any amount for 
which withholding is otherwise required by this title. 
"(3) EXEMPTION WHILE WAITING FOR TIN.—The Secretary shall 
prescribe regulations for exemptions from the tax imposed by 
97 STAT. 378 
PUBLIC LAW 98-67—AUG. 5, 1983 
subsection (a) during the period during which a person is wait-
ing for receipt of a TIN. 
"(h) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes of this 
section— 
"(1) OBVIOUSLY INCORRECT NUMBER.—A person shall be 
treated as failing to furnish his TIN if the TIN furnished does 
not contain the proper number of digits. 
"(2) PAYEE FURNISHES 2 INCORRECT TINS.—If the payee fur-
nishes the payor 2 incorrect TINs in any 3-year period, the 
payor shall, after receiving notice of the second incorrect TIN, 
treat the payee as not having furnished another TIN under 
subsection (e)(2)(B) until the day on which the payor receives 
notification from the Secretary that a correct TIN has been 
furnished. 
"(3) JOINT PAYEES.—Except to the extent otherwise provided 
in regulations, any payment to joint payees shall be treated as if 
all the payment were made to the first person listed in the 
payment. 
"(4) PAYOR DEFINED.—The term 'payor' means, with respect to 
any reportable payment, a person required to file a return 
described in paragraph (2) or (3) of subsection (b) with respect to 
such payment. 
"(5) BROKER.— 
"(A) IN GENERAL.—The term 'broker' has the meaning 
96 Stat. 600. 
given to such term by section 6045(c)(1). 
26 u s e 6045. 
'<(g) Q N L Y 1 BROKER PER ACQUISITION.—If, b u t for t h i s 
subparagraph, there would be more than 1 broker with 
respect to any acquisition, only the broker having the 
closest contact with the payee shall be treated as the 
broker. 
"(C) PAYOR NOT TREATED AS BROKER.—In the case of any 
instrument, such term shall not include any person who is 
the payor with respect to such instrument. 
"(6) READILY TRADABLE INSTRUMENT.—The term 'readily trad-
able instrument' means— 
"(A) any instrument which is part of an issue any portion 
of which is traded on an established securities market 
(within the meaning of section 453(f)(5)), and 
"(B) except as otherwise provided in regulations pre-
scribed by the Secretary, any instrument which is regularly 
quoted by brokers or dealers making a market. 
"(7) ORIGINAL ISSUE DISCOUNT.—To the extent provided in 
regulations, rules similar to the rules of paragraph (6) of section 
96 Stat. 591. 
6049(d) shall apply. 
26 use 6049. 
«(g) REQUIREMENT OF NOTICE T
O PAYEE.—Whenever the Secre-
tary notifies a payor under paragraph (1)(B) of subsection (a) 
that the TIN furnished by any payee is incorrect, the Secretary 
shall at the same time furnish a copy of such notice to the 
payor, and the payor shall promptly furnish such copy to the 
payee. 
(9) REQUIREMENT OF NOTICE TO SECRETARY.—If the Secretary 
notifies a payor under paragraph (1)(B) of subsection (a) that the 
TIN furnished by any payee is incorrect and such payee subse-
quently furnishes another TIN to the payor, the payor shall 
promptly notify the Secretary of the other TIN so furnished. 
"(10) COORDINATION WITH OTHER SECTIONS.—For purposes of 
96 Stat. 585. 
section 31, this chapter (other than section 3402(n)), and so 
^b Uoi-' ol. 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 379 
much of subtitle F (other than section 7205) as relates to this 
chapter, payments which are subject to withholding under this 
section shall be treated as if they were wages paid by an 
employer to an employee (and amounts deducted and withheld 
under this section shall be treated as if deducted and withheld 
under section 3402). 
"(i) REGULATIONS.—The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section." 
(b) CIVIL DAMAGES FOR UNAUTHORIZED DISCLOSURE OF INFORMA-
TION.—Section 7431 (relating to civil damages for unauthorized 96 Stat. 645. 
disclosure of returns and return information) is amended by adding ^^ ^SC 7431. 
at the end thereof the following new subsection: 
"(f) EXTENSION TO INFORMATION OBTAINED UNDER SECTION 3406.— Ante, p. 37i. 
For purposes of this section— 
"(1) any information obtained under section 3406 (including 
information with respect to any payee certification failure 
under subsection (d) thereof) shall be treated as return informa-
tion, and 
"(2) any use of such information other than for purposes of 
meeting any requirement under section 3406 or (subject to the 
safeguards set forth in section 6103) for purposes permitted 
under section 6103 shall be treated as a violation of section 6103. 
For purposes of subsection (b), the reference to section 6103 shall be 
treated as including a reference to section 3406." 
(c) PENALTY FOR FAILURE BY BROKER TO PROVIDE NOTICE.— 
(1) IN GENERAL.—Subchapter B of chapter 68 (relating to 
assessable penalties) is amended by adding at the end thereof 
the following new section: 
"SEC. 6705. FAILURE BY BROKER TO PROVIDE NOTICE TO PAYORS. 
26 USC 6705. 
"(a) IN GENERAL.—Any person required under section 3406(d)(2)(B) Ante, p. 371. 
to provide notice to any payor who willfully fails to provide such 
notice to such payor shall pay a penalty of $500 for each such 
failure. 
"(b) PENALTY IN ADDITION TO OTHER PENALTIES.—Any penalty 
imposed by this section shall be in addition to any other penalty 
provided by law." 
(2) CONFORMING AMENDMENT.—The table of sections for sub-
chapter B of chapter 68 is amended by adding at the end thereof 
the following new item: 
"Sec. 6705. Failure by broker to provide notice to payors." 
(d) TECHNICAL AMENDMENTS.— 
(1) DEFINITION OF TIN.—Subsection (a) of section 7701 (relating 96 Stat. 26ii. 
to definitions) is amended by adding at the end thereof the 26USC770i. 
following new paragraph: 
"(41) TIN.—The term 'TIN' means the identifying number 
assigned to a person under section 6109." 
(2) YEAR FOR WHICH CREDIT ALLOWED.—Section 31 (relating to 96 Stat. 585. 
credit for tax withheld on wages) is amended by adding at the ^6 use 3i. 
end thereof the following new subsection: 
"(c) SPECIAL RULE FOR BACKUP WITHHOLDING.—Any credit allowed 
by subsection (a) for any amount withheld under section 3406 shall Ante, p. 371. 
be allowed for the taxable year of the recipient of the income in 
which the income is received." 
97 STAT. 380 
PUBLIC LAW 98-67—AUG. 5, 1983 
(3) REPEAL OF EXISTING BACKUP WITHHOLDING PROVISIONS.— 
96 Stat. 607. 
Subsection (s) of section 3402 is hereby repealed. 
26 use 3402. 
(4) C
L
E
R
I
C
A
L AMENDMENT.—The table of sections for chapter 
24 is amended by inserting after the item relating to section 
3405 the following new item: 
"Sec. 3406. Backup withholding." 
SEC. 105. PENALTY FOR FAILURE BY PAYORS TO MEET CERTAIN INTER-
EST AND DIVIDEND REPORTING REQUIREMENTS. 
(a) FAILURE TO SUPPLY TAXPAYER IDENTIFICATION NUMBERS.— 
26 use 6676. 
Section 6676 (relating to failure to supply identifying numbers) is 
amended to read as follows: 
"SEC. 6676. FAILURE TO SUPPLY IDENTIFYING NUMBERS. 
"(a) IN GENERAL.—If any person who is required by regulations 
prescribed under section 6109— 
"(1) to include his TIN in any return, statement, or other 
document, 
"(2) to furnish his TIN to another person, or 
"(3) except in the case of a return or statement required to be 
9
f
i nip 
finlq 
^^ 
under section 6042, 6044, or 6049, to include in any return, 
26 use 6049. 
statement, or other document made with respect to another 
person the TIN of such other person, 
fails to comply with such requirement at the time prescribed by 
such regulations, such person shall, unless it is shown that such 
failure is due to reasonable cause and not to willful neglect, pay a 
penalty of $5 for each such failure described in paragraph (1) and 
$50 for each such failure described in paragraph (2) or (3), except 
that the total amount imposed on such person for all such failures 
during any calendar year shall not exceed $50,000. 
"(b) PENALTIES INVOLVING FAILURES ON INTEREST AND DIVIDEND 
RETURNS.— 
"(1) IN GENERAL.—If any payor— 
"(A) is required to include in any return or statement 
required to be filed under section 6042, 6044, or 6049 with 
respect to any payee the TIN of such payee, and 
(B) fails to include such number or includes an incorrect 
number, 
then the payor shall pay a penalty of $50 for each such failure 
unless it is shown that the payor exercised due diligence in 
attempting to satisfy the requirement with respect to such TIN. 
"(c) PROCEDURES RELATING TO ASSESSMENT OF PENALTY.— 
"(1) SELF-ASSESSMENT OF PENALTY IMPOSED BY SUBSECTION 
(b).—Any penalty imposed under subsection (b) on any person— 
"(A) for purposes of this subtitle, shall be treated as an 
26 use 4041. 
excise tax imposed by subtitle D, and 
"(B) shall be due and payable on April 1 of the calendar 
year following the calendar year for which the return or 
statement was made. 
"(2) DEFICIENCY PROCEDURES NOT TO APPLY.—Subchapter B of 
26 use 6211. 
chapter 63 (relating to deficiency procedures for income, estate, 
gift, and certain excise taxes) shall not apply in respect of the 
assessment or collection of any penalty imposed by this 
section." 
(b) FAILURE TO FILE STATEMENTS.— 
(1) SECTION 6652.— 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 381 
(A) Subsection (a) of section 6652 (relating to returns 96 stat. 605. 
relating to information at source, payments of dividends, ^^ ^^ ^^^^ 
etc., and certain transfers of stock) is amended by redes-
ignating paragraph (2) as paragraph (3) and by inserting 
after pars^aph (1) the following new paragraph: 
"(2) FAILURE TO FILE RETURNS ON INTEREST, DIVIDENDS, AND 
PATRONAGE DIVIDENDS.— 
"(A) IN GENERAL.—In the case of each failure to file a 
statement of the amount of payments to another person 
required by— 
"(i) section 6042(aXl) (relating to payments of 
dividends), 
"(ii) section 6044(a)(1) (relating to payments of 96 stat. 587. 
patronage dividends), or 
^6 use 6044. 
"(iii) section 6049(a) (relating to payments of interest), Ante, p. 370. 
on the date prescribed therefor (determined with regard to 
any extension of time for filing), there shall be paid by the 
person failing to file such statement a penalty of $50 for 
each such failure unless it is shown that such person exer-
cised due diligence in attempting to satisfy the requirement 
with respect to such statement. 
"(B) SELF-ASSESSMENT.—Any penalty imposed under sub-
paragraph (A) on any person— 
"(i) for purposes of this subtitle, shall be treated as an 
excise tax imposed by subtitle D, and 
2
6 use 404i. 
"(ii) shall be due and payable on April 1 of the 
calendar year following the calendar year for which 
such statement is required. 
"(C) DEFICIENCY PROCEDURES NOT TO APPLY.—Subchapter 
B of chapter 63 (relating to deficiency procedures for 26 use 6211. 
income, estate, gift, and certain excise taxes) shall not apply 
in respect of the assessment or collection of any penalty 
imposed by subparagraph (A)." 
(B) Subparagraph (A) of section 6652(aXl) is amended— 
(i) by striking out clauses (ii), (iii), and (iv) and by 
redesignating clauses (v) and (vi) as clauses (ii) and (iii), 
rGSOGCtivftlv d.nci 
(ii) by striking out "6042(e), 6044(f), 6049(e), or" in 
clause (iii), as so redesignated. 
(C) Paragraph (3) of section 6652(a) (as redesignated by 
sul}paragraph (A)) is amended by striking out "paragraph Supra. 
(1)" in the matter preceding subparagraph (A) and in sub-
paragraph (A) and inserting in lieu thereof "paragraph (1) 
or (2)". 
(2) SECTION 6678.—Section 6678 (relating to failure to furnish 
26 use 6678. 
certain statements) is amended— 
(A) by inserting "(a) IN GENERAL.—" before "In the case 
r»f" 
(B) by striking out "6042(c), 6044(e), 6045(b), 6049(c)," in 
paragraph (1) and inserting in lieu thereof "6045(b),", 
(C) by striking out "6042(a)(1), 6044(a)(1), 6045(a), 6049(a)," 
in paragraph (1) and inserting in lieu thereof "6045(a),", 
and 
(D) by adding at the end thereof the following new 
subsection: 
*(b) FAILURE TO FILE INTEREST AND DIVIDEND STATEMENTS.— 
97 STAT. 382 
PUBLIC LAW 98-67—AUG. 5, 1983 
"(1) IN GENERAL.—In the case of any person who fails to 
Post, p. 383. 
furnish a statement under section 6042(c), 6044(e), or 6049(c) on 
the date prescribed therefor to a person with respect to whom a 
return has been made under section 6042(a)(1), 6044(a)(1), or 
96 Stat. 587; 
6049(a), respectively, such person shall pay a penalty of $50 for 
ante, p. 370. 
each such failure unless it is shown that such person exercised 
due diligence in attempting to satisfy the requirement with 
respect to such statement. 
"(2) SELF-ASSESSMENT.—Any penalty imposed under para-
graph (1) on any person— 
"(A) for purposes of this subtitle, shall be treated as an 
26 use 4041. 
excise tax imposed by subtitle D, and 
"(B) shall be due and payable on April 1 of the calendar 
year following the calendar year for which such statement 
is required. 
"(3) DEFICIENCY PROCEDURES NOT TO APPLY.—Subchapter B of 
26 use 6211. 
chapter 63 (relating to deficiency procedures for income, estate, 
gift, and certain excise taxes) shall not apply in respect of the 
assessment or collection of any penalty imposed by paragraph 
(1)." 
SEC. 106. PRESUMPTION THAT NEGLIGENCE PENALTY APPLIES TO 
UNDERPAYMENTS ATTRIBUTABLE TO FAILURE TO REPORT 
CERTAIN INTEREST AND DIVIDEND PAYMENTS. 
26 use 6653. 
Section 6653 (relating to failure to pay tax) is amended by adding 
at the end thereof the following new subsection: 
"(g) 
SPECIAL RULE IN THE CASE OF INTEREST OR DIVIDEND 
PAYMENTS.— 
"(1) IN GENERAL.—If— 
"(A) any payment is shown on a return made by the 
payor under section 6042(a), 6044(a), or 6049(a), and 
'(B) the payee fails to include any portion of such pay-
ment in gross income, 
any portion of an underpayment attributable to such failure 
shall be treated, for purposes of subsection (a), as due to negli-
gence in the absence of clear and convincing evidence to the 
contrary. 
"(2) PENALTY TO APPLY ONLY TO PORTION OF UNDERPAYMENT 
DUE TO FAILURE TO INCLUDE INTEREST OR DIVIDEND PAYMENT.—If 
any penalty is imposed under subsection (a) by reason of para-
graph (1), the amount of the penalty imposed by paragraph (1) of 
subsection (a) shall be 5 percent of the portion of the underpay-
ment which is attributable to the failure described in paragraph 
(1)." 
SEC. 107. CIVIL AND CRIMINAL PENALTIES ON FALSE INFORMATION WITH 
RESPECT TO BACKUP WITHHOLDING O
N INTEREST AND DIVI-
DENDS. 
26 use 6682. 
(a) CIVIL PENALTY.—Paragraph (1) of section 6682(a) (relating to 
civil penalty for false information with respect to withholding) is 
amended by inserting "or section 3406" after "section 3402", 
96 Stat. 588. 
(b) CRIMINAL PENALTY.—Section 7205 (relating to fraudulent with-
26 use 7205. 
holding exemption certificate or failure to supply information) is 
amended— 
(1) by striking out "Any individual" and inserting in lieu 
thereof "(a) WITHHOLDING ON WAGES.—Any individual", and 
(2) by adding at the end thereof the following new subsection: 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 383 
"(b) BACKUP WITHHOLDING ON INTEREST AND DIVIDENDS.—If any 
individual willfully makes— 
"(1) any false certification or affirmation on any statement 
required by a payor in order to meet the due diligence require-
ments of section 6676(b), or 
Ante, p. 380. 
"(2) a false certification under paragraph (1) or (2)(C) of 
section 3406(d), 
Ante, p. 371. 
then such individual shall, in lieu of any other penalty provided by 
law (except the penalty provided by section 6682), upon conviction 
thereof, be fined not more than $1,000, or imprisoned not more than 
1 year, or both." 
SEC. 108. SEPARATE MAILING OF 1099. 
(a) INTEREST.—Section 6049(c)(2) (relating to time statement must 
Ante, p. 371. 
be furnished) is amended to read as follows: 
"(2) TIME AND FORM OF STATEMENT.—The written statement 
under paragraph (1)— 
"(A) shall be furnished (either in person or in a separate 
mailing by first-class mail) to the person on or before 
January 31 of the year following the calendar year for 
which the return under subsection (a) was made, and 
"(B) shall be in such form as the Secretary may prescribe 
by regulations." 
(b) DIVIDENDS.—The second sentence of section 6042(c) (relating to 96 Stat. 587. 
time statement must be furnished) is amended to read as follows: 26 use 6042. 
"The written statement required under the preceding sentence shall 
be furnished (either in person or in a separate mailing by first-class 
mail) to the person on or before January 31 of the year following the 
calendar year for which the return under subsection (a) was made, 
and shall be in such form as the Secretary may prescribe by 
regulations." 
(c) PATRONAGE DIVIDENDS.—The second sentence of section 6044(e) 96 Stat. 588. 
(relating to time statement must be furnished) is amended to read as ^^ ^^^ ^^^^• 
follows: "The written statement required under the preceding sen-
tence shall be furnished (either in person or in a separate mailing by 
first-class mail) to the person on or before January 31 of the year 
following the calendar year for which the return under subsection 
(a) was made, and shall be in such form as the Secretary may 
prescribe by regulations." 
SEC. 109. RETURNS ON MAGNETIC TAPE. 
(a) CERTAIN RETURNS MUST BE ON MAGNETIC TAPE.—Subsection (e) 
of section 6011 (relating to regulations requiring returns on mag- 96 Stat. 610. 
netic tape, etc.) is amended to read as follows: 
26 use 60ii. 
"(e) REGULATIONS REQUIRING RETURNS ON MAGNETIC TAPE, ETC.— 
"(1) IN GENERAL.—The Secretary shall prescribe regulations 
providing standards for determining which returns must be 
filed on magnetic media or in other machine-readable form. The 
Secretary may not require returns of any tax imposed by sub-
title A on individuals, estates, and trusts to be other than on 26 use i. 
paper forms supplied by the Secretary. In prescribing such 
regulations, the Secretary shall take into account (among other 
relevant factors) the ability of the taxpayer to comply at reason-
able cost with such a filing requirement. 
"(2) CERTAIN RETURNS MUST BE FILED ON MAGNETIC MEDIA.— 
"(A) IN GENERAL.—In the case of any person who is 
required to file returns under sections 6042(a), 6044(a), and 
97 STAT. 384 
PUBLIC LAW 98-67—AUG. 5, 1983 
Ante, p. 370. 
26 use 6011 
note. 
26 use 6011. 
96 Stat. 1731. 
26 use 6051. 
6049(a) with respect to more than 50 payees for any calen-
dar year, all returns under such sections shall be on mag-
netic media. 
"(B) HARDSHIP EXCEPTION.—Subparagraph (A) shall not 
apply to any person for any period if such person estab-
lishes to the satisfaction of the Secretary that its applica-
tion to such person for such period would result in undue 
hardship." 
(b) STUDY OF WAGE RETURNS ON MAGNETIC TAPE.— 
(1) STUDY.—The Secretary of the Treasury, in consultation 
with the Secretary of Health and Human Services, shall con-
duct a study of the feasibility of requiring persons to file, on 
magnetic media, returns under section 6011 of the Internal 
Revenue Code of 1954 containing information described in sec-
tion 6051(a) of such Code (relating to W-2s). 
(2) REPORT TO CONGRESS.—Not later than July 1, 1984, the 
Secretary of the Treasury shall submit to the Committee on 
Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate the results of the study 
conducted under paragraph (1). 
26 use 31 note. 
SEC. 110. EFFECTIVE DATES. 
(a) GENERAL RULE.—Except as otherwise provided in this section, 
the amendments made by this title shall apply with respect to 
payments made after December 31,1983. 
(b) SECTION 102.—The amendments made by section 102 shall take 
effect as of the close of June 30,1983. 
(c) SECTIONS 104(b) AND 107.—The amendments made by sections 
104(b) and 107 shall take effect on the date of the enactment of this 
Act. 
Caribbean Basin 
Economic 
Recovery Act. 
19 u s e 2701 
note. 
TITLE II—CARIBBEAN BASIN INITIATIVE 
SEC. 201. SHORT TITLE. 
This title may be cited as the "Caribbean Basin Economic Recov-
ery Act". 
Subtitle A—Duty-Free Treatment 
19 use 2701. 
19 u s e 2702. 
Definitions. 
Designation, 
notification of 
Congress. 
SEC. 211. AUTHORITY TO GRANT DUTY-FREE TREATMENT. 
The President may proclaim duty-free treatment for all eligible 
articles from any beneficiary country in accordance with the provi-
sions of this title. 
SEC. 212. BENEFICIARY COUNTRY. 
(a)(1) For purposes of this title— 
(A) The term "beneficiary country" means any country listed 
in subsection (b) with respect to which there is in effect a 
proclamation by the President designating such country as a 
beneficiary country for purposes of this title. Before the Presi-
dent designates any country as a beneficiary country for pur-
poses of this title, he shall notify the House of Representatives 
and the Senate of his intention to make such designation, 
together with the considerations entering into such decision. 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 385 
(B) The term "entered" means entered, or withdrawn from 
warehouse for consumption, in the customs territory of the 
United States. 
(C) The term "TSUS" means Tariff Schedules of the United 
States (19 U.S.C. 1202). 
(2) If the President has designated any country as a beneficiary 
country for purposes of this title, he shall not terminate such 
designation (either by issuing a proclamation for that purpose or by 
issuing a proclamation which has the effect of terminating such 
designation) unless, at least sixty days before such termination, he 
has notified the House of Representatives and the Senate and has 
notified such country of his intention to terminate such designation, 
together with the considerations entering into such decision. 
(b) In designating countries as "beneficiary countries" under this 
title the President shall consider only the following countries and 
territories or successor political entities: 
Termination, 
notification of 
Congress. 
Eligible 
countries. 
Anguilla 
Antigua and Barbuda 
Bahamas, The 
Barbados 
Belize 
Costa Rica 
Dominica 
Dominican Republic 
El Salvador 
Grenada 
Guatemala 
Guyana 
Haiti 
Honduras 
Jamaica 
Nicaragua 
Panama 
Saint Lucia 
Saint Vincent and the Grenadines 
Suriname 
Trinidad and Tobago 
Cayman Islands 
Montserrat 
Netherlands Antilles 
Saint Christopher-Nevis 
Turks and Caicos Islands 
Virgin Islands, British 
In addition, the President shall not designate any country a benefici- Restrictions. 
ary country under this title— 
(1) if such country is a Communist country; 
(2) if s u c h c o u n t r y — 
Seizure of U.S. 
(A) has nationalized, expropriated or otherwise seized property. 
ownership or control of property owned by a United States 
citizen or by a corporation, partnership, or association 
which is 50 per centum or more beneficially owned by 
United States citizens, 
(B) has taken steps to repudiate or nullify— 
(i) any existing contract or agreement with, or 
(ii) any patent, trademark, or other intellectual prop-
erty of, 
a United States citizen or a corporation, partnership, or 
association which is 50 per centum or more beneficially 
owned by United States citizens, the effect of which is to 
nationalize, expropriate, or otherwise seize ownership or 
control of property so owned, or 
(C) has imposed or enforced taxes or other exactions, 
restrictive maintenance or operational conditions, or other 
measures with respect to property so owned, the effect of 
which is to nationalize, expropriate, or otherwise seize own-
ership or control of such property, unless the President 
determines that— 
(i) prompt, adequate, and effective compensation has 
been or is being made to such citizen, corporation, 
partnership, or association. 
1 1 - 1 9 4 O - 85 — 14 : QL 3 
97 STAT. 386 
PUBLIC LAW 98-67—AUG. 5, 1983 
Determination 
submittal to 
Congress. 
Determinations 
based on U.S. 
national 
interest, report 
to Congress. 
Designation 
criteria. 
(ii) good-faith negotiations to provide prompt, ade-
quate, and effective compensation under the applicable 
provisions of international law are in progress, or such 
country is otherwise taking steps to discharge its obli-
gations under international law with respect to such 
citizen, corporation, partnership, or association, or 
(iii) a dispute involving such citizen, corporation, 
partnership, or association, over compensation for such 
a seizure has been submitted to arbitration under the 
provisions of the Convention for the Settlement of 
Investment Disputes, or in another mutually agreed 
upon forum, and 
promptly furnishes a copy of such determination to the Senate 
and House of Representatives; 
(3) if such country fails to act in good faith in recognizing as 
binding or in enforcing arbitral awards in favor of United States 
citizens or a corporation, partnership or association which is 50 
per centum or more beneficially owned by United States citi-
zens, which have been made by arbitrators appointed for each 
case or by permanent arbitral bodies to which the parties 
involved have submitted their dispute; 
(4) if such country affords preferential treatment to the prod-
ucts of a developed country, other than the United States, which 
has, or is likely to have, a significant adverse effect on United 
States commerce, unless the President has received assurances 
satisfactory to him that such preferential treatment will be 
eliminated or that action will be taken to assure that there will 
be no such significant adverse effect, and he reports those 
assurances to the Congress; 
(5) if a government-owned entity in such country engages in 
the broadcast of copyrighted material, including films or televi-
sion material, belonging to United States copyright owners 
without their express consent; 
(6) if such country does not take adequate steps to cooperate 
with the United States to prevent narcotic drugs and other 
controlled substances (as listed in the schedules in section 202 of 
the Comprehensive Drug Abuse Prevention and Control Act of 
1970 (21 U.S.C. 812)) produced, processed, or transported in such 
country from entering the United States unlawfully; and 
(7) unless such country is a signatory to a treaty, convention, 
protocol, or other agreement regarding the extradition of 
United States citizens. 
Paragraphs (1), (2), (3), and (5) shall not prevent the designation of 
any country as a beneficiary country under this Act if the President 
determines that such designation will be in the national economic or 
security interest of the United States and reports such determina-
tion to the Congress with his reasons therefor, 
(c) In determining whether to designate any country a beneficiary 
country under this title, the President shall take into account— 
(1) an expression by such country of its desire to be so 
designated; 
(2) the economic conditions in such country, the living stand-
ards of its inhabitants, and any other economic factors which he 
deems appropriate; 
(3) the extent to which such country has assured the United 
States it will provide equitable and reasonable access to the 
markets and basic commodity resources of such country; 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 387 
19 use 2503. 
(4) the degree to which such country follows the accepted 
rules of international trade provided for under the General 
Agreement on Tariffs and Trade, as well as applicable trade 
agreements approved under section 2(a) of the Trade Agree-
ments Act of 1979; 
(5) the degree to which such country uses export subsidies or 
imposes export performance requirements or local content 
requirements which distort international trade; 
(6) the degree to which the trade policies of such country as 
they relate to other beneficiary countries are contributing to 
the revitalization of the region; 
(7) the degree to which such country is undertaking self-help 
measures to promote its own economic development; 
(8) the degree to which workers in such country are afforded 
reasonable workplace conditions and enjoy the right to organize 
and bargain collectively; 
(9) the extent to which such country provides under its law 
adequate and effective means for foreign nationals to secure, 
exercise, and enforce exclusive rights in intellectual property, 
including patent, trademark, and copyright rights; 
(10) the extent to which such country prohibits its nationals 
from engaging in the broadcast of copyrighted material, includ-
ing films or television material, belonging to United States 
copyright owners without their express consent; and 
(11) the extent to which such country is prepared to cooperate 
with the United States in the administration of the provisions of 
this title. 
(d) General headnote 8(a) of the TSUS (relating to products of the U.S. insular 
insular possessions) is amended by adding at the end thereof the 
following paragraph: 
"(iv) Subject to the provisions in section 213 of the Caribbean 
Basin Economic Recovery Act, articles which are imported from 
insular possessions of the United States shall receive duty 
treatment no less favorable than the treatment afforded such 
articles when they are imported from a beneficiary country 
under such Act.". 
(e) The President shall, after complying with the requirements of Withdrawal or 
subsection (a)(2), withdraw or suspend the designation of any coun-
try as a beneficiary country if, after such designation, he determines 
that as the result of changed circumstances such country would be 
barred from designation as a beneficiary country under subsection 
(b). 
possessions. 
19 u s e 1202. 
Infra. 
suspension. 
19 use 2702. 
SEC. 213. ELIGIBLE ARTICLES. 
19 u s e 2703. 
(a)(1) Unless otherwise excluded from eligibility by this title, the 
duty-free treatment provided under this title shall apply to any 
article which is the growth, product, or manufacture of a beneficiary 
country i
f
— 
(A) that article is imported directly from a beneficiary woun-
try into the customs territory of the United States; and 
(B) the sum of (i) the cost or value of the materials produced Appraised value. 
in a beneficiary country or two or more beneficiary countries, 
plus (ii) the direct costs of processing operations performed in a 
beneficiary country or countries is not less than 35 per centum 
of the appraised value of such article at the time it is entered. 
For purposes of determining the percentage referred to in subpara-
graph (B), the term "beneficiary country" includes the Common-
97 STAT. 388 
PUBLIC LAW 98-67—AUG. 5, 1983 
Regulations. 
"Direct costs of 
processing 
operations." 
Exceptions. 
19 u s e 2461. 
19 u s e 1202. 
"Sugar and beef 
products." 
wealth of Puerto Rico and the United States Virgin Islands. If the 
cost or value of materials produced in the customs territory of the 
United States (other than the Commonwealth of Puerto Rico) is 
included with respect to an article to which this paragraph applies, 
an amount not to exceed 15 per centum of the appraised value of the 
article at the time it is entered that is attributed to such United 
States cost or value may be applied toward determining the percent-
age referred to in subparagraph (B). 
(2) The Secretary of the Treasury shall prescribe such regulations 
as may be necessary to carry out this subsection including, but not 
limited to, regulations providing that, in order to be eligible for 
duty-free treatment under this title, an article must be wholly the 
growth, product, or manufacture of a beneficiary country, or must 
be a new or different article of commerce which has been grown, 
produced, or manufactured in the beneficiary country; but no article 
or material of a beneficiary country shall be eligible for such 
treatment by virtue of having merely undergone— 
(A) simple combining or packaging operations, or 
(B) mere dilution with water or mere dilution with another 
substance that does not materially alter the characteristics of 
the article. 
(3) As used in this subsection, the phrase "direct costs of process-
ing operations" includes, but is not limited to— 
(A) all actual labor costs involved in the growth, production, 
manufacture, or assembly of the specific merchandise, including 
fringe benefits, on-the-job training and the cost of engineering, 
supervisory, quality control, and similar personnel; and 
(B) dies, molds, tooling, and depreciation on machinery and 
equipment which are allocable to the specific merchandise. 
Such phrase does not include costs which are not directly attribut-
able to the merchandise concerned or are not costs of manufacturing 
the product, such as (i) profit, and (ii) general expenses of doing 
business which are either not allocable to the specific merchandise 
or are not related to the growth, production, manufacture, or assem-
bly of the merchandise, such as administrative salaries, casualty 
and liability insurance, advertising, and salesmen's salaries, com-
missions or expenses. 
(b) The duty-free treatment provided under this title shall not 
apply t o -
ll) textile and apparel articles which are subject to textile 
agreements; 
(2) footwear, handbags, luggage, flat goods, work gloves, and 
leather wearing apparel not designated at the time of the 
effective date of this title as eligible articles for the purpose of 
the generalized system of preferences under title V of the Trade 
Act of 1974; 
(3) tuna, prepared or preserved in any manner, in airtight 
containers; 
(4) petroleum, or any product derived from petroleum, pro-
vided for in part 10 of schedule 4 of the TSUS; or 
(5) watches and watch parts (including cases, bracelets and 
straps), of whatever type including, but not limited to, mechani-
cal, quartz digital or quartz analog, if such watches or watch 
parts contain any material which is the product of any country 
with respect to which TSUS column 2 rates of duty apply. 
(c)(1) As used in this subsection— 
(A) The term "sugar and beef products" means— 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 389 
19 u s e 1202. 
(i) sugars, sirups, and molasses provided for in items 
155.20 and 155.30 of the TSUS, and 
(ii) articles of beef or veal, however provided for in sub-
part B of part 2 of schedule 1 of the TSUS. 
(B) The term "Plan" means a stable food production plan that "Plan." 
consists of measures and proposals designed to ensure that the 
present level of food production in, and the nutritional level of 
the population of, a beneficiary country will not be adversely 
affected by changes in land use and land ownership that will 
result if increased production of sugar and beef products is 
undertaken in response to the duty-free treatment extended 
under this title to such products. A Plan must specify such facts 
regarding, and such proposed actions by, a beneficiary country 
as the President deems necessary for purposes of carrying out 
this subsection, including but not limited to— 
(i) the current levels of food production and nutritional 
health of the population; 
(ii) current level of production and export of sugar and 
beef products; 
(iii) expected increases in production and export of sugar 
and beef products as a result of the duty-free access to the 
United States market provided under this title; 
(iv) measures to be taken to ensure that the expanded 
production of those products because of such duty-free 
access will not occur at the expense of stable food produc-
tion; and 
(v) proposals for a system to monitor the impact of such 
duty-free access on stable food production and land use and 
land ownership patterns. 
(2) Duty-free treatment extended under this title to sugar and beef Suspension 
products that are the product of a beneficiary country shall be 
suspended by the President under this subsection if— 
(A) the beneficiary country, within the ninety-day period 
beginning on the date of its designation as such a country under 
section 212, does not submit a Plan to the President for evalua-
tion; 
(B) on the basis of his evaluation, the President determines 
that the Plan of a beneficiary country does not meet the criteria 
set forth in paragraph (IXB); or 
(C) as a result of the monitoring of the operation of the Plan 
under paragraph (5), the President determines that a beneficiary 
country is not making a good faith effort to implement its Plan, 
or that the measures and proposals in the Plan, although being 
implemented, are not achieving their purposes. 
(3) Before the President suspends duty-free treatment by reason of 
paragraph (2) (A), (B), or (C) to the sugar and beef products of a 
beneficiary country, he must offer to enter into consultation with the 
beneficiary country for purposes of formulating appropriate remedi-
al action which may be taken by that country to avoid such suspen-
sion. If the beneficiary country thereafter enters into consultation 
within a reasonable time and undertakes to formulate remedial 
action in good faith, the President shall withhold the suspension of 
duty-free treatment on the condition that the remedial action agreed 
upon be appropriately implemented by that country. 
Ante, p. 384. 
Consultation 
with beneficiary 
country. 
97 STAT. 390 
PUBLIC LAW 98-67—AUG. 5, 1983 
Plan monitoring, 
(4) The President shall monitor on a biennial basis the operation of 
Qm^'ress 
*^® Plans implemented by beneficiary countries, and shall submit a 
ongress. 
written report to Congress by March 15 following the close of each 
biennium, that— 
(A) specifies the extent to which each Plan, and remedial 
actions, if any, agreed upon under paragraph (4), have been 
implemented; and 
(B) evaluates the results of such implementation. 
(5) The President shall terminate any suspension of duty-free 
treatment imposed under this subsection if he determines that the 
beneficiary country has taken appropriate action to remedy the 
factors on which the suspension was based. 
Sugars, sirups, 
(d) For such period as there is in effect a proclamation issued by 
and molasses. 
^^g President pursuant to the authority vested in him by section 22 
of the Agricultural Adjustment Act (7 U.S.C. 624) to protect a price-
support program for sugar beets and sugar cane, the importation 
and duty-free treatment of sugars, sirups, and molasses classified 
19 use 1202. 
under items 155.20 and 155.30 of the TSUS shall be governed in the 
following manner: 
(IXA) For all beneficiary countries, except those subject to 
subparagraph (B) and paragraph (2), duty-free treatment shall 
be provided in the same manner as it is provided pursuant to 
title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.), at the 
time of the effective date of this title; except that the President 
upon the recommendation of the Secretary of Agriculture, may 
suspend or adjust upward the value limitation provided for in 
19 use 2464. 
section 504(c)(1) of the Trade Act of 1974 on the duty-free 
treatment afforded to beneficiary countries under this section if 
he finds that such adjustment will not interfere with the price 
support program for sugar beets and sugar cane and is appropri-
ate in light of market conditions. 
(B) As an alternative to subparagraph (A), the President may 
at the request of a beneficiary country not subject to paragraph 
(2) and upon the recommendation of the Secretary of Agricul-
ture, elect to permit sugar, sirups, and molasses from that 
country to enter duty-free during a calendar year subject to 
quantitative limitations to be established by the President on 
the quantity of sugar, sirups, and molasses entered from that 
country. 
(2) For the following countries whose exports of sugar, sirups, 
and molasses in 1981 were not eligible for duty-free treatment 
because of the operation of section 504(c) of the Trade Act of 
1974, the quantity of sugar, sirups, and molasses which may be 
entered in any calendar year shall be limited to no more than 
the quantity specified below: 
Metric tons: 
Dominican Republic 
780,000 
Guatemala 
210,000 
Panama 
160,000 
Such sugar, sirups, and molasses shall be admitted free of duty, 
except as provided for in paragraph (3). 
(3) The President, upon the recommendation of the Secretary 
of Agriculture, may suspend or adjust upward the quantitative 
limitations imposed under paragraph (1)(B) or (2) if he deter-
mines such action will not interfere with the price support 
program for sugar beets and sugar cane and is appropriate in 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 391 
light of market conditions. The President, upon the recommen-
dation of the Secretary of Agriculture, may suspend the duty-
free treatment for all or part of the quantity of sugar, sirups, 
and molasses permitted to be entered by paragraphs (1)(B) and 
(2) if such action is necessary to protect the price-support pro-
gram for sugar beets and sugar cane. 
(4) Any quantitative limitation imposed on a beneficiary coun-
try under paragraphs (1)(B) and (2) shall apply only to the 
extent that such limitation permits a lesser quantity of sugar, 
sirups, and molasses to be entered from that country than the 
quantity that would be permitted to be entered under any other 
provision of law. 
(e)(1) The President may by proclamation suspend the duty-free 
treatment provided by this title with respect to any eligible article 
and may proclaim a duty rate for such article if such action is 
proclaimed pursuant to section 203 of the Trade Act of 1974 or 
section 232 of the Trade Expansion Act of 1962. 
(2) In any report by the International Trade Commission to the 
President under section 201(d)(1) of the Trade Act of 1974 regarding 
any article for which duty-free treatment has been proclaimed by 
the President pursuant to this title, the Commission shall state 
whether and to what extent its findings and recommendations apply 
to such article when imported from beneficiary countries. 
(3) For purposes of subsections (a) and (c) of section 203 of the 
Trade Act of 1974, the suspension of the duty-free treatment pro-
vided by this title shall be treated as an increase in duty. 
(4) No proclamation which provides solely for a suspension 
referred to in paragraph (3) of this subsection with respect to any 
article shall be made under subsections (a) and (c) of section 203 of 
the Trade Act of 1974 unless the United States International Trade 
Commission, in addition to making an affirmative determination 
with respect to such article under section 201(b) of the Trade Act of 
1974, determines in the course of its investigation under section 
201(b) of such Act that the serious injury (or threat thereof) substan-
tially caused by imports to the domestic industry producing a like or 
directly competitive article results from the duty-free treatment 
provided by this title. 
(5)(A) Any proclamation issued pursuant to section 203 of the 
Trade Act of 1974 that is in effect when duty-free treatment pursu-
ant to section 101 of this title is proclaimed shall remain in effect 
until modified or terminated. 
(B) If any article is subject to import relief at the time duty-free 
treatment is proclaimed pursuant to section 211, the President may 
reduce or terminate the application of such import relief to the 
importation of such article from beneficiary countries prior to the 
otherwise scheduled date on which such reduction or termination 
would occur pursuant to the criteria and procedures of subsections 
(h) and (i) of section 203 of the Trade Act of 1974. 
(f)(1) If a petition is filed with the International Trade Commission 
pursuant to the provisions of section 201 of the Trade Act of 1974 
regarding a perishable product and alleging injury from imports 
from beneficiary countries, then the petition may also be filed with 
the Secretary of Agriculture with a request that emergency relief be 
granted pursuant to paragraph (3) of this subsection with respect to 
such article. 
(2) Within fourteen days after the filing of a petition under 
paragraph (1) of this subsection— 
Suspension. 
19 use 2253. 
19 use 1862. 
19 use 2251. 
19 use 2253. 
19 use 2251. 
19 use 2253. 
Ante, p. 384. 
19 use 2253. 
Emergency 
relief, petition 
filing. 
19 use 2251. 
97 STAT. 392 
PUBLIC LAW 98-67—AUG. 5, 1983 
Recommenda-
tion to the 
President. 
Notice. 
Proclamation. 
19 use 2252. 
19 use 2253. 
"Perishable 
product." 
19 use 1202. 
19 use 1202. 
(A) if the Secretary of Agriculture has reason to believe that a 
perishable product from a beneficiary country is being imported 
into the United States in such increased quantities as to be a 
substantial cause of serious injury, or the threat thereof, to the 
domestic industry producing a perishable product like or 
directly competitive with the imported product and that emer-
gency action is warranted, he shall advise the President and 
recommend that the President take emergency action; or 
(B) the Secretary of Agriculture shall publish a notice of his 
determination not to recommend the imposition of emergency 
action and so advise the petitioner. 
(3) Within seven days after the President receives a recommenda-
tion from the Secretary of Agriculture to take emergency action 
pursuant to paragraph (2) of this subsection, he shall issue a procla-
mation withdrawing the duty-free treatment provided by this title 
or publish a notice of his determination not to take emergency 
action. 
(4) The emergency action provided by paragraph (3) of this subsec-
tion shall cease to apply— 
(A) upon the proclamation of import relief pursuant to section 
202(a)(1) of the Trade Act of 1974, 
(B) on the day the President makes a determination pursuant 
to section 203(b)(2) of such Act not to impose import relief, 
(C) in the event of a report of the United States International 
Trade Commission containing a negative finding, on the day the 
Commission's report is submitted to the President, or 
(D) whenever the President determines that because of 
changed circumstances such relief is no longer warranted. 
(5) For purposes of this subsection, the term "perishable product" 
means— 
(A) live plants provided for in subpart A of part 6 of schedule 
loftheTSUS; 
(B) fresh or chilled vegetables provided for in items 135.10 
through 138.42 of the TSUS; 
(C) fresh mushrooms provided for in item 144.10 of the TSUS; 
(D) fresh fruit provided for in items 146.10, 146.20, 146.30, 
146.50 through 146.62, 146.90, 146.91, 147.03 through 147.33, 
147.50 through 149.21 and 149.50 of the TSUS; 
(E) fresh cut flowers provided for in items 192.17, 192.18, and 
192.21 ofthe TSUS; and 
(F) concentrated citrus fruit juice provided for in items 165.25 
and 165.35 of the TSUS. 
(g) No proclamation issued pursuant to this title shall affect fees 
imposed pursuant to section 22 of the Agricultural Adjustment Act 
(7 U.S.C. 624). 
SEC. 214. MEASURES FOR PUERTO RICO AND UNITED STATES INSULAR 
POSSESSIONS. 
(a) Effective with respect to articles entered on or after the 
effective date of this Act, general headnote 3(a) of the TSUS is 
amended— 
(1) by amending clause (i)— 
(A) by striking out "50 percent" and inserting in lieu 
thereof "70 percent", and 
(B) by inserting after "total value", "(or more than 50 
percent of their total value with respect to articles de-
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 393 
scribed in section 213(b) of the Caribbean Basin Economic 
Recovery Act)"; and 
(2) by amending clause (ii) by striking out "50 percent" and 
inserting in lieu thereof "70 percent". 
(b) Item 813.31 of the TSUS is amended by striking out "4 liters" 
and inserting in lieu thereof "5 liters", and by inserting after 
"United States,", "and not more than 4 liters of which shall have 
been produced elsewhere than in such insular possessions,". 
(c) If the sum of the amounts of taxes covered into the treasuries 
of Puerto Rico or the United States Virgin Islands pursuant to 
section 7652(c) of the Internal Revenue Code of 1954 is reduced 
below the amount that would have been covered over if the 
imported rum had been produced in Puerto Rico or the United 
States Virgin Islands, then the President shall consider compensa-
tion measures and, in this regard, may withdraw the duty-free 
treatment on rum provided by this title. The President shall submit 
a report to the Congress on the measures he takes. 
(d) Section 1112 of the Trade Agreements Act of 1979 (19 U.S.C. 
2582) is repealed. 
(e) No action pursuant to this title may affect any tariff duty 
imposed by the Legislature of Puerto Rico pursuant to section 319 of 
the Tariff Act of 1930 (19 U.S.C. 1319) on coffee imported into Puerto 
Rico. 
(f) For purposes of chapter 1 of title II of the Trade Act of 1974, the 
term "industry" shall include producers located in the United States 
insular possessions. 
(g) Any discharge from a point source in the United States Virgin 
Islands in existence on the date of the enactment of this subsection 
which discharge is attributable to the manufacture of rum (as 
defined in paragraphs (3) of section 7652(c) of the Internal Revenue 
Code of 1954) shall not be subject to the requirements of section 301 
(other than toxic pollutant discharges), section 306 or section 403 of 
the Federal Water Pollution Control Act i
f
— 
(1) such discharge occurs at least one thousand five hundred 
feet into the territorial sea from the line of ordinary low water 
from that portion of the coast which is in direct contact with the 
sea, and 
(2) the Governor of the United States Virgin Islands deter-
mines that such discharge will not interfere with the attain-
ment or maintenance of that water quality which shall assure 
protection of public water supplies, and the protection and 
propagation of a balanced population of shellfish, fish, and 
wildlife, and allow recreational activities, in and on the water 
and will not result in the discharge of pollutants in quantities 
which may reasonably be anticipated to pose an unacceptable 
risk to human health or the environment because of bioaccumu-
lation, persistency in the environment, acute toxicity, chronic 
toxicity (including carcinogenicity, mutagenicity, or terato-
genicity), or synergistic propensities. 
SEC. 215. INTERNATIONAL TRADE COMMISSION REPORTS ON IMPACT OF 
THIS ACT. 
(a) The United States International Trade Commission (herein-
after in this section referred to as the "Commission") shall prepare, 
and submit to the Congress and to the President, a report regarding 
the economic impact of this Act on United States industries and 
consumers during— 
Ante, p. 387. 
19 use 1202. 
19 use 2703 
note. 
Post, p. 395. 
Report to 
Congress. 
Repeal. 
Coffee tariff. 
19 use 1319 
note. 
"Industry." 
19 use 2251 
note. 
33 u s e 1311 
note. 
Post, p. 395. 
33 
use 
1311, 
1316, 1343. 
19 use 2704. 
Submittal to 
Congress and 
President. 
97 STAT. 394 
PUBLIC LAW 98-67—AUG. 5, 1983 
Infra. 
Assessment. 
Submittal 
period. 
Public comment. 
Report to 
Congress. 
19 use 2705. 
(1) the twenty-four-month period beginning with the date of 
enactment of this Act; and 
(2) each calendar year occurring thereafter until duty-free 
treatment under this title is terminated under section 216(b). 
For purposes of this section, industries in the Commonwealth of 
Puerto Rico and the insular possessions of the United States shall be 
considered to be United States industries. 
(b)(1) Each report required under subsection (a) shall include, but 
not be limited to, an assessment by the Commission regarding— 
(A) the actual effect, during the period covered by the report, 
of this Act on the United States economy generally as well as on 
those specific domestic industries which produce articles that 
are like, or directly competitive with, articles being imported 
into the United States from beneficiary countries; and 
(B) the probable future effect which this Act will have on the 
United States economy generally, as well as on such domestic 
industries, before the provisions of this Act terminate. 
(2) In preparing the assessments required under paragraph (1), the 
Commission shall, to the extent practicable— 
(A) analyze the production, trade and consumption of United 
States products affected by this Act, taking into consideration 
employment, profit levels, and use of productive facilities with 
respect to the domestic industries concerned, and such other 
economic factors in such industries as it considers relevant, 
including prices, wages, sales, inventories, patterns of demand, 
capital investment, obsolescence of equipment, and diversifica-
tion of production; and 
(B) describe the nature and extent of any significant change 
in employment, profit levels, and use of productive facilities, 
and such other conditions as it deems relevant in the domestic 
industries concerned, which it believes are attributable to this 
Act. 
(c)(1) Each report required under subsection (a) shall be submitted 
to the Congress and to the President before the close of the nine-
month period beginning on the day after the last day of the period 
covered by the report. 
(2) The Commission shall provide opportunity for the submission 
by the public, either orally or in writing, or both, of information 
relating to matters that will be addressed in the reports. 
SEC. 216. IMPACT STUDY BY SECRETARY OF LABOR. 
The Secretary of Labor, in consulation with other appropriate 
Federal agencies, shall undertake a continuing review and analysis 
of the impact which the implementation of the provisions of this 
title have with respect to United States labor; and shall make an 
annual written report to Congress on the results of such review and 
analysis. 
SEC. 217. FEASIBILITY STUDY REGARDING A CARIBBEAN TRADE 
INSTITUTE. 
(a) The Secretary of State shall prepare a study regarding the 
feasibility of establishing a Caribbean Trade Institute in Harlem, 
New York City, supported by a combination of Federal and private 
funds. 
(b) The study shall include, but not be limited to, an assessment of 
the extent to which, and the means by which, a Caribbean Trade 
Institute could— 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 395 
(1) facilitate cooperation between public and private entities 
interested in engaging in or furthering Caribbean trade; 
(2) serve as a catalyst for greater cultural exchange between 
the United States and Caribbean nations; and 
(3) facilitate expansion of job opportunities both in the United 
States and the Caribbean Basin. 
The study shall also include suggestions regarding the organization 
and staffing of such an institute. 
(c) The study required by this section shall be submitted to the Submittal to 
Congress within six months after the date of the enactment of this Congress. 
Act. 
SEC. 218. EFFECTIVE DATE OF SUBTITLE AND TERMINATION OF DUTY- 
19 USC 2706. 
FREE TREATMENT. 
(a) EFFECTIVE DATE.—This subtitle shall take effect on the date of 
the enactment of this Act. 
(b) TERMINATION OF DUTY-FREE TREATMENT.—No duty-free treat-
ment extended to beneficiary countries under this subtitle shall 
remain in effect after September 30,1995. 
Subtitle B—Tax Provisions 
SEC. 221. PAYMENT OF EXCISE TAXES COLLECTED ON RUM TO PUERTO 
RICO AND THE UNITED STATES VIRGIN ISLANDS. 
(a) IN GENERAL.—Section 7652 of the Internal Revenue Code of 
1954 (relating to shipments to the United States) is amended by 26 use 7652. 
inserting after subsection (b) the following new subsection: 
"(c) SHIPMENTS OF RUM TO THE UNITED STATES.— 
"(1) EXCISE TAXES ON RUM COVERED INTO TREASURIES OF PUERTO 
RICO AND VIRGIN ISLANDS.—All taxes collected under section 
5001(a)(1) on rum imported into the United States (less the 26 USC 5001. 
estimated amount necessary for payment of refunds and draw-
backs) shall be covered into the treasuries of Puerto Rico and 
the Virgin Islands. 
"(2) SECRETARY PRESCRIBES FORMULA.—The Secretary shall, 
from time to time, prescribe by regulation a formula for the 
division of such tax collections between Puerto Rico and the 
Virgin Islands and the timing and methods for transferring 
such tax collections. 
"(3) RUM DEFINED.—For purposes of this subsection, the term 
'rum' means any article classified under item 169.13 or 169.14 of 
the Tariff Schedules of the United States (19 U.S.C. 1202). 
"(4) COORDINATION WITH SUBSECTIONS (a) AND (b).—Para-
graph (1) shall not apply with respect to any rum subject to tax 
under subsection (a) or (b).". 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 use 7652 
shall apply to articles imported into the United States after June 30, ^°^^-
1983. 
SEC. 222. TREATMENT OF CARIBBEAN CONVENTIONS, ETC. 
(a) GENERAL RULE.—Subsection (h) of section 274 of the Internal 
Revenue Code of 1954 (relating to attendance at conventions, etc.) is 26 use 274. 
amended by adding at the end thereof the following new paragraph: 
"(6) TREATMENT OF CONVENTIONS IN CERTAIN CARIBBEAN 
COUNTRIES.— 
97 STAT. 396 
PUBLIC LAW 98-67—AUG. 5, 1983 
"North 
"(A) IN GENERAL.—For purposes of this subsection, the 
American area. 
term 'North American area' includes, with respect to any 
convention, seminar, or similar meeting, any beneficiary 
country if (as of the time such meeting begins)— 
"(i) there is in effect a bilateral or multilateral agree-
ment described in subparagraph (C) between such coun-
try and the United States providing for the exchange of 
information between the United States and such coun-
try, and 
"(ii) there is not in effect a finding by the Secretary 
that the tax laws of such country discriminate against 
conventions held in the United States. 
"(B) BENEFICIARY COUNTRY.—For purposes of this para-
graph, the term 'beneficiary country' has the meaning 
given to such term by section 212(a)(1)(A) of the Caribbean 
Ante, p. 384. 
Basin Economic Recovery Act; except that such term shall 
include Bermuda. 
"(C) AUTHORITY TO CONCLUDE EXCHANGE OF INFORMATION 
AGREEMENTS.— 
"(i) IN GENERAL.—The Secretary is authorized to 
negotiate and conclude an agreement for the exchange 
of information with any beneficiary country. Except as 
provided in clause (ii), an exchange of information 
agreement shall provide for the exchange of such infor-
mation (not limited to information concerning nation-
als or residents of the United States or the beneficiary 
country) as may be necessary or appropriate to carry 
out and enforce the tax laws of the United States and 
the beneficiary country (whether criminal or civil pro-
ceedings), including information which may otherwise 
be subject to nondisclosure provisions of the local law of 
the beneficiary country such as provisions respecting 
bank secrecy and bearer shares. The exchange of infor-
mation agreement shall be terminable by either 
country on reasonable notice and shall provide that 
information received by either country will be disclosed 
only to persons or authorities (including courts and 
administrative bodies) involved in the administration 
or oversight of, or in the determination of appeals in 
respect of, taxes of the United States or the beneficiary 
country and will be used by such persons or authorities 
only for such purposes. 
"(ii) 
NONDISCLOSURE OF QUALIFIED CONFIDENTIAL 
INFORMATION SOUGHT FOR CIVIL TAX PURPOSES.—An 
exchange of information agreement need not provide 
for the exchange of qualified confidential information 
which is sought only for civil tax purposes i
f
— 
"(I) the Secretary of the Treasury, after making 
all reasonable efforts to negotiate an agreement 
which includes the exchange of such information, 
determines that such an agreement cannot be 
negotiated but that the agreement which was nego-
tiated will significantly assist in the administra-
tion and enforcement of the tax laws of the United 
States, and 
PUBLIC LAW 98-67—AUG. 5, 1983 
97 STAT. 397 
"(II) the President determines that the agree-
ment as negotiated is in the national security 
interest of the United States, 
"(iii) 
QUALIFIED 
CONFIDENTIAL 
INFORMATION 
DEFINED.—For purposes of this subparagraph, the term 
'quaUfled confidential information' means information 
which is subject to the nondisclosure provisions of any 
local law of the beneficiary country regarding bank 
secrecy or ownership of bearer shares. 
"(iv) CIVIL TAX PURPOSES.—For purposes of this sub-
paragraph, the determination of whether information 
is sought only for civil tax purposes shall be made by 
the requesting party. 
"(D) COORDINATION WITH SECTION 6103.—Any exchange of 26 use 6103. 
information agreement negotiated under subparagraph (C) 
shall be treated as an income tax convention for purposes of 
section 6103(k)(4). 
"(E) DETERMINATIONS PUBLISHED IN THE FEDERAL REGIS-
TER. 
ter- -The following shall be published in the Federal Regis-
"(i) any determination by the President under sub-
paragraph (C)(ii) (including the reasons for such deter-
mination), 
"(ii) any determination by the Secretary under sub-
paragraph (C)(ii) (including the reasons for such deter-
mination), and 
"(iii) any finding by the Secretary under subpara-
graph (A)(ii) (and any termination thereof)." 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 use 2
7
4 note. 
shall apply to conventions, seminars, or other meetings which begin 
after June 30,1983. 
SEC. 223. REPORT WITH RESPECT TO USE OF CARIBBEAN BASIN TAX 
HAVENS. 
The Secretary of the Treasury shall, not later than ninety days 
after the date of the enactment of this Act, report to the Committee 
on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate on— 
(1) the level at which Caribbean Basin tax havens are being 
used to evade or avoid Federal taxes, and the effect on Federal 
revenues of such use, 
(2) any information he may have on the relationship of such 
use to drug trafficking and other criminal activities, and 
(3) current antitax haven enforcement activities of the 
Department of the Treasury. 
Submittal to 
congressional 
committees. 
97 STAT. 398 
PUBLIC LAW 98-67—AUG. 5, 1983 
Subtitle C—Sense of the Congress Regarding 
Sugar Imports 
SEC. 231. SUGAR IMPORTS. 
It is the sense of the Congress that sugar from any Communist 
country in the Caribbean Basin or in Central America should not be 
imported into the United States. 
Approved August 5, 1983. 
LEGISLATIVE HISTORY—H.R. 2973 (H.R. 500): 
HOUSE REPORTS: No. 98-120 (Comm. on Ways and Means) and No. 98-325 (Comm. 
of Conference). 
CONGRESSIONAL RECORD, Vol. 129 (1983): 
May 17, considered and passed House. 
June 16, considered and passed Senate, amended. 
July 14, House concurred in Senate amendment with an amendment. 
July 28, House and Senate agreed to conference report.