Implementation of the Andean Trade Promotion and Drug Eradication Act, 44564-44584 [06-6741]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• DEPARTMENT OF THE TREASURY
• Bureau of Customs and Border Protection
• Customs and Border Protection Bureau

[Federal Register Volume 71, Number 151 (Monday, August 7, 2006)]
[Rules and Regulations]
[Pages 44564-44584]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-6741]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 10, 163 and 178

[CBP Dec. 06-21]
RIN 1505-AB37


Implementation of the Andean Trade Promotion and Drug Eradication 
Act

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

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with some changes, 
interim amendments to the Customs and Border Protection (CBP) 
Regulations which were published in the Federal Register on March 25, 
2003, as T.D. 03-16, to implement the trade benefit provisions for 
Andean countries contained in Title XXXI of the Trade Act of 2002. The 
trade benefits under Title XXXI, also referred to as the Andean Trade 
Promotion and Drug Eradication Act (the ATPDEA), apply to Andean 
countries specifically designated by the President for ATPDEA purposes. 
The ATPDEA trade benefits involve the entry of specific apparel and 
other textile articles free of duty and free of any quantitative 
restrictions, limitations, or consultation levels; the extension of 
duty-free treatment to specified non-textile articles normally excluded 
from duty-free treatment under the Andean Trade Preference Act (ATPA) 
program if the President finds those articles to be not import-
sensitive in the context of the ATPDEA; and the entry of certain 
imports of tuna free of duty and free of any quantitative restrictions. 
The regulatory amendments adopted as a final rule in this document 
reflect and clarify the statutory standards for the trade benefits 
under the ATPDEA and also include specific documentary, procedural and 
other related requirements that must be met in order to obtain those 
benefits.

DATES: This final rule is effective on September 6, 2006.

FOR FURTHER INFORMATION CONTACT: Operational issues regarding textiles: 
Robert Abels, Office of Field Operations (202-344-1959).
    Other operational issues: Lori Whitehurst, Office of Field 
Operations (202-344-2722). Legal issues: Cynthia Reese, Office of 
Regulations and Rulings (202-572-8812).

SUPPLEMENTARY INFORMATION:

Background

Andean Trade Promotion and Drug Eradication Act

    On August 6, 2002, the President signed into law the Trade Act of 
2002 (the ``Act''), Public Law 107-210, 116 Stat. 933. Title XXXI of 
the Act concerns trade benefits for Andean countries, is referred to in 
the Act as the ``Andean Trade Promotion and Drug Eradication Act'' (the 
``ATPDEA''), and consists of sections 3101 through 3108. This document 
specifically concerns the trade benefit provisions of section 3103 of 
the Act which is headed ``articles eligible for preferential 
treatment.''
    Subsection (a) of section 3103 of the Act amends section 204 of the 
Andean Trade Preference Act (the ATPA, codified at 19 U.S.C. 3201-
3206). The ATPA is a duty preference program that applies to exports 
from those Andean region countries that have been designated by the 
President as program beneficiaries. The origin and related rules for 
eligibility for duty-free treatment under the ATPA are similar to those 
under the older Caribbean Basin Economic Recovery Act (the CBERA, also 
referred to as the Caribbean Basin Initiative, or CBI statute, codified 
at 19 U.S.C. 2701-2707). As in the case of the CBI, all articles are 
eligible for duty-free treatment under the ATPA (that is, they do not 
have to be specially designated as eligible by the President) except 
those articles that are specifically excluded under the statute.
    The changes to section 204 of the ATPA made by subsection (a) of 
section 3103 of the Act involve the following: (1) The removal of 
section 204(c) which provided for the application of reduced duty rates 
(rather than duty-free treatment) for certain handbags, luggage, flat 
goods, work gloves, and leather wearing apparel, with a consequential 
redesignation of subsections (d) through (g) as (c) through (f), 
respectively; and (2) a revision of section 204(b). Prior to the 
amendment effected by subsection (a) of section 3103 of the Act, 
section 204(b) of the ATPA was headed ``exceptions to duty-free 
treatment'' and consisted only of a list of eight specific products or 
groups of products excluded from ATPA duty-free treatment.
    As a result of the amendment made by subsection (a) of section 3103 
of the Act, section 204(b) of the ATPA now is headed ``exceptions and 
special rules'' and consists of six principal paragraphs. These six 
paragraphs are discussed below.
Paragraphs (1) and (2): Articles That Are Not Import-Sensitive and 
Excluded Articles
    Paragraph (1) of amended section 204(b) is headed ``certain 
articles that are not import-sensitive'' and provides that the 
President may proclaim duty-free treatment under the ATPA for any 
article described in subparagraph (A), (B), (C), or (D) that is the 
growth, product, or manufacture of an ATPDEA beneficiary country, that 
is imported directly into the customs territory of the United States 
from an ATPDEA beneficiary country, and that meets the requirements of 
section 204, if the President determines that the article is not 
import-sensitive in the context of imports from ATPDEA beneficiary 
countries. Subparagraphs (A), (B), (C), and (D) cover, respectively:
    1. Footwear not designated at the time of the effective date of the 
ATPA (that is, December 4, 1991) as eligible articles for the purpose 
of the Generalized System of Preferences (the GSP, Title V of the Trade 
Act of 1974, codified at 19 U.S.C. 2461-2467);
    2. Petroleum, or any product derived from petroleum, provided for 
in headings 2709 and 2710 of the Harmonized Tariff Schedule of the 
United States (HTSUS);
    3. Watches and watch parts (including cases, bracelets, and 
straps), of whatever type including, but not limited to, mechanical, 
quartz digital or quartz analog, if those watches or watch parts 
contain any material which is the product of any country with respect 
to which HTSUS column 2 rates of duty apply; and
    4. Handbags, luggage, flat goods, work gloves, and leather wearing 
apparel that were not designated on August 5, 1983, as eligible 
articles for purposes of the GSP.
    Paragraph (2) of amended section 204(b) is headed ``exclusions'' 
and provides that, subject to paragraph (3), duty-free treatment under 
the ATPA may not be extended to the following:
    1. Textile and apparel articles which were not eligible articles 
for purposes of the ATPA on January 1, 1994, as the ATPA was in effect 
on that date;
    2. Rum and tafia classified in subheading 2208.40 of the HTSUS;
    3. Sugars, syrups, and sugar-containing products subject to over-
quota duty rates under applicable tariff-rate quotas; and
    4. Tuna prepared or preserved in any manner in airtight containers, 
except as provided in paragraph (4).

[[Page 44565]]

    The effect of paragraphs (1) and (2) is to divide the former 
section 204(b) list of eight types of products excluded from ATPA duty-
free treatment into two groups of four each. The four types of products 
covered by paragraph (1) would no longer be excluded from ATPA duty-
free treatment but rather would be eligible for that treatment, 
provided that the President makes the appropriate negative import 
sensitivity determination. For these products (which include the 
handbags, luggage, flat goods, work gloves, and leather wearing apparel 
to which reduced duty rates previously applied under removed section 
204(c)), the country of origin and value-content and related 
requirements under section 204(a) of the ATPA and the regulations 
thereunder would apply. The four types of products covered by paragraph 
(2) would remain as exclusions from duty-free treatment except as 
otherwise provided in paragraph (3) in the case of certain apparel and 
textile articles and paragraph (4) in the case of certain tuna 
products, and the exclusion in the case of sugar and sugar products has 
been reworded to refer to tariff-rate quota applicability rather than 
HTSUS classification. Paragraphs (3) through (6) of amended section 
204(b), as discussed below, are entirely new provisions.
Paragraph (3): Preferential Treatment of Textile Articles
    Paragraph (3) of amended section 204(b) is headed ``apparel 
articles and certain textile articles.'' Paragraph (3)(A) provides that 
apparel articles that are imported directly into the customs territory 
of the United States from an ATPDEA beneficiary country shall enter the 
United States free of duty and free of any quantitative restrictions, 
limitations, or consultation levels, but only if those articles are 
described in subparagraph (B), which states that the apparel articles 
referred to in subparagraph (A) are the following:
    1. Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries, or the United States, or both, 
exclusively from any one or any combination of the following [clause 
(i)]:
    a. Fabrics or fabric components wholly formed, or components knit-
to-shape, in the United States, from yarns wholly formed in the United 
States or one or more ATPDEA beneficiary countries (including fabrics 
not formed from yarns, if those fabrics are classifiable under heading 
5602 or 5603 of the HTSUS and are formed in the United States). Apparel 
articles shall qualify under this subclause only if all dyeing, 
printing, and finishing of the fabrics from which the articles are 
assembled, if the fabrics are knit fabrics, is carried out in the 
United States. Apparel articles shall qualify under this subclause only 
if all dyeing, printing, and finishing of the fabrics from which the 
articles are assembled, if the fabrics are woven fabrics, is carried 
out in the United States [subclause (I)];
    b. Fabrics or fabric components formed or components knit-to-shape, 
in one or more ATPDEA beneficiary countries, from yarns wholly formed 
in one or more ATPDEA beneficiary countries, if those fabrics 
(including fabrics not formed from yarns, if those fabrics are 
classifiable under heading 5602 or 5603 of the HTSUS and are formed in 
one or more ATPDEA beneficiary countries) or components are in chief 
value of llama, alpaca, or vicu[ntilde]a [subclause (II)];
    c. Fabrics or yarns, to the extent that apparel articles of those 
fabrics or yarns would be eligible for preferential treatment, without 
regard to the source of the fabrics or yarns, under Annex 401 of the 
North American Free Trade Agreement (NAFTA) [subclause (III)]; and
    d. Fabrics or yarns, to the extent that the President has 
determined that the fabrics or yarns cannot be supplied by the domestic 
industry in commercial quantities in a timely manner and has proclaimed 
the treatment provided under clause (i)(III) [clause (ii)];
    2. Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries from fabrics or from fabric components 
formed or from components knit-to-shape in one or more ATPDEA 
beneficiary countries from yarns wholly formed in the United States or 
one or more ATPDEA beneficiary countries (including fabrics not formed 
from yarns, if those fabrics are classifiable under heading 5602 or 
5603 of the HTSUS and are formed in one or more ATPDEA beneficiary 
countries), whether or not the apparel articles are also made from any 
of the fabrics, fabric components formed, or components knit-to-shape 
described in clause (i) (unless the apparel articles are made 
exclusively from any of the fabrics, fabric components formed, or 
components knit-to-shape described in clause (i)). For these articles, 
preferential treatment starts on October 1, 2002, and extends for each 
of the four succeeding 1-year periods, subject to the application of 
annual quantitative limits expressed in square meter equivalents and 
with an equal percentage increase in the limit for each succeeding year 
[clause (iii)];
    3. A handloomed, handmade, or folklore textile or apparel article 
of an ATPDEA beneficiary country that the President and representatives 
of the ATPDEA beneficiary country concerned mutually agree upon as 
being a handloomed, handmade, or folklore good of a kind described in 
section 2.3(a), (b), or (c) or Appendix 3.1.B.11 of Annex 300-B of the 
NAFTA and that is certified as such by the competent authority of the 
beneficiary country [clause (iv)]; and
    4. Brassieres classifiable under subheading 6212.10 of the HTSUS, 
if both cut and sewn or otherwise assembled in the United States, or 
one or more ATPDEA beneficiary countries, or both, but excluding 
articles entered under clause (i), (ii), (iii), or (iv) [clause 
(v)(I)]. However, during each of four 1-year periods starting on 
October 1, 2003, the articles in question are eligible for preferential 
treatment under paragraph (3) only if the aggregate cost of fabrics 
(exclusive of all findings and trimmings) formed in the United States 
that are used in the production of all such articles of a producer or 
an entity controlling production that are entered and eligible under 
clause (v)(I) during the preceding 1-year period is at least 75 percent 
of the aggregate declared customs value of the fabric (exclusive of all 
findings and trimmings) contained in all such articles of that producer 
or entity that are entered and eligible under clause (v)(I) during the 
preceding 1-year period [clause (v)(II)]; the 75 percent standard rises 
to 85 percent for a producer or entity controlling production whose 
articles are found by Customs and Border Protection (CBP) to have not 
met the clause (v)(II) 75 percent standard in the preceding year 
[clause (v)(III)].
    In addition to the articles described above, paragraph (3)(B) 
provides for preferential treatment of the following non-apparel 
textile articles:
    1. Textile luggage assembled in an ATPDEA beneficiary country from 
fabric wholly formed and cut in the United States, from yarns wholly 
formed in the United States, that is entered under subheading 
9802.00.80 of the HTSUS [clause (vii)(I)]; and
    2. Textile luggage assembled from fabric cut in an ATPDEA 
beneficiary country from fabric wholly formed in the United States from 
yarns wholly formed in the United States [clause (vii)(II)].
    Clause (vi) under paragraph (3) sets forth special rules that apply 
for purposes of determining the eligibility of articles for 
preferential treatment under paragraph (3). These special rules are as 
follows:
    1. Clause (vi)(I) sets forth a rule regarding the treatment of 
findings and

[[Page 44566]]

trimmings. It provides that an article otherwise eligible for 
preferential treatment under paragraph (3) will not be ineligible for 
that treatment because the article contains findings or trimmings of 
foreign origin, if those findings and trimmings do not exceed 25 
percent of the cost of the components of the assembled product. This 
provision specifies the following as examples of findings and 
trimmings: sewing thread, hooks and eyes, snaps, buttons, ``bow buds,'' 
decorative lace trim, elastic strips, zippers (including zipper tapes), 
and labels.
    2. Clause (vi)(II) sets forth a rule regarding the treatment of 
specific interlinings, that is, a chest type plate, ``hymo'' piece, or 
``sleeve header,'' of woven or weft-inserted warp knit construction and 
of coarse animal hair or man-made filaments. Under this rule, an 
article otherwise eligible for preferential treatment under paragraph 
(3) will not be ineligible for that treatment because the article 
contains interlinings of foreign origin, if the value of those 
interlinings (and any findings and trimmings) does not exceed 25 
percent of the cost of the components of the assembled article. This 
provision also provides for the termination of this treatment of 
interlinings if the President makes a determination that United States 
manufacturers are producing those interlinings in the United States in 
commercial quantities.
    3. Clause (vi)(III) sets forth a de minimis rule which provides 
that an article that would otherwise be ineligible for preferential 
treatment under paragraph (3) because the article contains yarns not 
wholly formed in the United States or in one or more ATPDEA beneficiary 
countries will not be ineligible for that treatment if the total weight 
of all those yarns is not more than 7 percent of the total weight of 
the good.
    4. Finally, clause (vi)(IV) sets forth a special origin rule that 
provides that an article otherwise eligible for preferential treatment 
under clause (i) or clause (iii) will not be ineligible for that 
treatment because the article contains nylon filament yarn (other than 
elastomeric yarn) that is classifiable under subheading 5402.10.30, 
5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 
5402.41.90, 5402.51.00, or 5402.61.00 of the HTSUS from a country that 
is a party to an agreement with the United States establishing a free 
trade area, which entered into force before January 1, 1995.
Paragraph (4): Preferential Treatment of Tuna
    Paragraph (4) of amended section 204(b) concerns the preferential 
treatment of tuna. Paragraph (4)(A) provides for the entry in the 
United States, free of duty and free of any quantitative restrictions, 
of tuna that is harvested by United States vessels or ATPDEA 
beneficiary country vessels, that is prepared or preserved in any 
manner, in an ATPDEA beneficiary country, in foil or other flexible 
airtight containers weighing with their contents not more than 6.8 
kilograms each, and that is imported directly into the customs 
territory of the United States from an ATPDEA beneficiary country. 
Paragraph (4)(B)(i) has been amended by the Miscellaneous Trade and 
Technical Corrections Act of 2004 to define a ``United States vessel'' 
for purposes of paragraph (4)(A) as a vessel having a certificate of 
documentation with a fishery endorsement under chapter 121 of title 46 
of the United States Code [paragraph (4)(B)(i)(I)] or in the case of a 
vessel without a fishery endorsement, a vessel that is documented under 
the laws of the United States and for which a license has been issued 
pursuant to section 9 of the South Pacific Tuna Act of 1988 [paragraph 
(4)(B)(i)(II)]. Paragraph (4)(B)(ii) defines an ``ATPDEA vessel'' for 
purposes of paragraph (4)(A) as a vessel (1) which is registered or 
recorded in an ATPDEA beneficiary country, (2) which sails under the 
flag of an ATPDEA beneficiary country, (3) which is at least 75 percent 
owned by nationals of an ATPDEA beneficiary country or by a company 
having its principal place of business in an ATPDEA beneficiary 
country, of which the manager or managers, chairman of the board of 
directors or of the supervisory board, and the majority of the members 
of those boards are nationals of an ATPDEA beneficiary country and of 
which, in the case of a company, at least 50 percent of the capital is 
owned by an ATPDEA beneficiary country or by public bodies or nationals 
of an ATPDEA beneficiary country, (4) of which the master and officers 
are nationals of an ATPDEA beneficiary country, and (5) of which at 
least 75 percent of the crew are nationals of an ATPDEA beneficiary 
country.
Paragraph (5): Customs Procedures
    Paragraph (5) of amended section 204(b) is entitled ``Customs 
procedures'' and sets forth regulatory standards for purposes of 
preferential treatment under paragraph (1), (3), or (4). It includes 
provisions relating to import procedures, prescribes a specific factual 
determination that the President must make regarding the implementation 
of certain procedures and requirements by each ATPDEA beneficiary 
country, and sets forth the responsibility of CBP regarding the study 
of, and reporting to Congress on, cooperative and other actions taken 
by each ATPDEA beneficiary country to prevent transshipment and 
circumvention in the case of textile and apparel goods. The specific 
provisions under paragraph (5) that require regulatory treatment in 
this document are the following:
    1. Paragraph (5)(A)(i) provides that any importer that claims 
preferential treatment under paragraph (1), (3), or (4) must comply 
with customs procedures similar in all material respects to the 
requirements of Article 502(1) of the NAFTA as implemented pursuant to 
United States law, in accordance with regulations promulgated by the 
Secretary of the Treasury. The NAFTA provision referred to in paragraph 
(5)(A)(i) concerns the use of a Certificate of Origin and specifically 
requires that the importer (1) make a written declaration, based on a 
valid Certificate of Origin, that the imported good qualifies as an 
originating good, (2) have the Certificate in its possession at the 
time the declaration is made, (3) provide the Certificate to CBP on 
request, and (4) promptly make a corrected declaration and pay any 
duties owing where the importer has reason to believe that a 
Certificate on which a declaration was based contains information that 
is not correct.
    2. Paragraph (5)(B) provides that the Certificate of Origin that 
otherwise would be required pursuant to the provisions of paragraph 
(5)(A)(i) will not be required in the case of an article imported under 
paragraph (1), (3), or (4) if that Certificate of Origin would not be 
required under Article 503 of the NAFTA (as implemented pursuant to 
United States law), if the article were imported from Mexico. Article 
503 of the NAFTA sets forth, with one general exception, three specific 
circumstances in which a NAFTA country may not require a Certificate of 
Origin.
Paragraph (6): Definitions
    Paragraph (6) of amended section 204(b) sets forth a number of 
definitions that apply for purposes of section 204(b). These 
definitions include, in paragraph (6)(B), a definition of ``ATPDEA 
beneficiary country'' as any ``beneficiary country,'' as defined in 
section 203(a)(1) of the ATPA, which the President designates as an 
ATPDEA beneficiary country, taking into account the criteria contained 
in sections 203(c)

[[Page 44567]]

and (d) and other appropriate criteria, including those specified under 
new paragraph (6)(B) of amended section 204(b).
    On October 31, 2002, the President signed Proclamation 7616 
(published in the Federal Register at 67 FR 67283 on November 5, 2002) 
to implement the new trade benefit provisions of section 3103 of the 
Act. The Annex to that Proclamation set forth a number of modifications 
to the HTSUS to accommodate the ATPDEA program, and those HTSUS changes 
were also the subject of a technical corrections document prepared by 
the Office of the United States Trade Representative and published in 
the Federal Register (67 FR 79954) on December 31, 2002.

Interim Regulatory Amendments in T.D. 03-16

    On March 25, 2003, CBP published in the Federal Register (68 FR 
14478) as T.D. 03-16 (corrected at 68 FR 67338 on December 1, 2003), an 
interim rule document setting forth amendments to the CBP Regulations 
that implement the trade benefit provisions for Andean countries. The 
regulatory changes in T.D. 03-16 implemented the new trade benefit 
provisions and conformed the ATPA implementing regulations to those 
statutory changes and involved, among other things, the following: (1) 
The addition of Sec. Sec.  10.241 through 10.248 to implement those 
apparel and other textile article preferential treatment provisions 
within paragraphs (3), (5) and (6) of amended section 204(b) of the 
ATPA statute that relate to U.S. import procedures; (2) the addition of 
Sec. Sec.  10.251 through 10.257 to implement those non-textile 
preferential treatment provisions within paragraphs (1), (4), (5) and 
(6) of amended section 204(b) of the ATPA statute that relate to U.S. 
import procedures; (3) the removal of the reference to Sec.  10.208 in 
the introductory text of Sec.  10.202; (4) the revision of Sec.  10.201 
to reflect the removal of that reduced-duty provision and to refer to 
Sec. Sec.  10.241-10.248 and 10.251-10.257; (5) the amendment of 
paragraph (b) of Sec.  10.202 to recast the list of articles excluded 
from the ATPA to reflect the terms of paragraph (2) of amended section 
204(b); and (6) the amendment of Part 163 of the CBP Regulations (19 
CFR Part 163) by adding to the list of entry records in the Appendix 
(the interim ``(a)(1)(A) list'') references to the ATPDEA Textile 
Certificate of Origin prescribed under Sec.  10.246, the ATPDEA 
Declaration of Compliance for brassieres prescribed under Sec.  10.248, 
and the ATPDEA Certificate of Origin for tuna and other non-textile 
articles prescribed under Sec.  10.256. For a complete section-by-
section discussion of each regulatory change, see T.D. 03-16. Please 
note that on December 1, 2003, two correction documents pertaining to 
T.D. 03-16 were published in the Federal Register (68 FR 67338).
    Although the interim regulatory amendments were promulgated without 
prior public notice and comment procedures and took effect on March 25, 
2003, T.D. 03-16 nevertheless provided for the submission of public 
comments which would be considered before adoption of the interim 
regulations as a final rule. The prescribed public comment period 
closed on May 27, 2003. A discussion of the comments received by CBP is 
set forth below.

Discussion of Comments

    A total of 6 commenters responded to the solicitation of public 
comments in the March 25, 2003, interim rule document referred to 
above. All of the comments received involved the regulatory provisions 
for the preferential treatment of apparel and other textile articles.

Finishing Processes

Comment
    One commenter agrees with the decision to have a single provision 
in the regulations, Sec.  10.243(b), address dyeing and finishing 
requirements contained in the ATPDEA. Further, the commenter agrees 
that ``the restrictions (requiring the operations be performed in the 
United States) only apply to the dyeing, printing, and finishing of 
knit or woven U.S. fabrics, or the U.S. fabric components formed from 
those fabrics, of garments described only in Sec.  10.243(a)(1) or 
(a)(2).'' Based on the language in the provision, the commenter also 
believes that U.S. knit-to-shape components are not subject to the 
dyeing, printing, and finishing restriction which is consistent with 
CBP's position that knit-to-shape components are not fabrics.
    The commenter disagrees, however, with CBP's conclusion that U.S. 
knit or woven fabrics or fabric components made from such U.S. fabrics 
that are used in apparel provided for in Sec.  10.243(a)(7) are also 
subject to the requirement that the knit or woven fabric, or components 
made from such fabric be dyed, printed or finished in the United 
States. The commenter believes ``that such U.S. fabrics or components, 
used in conjunction with (a)(7) DO NOT face a dyeing, printing and 
finishing restriction.'' The commenter believes CBP has misread the 
statute and reached an erroneous conclusion.
    In making the argument that CBP has misread the statute, the 
commenter refers to a ``hybrid provision'' in the statute, cites to the 
language in Sec.  204(b)(3)(B)(iii)(I), and states the provision 
``permits the inclusion of `fabrics, fabric components formed, or 
components knit to shape described in clause (i).' '' The commenter 
maintains that the requirement in subclause (i)(I) that U.S. knit or 
woven fabric and fabric components from such fabric be dyed, printed, 
or finished in the United States applies only with regard to apparel 
articles qualifying under subclause (i)(I). The commenter argues that 
the dyeing, printing, and finishing requirement does not apply to U.S. 
knit and woven fabric or fabric components when these inputs are used 
in apparel which qualifies for preferential treatment under another 
provision of the ATPDEA, namely apparel described in Sec.  
10.243(a)(7).
    The commenter points to ``common commercial practice'' to argue 
that this dyeing, printing, and finishing requirement would not apply 
to U.S. inputs when used in conjunction with regional inputs as ``the 
dyeing, printing, and finishing operations all need to occur in the 
same location to ensure consistency for all the components of the 
garment.'' The commenter argues that CBP's interpretation which applies 
the dyeing, printing and finishing requirement to knit and woven U.S. 
fabric and fabric components will result in apparel companies choosing 
not to buy U.S. inputs for hybrid U.S./regional garments.
CBP's Response
    The commenter is correct that CBP does not view the dyeing, 
printing, and finishing requirement to extend to knit-to-shape 
components as such components are not considered ``fabric'' but are 
components created directly from yarn. CBP disagrees with the 
commenter's reading of the statute to limit the dyeing, printing, and 
finishing requirement contained in subclause (i)(I) to apparel articles 
qualifying for preferential treatment under that subclause only. CBP 
views the dyeing, printing, and finishing requirement contained in 
subclause (i)(I) as part of the description of the fabric, and fabric 
components formed from such fabric, provided for under that subclause. 
Consequently, the language in subclause (iii)(I) which allows for the 
use of fabrics, fabric components formed, or components knit-to-shape 
described in clause (i) is interpreted by CBP to include the dyeing, 
printing, and finishing requirement contained in subclause (i)(I) with 
regard to fabrics or fabric components wholly formed from

[[Page 44568]]

fabric which are described in that subclause. In the Conference Report 
to the Trade Act of 2002, Report No. 107-624, at page 251, it is 
clearly stated with regard to the dyeing, finishing and printing 
requirement: ``Apparel made of U.S. knit or woven fabric assembled in 
an Andean beneficiary country qualifies for benefits only if the U.S. 
knit or woven fabric is dyed and finished in the United States.'' CBP's 
interpretation of the dyeing, printing and finishing requirement as 
part of the descriptive of the ``inputs'' provided for in subclause 
(i)(I) carries out the intent of Congress to ensure that U.S.-formed 
fabric and fabric components are finished in the United States. To 
interpret the provision, as suggested by the commenter (to apply the 
requirement only in the case when all the fabric and fabric components 
in an apparel article are wholly formed in the United States of yarns 
wholly formed in the United States or one or more ATPDEA beneficiary 
countries) would mean that the introduction of any other fabric or 
fabric component within the apparel article (provided the fabric or 
fabric component is described within one of the other provisions of the 
ATPDEA) would negate the requirement regarding U.S. finishing so 
specifically stated by Congress in this Act and obstruct their intent 
as stated in the Conference Report previously cited.
    As to the commenter's argument that ``common commercial practice'' 
dictates that the requirement to dye, print, and finish U.S.-formed 
fabric (and fabric components from such fabric) in the United States 
does not apply when U.S. ``inputs'' are combined with regional fabrics, 
we disagree. We agree that normally fabric for apparel production is 
dyed by lot and a manufacturer wants to use fabric from the same dye 
lot in the production of an apparel article, assuming the apparel 
article is constructed of one fabric. However, if fabrics from the 
United States and the region are being combined in the production of 
apparel, it is likely the fabrics will not be exactly the same. Dyes, 
inks and finishes will affect different fabrics of different 
constructions and different fiber compositions differently. Therefore, 
CBP rejects the proposition that ``common commercial practice'' 
dictates an interpretation of the dyeing, printing, and finishing 
requirement for U.S.-formed fabric which is contrary to the stated 
intent of Congress.
Comment
    A commenter noted that the interim regulations do not provide a 
definition of the terms ``dyeing,'' ``printing,'' and ``finishing.'' 
The commenter would like CBP to publish definitions of these terms so 
as to clarify the requirements with regard to these processes.
CBP's Response
    As technological advances may occur with regard to dyeing, printing 
and finishing processes, CBP will not attempt to provide a finite 
definition of these terms because the definition may not encompass such 
unforeseen advances. It is prudent to rely on the common and commercial 
meanings of these terms which may change over time with scientific and 
technological advances. Questions of whether a particular process 
constitutes a dyeing, printing, or finishing process will continue to 
be addressed on a case-by-case basis.

Interlinings

Comment
    There is no clear translation into Spanish of the terms ``chest 
type plate,'' ``hymo piece,'' and ``sleeve header.'' Assistance in this 
regard is requested. In addition, the same commenter requests that CBP 
not object to the use of other interlinings originating in third 
countries since the type of products exported by Peru use a minimum 
amount of such interlinings. Finally, the commenter asks if the use of 
interlinings originating in a country other than the United States or a 
beneficiary country and that is not one of the three types mentioned 
above, will preclude preferential treatment under the ATPDEA even 
though such interlinings, along with other accessories, represent less 
than 25% of the cost of the garment.
CBP's Response
    CBP does not have the authority to allow the use of foreign (third 
country) interlinings beyond the three named and described in the 
ATPDEA. The use of other foreign interlinings in apparel articles, 
regardless of the amount, will preclude preferential treatment under 
the ATPDEA.
    With regard to the lack of a clear translation into Spanish for the 
terms ``chest type plate,'' ``hymo piece,'' and ``sleeve header,'' CBP 
is able to offer some descriptive information about these interlinings, 
which are used in the production of suit and suit-type jackets, which 
may be helpful when translated into Spanish.
    A ``sleeve header,'' which may also be referred to as a 
``sleevehead interlining,'' is an interlining piece sewn between the 
shell fabric and lining fabric along the outside shoulder seam where 
the sleeve joins the body of the garment. This interlining provides 
fullness along the seam and enhances the appearance of a jacket at the 
point where the sleeve meets the shoulder. See Headquarters Ruling 
Letter (HQ) 559552, dated February 14, 1996, and HQ 966510, dated 
August 27, 2003.
    A ``chest type plate'' may also be referred to as a ``chest 
piece.'' This interlining piece is placed in the chest area of a jacket 
for strength and shape. It serves to stabilize the jacket, enhancing 
its appearance. See HQ 966510; https://www.actk.nl/; and https://
www.resil.com/dictionary.
    The term ``hymo'' is defined as ``Fabric of mohair and linen, used 
in tailoring to reinforce body of a coat.'' See A Dictionary of Costume 
and Fashion, Historic and Modern, by Mary Brooks Picken, at 181 (Dover 
Publications, Inc., 1985). Similarly, from Fairchild's Dictionary of 
Textiles, edited by Dr. Isabel B. Wingate, at 289, ``hymo'' is defined 
as ``A fabric made of mohair and linen. Used in tailoring to reinforce 
the body section of a coat.'' (Fairchild Publications, Inc., 1970). 
Based on these definitions, a ``hymo piece'' may be considered a type 
of ``chest piece'' or ``chest type plate.'' The distinction between 
these two types of interlinings is that the ``hymo piece'' is 
constructed specifically of fabric of mohair and linen.

Short Supply

Comment
    With regard to the designation of additional short supply fabrics 
and yarns, the commenter asks what criteria will be used by the 
President to determine that a fabric or yarn is scarce in the U.S. 
market, and when such determinations will be published in the Federal 
Register.
CBP's Response
    Congress authorized the President to proclaim additional fabrics 
and yarns as eligible for preferential treatment under clause (i)(III) 
of section 3103(b)(3)(B) of the ATPDEA. This authority, provided in 
section 3103(b)(3)(B)(ii), has been delegated to the Committee for the 
Implementation of Textile Agreements (CITA). See ``Notice of 
Redelegation of Authority and Further Assignment of Functions'' which 
was published on December 2, 2002 (67 FR 71606). Questions regarding 
designations of fabrics or yarns as commercially unavailable, such as 
the criteria for making such determinations and the procedures 
involved, should be directed to the Chairman, Committee for the 
Implementation of Textile Agreements, Room H3100, U.S. Department of

[[Page 44569]]

Commerce, 14th and Constitution Avenue, NW., Washington, DC 20230. 
Information on ``commercial availability'' requests under the ATPDEA 
may be found at the Web site for the Office of Textiles and Apparel, 
Department of Commerce, at https://www.otexa.ita.doc.gov.
Comment
    A commenter notes with appreciation a Textile Book Transmittal 
(TBT) publication by CBP (which is available on the CBP Web site), TBT-
03-013 ``List of Short Supply Fabrics for Trade Agreements,'' and the 
use of the term ``short supply'' by CBP; the commenter believes CBP's 
use of the term ``reflects both an accurate description of this 
provision and the way the trade views this process.'' However, the 
commenter takes issue with the language included in the TBT describing 
the general treatment for apparel produced from short supply fabrics or 
yarns designated by the Committee for the Implementation of Textile 
Agreements (CITA). The language at issue indicates that apparel 
incorporating short supply fabrics designated by CITA must use fabrics 
wholly formed in the United States from yarns wholly formed in the 
United States for all other fabric components in the garment for which 
the short supply fabric is not used.
    The commenter cites to the language in the Conference Report for 
the Trade Act of 2002 (H. Rept 107-624) which clarifies congressional 
intent regarding the treatment of short supply inputs in apparel 
qualifying for preferential treatment under the trade program. The 
commenter refers to this report language to assert that when the short 
supply fabric determines the essential character of an apparel article, 
the remaining fabrics used in the apparel article may originate from 
anywhere; and, when the short supply fabric does not impart the 
essential character of an apparel article, it will not disqualify the 
apparel article from qualifying for preferential treatment under the 
ATPDEA. The use of the same short supply provision in the AGOA and 
CBTPA leads the commenter to conclude that designated short supply 
fabrics and yarns should be extended the same treatment, i.e., 
consideration of only the fabric or yarn that determines the essential 
character of the apparel article.
    The commenter notes that the interim regulations on the ATPDEA are 
silent on how CBP ``expects to treat garments entered claiming a short 
supply fabric or yarn designated by CITA.''
CBP's Response
    In Section 3103(b)(3)(B)(ii) of the ATPDEA, the President is 
authorized to designate additional fabrics and yarns as in ``short 
supply'' and thus allowable in the construction of apparel articles 
under the ATPDEA regardless of the origin of the fabrics or yarns. This 
authority to designate additional fabrics and yarns has been delegated 
to CITA pursuant to Executive Order No. 13277 (67 FR 70305) and the 
United States Trade Representative's Notice of Redelegation of 
Authority and Further Assignment of Functions (67 FR 71606).
    The tariff provision which implements this provision of the ATPDEA 
is subheading 9821.11.10, HTSUS, which provides for: ``Apparel articles 
sewn or otherwise assembled in one or more such countries, or the 
United States, or both, exclusively from any of the following: Fabrics 
or yarns designated by the appropriate U.S. government authority in the 
Federal Register as fabrics or yarns that cannot be supplied by the 
domestic industry in commercial quantities in a timely manner, under 
any terms as such authority may provide.''
    The interim regulations were silent on how CBP will treat apparel 
articles under Sec.  10.243(a)(1)(iv) of the regulations which pertains 
to apparel articles provided for in subheading 9821.11.10, HTSUS, 
because the authority to designate the fabrics or yarns allowed under 
this provision and the authority to designate any terms or requirements 
to be applied to the allowance of these fabrics or yarns in eligible 
apparel resides with CITA, pursuant to the language of the tariff. CBP 
will follow the language of the designation notices issued by CITA 
(which will appear in the Federal Register) in applying this provision 
to apparel articles as CITA is the designated U.S. government authority 
to make such determinations.
Comment
    A commenter objects to the exclusion of brassieres from eligibility 
for preferential treatment under Sec.  10.243(a)(1)(iii). The commenter 
claims that in the CBTPA changes contained in section 3107 of the Trade 
Act of 2002 and provisions of the ATPDEA, Congress included language 
that specifically envisions brassieres being imported under the 
respective short supply provisions in each of those two trade 
preference programs. This statutory language stands in sharp contrast 
to CBP's view that brassieres are not eligible for short supply 
treatment in those trade programs.
CBP's Response
    The commenter argues that in both CBTPA and ATPDEA legislative 
changes made by Congress, specifically listing exceptions for certain 
provisions, Congress clearly envisioned brassieres being imported under 
these respective provisions, including the short supply provisions. In 
CBP's opinion, the specific exception language added to both the ATPDEA 
in section 3103(b)(3)(B)(v)(I) and the CBTPA in section 3107(a)(5)(iv) 
does not indicate that brasseries should therefore, be eligible under 
any or all of these excepted provisions. This clarifying language 
merely states that in determining eligibility requirements under the 
cited provisions, any brassieres classified in one of the exceptions 
would not be included in determining the eligibility under section 
3103(b)(3)(B)(v)(I) and section 3107(a)(5)(iv). In fact, one of the 
exceptions listed in both section 3103(b)(3)(B)(v)(I) of the ATPDEA and 
section 3107(a)(5)(iv) of the CBTPA is a provision covering 
``Handloomed, Handmade, and Folklore Articles''. CBP is not aware of 
any brassieres that could be claimed under this provision and yet this 
is one of the exceptions listed. CBP believes that the Congress did not 
intend the listing of these exceptions to mean that brassieres would be 
classifiable in all these provisions.

Brassieres

Comment
    A commenter is concerned that Sec.  10.243(b)(2) requires 
brassieres to be produced and entered during the same year in order to 
qualify for inclusion in the calculations of a year's shipments in 
order to determine eligibility of brassieres for preferential treatment 
in the following year. The commenter points to Example 6 in the interim 
regulations as illustrating this point. The commenter strongly 
disagrees with requiring brassieres to be produced and entered in the 
same year for the purpose of determining eligibility and asserts that 
the language adopted by Congress in drafting this provision of the 
ATPDEA requires that the calculation to determine eligibility be 
performed on brassieres `` `that are entered and eligible during the 
preceding 1-year period,' regardless of when those actual brassieres 
are produced.''
CBP's Response
    The commenter has misread Example 6 in the interim regulations. A 
proper reading of the example reveals that it actually supports the 
view of the commenter that in determining the

[[Page 44570]]

brassieres to be included in calculating the aggregate value of the 
fabric formed in the United States which is present in brassieres in a 
1-year period (October 1 to September 30) for the purpose of 
determining eligibility of brassieres for preferential treatment under 
this provision of the ATPDEA in the subsequent 1-year period, one 
includes brassieres which are entered and eligible during the preceding 
1-year period and the year of production is not a determinative factor. 
In Example 6, brassieres not meeting the minimum 75 percent fabric 
standard are shipped to the United States in February. A second 
shipment of brassieres, meeting the 75 percent fabric standard and 
actually exceeding the 85 percent standard, is shipped in June. If 
these two shipments are entered in the same 1-year period year, the 
aggregate value would meet the 75 percent standard. However, the 
February shipment is entered for consumption on March 1 of the same 
calendar year; the June shipment is not entered for consumption until 
November 1 of that calendar year. Although entered for consumption in 
the same calendar year, these shipments were entered for consumption in 
different eligibility years which run from October 1 to September 30. 
Therefore, a valid declaration of compliance cannot be prepared for the 
shipment entered in March as it failed to meet the 75 percent standard; 
however, a valid declaration may be prepared for the shipment entered 
in November since it exceeded the 85 percent standard which would be 
applicable for brassieres entered in that year because of the failure 
to meet the 75 percent standard in the preceding year. The year of 
production of the brassieres is not a consideration in the example.

Scope of the Term ``Elastic Strips''

Comment
    Three commenters submitted observations concerning the scope of the 
term ``elastic strips'' in the list of examples of ``findings and 
trimmings'' set forth in Sec.  10.243(c)(1)(A). [The ATPDEA includes a 
special rule that permits the use of foreign findings and trimmings in 
producing eligible textile and apparel articles, provided the value of 
those findings and trimmings does not exceed 25% of the cost of the 
components of the assembled article.] The commenters noted that the 
term ``elastic strips'' is not defined in the interim regulations and 
therefore the regulations provide manufacturers and importers little 
guidance regarding the scope of the term. All three commenters urged 
CBP to narrowly construe the term so that it excludes most, if not all, 
narrow elastic fabrics. The commenters made the following specific 
points in support of their position:
    1. The exception for foreign findings and trimmings under the 
ATPDEA ``was necessarily intended to be of a restrictive nature, as the 
intent of the statute was to ensure that all fabric components be 
formed [in the] U.S. or ATPDEA region.''
    2. If the exception for foreign ``elastic strips'' is interpreted 
as including narrow elastic fabrics, an entire segment of the U.S. 
textile industry (the weavers and knitters of narrow elastic fabric) 
will be adversely affected as it will receive absolutely no benefit 
from the fabric origin requirements of the ATPDEA. In passing this 
statute, Congress did not intend to exclude from its benefits all U.S. 
producers of narrow elastic fabrics.
    3. In the textile industry, the word ``strip'' is used to describe 
cut (slit) pieces of flat rubber or other elastic material of a rubber-
like consistency throughout. Narrow elastic fabrics that are essential 
components are not normally considered elastic strips.
    4. CBP rulings support the view that most fabric components ``that 
serve a purpose'' are not findings. See HQ 559522 dated February 14, 
1996. In addition, CBP rulings have generally not considered fabric 
components to be trimmings.
    5. It is noted that the ATPDEA did not replicate language in the 
Caribbean Basin Trade Partnership Act (CBTPA) limiting ``elastic 
strips'' in the findings and trimmings exception to elastic strips of 
less than one-inch in width and used in the production of brassieres. 
By omitting this language in the ATPDEA, Congress intended to exclude 
elastic fabric brassiere straps from the findings and trimmings 
exception. This is consistent with the belief that Congress intended to 
exclude from the findings and trimmings exception fabric components, 
such as waistbands, leg gatherings and brassiere straps, that are 
essential to the garment and are not primarily decorative.
CBP's Response
    Section 10.243(c)(1)(A) essentially repeats the language found in 
the statute (amended section 402(b)(B)(vi)(I) of the ATPA) relating to 
the exception for findings and trimmings and the examples set forth 
therein. Therefore, CBP acknowledges that the regulation provides no 
guidance as to what is meant by ``elastic strips'' in the findings and 
trimmings rule. However, as further explained below, CBP believes that, 
generally speaking, determinations regarding the scope of that term 
should be made on a case-by-case basis through the CBP rulings process.
    CBP agrees with the assertion by one commenter that the exception 
for foreign findings and trimmings in the ATPDEA was necessarily 
intended to be of a restrictive nature. With few exceptions, the 
preferential treatment accorded to textile and apparel articles under 
the ATPDEA, like the treatment accorded to similar articles under the 
AGOA and CBTPA, is based upon the requirement that all fabric 
components be formed in the United States or the ATPDEA region. 
Therefore, CBP believes that the scope of the term ``findings and 
trimmings'' should be limited to the specific items set forth as 
examples in the statute as well as items that are closely analogous to 
the cited examples.
    In response to the argument that Congress did not intend to exclude 
an entire segment of the U.S. textile industry (producers of narrow 
elastic fabric) from benefiting from the ATPDEA, CBP notes that it 
attempts to discern Congressional intent from the specific wording in 
the statute as well as the legislative history. In regard to the use of 
the term ``elastic strips'' in the ATPDEA, the statute's legislative 
history sheds no light on how the term should be defined. However, as 
one commenter pointed out, Congress did not include language limiting 
the scope of the term ``elastic strips'' in the ``findings and 
trimmings'' rule to elastic strips that are ``each less than 1 inch in 
width and used in the production of brassieres,'' as it did in the AGOA 
and CBTPA statutes.
    One seemingly inescapable conclusion that can be drawn from the 
above omission in the ATPDEA is that Congress did not intend that the 
term ``elastic strips'' would be subject to the ``less than 1 inch in 
width'' brassiere strip limitation. Therefore, in future considerations 
of whether particular items qualify as ``elastic strips'' under the 
``findings and trimmings'' exception in the ATPDEA, CBP will not 
disqualify an item solely because it is an inch or more in width and 
used in the production of garments other than brassieres.
    However, CBP agrees with the assertion by one commenter that, by 
failing to limit the term ``elastic strips'' in the ATPDEA to certain 
narrow elastic brassiere strips, Congress intended to exclude elastic 
fabric brassiere straps from being considered findings and trimmings 
under this statute. HQ 562018 dated March 22, 2002, concerned whether 
the use of foreign-origin \1/2\ inch wide polyurethane strips

[[Page 44571]]

in the construction of brassieres would disqualify the brassieres from 
receiving preferential treatment under the CBTPA. CBP concluded 
initially that the polyurethane strips are outside the scope of the 
exception for ``elastic strips'' because the language limiting that 
exception to certain narrow elastic strips used in the production of 
brassieres related only to elastic fabric strips. CBP then determined 
in HQ 562018 that the polyurethane strip is not a ``finding or 
trimming'' inasmuch as it is not a ``supplementary element used to 
construct the garment, but, rather, is a brassiere strap, a major 
component of the brassiere.'' Because the polyurethane strip was 
neither a textile component nor a ``finding or trimming,'' CBP 
concluded that the strip's presence in the brassiere would not preclude 
the article from receiving preferential treatment under the CBTPA. 
Consistent with HQ 562018, CBP believes that brassiere straps, whether 
made of fabric or a non-textile material, do not qualify as ``findings 
or trimmings'' for purposes of the ATPDEA.
    Concerning whether the term ``elastic strips'' should be construed 
as encompassing narrow elastic fabrics or only non-textile rubber 
strips, or both, it is noted that in rulings interpreting ``elastic 
strips'' as that term appears in the AGOA and CBTPA, CBP determined 
that the term encompassed only ``narrow elastic fabric less than one 
inch in width used in the production of brassieres.'' (Emphasis added.) 
See, for example, HQs 965909 dated January 7, 2003, 562018 dated July 
10, 2001, and 966495 dated July 3, 2003. However, the basis for this 
conclusion was a statement in the legislative history of the CBTPA 
indicating that that program was to be administered in a manner 
consistent with the ``Special Access Program'' (SAP). A directive 
issued in connection with the SAP stated that ``the foreign origin 
exception for elastic strips is clarified as limited to narrow elastic 
fabric less than one inch in width used in the production of brassieres 
only.'' (Emphasis added.) As previously indicated, the term ``elastic 
strips'' in the ATPDEA ``findings and trimmings'' rule is not limited 
to strips less than 1 inch in width used in the production of 
brassieres. Moreover, there is no similar reference in the ATPDEA's 
legislative history to the SAP. As a result, CBP concludes that the 
above rulings relating to the AGOA and CBTPA are not controlling with 
respect to this issue and that ``elastic strips'' in the ATPDEA should 
not be construed as encompassing only narrow elastic fabric strips.
    By the same token, CBP cannot agree with the contention that the 
term ``elastic strips'' should be construed as encompassing only non-
textile (e.g., rubber) strips as CBP is not aware of any evidence 
indicating that Congress intended such a construction. Rather, CBP 
believes that, in determining whether certain items qualify as 
``elastic strips'' under the ATPDEA, consideration should be given to 
items consisting of elastic fabric material as well as items consisting 
of non-textile elastic material.
    CBP also does not agree with the argument that elastic fabric 
strips used in waistbands and leg gatherings are automatically excluded 
from the ``findings and trimmings'' exception under the ATPDEA. 
Previous CBP rulings on the scope of the ``findings and trimmings'' 
exception under other preference programs and provisions have defined 
``findings'' as ``sewing essentials used in textile goods'' and 
``trimmings'' as ``decoration or ornamental parts.'' Rubber tape used 
to provide secure fittings in the leg and arm openings of garments, 
such as bathing suits, underwear and sweatpants, have been held to 
qualify as ``findings'' under the CBTPA and subheading 9802.00.90, 
HTSUS. See HQs 966239 dated May 16, 2003, 966317 dated June 9, 2003, 
and 561868 dated July 10, 2001. By analogy, elastic fabric strips 
serving the same functions would also qualify as findings under the 
ATPDEA. Whether elastic fabric strip used in waistbands would also 
qualify as findings will be determined pursuant to the CBP rulings 
process.
Comment
    A commenter commends CBP for the inclusion in Sec.  10.243(b)(2) of 
language ``that clarifies that a series of post-assembly finishing 
operations will not disqualify a garment entered under specific 
provisions.''
CBP's Response
    CBP appreciates the comment.

Certificate of Origin

Comment
    A commenter believes the Certificate of Origin may be further 
simplified into one form to serve the AGOA, the CBTPA and the ATPDEA as 
the requirements for all three programs are the same. The commenter 
also requests that ``available upon request'' be permitted with regard 
to information requested on the certificate for thread, fabric and yarn 
names and addresses.
CBP's Response
    We would certainly be open to any suggestions concerning the 
simplification of the certificate of origin. However, developing one 
form to accommodate AGOA, CBTPA and ATPDEA would make the form more 
complex, especially for the exporter or producer who is required to 
complete the form and is responsible for ensuring that the information 
is accurate. A combining of the form could include groupings or 
requirements that would be in place for AGOA, e.g. knit to shape with 
50 percent by more of weight of fine wool that do not exist for CBTPA 
or ATPDEA.
    However with regard to the commenter's second point, CBP will not 
accept ``available upon request'' where information is needed on the 
name and address of the yarn, fabric and thread suppliers. The 
certificate of origin is not a document that is required for entry 
purposes. The importer must have it in their possession when making the 
claim. When CBP requests the certificate of origin all information must 
be on that form to assist CBP in confirming the accuracy of the claim. 
CBP does not want to make a second request to see what should have been 
available when a request was made to see the certificate of origin on 
the first request.
Comment
    A commenter inquired about reproduction of the Certificates of 
Origin shown in the Federal Register notice.
CBP's Response
    The Textile Certificate of Origin shown in the interim regulations 
is shown to illustrate the format in which the information should be 
presented; it is not a form. This format may be reproduced locally.

Handloomed, Hand-Made and Folklore Articles

Comment
    A commenter raises questions with regard to the provision of the 
ATPDEA which provides for handloomed, hand-made, and folklore articles. 
Specifically, the commenter wants to know how and when certification of 
such goods will be effectuated, particularly in light of the fact that 
Peru already has a system in place for the authorization of export 
invoices under the ``Administrative Agreement of Authorization and 
Certification of Textile Products'' which includes handloomed, hand-
made and folklore articles. The commenter inquires as to whether a 
separate certification is necessary when there

[[Page 44572]]

already is a certification process in place and whether textile 
articles other than garments, such as pillows, carpets, covers, and 
tablecloths will also enjoy preferential treatment.
CBP's Response
    CBP does not have the authority to answer these questions 
concerning the administration of the ``Handloomed, Handmade, and 
Folklore Articles'' provisions under the ATPDEA. These authorities and 
functions, which were granted to the President under the ATPDEA, were 
delegated in an Executive Order 13277 to USTR, including the authority 
to redelegate these authorities and functions. In a notice published in 
the Federal Register on Monday, December 2, 2002, such authorities and 
functions were assigned to the Secretary of State, the Secretary of the 
Treasury, the Secretary of Labor, the Secretary of Commerce, and the 
United States Trade Representative Office. The responsibility to 
administer this provision lies with the Committee for the 
Implementation of Textile Agreements (CITA). It is suggested that you 
contact them directly by writing to the Chairman, Committee for the 
Implementation of Textile Agreements, U.S. Department of Commerce, ITA/
TD/OTEXA, Room H-3100, 14th and Constitution Avenue, NW., Washington, 
DC 20230.

Changes to the Regulations

    While there are no changes to the interim regulations made in 
connection with the public comments, CBP in this final rule document 
has made a number of other changes to the interim regulatory texts for 
editorial and clarification purposes. These changes are as follows:
    1. In Sec.  10.242, CBP has determined that the definition of 
``foreign'' as set forth in the interim regulations could cause some 
confusion and might lead to anomalous and unintended results in certain 
circumstances. That definition (which has relevance only in the context 
of the findings and trimmings and interlinings provisions of Sec.  
10.243(c)) in the interim texts simply read ``of a country other than 
the United States or an ATPDEA beneficiary country.'' However, because 
the various textile and apparel articles to which preferential 
treatment applies are described in Sec.  10.243(a) with reference to 
specific production processes in the case of yarns, fabrics and 
components that must take place in the United States or in an ATPDEA 
beneficiary country or both, more is required than that the yarn or 
fabric or component be ``of'' (that is, have its origin in) the United 
States or an ATPDEA beneficiary country. For example, Sec.  
10.243(a)(1) refers to articles ``assembled'' in one or more ATPDEA 
beneficiary countries from ``fabric wholly formed and cut'' in the 
United States from ``yarns wholly formed'' in the United States. A 
fabric that was wholly formed in the United States but from yarns 
formed outside the United States would not meet the Sec.  10.243(a)(1) 
standard and also would not be considered ``foreign'' under the interim 
definition because it is ``of'' (that is, it has its origin in) the 
United States by virtue of its having been formed in the United States. 
Therefore, that fabric could not be present in the article under the 
findings or trimmings or interlinings rule exception; consequently, 
even if all of the other fabric in the article was wholly formed and 
cut in the United States from yarns wholly formed in the United States 
and the article was assembled in an ATPDEA beneficiary country, the 
assembled article would not qualify for preferential treatment. On the 
other hand, a fabric formed outside the United States or the ATPDEA 
region, if used as a finding or trimming or interlining within the 25 
percent limit, would not disqualify the article. Thus, under the 
interim definition of ``foreign,'' U.S. and ATPDEA beneficiary country 
textile materials could be at a disadvantage vis-a-vis materials from 
outside the United States and the ATPDEA region, contrary to the 
overall thrust of the ATPDEA program as discussed in the comment 
discussion set forth above in this document. CBP believes that the 
interim definition was appropriate in the case of non-textile findings 
and trimmings. However, in the case of textile findings and trimmings 
and interlinings the concept of ``foreign'' logically only has 
relevance in the context of an exception to the production standards 
that apply to articles eligible for preferential treatment. 
Accordingly, the definition of ``foreign'' has been replaced by a 
definition of ``foreign origin'' to address these concerns.
    2. In Sec.  10.242, CBP has added a new definition for the term 
``self start edge'' and modified the definition of ``knit-to-shape 
components'' by adding the phrase ``that is, the shape or form of the 
component as it is used in the apparel article, containing at least one 
self start edge'' after the words ``specific shape.''
    3. In Sec.  10.243(b)(1)(i), CBP has added the words ``or in one or 
more ATPDEA beneficiary countries, as described in paragraph (a)(1)(i) 
of this section'' after the phrase ``from yarns wholly formed in the 
United States''. This change is being made because of the inadvertent 
omission of this statutory language in section 3103(b)(3)(B)(i)(I) of 
the ATPDEA which limits the dyeing, printing, and finishing requirement 
to certain fabrics.
    4. With reference to the findings, trimmings and interlinings 
provisions under Sec.  10.243(c)(1)(ii), CBP has used an f.o.b. port of 
exportation basis for determining the ``cost'' of the components and 
the ``value'' of the findings and trimmings and interlinings. However, 
CBP now believes that the use of an ex-factory standard in lieu of the 
f.o.b. port of exportation standard would be more accurate because it 
eliminates transportation costs from the comparison between the 
``value'' of foreign findings and trimmings and/or foreign interlinings 
and