Proposed Limit on Duty-Free Insular Watches in Calendar Year 1999

DEPARTMENT OF COMMERCE

International Trade Administration

15 CFR Part 303

DEPARTMENT OF THE INTERIOR

Office of Territorial and International Affairs

[Docket No. 980716178-8178-01]

RIN 0625-AA53

Proposed Limit on Duty-Free Insular Watches in Calendar Year 1999

AGENCIES: Import Administration, International Trade Administration,

Department of Commerce; Office of Insular Affairs, Department of the

Interior.

ACTION: Proposed rule and request for comments.

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SUMMARY: This action invites public comment on a proposal to amend the

Departments' ITA regulations governing duty-exemption allocations and

duty-refund entitlements for watch producers in the United States'

insular possessions (the Virgin Islands, Guam and American Samoa) and

the Northern Mariana Islands. The proposed amendments would change the

value limit for watches eligible for duty-exemption, update the

creditable wage ceiling, modify the new entrant invitation language and

establish the total quantity and respective territorial shares of

insular watches and watch movements which would be allowed to enter the

United States free of duty during calendar year 1999.

DATES: Comments must be received on or before August 27, 1998.

ADDRESSES: Address written comments to Faye Robinson, Program Manager,

Statutory Import Programs Staff, Room 4211, U.S. Department of

Commerce, Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Faye Robinson, (202) 482-3526, same

address as above.

SUPPLEMENTARY INFORMATION: The insular possessions watch industry

provision in Sec. 110 of Pub. L. No. 97-446 (96 Stat. 2331) (1983) as

amended by Sec. 602 of Pub. L. No. 103-465 (108 Stat. 4991) (1994)

additional U.S. Note 5 to chapter 91 of the HTS requires the Secretary

of Commerce and the Secretary of the Interior, acting jointly, to

establish a limit on the quantity of watches and watch movements which

may be entered free of duty during each calendar year. The law also

requires the Secretaries to establish the shares of this limited

quantity which may be entered from the Virgin Islands, Guam, American

Samoa and the Northern Mariana Islands. Regulations on the

establishment of these quantities and shares are contained in Sec.

303.3 and 303.4 of title 15, Code of Federal Regulations (15 CFR 303.3

and 303.4). The Departments propose to establish for calendar year 1999

a total quantity of 3,740,000 units and respective territorial shares

as shown in the following table:

Virgin Islands............................................. 2,240,000

Guam....................................................... 500,000

American Samoa............................................. 500,000

Northern Mariana Islands................................... 500,000

Compared to the total quantity established for 1998 (63 FR 5887;

February 5, 1998), this amount would be a decrease of 400,000 units.

The proposed Virgin Islands territorial share would be reduced by

400,000 and the shares for Guam, American Samoa and the Northern

Mariana Islands would not change. The amount we propose for the Virgin

Islands is more than sufficient for the anticipated needs of all the

existing producers.

We also propose raising the maximum value of components for duty-

free treatment of watches from $200 to $500 by amending Sec.

303.14(b)(3). This change would relax the limitation on the value of

imported components that may be used in the assembly of duty-free

insular watches. The proposed value levels would provide the producers

with a greater choice in the kinds of watches they assemble, thereby

affording them an opportunity to increase shipments and raise

territorial employment.

We propose raising from $35,000 to $38,650 the maximum dollar

amount of wages creditable in the calculation of the value of the

production incentive certificate by amending Sec. 303.14(a)(1)(i). The

increase in the maximum creditable wage limit is being proposed to keep

pace with inflation. The ceiling was last raised in 1994.

Finally, we propose eliminating subparagraphs (1) and (2) of

Sec. 303.14(d) and consolidating provisions on new entrant invitations

in a revised Sec. 303.14(d). There is no longer a producer in Guam,

leaving the Virgin Islands as the only territory with an active

industry. The proposed change would remove the need to amend the

regulations when such production shifts occur.

Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et

seq., the Assistant General Counsel for Legislation and Regulation has

certified to the Chief Counsel, Small Business Administration, that the

proposed rule will not have a significant economic impact on a

substantial number of small entities. This is because the rulemaking

affects only the five watch companies currently participating in the

insular possessions watch program, all of which are located in the

Virgin Islands. Although a reduction of the 1999 Virgin Islands

territorial share of duty-exemption is being proposed, the reduced

amount would still represent more than twice the amount of duty-free

shipments used in 1997. Accordingly, the proposed reduction for the

1999 annual duty-exemption for the Virgin Islands should not impose any

cost or have any economic effect on these small companies. Similarly,

updating the creditable wage ceiling, simplifying and updating the new

entrant invitation language and raising the value limit for watches

eligible for duty-exemption will not impose any cost or have any other

adverse economic effect on the producers.

Paperwork Reduction Act

This proposed rulemaking involves information collection activities

subject to the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq.

which are currently approved by the Office of Management and Budget

under control numbers 0625-0040 and 0625-0134. The amendments will not

increase the information burden on the public.

Notwithstanding any other provision of the law, no person is

required to respond to, nor shall any person be subject to a penalty

for failure to comply with a collection of information unless it

displays a currently valid OMB Control Number.

It has been determined that the proposed rulemaking is not

significant for purposes of Executive Order 12866.

List of Subjects in 15 CFR Part 303

Administrative practice and procedure, American Samoa, Customs

duties and inspection, Guam, Imports, Marketing quotas, Northern

Mariana Islands, Reporting and recordkeeping requirements, Virgin

Islands, Watches and jewelry.

For reasons set forth above, we propose to amend 15 CFR part 303 as

follows:

PART 303--[AMENDED]

1. The authority citation for 15 CFR part 303 continues to read as

follows:

Authority: Pub. L. 94-241, 90 Stat. 263 (48 U.S.C. 1681, note);

Pub. L. 97-446, 96 Stat. 2331 (19 U.S.C. 1202, note); Pub. L. 103-

465, 108 Stat. 4991.

[[Page 40231]]

Sec. 303.14 [Amended]

2. Section 303.14(a)(1)(i) is amended by removing ``$35,000'' and

adding ``$38,650'' in its place.

3. Section 303.14(b)(3) is amended by removing ``$200'' and adding

``$500'' in its place.

4. Section 303.14(d) is revised to read as follows:

Sec. 303.14 Allocation factors and miscellaneous provisions.

* * * * *

(d) New entrant invitations. Applications from new firms are

invited for any unused portion of any territorial share.

* * * * *

5. Section 303.14(e) is amended by removing ``2,640,000'' and

adding ``2,240,000'' in its place.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

Allen Stayman,

Director, Office of Insular Affairs.

[FR Doc. 98-20162 Filed 7-27-98; 8:45 am]

BILLING CODE 3510-DS-P 4310-93-P