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. 980716178-8234-02]

RIN 0625-AA53

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: Final rule.

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SUMMARY: This action amends 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 amendments 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 are

allowed to enter the United States free of duty during calendar year

1999.

EFFECTIVE DATE: September 17, 1998.

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

SUPPLEMENTARY INFORMATION: We published proposed regulatory revisions

on July 28, 1998 (63 FR 40230) and invited comments. We received no

comments.

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 Harmonized Tariff Schedule 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 Secs.

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

and 303.4). The Departments 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

The rule raises the maximum value of components for duty-free

treatment of watches from $200 to $500 by amending Sec. 303.14(b)(3).

This change increases the value of imported components that may be used

in the assembly of duty-free insular watches. The increased value level

is intended to provide the

[[Page 49667]]

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

thereby affording them an opportunity to increase shipments and raise

territorial employment.

The rule also raises 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 intended to keep pace

with inflation. The ceiling was last raised in 1994.

Finally, the amendment eliminates subparagraphs (1) and (2) of Sec.

303.14(d) and consolidates provisions on new entrant invitations in a

revised Sec. 303.14(d). There currently is no producer in Guam, leaving

the Virgin Islands as the only territory with an active industry. The

change removes the need to amend the regulations when such production

shifts occur.

Under the Administrative Procedure Act, 5 U.S.C. 553(d)(1), the

effective date of this rule need not be delayed for 30 days because

this rule relieves restrictions. The restrictions are relieved by

raising the value limit on watches which are allowed into the United

States free of duty and raising the creditable wage ceiling used in the

calculation of the duty refund.

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 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 there is a

reduction of the 1999 Virgin Islands territorial share of duty-

exemption, the reduced amount still represents more than twice the

amount of duty-free shipments used in 1997. Accordingly, the reduction

for the 1999 annual duty-exemption for the Virgin Islands will 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 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 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 are amending 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.

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.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration, Department of

Commerce.

Allen Stayman,

Director, Office of Insular Affairs, Department of the Interior.

[FR Doc. 98-24962 Filed 9-16-98; 8:45 am]

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