Implementation and Enforcement of the Special Access Program for Caribbean Basin Initiative and Andean Trade Preference Act Countries

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS

Implementation and Enforcement of the Special Access Program for

Caribbean Basin Initiative and Andean Trade Preference Act Countries

March 30, 1998.

AGENCY: Committee for the Implementation of Textile Agreements (CITA).

ACTION: Notice and directive to the Commissioner of Customs amending

requirements for participation in the Special Access Program for

Caribbean Basin Initiative and Andean Trade Preference Act Countries;

termination of Form ITA-370P.

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SUMMARY: This notice sets forth amended requirements for participating

in the Caribbean Basin Initiative (CBI) Special Access Program and the

Special Access Program for Andean Trade Preference Act (ATPA) countries

(collectively, the ``Special Access Program''). Under the Special

Access Program, textile products assembled in CBI and ATPA countries

from fabric formed and cut in the United States that meet the

requirements of the Special Access Program are guaranteed access to the

U.S. market. Textile products that meet the requirements of the Special

Access Program are eligible for tariff treatment as articles assembled

abroad from U.S. components. Currently, participants in the Special

Access Program are required to file a Special Access/Special Regime

Export Declaration (Form ITA-370P) prior to the exportation of

qualifying parts and to present a completed Form ITA-370P as part of

the entry package when the assembled products are imported into

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the United States. For products assembled from U.S. formed and cut

fabric that are exported from the United States on or after May 4,

1998, participants will no longer be required to file and present a

Form ITA-370P. Failure to comply with the requirements set forth in

this notice may result in suspension of eligibility to participate in

the Special Access Program. This notice supersedes certain previous

notices setting forth the requirements for participation in the Special

Access Program.

EFFECTIVE DATE: May 4, 1998.

FOR FURTHER INFORMATION CONTACT: Lori E. Mennitt, International Trade

Specialist, Office of Textiles and Apparel, U.S. Department of

Commerce, (202) 482-3400.

SUPPLEMENTARY INFORMATION:

Authority: Section 204 of the Agricultural Act of 1956, as

amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as

amended.

On February 20, 1986, the President announced a program to

guarantee access to the U.S. market for Caribbean-produced textile

products assembled from fabric formed and cut in the United States.

Caribbean countries entered into bilateral agreements with the United

States under which guaranteed levels of access were established for

their exports of qualifying assembled textile products. These

guaranteed access levels are distinct from the quotas or designated

consultation levels which apply to textile products that do not meet

the requirements of the Special Access Program. Textile products that

meet the requirements of the Special Access Program must be entered

under heading 9802.00.8015 of the Harmonized Tariff Schedule of the

United States (HTSUS), which applies to articles assembled abroad from

U.S. components, and are subject to duty on the value of the assembled

textile product less the value of the U.S. components. The program has

been implemented by Federal Register notices published on June 11, 1986

(51 FR 21208); October 20, 1986 (51 FR 37214); May 15, 1987 (52 FR

18414); July 10, 1987 (52 FR 26057); November 15, 1989 (54 FR 47549);

December 6, 1989 (54 FR 50425) and June 7, 1991 (56 FR 26394). In a

Federal Register notice dated August 30, 1995 (60 FR 45144), the

Committee for the Implementation of Textile Agreements (CITA) announced

the establishment of a similar Special Access Program for textile

products assembled in ATPA designated countries from fabric formed and

cut in the United States. These notices are hereby superseded. In this

notice, the two programs are collectively referred to as the ``Special

Access Program.'' Also see 52 FR 6049, published on February 27, 1987;

52 FR 6594, published on March 4, 1987; 55 FR 3079, published on

January 30, 1990; 55 FR 21047, published on May 22, 1990; 60 FR 2740,

published on January 11, 1995; and 61 FR 38236, published on July 23,

1996.

General Requirements; Qualifying Products

In order to qualify for Special Access Program treatment, a textile

product must meet the following requirements:

(1) the product must be assembled in a CBI or ATPA country with

which the United States has entered into a bilateral agreement

regarding guaranteed access levels under the Special Access Program;

(2) the product must be assembled from fabric formed and cut in the

United States; i.e., all fabric components of the assembled product

(with the exception of findings and trimmings, including elastic

strips) must be U.S. formed and cut. This requirement applies to all

textile components of the assembled product, including linings and

pocketing, except as provided in (4) below. Greige goods imported into,

and then finished in, the United States are not considered fabric

formed and cut in the United States. Fabric that is woven or knitted in

the United States from yarn is considered U.S.-formed;

(3) the importer of the product and the exporter of the component

parts from which the product is assembled must be the same entity or

person; and

(4) findings and trimmings of non-U.S. origin may be incorporated

into the assembled product provided they do not exceed 25 percent of

the cost of the components of the assembled product. Findings and

trimmings include sewing thread, hooks and eyes, snaps, buttons, ``bow

buds,'' decorative lace trim, elastic strips, zippers, including zipper

tapes, and labels. Elastic strips are considered findings or trimmings

only if less than one inch in width and used in the production of

brassieres. Certain non-U.S. formed, U.S. cut interlinings for suit

jackets and suit-type jackets may currently qualify as findings and

trimmings under a temporary amendment to the Special Access Program.

See 62 FR 49206 (September 23, 1997) and 62 FR 66057 (December 17,

1997);

(5) upon entry into the United States, the product must be

classified under heading 9802.00.8015 of the HTSUS.

Recordkeeping Requirements

The following documents shall be maintained and made available for

review by the U.S. Customs Service and CITA:

(1) entry documents made during the quarter;

(2) design style costing sheets or similar documents providing a

complete description of the assembled products;

(3) cutting tickets, including the name and location of the cutting

facility for those entries;

(4) mill invoices, including the name of the mill where the fabric

was formed. If the fabric was purchased from a third party, the

participant is responsible for obtaining the mill invoice. The

participant must also obtain a signed statement from a principal at the

mill that the fabric is of U.S. origin. This can be stated directly on

the invoice or on a separate document that relates to each specific

shipment of fabric. Vertically integrated participants, i.e.,

participants which both form and cut fabric, should retain an internal

transfer document or other documentary proof that they formed the

fabric in the United States.

(5) transportation documents (mill to cutting facility; cutting

facility to border/assembler); and

(6) export documentation.

The above documents shall be maintained by calendar quarter, by

country, and by category; and shall be retained for three years from

the date of the exportation of the U.S. formed and cut fabric. The

documents shall be organized and filed (preferably in a single

location) to facilitate Customs review.

Special Access/Special Regime Export Declaration (Form ITA-370P)

CITA has determined that the Special Access/Special Regime Export

Declaration (Form ITA-370P) is no longer necessary for the efficient

administration of the Special Access Program. For component parts

exported from the United States on or after May 4, 1998, participants

in the Special Access Program will no longer be required to file and

present this form. For assembled products imported into the United

States that were made from component parts exported from the United

States on or after May 4, 1998, participants in the Special Access

Program will no longer be required to file and present this form.

Participants should be aware, however, that the representations made at

the time of entry of products alleged to qualify under the Special

Access Program continue to be subject to federal law prohibiting false

or misleading statements (see below).

Enforcement Procedures and Penalties

In order to determine that participants in the Special Access

Program comply fully with the Special Access Program

[[Page 16476]]

requirements set forth in this notice, Customs will continue to conduct

a series of Post Entry Compliance reviews. These reviews will be

conducted for entries made for the first quarter of 1998 and shall

continue for each successive quarter. During the course of such a

review, the participant must provide Customs officials with evidence,

through the documents describes above, that all products entered under

the Special Access Program qualify for Special Access Program

treatment.

False or inaccurate representations made in the context of the

Special Access Program may result in liability under U.S. laws

prohibiting false or misleading statements, including 18 U.S.C. 1001

and 19 U.S.C. 1592. Moreover, participants may be suspended from

participation in the Special Access Program for such representations,

for failing to abide by the Special Access Program's record keeping

requirements, or for otherwise violating the terms of the Program.

In the event of credible evidence that a participant has violated

the terms of the Special Access Program, the Chairman of CITA will

notify the participant in writing of the alleged violation. The

participant will have 30 days to respond and/or request a meeting with

CITA representatives to discuss the alleged violation. After reviewing

the evidence and the participant's response, CITA will determine

whether a violation occurred and what penalty, if any, is appropriate.

Penalties may include temporary or permanent suspension from

participation in the Special Access Program. In determining the

appropriate penalty, CITA will consider all relevant factors, including

the seriousness of the violation, previous violations by the

participant, the experience of the participant with the Special Access

Program, and the steps taken by the participant to prevent future

violations.

CITA has determined that this action falls within the foreign

affairs exception to the rulemaking provisions of 5 U.S.C. 553(a)(1).

J. Hayden Boyd,

Acting Chairman, Committee for the Implementation of Textile

Agreements.

Committee for the Implementation of Textile Agreements

March 30, 1998.

Commissioner of Customs,

Department of the Treasury, Washington, DC 20229.

Dear Commissioner: This directive amends, but does not cancel,

the directives issued to you on May 15, 1990 for Costa Rica;

February 25, 1987 for the Dominican Republic; January 6, 1995 for El

Salvador; January 24, 1990 for Guatemala; July 18, 1996 for

Honduras; and February 19, 1987 for Jamaica, by the Chairman,

Committee for the Implementation of Textile Agreements, for the

Special Access Program.

Effective on May 4, 1998, for component parts exported from the

United States on or after May 4, 1998, participants in the Special

Access Program will no longer be required to file and present the

Special Access/Special Regime Export Declaration (Form ITA-370P).

For assembled products imported into the United States that were

made from component parts exported from the United States on or

after May 4, 1998, participants in the Special Access Program will

no longer be required to file and present this form. The

representations made at the time of entry of products alleged to

qualify under the Special Access Program continue to be subject to

federal law prohibiting false or misleading statements.

In order to determine that participants in the Special Access

Program comply fully with the Special Access Program requirements,

Customs will continue to conduct a series of Post Entry Compliance

reviews. These reviews will be conducted for entries made for the

first quarter of 1998 and shall continue for each successive

quarter. During the course of such a review, the participant must

provide Customs officials with evidence that all products entered

under the Special Access Program qualify for Special Access Program

treatment.

The Committee for the Implementation of Textile Agreements has

determined that this action falls within the foreign affairs

exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).

Sincerely,

J. Hayden Boyd,

Acting Chairman, Committee for the Implementation of Textile

Agreements.

[FR Doc. 98-8826 Filed 4-2-98; 8:45 am]

BILLING CODE 3510-DR-F