S 2776
110th CONGRESS
2d Session
S. 2776
To provide duty-free treatment for certain goods from designated
Reconstruction Opportunity Zones in Afghanistan and Pakistan, and for
other purposes.
IN THE SENATE OF THE UNITED STATES
March 13, 2008
Ms. CANTWELL (for herself, Mr. HATCH, Mr. BOND, Mr. LIEBERMAN, and
Mr. HAGEL) introduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To provide duty-free treatment for certain goods from designated
Reconstruction Opportunity Zones in Afghanistan and Pakistan, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Afghanistan and Pakistan Reconstruction
Opportunity Zones Act of 2008'.
SEC. 2. DEFINITIONS; PURPOSES.
(a) Definitions- In this Act:
(1) AGREEMENT ON TEXTILES AND CLOTHING- The term `Agreement on Textiles
and Clothing' means the Agreement on Textiles and Clothing referred
to in section 101(d)(4) of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(4)).
(2) CATEGORY; TEXTILE AND APPAREL CATEGORY NUMBER- The terms `category'
and `textile and apparel category number' mean the number assigned
under the U.S. Textile and Apparel Category System of the Office of
Textiles and Apparel of the Department of Commerce, as listed in the
HTS under the applicable heading or subheading (as in effect on September
1, 2007).
(3) ENTERED- The term `entered' means entered, or withdrawn from warehouse
for consumption, in the customs territory of the United States.
(4) ENTITY- The term `entity' means--
(A) a natural person, corporation, company, business association,
partnership, society, trust, any other nongovernmental entity, organization,
or group, whether or not for profit;
(B) any governmental entity or instrumentality of a government;
and
(C) any successor, subunit, or subsidiary of any entity described
in subparagraph (A) or (B).
(5) HTS- The term `HTS' means the Harmonized Tariff Schedule of the
United States.
(6) NAFTA- The term `NAFTA' means the North American Free Trade Agreement
concluded between the United States, Mexico, and Canada on December
17, 1992.
(7) RECONSTRUCTION OPPORTUNITY ZONE- The term `Reconstruction Opportunity
Zone' means any area that--
(A) encompasses portions of the territory of--
(ii) 1 or more of the following areas of Pakistan:
(I) the Federally Administered Tribal Areas;
(II) areas of Pakistan-administered Kashmir that the President
determines were harmed by the earthquake of October 8, 2005;
(III) areas of Baluchistan that are within 100 miles of Pakistan's
border with Afghanistan; and
(IV) the North West Frontier Province;
(B) has been designated by the competent authorities in Afghanistan
or Pakistan, as the case may be, as an area in which merchandise
may be introduced without payment of duty or excise tax; and
(C) has been designated by the President as a Reconstruction Opportunity
Zone pursuant to subsection (b).
(b) Purposes- The purposes of this Act are--
(1) to stimulate economic activity and development in Afghanistan
and the border region of Pakistan, critical fronts in the struggle
against violent extremism;
(2) to reflect the strong support that the United States has pledged
to Afghanistan and Pakistan for their sustained commitment in the
global war on terrorism;
(3) to support the 3-pronged United States strategy in Afghanistan
and the border region of Pakistan that leverages political, military,
and economic tools, with Reconstruction Opportunity Zones as a critical
part of the economic component of that strategy; and
(4) to offer a vital opportunity to improve livelihoods, promote good
governance, and extend and strengthen the Governments of Afghanistan
and Pakistan.
SEC. 3. DESIGNATION OF RECONSTRUCTION OPPORTUNITY ZONES.
(a) Authority To Designate- The President is authorized to designate
an area within Afghanistan or Pakistan described in section 2(a), (7)
(A) and (B) as a Reconstruction Opportunity Zone if the President determines
that--
(1) Afghanistan or Pakistan, as the case may be, meets the eligibility
criteria set forth in subsection (c);
(2) Afghanistan or Pakistan, as the case may be, meets the eligibility
criteria set forth in subsection (c) of section 502 of the Trade Act
of 1974 (19 U.S.C. 2462(c)) for designation as a beneficiary developing
country under that section and is not ineligible under subsection
(b) of such section; and
(3) designation of the area as a Reconstruction Opportunity Zone is
appropriate taking into account the factors listed in subsection (c).
(b) Eligibility Criteria- Afghanistan or Pakistan, as the case may be,
meets the eligibility criteria set forth in this subsection if that
country--
(1) has established, or is making continual progress toward establishing--
(A) a market-based economy that protects private property rights,
incorporates an open rules-based trading system, and minimizes government
interference in the economy through measures such as price controls,
subsidies, and government ownership of economic assets;
(B) the rule of law, political pluralism, and the right to due process,
a fair trial, and equal protection under the law;
(C) economic policies to--
(ii) increase the availability of health care and educational
opportunities;
(iii) expand physical infrastructure;
(iv) promote the development of private enterprise; and
(v) encourage the formation of capital markets through microcredit
or other programs;
(D) a system to combat corruption and bribery, such as ratifying
and implementing the United Nations Convention Against Corruption;
and
(E) protection of internationally recognized worker rights, as defined
in section 507(4) of the Trade Act of 1974 (19 U.S.C. 2467(4));
(2) is eliminating or has eliminated barriers to trade and investment,
including by--
(A) providing national treatment and measures to create an environment
conducive to domestic and foreign investment;
(B) protecting intellectual property; and
(C) resolving bilateral trade and investment disputes;
(3) does not engage in activities that undermine United States national
security or foreign policy interests;
(4) does not engage in gross violations of internationally recognized
human rights;
(5) does not provide support for acts of international terrorism;
and
(6) cooperates in international efforts to eliminate human rights
violations and terrorist activities.
(c) Additional Factors- In determining whether to designate an area
in Afghanistan or Pakistan as a Reconstruction Opportunity Zone, the
President shall take into account--
(1) an expression by the government of the country of its desire to
have a particular area designated as a Reconstruction Opportunity
Zone under this Act;
(2) whether the government of the country has provided the United
States with a monitoring and enforcement plan outlining specific steps
the country will take to cooperate with the United States to--
(A) facilitate legitimate cross-border commerce;
(B) ensure that articles for which duty-free treatment is sought
pursuant to this Act satisfy the applicable rules of origin described
in section 4 (c) and (d) or section 5 (c) and (d), whichever is
applicable;
(C) prevent unlawful transshipment, as described in section 6(b)(3);
and
(D) protect internationally recognized worker rights, as defined
in section 507(4) of the Trade Act of 1974 (19 U.S.C. 2467(4));
(3) the potential for such designation to create local employment
and to promote local and regional economic development;
(4) the physical security of the proposed Reconstruction Opportunity
Zone;
(5) the economic viability of the proposed Reconstruction Opportunity
Zone, including--
(A) whether there are commitments to finance economic activity proposed
for the Reconstruction Opportunity Zone; and
(B) whether there is existing or planned infrastructure for power,
water, transportation, and communications in the area;
(6) whether such designation would be compatible with and contribute
to the foreign policy and national security objectives of the United
States, taking into account the information provided under subsection
(e); and
(7) the views of interested persons submitted pursuant to subsection
(e).
(d) Information Relating to Compatibility With and Contribution to Foreign
Policy and National Security Objectives of the United States- In determining
whether designation of a Reconstruction Opportunity Zone would be compatible
with and contribute to the foreign policy and national security objectives
of the United States in accordance with subsection (c)(6), the President
shall take into account whether Afghanistan or Pakistan, as the case
may be, has provided the United States with a plan outlining specific
steps it will take to verify the ownership and nature of the activities
of entities to be located in the proposed Reconstruction Opportunity
Zone. The specific steps outlined in a country's plan shall include
a mechanism by which a competent authority of the country--
(1) collects from each entity operating in, or proposing to operate
in, a Reconstruction Opportunity Zone, information including--
(A) the name and address of the entity;
(B) the name and location of all facilities owned or operated by
the entity that are operating in or proposed to be operating in
a Reconstruction Opportunity Zone;
(C) the name, nationality, date and place of birth, and position
title of each person who is an owner, director, or officer of the
entity; and
(D) the nature of the activities of each entity;
(2) updates the information required under paragraph (1) as changes
occur; and
(3) provides such information promptly to the Secretary of State.
(e) Opportunity for Public Comment- Before the President designates
an area as a Reconstruction Opportunity Zone pursuant to subsection
(a), the President shall afford an opportunity for interested persons
to submit their views concerning the designation.
(f) Notification to Congress- Before the President designates an area
as a Reconstruction Opportunity Zone pursuant to subsection (a), the
President shall notify Congress of the President's intention to make
the designation, together with the reasons for making the designation.
SEC. 4. DUTY-FREE TREATMENT FOR CERTAIN NONTEXTILE AND NONAPPAREL
ARTICLES.
(a) In General- The President is authorized to proclaim duty-free treatment
for--
(1) any article from a Reconstruction Opportunity Zone that the President
has designated as an eligible article under section 503(a)(1)(A) of
the Trade Act of 1974 (19 U.S.C. 2463(a)(1)(A));
(2) any article from a Reconstruction Opportunity Zone located in
Afghanistan that the President has designated as an eligible article
under section 503(a)(1)(B) of the Trade Act of 1974 (19 U.S.C. 2463(a)(1)(B));
or
(3) any article from a Reconstruction Opportunity Zone that is not
a textile or apparel article, regardless of whether the article has
been designated as an eligible article under section 503(a)(1)(A)
or (B) of the Trade Act of 1974 (19 U.S.C. 2463(a)(1)(A) or (B)),
if, after receiving the advice of the International Trade Commission
pursuant to subsection (b), the President determines that such article
is not import-sensitive in the context of imports from a Reconstruction
Opportunity Zone.
(b) Advice Concerning Certain Eligible Articles- Before proclaiming
duty-free treatment for an article pursuant to subsection (a)(3), the
President shall publish in the Federal Register and provide the International
Trade Commission a list of articles which may be considered for such
treatment. The provisions of sections 131 through 134 of the Trade Act
of 1974 (19 U.S.C. 2151 through 2154) shall apply to any designation
under subsection (a)(3) in the same manner as such sections apply to
action taken under section 123 of the Trade Act of 1974 (19 U.S.C. 2133)
regarding a proposed trade agreement.
(c) General Rules of Origin-
(1) IN GENERAL- The duty-free treatment proclaimed with respect to
an article described in paragraph (1) or (3) of subsection (a) shall
apply to any article subject to such proclamation which is the growth,
product, or manufacture of 1 or more Reconstruction Opportunity Zones
if--
(A) that article is imported directly from a Reconstruction Opportunity
Zone into the customs territory of the United States; and
(B)(i) with respect to an article that is an article of a Reconstruction
Opportunity Zone in Pakistan, the sum of--
(I) the cost or value of the materials produced in 1 or more Reconstruction
Opportunity Zones in Pakistan or Afghanistan,
(II) the direct costs of processing operations performed in 1
or more Reconstruction Opportunity Zones in Pakistan or Afghanistan,
and
(III) the cost or value of materials produced in the United States,
determined in accordance with paragraph (2),
is not less than 35 percent of the appraised value of the article
at the time it is entered into the United States; or
(ii) with respect to an article that is an article of a Reconstruction
Opportunity Zone in Afghanistan, the sum of--
(I) the cost or value of the materials produced in 1 or more Reconstruction
Opportunity Zones in Pakistan or Afghanistan,
(II) the cost or value of the materials produced in 1 or more
countries that are members of the South Asian Association for
Regional Cooperation,
(III) the direct costs of processing operations performed in 1
or more Reconstruction Opportunity Zones in Pakistan or Afghanistan,
and
(IV) the cost or value of materials produced in the United States,
determined in accordance with paragraph (2),
is not less than 35 percent of the appraised value of the article
at the time it is entered into the United States.
(2) DETERMINATION OF 35 PERCENT FOR ARTICLES FROM RECONSTRUCTION OPPORTUNITY
ZONES IN PAKISTAN AND AFGHANISTAN- If the cost or value of materials
produced in the customs territory of the United States is included
with respect to an article described in paragraph (1)(B), for purposes
of determining the 35 percent appraised value requirement under clause
(i) or (ii) of paragraph (1)(B), not more than 15 percent of the appraised
value of the article at the time the article is entered into the United
States may be attributable to the cost or value of such United States
materials.
(d) Rules of Origin for Certain Articles of Reconstruction Opportunity
Zones in Afghanistan-
(1) IN GENERAL- The duty-free treatment proclaimed with respect to
an article described in paragraph (2) of subsection (a) shall apply
to any article subject to such proclamation which is the growth, product,
or manufacture of 1 or more Reconstruction Opportunity Zones in Afghanistan
if--
(A) that article is imported directly from a Reconstruction Opportunity
Zone in Afghanistan into the customs territory of the United States;
and
(B) with respect to that article, the sum of--
(i) the cost or value of the materials produced in 1 or more Reconstruction
Opportunity Zones in Afghanistan,
(ii) the cost or value of the materials produced in 1 or more
countries that are members of the South Asian Association for
Regional Cooperation,
(iii) the direct costs of processing operations performed in 1
or more Reconstruction Opportunity Zones in Afghanistan, and
(iv) the cost or value of materials produced in the United States,
determined in accordance with paragraph (2),
is not less than 35 percent of the appraised value of the product
at the time it is entered into the United States.
(2) DETERMINATION OF 35 PERCENT FOR ARTICLES FROM RECONSTRUCTION OPPORTUNITY
ZONES IN PAKISTAN AND AFGHANISTAN- If the cost or value of materials
produced in the customs territory of the United States is included
with respect to an article described in paragraph (1)(B), for purposes
of determining the 35 percent appraised value requirement under paragraph
(1)(B), not more than 15 percent of the appraised value of the article
at the time the article is entered into the United States may be attributable
to the cost or value of such United States materials.
(e) Exclusions- An article shall not be treated as the growth, product,
or manufacture of 1 or more Reconstruction Opportunity Zones, and no
material shall be included for purposes of determining the 35 percent
appraised value requirement under subsection (c)(1) or (d)(1), by virtue
of having merely undergone--
(1) simple combining or packaging operations; or
(2) mere dilution with water or with another substance that does not
materially alter the characteristics of the article or material.
(f) Direct Costs of Processing Operations-
(1) IN GENERAL- As used in subsections (c)(1)(B)(i)(II), (c)(1)(B)(ii)(III),
and (d)(1)(B)(iii), the term `direct costs of processing operations'
includes, but is not limited to--
(A) all actual labor costs involved in the growth, production, manufacture,
or assembly of the article, including--
(ii) on-the-job training; and
(iii) costs of engineering, supervisory, quality control, and
similar personnel; and
(B) dies, molds, tooling, and depreciation on machinery and equipment
which are allocable to the article.
(2) EXCLUDED COSTS- As used in subsections (c)(1)(B)(i)(II), (c)(1)(B)(ii)(III),
and (d)(1)(B)(iii), the term `direct costs of processing operations'
does not include costs which are not directly attributable to the
article or are not costs of manufacturing the article, such as--
(B) general expenses of doing business which are either not allocable
to the article or are not related to the growth, production, manufacture,
or assembly of the article, such as administrative salaries, casualty
and liability insurance, advertising, and salesmen's salaries, commissions,
or expenses.
(g) Regulations- The Secretary of the Treasury, after consultation with
the United States Trade Representative, shall prescribe such regulations
as may be necessary to carry out this section. The regulations may provide
that, in order for an article to be eligible for duty-free treatment
under this section, the article--
(1) shall be wholly the growth, product, or manufacture of 1 or more
Reconstruction Opportunity Zones; or
(2) shall be a new or different article of commerce which has been
grown, produced, or manufactured in 1 or more Reconstruction Opportunity
Zones.
SEC. 5. DUTY-FREE TREATMENT FOR CERTAIN TEXTILE AND APPAREL ARTICLES.
(a) Duty-Free Treatment- The President is authorized to proclaim duty-free
treatment for any textile or apparel article described in subsection
(b), if--
(1) the article is a covered article described in subsection (b);
and
(2) the President determines that the country in which the Reconstruction
Opportunity Zone is located has satisfied the requirements set forth
in section 6.
(b) Covered Articles- A covered article described in this subsection
is an article in 1 of the following categories:
(1) ARTICLES OF RECONSTRUCTION OPPORTUNITY ZONES- An article that
is the product of 1 or more Reconstruction Opportunity Zones and falls
within the scope of 1 of the following textile and apparel category
numbers, as set forth in the HTS (as in effect on September 1, 2007):
--------------
--------------
237 641 751
330 642 752
331 643 758
333 644 759
334 650 831
335 651 832
336 653 833
341 654 834
342 665 835
350 669 836
351 733 838
353 734 839
354 735 840
360 736 842
361 738 843
362 739 844
363 740 845
369 741 846
465 742 850
469 743 851
630 744 852
631 745 858
633 746 859
634 747 863
635 748 899
636 750
--------------
(2) ARTICLES OF RECONSTRUCTION OPPORTUNITY ZONES IN AFGHANISTAN- The
article is the product of 1 or more Reconstruction Opportunity Zones
in Afghanistan and falls within the scope of 1 of the following textile
and apparel category numbers, as set forth in the HTS (as in effect
on September 1, 2007):
------------
------------
201 439 459
414 440 464
431 442 670
433 444 800
434 445 810
435 446 870
436 448 871
438
------------
(3) CERTAIN OTHER TEXTILE AND APPAREL ARTICLES- The article is the
product of 1 or more Reconstruction Opportunity Zones and falls within
the scope of 1 of the following textile and apparel category numbers
as set forth in the HTS (as in effect on September 1, 2007) and is
covered by the corresponding description for such category:
(A) CATEGORY 239- An article in category 239 (relating to cotton
and man-made fiber babies' garments) except for baby socks and baby
booties described in subheading 6111.20.6050, 6111.30.5050, or 6111.90.5050
of the HTS.
(B) CATEGORY 338- An article in category 338 (relating to men's
and boys' cotton knit shirts) if the article is a certain knit-to-shape
garment that meets the definition included in Statistical Note 6
to Chapter 61 of the HTS, and is provided for in subheading 6110.20.1026,
6110.20.2067 or 6110.90.9067 of the HTS.
(C) CATEGORY 339- An article in category 339 (relating to women's
and girls' cotton knit shirts and blouses) if the article is a knit-to-shape
garment that meets the definition included in Statistical Note 6
to Chapter 61 of the HTS, and is provided for in subheading 6110.20.1031,
6110.20.2077, or 6110.90.9071 of the HTS.
(D) CATEGORY 359- An article in category 359 (relating to other
cotton apparel) except swimwear provided for in subheading 6112.39.0010,
6112.49.0010, 6211.11.8010, 6211.11.8020, 6211.12.8010, or 6211.12.8020
of the HTS.
(E) CATEGORY 632- An article in category 632 (relating to man-made
fiber hosiery) if the article is panty hose provided for in subheading
6115.21.0020 of the HTS.
(F) CATEGORY 638- An article in category 638 (relating to men's
and boys' man-made fiber knit shirts) if the article is a knit-to-shape
garment that meets the definition included in Statistical Note 6
to Chapter 61 of the HTS, and is provided for in subheading 6110.30.2051,
6110.30.3051, or 6110.90.9079 of the HTS.
(G) CATEGORY 639- An article in category 639 (relating to women's
and girls' man-made fiber knit shirts and blouses) if the article
is a knit-to-shape garment that meets the definition included in
Statistical Note 6 to Chapter 61 of the HTS, and is provided for
in subheading 6110.30.2061, 6110.30.3057, or 6110.90.9081 of the
HTS.
(H) CATEGORY 647- An article in category 647 (relating to men's
and boys' man-made fiber trousers) if the article is ski/snowboard
pants that meets the definition included in Statistical Note 4 to
Chapter 62 of the HTS, and is provided for in subheading 6203.43.3510,
6210.40.5031, or 6211.20.1525 of the HTS.
(I) CATEGORY 648- An article in category 648 (relating to women's
and girls' man-made fiber trousers) if the article is ski/snowboard
pants that meets the definition included in Statistical Note 4 to
Chapter 62 of the HTS, and is provided for in subheading 6204.63.3010,
6210.50.5031, or 6211.20.1555 of the HTS.
(J) CATEGORY 659- An article in category 659 (relating to other
man-made fiber apparel) except for swimwear provided for in subheading
6112.31.0010, 6112.31.0020, 6112.41.0010, 6112.41.0020, 6112.41.0030,
6112.41.0040, 6211.11.1010, 6211.11.1020, 6211.12.1010, or 6211.12.1020
of the HTS.
(K) CATEGORY 666- An article in category 666 (relating to other
man-made fiber furnishings) if the article is window shades and
window blinds provided for in subheading 6303.12.0010 or 6303.92.2030
of the HTS.
(4) CERTAIN OTHER ARTICLES- The article is the product of 1 or more
Reconstruction Opportunity Zones and falls within the scope of 1 of
the following statistical reporting numbers of the HTS (as in effect
on September 1, 2007):
---------------------------------------
---------------------------------------
4202.12.8010 6210.20.3000 6304.99.1000
4202.12.8050 6210.20.7000 6304.99.2500
4202.22.4010 6210.30.3000 6304.99.4000
4202.22.7000 6210.30.7000 6304.99.6030
4202.22.8070 6210.40.3000 6306.22.9010
4202.92.3010 6210.40.7000 6306.29.1100
4202.92.6010 6210.50.3000 6306.29.2100
4202.92.9010 6210.50.7000 6306.40.4100
4202.92.9015 6211.20.0810 6306.40.4900
5601.29.0010 6211.20.0820 6306.91.0000
5702.39.2090 6211.32.0003 6306.99.0000
5702.49.2000 6211.33.0003 6307.10.2030
5702.50.5900 6211.42.0003 6307.20.0000
5702.99.2000 6211.43.0003 6307.90.7200
5703.90.0000 6212.10.3000 6307.90.7500
5705.00.2090 6212.10.7000 6307.90.8500
6108.22.1000 6212.90.0050 6307.90.8950
6111.90.7000 6213.90.0500 6307.90.8985
6113.00.1005 6214.10.1000 6310.90.1000
6113.00.1010 6216.00.0800 6406.99.1580
6113.00.1012 6216.00.1300 6501.00.6000
6115.29.4000 6216.00.1900 6502.00.2000
6115.30.1000 6216.00.2600 6502.00.4000
6115.99.4000 6216.00.3100 6502.00.9060
6116.10.0800 6216.00.3500 6504.00.3000
6116.10.1300 6216.00.4600 6504.00.6000
6116.10.4400 6217.10.1010 6504.00.9045
6116.10.6500 6217.10.8500 6504.00.9075
6116.10.9500 6301.90.0020 6505.10.0000
6116.92.0800 6302.29.0010 6505.90.8015
6116.93.0800 6302.39.0020 6505.90.9050
6116.99.3500 6302.59.3010 6505.90.9076
6117.10.4000 6302.99.1000 9404.90.2000
6117.80.3010 6303.99.0030 9404.90.8523
6117.80.8500 6304.19.3030 9404.90.9523
6210.10.2000 6304.91.0060 9404.90.9570
6210.10.7000
---------------------------------------
(c) Rules of Origin for Certain Covered Articles-
(1) GENERAL RULES- Except with respect to an article listed in paragraph
(2) of subsection (b), duty-free treatment may be proclaimed for an
article listed in subsection (b) only if the article is imported directly
into the customs territory of the United States from a Reconstruction
Opportunity Zone and--
(A) the article is wholly the growth, product, or manufacture of
1 or more Reconstruction Opportunity Zones;
(B) the article is a yarn, thread, twine, cordage, rope, cable,
or braiding, and--
(i) the constituent staple fibers are spun in, or
(ii) the continuous filament fiber is extruded in,
1 or more Reconstruction Opportunity Zones;
(C) the article is a fabric, including a fabric classifiable under
chapter 59 of the HTS, and the constituent fibers, filaments, or
yarns are woven, knitted, needled, tufted, felted, entangled, or
transformed by any other fabric-making process in 1 or more Reconstruction
Opportunity Zones; or
(D) the article is any other textile or apparel article that is
cut (or knit-to-shape) and sewn or otherwise assembled in 1 or more
Reconstruction Opportunity Zones from its component pieces.
(A) CERTAIN MADE-UP ARTICLES, TEXTILE ARTICLES IN THE PIECE, AND
CERTAIN OTHER TEXTILES AND TEXTILE ARTICLES- Notwithstanding paragraph
(1)(D) and except as provided in subparagraphs (C) and (D) of this
paragraph, subparagraph (A), (B), or (C) of paragraph (1), as appropriate,
shall determine whether a good that is classifiable under 1 of the
following headings or subheadings of the HTS shall be considered
to meet the rules of origin of this subsection: 5609, 5807, 5811,
6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10,
6307.90, 6308, and 9404.90.
(B) CERTAIN KNIT-TO-SHAPE TEXTILES AND TEXTILE ARTICLES- Notwithstanding
paragraph (1)(D) and except as provided in subparagraphs (C) and
(D) of this paragraph, a textile or apparel article that is wholly
formed on seamless knitting machines or by hand-knitting in 1 or
more Reconstruction Opportunity Zones shall be considered to meet
the rules of origin of this subsection.
(C) CERTAIN DYED AND PRINTED TEXTILES AND TEXTILE ARTICLES- Notwithstanding
paragraph (1)(D), an article classifiable under subheading 6117.10,
6213.00, 6214.00, 6302.22, 6302.29, 6302.52, 6302.53, 6302.59, 6302.92,
6302.93, 6302.99, 6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85,
or 9404.90.95 of the HTS, except for an article classifiable under
1 of such subheadings as of cotton or of wool or consisting of fiber
blends containing 16 percent or more by weight of cotton, shall
be considered to meet the rules of origin of this subsection if
the fabric in the article is both dyed and printed in 1 or more
Reconstruction Opportunity Zones, and such dyeing and printing is
accompanied by 2 or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating, permanent stiffening,
weighting, permanent embossing, or moireing.
(D) FABRICS OF SILK, COTTON, MAN-MADE FIBER, OR VEGETABLE FIBER-
Notwithstanding paragraph (1)(C), a fabric classifiable under the
HTS as of silk, cotton, man-made fiber, or vegetable fiber shall
be considered to meet the rules of origin of this subsection if
the fabric is both dyed and printed in 1 or more Reconstruction
Opportunity Zones, and such dyeing and printing is accompanied by
2 or more of the following finishing operations: bleaching, shrinking,
fulling, napping, decating, permanent stiffening, weighting, permanent
embossing, or moireing.
(d) Rules of Origin for Covered Articles That Are Products of 1 or More
Reconstruction Opportunity Zones in Afghanistan-
(1) GENERAL RULES- Duty-free treatment may be proclaimed for an article
listed in paragraph (2) of subsection (b) only if the article is imported
directly into the customs territory of the United States from a Reconstruction
Opportunity Zone in Afghanistan and--
(A) the article is wholly the growth, product, or manufacture of
1 or more Reconstruction Opportunity Zones in Afghanistan,
(B) the article is a yarn, thread, twine, cordage, rope, cable,
or braiding, and--
(i) the constituent staple fibers are spun in, or
(ii) the continuous filament fiber is extruded in,
1 or more Reconstruction Opportunity Zones in Afghanistan;
(C) the article is a fabric, including a fabric classifiable under
chapter 59 of the HTS, and the constituent fibers, filaments, or
yarns are woven, knitted, needled, tufted, felted, entangled, or
transformed by any other fabric-making process in 1 or more Reconstruction
Opportunity Zones in Afghanistan; or
(D) the article is any other textile or apparel article that is
cut (or knit-to-shape) and sewn or otherwise assembled in 1 or more
Reconstruction Opportunity Zones in Afghanistan from its component
pieces.
(A) CERTAIN MADE-UP ARTICLES, TEXTILE ARTICLES IN THE PIECE, AND
CERTAIN OTHER TEXTILES AND TEXTILE ARTICLES- Notwithstanding paragraph
(1)(D) and except as provided in subparagraphs (C) and (D) of this
paragraph, subparagraph (A), (B), or (C) of paragraph (1), as appropriate,
shall determine whether a good that is classifiable under 1 of the
following headings or subheadings of the HTS shall be considered
to meet the rules of origin of this subsection: 5609, 5807, 5811,
6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10,
6307.90, 6308, and 9404.90.
(B) CERTAIN KNIT-TO-SHAPE TEXTILES AND TEXTILE ARTICLES- Notwithstanding
paragraph (1)(D) and except as provided in subparagraphs (C) and
(D) of this paragraph, a textile or apparel article that is wholly
formed on seamless knitting machines or by hand-knitting in 1 or
more Reconstruction Opportunity Zones in Afghanistan shall be considered
to meet the rules of origin of this subsection.
(C) CERTAIN DYED AND PRINTED TEXTILES AND TEXTILE ARTICLES- Notwithstanding
paragraph (1)(D), an article classifiable under subheading 6117.10,
6213.00, 6214.00, 6302.22, 6302.29, 6302.52, 6302.53, 6302.59, 6302.92,
6302.93, 6302.99, 6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85,
or 9404.90.95 of the HTS, except for an article classifiable under
1 of such subheadings as of cotton or of wool or consisting of fiber
blends containing 16 percent or more by weight of cotton, shall
be considered to meet the rules of origin of this subsection if
the fabric in the article is both dyed and printed in 1 or more
Reconstruction Opportunity Zones in Afghanistan, and such dyeing
and printing is accompanied by 2 or more of the following finishing
operations: bleaching, shrinking, fulling, napping, decating, permanent
stiffening, weighting, permanent embossing, or moireing.
(D) FABRICS OF SILK, COTTON, MAN-MADE FIBER OR VEGETABLE FIBER-
Notwithstanding paragraph (1)(C), a fabric classifiable under the
HTS as of silk, cotton, man-made fiber, or vegetable fiber shall
be considered to meet the rules of origin of this subsection if
the fabric is both dyed and printed in 1 or more Reconstruction
Opportunity Zones in Afghanistan, and such dyeing and printing is
accompanied by 2 or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating, permanent stiffening,
weighting, permanent embossing, or moireing.
(e) Regulations- The Secretary of the Treasury, after consultation with
the United States Trade Representative, shall prescribe such regulations
as may be necessary to carry out this section.
SEC. 6. PROTECTIONS AGAINST UNLAWFUL TRANSSHIPMENT.
(a) Duty-Free Treatment Conditioned on Enforcement Measures-
(1) IN GENERAL- The duty-free treatment described in section 5 shall
not be provided to covered articles that are imported from a Reconstruction
Opportunity Zone in a country unless the President determines that
country meets the following criteria:
(A) The country has adopted effective domestic law and enforcement
procedures applicable to covered articles to prevent unlawful transshipment
of the articles and the use of false documents relating to the importation
of the articles into the United States.
(B) The country has enacted legislation or promulgated regulations
that would permit U.S. Customs and Border Protection verification
teams to have the access necessary to investigate thoroughly allegations
of unlawful transshipment through such country.
(C) The country agrees to provide U.S. Customs and Border Protection
with a monthly report on shipments of covered articles from each
facility engaged in the production of those articles in a Reconstruction
Opportunity Zone in that country.
(D) The country will cooperate fully with the United States to address
and take action necessary to prevent circumvention, as described
in Article 5 of the Agreement on Textiles and Clothing.
(E) The country agrees to require each entity engaged in the production
or manufacture of a covered article in a Reconstruction Opportunity
Zone in that country to register with the competent government authority,
to provide that authority with the following information, and to
update that information as changes occur:
(i) The name and address of the entity, including the location
of all textile or apparel facilities owned or operated by that
entity in Afghanistan or Pakistan.
(ii) The telephone number, facsimile number, and electronic mail
address of the entity.
(iii) The names and nationalities of the owners, directors, and
corporate officers, and their positions within the entity.
(iv) The number of employees the entity employs and their occupations.
(v) A general description of the covered articles the entity produces
and the entity's production capacity.
(vi) The number and type of machines the entity uses to produce
textile or apparel articles at each facility.
(vii) The approximate number of hours the machines operate per
week.
(viii) The identity of any supplier to the entity of textile or
apparel goods, or fabrics, yarns, or fibers used in the production
of those goods.
(ix) The name of, and contact information for, each of the entity's
customers in the United States.
(F) The country agrees to provide to U.S. Customs and Border Protection
on a timely basis all of the information received by the competent
government authority in accordance with subparagraph (E) and to
provide U.S. Customs and Border Protection with an annual update
of that information.
(G) The country agrees to require that all producers and exporters
of covered articles in a Reconstruction Opportunity Zone in that
country maintain complete records of the production and the export
of covered articles, including materials used in the production,
for at least 5 years after the production or export (as the case
may be).
(H) The country agrees to provide, on a timely basis, at the request
of U.S. Customs and Border Protection, documentation establishing
the eligibility of covered articles for duty-free treatment under
section 5.
(2) DOCUMENTATION ESTABLISHING ELIGIBILITY OF ARTICLES FOR DUTY-FREE
TREATMENT- For purposes of paragraph (1)(H), documentation establishing
the eligibility of a covered article for duty-free treatment under
section 5 includes documentation such as production records, information
relating to the place of production, the number and identification
of the types of machinery used in production, and the number of workers
employed in production.
(b) Customs Procedures and Enforcement-
(A) REGULATIONS- The Secretary of the Treasury, after consultation
with the United States Trade Representative, shall promulgate regulations
setting forth customs procedures similar in all material respects
to the requirements of article 502(1) of the NAFTA as implemented
pursuant to United States law, which shall apply to any importer
that claims duty-free treatment for an article under section 5.
(B) DETERMINATION- In order for articles produced in a Reconstruction
Opportunity Zone to qualify for the duty-free treatment under section
5, there shall be in effect a determination by the President that
Afghanistan or Pakistan, as the case may be--
(i) has implemented and follows, or
(ii) is making substantial progress toward implementing and following,
procedures and requirements similar in all material respects to
the relevant procedures and requirements under chapter 5 of the
NAFTA.
(2) PENALTIES- If the President determines, based on sufficient evidence,
that an entity has engaged in unlawful transshipment described in
paragraph (3), the President shall deny for a period of 5 years beginning
on the date of the determination all benefits under section 5 to the
entity, any successor of the entity, and any other entity owned or
operated by the principals of the entity.
(3) UNLAWFUL TRANSSHIPMENT DESCRIBED- For purposes of this section,
unlawful transshipment occurs when duty-free treatment for a covered
article has been claimed on the basis of material false information
concerning the country of origin, manufacture, processing, or assembly
of the article or any of its components. For purposes of the preceding
sentence, false information is material if disclosure of the true
information would mean or would have meant that the article is or
was ineligible for duty-free treatment under section 5.
SEC. 7. LIMITATIONS ON PROVIDING DUTY-FREE TREATMENT.
(1) PROCLAMATION- Except as provided in paragraph (2), and subject
to subsection (b) and the conditions described in sections 3 through
6, the President shall exercise the President's authority under this
Act, and the President shall proclaim any duty-free treatment pursuant
to that authority.
(2) WAIVER- The President may waive the application of duty-free treatment
under this Act if the President determines that providing such treatment
is inconsistent with the national interests of the United States.
In making such determination, the President shall consider--
(A) obligations of the United States under international agreements;
(B) the national economic interests of the United States; and
(C) the foreign policy interests of the United States, including
the economic development of Afghanistan and the border region of
Pakistan.
(b) Withdrawal, Suspension, or Limitation of Duty-Free Treatment-
(1) IN GENERAL- The President may withdraw, suspend, or limit the
application of the duty-free treatment proclaimed under this Act.
In taking any action to withdraw, suspend, or limit duty-free treatment,
the President shall consider the factors set forth in section 3 (b)
and (c) of this Act, and section 502 (b) and (c) of the Trade Act
of 1974 (19 U.S.C. 2462(b) and (c)).
(2) NOTICE TO CONGRESS- The President shall advise Congress--
(A) of any action the President takes to withdraw, suspend, or limit
the application of duty-free treatment with respect to Reconstruction
Opportunity Zones in Afghanistan or Pakistan; and
(B) if either Afghanistan or Pakistan fails to adequately take the
actions described in section 3 (b) and (c) of this Act or section
502 (b) and (c) of the Trade Act of 1974.
SEC. 8. TERMINATION OF BENEFITS.
Duty-free treatment provided under this Act shall remain in effect through
September 30, 2023.
END
