[Federal Register: October 5, 2005 (Volume 70, Number 192)]
[Rules and Regulations]
[Page 58009-58016]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05oc05-9]
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DEPARTMENT OF HOMELAND SECURITY
Bureau of Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 12, 102, 141, 144, 146, and 163
[CBP Dec. 05-32; USCBP-2005-0009]
RIN 1505-AB60
Country of Origin of Textile and Apparel Products
AGENCY: Customs and Border Protection, Department of Homeland Security;
Department of the Treasury.
ACTION: Interim regulations; solicitation of comments.
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SUMMARY: This document sets forth interim amendments to the Customs and
Border Protection (``CBP'') regulations to update, restructure, and
consolidate the regulations relating to the country of origin of
textile and apparel products. The interim amendments reflect changes
brought about, in part, by the expiration on January 1, 2005, of the
Agreement on Textiles and Clothing (``ATC'') and the resulting
elimination of quotas on the entry of textile and apparel products from
World Trade Organization (``WTO'') members. The primary regulatory
change set forth in this document is the elimination of the requirement
that a textile declaration be submitted for all importations of textile
and apparel products. In addition, to improve the quality of reporting
of the identity of the manufacturer of imported textiles and apparel
products, the interim amendments include a requirement that importers
identify the manufacturer of such products through a manufacturer
identification code (``MID'').
DATES: Interim rule effective October 5, 2005; comments must be
received by December 5, 2005.
ADDRESSES: You may submit comments, identified by the docket number, by
one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail, hand delivery or courier: paper, disk or CD-ROM
submissions may be mailed or delivered to the Trade and Commercial
Regulations Branch, Office of Regulations and Rulings, Bureau of
Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint
Annex), Washington, DC 20229.
Instructions: All submissions received must include the agency
name, document title, and docket number (if available) or Regulatory
Information Number (``RIN'') for this rulemaking.
Docket: For access to the docket to read background documents or
comments received, go to the Federal eRulemaking Portal at http://www.regulations.gov.
Submitted comments also may be inspected at the
Trade and Commercial Regulations Branch, Office of Regulations and
Rulings, Customs and Border Protection, 799 9th Street, NW. (5th
Floor), Washington, DC during regular business hours.
FOR FURTHER INFORMATION CONTACT:
Operational aspects: Roberts Abels, Textile Operations, Office of
Field Operations (202) 344-1959.
Legal aspects: Cynthia Reese, Tariff Classification and Marking
Branch, Office of Regulations and Rulings (202) 572-8812.
SUPPLEMENTARY INFORMATION:
Background
CBP notes initially that in this document, references to the
Customs Service or Customs concern the former Customs Service or
actions undertaken by the former Customs Service prior to its transfer
to the Department of Homeland Security (``DHS'') under the Homeland
Security Act and the Reorganization Plan Modification for DHS of
January 30, 2003.
On May 9, 1984, the President issued Executive Order 12475 to
address a number of problems that had arisen in the context of the U.S.
textile import program. These problems included (1) the absence of
specific regulatory standards for determining the origin of imported
textiles and textile products for purposes of textile agreements and
(2) an ever increasing number and variety of instances in which
attempts were made to circumvent and frustrate
[[Page 58010]]
the objectives of the United States textile import program and the
bilateral and multilateral textile agreements negotiated thereunder.
Section 1(a) of that Executive Order instructed the Secretary of the
Treasury, in accordance with policy guidance from the interagency
Committee for the Implementation of Textile Agreements (CITA), to issue
regulations governing the entry of textiles and textile products
subject to section 204 of the Agricultural Act of 1956, as amended
(codified at 7 U.S.C. 1854).
In T.D. 85-38, published in the Federal Register (50 FR 8710) on
March 5, 1985, the Customs Service adopted as a final rule interim
amendments to part 12 of the CBP Regulations (19 CFR Part 12), which
involved the addition of a new Sec. 12.130 that established criteria
to be used in determining the country of origin of imported textiles
and textile products for purposes of multilateral or bilateral textile
agreements entered into by the United States pursuant to section 204,
Agricultural Act of 1956, as amended. In that final rule document,
Customs stated that the principles of origin contained in Sec. 12.130
are applicable to merchandise for all purposes. In T.D. 90-17,
published in the Federal Register (55 FR 7303) on March 1, 1990, which
involved a change of practice to conform several previously published
Customs positions to certain provisions within 19 CFR 12.130, Customs
again stated that the criteria set forth in 19 CFR 12.130 should be
used in making country of origin determinations for all CBP purposes.
On December 8, 1994, the President signed into law the Uruguay
Round Agreements Act (``URAA''), Public Law 103-465, 108 Stat. 4809.
Subtitle D of Title III of the URAA concerns textiles and includes
section 334 (codified at 19 U.S.C. 3592). Paragraph (a) of section 334
directed the Secretary of the Treasury to prescribe rules implementing
the principles contained in paragraph (b) of section 334 for
determining the origin of textile and apparel products. After the
enactment of 19 U.S.C. 3592, 7 U.S.C. 1854 was no longer the only
statute relevant to the administration of quantitative restrictions on
textile products. The principles set forth in section 334 of the URAA
for determining the country of origin of textile and apparel products
apply for the purposes of the customs laws and the administration of
quantitative restrictions, except as otherwise provided for by statute.
However, section 334(b)(5) of the URAA excepts from the rules of origin
governing textile and apparel products set forth in section 334 goods
which, under rulings and administrative practices in effect immediately
before the enactment of section 334 (December 8, 1994), would have
originated in, or been the growth, product, or manufacture of, Israel.
In T.D. 95-69, published in the Federal Register (60 FR 46188) on
September 5, 1995, Customs issued final amendments to the CBP
regulations (set forth principally at 19 CFR 102.21) to implement the
provisions of Sec. 334 of the URAA regarding the country of origin of
textile and apparel products. The rules set forth in Sec. 102.21,
which became effective for goods entered, or withdrawn from warehouse,
for consumption on or after July 1, 1996, are used to determine the
country of origin of textile and apparel products subject to
manufacture or processing in all countries, except Israel. With the
creation of Sec. 102.21 to implement Sec. 334 of the URAA, the
principles of origin set forth in Sec. 12.130 are used for the purpose
of determining whether Israel is the country of origin for imported
textile and apparel products. If Israel is found not to be the country
of origin of a textile or apparel product by application of Sec.
12.130, then the rules set set forth in Sec. 102.21 are used to
determine the product's country of origin. However, the application of
Sec. 102.21 under these circumstances cannot result in a determination
that Israel is the country of origin of the product. See
``Determination of Origin of Textile Goods Processed in Israel,''
General Statement of Policy, published in the Federal Register (61 FR
40076) on July 31, 1996.
As Sec. 12.130 exists currently, paragraph (a) defines the scope
of textile and textile products subject to section 204, Agricultural
Act of 1956, as amended, as including merchandise which is subject to
the Multifiber Arrangement Regarding International Trade in Textiles
(``MFA'') and identifies such merchandise based on value or weight of
specified fibers. Paragraph (b) of Sec. 12.130 sets out the standards
for determining the country of origin of a textile or textile product
subject to section 204, Agricultural Act of 1956, as amended. It
further provides that the procedures set forth in Part 102 are to be
used to determine the origin of products of Canada and Mexico as well
as the origin of textile and apparel products covered by Sec. 102.21.
Paragraph (c) of Sec. 12.130 sets forth principles for determining
the country of origin of certain textiles or textile products that are
exported for processing and returned. Paragraph (c)(1) refers to U.S.
Note 2, Subchapter II, Chapter 98, HTSUS, and therefore covers products
of the United States that are returned after having been advanced in
value, improved in condition, or assembled outside the United States.
Paragraph (c)(1) provides that those products, upon their return to the
United States, may not be considered products of the United States.
Paragraph (c)(2) applies the same rule to products of insular
possessions of the United States and thus provides that those products,
if imported into the United States after having been advanced in value,
improved in condition, or assembled outside the insular possessions,
are not to be treated as products of those insular possessions.
It is noted that, pursuant to T.D. 00-44, an interpretative rule
published in the Federal Register (65 FR 42634) on July 11, 2000, CBP
no longer applies Sec. 12.130(c) for purposes of country of origin
marking of textiles and textile products.
Paragraphs (d) and (e) of Sec. 12.130 set forth factors to
consider in determining whether the standard for determining the
country of origin of a textile or textile product set out in paragraph
(b) has been met. Paragraph (f) of Sec. 12.130 requires the submission
of a textile declaration for importations of textiles and textile
products subject to section 204, Agricultural Act of 1956, as amended.
The textile declaration sets forth information regarding the country of
origin of the imported products. Paragraphs (g) and (h) of Sec. 12.130
authorize the port director to require the submission of additional
information regarding the origin of textiles and textile products.
Paragraph (i) of Sec. 12.130 defines ``date of exportation'' for
quota, visa or export license requirements, and statistical purposes,
for textiles or textile products subject to section 204 of the
Agricultural Act of 1956, as amended.
On January 1, 2005, the Agreement on Textiles and Clothing
(``ATC'') expired. The ATC was the successor agreement to the
Multifiber Arrangement Regarding International Trade in Textiles
(``MFA'') which governed international trade in textiles and apparel
through the use of quantitative restrictions. The ATC provided for the
integration of textiles and clothing into the General Agreement on
Tariffs and Trade (``GATT'') regime over a 10-year transition period.
With the conclusion of the 10-year period, the integration was complete
and the ATC thus expired. As of January 1, 2005, textiles and apparel
products of World Trade Organization members are no longer subject to
quantitative restrictions for entry of such products into the United
[[Page 58011]]
States. The one exception to this would be for textiles and textile
products subject to safeguard actions taken under China's Accession
Agreement to the World Trade Organization.
The United States retains bilateral textile agreements with certain
countries that are not members of the World Trade Organization. Textile
products from these countries remain subject to applicable restraints
which are enforced by CBP pursuant to directives from the Chairman of
CITA.
By letter dated February 11, 2005, CITA, through its chairman,
requested that CBP review the regulations set forth in Sec. 12.130 and
recommend appropriate changes in light of the conclusion of the ten-
year transition period for the integration of the textiles and apparel
sector into GATT 1994 to ensure ongoing enforcement of trade in
textiles and apparel. By letter dated February 23, 2005, CBP responded
to CITA's request. CITA agreed by letter dated May 4, 2005, that Sec.
12.130 should be amended at this time and responded to the
recommendations offered by CBP in response to CITA's solicitation of
February 11, 2005. By letter dated July 28, 2005, the Department of the
Treasury, pursuant to the authority retained by the Department of the
Treasury over the customs revenue functions defined in the Homeland
Security Act, and pursuant to section 204 of the Agricultural Act of
1956, as amended, as that authority is delegated by Executive Order
11651 of March 3, 1972, and Executive Order 12475 of May 9, 1984, and
in accordance with the policy guidance, recommendation and direction
provided by the Chairman of CITA in his letter of May 4, 2005,
authorized and directed the Department of Homeland Security to
promulgate, as immediately effective regulations, amendments to the CBP
regulations regarding the country of origin of textiles and textile
products, including changes to the method of reporting information
relevant to the origin determination for textile and apparel products.
Discussion of Amendments
With the implementation of the Harmonized Tariff Schedule of the
United States (``HTSUS''), the expiration of the MFA and its successor,
the ATC, and the enactment of section 334 of the URAA, certain of the
provisions of Sec. 12.130 have become out-of-date. Accordingly, CBP in
this document is amending its regulations relating to the country of
origin of textile and apparel products. In addition to revising and
updating the provisions of Sec. 12.130, this document also is re-
designating revised Sec. 12.130 as new Sec. 102.22. This will
consolidate the rules of origin for textiles and apparel products from
all countries in Part 102 of the CBP regulations. As a consequence of
relocating the provisions of Sec. 12.130 to Part 102, Sec. 12.130 is
removed from the CBP regulations.
It is important to note that in this regulatory package CBP is
eliminating the requirement that a textile declaration accompany
importations of textiles and apparel products. This will reduce the
paperwork burden on importers and is consistent with the movement
toward paperless entries. However, pursuant to guidance from CITA and
the Department of the Treasury, CBP is amending the CBP regulations to
require that importers of textile and apparel products construct the
manufacturer's identification code (``MID'') which is declared at the
time of entry from the name and address of the entity performing the
origin-conferring operations. This requirement will better enable CBP
to enforce trade in textile and apparel products.
CBP has closely consulted with CITA in the promulgation of the
interim amendments set forth in this document. A discussion of the
interim amendments is set forth below.
Section 102.0, which sets forth the scope of Part 102, is amended
by including a summary of the provisions that are being relocated from
Part 12 to Part 102 pursuant to the amendments promulgated by this
document.
Paragraph (a) of Sec. 12.130, which defines the scope of textile
or textile products subject to section 204, Agricultural Act of 1956,
as amended, includes outdated references to the MFA and to ``chief
value.'' This document amends Sec. 12.130(a) by re-designating this
paragraph as paragraph (a) of new Sec. 102.22 and by revising the
provision to accord with the scope of coverage set forth in Sec.
102.21. Specifically, a cross-reference to the definition of ``textile
or apparel products'' in Sec. 102.21(b)(5) is added to Sec.
102.22(a). This will ensure uniformity of coverage between the
regulations for determining the origin of textile and apparel products
of Israel and the regulations for determining the origin of textile and
apparel products of all other countries. Consistent with the above, all
references to ``textile or textile product'' in Sec. 12.130 are
replaced in new Sec. 102.22 by the words ``textile or apparel
product,'' which CBP considers to be synonymous with the former phrase.
Section 12.130(b) is amended by incorporating its provisions into
paragraph (a) of new Sec. 102.22 and by clarifying that Sec. 102.22
applies, pursuant to section 334 of the URAA, only to textile and
apparel products that are products of Israel.
Paragraph (c) of Sec. 12.130, which concerns the origin of
products of the United States and products of insular possessions of
the United States that are exported for processing and returned, is
removed. In view of the limitation of the origin rules of Sec. 12.130
(now Sec. 102.22) to products of Israel, Sec. 12.130(c) no longer has
an appropriate context since it has no relevance to products of Israel.
In addition, with the expiration of the ATC, CBP believes this
provision is unnecessary.
Paragraphs (d) and (e) of Sec. 12.130 set forth factors to
consider in determining whether the standard for determining the
country of origin of a textile or textile product set forth in Sec.
12.130(b) (now Sec. 102.22(a)) has been met. Paragraphs (d) and (e)
are amended by re-designating these provisions as paragraphs (b) and
(c) of new Sec. 102.22, respectively, and by clarifying that these
paragraphs are applicable only in determining whether a good is a
product of Israel, pursuant to section 334 of the URAA.
Paragraph (f) of Sec. 12.130 is removed. As discussed above, this
eliminates the requirement that a textile declaration accompany
importations of textiles and textile products subject to section 204,
Agricultural Act of 1956, as amended. As stated above, CBP is now
requiring importers of textile and apparel goods to include on the CBP
Form 3461 (Entry/Immediate Delivery) and CBP Form 7501 (Entry Summary),
and in all electronic data transmissions that require identification of
the manufacturer, a manufacturer's identification code (``MID'') which
is derived from the name and address of the entity performing the
origin-conferring operations. This requirement will assist CBP in
verifying the country of origin of imported textile and apparel
products, thereby upholding our international obligations by properly
enforcing the international textile restraint agreements to which the
United States is a party. CBP is responsible for correctly determining
the country of origin of textile and apparel imports to prevent such
goods from entering the United States with a false country of origin.
The MID requirement will also assist in ensuring that only those
textile imports that are eligible to receive preferential trade
benefits receive those benefits. As this requirement applies to textile
or apparel products from all countries, it is set forth in paragraph
(a) of new Sec. 102.23 of the CBP regulations. CBP also is amending
Part 102 by adding an
[[Page 58012]]
appendix to set forth rules for the proper construction of MIDs.
It is noted that importers of all goods are required to provide a
manufacturer or shipper identification code at the time of entry. The
MID requirement for textile or apparel goods described above differs
from the identification code required for all products only in that the
MID must identify the manufacturer of the imported product.
Paragraphs (g) and (h) of Sec. 12.130 concern the circumstances
under which CBP may require additional information regarding the origin
of imported textile or apparel products and, if admissibility is an
issue, deny the release of such products from CBP custody until their
country of origin is determined. Paragraphs (g) and (h) are amended by
combining the two provisions and re-designating them as paragraph (b)
of new Sec. 102.23, and by removing any references to textile
declarations. New Sec. 102.23(b) applies to textile or apparel
products from all countries.
Paragraph (i) of Sec. 12.130 is amended by re-designating this
provision as paragraph (c) of new Sec. 102.23 and by clarifying that
this paragraph is applicable only to goods identified in 19 CFR
102.21(b)(5), regardless of the origin of such goods.
A new paragraph (d) is added to new Sec. 102.22 to provide that
the rules of origin set forth in Sec. 102.21 are to be used to
determine the country of origin of a textile or apparel product if
Israel is determined not to be the country of origin of the product
under Sec. 102.22. This application of the rules of origin for textile
or apparel products is consistent with CBP's practice since the
implementation of section 334 of the URAA . See ``Determination of
Origin of Textile Goods Processed in Israel,'' General Statement of
Policy, published in the Federal Register (61 FR 40076) on July 31,
1996.
Conforming changes are also being made in this document to
Sec. Sec. 141.113(b), 144.38(f)(1), and 146.63(d)(1) of the CBP
regulations to replace references to ``Sec. 12.130'' with ``Sec.
102.21 or Sec. 102.22 of this chapter, as applicable.''
Sections 12.131 and 12.132 set forth certain procedural matters
regarding the entry of textiles and textile products in general, and
the entry of textile and apparel products under the North American Free
Trade Agreement (NAFTA), respectively. These sections are moved to Part
102 to follow the rules of origin for textile and apparel products set
forth in Sec. 102.21 and new Sec. Sec. 102.22 and 102.23 as part of
the consolidation of the textile regulations. Section 12.131 is amended
by re-designating this provision as Sec. 102.24, by replacing the
references to ``textiles and textile products'' with the words
``textile or apparel products,'' and by replacing the reference in
paragraph (b) to ``12.130'' with the words ``Sec. 102.21 or Sec.
102.22 of this chapter, as applicable.'' Section 12.131(b) (now Sec.
102.24(b)) is further amended by adding the words ``or other company''
in the first sentence after ``factory, producer or manufacturer'' to
address a situation in which a company that is declared as the actual
manufacturer at the time of entry is not a factory, producer or
manufacturer but is a trading company or other type of company.
Section 12.132 is amended by re-designating this provision as new
Sec. 102.25 and by replacing the references to ``textile and apparel
goods'' with the words ``textile or apparel products.'' As the
requirement for the submission of a textile declaration has been
eliminated, the language preceding paragraph (a)(1) of Sec. 12.132 is
removed, as are paragraphs (a)(1) and (a)(2), which concern
declarations by manufacturers or producers. Paragraph (a)(3) of Sec.
12.132, pertaining to incomplete declarations and the ability of the
port director to determine the country of origin of merchandise, is
retained although it is amended by deleting the reference to the
textile declaration. Paragraph (b) of Sec. 12.132 is also retained as
part of new Sec. 102.25.
Finally, this document amends Part 163 of the CBP regulations by
removing from the list of entry records in the Appendix (the interim
``(a)(1)(A) list'') the reference to former ``Sec. 12.130'' and the
records listed thereunder and by replacing the reference to ``Sec.
12.132'' in the Appendix with ``Sec. 102.25.''
Comments
Before adopting these interim regulations as a final rule,
consideration will be given to any written comments from the general
public, including state, local, and tribal governments, that are timely
submitted to CBP, including comments on the clarity of the interim
regulations and how they may be made easier to understand. All such
comments received from the public pursuant to this interim rule
document will be available for public inspection in accordance with the
Freedom of Information Act (5 U.S.C. 552) and Sec. 103.11(b), CBP
regulations (19 CFR 103.11(b)), during regular business days between
the hours of 9 a.m. and 4:30 p.m. at the Trade and Commercial
Regulations Branch, Customs and Border Protection, 799 9th Street, NW.
(5th Floor), Washington, DC. Arrangements to inspect submitted comments
should be made in advance by calling Mr. Joseph Clark at (202) 572-
8768. Comments may also be accessed at the Federal eRuling Portal. For
additional information on accessing comments via the Federal
eRulingmaking Portal, see the ADDRESSES section of this document.
Inapplicability of Notice and Delayed Effective Date Requirements
Under the Administrative Procedure Act (``APA'') (5 U.S.C. 553),
agencies generally are required to publish a notice of proposed
rulemaking in the Federal Register that solicits public comment on
proposed regulatory amendments, consider public comments in deciding on
the content of the final amendments, and publish the final amendments
at least 30 days prior to their effective date. However, section
553(a)(1) of the APA provides that the standard notice and comment
procedures do not apply to an agency rulemaking to the extent that it
involves a foreign affairs function of the United States. The
Department of the Treasury has directed that these regulations be
promulgated as immediately effective interim regulations because they
involve a foreign affairs function of the United States.
In order to implement import policies with respect to textiles and
textile products, Congress provided authority to the President to
negotiate textile restraint agreements in section 204 of the
Agricultural Act of 1956, as amended (7 U.S.C. 1854), and the authority
to carry out such agreements by issuing regulations governing the entry
of merchandise covered by the agreements into the United States. The
amendments set forth in this document, which are promulgated in large
part pursuant to 7 U.S.C. 1854, revise, update, and restructure the
regulations relating to the country of origin of textile and apparel
products. The primary function of these amendments is to facilitate the
correct reporting (and deter the fraudulent reporting) of the origin of
textile and apparel imports, thereby preventing the circumvention or
frustration of the bilateral textile restraint agreements which remain
in force or which may be negotiated in the future as well as prevent
the contravention of actions taken by CITA pursuant to the textile
safeguard provisions of China's WTO Accession Agreement. The interim
regulations set forth in this document directly impact upon the
administration and enforcement of the remaining quantitative
limitations in bilateral trade agreements and the unilaterally imposed
restrictions on textile imports by ensuring, to the greatest extent
[[Page 58013]]
possible, that the correct country of origin is attributed to all
textile imports.
In addition, by improving the proper reporting of the country of
origin of textile imports, these interim regulations will facilitate
enforcement and administration of the various bilateral and
multilateral free trade agreements with which the United States is a
party by helping to ensure that only those textile products that are
entitled to trade benefits receive those benefits.
For the above reasons, it has also been determined that prior
notice and public procedure, and a delayed effective date, are
impracticable, unnecessary and contrary to the public interest pursuant
to 5 U.S.C. 553(b)(B) and 553(d)(3), respectively.
Executive Order 12866 and Regulatory Flexibility Act
CBP has determined that this document is not a regulation or rule
subject to the provisions of Executive Order 12866 of September 30,
1993 (58 FR 51735, October 1993), because it pertains to a foreign
affairs function of the United States, as described above, and
therefore is specifically exempted by section 3(d)(2) of Executive
Order 12866. Because a notice of proposed rulemaking is not required
under section 553(b) of the APA for the reasons described above, CBP
notes that the provisions of the Regulatory Flexibility Act, as amended
(5 U.S.C. 601 et seq.), do not apply to this rulemaking. Accordingly,
CBP also notes that this interim rule is not subject to the regulatory
analysis requirements or other requirements of 5 U.S.C. 603 and 604.
Paperwork Reduction Act
The collections of information in these interim regulations (the
identification of the manufacturer on CBP Form 3461 (Entry/Immediate
Delivery) and CBP Form 7501 (Entry Summary)) have been previously
reviewed and approved by the Office of Management and Budget in
accordance with the requirements of the Paperwork Reduction Act (44
U.S.C. 3507) under control numbers 1651-0024 and 1651-0022,
respectively. This interim rule clarifies that the manufacturer to be
identified on entries of textile and apparel products must consist of
the entity performing the origin-conferring operations.
Drafting Information
The principal authors of this document were Cynthia Reese and Craig
Walker, Office of Regulations and Rulings, Customs and Border
Protection. However, personnel from other offices participated in its
development.
Signing Authority
This document is being issued in accordance with Sec. 0.1(a)(1) of
the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of
the Secretary of the Treasury (or his delegate) to approve regulations
related to certain CBP revenue functions.
List of Subjects
19 CFR Part 12
Customs duties and inspection, Entry of merchandise, Imports,
Reporting and recordkeeping requirements, Textiles and textile
products, Trade agreements.
19 CFR Part 102
Customs duties and inspections, Imports, Reporting and
recordkeeping requirements, Rules of origin, Trade agreements.
19 CFR Part 141
Bonds, Customs duties and inspection, Entry of merchandise, Release
of merchandise, Reporting and recordkeeping requirements.
19 CFR Part 144
Bonds, Customs duties and inspection, Reporting and recordkeeping
requirements, Warehouses.
19 CFR Part 146
Bonds, Customs duties and inspection, Entry, Foreign trade zones,
Imports, Reporting and recordkeeping requirements.
19 CFR Part 163
Administrative practice and procedure, Customs duties and
inspection, Imports, Reporting and recordkeeping requirements, Trade
agreements.
Amendments to the Regulations
0
Accordingly, chapter I of title 19, Code of Federal Regulations (19 CFR
chapter I), is amended as set forth below.
PART 12--SPECIAL CLASSES OF MERCHANDISE
0
1. The general authority citation for Part 12 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i),
Harmonized Tariff Schedule of the United States (HTSUS), 1624;
* * * * *
0
2. The specific authority citation for Sec. Sec. 12.130 and 12.131 is
removed.
Sec. Sec. 12.130, 12.131, 12.132 [Removed]
0
3. The undesignated center heading ``TEXTILES AND TEXTILE PRODUCTS''
and Sec. Sec. 12.130, 12.131, and 12.132 are removed.
PART 102--RULES OF ORIGIN
0
1. The general authority citation for Part 102 is revised to read as
follows:
Authority: 7 U.S.C. 1854, 19 U.S.C. 66, 1202 (General Note 3(i)
Harmonized Tariff Schedule of the United States), 1624, 3314, 3592.
0
2. Section 102.0 is revised to read as follows:
Sec. 102.0 Scope.
With the exception of Sec. Sec. 102.21 through 102.25, this part
sets forth rules for determining the country of origin of imported
goods for the purposes specified in paragraph 1 of Annex 311 of the
North American Free Trade Agreement (``NAFTA''). These specific
purposes are: country of origin marking; determining the rate of duty
and staging category applicable to originating textile and apparel
products as set out in Section 2 (Tariff Elimination) of Annex 300-B
(Textile and Apparel Goods); and determining the rate of duty and
staging category applicable to an originating good as set out in Annex
302.2 (Tariff Elimination). The rules for determining the country of
origin of textile and apparel products set forth in Sec. 102.21 apply
for the foregoing purposes and for the other purposes stated in that
section. Section 102.22 sets forth rules for determining whether
textile and apparel products are considered products of Israel for
purposes of the customs laws and the administration of quantitative
limitations. Sections 102.23 through 102.25 set forth certain
procedural requirements relating to the importation of textile and
apparel products.
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3. New Sec. Sec. 102.22 through 102.25 are added to read as follows:
Sec. 102.22 Rules of origin for textile and apparel products of
Israel.
(a) Applicability. The provisions of this section will control for
purposes of determining whether a textile or apparel product, as
defined in Sec. 102.21(b)(5), is considered a product of Israel for
purposes of the customs laws and the administration of quantitative
limitations. A textile or apparel product will be a product of Israel
if it is wholly the growth, product, or manufacture of Israel. However,
a textile or apparel product that consists of materials produced or
derived from, or processed in, another country, or insular possession
of the United States, in
[[Page 58014]]
addition to Israel, will be a product of Israel if it last underwent a
substantial transformation in Israel. A textile or apparel product will
be considered to have undergone a substantial transformation if it has
been transformed by means of substantial manufacturing or processing
operations into a new and different article of commerce.
(b) Criteria for determining country of origin for products of
Israel. The criteria in paragraphs (b)(1) and (b)(2) of this section
will be considered in determining whether an imported textile or
apparel product is a product of Israel. These criteria are not
exhaustive. One or any combination of criteria may be determinative,
and additional factors may be considered.
(1) A new and different article of commerce will usually result
from a manufacturing or processing operation if there is a change in:
(i) Commercial designation or identity;
(ii) Fundamental character; or
(iii) Commercial use.
(2) In determining whether merchandise has been subjected to
substantial manufacturing or processing operations, the following will
be considered:
(i) The physical change in the material or article as a result of
the manufacturing or processing operations in Israel or in Israel and a
foreign territory or country or insular possession of the U.S.;
(ii) The time involved in the manufacturing or processing
operations in Israel or in Israel and a foreign territory or country or
insular possession of the U.S.;
(iii) The complexity of the manufacturing or processing operations
in Israel or in Israel and a foreign territory or country or insular
possession of the U.S.;
(iv) The level or degree of skill and/or technology required in the
manufacturing or processing operations in Israel or in Israel and a
foreign territory or country or insular possession of the U.S.; and
(v) The value added to the article or material in Israel or in
Israel and a foreign territory or country or insular possession of the
U.S., compared to its value when imported into the U.S.
(c) Manufacturing or processing operations. (1) An article or
material usually will be a product of Israel when it has undergone in
Israel prior to importation into the United States any of the
following:
(i) Dyeing of fabric and printing when accompanied by two or more
of the following finishing operations: bleaching, shrinking, fulling,
napping, decating, permanent stiffening, weighting, permanent
embossing, or moireing;
(ii) Spinning fibers into yarn;
(iii) Weaving, knitting or otherwise forming fabric;
(iv) Cutting of fabric into parts and the assembly of those parts
into the completed article; or
(v) Substantial assembly by sewing and/or tailoring of all cut
pieces of apparel articles which have been cut from fabric in another
foreign territory or country, or insular possession of the U.S., into a
completed garment (e.g., the complete assembly and tailoring of all cut
pieces of suit-type jackets, suits, and shirts).
(2) An article or material usually will not be considered to be a
product of Israel by virtue of merely having undergone any of the
following:
(i) Simple combining operations, labeling, pressing, cleaning or
dry cleaning, or packaging operations, or any combination thereof;
(ii) Cutting to length or width and hemming or overlocking fabrics
which are readily identifiable as being intended for a particular
commercial use;
(iii) Trimming and/or joining together by sewing, looping, linking,
or other means of attaching otherwise completed knit-to-shape component
parts produced in a single country, even when accompanied by other
processes (e.g., washing, drying, and mending) normally incident to the
assembly process;
(iv) One or more finishing operations on yarns, fabrics, or other
textile articles, such as showerproofing, superwashing, bleaching,
decating, fulling, shrinking, mercerizing, or similar operations; or
(v) Dyeing and/or printing of fabrics or yarns.
(d) Results of origin determination. If Israel is determined to be
the country of origin of a textile or apparel product by application of
the provisions in paragraphs (a), (b), and (c) of this section, the
inquiry into the origin of the product ends. However, if Israel is
determined not to be the country of origin of a textile or apparel
product by application of the provisions in paragraphs (a), (b), and
(c) of this section, the country of origin of the product will be
determined under the rules of origin set forth in Sec. 102.21,
although the application of those rules cannot result in Israel being
the country of origin of the product.
Sec. 102.23 Origin and Manufacturer Identification
(a) Textile or Apparel Product Manufacturer Identification. All
entries of textile or apparel products listed in Sec. 102.21(b)(5)
must identify on CBP Form 3461 (Entry/Immediate Delivery) and CBP Form
7501 (Entry Summary), and in all electronic data transmissions that
require identification of the manufacturer, the manufacturer of such
products through a manufacturer identification code (MID) constructed
from the name and address of the entity performing the origin-
conferring operations pursuant to Sec. 102.21 or Sec. 102.22, as
applicable. This code must be accurately constructed using the
methodology set forth in the Appendix to this part, including the use
of the two-letter International Organization for Standardization (ISO)
code for the country of origin of such products. When a single entry is
filed for products of more than one manufacturer, the products of each
manufacturer must be separately identified. Importers must be able to
demonstrate to CBP their use of reasonable care in determining the
manufacturer. If an entry filed for such merchandise fails to include
the MID properly constructed from the name and address of the
manufacturer, the port director may reject the entry or take other
appropriate action.
(b) Incomplete or insufficient information. If the port director is
unable to determine the country of origin of a textile or apparel
product, the importer must submit additional information as requested
by the port director. Release of the product from CBP custody will be
denied until a determination of the country of origin is made based
upon the information provided or the best information available.
(c) Date of exportation. For quota, visa or export license
requirements, and statistical purposes, the date of exportation for
textile or apparel products listed in Sec. 102.21(b)(5) will be the
date the vessel or carrier leaves the last port in the country of
origin, as determined by application of Sec. 102.21 or Sec. 102.22,
as applicable. Contingency of diversion in another foreign territory or
country will not change the date of exportation for quota, visa or
export license requirements or for statistical purposes.
Sec. 102.24 Entry of textile or apparel products.
(a) General. Separate shipments of textile or apparel products,
including samples, which originate from a country subject to visa or
export license requirements for exports of textile or
[[Page 58015]]
apparel products, arriving in the customs territory of the United
States for one consignee on the same conveyance on the same day, the
combined value of which is over $250, will not be entered under the
informal entry procedures set forth in subpart C, Part 143 or
procedures set forth in Sec. 141.52 of this chapter. Port directors
will refuse separate informal entries and require a formal entry and
visa or export license, as appropriate, for all such merchandise. A
consignee for purposes of this section is the ultimate consignee and
does not include a freight forwarder or Customs broker not importing
for its own account.
(b) Denial of entry pursuant to directive. Textile or apparel
products subject to section 204 of the Agricultural Act of 1956, as
amended (7 U.S.C. 1854), whether or not the requirements set forth in
Sec. 102.21 or Sec. 102.22, as applicable, have been met, will be
denied entry where the factory, producer, manufacturer, or other
company named in the entry documents for such textile or apparel
products is named in a directive published in the Federal Register by
the Committee for the Implementation of Textile Agreements as a company
found to be illegally transshipping, closed or unable to produce
records to verify production. In these circumstances, no additional
information will be accepted or considered by CBP for purposes of
determining the admissibility of such textile or apparel products.
Sec. 102.25 Textile or apparel products under the North American Free
Trade Agreement.
In connection with a claim for NAFTA preferential tariff treatment
involving non-originating textile or apparel products subject to the
tariff preference level provisions of appendix 6.B to Annex 300-B of
the NAFTA and Additional U.S. Notes 3 through 6 to Section XI,
Harmonized Tariff Schedule of the United States, the importer must
submit to CBP a Certificate of Eligibility covering the products. The
Certificate of Eligibility must be properly completed and signed by an
authorized official of the Canadian or Mexican government and must be
presented to CBP at the time the claim for preferential tariff
treatment is filed under Sec. 181.21 of this chapter. If the port
director is unable to determine the country of origin of the products,
they will not be entitled to preferential tariff treatment or any other
benefit under the NAFTA for which they would otherwise be eligible.
0
4. Part 102 is amended by adding an appendix to read as follows:
Appendix To Part 102--Textile and Apparel Manufacturer Identification
Rules for Constructing the Manufacturer Identification Code (MID)
1. Pursuant to Sec. 102.23(a) of this part, all entries of
textile or apparel products listed in Sec. 102.21(b)(5) must
identify on CBP Form 3461 (Entry/Immediate Delivery) and CBP Form
7501 (Entry Summary), and in all electronic data transmissions that
require identification of the manufacturer, the manufacturer of such
products through a manufacturer identification code (MID)
constructed from the name and address of the entity performing the
origin-conferring operations. The MID may be up to 15 characters in
length, with no spaces inserted between the characters.
2. The first 2 characters of the MID consist of the ISO code for
the actual country of origin of the goods. The one exception to this
rule is Canada. ``CA'' is not a valid country code for the MID;
instead, one of the appropriate province codes listed below must be
used:
ALBERTA--XA
BRITISH COLUMBIA--XC
MANITOBA--XM
NEW BRUNSWICK--XB
NEWFOUNDLAND (LABRADOR)--XW
NORTHWEST TERRITORIES--XT
NOVA SCOTIA--XN
NUNAVUT--XV
ONTARIO--XO
PRINCE EDWARD ISLAND--XP
QUEBEC--XQ
SASKATCHEWAN--XS
YUKON TERRITORY--XY
3. The next group of characters in the MID consists of the first
three characters in each of the first two ``words'' of the
manufacturer's name. If there is only one ``word'' in the name, then
only the first three characters from the name are to be used. For
example, ``Amalgamated Plastics Corp.'' would yield ``AMAPLA,'' and
``Bergstrom'' would yield ``BER.'' If there are two or more initials
together, they are to be treated as a single word. For example,
``A.B.C. Company'' or ``A B C Company'' would yield ``ABCCOM,''
``O.A.S.I.S. Corp.'' would yield ``OASCOR,'' ``Dr. S.A. Smith''
would yield ``DRSA,'' and ``Shavings B L Inc.'' would yield
``SHABL.'' The English words ``a,'' ``an,'' ``and,'' ``of,'' and
``the'' in the manufacturer's name are to be ignored. For example,
``The Embassy of Spain'' would yield ``EMBSPA.'' Portions of a name
separated by a hyphen are to be treated as a single word. For
example, ``Rawles-Aden Corp.'' or ``Rawles--Aden Corp.'' would both
yield ``RAWCOR.'' Some names include numbers. For example, ``20th
Century Fox'' would yield ``20TCEN'' and ``Concept 2000'' would
yield ``CON200.''
a. Some words in the title of the foreign manufacturer's name
are not to be used for the purpose of constructing the MID. For
example, most textile factories in Macau start with the same words,
``Fabrica de Artigos de Vestuario,'' which means ``Factory of
Clothing.'' For a factory named ``Fabrica de Artigos de Vestuario
JUMP HIGH Ltd,'' the portion of the factory name that identifies it
as a unique entity is ``JUMP HIGH.'' This is the portion of the name
that should be used to construct the MID. Otherwise, all of the MIDs
from Macau would be the same, using ``FABDE,'' which is incorrect.
b. Similarly, many factories in Indonesia begin with the prefix
PT, such as ``PT Morich Indo Fashion.'' In Russia, other prefixes
are used, such as ``JSC,'' ``OAO,'' ``OOO,'' and ``ZAO.'' These
prefixes are to be ignored for the purpose of constructing the MID.
4. The next group of characters in the MID consists of the first
four numbers in the largest number on the street address line. For
example, ``11455 Main Street, Suite 9999'' would yield ``1145.'' A
suite number or a post office box is to be used if it contains the
largest number. For example, ``232 Main Street, Suite 1234'' would
yield ``1234.'' If the numbers in the street address are spelled
out, such as ``One Thousand Century Plaza,'' no numbers representing
the manufacturer's address will appear in this section of the MID.
However, if the address is ``One Thousand Century Plaza, Suite
345,'' this would yield ``345.'' When commas or hyphens separate
numbers, all punctuation is to be ignored and the number that
remains is to be used. For example, ``12,34,56 Alaska Road'' and
``12-34-56 Alaska Road'' would yield ``1234.'' When numbers are
separated by a space, both numbers are recognized and the larger of
the two numbers is to be selected. For example, ``Apt. 509 2727
Cleveland St.'' would yield ``2727.''
5. The last characters in the MID consist of the first three
letters in the city name. For example, ``Tokyo'' would yield
``TOK,'' ``St. Michel'' would yield ``STM,'' ``18-Mile High'' would
yield ``MIL,'' and ``The Hague'' would yield ``HAG.'' Numbers in the
city name or line are to be ignored. For city-states, the first
three letters are to be taken from the country name. For example,
Hong Kong would yield ``HON,'' Singapore would yield ``SIN,'' and
Macau would yield ``MAC.''
6. As a general rule, in constructing a MID, all punctuation,
such as commas, periods, apostrophes, and ampersands, are to be
ignored. All single character initials, such as the ``S'' in
``Thomas S. Delvaux Company,'' are also to be ignored, as are
leading spaces in front of any name or address.
7. Examples of manufacturer names and addresses and their
corresponding MIDs are listed below:
LA VIE DE FRANCE, 243 Rue de la Payees, 62591 Bremond, France;
FRLAVIE243BRE
20TH CENTURY TECHNOLOGIES, 5 Ricardo Munoz, Suite 5880, Caracas,
Venezuela; VE20TCEN5880CAR
Fabrica de Artigos de Vestuario TOP JOB, Grand River Building, FI 2-
4, Macau; MOTOPJOB24MAC
THE GREENHOUSE, 45 Royal Crescent, Birmingham, Alabama 35204;
USGRE45BIR
CARDUCCIO AND JONES, 88 Canberra Avenue, Sidney, Australia;
AUCARJON88SID
N. MINAMI & CO., LTD., 2-6, 8-Chome Isogami-Dori, Fukiai-Ku, Kobe,
Japan; JPMINCO26KOB
BOCCHACCIO S.P.A., Visa Mendotti, 61, 8320 Verona, Italy;
ITBOCSPA61VER
MURLA-PRAXITELES INC., Athens, Greece; GRMURINCATH
SIGMA COY E.X.T., 4000 Smyrna, Italy, 1640 Delgado; ITSIGCOY1640SMY
[[Page 58016]]
COMPANHIA TEXTIL KARSTEN, Calle Grande, 25-27, 67890 Lisbon,
Portugal, PTKAR2527LIS
HURON LANDMARK, 1840 Huron Road, Windsor, ON, Canada N9C 2L5;
XOHURLAN1840WIN
PART 141--ENTRY OF MERCHANDISE
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5. The general authority citation for Part 141 and specific authority
citation for Sec. 114.113 continue to read as follows:
Authority: 19 U.S.C. 66, 1448, 1624.
* * * * *
Section 141.113 also issued under 19 U.S.C. 1499, 1623.
Sec. 141.113 [Amended]
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6. In Sec. 141.113, paragraph (b) is amended by removing the words
``12.130 of this chapter'' and by adding, in their place, the words
``Sec. 102.21 or Sec. 102.22 of this chapter, as applicable,''.
PART 144--WAREHOUSE AND REWAREHOUSE ENTRIES AND WITHDRAWALS
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7. The general authority citation for Part 144 continues to read as
follows:
Authority: 19 U.S.C. 66, 1484, 1557, 1559, 1624.
* * * * *
Sec. 144.38 [Amended]
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8. In Sec. 144.38, paragraph (f)(1) is amended by removing the words
``Sec. 12.130 of this chapter'' and by adding, in their place, the
words ``Sec. 102.21 or Sec. 102.22 of this chapter, as applicable''.
PART 146--FOREIGN TRADE ZONES
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9. The authority citation for Part 146 is revised to read as follows:
Authority: 19 U.S.C. 66, 81a-81u, 1202 (General Note 3(i),
Harmonized Tariff Schedule of the United States), 1623, 1624.
Sec. 146.63 [Amended]
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10. In Sec. 146.63, paragraph (d)(1) is amended by removing the words
Sec. 12.130 of this chapter'' and by adding, in their place, the words
``Sec. 102.21 or Sec. 102.22 of this chapter, as applicable''.
PART 163--RECORDKEEPING
0
11. The authority citation for Part 163 continues to read as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1510, 1624.
0
12. The Appendix to Part 163 is amended by removing under section IV
the listing of ``Sec. 12.130 Textiles and textile products Single
country declaration Multiple country declaration VISA'' and the listing
of ``Sec. 12.132 NAFTA textile requirements'', and by adding a new
listing under section IV in numerical order to read as follows:
Appendix to Part 163--Interim (a)(1)(A) List.
* * * * *
IV. * * *
Sec. 102.25 NAFTA textile requirements
* * * * *
Robert C. Bonner,
Commissioner of Customs and Border Protection.
Approved: September 30, 2005.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 05-19985 Filed 9-30-05; 2:38 pm]
BILLING CODE 9110-06-P