[Federal Register: December 20, 2006 (Volume 71, Number 244)]
[Rules and Regulations]
[Page 76127-76134]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20de06-5]
[[Page 76127]]
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DEPARTMENT OF HOMELAND SECURITY
Bureau of Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 10 and 191
[CBP Dec. 06-39]
RIN 1505-AB47
United States-Chile Free Trade Agreement
AGENCIES: Customs and Border Protection, Depart of Homeland Security;
Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This document adopts as a final rule, with some changes,
interim amendments to title 19 of the Code of Federal Regulations
(``CFR'') which were published in the Federal Register on March 7,
2005, as CBP Dec. 05-07 to implement the preferential tariff treatment
and other customs-related provisions of the United States-Chile Free
Trade Agreement signed by the United States and the Republic of Chile.
DATES: Final rule effective January 19, 2007.
FOR FURTHER INFORMATION CONTACT:
Textile Operational Aspects: Robert Abels, Office of Field
Operations, (202) 344-1959.
Other Operational Aspects: Lori Whitehurst, Office of Field
Operations, (202) 344-2722.
Audit Aspects: Mark Hanson, Office of Regulatory Audit, (202) 344-
2877.
Legal Aspects: Edward Leigh, Office of International Trade, (202)
572-8827.
SUPPLEMENTARY INFORMATION:
Background
On June 6, 2003, the United States and the Republic of Chile (the
``Parties'') signed the U.S.-Chile Free Trade Agreement (``US-CFTA'').
The provisions of the US-CFTA were adopted by the United States with
the enactment of the United States-Chile Free Trade Agreement
Implementation Act (the ``Act''), Public Law 108-77, 117 Stat. 909 (19
U.S.C. 3805 note), on September 3, 2003. Section 210 of the Act
requires that regulations be prescribed as necessary.
Those customs-related US-CFTA provisions which require
implementation through regulation include certain tariff and non-tariff
provisions within Chapter Three (National Treatment and Market Access
for Goods) and the provisions of Chapter Four (Rules of Origin and
Origin Procedures) and Chapter Five (Customs Administration).
The tariff-related provisions within US-CFTA Chapter Three which
require regulatory action by CBP are Article 3.7 (Temporary Admission
of Goods), Article 3.9 (Goods Re-Entered after Repair or Alteration),
and Article 3.20 (Rules of Origin and Related Matters).
Chapter Four of the US-CFTA sets forth the rules for determining
whether an imported good qualifies as an originating good of the United
States or Chile (US-CFTA Party) and, as such, is therefore eligible for
preferential tariff (duty-free or reduced duty) treatment as provided
for under Article 4.1 and Annex 4.1 of the US-CFTA. Under Article 4.1
within that Chapter, originating goods may be grouped in three broad
categories: (1) Goods which are wholly obtained or produced entirely in
one or both of the Parties; (2) goods which are produced entirely in
one or both of the Parties and which satisfy the specific rules of
origin in US-CFTA Annex 4.1 (change in tariff classification
requirement and/or regional value content requirement); and (3) goods
which are produced entirely in one or both of the Parties exclusively
from materials that originate in those countries. Article 4.2 sets
forth the methods for calculating the regional value content of a good.
Article 4.3 sets forth the rules for determining the value of materials
for purposes of calculating the regional value content of a good and
applying the de minimis rule. Article 4.4 sets forth the rules for
determining whether accessories, spare parts, or tools delivered with a
good qualify as material used in the production of such good. Article
4.6 provides for accumulation of production by two or more producers.
Article 4.7 provides a de minimis criterion. The remaining Articles
within Section A of Chapter Four consist of additional sub-rules,
applicable to the originating good concept, involving fungible
materials, packaging materials, packing materials, transshipment, and
non-qualifying operations. The basic rules of origin in Chapter Four of
the US-CFTA are set forth in General Note 26, Harmonized Tariff
Schedule of the United States (HTSUS). In addition, Section B of
Chapter Four sets forth the procedural requirements which apply under
the US-CFTA, in particular with regard to claims for preferential
tariff treatment.
Chapter Five sets forth the customs operational provisions related
to the implementation and continued administration of the US-CFTA.
On March 7, 2005, Customs and Border Protection (``CBP'') published
CBP Dec. 05-07 in the Federal Register (70 FR 10868) setting forth
interim amendments to implement the preferential tariff treatment and
other customs-related provisions of the US-CFTA. In order to provide
transparency and facilitate their use, the majority of the US-CFTA
implementing regulations set forth in CBP Dec. 05-07 were included
within new Subpart H in Part 10 of title 19 of the Code of Federal
Regulations (19 CFR Subpart H, Part 10). However, in those cases in
which US-CFTA implementation was more appropriate in the context of an
existing regulatory provision, the US-CFTA regulatory text was
incorporated in an existing part within the CBP regulations. CBP Dec.
05-07 also set forth a number of cross-references and other
consequential changes to existing regulatory provisions to clarify the
relationship between those existing provisions and the new US-CFTA
implementing regulations.
Although the interim regulatory amendments were promulgated without
prior public notice and comment procedures and took effect on March 7,
2005, CBP Dec. 05-07 provided for the submission of public comments
which would be considered before adoption of the interim regulations as
a final rule, and the prescribed public comment period closed on June
6, 2005. A discussion of the comments received by CBP is set forth
below.
Discussion of Comments
A total of three commenters responded to the solicitation of
comments on the interim regulations set forth in CBP Dec. 05-07. The
comments are discussed below.
Comment:
One commenter stated that Sec. Sec. 10.412 and 10.415, which
concern importer obligations and maintenance of records, respectively,
should make clear that importers are required to retain records and
documents related to the production of goods for which preferential
tariff treatment is claimed only to the extent that they possess such
records in the normal course of business. The commenter explained that,
in many cases involving unrelated parties, Chilean producers may be
unwilling to share their production information and costs with the U.S.
importer.
CBP's Response:
CBP recognizes that, under certain circumstances, Chilean producers
may be reluctant to provide production information and costs to U.S.
importers due to business confidentiality concerns. In these cases, CBP
has no objection to the direct submission to the port director of such
information from
[[Page 76128]]
the exporter or producer. To clarify this point, CBP is amending Sec.
10.412 in this final rule by adding a sentence at the end of paragraph
(a) stating that CBP will allow for the direct submission by the
exporter or producer of business confidential or other sensitive
information, including cost and sourcing information. Regarding Sec.
10.415, CBP notes that paragraph (a) of that section provides, in
pertinent part, that an importer claiming preferential tariff treatment
must maintain for five years after the date of importation of the good
``* * * any records and documents that the importer has relating to the
origin of the good * * *.'' [Emphasis added.] CBP submits that the
current language of the regulation adequately addresses the
commenters's concerns.
Comment:
One commenter noted that Sec. Sec. 10.441 and 10.442, concerning
procedures for the filing and processing of post-importation duty-
refund claims, set forth several references to the words ``petition or
request for reliquidation.'' The commenter asks whether these
references are necessary in view of the fact that 19 U.S.C. 1520(c) was
repealed by section 2105 of the Miscellaneous Trade and Technical
Corrections Act of 2004 (Pub. L. 108-429, 118 Stat. 2434).
CBP's Response:
Section 1520(c), which authorized the reliquidation of an entry
under certain circumstances, was repealed effective December 18, 2004
(see Sec. 2108 of the Miscellaneous Trade and Technical Corrections
Act of 2004). As a result, CBP agrees with the commenter that the
references to ``petition or request for reliquidation'' in Sec. Sec.
10.441(b)(4) and 10.442(b), (c)(2), and (d)(3) are no longer necessary.
These references have been removed in this final rule document.
Comment:
One commenter stated that Sec. 10.455(a)(3), concerning the value
of materials, is too broad because ``it would preclude transaction
value as the value of a material where the material is provided to the
producer at a price reflecting any discount or reduction in price,''
including quantity discounts. [Emphasis by commenter.] The commenter
suggested that the wording of this paragraph should parallel the
definition of assists in Sec. 152.102(a) of the CBP regulations; e.g.,
``In the case of a material provided to the producer free of charge or
at reduced cost * * *.''
CBP's Response:
First, CBP assumes that, by using the term ``transaction value,''
the commenter meant to refer to ``adjusted value'' or ``the price
actually paid or payable,'' as those terms are used in paragraphs
(a)(1) and (a)(2) of Sec. 10.455. Second, the language ``* * * or at a
price reflecting a discount or similar reduction * * *.'' in Sec.
10.455(a)(3) was taken verbatim from Article 4.3 of the US-CFTA and
section 202(e) of the Act. CBP is bound by this statutory language and
cannot make the substantive change suggested by the commenter. CBP
notes that the effect of this provision is to prevent the value of
originating materials from being understated for purposes of origin
determination by the type of common discounts to which the commenter
has referred.
Comment:
One commenter stated that Sec. 10.483(c)(2), relating to voluntary
corrections of declarations, should be revised to clarify that the
affected import transactions should be identified ``to the extent
possible.'' According to the commenter, in some cases, unrelated
exporters will not have details (such as the date and port of
importation) on the import transactions that were affected by the
incorrect declaration.
CBP's Response:
Section 10.410(b) states that it is the responsibility of the U.S.
importer (not the exporter) to make a corrected declaration. The
importer clearly should be able to identify from its records the import
transactions affected by the incorrect declaration, including the port
and approximate date of each importation. For this reason, CBP declines
to make the change to Sec. 10.483(c)(2) suggested by the commenter.
Comment:
Two commenters noted that CBP Dec. 05-07 amended the scope
section(Sec. 191.0) in Part 191 of the CBP regulations, relating to
drawback, to provide a cross-reference to the US-CFTA drawback
provisions contained in new Subpart H of Part 10. However, the
commenters stated that they were unable to find any provisions in
Subpart H which discuss the subject of drawback.
CBP's Response:
Although CBP originally intended to include regulations which
address the subject of drawback in new Subpart H of Part 10, it was
subsequently determined that no such regulations were necessary as the
drawback provisions in Part 191 were sufficient for purposes of the US-
CFTA. However, CBP neglected to delete the amendment to Sec. 191.0 set
forth in CBP Dec. 05-07, as noted by the commenter. That error has been
corrected in this final rule document.
Additional Changes to the Regulations
In addition to the regulatory changes identified and discussed
above in connection with the discussion of public comments received in
response to CBP Dec. 05-07, the final rulemaking text set forth below
incorporates the following additional changes which CBP believes are
necessary based on further internal review of the interim regulatory
text:
1. In Sec. 10.401, relating to the scope of Subpart H:
a. The words ``entered into'' in the first sentence have been
replaced by the word ``signed'' to avoid any potential confusion
between the date that the US-CFTA was signed (June 6, 2003) and the
date that it entered into force (January 1, 2004); and
b. The reference to Part 191 in the third sentence has been removed
consistent with the removal of the cross-reference to Subpart H, Part
10 in Sec. 191.0, as discussed in the comment discussion above;
2. In Sec. 10.402, which sets forth general definitions:
a. The definition of ``claim for preferential tariff treatment'' in
paragraph (c) has been revised to add the words ``and to an exemption
from the merchandise processing fee'' at the end of the definition to
clarify that the term encompasses a claim that a good is entitled to an
exemption from the merchandise processing fee (see Sec. 24.23(c)(7) of
the CBP regulations);
b. The definition of ``national'' (formerly paragraph (o)) has been
removed as that term is not used in Subpart H of Part 10;
c. A definition of ``identical goods'' has been added as new
paragraph (n). This definition was set forth in Sec. Sec. 10.411(d)(2)
and 10.422(d)(2) of the interim regulatory text but has been removed
from those provisions and inserted into the general definitions section
for the reason that the term also appears in Sec. 10.474, and the
definition is equally applicable to all three provisions. In addition,
the definition has been modified slightly by replacing the word
``production'' with the words ``particular rule of origin,'' which CBP
believes more accurately describe the means by which a good is
determined to qualify as originating;
d. As a result of the removal of the definition of ``national'' and
the addition of a definition for ``identical goods'' discussed above,
current paragraph (n), setting forth the definition of ``indirect
material,'' has been re-designated as paragraph (o), and a conforming
change has been made to Sec. 10.460 to reflect the re-designation of
this paragraph; and
[[Page 76129]]
e. The definition of ``preferential tariff treatment'' in paragraph
(s) has been revised to add the words ``, and an exemption from the
merchandise processing fee'' at the end of the definition to clarify
that the term includes an exemption from the merchandise processing
fee.
3. In Sec. 10.410, relating to the filing of a claim for
preferential tariff treatment:
a. Paragraph (a) has been revised to add the words ``including an
exemption from the merchandise processing fee,'' immediately following
the words ``under the US-CFTA,'' in the first sentence to clarify that
a claim for preferential tariff treatment for an originating good under
the US-CFTA includes a claim that the good is entitled to an exemption
from the merchandise processing fee;
b. Paragraph (b) has been revised to add the words ``or other
information'' immediately following the word ``certification'',
consistent with the wording in the corresponding provision in the US-
CFTA (see Article 4.12.1(c)); and
c. Paragraph (b) has been further revised to provide that a
corrected declaration may be effected by submission of a statement
``via an authorized electronic data interchange system,'' as an
alternative to submission of a written statement, consistent with CBP's
movement toward a paperless environment;
4. In Sec. 10.411, relating to the certification of origin:
a. The heading to Sec. 10.411 and the paragraph (a) introductory
text have been revised to add the words ``or other information'' after
``certification'' and ``certification of origin'' to conform to the
wording in Articles 4.12.1(b) and 4.14.1 of the US-CFTA, which
reference the importer's obligation to submit a certificate of origin
or other information demonstrating that the good qualifies as
originating;
b. Paragraph (a)(2)(iv) has been modified to add the words ``for
which preferential tariff treatment is claimed'' immediately following
the word ``good'' for clarification purposes;
c. Paragraph (a)(2)(vii), relating to multiple shipments of
identical goods, has been removed and incorporated (in slightly revised
form) into re-designated paragraph (e)(2) (formerly paragraph (d)(2))
to clarify that this provision applies to certifications but not to
``other information'' submitted pursuant to Sec. 10.411(a);
d. Paragraph (a)(3), which sets forth the certifying statement to
be included on the certification of origin, has been removed and re-
designated as new paragraph (b) and a heading has been added. This
change clarifies that the statement is required on the certification
but not when ``other information'' is submitted pursuant to Sec.
10.411(a);
e. As a result of the insertion of new paragraph (b), as discussed
above, paragraphs (b) through (e) of the interim regulatory text have
been re-designated as paragraphs (c) through (f), respectively;
f. Re-designated paragraph (c) (formerly paragraph (b)), which
concerns who may sign the certification, has been revised to require
that the certification of origin include the legal name and address of
the responsible official or authorized agent signing the certification,
and also to ask for the telephone and e-mail address when available.
This information is necessary in the event that the person signing the
certification is not identified pursuant to paragraphs (a)(2)(i)
through (a)(2)(iii) of Sec. 10.411; and
g. Re-designated paragraphs (d) and (f) (formerly paragraphs (c)
and (e), respectively) have been revised to add the words ``or other
information'' immediately following the word ``certification,''
consistent with the changes to paragraph (a) discussed above;
5. In Sec. 10.412, relating to importer obligations:
a. Paragraph (a) has been revised to add the words ``or other
information submitted to CBP under Sec. 10.411(a) of this subpart''
immediately following the word ``certification'', consistent with the
change to the Sec. 10.411(a) introductory text discussed above;
b. The paragraph (b) introductory text and paragraph (b)(1) have
been revised to add the word ``tariff'' between the words
``preferential'' and ``treatment'' each place they appear for
clarification purposes and consistent with other references to these
words throughout Subpart H. Paragraph (b)(1) has been further revised
to add the words ``or other information'' immediately following the
word ``certification'', consistent with the change to the Sec.
10.411(a) introductory text discussed above; and
c. Paragraph (d), which stated that ``* * * importers are expected
to establish and implement internal controls which provide for the
periodic review of the accuracy of the certifications or other records
referred to in paragraph (b)(1) of this section,'' has been removed as
there is no basis of authority for this provision in the US-CFTA or the
Act;
6. In Sec. 10.413, concerning the validity of the certification,
the words ``of this subpart'' have been added immediately following the
reference to ``Sec. 10.411'' each place it appears for clarification
purposes;
7. In Sec. 10.414, which sets forth the circumstances under which
a certification is not required:
a. The section heading, paragraph (a) introductory text, and
paragraph (b) have been revised to add the words ``or other
information'' immediately following the word ``certification'' each
place it appears, consistent with the change to the Sec. 10.411(a)
introductory text discussed above; and
b. The paragraph (a) introductory text has been further revised to
replace the words ``for preferential tariff treatment'' with the words
``as originating under Sec. 10.411(a),'' consistent with the wording
in Sec. 10.411(a);
8. In Sec. 10.415, concerning maintenance of records, the
paragraph (a) introductory text has been revised:
a. To add the word ``tariff'' between the words ``preferential''
and treatment'' for clarification purposes and consistent with other
references to these words throughout Subpart H;
b. To add the words ``or other information'' immediately following
the word ``certification'', consistent with the change to the Sec.
10.411(a) introductory text discussed above; and
c. To remove the words ``in the United States'' to conform to the
corresponding provision in the US-CFTA (see Article 4.14.3), which
includes no restriction on where the records referenced in that
provision must be maintained;
9. In Sec. 10.416, relating to the consequences of failing to
comply with the requirements of Subpart H:
a. Paragraph (a) has been revised to add the words ``or other
information demonstrating that the good qualifies as originating''
immediately following the word ``certification'', consistent with the
change to the Sec. 10.411(a) introductory text discussed above; and
b. Paragraph (b) has been revised to add the words ``of this
subpart'' immediately following the reference to ``Sec. 10.463'' for
clarification purposes;
10. In Sec. 10.420, relating to the filing of a tariff preference
level (TPL) claim, the words ``of this subpart'' have been added
immediately following each of the references to ``Sec. 10.421'',
``Sec. 10.451'', ``Sec. 10.421(a) or (b)'', and ``Sec. 10.421(c)''
for clarification purposes;
11. In Sec. 10.421, concerning goods eligible for TPL claims:
a. The words ``of this subpart'' have been added immediately
following the reference to ``Sec. 10.420'' in the introductory text
for clarification purposes; and
b. The term ``HTS'' has been replaced each place it appears
(including the
[[Page 76130]]
footnote) with the correct term ``HTSUS'' (see Sec. 10.402(m));
12. In Sec. 10.422, relating to the TPL certificate of
eligibility:
a. The paragraph (a) introductory text has been revised to add the
words ``of this subpart'' immediately following the reference to
``Sec. 10.421'' for clarification purposes;
b. Paragraph (a)(2), which sets forth the information to be
included on the certificate of eligibility, has been modified to
require (in new paragraph (a)(2)(ii)) that the certificate include the
legal name and address of the responsible official or authorized agent
of the importer signing the certificate (if different from the importer
of record), and also to ask for the telephone and e-mail address when
available. Similar to the change to Sec. 10.411(c) discussed above,
this change is necessary in the event that the person signing the
certificate of eligibility is not identified pursuant to Sec.
10.422(a)(2)(i);
c. As a result of the addition of new paragraph (a)(2)(ii), as
discussed above, paragraphs (a)(2)(ii) through (a)(2)(vii) of the
interim regulatory text have been re-designated as paragraphs
(a)(2)(iii) through (a)(2)(viii), respectively; and
d. The reference to ``certification'' in paragraph (d)(2) has been
replaced with the correct word ``certificate;''
13. In Sec. 10.424, concerning the effect of noncompliance with
applicable TPL requirements, the words ``of this subpart'' have been
added immediately following the reference to ``Sec. 10.422'' in
paragraph (a) and the reference to ``Sec. 10.425'' in paragraph (b)
for clarification purposes;
14. In Sec. 10.440, relating to the right to make post-importation
duty refund claims, the word ``part'' has been replaced each place it
appears with the correct word ``subpart'';
15. In Sec. 10.441, relating to the procedures for filing post-
importation claims:
a. Paragraphs (a) and (b)(2) have been revised to replace the word
``part'' each place it appears with the correct word ``subpart''; and
b. Paragraph (b)(2) has been further revised to add the words ``or
other information demonstrating'' immediately following the word
``certification'', consistent with the change to the Sec. 10.411(a)
introductory text discussed above;
16. In Sec. 10.442, relating to CBP processing procedures for
post-importation claims:
a. The word ``part'' in paragraphs (a) and (d)(1) has been replaced
each place it appears with the correct word ``subpart'';
b. The words ``for refund'' have been added immediately following
the word ``claim'' in the first and second sentences of paragraph (b)
for clarification purposes; and
c. Paragraphs (d)((2) and (d)(3) have been revised to provide that
notice of a denial of a claim for a refund may be made ``via an
authorized electronic data interchange system,'' as an alternative to
the issuance of a written notice, consistent with CBP's movement toward
a paperless environment;
17. In Sec. 10.450, which sets forth definitions regarding the
rules of origin, the words ``of this subpart'' have been added
immediately following the reference to ``Sec. Sec. 10.450 through
10.463'' in the introductory text for clarification purposes:
18. In Sec. 10.455, relating to the value of materials:
a. Paragraph (a)(1) has been revised to add the words ``with
respect to that importation'' at the end of the paragraph to conform to
the wording in the corresponding statutory provision (see Sec.
202(e)(1)(A) of the Act);
b. The heading to paragraph (b) (``Adjustments to value'') has been
changed to read ``Permissible additions to, and deductions from, the
value of materials'' to avoid any potential confusion between the
heading to this paragraph and the term ``adjusted value;''
c. Paragraphs (b)(1)(i) and (b)(2)(i) have been revised to delete
the words ``within or between the territory of Chile, the United
States, or both'' to conform these paragraphs to the wording in the
corresponding statutory provisions (see Sec. 202(e)(2)(A)(i) and
(B)(i) of the Act), respectively; and
d. Paragraph (c) has been modified to replace the term ``country,''
which is not defined in Subpart H, with the more appropriate term
``Party,'' which is defined in Sec. 10.402(q);
19. In Sec. Sec. 10.457(a) and 10.458(a), concerning fungible
goods and materials, and accumulation, respectively, the term
``country'' has been replaced each place it appears with the more
appropriate term ``Party;''
20. In Sec. 10.461, relating to indirect materials, Example 1 has
been revised to add the words ``of this subpart'' at the end of the
parenthetical phrase ``see Sec. 10.454(a)'' in the third sentence;
21. In Sec. 10.470, relating to verification of claims for
preferential tariff treatment:
a. The section heading has been revised to add the word ``tariff''
between the words ``preferential'' and ``treatment'';
b. The heading to paragraph (a) has been revised to remove the
words ``by CBP'' to allow for the possibility that another U.S.
Government agency may assist in a verification; and
c. The first sentence of the paragraph (a) introductory text has
been revised to add the word ``tariff'' between the words
``preferential'' and ``treatment'' and to add the words ``of this
subpart'' immediately following the reference to ``Sec. 10.410''.
d. The second sentence of the paragraph (a) introductory text has
been revised to replace the words ``for any reason is prevented from
verifying'' with the words ``is provided with insufficient information
to verify or substantiate'', and to add the word ``tariff'' between the
words ``preferential'' and ``treatment''. The former change recognizes
that the words ``for any reason'' may be interpreted too broadly and
result in the denial of a claim for reasons beyond the control of the
parties to an import transaction. This new wording more accurately
reflects the circumstances under which a verification may result in the
denial of a claim--the failure to provide sufficient information to
verify or substantiate the claim for preferential tariff treatment;
22. In Sec. 10.473, concerning notice of a negative origin
determination:
a. The incorrect reference to ``section''` in the introductory text
has been replaced with the correct word ``subpart'';
b. The introductory text has been further revised to provide for
the issuance of a negative origin determination ``via an authorized
electronic data interchange system,'' as an alternative to the issuance
of a written determination, consistent with CBP's movement toward a
paperless environment; and
c. Paragraph (c) has been revised to replace the words ``the `Rules
of Origin' heading under this subpart'' with the words ``Sec. Sec.
10.450 through 10.463 of this subpart'' to provide more clarity
regarding the regulatory provisions to which this paragraph is
referring;
23. In Sec. 10.474, relating to repeated false or unsupported
preference claims, the words ``CBP finds'' have been replaced with the
words ``verification or other information reveals'' to more accurately
reflect the wording in Sec. 205(g) of the Act, which provides, in
pertinent part, that ``[i]f the Bureau of Customs and Border Protection
or the Bureau of Immigration and Customs Enforcement finds indications
of a pattern of conduct * * *.'' [Emphasis added.];
24. In Sec. 10.483, concerning the framework for correcting
declarations and certifications:
[[Page 76131]]
a. The incorrect reference to ``part'' in paragraph (a)(2) has been
replaced by the correct word ``chapter''; and
b. Paragraph (c) has been revised to remove the word ``Written'' in
the heading and by providing in the introductory text for the
submission of a statement ``via an authorized electronic data
interchange system,'' as an alternative to the submission of a written
statement, consistent with the change described above in regard to
Sec. 10.410(b);
Conclusion
Accordingly, based on the comments received and the analysis of
those comments as set forth above, and based on the additional
considerations discussed above, CBP believes that the interim
regulations published as CBP Dec. 05-07 should be adopted as a final
rule with certain changes as discussed above and as set forth below.
Executive Order 12866
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 and implements an international
agreement and, therefore, is specifically exempted by section 3(d)(2)
of Executive Order 12866.
Regulatory Flexibility Act
The regulations to implement the preferential tariff treatment and
other customs-related provisions of the US-CFTA were previously
published in CBP Dec. 05-07 as interim regulations. CBP issued the
regulations as an interim rule because it had determined that: (1) They
involve the foreign affairs function of the United States pursuant to
section 553(a)(1) of the Administrative Procedure Act (APA); and (2)
prior public notice and comment procedures on these regulations were
impracticable, unnecessary, and contrary to the public interest
pursuant to section 553(b)(B) of the APA. Because no notice of proposed
rulemaking was required, the provisions of the Regulatory Flexibility
Act, as amended (5 U.S.C. 601 et seq.), do not apply. Accordingly, this
final rule is not subject to the regulatory analysis requirements or
other requirements of 5 U.S.C. 603 and 604.
Paperwork Reduction Act
The collection of information contained in this final rule has
previously been 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 number 1651-0117. The collection of
information in these regulations is in Sec. Sec. 10.410 and 10.411.
This information is used by CBP to determine eligibility for a tariff
preference or other rights or benefits under the US-CFTA and the Act.
The likely respondents are business organizations including importers,
exporters and manufacturers.
The estimated average annual burden associated with the collection
of information in this final rule is 0.2 hours per respondent or
recordkeeper. Comments concerning the accuracy of this burden estimate
and suggestions for reducing this burden should be directed to the
Office of Management and Budget, Attention: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503. A copy should also be sent to the Trade
and Commercial Regulations Branch, Regulations and Rulings, Bureau of
Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint
Annex), Washington, DC 20229.
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/her delegate) to approve
regulations related to certain customs revenue functions.
List of Subjects
19 CFR Part 10
Alterations, Bonds, Customs duties and inspection, Exports,
Imports, Preference programs, Repairs, Reporting and recordkeeping
requirements, Trade agreements (United States-Chile Free Trade
Agreement).
19 CFR Part 191
Commerce, Customs duties and inspection, Drawback, Reporting and
recordkeeping requirements, Trade agreements.
Amendments to the Regulations
0
Accordingly, the interim rule amending parts 10, 24, 162, 163, 178, and
191 of the CBP regulations (19 CFR parts 10, 24, 162, 163, 178, and
191), which was published at 70 FR 10868 on March 7, 2005, is adopted
as a final rule with certain changes as discussed above and set forth
below.
PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE,
ETC.
0
1. The general authority citation for part 10 and the specific
authority for subpart H continue to read as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1321, 1481, 1484, 1498, 1508,
1623, 1624, 3314;
* * * * *
Sections 10.401 through 10.490 also issued under Pub. L. 108-77,
117 Stat. 909 (19 U.S.C. 3805 note).
Sec. 10.401 [Amended]
0
2. Section 10.401 is amended by removing the words ``entered into'' in
the first sentence and adding, in their place, the word ``signed'', by
adding the word ``and'' immediately prior to the number ``163'' in the
third sentence, and by removing the words ``and 191'' in the third
sentence;
0
3. Section 10.402 is amended by revising paragraph (c), removing
current paragraph (o), re-designating current paragraph (n) as
paragraph (o), adding a new paragraph (n), and revising paragraph (s).
The revisions and addition to Sec. 10.402 read as follows:
Sec. 10.402 General definitions.
* * * * *
(c) Claim for preferential tariff treatment. ``Claim for
preferential tariff treatment'' means a claim that a good is entitled
to the duty rate applicable under the US-CFTA and to an exemption from
the merchandise processing fee;
* * * * *
(n) Identical goods. ``Identical goods'' means goods that are the
same in all respects relevant to the particular rule of origin that
qualifies the goods as originating;
* * * * *
(s) Preferential tariff treatment. ``Preferential tariff
treatment'' means the duty rate applicable to an originating good under
the US-CFTA, and an exemption from the merchandise processing fee.
* * * * *
0
4. Section 10.410 is amended by adding the words ``including an
exemption from the merchandise processing fee,'' immediately following
the words ``under the US-CFTA,'' in the first sentence of paragraph (a)
and by revising paragraph (b). Revised paragraph (b) reads as follows:
Sec. 10.410 Filing of claim for preferential tariff treatment upon
importation.
* * * * *
[[Page 76132]]
(b) Corrected declaration. If, after making the declaration
required under paragraph (a) of this section, the U.S. importer has
reason to believe that the declaration or the certification or other
information on which the declaration was based contains information
that is not correct, the importer must, within 30 calendar days after
the date of discovery of the error, make a corrected declaration and
pay any duties that may be due. A corrected declaration will be
effected by submission of a letter or other statement either in writing
or via an authorized electronic data interchange system to the CBP
office where the original declaration was filed specifying the
correction (see Sec. Sec. 10.482 and 10.483 of this subpart);
0
5. In Sec. 10.411:
0
a. The section heading is revised;
0
b. Paragraph (a) is amended by revising the introductory text and
paragraph (a)(2)(iv) and by removing paragraphs (a)(2)(vii) and (a)(3);
0
c. Current paragraphs (b), (c), (d), and (e) are re-designated as
paragraphs (c), (d), (e), and (f), respectively;
0
d. A new paragraph (b) is added;
0
e. The introductory text of re-designated paragraph (c) is revised;
0
f. Re-designated paragraphs (d) and (e)(2) and the introductory text to
re-designated paragraph (f) are revised.
The additions and revisions to Sec. 10.411 read as follows:
Sec. 10.411 Certification of origin or other information.
(a) Contents. An importer who claims preferential tariff treatment
on a good must submit, at the request of the port director, a
certification of origin or other information demonstrating that the
good qualifies as originating. A certification or other information
submitted to CBP under this paragraph:
* * * * *
(2) * * *
(iv) A description of the good for which preferential tariff
treatment is claimed, which must be sufficiently detailed to relate it
to the invoice and the HS nonmenclature;
* * * * *
(b) Statement. A certification submitted to CBP under paragraph (a)
of this section must include a statement, in substantially the
following form:
``I Certify that:
The information on this document is true and accurate and I assume
the responsibility for proving such representations. I understand that
I am liable for any false statements or material omissions made on or
in connection with this document;
I agree to maintain, and present upon request, documentation
necessary to support this certification, and to inform, in writing, all
persons to whom the certification was given of any changes that could
affect the accuracy or validity of this certification; and
The goods originated in the territory of one or more of the
parties, and comply with the origin requirements specified for those
goods in the United States-Chile Free Trade Agreement; there has been
no further production or any other operation outside the territories of
the parties, other than unloading, reloading, or any other operation
necessary to preserve it in good condition or to transport the good to
the United States; and
This document consists of ---- pages, including all attachments.''
(c) Responsible official or agent. A certification submitted under
paragraph (a) of this section must be signed and dated by a responsible
official of the importer; exporter; or producer; or by the importer's,
exporter's, or producer's authorized agent having knowledge of the
relevant facts. The certification must include the legal name and
address of the responsible official or authorized agent signing the
certification, and should include that person's telephone and e-mail
address, if available. If the person making the certification is not
the producer of the good, or the producer's authorized agent, the
person may sign the certification of origin based on:
* * * * *
(d) Language. The certification or other information submitted
under paragraph
(a) of this section must be completed either in the English or
Spanish language. If the certification or other information is
completed in Spanish, the importer must also provide to the port
director, upon request, a written English translation of the
certification or other information.
(e) * * *
(2) Multiple importations of identical goods into the United States
that occur within a specified blanket period, not exceeding 12 months.
In the case of multiple shipments of identical goods, the certification
must specify the blanket period in ``mm/dd/yyyy to mm/dd/yyyy'' format.
(f) Preference criteria. The preference criterion to be included on
the certification or other information as required in paragraph
(a)(2)(vi) of this section is as follows:
* * * * *
0
6. Section 10.412 is amended by revising paragraphs (a) and (b)(1) and
by removing paragraph (d). The revisions to paragraphs (a) and (b)(1)
read as follows:
Sec. 10.412 Importer obligations.
(a) General. An importer who makes a declaration under Sec.
10.410(a) of this subpart is responsible for the truthfulness of the
declaration and of all the information and data contained in the
certification or other information submitted to CBP under Sec.
10.411(a) of this subpart, for submitting any supporting documents
requested by CBP, and for the truthfulness of the information contained
in those documents. CBP will allow for the direct submission by the
exporter or producer of business confidential or other sensitive
information, including cost and sourcing information.
(b) * * *
(1) Must have records that explain how the importer came to the
conclusion that the good qualifies for preferential tariff treatment.
Those records must include documents that support a claim that the
article in question qualifies for preferential tariff treatment because
it meets the applicable rules of origin set forth in General Note 26,
HTSUS, and in this subpart. Those records may include a properly
completed certification or other information as set forth in Sec.
10.411 of this subpart; and
* * * * *
Sec. 10.413 [Amended]
0
7. Section 10.413 is amended by adding the words ``of this subpart''
immediately following the reference to ``Sec. 10.411'' each place it
appears;
0
8. Section 10.414 is amended by revising the section heading, paragraph
(a) introductory text, and paragraph (b) to read as follows:
Sec. 10.414 Certification or other information not required.
(a) General. Except as otherwise provided in paragraph (b) of this
section, an importer will not be required to submit a certification or
other information demonstrating that the good qualifies as originating
under Sec. 10.411(a) of this subpart for:
* * * * *
(b) Exception. If the port director determines that an importation
described in paragraph (a) of this section may reasonably be considered
to have been carried out or planned for the purpose of evading
compliance with the rules and procedures governing claims for
preference under the US-CFTA, the port director will notify the
importer in writing that for that importation the importer must submit
to CBP a valid certification or other information
[[Page 76133]]
demonstrating that the good qualifies as originating. The importer must
submit such a certification or other information within 30 calendar
days from the date of the written notice. Failure to timely submit the
certification or other information will result in denial of the claim
for preferential tariff treatment.
0
9. Section 10.415 is amended by revising the paragraph (a) introductory
text to read as follows:
Sec. 10.415 Maintenance of records.
(a) General. An importer claiming preferential tariff treatment for
a good imported into the United States must maintain, for five years
after the date of importation of the good, a certification (or a copy
thereof) or other information demonstrating that the good qualifies as
originating, and any records and documents that the importer has
relating to the origin of the good, including records and documents
associated with:
* * * * *
0
10. Section 10.416 is amended by revising paragraph (a) and by adding
the words ``of this subpart'' immediately following the reference to
``Sec. 10.463'' in paragraph (b). Revised paragraph (a) reads as
follows:
Sec. 10.416 Effect of noncompliance; failure to provide documentation
regarding transshipment.
(a) Effect of noncompliance. If the importer fails to comply with
any requirement under this subpart, including submission of a
certification of origin or other information demonstrating that the
good qualifies as originating under Sec. 10.411(a) of this subpart or
submission of a corrected certification under Sec. 10.413 of this
subpart, the port director may deny preferential tariff treatment to
the imported good.
* * * * *
Sec. 10.420 [Amended]
0
11. Section 10.420 is amended by adding the words ``of this subpart''
immediately following each of the references in the section to ``Sec.
10.421,'' ``Sec. 10.451,'' ``Sec. 10.421(a) or (b),'' and ``Sec.
10.421(c)'';
Sec. 10.421 [Amended]
0
12. Section Sec. 10.421 is amended by adding the words ``of this
subpart'' immediately following the reference to ``Sec. 10.420'' in
the introductory text and by removing the term ``HTS'' each place it
appears in the section (and footnote) and adding, in its place, the
term ``HTSUS'';
0
13. Section 10.422 is amended by adding the words ``of this subpart''
immediately following the reference to ``Sec. 10.421'' in the
paragraph (a) introductory text, by re-designating current paragraphs
(a)(2)(ii) through (a)(2)(vii) as paragraphs (a)(2)(iii) through
(a)(2)(viii), respectively, by adding a new paragraph (a)(2)(ii), and
by revising paragraph (d)(2). New paragraph (a)(2)(ii) and revised
paragraph (d)(2) read as follows:
Sec. 10.422 Submission of certificate of eligibility.
(a) * * *
(2) * * *
(ii) The legal name and address of the responsible official or
authorized agent of the importer signing the certificate (if different
from the importer of record), and that person's telephone and e-mail
address, if available;
* * * * *
(d) * * *
(2) Multiple importations of identical goods into the United States
that occur within a specified blanket period, not exceeding 12 months,
set out in the certificate.
Sec. 10.424 [Amended]
0
14. Section 10.424 is amended by adding the words ``of this subpart''
immediately following the reference to ``Sec. 10.422'' in paragraph
(a) and immediately following the reference to ``Sec. 10.425'' in
paragraph (b);
Sec. 10.440 [Amended]
0
15. Section 10.440 is amended by removing the word ``part'' each place
it appears and adding, in its place, the word ``subpart'';
0
16. Section 10.441 is amended by removing the word ``part'' in
paragraph (a) and adding, in its place, the word ``subpart'', and by
revising paragraphs (b)(2) and (b)(4) to read as follows:
Sec. 10.441 Filing procedures.
* * * * *
(b) * * *
(2) Subject to Sec. 10.413 of this subpart, a copy of a
certification of origin or other information demonstrating that the
good qualifies for preferential tariff treatment;
* * * * *
(4) A written statement indicating whether or not any person has
filed a protest relating to the good under any provision of law; and if
any such protest has been filed, the statement must identify the
protest by number and date.
0
17. Section 10.442 is amended by removing the word ``part'' each place
it appears in paragraphs (a) and (d)(1) and adding, in its place, the
word ``subpart'', and by revising the heading and text of paragraph
(b), the second sentence of paragraph (c)(2), paragraph (d)(2), and the
second and third sentences of paragraph (d)(3). The revisions to
paragraphs (b), (c)(2), (d)(2) and (d)(3) read as follows:
Sec. 10.442 CBP processing procedures.
* * * * *
(b) Pending protest or judicial review. If the port director
determines that any protest relating to the good has not been finally
decided, the port director will suspend action on the claim for refund
filed under this subpart until the decision on the protest becomes
final. If a summons involving the tariff classification or dutiability
of the good is filed in the Court of International Trade, the port
director will suspend action on the claim for refund filed under this
subpart until judicial review has been completed.
(c) * * *
(2) * * * If the entry is otherwise to be reliquidated based on
administrative review of a protest or as a result of judicial review,
the port director will reliquidate the entry taking into account the
claim for refund under this subpart.
(d) * * *
(2) Unliquidated entry. If the port director determines that a
claim for a refund filed under this subpart should be denied and the
entry covering the good has not been liquidated, the port director will
deny the claim in connection with the liquidation of the entry, and
notice of the denial and the reason for the denial will be provided to
the importer in writing or via an authorized electronic data
interchange system.
(3) * * * If the entry is otherwise to be reliquidated based on
administrative review of a protest or as a result of judicial review,
such reliquidation may include denial of the claim filed under this
subpart. In either case, the port director will give the importer
notice of the denial and the reason for the denial in writing or via an
authorized electronic data interchange system.
Sec. 10.450 [Amended]
0
18. Section 10.450 is amended by adding the words ``of this subpart''
immediately following the reference to ``Sec. Sec. 10.450 through
10.463'' in the introductory text.
0
19. Section 10.455 is amended by revising paragraph (a)(1), the heading
to paragraph (b), and paragraphs (b)(1)(i), (b)(2)(i), and (c) to read
as follows:
Sec. 10.455 Value of materials.
(a) * * *
[[Page 76134]]
(1) In the case of a material imported by the producer of the good,
the adjusted value of the material with respect to that importation;
* * * * *
(b) Permissible additions to, and deductions from, the value of
materials.
* * * * *
(1) * * *
(i) The costs of freight, insurance, packing and all other costs
incurred in transporting the material to the location of the producer;
* * * * *
(2) * * *
(i) The costs of freight, insurance, packing and all other costs
incurred in transporting the material to the location of the producer;
(c) Accounting method. Any cost or value referenced in General Note
26(n), HTSUS, and this subpart, must be recorded and maintained in
accordance with the generally accepted accounting principles applicable
in the territory of the Party in which the good is produced (whether
Chile or the United States).
Sec. 10.457 [Amended]
0
20. In Sec. 10.457, paragraph (a)(4) is amended by removing the word
``country'' each place it appears and adding, in its place, the word
``Party''.
Sec. 10.458 [Amended]
0
21. In Sec. 10.458, paragraph (a) is amended by removing the word
``country'' each it appears and adding, in its place, the word
``Party''.
Sec. 10.460 [Amended]
0
22. Section 10.460 is amended by removing the term ``Sec. 10.402(n)''
and adding, in its place, the term ``Sec. 10.402(o)''.
Sec. 10.461 [Amended]
0
23. Section 10.461 is amended by adding in Example 1 the words ``of
this subpart'' at the end of the parenthetical phrase ``see Sec.
10.454(a)'' in the third sentence.
0
24. In Sec. 10.470, paragraph (a) is amended by revising the heading
and the first two sentences of the introductory text, to read as
follows:
Sec. 10.470 Verification and justification of claim for preferential
tariff treatment.
(a) Verification. A claim for preferential tariff treatment made
under Sec. 10.410 of this subpart, including any statements or other
information submitted to CBP in support of the claim, will be subject
to such verification as the port director deems necessary. In the event
that the port director is provided with insufficient information to
verify or substantiate the claim, the port director may deny the claim
for preferential tariff treatment. * * *
* * * * *
0
25. Section 10.473 is amended by revising the introductory text and
paragraph (c) to read as follows:
Sec. 10.473 Issuance of negative origin determinations.
If CBP determines, as a result of an origin verification initiated
under this subpart, that the good which is the subject of the
verification does not qualify as an originating good, it will issue a
determination in writing or via an authorized electronic data
interchange system to the importer that sets forth the following:
* * * * *
(c) With specific reference to the rules applicable to originating
goods as set forth in General Note 26, HTSUS, and in Sec. Sec. 10.450
through 10.463 of this subpart, the legal basis for the determination;
and
* * * * *
Sec. 10.474 [Amended]
0
26. Section 10.474 is amended by removing the words ``CBP finds'' and
adding, in their place, the words ``verification or other information
reveals'';
0
27. In Sec. 10.483, paragraph (a)(2) is amended by removing the word
``part'' and adding, in its place, the word ``chapter,'' and paragraph
(c) introductory text is revised to read as follows:
Sec. 10.483 Framework for correcting declarations and certifications.
* * * * *
(c) Statement. For purposes of this subpart, each corrected
declaration or notification of an incorrect certification must be
accompanied by a statement, submitted in writing or via an authorized
electronic data interchange system, which:
* * * * *
PART 191--DRAWBACK
0
28. The general authority citation for part 191 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), 1313, 1624.
* * * * *
Sec. 191.0 [Amended]
0
29. Section 191.0 is amended by removing the last sentence.
Deborah J. Spero,
Acting Commissioner, Customs and Border Protection.
Approved: December 15, 2006.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 06-9780 Filed 12-19-06; 8:45 am]
BILLING CODE 9111-14-P