[Federal Register: December 3, 2007 (Volume 72, Number 231)]
[Notices]
[Page 67916-67918]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de07-46]
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COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS
Request for Public Comment on the Due Diligence Requirement Under
the Commercial Availability Procedures of the Dominican Republic-
Central America-United States Free Trade Agreement (CAFTA-DR)
November 28, 2007.
AGENCY: Committee for the Implementation of Textile Agreements
(``CITA'').
ACTION: Request for Public Comment on the Due Diligence Requirement
Under the CAFTA-DR Commercial Availability Procedures.
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SUMMARY: CITA requests public comment on the due diligence requirement
under the CAFTA-DR Commercial Availability procedures. Comments should
be submitted no later than January 2, 2008 to the attention of: R.
Matthew Priest, Chairman, Committee for the Implementation of Textile
Agreements, Room 3001, Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: Richard Stetson, Office of Textiles
and Apparel, U.S. Department of Commerce, (202) 482-2582.
SUPPLEMENTARY INFORMATION:
Authority: Authority: Section 203(o)(4) of the Dominican
Republic-Central America-United States Free Trade Agreement
Implementation Act (``CAFTA-DR''); CAFTA-DR Commercial Availability
Final Procedures (72 FR 13256, published March 21, 2007) (``Final
Procedures'').
BACKGROUND:
The CAFTA-DR Commercial Availability provision permits the use of
non-originating CAFTA-DR products by implementing procedures that allow
products to be placed on or removed from a product list, on a timely
basis,
[[Page 67917]]
and in a manner that is consistent with normal business practice. The
Final Procedures provide that the procedures may be modified to address
concerns that may arise as CITA gains experience in implementing them.
CITA notes that these are administrative procedures rather than
regulations, and can be modified as needed.
A critical component to the efficient functioning of the Commercial
Availability process is the requirement that a requester and a
potential supplier engage in due diligence efforts, as provided under
the Final Procedures, to determine whether a product is available in
commercial quantities in a timely manner in the region. The due
diligence provisions require communications between the requester and
potential suppliers, supported by documentation, to ensure that a
proper inquiry into a product's commercial availability has been
undertaken prior to the filing of the request.
Based on CITA's experience, there is a concern that, in certain
cases, due diligence efforts have fallen short of those expected when
the procedures were drafted; that product descriptions may not meet
recognized standards; that potential suppliers may not be adequately
substantiating their claims that they are to be able to supply
requested products; and that CITA is not receiving complete information
from interested entities regarding meaningful contact between
requesters and potential suppliers necessary for CITA to make informed
determinations.
Therefore, CITA requests public comment and proposals on the
operation of the due diligence requirement under the CAFTA-DR
Commercial Availability procedures, including the following areas of
concern:
Communications between Requesters and Potential Suppliers: Past
proceedings have exposed issues with regard to the nature of the
communications between requesters and potential suppliers.
Specifically, CITA notes that there is a lack of substantive dialogue
between requesters and potential suppliers. CITA requests public
comment as to how such communications should be conducted, in keeping
with normal business practice, as well as the role that third party
counsels and advisors should play in the communications between
requesters and potential suppliers; whether only certain employees of
the requester and potential supplier should be deemed as the
appropriate contacts for communication regarding potential sales; and
whether there should be direct dialogue between those appropriate
personnel prior to submission of requests to CITA.
Identification of Potential Suppliers: CITA is concerned that
methods being used to identify potential suppliers and the means of
contacting requesters and the potential suppliers have not been
effective. For example, CITA has received requests that contain a
general inquiry sent via email to all manufacturers within the CAFTA-DR
region without regard to actual potential for supply. In prior cases,
CITA has noted a concern regarding the detailed and confidential
information requested of potential suppliers concerning their business
plans. CITA seeks public comment regarding what methods of
communications should be employed to satisfactorily determine whether
there are potential suppliers and the types of information that can be
requested of potential suppliers.
Content of Communications between Requesters and Potential
Suppliers: In the course of various proceedings, CITA notes that there
have been issues regarding the content of communications between
requesters and potential suppliers, namely the description of the
product, such as production specifications and performance criteria.
CITA seeks public comment regarding the requirements for a description
of product specifications; whether industry accepted standards, such as
ASTM (American Society for Testing and Materials) or AATCC (American
Association of Textile Chemists and Colorists), should be referenced;
and whether only measurable criteria and performance standards may be
referenced in product descriptions. In the course of past proceedings,
CITA has also noted a concern regarding potentially unreasonable
demands regarding time lines for supplying requested products, and the
provision of samples. CITA seeks public comment regarding whether and
under what conditions potential requesters and potential suppliers
should provide samples to each other; how reasonable time frames should
be determined; and whether consideration should be given to time needed
to develop a product new to a potential supplier.
Substitutability of Products: In the course of past proceedings,
CITA has noted concerns as to whether products similar to the requested
product are substitutable. CITA seeks public comment regarding how
potential suppliers should identify and describe potentially
substitutable products; which specifications and performance criteria a
potentially substitutable product would have to be meet; and reasonable
justifications for rejecting potentially substitutable products.
Commercial Availability of a Production Input vs. Downstream
Product: CITA has found there is concern that a request actually is for
a downstream product, but it is a production input whose commercial
availability is in question. CITA seeks public comment regarding
whether it should reject or deny requests when it becomes clear that a
production input is not available in commercial quantities in a timely
manner rather than the downstream product.
Potential Suppliers' Responses to Requester's Inquiry: CITA has
found that there is concern regarding the information provided by
potential suppliers in responses with offers to supply and that
potential suppliers are not demonstrating a legitimate intent to do
business by providing a clear, detailed response to a request. CITA
seeks public comment regarding what information a potential supplier
should provide to substantiate an objection to a request and an offer
to supply; whether a potential supplier should have produced the
requested product within the past 24 months; what information is needed
to substantiate that a potential supplier has the ability to supply;
whether types of equipment, capacity, and other production information
should be business confidential; and what constitutes a timely response
to an inquiry and a legitimate interest to do business.
CITA requests public comment on the operation of the due diligence
requirement under the CAFTA-DR Commercial Availability procedures and
the issues identified above. Comments must be in English, and must be
received no later than January 2, 2008. Comments must be submitted
electronically AND in writing.
(1) An electronic mail (``email'') version of the comments must be
either in PDF, Word, or Word-Perfect format, and sent to the following
email address: OTEXA CAFTA@ita.doc.gov. Comments must have a bolded
heading stating ``Public Version'', and all business confidential
information must be deleted and substituted with asterisks. No business
confidential information should be submitted in the ``email'' version
of the document.
(2) The original signed comments must be mailed to the Chairman,
Committee for the Implementation of Textile Agreements, Room H3001A,
U.S. Department of Commerce, 14th and Constitution Avenue N.W.,
Washington, DC 20230. Any business confidential information upon which
an interested person wishes to rely must be included
[[Page 67918]]
in the original signed comments only. Brackets must be placed around
all business confidential information. Comments containing business
confidential information must have a bolded heading stating
``Confidential Version.'' Attachments considered business confidential
information must have a heading stating ``Business Confidential
Information''. The Committee will protect from disclosure any business
confidential information that is marked ``business confidential'' to
the full extent permitted by law. Except for the inclusion of business
confidential information, the two versions of comments should be
identical.
(3) All comments submitted via ``email'' will be made available for
public inspection at the Office of Textile and Apparel, Room H3001A,
the Department of Commerce, 14th and Constitution Avenue N.W.,
Washington, DC, between the hours of 8:30 a.m. and 5:00 p.m. on
business days. In addition, the ``email'' version of the comments will
be posted for public review on the Office of Textile and Apparel,
CAFTA-DR Free Trade Agreement website http://otexa.ita.doc.gov/tradeagree2007.htm
.
R. Matthew Priest,
Chairman, Committee for the Implementation of Textile Agreements.
[FR Doc. E7-23410 Filed 11-30-07; 8:45 am]