[Code of Federal Regulations]
[Title 15, Volume 2]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 15CFR303.8]

[Page 26-27]
 
                  TITLE 15--COMMERCE AND FOREIGN TRADE
 
 CHAPTER III--INTERNATIONAL TRADE ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 303_WATCHES, WATCH MOVEMENTS AND JEWELRY PROGRAM--Table of Contents
 
                  Subpart A_Watches and Watch Movements
 
Sec.  303.8  Maintenance of duty-exemption entitlements.

    (a) The Secretaries may order a producer to show cause within 30 
days of receipt of the order why the duty-exemption to which the firm 
would otherwise be entitled should not be cancelled, in whole or in 
part, if:
    (1) At any time after June 30 of the calendar year:

[[Page 27]]

    (i) A producer's assembly and shipment record provides a reasonable 
basis to conclude that the producer will use less than 80 percent of its 
total allocation by the end of the calendar year, and
    (ii) The producer refuses a request from the Departments to 
relinquish that portion of its allocation which they conclude will not 
be used; or
    (2) A producer fails to satisfy or fulfill any term, condition or 
representation, whether undertaken by itself or prescribed by the 
Departments, upon which receipt of allocation has been predicated or 
upon which the Departments have relied in connection with the sale or 
transfer of a business together with its allocation; or
    (3) A producer, in the judgment of the Secretaries, has failed to 
make a meaningful contribution to the territory for a period of two or 
more consecutive calendar years, when compared with the performance of 
the duty-free watch assembly industry in the territory as a whole. This 
comparison shall include the producer's quantitative use of its 
allocations, amount of direct labor employed in the assembly of watches 
and watch movements, and the net amount of corporate income taxes paid 
to the government of the territory. If the producer fails to satisfy the 
Secretaries as to why such action should not be taken, the firm's 
allocation shall be reduced or cancelled, whichever is appropriate under 
the show-cause order. The eligibility of a firm whose allocation has 
been cancelled to receive further allocations may also be terminated.
    (b) The Secretaries may also issue a show-cause order to reduce or 
cancel a producer's allocation or production incentive certificate (see 
Sec.  303.12, below), as appropriate, or to declare the producer 
ineligible to receive an allocation or certificate if it violates any 
regulation in this part, uses a form, license, permit, or certificate in 
an unauthorized manner, or fails to provide information or data required 
by these regulations or requested by the Secretaries or their delegates 
in the performance of their responsibilities.
    (c) If a firm's allocation is reduced or cancelled, or if a firm 
voluntarily relinquishes a part of its allocation, the Secretaries may:
    (1) Reallocate the allocation involved among the remaining producers 
in a manner best suited to contribute to the economy of the territory;
    (2) Reallocate the allocation or part thereof to a new entrant 
applicant; or
    (3) Do neither of the above if deemed in the best interest of the 
territories and the established industry.

[49 FR 17740, Apr. 25, 1984, as amended at 61 FR 55885, Oct. 31, 1996]