Senate Passes Bill to Grant Duty-Free Entry to Limited Quantities of Apparel Assembled or Knit-to-Shape in Haiti

(Two Haiti bills have also been introduced in the House of Representatives and referred to the House Ways and Means Committee - H.R. 1031, the Haiti Economic Recovery Opportunity Act of 2003 and H.R. 4889, the Haiti Economic Recovery Opportunity Act of 2004. See today's ITT, 04092120, for BP summary on upcoming House Trade Subcommittee hearing on Haiti.)

S. 2261 would amend the Caribbean Basin Economic Recovery Act (CBERA, 19 USC 2701 et seq.) by adding a "Special Rule for Haiti," highlights of which include:

Duty-free treatment for limited quantities of Haiti apparel assembled or knit-to-shape from any country's fabric, components, or yarns. Under the provisions of S. 2261, beginning on October 1, 2003, and in each of the 7 succeeding 1-year periods, apparel articles that are wholly assembled or knit-to-shape in Haiti¹ that are imported directly into the customs territory of the U.S. from Haiti would be eligible for duty-free entry into the U.S., subject to certain quantitative limits, if the President determines and/or certifies to Congress that Haiti has satisfied certain eligibility requirements.

¹ wholly assembled or knit-to-shape in Haiti from any combination of fabrics, fabric components, components knit-to-shape, and yarns without regard to the country of origin of the fabric, components, or yarns

Eligibility requirements for Haiti. Under the provisions of S. 2261, Haiti would be eligible for such duty-free treatment if the President determines and/or certifies to Congress that Haiti:

has established, or is making continual progress toward establishing (a) a market-based economy; (b) the rule of law, political pluralism, the right to due process, etc.; (c) the elimination of barriers to U.S. trade and investment; (d) economic policies to reduce poverty, etc.; (e) a system to combat corruption and bribery, etc.; and (f) protection of internationally recognized worker rights;

does not engage in activities that undermine U.S. national security or foreign policy interests;

does not engage in gross violations of internationally recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to eliminate human rights violations and terrorist activities;

has met specified "circumvention enforcement" conditions, including (partial list): (a)

adopting an effective visa system, domestic laws, and enforcement procedures to prevent unlawful transshipment and the use of counterfeit documents; (b) enacting legislation or promulgating regulations that would permit U.S. Customs and Border Protection (CBP) verification teams to have the access necessary to investigate thoroughly allegations of transshipment; (c) agreeing to cooperate fully with the U.S. to address and take action necessary to prevent circumvention; (d) etc.

Formula for quantitative limits on duty-free treatment. According to S. 2261, the following quantities of apparel would be eligible for duty-free treatment under the "Special Rule for Haiti:"

during the 12-month period beginning on October 1, 2003, a quantity equal to 1.5 percent of the aggregate square meter equivalents (SME) of all apparel articles imported into the U.S. during the 12-month period beginning October 1, 2002; and

during the 12-month period beginning on October 1 of each succeeding year, a quantity equal to the product of (a) the percentage applicable during the previous 12-month period plus 0.5 percent (but not over 3.5 percent); and (b) the aggregate SMEs of all apparel articles imported into the U.S. during the 12-month period that ends on September 30 of that year.)

Effective date. S. 2261 states that the duty-free treatment provided by the "Special Rule for Haiti" would apply with respect to goods entered, or withdrawn from warehouse, for consumption on or after October 1, 2003.

Retroactive duty-free treatment for certain Haiti apparel entries. S. 2261 states that notwithstanding 19 USC 1514 (protests), or any other provision of law, upon proper request filed with CBP before the 90th day after the date of the enactment of S. 2261, any entry or withdrawal from warehouse for consumption, of any goods described in the "Special Rule for Haiti" (a) that was made on or after October 1, 2003, and before the date of the enactment of S. 2261, and (b) with respect to which there would have been no duty if the "Special Rule for Haiti" applied to such entry or withdrawal, shall be liquidated or reliquidated as though the "Special Rule for Haiti" applied to such entry or withdrawal.

S. 2261 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:s2261es.txt.pdf.