CBP Issues Final Rule on ATPDEA Trade Benefits (Part III)

(The ATPDEA currently applies to the Andean countries of Bolivia, Colombia, Ecuador, and Peru.)

This is Part III, the final part of BP's summaries on this final rule, and highlights the regulatory amendments as described by the preamble. (See ITT's Online Archives or 09/07/06 and 09/11/06 news, 06090705 and 06091110 for Parts I and II.)

Definitions Amended, Added, or Replaced

CBP's final rule amends 19 CFR 10.242 on the ATPDEA to:

Self-start edge. Add the definition "self-start edge", which reads as follows:

Self-start edge. "Self-start edge" when used with reference to knit-to-shape components means a finished edge which is finished as the component comes off the knitting machine. Several components with finished edges may be linked by yarn or thread as they are produced from the knitting machine.

Knit-to shape components. Amend the definition of"Knit-to-shape components" to read as follows (deleted text is denoted by <->; added text is denoted by ):

Knit-to-Shape Components. "Knit-to-shape," when used with reference to textile components, means components that are knitted or crocheted from a yarn directly to a specific shape , that is, the shape or form of the component as it is used in the apparel article, containing <a> at least one self-start edge. Minor cutting or trimming will not affect the determination of whether a component is "knit-to-shape."

Foreign. Delete the definition of "foreign".

Foreign origin. Add the definition of "foreign origin", which reads as follows:

Foreign origin. "Foreign origin" means, in the case of a finding or trimming of non-textile materials, that the finding or trimming is a product of a country other than the U.S. or a ATPDEA beneficiary country and, in the case of a finding, trimming, or interlining of textile materials, that the finding, trimming, or interlining does not meet all of the U.S. and ATPDEA beneficiary country production requirements for yarns, fabrics, and/or components specified under 19 CFR 10.243(a) for the article in which it is incorporated.

CBP's final rule also amends 19 CFR 10.252 on the extension of Andean Trade Preference Act (ATPA) benefits to tuna and certain other non-textile articles to:

United States vessel. Amend the definition of "United States vessel" to read as follows (added text is denoted by ):

United States vessel. "United States vessel" means either: a vessel having a certificate of documentation with a fishery endorsement under chapter 121 of title 46 of the United States Code; or a vessel that is documented under the laws of the United States and for which a license has been issued pursuant to section 9 of the South Pacific Tuna Act of 1988.

Amended Regulations on Articles Eligible for ATPDEA Treatment

CBP's final rule amends 19 CFR 10.243 on articles eligible for ATPDEA treatment, including requirements regarding dyeing, printing, finishing and other operations, as follows:

1. CFR 10.243(b)(1)(i) regarding dyeing, printing, finishing and other operations is amended to read as follows (added text is denoted by ):

(i) In the case of an article described in paragraph (a)(1), (a)(2), or (a)(7) of this section that contains a knitted or crocheted or woven fabric, or a knitted or crocheted or woven fabric component produced from fabric, that was wholly formed in the United States from yarns wholly formed in the United States or in one or more ATPDEA beneficiary countries, as described in paragraph (a)(1)(i) of this section, any dyeing, printing, or finishing of that knitted or crocheted or woven fabric or component must have been carried out in the United States;

1. CFR 10.243(c)(1)(ii)(A) regarding the cost and value of findings and trimmings or interlinings is revised to incorporate an ex-factory standard in lieu of the f.o.b. port of exportation standard. Amended 19 CFR 10.243(c)(1)(ii)(A) reads as follows:

The ex-factory price of the components, findings and trimmings, or interlinings as set out in the invoice or other commercial documents, or, if the price is other than ex-factory, the price as set out in the invoice or other commercial documents adjusted to arrive at an ex-factory price;

Subsequent 19 CFR 10.243(c)(1)(ii)(B) is also amended to read as follows (deleted text is denoted by <->):

If the price cannot be determined under paragraph (c)(1)(ii)(A) of this section or if CBP finds that price to be unreasonable, all reasonable expenses incurred in the growth, production, manufacture, or other processing of the components, findings and trimmings, or interlinings, including the cost or value of materials and general expenses, plus a reasonable amount for profit <and the freight, insurance, packaging, and other costs, if any, incurred in transporting the components, findings and trimmings, or interlinings to the port of exportation>.

Textile Certificate of Origin Can be Signed by Producer or Producer's Agent

CBP states that 19 CFR 10.244(a), 10.244(c)(12), 10.246(b)(2), 10.254, and 10.256(b)(2) have been amended to provide that the textile Certificate of Origin must be signed by the exporter or producer or by the exporter's or producer's authorized agent having knowledge of the relevant facts.

CBP notes that this change is consistent with changes to the implementing regulations under the Caribbean Basin Trade Partnership Act (CBTPA) and the African Growth and Opportunity Act (AGOA) relating to the textile Certificate of Origin and thus brings uniformity to the three programs in this regard.

Brassiere Straps are Not Considered Findings or Trimmings, Etc.

CBP states that in 19 CFR 10.248(b)(2)(ii), Example 5 has been changed to clarify that elastic strips used as brassiere straps are not considered findings or trimmings, as follows (partial excerpt of Example 5; deleted text is denoted by <->):

In determining whether the entered articles meet the minimum 75 or 85 percent standard, the fabric in the <elastic strips and> labels is to be disregarded entirely because the <strips and> labels constitute findings or trimmings for purposes of this section, and all of the fabric in the front subassemblies is countable because it was all formed in the United States and used in the production of articles that were entered in the same year.

In 19 CFR 10.248(c)(3)(i), CBP has amended blocks 4-6 of the declaration of compliance for brassieres by adding exclusion language regarding findings and trimmings after each reference to fabric(s) for purposes of calculating whether the minimum 75 or 85 percent standard was met. CBP states that this change is being made because of the inadvertent omission of this language in the interim rule. For example, block 4 is amended to read as follows (added text is denoted by ; blocks 5 and 5 are similarly amended):

Aggregate cost of fabrics (exclusive of all findings and trimmings) formed in the United States that were used in the production of brassieres that were entered during the year_____:

(See ITT's Online Archives or 04/15/03 news 03041520 for Part VI, the final part of BP's series of summaries of the interim rule, with links to Parts I - V.)

CBP final rule on ATPDEA (CBP Dec. 06-21), FR Pub 08/07/06, available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-6741.pdf