[Federal Register Volume 64, Number 239 (Tuesday, December 14, 1999)]
[Notices]
[Pages 69746-69748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32421]
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COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS
Implementation and Enforcement of the Outward Processing Program
for Textiles and Apparel
December 8, 1999.
AGENCY: Committee for the Implementation of Textile Agreements (CITA).
ACTION: Issuing a directive to the Commissioner of Customs setting
forth the requirements for participation in the Outward Processing
Program.
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[[Page 69747]]
SUMMARY: This notice sets forth the requirements for participating in
the Outward Processing Program for textiles and apparel. Under the
Outward Processing Program, textile products will not be subject to
quantitative restrictions upon importation into the United States if
they either (a) are assembled in a participating country of fabrics
formed and cut in the United States or (b) are cut and assembled in a
participating country of fabric formed in the United States. Products
exported on or after January 1, 2000 may be imported pursuant to the
Outward Processing Program.
EFFECTIVE DATE: January 1, 2000
FOR FURTHER INFORMATION CONTACT: Brian F. Fennessy, International Trade
Specialist, Office of Textiles and Apparel, U.S. Department of
Commerce. (202) 482-3400.
SUPPLEMENTARY INFORMATION:
Authority: Section 204 of the Agricultural Act of 1956, as
amended (7 U.S.C. 1854); Executive Order 11651 of March 2, 1972, as
amended.
On September 10, 1999 the Government of the United States and the
Government of Romania signed a Memorandum of Understanding providing
for an Outward Processing Program for certain wool apparel products. On
September 17, 1999, the Government of the U.S. and the Government of
the Former Yugoslav Republic of Macedonia signed a Memorandum of
Understanding providing for an Outward Processing Program for certain
wool apparel products.
Pursuant to these agreements, products that qualify for Outward
Processing Program treatment will not be subject to quantitative
restrictions. However, products that qualify for Outward Processing
Program treatment must be certified by the participating government and
will be monitored by the U.S. Customs Service. Each shipment must be
certified by the placing of the original square-shaped stamped marking
in blue ink on the front of the commercial invoice.
Outward Processing Program treatment is available for qualifying
wool apparel products exported on or after January 1, 2000. Future
Federal Register notices will indicate qualifying products eligible for
the Outward Processing Program.
General Requirements; Qualifying Products
In order to qualify for Outward Processing Program treatment,
qualifying wool apparel products must meet the following requirements:
(1) the product must be either manufactured from fabric that is
both cut and assembled in a participating country, or from fabric which
is cut in the United States and assembled in a participating country.
The product may be partially cut or partially assembled in either
country, but all assembly and cutting operations must be performed in
either the participating country or the United States. A participating
country is a country with which the United States has entered into a
bilateral agreement regarding the Outward Processing Program;
(2) the product must be assembled or manufactured (that is, both
cut and assembled) from fabric which is formed in the United States;
i.e., all fabric components of the product must be U.S. formed. This
requirement applies to all textile components of the product, including
linings and pocketing, except as provided in (4) below. Greige goods
imported into, and then finished in, the United States are not
considered fabric formed in the United States. Fabric that is woven or
knitted in the United States from yarn is considered U.S. formed;
(3) the importer of the qualifying wool apparel product and the
exporter of the U.S. formed fabric or the component parts must be the
same entity or person;
(4) findings and trimmings of non-U.S. origin may be incorporated
into the product, provided they do not exceed 25 percent of the cost of
the fabric in the product. Findings and trimmings include sewing
thread, hooks and eyes, snaps, buttons, ``bow buds,'' decorative lace
trim, zippers, including zipper tapes, and labels;
(5) upon entry into the United States, the product must be
classified under a subheading of heading 9802 of the Harmonized Tariff
Schedule of the United States (HTS) created to capture such trade
(9802.00.8016) or qualify for the special ``S'' prefix indicating the
item was produced with U.S. formed fabric.
Nothing in these requirements precludes performing any operation in
the United States.
Record keeping Requirements
The following documents shall be maintained and made available for
review by the U.S. Customs Service and CITA:
(1) entry documents made during the quarter;
(2) design style costing sheets or similar documents providing a
complete description of the assembled products;
(3) cutting tickets (if the fabric is cut in the United States),
including the name and location of the cutting facility for those
entries;
(4) mill invoices, including the name of the mill where the fabric
was formed. If the fabric was purchased from a third party, the
participant is responsible for obtaining the mill invoice. The
participant must also obtain a signed statement from a principal at the
mill that the fabric is of U.S. origin. This can be stated directly on
the invoice or on a separate document that relates to each specific
shipment of fabric. Vertically integrated participants, i.e.,
participants that both form and cut fabric, must retain an internal
transfer document or other documentary proof that they formed the
fabric in the United States;
(5) transportation documents if fabric is cut in the United States
(mill to cutting facility; cutting facility to border/assembler); and
(6) export documentation.
The above documents shall be maintained by calendar quarter, by
country, and by category; and shall be retained for three years from
the date of the exportation of the U.S. formed fabric or U.S. formed
and cut fabric. The documents shall be organized and filed (preferably
in a single location) to facilitate U.S. Customs' review.
Enforcement Procedures and Penalties
The U.S. Customs Service shall monitor all shipments entered
pursuant to the Outward Processing Program.
In order to ensure that participants in the Outward Processing
Program comply fully with the requirements set forth in this notice,
Customs will conduct Post Entry Compliance reviews. These reviews will
be conducted for entries made for the first quarter of 2000 and shall
continue for each successive quarter. During the course of such review,
the participant must provide Customs officials with evidence, through
the documents described above, that all products entered under the
Outward Processing Program qualify for Outward Processing Program
treatment.
False or inaccurate representations made in the context of the
Outward Processing Program may result in liability under U.S. laws
prohibiting false or misleading statements, including 18 U.S.C. 1001
and 19 U.S.C. 1592. Moreover, participants may be suspended from
participation in the Outward Processing Program for such
representations, for failing to abide by the Outward Processing
Program's record keeping requirements, or for otherwise violating the
terms of the Program.
In the event of credible evidence that a participant has violated
the terms of the Outward Processing Program, the Chairman of CITA will
notify the participant in writing of the alleged violation. The
participant will have 30 days to respond and/or request a
[[Page 69748]]
meeting with CITA representatives to discuss the alleged violation.
After reviewing the evidence and the participant's response, CITA will
determine whether a violation occurred and what penalty, if any, is
appropriate. Penalties may include temporary or permanent suspension
from participation in the Outward Processing Program. In determining
the appropriate penalty, CITA will consider all relevant factors,
including the seriousness of the violation, previous violations by the
participant, the experience of the participant with the Outward
Processing Program, and the steps taken by the participant to prevent
future violations.
CITA has determined that this action falls within the foreign
affairs exception to the rulemaking provisionsof 5 U.S.C. 553(a)(1).
Troy H. Cribb,
Chairman, Committee for the Implementation of Textile Agreements.
Committee for the Implementation of Textile Agreements
December 8, 1999.
Commissioner of Customs
Department of Treasury, Washington, DC 20229
Dear Commissioner: This directive sets forth the requirements
for participation in the Outward Processing Program for textiles and
apparel and provides for enforcement procedures to ensure that these
requirements are met.
Effective on January 1, 2000, no quantitative restrictions shall
apply to qualifying textile products which are exported from a
participating country to the United States under the Outward
Processing Program for textiles and apparel. However, products that
qualify for Outward Processing Program treatment must be certified
by the participating government and shall be monitored by the U.S.
Customs Service. Each shipment must be certified by the placement of
the original square-shaped stamped marking in blue ink on the front
of the commercial invoice. Qualifying products must be either
manufactured (that is, both cut and assembled) in a participating
country or cut in the United States and assembled in a participating
country and must be assembled or manufactured (that is, both cut and
assembled) from fabric formed in the United States.
General Requirements; Qualifying Products
In order to qualify for Outward Processing Program treatment,
qualifying wool apparel products must meet the following
requirements:
(1) the product must be either manufactured from fabric that is
both cut and assembled in a participating country, or from fabric
which is cut in the United States and assembled in a participating
country. A participating country is a country with which the United
States has entered into a bilateral agreement regarding the Outward
Processing Program;
(2) the product must be assembled or manufactured (that is, both
cut and assembled) from fabric which is formed in the United States;
i.e., all fabric components of the product must be U.S. formed. This
requirement applies to all textile components of the product,
including linings and pocketing except as provided in (4) below.
Greige goods imported into, and then finished in, the United States
are not considered fabric formed in the United States. Fabric that
is woven or knitted in the United States from yarn is considered
U.S. formed;
(3) the importer of the qualifying wool apparel product and the
exporter of the U.S. formed fabric or its component parts must be
the same entity or person;
(4) findings and trimmings of non-U.S. origin may be
incorporated into the product provided they do not exceed 25 percent
of the cost of the fabric in the product. Findings and trimmings
include sewing thread, hooks and eyes, snaps, buttons, ``bow buds,''
decorative lace trim, zippers, including zipper tapes, and labels;
(5) upon entry into the United States, the product must be
classified under a subheading of heading 9802 of the Harmonized
Tariff Schedule of the United States (HTS) created to capture such
trade (9802.00.8016) or qualify for the special ``S'' prefix
indicating the item was produced with U.S. formed fabric.
Nothing in these requirements precludes performing any operation
in the United States.
Record keeping Requirements
Participants are required to retain the following documents for
review by Customs:
(1) entry documents made during the quarter;
(2) design style costing sheets or similar documents providing a
complete description of the assembled products;
(3) cutting tickets (if the fabric is cut in the United States)
including the name and location of the cutting facility for those
entries;
(4) mill invoices, including the name of the mill where the
fabric was formed. If the fabric was purchased from a third party,
the participant is responsible for obtaining the mill invoice. The
participant must also obtain a signed statement from a principal at
the mill that the fabric is of U.S. origin. This can be stated
directly on the invoice or on a separate document that relates to
each specific shipment of fabric. Vertically integrated
participants, i.e., participants that both for and cut fabric must
retain an internal transfer document or other documentary proof that
they formed the fabric in the United States;
(5) transportation documents if fabric is cut in the United
States (mill to cutting facility; cutting facility to border/
assembler); and
(6) export documentation.
The participant is obligated to maintain the above documents by
calendar quarter, by country, and by category, and must retain them
for three years from the date of the exportation of the U.S. formed
fabric or U.S. formed and cut fabric. The documents must be
organized and filed (preferably in a single location) to facilitate
U.S. customs review.
Enforcement Procedures and Penalties
All shipments entered pursuant to the Outward Processing Program
shall be monitored. To facilitate the implementation and enforcement
of the Outward Processing Program, Customs is directed to require
entry/entry-summary procedures for all imports for consumption and
withdrawals from warehouse for consumption under the Outward
Processing Program.
In order to determine that participants in the Outward
Processing Program comply fully with the requirements set forth in
this notice, Customs will conduct Post Entry Compliance reviews.
These reviews will be conducted for entries made for the first
quarter of 2000 and shall continue for each successive quarter.
During the course of such review, the participant must provide
Customs officials with evidence, through the documents described
above, that all products entered under the Outward Processing
Program qualify for Outward Processing Program treatment. Customs
shall inform CITA of any violations of the program.
The Committee for the Implementation of Textile Agreements has
determined that this action falls within the foreign affairs
exception to the rulemaking provisionsof 5 U.S.C. 553(a)(1).
Sincerely,
Troy H. Cribb,
Chairman, Committee for the Implementation of Textile Agreements
[FR Doc. 99-32421 Filed 12-13-99; 8:45 am]
BILLING CODE 3510-DR-F