ITC Interim Rule on "Abundant Supply" AGOA Fabric/Yarn Determinations (Could Result in TPL Exclusions)
The International Trade Commission (ITC) has issued an interim rule, effective February 27, 2007, which adds a new Part 208 to 19 CFR to provide for ITC investigations, determinations, reports, and petitions from interested parties, regarding "abundant supply" fabric/yarn determinations, as required by recent amendments to the African Growth and Opportunity Act (AGOA).
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(P.L. 109-432, which was signed into law on December 20, 2006, amended AGOA to impose new requirements to exclude, in certain situations, apparel from the AGOA tariff preference level (TPL) sublimit (for apparel made in lesser developed AGOA beneficiary countries (LDBCs) from "third country" fabric/yarn) if "abundant supply" AGOA fabric/yarn is not used.)
Highlights of new 19 CFR Part 208 include the following provisions (partial list):
Petition may be filed by an interested party. A petition may be filed with the ITC by an interested party, including a producer of fabric or yarn in a beneficiary AGOA country, a producer of apparel in a LDBC, or any other person who demonstrates to the satisfaction of the ITC a proper interest in filing a petition.
Contents of petition. The ITC will only consider petitions that address a single yarn or single fabric. To the extent information is not availablefrom government or other sources, the petition may be based on best estimates. The petition must include the product description; statement of interest by the interested party(s); the basis for asserting that the subject fabric or yarn produced in an AGOA beneficiary country is available in commercial quantities for use in LDBCs; certain data on the production, sales, inventories, and capacity of the subject fabric or yarn; certain data on orders from apparel producers and other users; and the estimated production of the subject fabric or yarn, by firm, for the 1-year (fiscal year) period beginning after the date of the ITC's determination; etc.
Institution of investigation. After receipt of a properly filed petition, the ITC will institute an investigation within 10 days, and will publish notice of its institution in the Federal Register. The ITC also has the discretion to hold a public hearing in connection with an investigation.
ITC determinations. The ITC will determine whether the fabric or yarn produced in the beneficiary AGOA country is available in commercial quantities for use in lesser developed beneficiary AGOA countries.
If this determination is affirmative, the ITC will also determine the quantity that will be so available in the applicable 1 year (fiscal year) period beginning after the determination is made. The ITC will provide its determinations to the President, a public version of which will be made available. A summary of the report will also be published in the Federal Register.
Timeframe for ITC determinations. The ITC will make its determinations and transmit its reports to the President by September 25, 2007, with respect to petitions received on or before March 28 and accepted on or before April 11, 2007, and will make its determinations by August 1 of subsequent years with respect to petitions received on or before January 15 and accepted on or before February 1 of those years. (As of April 3, 2007, no petitions have been filed.)
(BP has previously stated that P.L. 109-432 creates a process whereby interested parties (which may include a foreign manufacturer) can petition the ITC to determine whether a fabric or yarn produced in an AGOA beneficiary country(s) is available in commercial quantities for use by LDBCs (i.e., in "abundant supply").
If the determination is affirmative, the ITC will then determine the quantity of such fabric or yarn that will be so available for the 1-year (fiscal year) period following the determination. The ITC will also determine before the end of that 1-year period whether the fabric or yarn will be in abundant supply in the succeeding year; and if so, at what quantity. The ITC will then determine to what extent this quantity of "abundant supply" fabric/yarn was used in the production of TPL sublimit apparel entered during that 1-year period. Any portion that is not used would be added to the next year's quantity.
P.L. 109-432 also deemed denim articles in HTS 5209.42.00 to be in abundant supply, in an amount of 30,000,000 square meters equivalent (SMEs) for the 1-year period beginning October 1, 2006. See ITT's Online Archives or 02/06/07 news, 07020610, for BP summary of P.L. 109-432.)
- Written comments on interim rule due by April 30, 2007
ITC contact - William Gearhart (202) 205-3091
ITC interim rule, FR Pub 02/27/07, available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-3387.pdf
BP Note
The April 6, 2007 version of the 2007 HTS (Rev. 1) contains the new HTS Chapter 98 tariff numbers for the AGOA abundant supply provisions as well as the new AGOA provision for certain non-apparel textile articles. Note that U.S. Customs and Border Protection (CBP) has stated that neither Automated Broker Interface (ABI) nor non-ABI claims under these new AGOA provisions can be made until the Automated Commercial System (ACS) is updated for these new HTS Chapter 98 tariff numbers. (See ITT's Online Archives or 04/06/07 news, 07040610, for BP summary.)