CBP Issues Haiti HOPE I and HOPE II Final Rule, Proclamation Modifies HTS for HOPE II

This final rule also includes the changes necessitated by enactment of the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE II) Act of 2008, which requires regulations to be issued no later than September 30, 2008.

In addition, the President issued Proclamation 8296, which effective for goods entered or withdrawn from warehouse on or after October 1, 2008, modified Subchapter XX of Chapter 98, of the Harmonized Tariff Schedule for HOPE II.

HOPE I Duty-Free Apparel Program Revised and Expanded by HOPE II

The duty-free apparel benefits under HOPE I, including the Value-Added and Woven tariff preference levels (TPLs), have been revised by HOPE II. In addition, HOPE II has added new apparel and textile product duty-free benefits.

HOPE II Revisions

HOPE II has made revisions to the existing HOPE I TPLs, and added a new HOPE II TPL and new HOPE II unlimited duty-free benefits for certain apparel and textile products.

Highlights of the HOPE II changes include (partial list):

Direct importation from D.R. allowed. HOPE II allows apparel and textile articles of a producer or entity controlling production to be imported directly from Haiti or the Dominican Republic.

Wholly assembled redefined. The definition of "wholly assembled in Haiti" is liberalized to allow, among other things, minor subassemblies, and minor attachments and minor embellishments not appreciably affecting the identity of the good.

Revised Value-Added TPL. The percentages used to calculate the annual TPL limits for the third through the fifth applicable 1-year periods are revised. Brassieres (9820.62.12) are removed from this TPL. In addition, the language regarding the value-content requirements is revised. (See text of final rule for details.) The time period for this TPL has not be extended; it is effective through December 19, 2011.

Revised Woven TPL. Subject apparel may now be wholly assembled or knit to shape from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs. In addition, the woven TPL is now effective through September 30, 2018, and its limit each year (beginning October 1, 2008) is 70,000,000 square meter equivalents (SME).

New Knit TPL. A new TPL provides for the duty-free treatment of any apparel article of HTS Chapter 61 (except certain T-shirts, singlets, sweatshirts, and pullovers for men and boys) that is wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs. This new TPL is effective from October 1, 2008 through September 30, 2018, and its limit each year is 70,000,000 SME.

New duty-free treatment for apparel/textile products (no limit). New duty-free treatment is provided for certain apparel items, to be effective from October 1, 2008 through September 30, 2018, without quantitative limitations. The articles to which this treatment applies are as follows:

Brassieres. Articles of HTS 6212.10 (brassieres), that are wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs;

Headgear. Articles of HTS 6501, 6502, or 6504, or HTS 6505.90, that are wholly assembled, knit-to-shape, or formed in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs;

Sleepwear. Any of the following apparel articles that is wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs:

Pajama bottoms and other sleepwear for women and girls, of cotton, of HTS 6208.91.30, or of man-made fibers, of HTS 6208.92.00; and

Pajama bottoms and other sleepwear for girls, of other textile materials, of HTS 6208.99.20.

Luggage, handbags, etc. Articles of HTS 4202.12, 4202.22, 4202.32, or 4202.92, that are wholly assembled in Haiti, without regard to the source of the fabric, components, or materials from which the article is made.

DR-CAFTA chapter rule apparel. Any of the following apparel articles that is wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs (this list of items is taken from certain DR-CAFTA GN 29 Chapter rules):

Chapter 61 - Knit Apparel

HTS 6102.20.00, 6102.90.90 (for goods subject to cotton restraints),

HTS 6104.13.20, 6104.19.15, 6104.19.60 (for jackets imported as parts of suit),

HTS 6104.19.80 (for goods subject to cotton or man-made fiber restraints),

HTS 6104.22.00 (for garments described in heading 6102 or jackets and blazers described in heading 6104),

HTS 6104.29.20 (for garments described in heading 6102 or jackets and blazers described in heading 6104, the foregoing subject to cotton restraints)

HTS 6104.32,

HTS 6104.39.20 (for goods subject to cotton restraints),

HTS 6112.11.00 (for women's or girls' garments described in headings 6101 or 6102),

HTS 6113.00.90 (for coats and jackets of cotton, for women or girls), or

HTS 6117.90.90 (for coats and jackets of cotton)

Chapter 62 - Woven Apparel

HTS 6202.12.20, 6202.19.90 (for goods subject to cotton restraints),

HTS 6202.91.20 (for goods for women),

HTS 6202.92.15, 6202.92.20 (other than padded, sleeveless jackets without attachments for sleeves),

HTS 6202.93.45, 6202.99.90 (for goods subject to cotton restraints),

HTS 6203.39.90 (for goods subject to wool restraints),

HTS 6204.12.00 (for jackets imported as parts of suits),

HTS 6204.13.20, 6204.19.20, 6204.19.80 (for jackets imported as parts of suits and subject to cotton restraints, or for goods subject to man-made fiber restraints), 6204.22.30 (for garments described in heading 6202, or for jackets and blazers described in heading 6204),

HTS 6204.23.00, 6204.29, 6204.32, 6204.33.20, 6204.39.80, 6204.42.30 (for garments for girls, other than of corduroy),

HTS 6204.43.40 (for garments for girls),

HTS 6204.44.40 (for garments for girls),

HTS 6205.20.20 (for dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve size stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett clips, individual polybags and hang tags ready for retail sale),

HTS 6205.30.20 (for dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve size stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett clips, individual polybags and hang tags ready for retail sale),

HTS 6207 and 6208 (for boxers, pajamas, and nightwear only),

HTS 6209.20.10, 6210.30.90 (for garments other than of linen),

HTS 6210.50.90 (for anoraks),

HTS 6211.20.15 (for anoraks (including ski-jackets), windbreakers, and similar articles (including padded, sleeveless jackets), for women or girls, of cotton, imported as parts of ski suits),

HTS 6211.20.58 (for goods of cotton),

HTS 6211.41.00 (for jackets and jacket-type garments excluded from heading 6202),

HTS 6211.42.00 (for track suits, other than trousers, or for jackets and jacket-type garments excluded from heading 6202) or

HTS 6212.10 or 6217.90.90 (for coats and jackets, of cotton)

Earned import allowance certificate apparel (no limit). Duty-free treatment is also provided to apparel articles that are wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs, if such apparel articles are accompanied by an earned import allowance certificate issued by the Department of Commerce reflecting the amount of credits equal to the total square meter equivalents of such apparel articles. The duty-free is effective from October 1, 2008, through September 30, 2018, and is not subject to quantitative limitations.

Apparel made with short supply fabrics (no limit). Duty-free treatment is provided to apparel articles that are wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns, without regard to the source of these inputs, if the fabrics, fabric components, components knit-to-shape, or yarns comprising the component that determines the tariff classification of the article are of any of the fabrics or yarns set forth below. This duty-free treatment is effective from October 1, 2008, through September 30, 2018, and is not subject to quantitative limitations.

Fabrics or yarns, to the extent that apparel articles of such fabrics or yarns would be eligible for preferential treatment, without regard to the source of the fabrics or yarns, under Annex 401 of the North American Free Trade Agreement (NAFTA); or

Fabrics or yarns, to the extent that such fabrics or yarns are designated as not being available in commercial quantities for purposes of CBERA, AGOA, ATPA, any other provision, relating to determining whether a textile or apparel article is an originating good eligible for preferential treatment, of a law that implements a free trade agreement entered into by the United States that is in effect at the time the claim for preferential tariff treatment is made.

(See ITT's Online Archives or 06/08/07 news, 07060810, for BP summary of HOPE I TPLs. See ITT's Online Archives or 12/18/07 news, 07121810, for BP summary of CITA's announcement of Haiti HOPE I Value-added TPL level for 07/08.

See ITT's Online Archives or 09/17/08 news, 08091710, for BP summary of ITA's interim procedures for HOPE II '3 for 1' program for Haiti apparel.

See ITT's Online Archives or 06/20/08 news, 08062025, for BP summary of ITC report on HOPE I and HOPE II, stating impact of HOPE I has been minimal to date.

See ITT's Online Archives or 06/27/07 news, 07062720, for Part II of BP's summary of CBP's interim rule on HOPE I, with link to Part I.)

CBP Final Rule (D/N USCBP-2007-0062; CBP Dec. 08-24, FR Pub 09/30/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-23008.pdf

Proclamation 8296 (FR Pub 10/03/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-23562.pdf

ITA Website for HOPE II Earned Import Allowance Program available at http://web.ita.doc.gov/tacgi/eamain.nsf/6e1600e39721316c852570ab0056f719/abf187b4c9ffc0f9852574d00058ff56?OpenDocument