Bills Introduced on Duty-Free Reconstruction Opportunity Zones in Pakistan, Afghanistan
Bills have been introduced in the House and Senate which would authorize the President to designate areas within Afghanistan or certain areas of Pakistan as a Reconstruction Opportunity Zones (ROZ) if the President determines that Afghanistan and Pakistan meet certain eligibility criteria, etc.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
President Has Called on Congress to Pass ROZ Legislation
During his March 27, 2009 announcement of a new strategy for Afghanistan and Pakistan, the President called on Congress to pass legislation creating ROZs in Afghanistan and the border regions of Pakistan. (See ITT's Online Archives or 03/31/09 news, 09033199 1, for previous BP summary.)
House Bill for Duty-Free ROZs
On March 4, 2009, Representative Van Hollen introduced H.R. 13181, the Afghanistan-Pakistan Security and Prosperity Enhancement Act. Highlights of H.R. 1318 include the following provisions:
Articles other than textiles and apparel.The President would be authorized to proclaim duty-free treatment for eligible articles from ROZs if they meet certain general and specific rules of origin.
Specifically, the following would be eligible for duty-free treatment:
any article from a ROZ that has been designated as an eligible article under 19 USC 2463(a)(1)(A) (articles eligible for Generalized System of Preferences (GSP) from all GSP beneficiary countries);
any article from a ROZ located in Afghanistan that the President has designated as an eligible article under 19 USC 2463(a)(1)(B) (articles eligible for GSP from least-developed beneficiary developing countries); or
any article from a ROZ that is not a textile or apparel article, regardless of whether the article has been designated as a GSP eligible article under 19 USC 2463(a)(1)(A) or (B), if, after receiving advice from the International Trade Commission, the President determines that such article is not import sensitive in the context of imports from a ROZ.
Textile and apparel articles.The President would also be authorized to proclaim duty-free treatment for an eligible textile or apparel article if (a) the article is a "covered" article; and (b) the President determines that the country in which the ROZ is located has satisfied the requirements for protecting against unlawful transshipment, etc.
"Covered" articles are certain products that fall within the scope of certain specified textile and apparel category numbers or Harmonized Tariff Schedule (HTS) numbers.
The duty-free treatment would apply to certain textile and apparel articles that meet certain general and special rules of origin. H.R. 1318 contains special rules of origin for (i) certain made-up articles, textile articles in the piece, and certain other textiles and textile articles; (ii) certain knit-to-shape textiles and textile articles; (iii) certain dyed and printed textiles and textile articles, (iv) fabrics of silk, cotton, man-made fiber, or vegetable fiber, and (v) ROZs in Afghanistan.
Duty-free treatment would not be provided to covered textile and apparel articles that are imported from a ROZ in a country unless the President determines that country meets the certain specified criteria (e.g., the adoption of certain enforcement measures to prevent unlawful transshipment etc.)
H.R. 1318 also includes provisions on technical assistance, capacity building, compliance assessment, a remediation program, limitation on providing duty-free treatment, etc.
H.R. 1318 also authorizes the President to: (1) waive duty-free treatment for such articles if it is inconsistent with U.S. national interests; and (2) withdraw, suspend, or limit such treatment.
Benefits through Sept 2024. The duty-free treatment provided for in HR 1318 would remain in effect through September 30, 2024.
Similar Senate Bill for Duty-Free ROZs
On February 26, 2009, a companion bill (similar, but not identical) was introduced in the Senate (S. 496)2 by Senator Cantwell (D). S. 496 has been referred to the Senate Finance Committee. Some of the differences in S. 496 is that the ROZ program would end September 30, 2023, it contains fewer Customs procedures and enforcement provisions, and it does not contain a section on technical assistance, capacity building, etc.
1H.R. 1318 has a bipartisan group of 10 co-sponsors.
2S. 496 has a bipartisan group of 5 co-sponsors.
H.R. 1318 available at http://thomas.loc.gov/cgi-bin/query/C?c111:./temp/c111UPrxEp.
S. 496 available at http://thomas.loc.gov/cgi-bin/query/C?c111:./temp/c111kOMDHO
President Obama's statement available at http://www.whitehouse.gov/the_press_office/Whats-New-in-the-Strategy-for-Afghanistan-and-Pakistan/