President Signs HELP Into Law: Expands Haiti Benefits, Extends CBTPA

CBTPA, and its TPLs and Brassiere Provisions, Extended Thru 2020

The HELP Act extends the U.S.-Caribbean Basin Trade Partnership Act preference program another ten years, through September 30, 2020 (from September 30, 2010).

The two CBTPA TPLs, for certain knit apparel (other than socks) and certain T-shirts (other than underwear), are also extended through that date, as is the CBTPA preference provision for certain brassieres with U.S. fabric content.

(Haiti is one of a number of CBTPA beneficiary countries.)

Haiti HOPE, and Woven and Knit TPLs, Extended Thru 2020

The Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE) is extended for two years, through September 30, 2020 (from September 30, 2018). The HOPE woven and knit apparel tariff preference levels are similarly extended. (See below for information on the Haiti HOPE value-added TPL.)

Certain Additional Haiti Apparel are Duty-Free Regardless of Fabric Source

The HELP Act adds a new section to the Haiti HOPE law stating that any apparel items in certain tariff numbers that are wholly assembled or knit-to-shape in Haiti from any combination of fabrics, fabric components, knit-to-shape, or yarns, and that are imported to the U.S. directly from Haiti or the Dominican Republic are duty-free, without regard to the source of the fabric, fabric components, knit-to-shape, or yarns from which the item in made.

Cat 334 -- Men/Boys Cotton Coats

Cat 335 -- Women/Girls Cotton Coats

Cat 336 -- Cotton Dresses

Cat 338 -- Men/Boys Cotton Knit Shirts

Cat 339 -- Women/Girls Cotton Knit Shirts/Blouses

Cat 342 -- Cotton Skirts

Cat 350 -- Cotton Dressing Gowns, Robes, etc.

Cat 351 -- Cotton Nightwear, Pajamas

Cat 433 -- Men/Boys Suit-Type Coats (Wool)

Cat 434 -- Other Men/Boys Wool Coats

Cat 435 -- Women/Girls Wool Coats

Cat 438 -- Wool Knit Shirts/Blouses

Cat 633 -- Man-Made Fiber Suit-Type Coats

Cat 634 -- Other Men/Boys Man-Made Fiber Coats

Cat 635 -- Women/Girls Man-Made Fiber Coats

Cat 636 -- Man-Made Fiber Dresses

Cat 638 -- Men/Boys Man-Made Fiber Knit Shirts

Cat 639 -- Women/Girls Man-Made Fiber Knit Shirts/Blouses

Cat 651 -- Man-Made Fiber Nightwear/Pajamas

Certain Additional Haiti Made-Up Textile Articles are Duty-Free Regardless of Yarn or Fiber Source

The HELP Act amends the Haiti HOPE law to state that made-up textile articles in the following tariff numbers that are wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns and that are imported directly from Haiti or the Dominican Republic would enter the United States free of duty, without regard to the source of the fabric, fabric components, components knit-to-shape, or yarns from which the article is made:

Cat 363 -- Cotton Terry/Other Pile Towels

Cat 369 -- Other Cotton Manufactures

Cat 465 -- Wool Floor Coverings

Cat 469 -- Other Wool Manufactures

Cat 665 -- Man-Made Fiber Floor Coverings

Cat 666 -- Other Made-Made Fiber Furnishings

Cat 669 -- Other Man-Made Manufactures

Cat 899 -- Other Silk/Vegetable Blend Manufactures

Cat 900 -- (residual Haiti HOPE category number)

Other Made-Up Textile Articles (no category number)

HOPE Woven or Knit TPLs Would Increase if Heavily Utilized

The HELP Act creates a new special rule for the Haiti HOPE Woven and Knit TPLs to allow the President to increase a TPL to not more than 200 million square meter equivalents (SMEs), if 52 million SMEs of the TPL enters the U.S. during any of its one-year TPL periods (effective with the period starting on October 1, 2009).

(The Woven and Knit TPLs currently have a limit of 70 million SMEs each.)

Woven apparel exception. This increase is not be available for the Woven TPL, if such heavy utilization was due to the importation of the following tariff numbers:

Cat 347 - Men/Boys Cotton Trousers/Breeches/Shorts

Cat 348 -- Women/Girls Cotton Trousers/Slacks/Shorts

Cat 647 -- Men/Boys Man-Made Fiber Trousers/Breeches/Shorts

Cat 648 -- Women/Girls Man-Made Fiber Slacks/Breeches Shorts

Knit apparel limited exception. Only an increase to 85 million SME is available for the knit TPL, if such heavy utilization was due to the importation of the following tariff numbers (other than shirts with plackets and pointed collars):

Verification of no illegal transshipment. The Commissioner responsible for Customs and Border Protection must verify (not later than April 1, July 1, October 1, and January 1 of each year) that apparel articles imported into the under this heavy utilization provision are not being unlawfully transshipped into the U.S.

Report to President. If CBP determines that articles are being unlawfully transshipped, HELP Act requires that determination to be reported to the President.

Quantitative limit could be reduced. In any one-year period during which preferential treatment is extended under the HELP Act, and during which CBP determines that transshipments are occurring, the Act allows the President to modify the quantitative limitation to account for such transshipments. Notice of such modifications would be published in the Federal Register.

‘3 for 1’ Earned Import Allowance Rule Lowered to ‘2 for 1’

The HELP Act amends the Haiti HOPE law to make the current Earned Import Allowance program for certain Haiti apparel a ‘2 for 1’ program by providing one square meter equivalent (SME) credit to a qualifying apparel producer for every two SMEs of ‘qualifying woven fabric’ or ‘qualifying knit fabric’ that the qualifying apparel producer can demonstrate it purchased for the manufacture of apparel wholly assembled or knit to shape in Haiti.

Haiti’s prior Earned Import Allowance program was a ‘3 for 1’ program, as one SME credit is issued for every three SMEs of qualifying fabric used.

(See ITT’s Online Archives or 09/17/08 news, (Ref: 08091710), for BP summary providing additional details on Haiti’s Earned Import Allowance program.)

Value Added Rule, TPL Would be Revised, Extended

The HELP Act revises and extends through December 19, 2018 (from December 19, 2011) the Haiti HOPE law’s value added rule, which provides duty-free treatment to apparel articles wholly assembled or knit-to-shape in Haiti from any combination of fabrics, fabric components, components knit-to-shape, and yarns, as long as a specified value percentage is from Haiti, a U.S. free trade agreement partner, a specified preference program beneficiary, or a combination thereof, and certain conditions are met.

The Act also revises the specified value percentage from the current 55% to 50% (through December 19, 2015), 55% (for December 20, 2015 through December 19, 2017), and 60% (for December 20, 2017 -- December 19, 2018).

With respect to the value added rule’s TPL, H.R. 5160 extends it through December 19, 2018 (from December 19, 2011). The TPL will continue to be set at 1.25% of the aggregate SMEs of all apparel articles imported into the U.S. in the most recent 12-month period for which data are available.

Duty-Free Treatment for Wire Harnesses Extended 5 Years

The HELP Act extends the duty-free provision for wire harnesses in Haiti HOPE law for an additional five years, until December 20, 2016.

(The Haiti HOPE law provides duty-free treatment to any wire harness automotive component that is the product or manufacture of Haiti and is imported directly from Haiti to the U.S. if the sum of (i) the cost or value of the materials produced in Haiti or one or more countries described in 19 USC 2703a(b)(2)(C), or any combination thereof, plus (ii) the direct costs of processing operations (as defined in 19 USC 2703(a)(3) performed in Haiti or the U.S., or both, is not less than 50% of the declared customs value of such component.)

CBP Must Provide Support to Haitian Customs Authorities

The HELP Act requires U.S. Customs and Border Protection to provide certain support services to Haitian customs authorities, including:

Rapid response team for Haiti. The CBP Commissioner is required, in consultation with the U.S. Coast Guard, the Drug Enforcement Agency, and appropriate federal agencies, to seek to send a rapid response team to Haiti to assess the needs of Haiti’s customs authorities and provide immediate assistance, as warranted, particularly with respect to reestablishing full capacity for commercial port operations at the seaport at Port-au-Prince; facilitating trade between the U.S. and Haiti under the Caribbean Basin Economic Recovery Act (CBERA), as amended by this Act; preventing unlawful transshipment of goods through Haiti to the U.S.; etc.

Report to Congress. Not later than 75 days after the date of the enactment, the CBP Commissioner must prepare and submit to the specified congressional Committees a report summarizing the results of the assessment of Haiti’s customs authorities (see bill for specific items to be included in the report).

Support team for Haiti. The CBP Commissioner is required, in consultation with other appropriate Federal agencies, to seek to establish a support team in Haiti for the purpose of helping to meet the short-term and long-term technical, capacity-building, and training needs of the Haitian customs authorities. This support team terminates on September 30, 2020.

Authorization of appropriations. H.R. 5160 authorizes appropriations to CBP as follows (i) $100,000 to help meet the immediate infrastructure needs of the Haitian customs authorities for the purpose of facilitating trade between the U.S. and Haiti under CBERA, as amended by H.R. 5160; and (ii) $750,000 for each of the fiscal years 2011 through 2020 for the purpose of maintaining the CBP support team (described above).

(H.R. 5160 would fund the above changes by extending the merchandise processing fee (MPF) and certain other Customs user fees for 2-6 months. H.R. 5160 would also makes certain revisions to provisions on corporate estimated taxes in Section 202(b) of the Corporate Estimated Tax Shift Act of 2009.)

(See ITT's Online Archives or 05/19/10 news, 10051910, for BP summary of Haiti's recovery plan which calls for new ports, textile centers.

See ITT’s Online Archives or 05/07/10 news, 10050731, for BP summary of Senate passage of HELP Act. See ITT’s Online Archives or 05/06/10 news, 10050647, for BP summary of House passage of HELP Act.

See ITT’s Online Archives or 03/10/10 news, 10031005, for BP summary on Senate Finance plans for trade preference reform, Haiti legislation.

See ITT’s Online Archives or 02/17/10 news, 10021715, for BP summary on the USTR’s “Plus One” for Haiti program to encourage Haitian textile production.)