04-28445. United States-Israel Free Trade Area Implementation Act; Designation of Qualifying Industrial Zones

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice.

SUMMARY:

Under the United States-Israel Free Trade Area Implementation Act (“IFTA Act”), articles of qualifying industrial zones encompassing portions of Israel and Jordan or Israel and Egypt are eligible to receive duty-free treatment. Effective upon publication of this notice, the United States Trade Representative, pursuant to authority delegated by the President, is designating the Greater Cairo zone, Alexandria zone, and Suez Canal zone as qualifying industrial zones under the IFTA Act.

FOR FURTHER INFORMATION CONTACT:

Edmund Saums, Director for Middle East Affairs, [phone], Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508.

SUPPLEMENTARY INFORMATION:

Pursuant to authority granted under section 9 of the United States-Israel Free Trade Area Implementation Act of 1985 (“IFTA Act”), as amended (19 U.S.C. 2112 note), Presidential Proclamation 6955 of November 13, 1996 (61 FR 58761) proclaimed certain tariff treatment for articles of the West Bank, the Gaza Strip, and qualifying industrial zones. In particular, the Presidential Proclamation modified general notes 3 and 8 of the Harmonized Tariff Schedule of the United States: (a) To provide duty-free treatment to qualifying articles that are the product of the West Bank, the Gaza Strip or a qualifying industrial zone and are entered in accordance with the provisions of section 9 of the IFTA Act; (b) to provide that articles of Israel may be treated as though they were articles directly shipped from Israel for the purposes of the United States-Israel Free Trade Area Agreement (“the Agreement”) even if shipped to the United States from the West Bank, the Gaza Strip, or a qualifying industrial zone, if the articles otherwise meet the requirements of the Agreement; and (c) to provide that the cost or value of materials produced in the West Bank, the Gaza Strip, or a qualifying industrial zone may be included in the cost or value of materials produced in Israel under section 1(c)(i) of Annex 3 of the Agreement and that the direct costs of processing operations performed in the West Bank, the Gaza Strip, or a qualifying industrial zone may be included in the direct costs of processing operations performed in Israel under section 1(c)(ii) of Annex 3 of the Agreement.

Section 9(e) of the IFTA Act defines a “qualifying industrial zone” as an area that “(1) encompasses portions of the territory of Israel and Jordan or Israel and Egypt; (2) has been designated by local authorities as an enclave where merchandise may enter without payment of duty or excise taxes; and (3) has been specified by the President as a qualifying industrial zone.”

Presidential Proclamation 6955 delegated to the United States Trade Representative the authority to designate qualifying industrial zones.

The United States Trade Representative has previously designated qualifying industrial zones under Section 9 of the IFTA Act on March 13, 1998 (63 FR 12572), March 19, 1999 (64 FR 13623), October 15, 1999 (64 FR 56015), October 24, 2000 (65 FR 64472), December 12, 2000 (65 FR 77688), June 15, 2001 (66 FR 32660), and January 28, 2004 (69 FR 4199).

The governments of Israel and Egypt jointly requested in a letter submitted to the United States Trade Representative on December 7, 2004, the designation as qualifying industrial zones of areas comprising a Greater Cairo zone, Alexandria zone, and Suez Canal zone. The names and locations of the factories comprising these three zones are specified on maps and materials submitted by Egypt and Israel and on file with the Office of the U.S. Trade Representative. Israel and Egypt have agreed that merchandise may enter, without payment of duty or excise taxes, areas under their respective customs control that comprise the Greater Cairo zone, Alexandria zone, and Suez Canal zone. In addition, Israel and Egypt have agreed to a “Protocol Between the Government of the State of Israel and the Government of the Arab Republic of Egypt On Qualifying Industrial Zones' that provides for the operation and administration of these zones.

Accordingly, the Greater Cairo zone, Alexandria zone, and Suez Canal zone meet the criteria under sections 9(e)(1) and (2) of the IFTA Act.

Therefore, pursuant to the authority delegated to me by Presidential Proclamation 6955, I hereby designate the areas occupied by the factories that comprise the Greater Cairo zone, Alexandria zone, and Suez Canal zone, as specified on maps and materials received from Egypt and Israel, as qualifying industrial zones under section 9 of the IFTA Act, effective upon the date of publication of this notice, applicable to articles shipped from these qualifying industrial zones after such date.

Dated: December 14, 2004.

Robert B. Zoellick,

United States Trade Representative.