06-1734. Interim Procedures for Considering Requests Under the Commercial Availability Provision to the Dominican Republic-Central America-United States Free Trade Agreement

February 21, 2006.

AGENCY:

Committee for the Implementation of Textile Agreements (CITA).

ACTION:

Notice of Interim Procedures and Request for Comments.

SUMMARY:

This notice sets forth the interim procedures the Committee for the Implementation of Textile Agreements (“CITA”) will follow in implementing certain provisions of the Dominican Republic-Central America-United States Free Trade Agreement (“CAFTA-DR” or “Agreement”) Implementation Act. Section 203(o)(4) of the CAFTA-DR Implementation Act establishes procedures for the President to modify the list of fabrics, yarns, or fibers not available in commercial quantities in a timely manner in the countries that are Parties to the CAFTA-DR, as set out in Annex 3.25 of the CAFTA-DR. The President has delegated to CITA the authority to determine whether fabrics, yarns, or fibers are not available in commercial quantities in a timely manner in CAFTA-DR countries and has directed CITA to establish procedures that govern the submission of a request and provide the opportunity for interested entities to submit comments and supporting evidence in any such determination pursuant to the CAFTA-DR Implementation Act. This notice hereby gives notice to interested entities of the procedures CITA will follow in considering such requests and solicits public written comments on these procedures. Comments must be received not later than March 9, 2006 of this notice to the Chairman, Committee for the Implementation of Textile Agreements, Room 3100, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230.

EFFECTIVE DATE:

The date of entry into force of the Dominican-Central America-United States Free Trade Agreement.

FOR FURTHER INFORMATION CONTACT:

Richard Stetson, Office of Textiles and Apparel, U.S. Department of Commerce, [phone].

SUPPLEMENTARY INFORMATION:

Authority: Section 204(o)(4) of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (“CAFTA-DR”) the Statement of Administrative Action (“SAA”), accompanying the CAFTA-DR, at 16-20.

Background

The CAFTA-DR provides a list in Annex 3.25 of the Agreement for fabrics, yarns, and fibers that the Parties to the Agreement have determined are not available in commercial quantities in a timely manner from producers in the United States or other CAFTA-DR countries. A textile and apparel good containing fabrics, yarns, or fibers that is included in Annex 3.25 of the Agreement will be treated as if it is an originating good for purposes of the specific rules of origin in Annex 4.1 of the Agreement, regardless of the actual origin of those inputs. However, all other fabrics, yarns, or fibers of the component that determines the classification of the good must meet the specific rules of origin in Annex 4.1 of the Agreement. The CAFTA-DR provides that the President will establish procedures governing the submission of requests and may determine whether additional fabrics, yarns, or fibers are available or are not available in commercial quantities in a timely manner in the United States or the other CAFTA-DR countries. In addition, the CAFTA-DR establishes that the President may remove a fabric, yarn, or fiber from the list, if it has been added to the list in an unrestricted quantity pursuant to section 203(o), if he determines that the fabric, yarn, or fiber has become available in commercial quantities in a timely manner.

The SAA provides that the President will delegate to CITA his authority under section 203(o)(4) of the Agreement (“Commercial Availability Provision”), to establish procedures for modifying the list of fabrics, yarns, or fibers not available in commercial quantities in a timely manner for Agreement countries, as set out in Annex 3.25 of the Agreement.

These procedures are not subject to the requirement to provide prior notice and opportunity for public comment, pursuant to 5 U.S.C. 553(b)(A) (Administrative Procedures Act).

Procedures for Considering Requests

1.  Introduction

The intent of the CAFTA-DR Commercial Availability Procedures is to foster the use of U.S. and CAFTA-DR products by implementing procedures that allow products to be placed on or removed from a product list, on a timely basis, and in a manner that is consistent with normal business practice. To this end, these procedures are intended to facilitate the transmission, on a timely basis, of order requests and offers to supply such requests; have the market indicate the availability of the supply of products that are the subject of requests; make available promptly, to interested entities and parties, information regarding the requests for products and offers received; ensure wide participation by interested entities and parties; provide careful scrutiny of information provided to substantiate order requests and response offers; and provide timely public dissemination of information used by CITA in making commercial availability determinations.

2.  Definitions

(a) Commercial Availability Request. A “Commercial Availability Request” is a submission from an interested entity requesting that CITA place a good on the list in Annex 3.25 because that fiber, yarn, or fabric is not available in commercial quantities in a timely manner from a producer in the territory of any Party in the CAFTA-DR region.

(b) Interested Entity. An “interested entity” means a government that is a Party to the Agreement, other than the United States; a potential or actual purchaser of a textile or apparel good; or a potential or actual supplier of a textile or apparel good. See section 202(o)(4)(B)(i) of the CAFTA-DR.

(c) Interested Party. An “interested party” means any interested entity that requests to be included on the e-mail notification list for Commercial Availability proceedings. Any interested entity may become an interested party by contacting CITA. See Office of Textile and Apparel, U.S. Department of Commerce, website for details at http://web.ita.doc.gov/​tacgi/​CABroadcast.nsf/​Document?​Openform or send an e-mail to [e-mail].

(d) Official Receipt. The “official receipt” is CITA's e-mail confirmation that it has received both the e-mail version and the original submission signed by the interested entity delivered via express courier.

(e) Request. A “request” refers to the Commercial Availability Request.

(f) Request to Remove or Restrict. A “request to remove or restrict” is a submission from an interested entity requesting that CITA either remove a good or that a quantity restriction be introduced six months after a subject product has been added to Commercial Availability List in an unrestricted quantity pursuant to section 203(o).

(g) Requestor. The “requestor” refers to the interested entity that files a request, either a Commercial Availability Request or a Request to Remove or Restrict, under the CAFTA-DR Commercial Availability provision, for CITA's consideration.

(h) Response with an Offer. A “response with an offer” is a submission from an interested entity to CITA providing its objection to the request or asserting its ability to supply the subject product by providing an offer to supply the subject product described in the request.

(i) Rebuttal Comment. A “rebuttal comment” is a submission from an interested entity providing information in response to evidence or arguments raised in a response submission. Rebuttal comments must be limited to evidence and arguments provided in a response submission.

(j) Single, fiber, yarn, or fabric. The term “single fiber, yarn, or fabric” means a single product, which may be only part of a Harmonized Tariff Schedule of the United States (“HTSUS”) provision.

(k) U.S. Business day. A “U.S. business day” is any calendar day other than a Saturday, Sunday, or a legal holiday. See section 202(o)(4)(B)(i) of the CAFTA-DR Implementation Act.

3. Submissions for Participation the U.S.-CAFTA-DR Commercial Availability Proceeding.

(a) Filing Submission. All submissions for a CAFTA-DR Commercial Availability proceeding (e.g., Commercial Availability Request, Response with an Offer, Rebuttal Comments, and Request to Remove or Restrict) must be in English and must be submitted to the U.S. Department of Commerce's Office of Textiles and Apparel (“OTEXA”) in two forms:

(1) an electronic-mail (“e-mail”) version of the submission must be either in Word or Word-Perfect format and must contain an adequate public summary of any business confidential information sent to [e-mail], which will be posted for public review on the OTEXA's CAFTA-DR Commercial Availability website at http:otexa.ita.doc.gov. No business proprietary information should be submitted in the e-mail@ version of any document; and

(2) the original signed submission must be received via express courier to—Chairman, Committee for the Implementation of Textile Agreements, Room H3100, U.S. Department of Commerce, 14th and Constitution Ave., N.W., Washington, DC 20230. Any business confidential information upon which an interested entity wishes to rely must be included in the original signed submission only.

(3) Brackets must be placed around all business confidential information contained in submissions. Documents containing business confidential information must have a bolded heading stating “Confidential Version.” Documents, including those submitted via e-mail, provided for public release, must have a bolded heading stating “Public Version” and all the business confidential information must be deleted and replaced with asterisks.

(4) Generally, details, such as quantities and lead times for providing the subject product, can be treated as business confidential information. However, the names of manufacturers who were contacted, what was asked generally about the capability to manufacture the subject product, and the responses thereto should be publicly available.

(b) Due Diligence Certification. An interested entity must file a certification of due diligence as described in subsection (b)(1) with each submission containing factual information. If the interested entity has legal counsel or other representative, the legal counsel or other representative must file a certification of due diligence as described in subsection (b)(2) with each submission containing factual information. Accurate representations of material facts submitted to CITA for the CAFTA-DR Commercial Availability proceeding are vital to the integrity of this process and are necessary for CITA's effective administration of the statutory scheme. Each submission containing factual information for CITA's consideration must be accompanied by the appropriate certification regarding the accuracy of the factual information. Any submission that lacks the applicable certifications will be considered an incomplete submission that CITA will reject and return to the submitter. CITA may verify any factual information submitted by interested entities in a CAFTA-DR Commercial Availability proceeding.

(1) For the person responsible for presentation of the factual information: I, (name and title), currently employed by (interested entity), certify that (1) I have read the attached submission, and (2) the information contained in this submission is, to the best of my knowledge, complete and accurate.

(2) For the person's legal counsel or other representative: I, (name), of (law or other firm), counsel or representative to (interested party), certify that (1) I have read the attached submission, and (2) based on the information made available to me by (person), I have no reason to believe that this submission contains any material misrepresentation or omission of fact.

(c) Official Receipt. A submission will be considered officially submitted to CITA only when both the e-mail version and the original signed submission have been received by CITA. CITA will confirm to the requestor and responder that both versions of the request were received and properly submitted by e-mail. CITA's e-mail confirmation shall be considered the “official receipt” of the submission, and also begins the statutory 30 U.S. business day process for CITA's consideration of requests.

4.  Submitting a Request for Consideration in a Commercial Availability Proceeding.

(a) Commercial Availability Request. An interested entity may submit a Commercial Availability request to CITA alleging that a fiber, yarn, or fabric is not available in commercial quantities in a timely manner from a producer in the territory of any Party in the U.S.-CAFTA-DR region.

(b) Contents of a Commercial Availability Request.

(1) Detailed Product Information. The Commercial Availability request must provide a detailed description of the product subject to the request, including, if applicable, fiber content, construction, yarn size, and finishing processes; and the classification of the product under the HTSUS. All measurements must be stated in metric units.

(2) Quantity. The Commercial Availability request must provide the specific quantity of the product needed by the requestor, in standard units of quantity for production of the subject product in the CAFTA-DR region.

(3) Due Diligence. The Commercial Availability request must provide a complete description of the due diligence undertaken by the requestor to determine the subject product's availability in the CAFTA-DR region. Due diligence for the requestor means that it has made reasonable efforts to obtain the subject product from CAFTA-DR manufacturers. The requestor must provide the names and addresses of manufacturers contacted, who was specifically contacted, the exact request that was made, the dates of those contacts, whether a sample of the subject product was provided for review, and the exact response given for the manufacturer's inability to supply the subject product under the same conditions as contained in the Commercial Availability request submitted to CITA, in addition to any other information the requestor believes is relevant. The requestor must submit copies of relevant correspondence, both inquiries and responses, with these manufacturers. Specific details of correspondence with manufacturers, such as quantities and lead times for providing the subject product, can be treated as business confidential. However, the names of domestic manufacturers who were contacted, what was asked generally about the capability to manufacture the subject product, and the responses thereto should be available for public review to ensure proper public participation in the process.

(4) Substitutable Products. The Commercial Availability request may provide, if relevant, the basis for the requestor's belief that other products that are supplied by the domestic industry in commercial quantities in a timely manner are not substitutable for the product(s) that is (are) the subject of the request for purposes of the intended use.

(5) Additional Information. The Commercial Availability request may provide any additional evidence or information believed to be relevant for CITA to determine whether a fiber, yarn, or fabric is not available in commercial quantities in a timely manner from a producer in the territory of any Party in the CAFTA-DR region.

(c) CITA will send e-mail confirmation of official receipt of the Commercial Availability request, which begins the statutory 30 U.S. business day process for considering the Commercial Availability request.

5. Consideration and Acceptance of a Request.

In considering whether to accept a request, CITA will consider and determine whether it provides all the required information specified section 4(b)(1)-(3) in these procedures. CITA will determine whether to accept the request for consideration and investigation not later than two U.S. business days after the official receipt of a request.

(a) Request Rejected. If CITA determines that the request does not contain the required information, the requestor will be notified promptly by e-mail that the request has not been accepted and the reasons for the rejection. A request may be resubmitted with additional information for the subject product and CITA will reevaluate it as a new request.

(b) Request Accepted. If CITA determines that the request contains the required information, CITA will notify interested parties by e-mail that a request has been filed. CITA will post the accepted request on its website for public notice.

6.  Submitting a Response in a Commercial Availability Proceeding.

(a) Response Submission. An interested entity may file a response submission to a request CITA accepted advising CITA of its objection to the request and its ability to supply the subject product by providing an offer to supply the subject product as described in the request. An interested entity will have 10 U.S. business days after official receipt of a request to respond to a request. CITA may, for good cause, extend the time limit, unless expressly precluded by statute.

(b) Contents of a Response with an Offer.

(1) Quantity. The response with an offer must supply the quantity of the requested subject product that the interested entity, e.g., a CAFTA-DR supplier(s) or manufacturer(s), is capable of currently supplying, in standard units of quantity. All measurements must be in metric units.

(2) Production Capability. The response with an offer must report the quantity, in metric units, that the CAFTA-DR manufacturer produced in the preceding 24-month period of the requested subject product.

(i) For products that have experienced cyclical demand or are not currently produced, the manufacturer should indicate the quantity that has been supplied or offered commercially in the past, with an explanation of the reasons it is not currently produced or offered.

(ii) If the requestor has requested a new style, weight, or other variation that is new to the market, then the CAFTA-DR supplier(s) or manufacturer(s) should provide detailed information on its current ability to make the new product.

(iii) If the CAFTA-DR supplier(s) or manufacturer(s) is making a new product that has not yet been offered to the market but could meet the requirements of the subject product, then the CAFTA-DR supplier(s) or manufacturer(s) needs to provide detailed information regarding the product and its ability to meet a request.

(iv) Substitutable Products. The response with an offer may provide, if relevant, the basis for the responder's belief that other products that are supplied by the domestic industry in commercial quantities in a timely manner are substitutable for the product(s) that is the subject of the request for purposes of the intended use.

(3) Due Diligence. The response with an offer must provide a complete description of the due diligence undertaken by the CAFTA-DR supplier(s) or manufacturer(s) to substantiate the ability to supply the subject product.

(i) In the case of new variations of a product, the supplier must substantiate the ability to manufacture the subject product. The supplier must provide sufficient detail of the manufacturing capabilities of the facility that will supply the subject product, in addition to any other information the supplier believes is relevant.

(ii) If some operations, such as finishing, will be completed by other entities, the name of the facility and contact information must be provided.

(4) Location of the CAFTA-DR supplier(s) or manufacturer(s). The response with an offer must provide the name, address, phone number, and e-mail address of a contact person at the facility claimed to be able to supply the subject product.

(c) CITA will confirm official receipt of response submissions by e-mail to the responding interested entity.

7.  Submitting Rebuttal Evidence.

(a) Rebuttal Submission. Any interested entity may submit a rebuttal submission to a response submission. An interested entity must submit its rebuttal submission not later than 4 U.S. business days after the deadline for response submissions. If good cause is shown, CITA may extend the time limit.

(b) Contents of a Rebuttal Submission. The rebuttal submission may respond only to evidence or arguments raised in the response submission and must identify the submission, evidence and/or arguments to which it is responding.

8.  Determination Process.

(a) Not later than 30 U.S. business days after official receipt of a request (or not later than 44 U.S. business days where an extension is provided pursuant to section 8(c)(4) of these procedures), CITA will notify interested parties by e-mail and the public on its website whether the subject product is available in commercial quantities in a timely manner in the CAFTA-DR area and whether an interested entity has objected to the request.

(b) CITA will notify the public of the determination by publication in the Federal Register when the determination results in a change to the Commercial Availability List in Annex 3.25 of the Agreement.

(c) Types of Determinations.

(1) Denial. A denial means that CITA has determined that the subject product is available in commercial quantities in a timely manner in the CAFTA-DR area. If a request is denied, notice of the denial will be posted on the CAFTA Commercial Availability website at http://otexa.ita.doc.gov.

(2) Approval in Unrestricted Quantity. An approval in unrestricted quantities means that CITA has determined that the subject product is not available in commercial quantities in a timely manner in the CAFTA-DA area or that no interested entity has objected to the request. CITA will approve the request in an unrestricted quantity if CITA determines that no CAFTA-DR supplier(s) or manufacturer(s) could fulfill the request for the subject product.

(i) If a request is approved without restriction, a notice will be published in the U.S. Federal Register not later than 30 U.S. business days after the official receipt of a request, adding the subject product to the Commercial Availability List in Annex 3.25 of the CAFTA-DR.

(ii) The effective date of the determination is the notice's date of publication in the U.S. Federal Register.

(3) Approval in Restricted Quantity. An approval in restricted quantities means that CITA has determined that the subject product is not available in sufficient commercial quantities to supply the quantities stated in the request in a timely manner in the CAFTA-DR area. CITA may approve the request in a restricted quantity if CITA determines that a CAFTA-DR supplier(s) or manufacturer(s) could partially fulfill the request for the subject product.

(i) If a request is approved with a restriction, a notice will be published in the Federal Register not later than the 30 U.S. business days after approval, adding the subject product to the Commercial Availability List in Annex 3.25 of the CAFTA-DR with a restricted quantity. The restricted quantity specifies the amount of the subject product that must be obtained from a CAFTA-DR supplier(s) or manufacturer(s) for the product to remain eligible for inclusion on the Commercial Availability List.

(ii) The effective date of the determination will be the date of publication in the U.S. Federal Register.

(iii) Elimination of the Restricted Quantity. Not later than six months after adding a product to the Commercial Availability List with a restricted quantity, CITA may eliminate the restriction if it determines that the subject product is not available in commercial quantities in a timely manner in the CAFTA-DR area.

(A) Within this six-month period, CITA will determine whether the restricted quantity of the subject product specified in the original determination, which was based upon an offer presented by the CAFTA-DR supplier(s) or manufacturer(s), has been met. CITA will solicit comments from the CAFTA-DR supplier(s) or manufacturer(s) and requestor regarding the restricted quantity during the six-month period.

(1) If the CAFTA-DR supplier(s) or manufacture(s)r was unable to provide the specifically offered amount, an explanation must be provided to CITA for its consideration of whether to eliminate the restriction.

(2) In the event that the restricted amount was not obtained from the CAFTA-DR supplier(s) or manufacturer(s), CITA will notify interested entities, by e-mail not later than 30 U.S. business days before the six-month period expires, that it is considering elimination of the quantitative restrictions for the subject product on the Commercial Availability List.

(3) Interested entities may provide information explaining the reasons for being unable to supply the specified offer, which CITA will consider in making a decision on whether to eliminate the quantitative restriction of the subject product.

(B) If CITA determines to eliminate the restricted quantity, a notice will be published in the Federal Register.

(4) Insufficient Information to Determine. CITA will extend its time period for consideration of the request an additional 14 U.S. business days in the event that CITA determines, not later than 30 U.S. business days after official receipt of a request, that it has insufficient information to make a determination regarding the ability of a CAFTA-DR supplier(s) or manufacturer(s) to supply the request based on the submitted information. CITA will normally determine that it does not have sufficient information to make a determination on a request when CITA finds there is inconsistency in material information contained in the request, one or more reply offers to supply the subject product, and/or the rebuttal submissions. CITA will notify interested parties via e-mail that it has extended the time period for CITA's consideration by 14 U.S. business days. CITA also will announce the extension on the website.

(i) Process during Extension Period. During the extended time period, CITA will request that interested entities provide additional evidence to support their claims and information previously submitted to CITA and may meet with interested entities. Such evidence may include inter alia product samples, lab tests, detailed descriptions of product facilities, and comparisons of product performance in the intended end-use of the subject product.

(ii) CITA also will consider evidence in support of claims that CAFTA-DR supplier(s) or manufacturer(s) can supply a substantially similar product to that specified in the request.

(iii) CITA will make a determination, not later than 44 U.S. business days after the official receipt of a request whether to approve, approve with restriction, or deny the request and will follow the notification process accordingly.

(5) Deemed Approval. In the unlikely event that CITA does not make a determination in response to a request, not later than 45 U.S. business days after the official receipt of the request or not later than 60 U.S. business days after the official receipt of the request that was determined to lack sufficient information pursuant to subsection (c)(4), the requested subject product shall be added to the Commercial Availability list, in accordance with the requirements of section 202(o)(4)(D) of the CAFTA-DR.

(6) Whenever the Chairman of CITA receives information concerning, or a request from an interested entity for the review of a final affirmative determination that resulted in a product being added to the Commercial Availability List in Annex 3.25, which shows changed circumstances sufficient to warrant a review of such determination, CITA may conduct a review of such a determination after notifying interested parties by e-mail of the review and posting notice on the website. During a review conducted by CITA under this subsection, the entity seeking revocation of a product from the Commercial Availability List in Annex 3.25 shall have the burden of persuasion with respect to whether there are changed circumstances sufficient to warrant such revocation. Absent a show of good cause, CITA may not review a determination less than 12 months after the date of publication of notice of that determination.

9. Six Month Procedures: Submitting a Request to Remove or Restrict.

(a) Request to Remove or Restrict. An interested entity may file a request with CITA requesting that a product be either removed or that a quantity restriction be introduced six months after a requested subject product has been added to Commercial Availability List in an unrestricted quantity pursuant to Section 203(o).

(b) Content of a Request to Remove or Restrict. The request to remove or restrict must provide the substantive information set forth in subsection 6(b) (Contents of a Response with an Offer).

(c) Procedures.

(1) In considering whether to accept a request to remove or restrict, CITA will follow procedures set forth in section 5 (Consideration and Acceptance of a Request).

(2) If CITA determines to accept the request to remove or restrict, CITA and any responding interested party shall follow procedures and contents set forth in subsections 6(a) and (c) (Response Submission) and section 7 (Submitting Rebuttal Evidence).

(3) As set forth in subsections 8(a) and (b) (Determination Process), CITA will determine whether the subject product of the request to remove or restrict is available in commercial quantities in a timely manner in the CAFTA-DR area not later than 30 U.S. business days after the official receipt of the request.

(i) If CITA determines that the product is available in commercial quantities in a timely manner in the CAFTA-DR area, e.g., that a CAFTA-DR supplier(s) or manufacturer(s) is capable to supply all of the subject product requested originally, then that product will be removed from the Commercial Availability List.

(ii) If CITA determines that the product is available in commercial quantities in a timely manner in the CAFTA-DR area, e.g., that a CAFTA-DR supplier(s) or manufacturer(s) is capable to supply part of the subject product requested originally, then a restricted quantity will be introduced for that product.

(iii) If the Commercial Availability List changes as a result of CITA's determination for the request to remove or restrict, CITA will notify interested parties by e-mail of its determination and will publish a notice of its determination for the request to remove or restrict in the Federal Register.

(A) For removal, the notice will state that textile and apparel articles containing the subject product are not to be treated as originating in a CAFTA-DR country if the subject product is obtained from non-CAFTA-DR sources, effective for goods entered into the United States on or after six months (e.g., 180 calendar days) after the date of publication of the notice.

(B) For restriction, the notice will specify the restricted quantity for the subject product that is to be effective six months after the publication date of the notice.

Philip J. Martello,

Acting Chairman, Committee for the Implementation of Textile Agreements.