[Federal Register Volume 63, Number 24 (Thursday, February 5, 1998)]
[Rules and Regulations]
[Pages 5887-5888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2893]
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DEPARTMENT OF COMMERCE
International Trade Administration
15 CFR Part 303
DEPARTMENT OF THE INTERIOR
Office of Insular Affairs
[Docket No. 971021249-8006-02]
RIN 0625-AA50
Limit on Duty-Free Insular Watches in Calendar Year 1998
AGENCIES: Import Administration, International Trade Administration,
Department of Commerce; Office of Insular Affairs, Department of the
Interior.
ACTION: Final rule.
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SUMMARY: This action amends the ITA regulations, which govern duty-
exemption allocations and duty-refund entitlements for watch producers
in the United States' insular possessions (the Virgin Islands, Guam and
American Samoa) and the Northern Mariana Islands. The amendments
establish the total quantity and respective territorial shares of
insular watches and watch movements which are allowed to enter the
United States free of duty during calendar year 1998 and make a minor
adjustment to the verification of shipments.
EFFECTIVE DATE: March 9, 1998.
FOR FURTHER INFORMATION CONTACT: Faye Robinson, (202) 482-3526.
SUPPLEMENTARY INFORMATION: We published proposed regulatory revisions
on November 5, 1997 (62 FR 59829) and invited comments. We received
comments from the U.S. Small Business Administration contending that we
had not provided sufficient information for the public to evaluate the
merits of the agencies' certification under the Regulatory Flexibility
Act, and that the proposed reduction in the duty-free allocation
exceeded the statutory limit of no more than 10% a year. We address
these comments below.
With respect to the comment concerning the Regulatory Flexibility
Act, we have included a more detailed explanation, including the nature
of the industry, the number of small firms involved, and the effect, if
any, on those firms from the reduction in the annual duty-exemption
watch allocation. See the ``Regulatory Flexibility Act'' section below.
Regarding the contention that the proposed reduction exceeds the
amount specified by the regulations, we agree and have made the
necessary correction. The limit as to the maximum allowable reduction
became a factor this year because of reductions that had been made in
previous years, a factor which was inadvertently overlooked in the
proposed allocation revisions for calendar year 1998. Section
303.3(b)(2) of the Department Regulations (15 CFR 303.3(b)(2))
specifies that ``the total annual duty-exemption shall not be decreased
by more than 10% of the quantity established for the preceding calendar
year, * * *'' The regulations further stipulate that ``[n]o territorial
share shall be less than 500,000 units.'' 15 CFR 303.4(b). The total
annual duty-exemption for 1997 was 4,600,000 units of which 3,100,000
units were allocated to the Virgin Islands, and 500,000 units to Guam,
American Samoa and the Northern Mariana Islands respectively. See
Changes in Procedures for the Insular Possessions Watch Program, 61 FR
55883 (Oct. 30, 1996). The proposed total annual duty-exemption of
4,100,000 units for calendar year 1998
[[Page 5888]]
would have resulted in a reduction of 10.87 percent from total units
allocated for 1997. Accordingly, we have revised the 1998 duty-
exemption such that the total annual duty-exemption has been reduced by
no more than 10 percent from the preceding year. Because all but the
Virgin Islands have been allocated the minimum allowable units, we have
revised the Virgin Islands annual duty-exemption upwards from the
proposed limit of 2,600,000 units to 2,640,000 units. While this change
for the Virgin Islands represents a decrease of 14.84 percent from the
1997 allocation of 3,100,000 units, the total exemption for all of the
insular possessions and the Northern Mariana Islands is within the
governing 10 percent limit set out in the Departments' Regulation. 15
CFR 303.3(b)(2). As we discuss further in the ``Regulatory Flexibility
Act'' section, we believe these allocations are more than sufficient to
meet the needs of the watch companies subject to these regulations.
The insular possessions watch industry provision in Sec. 110 of
Pub. L. No. 97-446 (96 Stat. 2331) (1983) as amended by Sec. 602 of
Pub. L. No. 103-465 (108 Stat. 4991) (1994) additional U.S. Note 5 to
chapter 91 of the Harmonized Tariff Schedule requires the Secretary of
Commerce and the Secretary of the Interior, acting jointly, to
establish a limit on the quantity of watches and watch movements which
may be entered free of duty during each calendar year. The law also
requires the Secretaries to establish the shares of this limited
quantity which may be entered from the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands. Regulations on the
establishment of these quantities and shares are contained in Sec.
303.3 and 303.4 of title 15, Code of Federal Regulations (15 CFR 303.3
and 303.4). The Departments establish for calendar year 1998 a total
quantity of 4,140,000 units and respective territorial shares as shown
in the following table:
Virgin Islands............................................. 2,640,000
Guam....................................................... 500,000
American Samoa............................................. 500,000
Northern Mariana Islands................................... 500,000
The rule also modifies section 303.6(a) by allowing producers to
provide other means of verification satisfactory to the Secretaries
when we are unable to verify shipments through the U.S. Customs
Service.
This final rule does not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism
assessment under Executive Order 12612.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq., the Assistant General Counsel for Legislation and Regulation has
certified to the Chief Counsel, Small Business Administration, that the
rule will not have a significant economic impact on a substantial
number of small entities. This is because the rulemaking affects only
the five watch companies currently participating in the insular
possessions watch program, all of which are located in the Virgin
Islands. In 1996 these companies used less than half of the territorial
share of duty-exemption for the Virgin Islands. Production to date
(according to monthly watch production reports received from the
Government of the Virgin Islands) indicates that these same companies
will again use less than half the territorial share allocated for 1997.
Based on these facts, we conclude that the annual duty-exemption
allocation of 2,640,000 units will more than adequately meet the
aggregate requirements of these Virgin Islands companies for calendar
year 1998. Accordingly, the 1998 annual duty-exemption established for
the Virgin Islands should not impose any cost or have any economic
effect on these small companies.
This action establishes the respective amounts available for
allocation. The allocation itself, based on verified data contained in
the companies' annual applications due by January 31, 1998, will be
published later in 1998, pursuant to 15 CFR 303.5 and 303.6.
Paperwork Reduction Act
This rulemaking involves information collection activities subject
to the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq. which
are currently approved by the Office of Management and Budget under
control number 0625-0134. The amendments would have no effect on the
information burden on the public.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with a collection of information unless it
displays a currently valid OMB Control Number.
It has been determined that this rule is not significant for
purposes of Executive Order 12866.
List of Subjects in 15 CFR Part 303
Administrative practice and procedure, American Samoa, Customs
duties and inspection, Guam, Imports, Marketing quotas, Northern
Mariana Islands, Reporting and recordkeeping requirements, Virgin
Islands, Watches and jewelry.
For reasons set forth above, we are amending 15 CFR Part 303 as
follows:
PART 303--[AMENDED]
1. The authority citation for 15 CFR Part 303 continues to read as
follows:
Authority: Pub. L. 94-241, 90 Stat. 263 (48 U.S.C. 1681, note);
Pub. L. 97-446, 96 Stat. 2331 (19 U.S.C. 1202, note); Pub. L. 103-
465, 108 Stat. 4991.
Sec. 303.6 [Amended]
2. Section 303.6(a) is amended by adding to the second to last
sentence ``, or verified by other means satisfactory to the
Secretaries,'' after the words U.S. Customs Service.
Sec. 303.14 [Amended]
3. Section 303.14(e) is amended by removing ``3,100,000'' and
adding ``2,640,000'' in its place.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
Allen Stayman,
Director, Office of Insular Affairs.
[FR Doc. 98-2893 Filed 2-4-98; 8:45 am]
BILLING CODE 3510-DS-P, 4310-93-P
