Collapse to view only § 2463. Designation of eligible articles
- § 2461. Authority to extend preferences
- § 2462. Designation of beneficiary developing countries
- § 2463. Designation of eligible articles
- § 2464. Review and report to Congress
- § 2465. Date of termination
- § 2466. Agricultural exports of beneficiary developing countries
- § 2466a. Designation of sub-Saharan African countries for certain benefits
- § 2466b. Termination of benefits for sub-Saharan African countries
- § 2467. Definitions
§ 2461. Authority to extend preferences
The President may provide duty-free treatment for any eligible article from any beneficiary developing country in accordance with the provisions of this subchapter. In taking any such action, the President shall have due regard for—
(1) the effect such action will have on furthering the economic development of developing countries through the expansion of their exports;
(2) the extent to which other major developed countries are undertaking a comparable effort to assist developing countries by granting generalized preferences with respect to imports of products of such countries;
(3) the anticipated impact of such action on United States producers of like or directly competitive products; and
(4) the extent of the beneficiary developing country’s competitiveness with respect to eligible articles.
(Pub. L. 93–618, title V, § 501, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1917.)
§ 2462. Designation of beneficiary developing countries
(a) Authority to designate countries
(1) Beneficiary developing countries
(2) Least-developed beneficiary developing countries
(b) Countries ineligible for designation
(1) Specific countriesThe following countries may not be designated as beneficiary developing countries for purposes of this subchapter:
(A) Australia.
(B) Canada.
(C) European Union member states.
(D) Iceland.
(E) Japan.
(F) Monaco.
(G) New Zealand.
(H) Norway.
(I) Switzerland.
(2) Other bases for ineligibilityThe President shall not designate any country a beneficiary developing country under this subchapter if any of the following applies:
(A) Such country is a Communist country, unless—
(i) the products of such country receive nondiscriminatory treatment,
(ii) such country is a WTO Member (as such term is defined in section 3501(10) of this title) and a member of the International Monetary Fund, and
(iii) such country is not dominated or controlled by international communism.
(B) Such country is a party to an arrangement of countries and participates in any action pursuant to such arrangement, the effect of which is—
(i) to withhold supplies of vital commodity resources from international trade or to raise the price of such commodities to an unreasonable level, and
(ii) to cause serious disruption of the world economy.
(C) Such country affords preferential treatment to the products of a developed country, other than the United States, which has, or is likely to have, a significant adverse effect on United States commerce.
(D)
(i) Such country—(I) has nationalized, expropriated, or otherwise seized ownership or control of property, including patents, trademarks, or copyrights, owned by a United States citizen or by a corporation, partnership, or association which is 50 percent or more beneficially owned by United States citizens,(II) has taken steps to repudiate or nullify an existing contract or agreement with a United States citizen or a corporation, partnership, or association which is 50 percent or more beneficially owned by United States citizens, the effect of which is to nationalize, expropriate, or otherwise seize ownership or control of property, including patents, trademarks, or copyrights, so owned, or(III) has imposed or enforced taxes or other exactions, restrictive maintenance or operational conditions, or other measures with respect to property, including patents, trademarks, or copyrights, so owned, the effect of which is to nationalize, expropriate, or otherwise seize ownership or control of such property,
unless clause (ii) applies.
(ii) This clause applies if the President determines that—(I) prompt, adequate, and effective compensation has been or is being made to the citizen, corporation, partnership, or association referred to in clause (i),(II) good faith negotiations to provide prompt, adequate, and effective compensation under the applicable provisions of international law are in progress, or the country described in clause (i) is otherwise taking steps to discharge its obligations under international law with respect to such citizen, corporation, partnership, or association, or(III) a dispute involving such citizen, corporation, partnership, or association over compensation for such a seizure has been submitted to arbitration under the provisions of the Convention for the Settlement of Investment Disputes, or in another mutually agreed upon forum,
and the President promptly furnishes a copy of such determination to the Senate and House of Representatives.
(E) Such country fails to act in good faith in recognizing as binding or in enforcing arbitral awards in favor of United States citizens or a corporation, partnership, or association which is 50 percent or more beneficially owned by United States citizens, which have been made by arbitrators appointed for each case or by permanent arbitral bodies to which the parties involved have submitted their dispute.
(F) Such country aids or abets, by granting sanctuary from prosecution to, any individual or group which has committed an act of international terrorism or the Secretary of State makes a determination with respect to such country under section 4605(j)(1)(A) 1
1 See References in Text note below.
of title 50 or such country has not taken steps to support the efforts of the United States to combat terrorism.(G) Such country has not taken or is not taking steps to afford internationally recognized worker rights to workers in the country (including any designated zone in that country).
(H) Such country has not implemented its commitments to eliminate the worst forms of child labor.
Subparagraphs (D), (E), (F), (G), and (H) (to the extent described in section 2467(6)(D) of this title) shall not prevent the designation of any country as a beneficiary developing country under this subchapter if the President determines that such designation will be in the national economic interest of the United States and reports such determination to the Congress with the reasons therefor.
(c) Factors affecting country designationIn determining whether to designate any country as a beneficiary developing country under this subchapter, the President shall take into account—
(1) an expression by such country of its desire to be so designated;
(2) the level of economic development of such country, including its per capita gross national product, the living standards of its inhabitants, and any other economic factors which the President deems appropriate;
(3) whether or not other major developed countries are extending generalized preferential tariff treatment to such country;
(4) the extent to which such country has assured the United States that it will provide equitable and reasonable access to the markets and basic commodity resources of such country and the extent to which such country has assured the United States that it will refrain from engaging in unreasonable export practices;
(5) the extent to which such country is providing adequate and effective protection of intellectual property rights;
(6) the extent to which such country has taken action to—
(A) reduce trade distorting investment practices and policies (including export performance requirements); and
(B) reduce or eliminate barriers to trade in services; and
(7) whether or not such country has taken or is taking steps to afford to workers in that country (including any designated zone in that country) internationally recognized worker rights.
(d) Withdrawal, suspension, or limitation of country designation
(1) In general
(2) Changed circumstances
(3) Advice to Congress
(e) Mandatory graduation of beneficiary developing countries
(f) Congressional notification
(1) Notification of designation
(A) In general
(B) Designation as least-developed beneficiary developing country
(2) Notification of termination
(Pub. L. 93–618, title V, § 502, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1917; amended Pub. L. 104–295, § 35(a), Oct. 11, 1996, 110 Stat. 3538; Pub. L. 106–200, title IV, § 412(a), May 18, 2000, 114 Stat. 298; Pub. L. 107–210, div. D, title XLI, § 4102(a), Aug. 6, 2002, 116 Stat. 1040.)
§ 2463. Designation of eligible articles
(a) Eligible articles
(1) Designation
(A) In general
(B) Least-developed beneficiary developing countries
(C) Three-year rule
(2) Rule of origin
(A) General ruleThe duty-free treatment provided under this subchapter shall apply to any eligible article which is the growth, product, or manufacture of a beneficiary developing country if—
(i) that article is imported directly from a beneficiary developing country into the customs territory of the United States; and
(ii) the sum of—(I) the cost or value of the materials produced in the beneficiary developing country or any two or more such countries that are members of the same association of countries and are treated as one country under section 2467(2) of this title, plus(II) the direct costs of processing operations performed in such beneficiary developing country or such member countries,
is not less than 35 percent of the appraised value of such article at the time it is entered.
(B) ExclusionsAn article shall not be treated as the growth, product, or manufacture of a beneficiary developing country by virtue of having merely undergone—
(i) simple combining or packaging operations, or
(ii) mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the article.
(3) RegulationsThe Secretary of the Treasury, after consulting with the United States Trade Representative, shall prescribe such regulations as may be necessary to carry out paragraph (2), including, but not limited to, regulations providing that, in order to be eligible for duty-free treatment under this subchapter, an article—
(A) must be wholly the growth, product, or manufacture of a beneficiary developing country, or
(B) must be a new or different article of commerce which has been grown, produced, or manufactured in the beneficiary developing country.
(b) Articles that may not be designated as eligible articles
(1) Import-sensitive articlesThe President may not designate any article as an eligible article under subsection (a) if such article is within one of the following categories of import-sensitive articles:
(A) Except as provided in paragraphs (4) and (5),1
1 See References in Text note below.
textile and apparel articles which were not eligible articles for purposes of this subchapter on January 1, 1994, as this subchapter was in effect on such date.(B) Watches, except those watches entered after June 30, 1989, that the President specifically determines, after public notice and comment, will not cause material injury to watch or watch band, strap, or bracelet manufacturing and assembly operations in the United States or the United States insular possessions.
(C) Import-sensitive electronic articles.
(D) Import-sensitive steel articles.
(E) Except as provided in paragraph (5),1 footwear, handbags, luggage, flat goods, work gloves, and leather wearing apparel which were not eligible articles for purposes of this subchapter on January 1, 1995, as this subchapter was in effect on such date.
(F) Import-sensitive semimanufactured and manufactured glass products.
(G) Any other articles which the President determines to be import-sensitive in the context of the Generalized System of Preferences.
(2) Articles against which other actions taken
(3) Agricultural products
(4) Certain hand-knotted or hand-woven carpets
(5)2
2 So in original. Two pars. (5) have been enacted.
Certain cotton articles(5)2 Certain luggage and travel articlesNotwithstanding subparagraph (A) or (E) of paragraph (1), the President may designate the following as eligible articles under subsection (a):
(A) Articles classifiable under subspan 4202.11.00, 4202.12.40, 4202.21.60, 4202.21.90, 4202.22.15, 4202.22.45, 4202.31.60, 4202.32.40, 4202.32.80, 4202.92.15, 4202.92.20, 4202.92.45, or 4202.99.90 of the Harmonized Tariff Schedule of the United States.
(B) Articles classifiable under statistical reporting number 4202.12.2020, 4202.12.2050, 4202.12.8030, 4202.12.8070, 4202.22.8050, 4202.32.9550, 4202.32.9560, 4202.91.0030, 4202.91.0090, 4202.92.3020, 4202.92.3031, 4202.92.3091, 4202.92.9026, or 4202.92.9060 of the Harmonized Tariff Schedule of the United States, as such statistical reporting numbers are in effect on June 29, 2015.
(c) Withdrawal, suspension, or limitation of duty-free treatment; competitive need limitation
(1) In general
(2) Competitive need limitation
(A) Basis for withdrawal of duty-free treatment
(i) In generalExcept as provided in clause (ii) and subject to subsection (d), whenever the President determines that a beneficiary developing country has exported (directly or indirectly) to the United States during any calendar year beginning after December 31, 1995—(I) a quantity of an eligible article having an appraised value in excess of the applicable amount for the calendar year, or(II) a quantity of an eligible article equal to or exceeding 50 percent of the appraised value of the total imports of that article into the United States during any calendar year,
the President shall, not later than November 1 of the next calendar year, terminate the duty-free treatment for that article from that beneficiary developing country.
(ii) Annual adjustment of applicable amountFor purposes of applying clause (i), the applicable amount is—(I) for 1996, $75,000,000, and(II) for each calendar year thereafter, an amount equal to the applicable amount in effect for the preceding calendar year plus $5,000,000.
(B) “Country” defined
(C) Redesignations
(D) Least-developed beneficiary developing countries and beneficiary sub-Saharan African countries
(E) Articles not produced in the United States excluded
(F) De minimis waivers
(i) In general
(ii) Applicable amountFor purposes of applying clause (i), the applicable amount is—(I) for calendar year 1996, $13,000,000, and(II) for each calendar year thereafter, an amount equal to the applicable amount in effect for the preceding calendar year plus $500,000.
(d) Waiver of competitive need limitation
(1) In generalThe President may waive the application of subsection (c)(2) with respect to any eligible article of any beneficiary developing country if, before November 1 of the calendar year beginning after the calendar year for which a determination described in subsection (c)(2)(A) was made with respect to such eligible article, the President—
(A) receives the advice of the International Trade Commission under section 1332 of this title on whether any industry in the United States is likely to be adversely affected by such waiver,
(B) determines, based on the considerations described in sections 2461 and 2462(c) of this title and the advice described in subparagraph (A), that such waiver is in the national economic interest of the United States, and
(C) publishes the determination described in subparagraph (B) in the Federal Register.
(2) Considerations by the PresidentIn making any determination under paragraph (1), the President shall give great weight to—
(A) the extent to which the beneficiary developing country has assured the United States that such country will provide equitable and reasonable access to the markets and basic commodity resources of such country, and
(B) the extent to which such country provides adequate and effective protection of intellectual property rights.
(3) Other bases for waiverThe President may waive the application of subsection (c)(2) if, before November 1 of the calendar year beginning after the calendar year for which a determination described in subsection (c)(2) was made with respect to a beneficiary developing country, the President determines that—
(A) there has been a historical preferential trade relationship between the United States and such country,
(B) there is a treaty or trade agreement in force covering economic relations between such country and the United States, and
(C) such country does not discriminate against, or impose unjustifiable or unreasonable barriers to, United States commerce,
and the President publishes that determination in the Federal Register.
(4) Limitations on waivers
(A) In general
(B) Other waiver limits
(i) The President may not exercise the waiver authority provided under this subsection with respect to a quantity of an eligible article entered during any calendar year beginning after 1995, the aggregate appraised value of which exceeds 15 percent of the aggregate appraised value of all articles that have entered duty-free under this subchapter during the preceding calendar year from those beneficiary developing countries which for the preceding calendar year—(I) had a per capita gross national product (calculated on the basis of the best available information, including that of the International Bank for Reconstruction and Development) of $5,000 or more; or(II) had exported (either directly or indirectly) to the United States a quantity of articles that was duty-free under this subchapter that had an aggregate appraised value of more than 10 percent of the aggregate appraised value of all articles that entered duty-free under this subchapter during that year.
(ii) Not later than November 1 of each year, the President should revoke any waiver that has then been in effect with respect to an article for 5 years or more if the beneficiary developing country has exported to the United States (directly or indirectly) during the preceding calendar year a quantity of the article—(I) having an appraised value in excess of 1.5 times the applicable amount set forth in subsection (c)(2)(A)(ii) for that calendar year; or(II) exceeding 75 percent of the appraised value of the total imports of that article into the United States during that calendar year.
(C) Calculation of limitationsThere shall be counted against the limitations imposed under subparagraphs (A) and (B) for any calendar year only that value of any eligible article of any country that—
(i) entered duty-free under this subchapter during such calendar year; and
(ii) is in excess of the value of that article that would have been so entered during such calendar year if the limitations under subsection (c)(2)(A) applied.
(5) Effective period of waiver
(e) International Trade Commission advice
(f) Special rule concerning Puerto Rico
(Pub. L. 93–618, title V, § 503, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1921; amended Pub. L. 106–36, title I, § 1001(a)(7), June 25, 1999, 113 Stat. 130; Pub. L. 106–200, title I, § 111(b), May 18, 2000, 114 Stat. 258; Pub. L. 108–429, title I, § 1555(a), (b), Dec. 3, 2004, 118 Stat. 2578, 2579; Pub. L. 109–432, div. D, title VIII, § 8001, Dec. 20, 2006, 120 Stat. 3195; Pub. L. 114–27, title II, §§ 202, 204, June 29, 2015, 129 Stat. 372; Pub. L. 115–141, div. M, title V, § 502, Mar. 23, 2018, 132 Stat. 1051.)
§ 2464. Review and report to Congress
The President shall submit an annual report to the Congress on the status of internationally recognized worker rights within each beneficiary developing country, including the findings of the Secretary of Labor with respect to the beneficiary country’s implementation of its international commitments to eliminate the worst forms of child labor.
(Pub. L. 93–618, title V, § 504, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1925; amended Pub. L. 106–200, title IV, § 412(c), May 18, 2000, 114 Stat. 299.)
§ 2465. Date of termination
No duty-free treatment provided under this subchapter shall remain in effect after December 31, 2020.
(Pub. L. 93–618, title V, § 505, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1925; amended Pub. L. 105–34, title IX, § 981(a), Aug. 5, 1997, 111 Stat. 902; Pub. L. 105–277, div. J, title I, § 1011(a), Oct. 21, 1998, 112 Stat. 2681–900; Pub. L. 106–170, title V, § 508(a), Dec. 17, 1999, 113 Stat. 1923; Pub. L. 107–210, div. D, title XLI, § 4101(a), Aug. 6, 2002, 116 Stat. 1040; Pub. L. 109–432, div. D, title VIII, § 8002, Dec. 20, 2006, 120 Stat. 3195; Pub. L. 110–436, § 4, Oct. 16, 2008, 122 Stat. 4981; Pub. L. 111–124, § 1, Dec. 28, 2009, 123 Stat. 3484; Pub. L. 112–40, § 1(a), Oct. 21, 2011, 125 Stat. 401; Pub. L. 114–27, title II, § 201(a), June 29, 2015, 129 Stat. 371; Pub. L. 115–141, div. M, title V, § 501(a), Mar. 23, 2018, 132 Stat. 1050.)
§ 2466. Agricultural exports of beneficiary developing countries
The appropriate agencies of the United States shall assist beneficiary developing countries to develop and implement measures designed to assure that the agricultural sectors of their economies are not directed to export markets to the detriment of the production of foodstuffs for their citizenry.
(Pub. L. 93–618, title V, § 506, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1925.)
§ 2466a. Designation of sub-Saharan African countries for certain benefits
(a) Authority to designate
(1) In generalNotwithstanding any other provision of law, the President is authorized to designate a country listed in section 107 of the African Growth and Opportunity Act [19 U.S.C. 3706] as a beneficiary sub-Saharan African country eligible for the benefits described in subsection (b)—
(A) if the President determines that the country meets the eligibility requirements set forth in section 104 of that Act [19 U.S.C. 3703], as such requirements are in effect on May 18, 2000; and
(B) subject to the authority granted to the President under subsections (a), (d), and (e) of section 2462 of this title, if the country otherwise meets the eligibility criteria set forth in section 2462 of this title.
(2) Monitoring and review of certain countries
(3) Continuing compliance
(A) In general
(B) Notification
(b) Preferential tariff treatment for certain articles
(1) In general
(2) Rules of originThe duty-free treatment provided under paragraph (1) shall apply to any article described in that paragraph that meets the requirements of section 2463(a)(2) of this title, except that—
(A) if the cost or value of materials produced in the customs territory of the United States is included with respect to that article, an amount not to exceed 15 percent of the appraised value of the article at the time it is entered that is attributed to such United States cost or value may be applied toward determining the percentage referred to in subparagraph (A) of section 2463(a)(2) of this title;
(B) the cost or value of the materials included with respect to that article that are produced in one or more beneficiary sub-Saharan African countries or former beneficiary sub-Saharan African countries shall be applied in determining such percentage; and
(C) the direct costs of processing operations performed in one or more such beneficiary sub-Saharan African countries or former beneficiary sub-Saharan African countries shall be applied in determining such percentage.
(3) Rules of origin under this subchapter
(c) Withdrawal, suspension, or limitation of preferential tariff treatment
(1) In general
(2) Notification
(d) Review and public comments on eligibility requirements
(1) In general
(2) Public hearingThe United States Trade Representative shall, not later than 30 days after the date on which the President publishes the notice of review and request for public comments under paragraph (1)—
(A) hold a public hearing on such review and request for public comments; and
(B) publish in the Federal Register, before such hearing is held, notice of—
(i) the time and place of such hearing; and
(ii) the time and place at which such public comments will be accepted.
(3) Petition process
(A) In general
(B) Use of petitions
(4) Out-of-cycle reviews
(A) In general
(B) Congressional notification
(C) Consequences of review
(D) Reports
(E) Initiation of out-of-cycle reviews for certain countries
(e) Beneficiary sub-Saharan African countries, etc.For purposes of this subchapter—
(1) the terms “beneficiary sub-Saharan African country” and “beneficiary sub-Saharan African countries” mean a country or countries listed in section 107 of the African Growth and Opportunity Act [19 U.S.C. 3706] that the President has determined is eligible under subsection (a) of this section.
(2) the term “former beneficiary sub-Saharan African country” means a country that, after being designated as a beneficiary sub-Saharan African country under the African Growth and Opportunity Act [19 U.S.C. 3701 et seq.], ceased to be designated as such a country by reason of its entering into a free trade agreement with the United States.
(Pub. L. 93–618, title V, § 506A, as added Pub. L. 106–200, title I, § 111(a), May 18, 2000, 114 Stat. 257; amended Pub. L. 108–274, § 7(a)(2), July 13, 2004, 118 Stat. 823; Pub. L. 114–27, title I, §§ 104(a), (b), 105, June 29, 2015, 129 Stat. 365.)
§ 2466b. Termination of benefits for sub-Saharan African countries
In the case of a beneficiary sub-Saharan African country, as defined in section 2466a(c) 1
1 See References in Text note below.
of this title, duty-free treatment provided under this subchapter shall remain in effect through September 30, 2025.(Pub. L. 93–618, title V, § 506B, as added Pub. L. 106–200, title I, § 114, May 18, 2000, 114 Stat. 266; amended Pub. L. 108–274, § 7(a)(1), July 13, 2004, 118 Stat. 823; Pub. L. 114–27, title I, § 103(a), June 29, 2015, 129 Stat. 364.)
§ 2467. Definitions
For purposes of this subchapter:
(1) Beneficiary developing country
(2) Country
(3) Entered
(4) Internationally recognized worker rights
The term “internationally recognized worker rights” includes—
(A) the right of association;
(B) the right to organize and bargain collectively;
(C) a prohibition on the use of any form of forced or compulsory labor;
(D) a minimum age for the employment of children, and a prohibition on the worst forms of child labor, as defined in paragraph (6); and
(E) acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.
(5) Least-developed beneficiary developing country
(6) Worst forms of child labor
The term “worst forms of child labor” means—
(A) all forms of slavery or practices similar to slavery, such as the sale or trafficking of children, debt bondage and serfdom, or forced or compulsory labor, including forced or compulsory recruitment of children for use in armed conflict;
(B) the use, procuring, or offering of a child for prostitution, for the production of pornography or for pornographic purposes;
(C) the use, procuring, or offering of a child for illicit activities in particular for the production and trafficking of drugs; and
(D) work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety, or morals of children.
The work referred to in subparagraph (D) shall be determined by the laws, regulations, or competent authority of the beneficiary developing country involved.
(Pub. L. 93–618, title V, § 507, as added Pub. L. 104–188, title I, § 1952(a), Aug. 20, 1996, 110 Stat. 1926; amended Pub. L. 106–200, title IV, § 412(b), May 18, 2000, 114 Stat. 298; Pub. L. 107–210, div. D, title XLI, § 4102(b), Aug. 6, 2002, 116 Stat. 1041.)