View all text of Subchapter V [§ 2461 - § 2467]
§ 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.)