§ 2463. — Designation of eligible articles.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 19USC2463]
TITLE 19--CUSTOMS DUTIES
CHAPTER 12--TRADE ACT OF 1974
SUBCHAPTER V--GENERALIZED SYSTEM OF PREFERENCES
Sec. 2463. Designation of eligible articles
(a) Eligible articles
(1) Designation
(A) In general
Except as provided in subsection (b) of this section, the
President is authorized to designate articles as eligible
articles from all beneficiary developing countries for purposes
of this subchapter by Executive order or Presidential
proclamation after receiving the advice of the International
Trade Commission in accordance with subsection (e) of this
section.
(B) Least-developed beneficiary developing countries
Except for articles described in subparagraphs (A), (B), and
(E) of subsection (b)(1) of this section and articles described
in paragraphs (2) and (3) of subsection (b) of this section, the
President may, in carrying out section 2462(d)(1) of this title
and subsection (c)(1) of this section, designate articles as
eligible articles only for countries designated as least-
developed beneficiary developing countries under section
2462(a)(2) of this title if, after receiving the advice of the
International Trade Commission in accordance with subsection (e)
of this section, the President determines that such articles are
not import-sensitive in the context of imports from least-
developed beneficiary developing countries.
(C) Three-year rule
If, after receiving the advice of the International Trade
Commission under subsection (e) of this section, an article has
been formally considered for designation as an eligible article
under this subchapter and denied such designation, such article
may not be reconsidered for such designation for a period of 3
years after such denial.
(2) Rule of origin
(A) General rule
The 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) Exclusions
An 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) Regulations
The 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 articles
The President may not designate any article as an eligible
article under subsection (a) of this section if such article is
within one of the following categories of import-sensitive articles:
(A) 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) 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
An article shall not be an eligible article for purposes of this
subchapter for any period during which such article is the subject
of any action proclaimed pursuant to section 2253 of this title or
section 1862 or 1981 of this title.
(3) Agricultural products
No quantity of an agricultural product subject to a tariff-rate
quota that exceeds the in-quota quantity shall be eligible for duty-
free treatment under this subchapter.
(c) Withdrawal, suspension, or limitation of duty-free treatment;
competitive need limitation
(1) In general
The President may withdraw, suspend, or limit the application of
the duty-free treatment accorded under this subchapter with respect
to any article, except that no rate of duty may be established with
respect to any article pursuant to this subsection other than the
rate which would apply but for this subchapter. In taking any action
under this subsection, the President shall consider the factors set
forth in sections 2461 and 2462(c) of this title.
(2) Competitive need limitation
(A) Basis for withdrawal of duty-free treatment
(i) In general
Except as provided in clause (ii) and subject to
subsection (d) of this section, 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 July 1 of the next
calendar year, terminate the duty-free treatment for that
article from that beneficiary developing country.
(ii) Annual adjustment of applicable amount
For 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
For purposes of this paragraph, the term ``country'' does
not include an association of countries which is treated as one
country under section 2467(2) of this title, but does include a
country which is a member of any such association.
(C) Redesignations
A country which is no longer treated as a beneficiary
developing country with respect to an eligible article by reason
of subparagraph (A) may, subject to the considerations set forth
in sections 2461 and 2462 of this title, be redesignated a
beneficiary developing country with respect to such article if
imports of such article from such country did not exceed the
limitations in subparagraph (A) during the preceding calendar
year.
(D) Least-developed beneficiary developing countries and
beneficiary sub-Saharan African countries
Subparagraph (A) shall not apply to any least-developed
beneficiary developing country or any beneficiary sub-Saharan
African country.
(E) Articles not produced in the United States excluded
Subparagraph (A)(i)(II) shall not apply with respect to any
eligible article if a like or directly competitive article was
not produced in the United States on January 1, 1995.
(F) De minimis waivers
(i) In general
The President may disregard subparagraph (A)(i)(II) with
respect to any eligible article from any beneficiary
developing country if the aggregate appraised value of the
imports of such article into the United States during the
preceding calendar year does not exceed the applicable
amount for such preceding calendar year.
(ii) Applicable amount
For 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 general
The President may waive the application of subsection (c)(2) of
this section with respect to any eligible article of any beneficiary
developing country if, before July 1 of the calendar year beginning
after the calendar year for which a determination described in
subsection (c)(2)(A) of this section 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 President
In 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 waiver
The President may waive the application of subsection (c)(2) of
this section if, before July 1 of the calendar year beginning after
the calendar year for which a determination described in subsection
(c)(2) of this section 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
The President may not exercise the waiver authority 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 equals or exceeds 30
percent of the aggregate appraised value of all articles that
entered duty-free under this subchapter during the preceding
calendar year.
(B) Other waiver limits
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.
(C) Calculation of limitations
There 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) of this section
applied.
(5) Effective period of waiver
Any waiver granted under this subsection shall remain in effect
until the President determines that such waiver is no longer
warranted due to changed circumstances.
(e) International Trade Commission advice
Before designating articles as eligible articles under subsection
(a)(1) of this section, the President shall publish and furnish the
International Trade Commission with lists of articles which may be
considered for designation as eligible articles for purposes of this
subchapter. The provisions of sections 2151, 2152, 2153, and 2154 of
this title shall be complied with as though action under section 2461 of
this title and this section were action under section 2133 of this title
to carry out a trade agreement entered into under section 2133 of this
title.
(f) Special rule concerning Puerto Rico
No action under this subchapter may affect any tariff duty imposed
by the Legislature of Puerto Rico pursuant to section 1319 of this title
on coffee imported into Puerto Rico.
(Pub. L. 93-618, title V, Sec. 503, as added Pub. L. 104-188, title I,
Sec. 1952(a), Aug. 20, 1996, 110 Stat. 1921; amended Pub. L. 106-36,
title I, Sec. 1001(a)(7), June 25, 1999, 113 Stat. 130; Pub. L. 106-200,
title I, Sec. 111(b), May 18, 2000, 114 Stat. 258.)
Prior Provisions
A prior section 2463, Pub. L. 93-618, title V, Sec. 503, Jan. 3,
1975, 88 Stat. 2069; Pub. L. 96-39, title XI, Sec. 1111(a)(3), July 26,
1979, 93 Stat. 315; Pub. L. 98-573, title V, Sec. 504, Oct. 30, 1984, 98
Stat. 3020; Pub. L. 99-47, Sec. 8(b)(2), June 11, 1985, 99 Stat. 85;
Pub. L. 99-514, title XVIII, Sec. 1889(7), Oct. 22, 1986, 100 Stat.
2926; Pub. L. 100-418, title I, Sec. 1903, Aug. 23, 1988, 102 Stat.
1313; Pub. L. 101-382, title II, Sec. 226, Aug. 20, 1990, 104 Stat. 660;
Pub. L. 103-465, title IV, Sec. 404(e)(3), Dec. 8, 1994, 108 Stat. 4961,
related to eligible articles, prior to the general amendment of this
subchapter by Pub. L. 104-188.
Amendments
2000--Subsec. (c)(2)(D). Pub. L. 106-200 amended heading and text of
subpar. (D) generally. Prior to amendment, text read as follows:
``Subparagraph (A) shall not apply to any least-developed beneficiary
developing country.''
1999--Subsec. (a)(2)(A)(ii). Pub. L. 106-36 added subcl. (II) and
concluding provisions and struck out former subcl. (II) which read as
follows: ``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.''
Section Referred to in Other Sections
This section is referred to in sections 2466a, 3011 of this title;
title 7 sections 7236, 7937.
