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G/C/W/508/Rev.2 Page 27

`(i) the cost or value of the materials produced in Haiti or one or more countries described in subparagraph (C), or any combination thereof, plus

`(ii) the direct costs of processing operations (as defined in section 213(a)(3)) performed in Haiti or one or more countries described in subparagraph (C), or any combination thereof,

is not less than the applicable percentage (as defined in subparagraph (E)(i)) of the declared customs value of such apparel articles.

`(B) DEDUCTIONS- In calculating cost or value under subparagraph (A)(i), there shall be deducted the cost or value of--

`(i) any foreign materials that are used in the production of the apparel articles in Haiti; and

`(ii) any foreign materials that are used in the production of the materials described in subparagraph (A)(i).

`(C) COUNTRIES DESCRIBED- The countries referred to in subparagraph (A) are the following:

`(i) The United States.

`(ii) Any country that is a party to a free trade agreement with the United States that is in effect on the date of the enactment of the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, or that enters into force under the Bipartisan Trade Promotion Authority Act of 2002 (19 U.S.C. 3801 et seq.).

`(iii) Any country designated as a beneficiary country under section 213(b)(5)(B) of this Act.

`(iv) Any country designated as a beneficiary country under section 506A(a)(1) of the Trade Act of 1974 (19 U.S.C. 2466a(a)(1)), if a finding has been made by the President or the President's designee, and published in the Federal Register, that the country has satisfied the requirements of section 113 of the African Growth and Opportunity Act (19 U.S.C. 3722).

`(v) Any country designated as a beneficiary country under section 204(b)(6)(B) of the Andean Trade Preference Act (19 U.S.C. 3203(b)(6)(B)).

`(D) ANNUAL AGGREGATION-

`(i) INITIAL APPLICABLE 1-YEAR PERIOD- In the initial applicable 1-year period, the requirements under subparagraph (A) relating to applicable percentage may also be met for articles of a producer or an entity controlling production that enter during the initial applicable 1-year period by aggregating--

`(I) the cost or value of materials under clause (i) of subparagraph (A), and

`(II) the direct costs of processing operations under clause (ii) of subparagraph (A),

of all apparel articles of that producer or entity controlling production that are wholly assembled, or are knit-to-shape, in Haiti and are entered during the initial applicable 1-year period.

`(ii) OTHER APPLICABLE 1-YEAR PERIODS- In each of the second, third, fourth, and fifth applicable 1-year periods, the requirements under subparagraph (A) relating to applicable percentage may also be met for articles of a producer or an entity controlling production that enter during the applicable 1-year period by aggregating--

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