19 U.S.C. § 2702 — Beneficiary country

Page 770 TITLE 19—CUSTOMS DUTIES § 2702 tween the United States, Mexico, and Canada on De- cember 17, 1992. ‘‘(2) NAFTA COUNTRY.—The term ‘NAFTA country’ means any country with respect to which the NAFTA is in force. ‘‘(3) WTO AND WTO MEMBER.—The terms ‘WTO’ and ‘WTO member’ have the meanings given those terms in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501).’’ § 2702. Beneficiary country (a) Definitions; termination of designation (1) For purposes of this chapter— (A) The term ‘‘beneficiary country’’ means any country listed in subsection (b) with re- spect to which there is in effect a proclama- tion by the President designating such coun- try as a beneficiary country for purposes of this chapter. Before the President designates any country as a beneficiary country for pur- poses of this chapter, he shall notify the House of Representatives and the Senate of his inten- tion to make such designation, together with the considerations entering into such decision. (B) The term ‘‘entered’’ means entered, or withdrawn from warehouse for consumption, in the customs territory of the United States. (C) The term ‘‘HTS’’ means Harmonized Tar- iff Schedule of the United States. (D) The term ‘‘USMCA’’ has the meaning given that term in section 4502 of this title. (E) The terms ‘‘WTO’’ and ‘‘WTO member’’ have the meanings given those terms in sec- tion 3501 of this title. (F) The term ‘‘former beneficiary country’’ means a country that ceases to be designated as a beneficiary country under this chapter be- cause the country has become a party to a free trade agreement with the United States. (2) If the President has designated any country as a beneficiary country for purposes of this chapter, he shall not terminate such designation (either by issuing a proclamation for that pur- pose or by issuing a proclamation which has the effect of terminating such designation) unless, at least sixty days before such termination, he has notified the House of Representatives and the Senate and has notified such country of his intention to terminate such designation, to- gether with the considerations entering into such decision. (b) Countries eligible for designation as bene- ficiary countries; conditions In designating countries as ‘‘beneficiary coun- tries’’ under this chapter the President shall consider only the following countries and terri- tories or successor political entities: Anguilla Saint Lucia Antigua and Barbuda Saint Vincent and the Gren- adines Bahamas, The Suriname Barbados Trinidad and Tobago Belize Cayman Islands Dominica Montserrat Grenada Netherlands Antilles Guyana Saint Christopher-Nevis Haiti Turks and Caicos Islands Jamaica Virgin Islands, British In addition, the President shall not designate any country a beneficiary country under this chapter— (1) if such country is a Communist country; (2) if such country— (A) has nationalized, expropriated or oth- erwise seized ownership or control of prop- erty owned by a United States citizen or by a corporation, partnership, or association which is 50 per centum or more beneficially owned by United States citizens, (B) has taken steps to repudiate or nul- lify— (i) any existing contract or agreement with, or (ii) any patent, trademark, or other in- tellectual property of, a United States citizen or a corporation, partnership, or association which is 50 per centum or more beneficially owned by United States citizens, the effect of which is to nationalize, expropriate, or otherwise seize ownership or control of property so owned, or (C) has imposed or enforced taxes or other exactions, restrictive maintenance or oper- ational conditions, or other measures with respect to property so owned, the effect of which is to nationalize, expropriate, or oth- erwise seize ownership or control of such property, unless the President determines that— (i) prompt, adequate, and effective com- pensation has been or is being made to such citizen, corporation, partnership, or association, (ii) good-faith negotiations to provide prompt, adequate, and effective compensa- tion under the applicable provisions of international law are in progress, or such country is otherwise taking steps to dis- charge its obligations under international law with respect to such citizen, corpora- tion, partnership, or association, or (iii) a dispute involving such citizen, cor- poration, partnership, or association, over compensation for such a seizure has been submitted to arbitration under the provi- sions of the Convention for the Settlement of Investment Disputes, or in another mu- tually agreed upon forum, and promptly furnishes a copy of such determina- tion to the Senate and House of Representa- tives; (3) if such country fails to act in good faith in recognizing as binding or in enforcing arbi- tral awards in favor of United States citizens or a corporation, partnership or association which is 50 per centum 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 dis- pute; (4) if such country affords preferential treat- ment 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, unless the President has received assurances satisfactory to him that such preferential treatment will be elimi- nated or that action will be taken to assure that there will be no such significant adverse Page 771 TITLE 19—CUSTOMS DUTIES § 2702 1 So in original. The period probably should be a semicolon. effect, and he reports those assurances to the Congress; (5) if a government-owned entity in such country engages in the broadcast of copy- righted material, including films or television material, belonging to United States copy- right owners without their express consent; (6) unless such country is a signatory to a treaty, convention, protocol, or other agree- ment regarding the extradition of United States citizens; and (7) if such country has not or is not taking steps to afford internationally recognized worker rights (as defined in section 2467(4) of this title) to workers in the country (including any designated zone in that country). Paragraphs (1), (2), (3), (5), and (7) shall not pre- vent the designation of any country as a bene- ficiary country under this Act if the President determines that such designation will be in the national economic or security interest of the United States and reports such determination to the Congress with his reasons therefor. (c) Factors determining designation In determining whether to designate any country a beneficiary country under this chap- ter, the President shall take into account— (1) an expression by such country of its de- sire to be so designated; (2) the economic conditions in such country, the living standards of its inhabitants, and any other economic factors which he deems appropriate; (3) the extent to which such country has as- sured the United States it will provide equi- table and reasonable access to the markets and basic commodity resources of such coun- try; (4) the degree to which such country follows the accepted rules of international trade pro- vided for under the WTO Agreement and the multilateral trade agreements (as such terms are defined in paragraphs (9) and (4), respec- tively, of section 3501 of this title); (5) the degree to which such country uses ex- port subsidies or imposes export performance requirements or local content requirements which distort international trade; (6) the degree to which the trade policies of such country as they relate to other bene- ficiary countries are contributing to the revi- talization of the region; (7) the degree to which such country is un- dertaking self-help measures to promote its own economic development; (8) 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.1 (9) the extent to which such country pro- vides under its law adequate and effective means for foreign nationals to secure, exer- cise, and enforce exclusive rights in intellec- tual property, including patent, trademark, and copyright rights; (10) the extent to which such country pro- hibits its nationals from engaging in the broadcast of copyrighted material, including films or television material, belonging to United States copyright owners without their express consent; and (11) the extent to which such country is pre- pared to cooperate with the United States in the administration of the provisions of this chapter. (d) Omitted (e) Withdrawal or suspension of duty-free treat- ment to specific articles (1)(A) The President may, after the require- ments of subsection (a)(2) and paragraph (2) have been met— (i) withdraw or suspend the designation of any country as a beneficiary country, or (ii) withdraw, suspend, or limit the applica- tion of duty-free treatment under this chapter to any article of any country, if, after such designation, the President deter- mines that as a result of changed circumstances such country would be barred from designation as a beneficiary country under subsection (b). (B) The President may, after the requirements of subsection (a)(2) and paragraph (2) have been met— (i) withdraw or suspend the designation of any country as a CBTPA beneficiary country; or (ii) withdraw, suspend, or limit the applica- tion of preferential treatment under section 2703(b)(2) and (3) of this title to any article of any country, if, after such designation, the President deter- mines that, as a result of changed cir- cumstances, the performance of such country is not satisfactory under the criteria set forth in section 2703(b)(5)(B) of this title. (2)(A) The President shall publish in the Fed- eral Register notice of the action the President proposes to take under paragraph (1) at least 30 days prior to taking such action. (B) The United States Trade Representative shall, within the 30-day period beginning on the date on which the President publishes under subparagraph (A) notice of proposed action— (i) accept written comments from the public regarding such proposed action, (ii) hold a public hearing on such proposed action, and (iii) publish in the Federal Register— (I) notice of the time and place of such hearing prior to the hearing, and (II) the time and place at which such writ- ten comments will be accepted. (3) If preferential treatment under section 2703(b)(2) and (3) of this title is withdrawn, sus- pended, or limited with respect to a CBTPA ben- eficiary country, such country shall not be deemed to be a ‘‘party’’ for the purposes of ap- plying section 2703(b)(5)(C) of this title to im- ports of articles for which preferential treat- ment has been withdrawn, suspended, or limited with respect to such country. (f) Reporting requirements (1) In general Not later than December 31, 2001, and every 2 years thereafter during the period this chap- Page 772 TITLE 19—CUSTOMS DUTIES § 2702 ter is in effect, the United States Trade Rep- resentative shall submit to Congress a report regarding the operation of this chapter, in- cluding— (A) with respect to subsections (b) and (c), the results of a general review of beneficiary countries based on the considerations de- scribed in such subsections; and (B) the performance of each beneficiary country or CBTPA beneficiary country, as the case may be, under the criteria set forth in section 2703(b)(5)(B) of this title. (2) Public comment Before submitting the report described in paragraph (1), the United States Trade Rep- resentative shall publish a notice in the Fed- eral Register requesting public comments on whether beneficiary countries are meeting the criteria listed in section 2703(b)(5)(B) of this title. (Pub. L. 98–67, title II, § 212, Aug. 5, 1983, 97 Stat. 384; Pub. L. 99–570, title IX, § 9002(b), Oct. 27, 1986, 100 Stat. 3207–166; Pub. L. 100–418, title I, §§ 1214(q)(1), 1909(c), Aug. 23, 1988, 102 Stat. 1159, 1318; Pub. L. 101–382, title II, §§ 213, 214, Aug. 20, 1990, 104 Stat. 656; Pub. L. 103–465, title VI, § 621(a)(2), Dec. 8, 1994, 108 Stat. 4992; Pub. L. 104–188, title I, § 1954(a)(3), Aug. 20, 1996, 110 Stat. 1927; Pub. L. 106–200, title II, § 211(b), (c)(1), (e)(2), May 18, 2000, 114 Stat. 286, 287; Pub. L. 109–53, title IV, § 402(a), (b), Aug. 2, 2005, 119 Stat. 495; Pub. L. 112–43, title IV, § 402(a), Oct. 21, 2011, 125 Stat. 530; Pub. L. 116–260, div. O, title VI, § 602(b)(1), Dec. 27, 2020, 134 Stat. 2152.) AMENDMENT OF SECTION For termination of amendment by section 107(c) of Pub. L. 112–43, see Effective and Ter- mination Dates of 2011 Amendment note below. For termination of amendment by section 107(d) of Pub. L. 109–53, see Effective and Ter- mination Dates of 2005 Amendment note below. Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a) to (c) and (f), was in the original ‘‘this title’’, meaning title II of Pub. L. 98–67, Aug. 5, 1983, 97 Stat. 384, which is classified principally to this chapter. For complete classification of title II to the Code, see Short Title note set out under section 2701 of this title and Tables. The Harmonized Tariff Schedule of the United States, referred to in subsec. (a)(1)(C), is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under section 1202 of this title. This Act, referred to in provisions following subsec. (b)(6), probably should be ‘‘this title’’ meaning title II of Pub. L. 98–67, Aug. 5, 1983, 97 Stat. 384, which is clas- sified principally to this chapter. For complete classi- fication of title II to the Code, see Short Title note set out under section 2701 of this title and Tables. This chapter, referred to in subsec. (e)(1)(B), was in the original ‘‘this subtitle’’, meaning subtitle A (§§ 211–218) of title II of Pub. L. 98–67 which enacted this chapter, amended section 1202 of this title, repealed section 2582 of this title, and enacted provisions set out as notes under sections 1202, 1319, 2251, and 2703 of this title and section 1311 of Title 33, Navigation and Navi- gable Waters. For complete classification of subtitle A to the Code, see Tables. CODIFICATION Subsec. (d) of this section amended general headnote 3(a) of the Tariff Schedules of the United States. The Tariff Schedules were replaced by the Harmonized Tar- iff Schedule of the United States. See References in Text note above. AMENDMENTS 2020—Subsec. (a)(1)(D). Pub. L. 116–260 added subpar. (D) and struck out former subpar. (D) which defined ‘‘NAFTA’’. 2011—Subsec. (b). Pub. L. 112–43, §§ 107(c), 402(a), tem- porarily struck out ‘‘Panama’’ from list of countries el- igible for designation as beneficiary country. See Effec- tive and Termination Dates of 2011 Amendment note below. 2005—Subsec. (a)(1)(F). Pub. L. 109–53, §§ 107(d), 402(a), temporarily added subpar. (F). See Effective and Ter- mination Dates of 2005 Amendment note below. Subsec. (b). Pub. L. 109–53, §§ 107(d), 402(b), tempo- rarily struck out ‘‘Costa Rica’’, ‘‘Dominican Republic’’, ‘‘El Salvador’’, ‘‘Guatemala’’, ‘‘Honduras’’, and ‘‘Nica- ragua’’ from list of countries eligible for designation as beneficiary country. See Effective and Termination Dates of 2005 Amendment notes below. 2000—Subsec. (a)(1)(D), (E). Pub. L. 106–200, § 211(e)(2), added subpars. (D) and (E). Subsec. (e)(1). Pub. L. 106–200, § 211(b)(1), designated existing provisions as subpar. (A), redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), and added subpar. (B). Subsec. (e)(3). Pub. L. 106–200, § 211(b)(2), added par. (3). Subsec. (f). Pub. L. 106–200, § 211(c)(1), inserted head- ing and amended text generally. Prior to amendment, text read as follows: ‘‘On or before October 1, 1993, and the close of each 3-year period thereafter, the President shall submit to the Congress a complete report regard- ing the operation of this chapter, including the results of a general review of beneficiary countries based on the considerations described in subsections (b) and (c) of this section.’’ 1996—Subsec. (b)(7). Pub. L. 104–188 substituted ‘‘2467(4)’’ for ‘‘2462(a)(4)’’. 1994—Subsec. (c)(4). Pub. L. 103–465 substituted ‘‘WTO Agreement and the multilateral trade agreements (as such terms are defined in paragraphs (9) and (4), respec- tively, of section 3501 of this title)’’ for ‘‘General Agree- ment on Tariffs and Trade, as well as applicable trade agreements approved under section 2503(a) of this title’’. 1990—Subsec. (b). Pub. L. 101–382, § 213(1)–(4), added par. (7) and in concluding provisions substituted ‘‘(5), and (7)’’ for ‘‘and (5)’’. Subsec. (c)(8). Pub. L. 101–382, § 213(5), amended par. (8) generally. Prior to amendment, par. (8) read as fol- lows: ‘‘the degree to which workers in such country are afforded reasonable workplace conditions and enjoy the right to organize and bargain collectively;’’. Subsec. (f). Pub. L. 101–382, § 214, added subsec. (f). 1988—Subsec. (a)(1)(C). Pub. L. 100–418, § 1214(q)(1), substituted ‘‘HTS’’ and ‘‘Harmonized Tariff Schedule of the United States’’ for ‘‘TSUS’’ and ‘‘Tariff Schedules of the United States’’, respectively. Subsec. (e). Pub. L. 100–418, § 1909(c), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: ‘‘The President shall, after complying with the requirements of subsection (a)(2) of this section, with- draw or suspend the designation of any country as a beneficiary country if, after such designation, he deter- mines that as the result of changed circumstances such country would be barred from designation as a bene- ficiary country under subsection (b) of this section.’’ 1986—Subsec. (b)(6), (7). Pub. L. 99–570 redesignated par. (7) as (6) and struck out former par. (6) which pro- vided that the President shall not designate a country as a beneficiary country under this chapter if the coun- try does not take adequate steps to cooperate with the United States to prevent narcotic drugs and other con- trolled substances produced, processed, or transported in the country from entering the United States unlaw- fully. Page 773 TITLE 19—CUSTOMS DUTIES § 2703 Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2020 AMENDMENT Amendment by Pub. L. 116–260 effective July 1, 2020, see section 602(g) of div. O of Pub. L. 116–260, set out as a note under section 2578b of this title. EFFECTIVE AND TERMINATION DATES OF 2011 AMENDMENT Amendment by Pub. L. 112–43 effective on date Presi- dent terminates designation of Panama [Designation terminated Oct. 29, 2012. See Proc. No. 8894, 77 F.R. 66507.] as beneficiary country pursuant to section 201(a)(3) of Pub. L. 112–43, set out in a note under sec- tion 3805 of this title, and to cease to have effect on date the United States–Panama Trade Promotion Agreement terminates, see sections 107(c) and 402(b) of Pub. L. 112–43, set out in a note under section 3805 of this title. EFFECTIVE AND TERMINATION DATES OF 2005 AMENDMENT Amendment by Pub. L. 109–53 effective on the date the Dominican Republic-Central America-United States Free Trade Agreement enters into force (Mar. 1, 2006) and to cease to have effect on date Agreement ceases to be in force with respect to the United States, and, during any period in which a country ceases to be a CAFTA–DR country, to cease to have effect with re- spect to such country, see section 107 of Pub. L. 109–53, set out as an Effective and Termination Dates note under section 4001 of this title. Pub. L. 109–53, title IV, § 402(b), Aug. 2, 2005, 119 Stat. 495, provided that the amendment made by section 402(b) is effective on date President terminates designa- tion of Costa Rica [Designation terminated Jan. 1, 2009. See Proc. No. 8331, 73 F.R. 79585.], Dominican Republic [Designation terminated Mar. 1, 2007. See Proc. No. 8111, 72 F.R. 10025.], El Salvador [Designation termi- nated Mar. 1, 2006. See Proc. No. 7987, 71 F.R. 10827.], Guatemala [Designation terminated July 1, 2006. See Proc. No. 8034, 71 F.R. 38509.], Honduras [Designation terminated Apr. 1, 2006. See Proc. No. 7996, 71 F.R. 16971.], or Nicaragua [Designation terminated Apr. 1, 2006. See Proc. No. 7996, 71 F.R. 16971.] as beneficiary country pursuant to section 4031(a)(3) of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–188 applicable to articles entered on or after Oct. 1, 1996, with provisions relating to retroactive application, see section 1953 of Pub. L. 104–188, set out as an Effective Date note under section 2461 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–465 effective on the date on which the WTO Agreement enters into force with re- spect to the United States (Jan. 1, 1995), see section 621(b) of Pub. L. 103–465, set out as a note under section 1677k of this title. EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 1214(q)(1) of Pub. L. 100–418 ef- fective Jan. 1, 1989, and applicable with respect to arti- cles entered on or after such date, see section 1217(b)(1) of Pub. L. 100–418, set out as an Effective Date note under section 3001 of this title. CARIBBEAN BASIN INITIATIVE Pub. L. 100–418, title I, § 1909(a), (b), Aug. 23, 1988, 102 Stat. 1317, 1318, provided that: ‘‘(a) FINDINGS.—The Congress finds that— ‘‘(1) Caribbean and Central American countries his- torically have had close economic, political, and cul- tural ties to the United States; ‘‘(2) promoting economic and political stability in the Caribbean and Central America is in the national security interests of the United States; ‘‘(3) the economic and political stability of the na- tions of the Caribbean and Central America can be strengthened significantly by the attraction of for- eign and domestic investment specifically devoted to employment generation; and ‘‘(4) the diversification of the economies and expan- sion of exports, particularly those of a non-tradi- tional nature, of the nations of the Caribbean and Central America is linked directly to fair access to the markets of the United States. ‘‘(b) INTENT OF THE CONGRESS.—The Congress hereby expresses its intention to ensure that— ‘‘(1) the trade elements of the Caribbean Basin Ini- tiative be strengthened in a manner consistent with the promotion of economic and political stability in the Caribbean and Central America; ‘‘(2) to the extent that Congress imposes changes that are intended to improve the competitive envi- ronment for United States industry and workers, such changes do not unduly affect the unilateral duty-free trade system available to the beneficiary countries designated under the Caribbean Basin Eco- nomic Recovery Act [19 U.S.C. 2701 et seq.]; and ‘‘(3) generic changes in the trade laws of the United States do not discriminate against imports from des- ignated beneficiary countries in relation to imports from other United States trading partners.’’ Executive Documents DELEGATION OF FUNCTIONS Functions of President under subsec. (e)(2)(A) of this section, related to publishing notice of proposed ac- tions, delegated to United States Trade Representative, see Proc. No. 7616, Oct. 31, 2002, 67 F.R. 67283, set out as a note under section 3203 of this title. § 2703. Eligible articles (a) Growth, product, or manufacture of bene- ficiary countries (1) Unless otherwise excluded from eligibility by this chapter, and subject to section 423 of the Tax Reform Act of 1986, and except as provided in subsection (b)(2) and (3), the duty-free treat- ment provided under this chapter shall apply to any article which is the growth, product, or manufacture of a beneficiary country if— (A) that article is imported directly from a beneficiary country into the customs territory of the United States; and (B) the sum of (i) the cost or value of the materials produced in a beneficiary country or two or more beneficiary countries, plus (ii) the direct costs of processing operations per- formed in a beneficiary country or countries is not less than 35 per centum of the appraised value of such article at the time it is entered. For purposes of determining the percentage re- ferred to in subparagraph (B), the term ‘‘bene- ficiary country’’ includes the Commonwealth of Puerto Rico, the United States Virgin Islands, and any former beneficiary country. If the cost or value of materials produced in the customs territory of the United States (other than the Commonwealth of Puerto Rico) is included with respect to an article to which this paragraph ap- plies, an amount not to exceed 15 per centum 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 de- termining the percentage referred to in subpara- graph (B). (2) The Secretary of the Treasury shall pre- scribe such regulations as may be necessary to