[112th Congress Public Law 41]
[From the U.S. Government Printing Office]
[[Page 427]]
UNITED STATES-KOREA FREE TRADE AGREEMENT IMPLEMENTATION ACT
[[Page 125 STAT. 428]]
Public Law 112-41
112th Congress
An Act
To implement the United States-Korea Free Trade Agreement. <<NOTE: Oct.
21, 2011 - [H.R. 3080]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: United States-
Korea Free Trade Agreement Implementation Act. 19 USC 3805 note.>>
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``United States-Korea
Free Trade Agreement Implementation Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT
Sec. 101. Approval and entry into force of the Agreement.
Sec. 102. Relationship of the Agreement to United States and State law.
Sec. 103. Implementing actions in anticipation of entry into force and
initial regulations.
Sec. 104. Consultation and layover provisions for, and effective date
of, proclaimed actions.
Sec. 105. Administration of dispute settlement proceedings.
Sec. 106. Arbitration of claims.
Sec. 107. Effective dates; effect of termination.
TITLE II--CUSTOMS PROVISIONS
Sec. 201. Tariff modifications.
Sec. 202. Rules of origin.
Sec. 203. Customs user fees.
Sec. 204. Disclosure of incorrect information; false certifications of
origin; denial of preferential tariff treatment.
Sec. 205. Reliquidation of entries.
Sec. 206. Recordkeeping requirements.
Sec. 207. Enforcement relating to trade in textile or apparel goods.
Sec. 208. Regulations.
TITLE III--RELIEF FROM IMPORTS
Sec. 301. Definitions.
Subtitle A--Relief From Imports Benefitting From the Agreement
Sec. 311. Commencing of action for relief.
Sec. 312. Commission action on petition.
Sec. 313. Provision of relief.
Sec. 314. Termination of relief authority.
Sec. 315. Compensation authority.
Sec. 316. Confidential business information.
Subtitle B--Motor Vehicle Safeguard Measures
Sec. 321. Motor vehicle safeguard measures.
Subtitle C--Textile and Apparel Safeguard Measures
Sec. 331. Commencement of action for relief.
[[Page 125 STAT. 429]]
Sec. 332. Determination and provision of relief.
Sec. 333. Period of relief.
Sec. 334. Articles exempt from relief.
Sec. 335. Rate after termination of import relief.
Sec. 336. Termination of relief authority.
Sec. 337. Compensation authority.
Sec. 338. Confidential business information.
Subtitle D--Cases Under Title II of the Trade Act of 1974
Sec. 341. Findings and action on Korean articles.
TITLE IV--PROCUREMENT
Sec. 401. Eligible products.
TITLE V--OFFSETS
Sec. 501. Increase in penalty on paid preparers who fail to comply with
earned income tax credit due diligence requirements.
Sec. 502. Requirement for prisons located in the United States to
provide information for tax administration.
Sec. 503. Rate for merchandise processing fees.
Sec. 504. Extension of customs user fees.
Sec. 505. Time for payment of corporate estimated taxes.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to approve and implement the free trade agreement
between the United States and Korea entered into under the
authority of section 2103(b) of the Bipartisan Trade Promotion
Authority Act of 2002 (19 U.S.C. 3803(b));
(2) to secure the benefits of the agreement entered into
pursuant to an exchange of letters between the United States and
the Government of Korea on February 10, 2011;
(3) to strengthen and develop economic relations between the
United States and Korea for their mutual benefit;
(4) to establish free trade between the United States and
Korea through the reduction and elimination of barriers to trade
in goods and services and to investment; and
(5) to lay the foundation for further cooperation to expand
and enhance the benefits of the Agreement.
SEC. 3. DEFINITIONS.
In this Act:
(1) Agreement.--The term ``Agreement'' means the United
States-Korea Free Trade Agreement approved by Congress under
section 101(a)(1).
(2) Commission.--The term ``Commission'' means the United
States International Trade Commission.
(3) HTS.--The term ``HTS'' means the Harmonized Tariff
Schedule of the United States.
(4) Korea.--The term ``Korea'' means the Republic of Korea.
(5) Textile or apparel good.--The term ``textile or apparel
good'' means a good listed in the Annex to the Agreement on
Textiles and Clothing referred to in section 101(d)(4) of the
Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
[[Page 125 STAT. 430]]
TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE AGREEMENT.
(a) Approval of Agreement and Statement of Administrative Action.--
Pursuant to section 2105 of the Bipartisan Trade Promotion Authority Act
of 2002 (19 U.S.C. 3805) and section 151 of the Trade Act of 1974 (19
U.S.C. 2191), Congress approves--
(1) the United States-Korea Free Trade Agreement entered
into on June 30, 2007, with the Government of Korea, and
submitted to Congress on October 3, 2011; and
(2) the statement of administrative action proposed to
implement the Agreement that was submitted to Congress on
October 3, 2011.
(b) Conditions <<NOTE: President.>> for Entry Into Force of the
Agreement.--At such time as the President determines that Korea has
taken measures necessary to comply with those provisions of the
Agreement that are to take effect on the date on which the Agreement
enters into force, the President is authorized to exchange notes with
the Government of Korea providing for the entry into force, on or after
January 1, 2012, of the Agreement with respect to the United States.
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE
LAW.
(a) Relationship of Agreement to United States Law.--
(1) United states law to prevail in conflict.--No provision
of the Agreement, nor the application of any such provision to
any person or circumstance, which is inconsistent with any law
of the United States shall have effect.
(2) Construction.--Nothing in this Act shall be construed--
(A) to amend or modify any law of the United States,
or
(B) to limit any authority conferred under any law
of the United States,
unless specifically provided for in this Act.
(b) Relationship of Agreement to State Law.--
(1) Legal challenge.--No State law, or the application
thereof, may be declared invalid as to any person or
circumstance on the ground that the provision or application is
inconsistent with the Agreement, except in an action brought by
the United States for the purpose of declaring such law or
application invalid.
(2) Definition of state law.--For purposes of this
subsection, the term ``State law'' includes--
(A) any law of a political subdivision of a State;
and
(B) any State law regulating or taxing the business
of insurance.
(c) Effect of Agreement With Respect to Private Remedies.--No person
other than the United States--
(1) shall have any cause of action or defense under the
Agreement or by virtue of congressional approval thereof; or
[[Page 125 STAT. 431]]
(2) may challenge, in any action brought under any provision
of law, any action or inaction by any department, agency, or
other instrumentality of the United States, any State, or any
political subdivision of a State, on the ground that such action
or inaction is inconsistent with the Agreement.
SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE
AND INITIAL REGULATIONS.
(a) Implementing Actions.--
(1) Proclamation authority.--After the date of the enactment
of this Act--
(A) the President may proclaim such actions, and
(B) other appropriate officers of the United States
Government may issue such regulations,
as may be necessary to ensure that any provision of this Act, or
amendment made by this Act, that takes effect on the date on
which the Agreement enters into force is appropriately
implemented on such date, but no such proclamation or regulation
may have an effective date earlier than the date on which the
Agreement enters into force.
(2) Effective date of certain proclaimed actions.--Any
action proclaimed by the President under the authority of this
Act that is not subject to the consultation and layover
provisions under section 104 may not take effect before the 15th
day after the date on which the text of the proclamation is
published in the Federal Register.
(3) Waiver of 15-day restriction.--The 15-day restriction
contained in paragraph (2) on the taking effect of proclaimed
actions is waived to the extent that the application of such
restriction would prevent the taking effect on the date on which
the Agreement enters into force of any action proclaimed under
this section.
(b) Initial <<NOTE: Deadlines.>> Regulations.--Initial regulations
necessary or appropriate to carry out the actions required by or
authorized under this Act or proposed in the statement of administrative
action submitted under section 101(a)(2) to implement the Agreement
shall, to the maximum extent feasible, be issued within 1 year after the
date on which the Agreement enters into force. In the case of any
implementing action that takes effect on a date after the date on which
the Agreement enters into force, initial regulations to carry out that
action shall, to the maximum extent feasible, be issued within 1 year
after such effective date.
SEC. 104. <<NOTE: President.>> CONSULTATION AND LAYOVER PROVISIONS
FOR, AND EFFECTIVE DATE OF, PROCLAIMED
ACTIONS.
If a provision of this Act provides that the implementation of an
action by the President by proclamation is subject to the consultation
and layover requirements of this section, such action may be proclaimed
only if--
(1) the President has obtained advice regarding the proposed
action from--
(A) the appropriate advisory committees established
under section 135 of the Trade Act of 1974 (19 U.S.C.
2155); and
(B) the Commission;
(2) <<NOTE: Reports.>> the President has submitted to the
Committee on Finance of the Senate and the Committee on Ways and
Means of the House of Representatives a report that sets forth--
[[Page 125 STAT. 432]]
(A) the action proposed to be proclaimed and the
reasons therefor; and
(B) the advice obtained under paragraph (1);
(3) <<NOTE: Time period.>> a period of 60 calendar days,
beginning on the first day on which the requirements set forth
in paragraphs (1) and (2) have been met, has expired; and
(4) the President has consulted with the committees referred
to in paragraph (2) regarding the proposed action during the
period referred to in paragraph (3).
SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS.
(a) Establishment <<NOTE: President.>> or Designation of Office.--
The President is authorized to establish or designate within the
Department of Commerce an office that shall be responsible for providing
administrative assistance to panels established under chapter 22 of the
Agreement. The office shall not be considered to be an agency for
purposes of section 552 of title 5, United States Code.
(b) Authorization of Appropriations.--There are authorized to be
appropriated for each fiscal year after fiscal year 2011 to the
Department of Commerce up to $750,000 for the establishment and
operations of the office established or designated under subsection (a)
and for the payment of the United States share of the expenses of panels
established under chapter 22 of the Agreement.
SEC. 106. ARBITRATION OF CLAIMS.
The United States is authorized to resolve any claim against the
United States covered by article 11.16.1(a)(i)(C) or article
11.16.1(b)(i)(C) of the Agreement, pursuant to the Investor-State
Dispute Settlement procedures set forth in section B of chapter 11 of
the Agreement.
SEC. 107. EFFECTIVE DATES; EFFECT OF TERMINATION.
(a) Effective Dates.--Except as provided in subsection (b), this Act
and the amendments made by this Act take effect on the date on which the
Agreement enters into force.
(b) Exceptions.--
(1) In general.--Sections 1 through 3, section 207(g), this
title, and title V take effect on the date of the enactment of
this Act.
(2) Certain <<NOTE: Applicability.>> amendatory
provisions.--The amendments made by sections 203, 204, 206, and
401 of this Act take effect on the date of the enactment of this
Act and apply with respect to Korea on the date on which the
Agreement enters into force.
(c) Termination of the Agreement.--On the date on which the
Agreement terminates, this Act (other than this subsection and title V)
and the amendments made by this Act (other than the amendments made by
title V) shall cease to have effect.
TITLE II--CUSTOMS PROVISIONS
SEC. 201. TARIFF MODIFICATIONS.
(a) Tariff Modifications Provided for in the Agreement.--The
President may proclaim--
(1) such modifications or continuation of any duty,
(2) such continuation of duty-free or excise treatment, or
[[Page 125 STAT. 433]]
(3) such additional duties,
as the President determines to be necessary or appropriate to carry out
or apply articles 2.3, 2.5, and 2.6, and Annex 2-B, Annex 4-B, and Annex
22-A, of the Agreement.
(b) Other Tariff Modifications.--Subject to the consultation and
layover provisions of section 104, the President may proclaim--
(1) such modifications or continuation of any duty,
(2) such modifications as the United States may agree to
with Korea regarding the staging of any duty treatment set forth
in Annex 2-B of the Agreement,
(3) such continuation of duty-free or excise treatment, or
(4) such additional duties,
as the President determines to be necessary or appropriate to maintain
the general level of reciprocal and mutually advantageous concessions
with respect to Korea provided for by the Agreement.
(c) Conversion to Ad Valorem Rates.--For purposes of subsections (a)
and (b), with respect to any good for which the base rate in the
Schedule of the United States to Annex 2-B of the Agreement is a
specific or compound rate of duty, the President may substitute for the
base rate an ad valorem rate that the President determines to be
equivalent to the base rate.
(d) Tariff Treatment of Motor Vehicles.--The President may proclaim
the following tariff treatment with respect to the following motor
vehicles of Korea:
(1) Certain passenger cars.--In the case of originating
goods of Korea classifiable under subheading 8703.10.10,
8703.10.50, 8703.21.00, 8703.22.00, 8703.23.00, 8703.24.00,
8703.31.00, 8703.32.00, or 8703.33.00 of the HTS that are
entered, or withdrawn from warehouse for consumption--
(A) the rate of duty for such goods shall be 2.5
percent for year 1 of the Agreement through year 4 of
the Agreement; and
(B) such goods shall be free of duty for each year
thereafter.
(2) Electric motor vehicles.--In the case of originating
goods of Korea classifiable under subheading 8703.90.00 of the
HTS that are entered, or withdrawn from warehouse for
consumption--
(A) the rate of duty for such goods shall be--
(i) 2.0 percent for year 1 of the Agreement;
(ii) 1.5 percent for year 2 of the Agreement;
(iii) 1.0 percent for year 3 of the Agreement;
and
(iv) 0.5 percent for year 4 of the Agreement;
and
(B) such goods shall be free of duty for each year
thereafter.
(3) Certain trucks.--In the case of originating goods of
Korea classifiable under subheading 8704.21.00, 8704.22.50,
8704.23.00, 8704.31.00, 8704.32.00, or 8704.90.00 of the HTS
that are entered, or withdrawn from warehouse for consumption--
(A) the rate of duty for such goods shall be--
(i) 25 percent for year 1 of the Agreement
through year 7 of the Agreement;
(ii) 16.6 percent for year 8 of the Agreement;
and
(iii) 8.3 percent for year 9 of the Agreement;
and
(B) such goods shall be free of duty for each year
thereafter.
[[Page 125 STAT. 434]]
(4) Definitions.--In this subsection--
(A) the term ``year 1 of the Agreement'' means the
period beginning on the date, in a calendar year, on
which the Agreement enters into force and ending on
December 31 of that calendar year; and
(B) the terms ``year 2 of the Agreement'', ``year 3
of the Agreement'', ``year 4 of the Agreement'', ``year
5 of the Agreement'', ``year 6 of the Agreement'',
``year 7 of the Agreement'', ``year 8 of the
Agreement'', and ``year 9 of the Agreement'' mean the
second, third, fourth, fifth, sixth, seventh, eighth,
and ninth calendar years, respectively, in which the
Agreement is in force.
SEC. 202. RULES OF ORIGIN.
(a) Application and Interpretation.--In this section:
(1) Tariff classification.--The basis for any tariff
classification is the HTS.
(2) Reference to hts.--Whenever in this section there is a
reference to a chapter, heading, or subheading, such reference
shall be a reference to a chapter, heading, or subheading of the
HTS.
(3) Cost <<NOTE: Records.>> or value.--Any cost or value
referred to in this section shall be recorded and maintained in
accordance with the generally accepted accounting principles
applicable in the territory of the country in which the good is
produced (whether Korea or the United States).
(b) Originating Goods.--For purposes of this Act and for purposes of
implementing the preferential tariff treatment provided for under the
Agreement, except as otherwise provided in this section, a good is an
originating good if--
(1) the good is a good wholly obtained or produced entirely
in the territory of Korea, the United States, or both;
(2) the good--
(A) is produced entirely in the territory of Korea,
the United States, or both, and--
(i) each of the nonoriginating materials used
in the production of the good undergoes an
applicable change in tariff classification
specified in Annex 4-A or Annex 6-A of the
Agreement; or
(ii) the good otherwise satisfies any
applicable regional value-content or other
requirements specified in Annex 4-A or Annex 6-A
of the Agreement; and
(B) satisfies all other applicable requirements of
this section; or
(3) the good is produced entirely in the territory of Korea,
the United States, or both, exclusively from materials described
in paragraph (1) or (2).
(c) Regional Value-content.--
(1) In general.--For purposes of subsection (b)(2), the
regional value-content of a good referred to in Annex 6-A of the
Agreement, except for goods to which paragraph (4) applies,
shall be calculated by the importer, exporter, or producer of
the good, on the basis of the build-down method described in
paragraph (2) or the build-up method described in paragraph (3).
(2) Build-down method.--
[[Page 125 STAT. 435]]
(A) In general.--The regional value-content of a
good may be calculated on the basis of the following
build-down method:
AV-VNM ......................
RVC = ---------- <dbl-dagger> 100
AV ......................
(B) Definitions.--In subparagraph (A):
(i) RVC.--The term ``RVC'' means the regional
value-content of the good, expressed as a
percentage.
(ii) AV.--The term ``AV'' means the adjusted
value of the good.
(iii) VNM.--The term ``VNM'' means the value
of nonoriginating materials, other than indirect
materials, that are acquired and used by the
producer in the production of the good, but does
not include the value of a material that is self-
produced.
(3) Build-up method.--
(A) In general.--The regional value-content of a
good may be calculated on the basis of the following
build-up method:
VOM ......................
RVC = ---------- <dbl-dagger> 100
AV ......................
(B) Definitions.--In subparagraph (A):
(i) RVC.--The term ``RVC'' means the regional
value-content of the good, expressed as a
percentage.
(ii) AV.--The term ``AV'' means the adjusted
value of the good.
(iii) VOM.--The term ``VOM'' means the value
of originating materials, other than indirect
materials, that are acquired or self-produced, and
used by the producer in the production of the
good.
(4) Special rule for certain automotive goods.--
(A) In general.--For purposes of subsection (b)(2),
the regional value-content of an automotive good
referred to in Annex 6-A of the Agreement may be
calculated by the importer, exporter, or producer of the
good on the basis of the build-down method described in
paragraph (2), the build-up method described in
paragraph (3), or the following net cost method:
NC-VNM ......................
RVC = ---------- <dbl-dagger> 100
NC ......................
(B) Definitions.--In subparagraph (A):
(i) Automotive good.--The term ``automotive
good'' means a good provided for in any of
subheadings 8407.31 through 8407.34, subheading
8408.20, heading 8409, or any of headings 8701
through 8708.
(ii) RVC.--The term ``RVC'' means the regional
value-content of the automotive good, expressed as
a percentage.
(iii) NC.--The term ``NC'' means the net cost
of the automotive good.
(iv) VNM.--The term ``VNM'' means the value of
nonoriginating materials, other than indirect
materials, that are acquired and used by the
producer in
[[Page 125 STAT. 436]]
the production of the automotive good, but does
not include the value of a material that is self-
produced.
(C) Motor vehicles.--
(i) Basis of calculation.--For purposes of
determining the regional value-content under
subparagraph (A) for an automotive good that is a
motor vehicle provided for in any of headings 8701
through 8705, an importer, exporter, or producer
may average the amounts calculated under the net
cost formula contained in subparagraph (A), over
the producer's fiscal year--
(I) with respect to all motor
vehicles in any one of the categories
described in clause (ii); or
(II) with respect to all motor
vehicles in any such category that are
exported to the territory of Korea or
the United States.
(ii) Categories.--A category is described in
this clause if it--
(I) is the same model line of motor
vehicles, is in the same class of motor
vehicles, and is produced in the same
plant in the territory of Korea or the
United States, as the good described in
clause (i) for which regional value-
content is being calculated;
(II) is the same class of motor
vehicles, and is produced in the same
plant in the territory of Korea or the
United States, as the good described in
clause (i) for which regional value-
content is being calculated; or
(III) is the same model line of
motor vehicles produced in the territory
of Korea or the United States as the
good described in clause (i) for which
regional value-content is being
calculated.
(D) Other automotive goods.--For purposes of
determining the regional value-content under
subparagraph (A) for automotive materials provided for
in any of subheadings 8407.31 through 8407.34, in
subheading 8408.20, or in heading 8409, 8706, 8707, or
8708, that are produced in the same plant, an importer,
exporter, or producer may--
(i) average the amounts calculated under the
net cost formula contained in subparagraph (A)
over--
(I) the fiscal year of the motor
vehicle producer to whom the automotive
goods are sold,
(II) any quarter or month, or
(III) the fiscal year of the
producer of such goods,
if the goods were produced during the fiscal year,
quarter, or month that is the basis for the
calculation;
(ii) determine the average referred to in
clause (i) separately for such goods sold to 1 or
more motor vehicle producers; or
(iii) make a separate determination under
clause (i) or (ii) for such goods that are
exported to the territory of Korea or the United
States.
(E) Calculating net cost.--The importer, exporter,
or producer of an automotive good shall, consistent with
the provisions regarding allocation of costs provided
for
[[Page 125 STAT. 437]]
in generally accepted accounting principles, determine
the net cost of the automotive good under subparagraph
(B) by--
(i) calculating the total cost incurred with
respect to all goods produced by the producer of
the automotive good, subtracting any sales
promotion, marketing, and after-sales service
costs, royalties, shipping and packing costs, and
nonallowable interest costs that are included in
the total cost of all such goods, and then
reasonably allocating the resulting net cost of
those goods to the automotive good;
(ii) calculating the total cost incurred with
respect to all goods produced by that producer,
reasonably allocating the total cost to the
automotive good, and then subtracting any sales
promotion, marketing, and after-sales service
costs, royalties, shipping and packing costs, and
nonallowable interest costs that are included in
the portion of the total cost allocated to the
automotive good; or
(iii) reasonably allocating each cost that
forms part of the total cost incurred with respect
to the automotive good so that the aggregate of
these costs does not include any sales promotion,
marketing, and after-sales service costs,
royalties, shipping and packing costs, or
nonallowable interest costs.
(d) Value of Materials.--
(1) In general.--For the purpose of calculating the regional
value-content of a good under subsection (c), and for purposes
of applying the de minimis rules under subsection (f), the value
of a material is--
(A) in the case of a material that is imported by
the producer of the good, the adjusted value of the
material;
(B) in the case of a material acquired in the
territory in which the good is produced, the value,
determined in accordance with Articles 1 through 8,
Article 15, and the corresponding interpretive notes, of
the Agreement on Implementation of Article VII of the
General Agreement on Tariffs and Trade 1994 referred to
in section 101(d)(8) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(8)), as set forth in regulations
promulgated by the Secretary of the Treasury providing
for the application of such Articles in the absence of
an importation by the producer; or
(C) in the case of a material that is self-produced,
the sum of--
(i) all expenses incurred in the production of
the material, including general expenses; and
(ii) an amount for profit equivalent to the
profit added in the normal course of trade.
(2) Further adjustments to the value of materials.--
(A) Originating material.--The following expenses,
if not included in the value of an originating material
calculated under paragraph (1), may be added to the
value of the originating material:
(i) The costs of freight, insurance, packing,
and all other costs incurred in transporting the
material
[[Page 125 STAT. 438]]
within or between the territory of Korea, the
United States, or both, to the location of the
producer.
(ii) Duties, taxes, and customs brokerage fees
on the material paid in the territory of Korea,
the United States, or both, other than duties or
taxes that are waived, refunded, refundable, or
otherwise recoverable, including credit against
duty or tax paid or payable.
(iii) The cost of waste and spoilage resulting
from the use of the material in the production of
the good, less the value of renewable scrap or
byproducts.
(B) Nonoriginating material.--The following
expenses, if included in the value of a nonoriginating
material calculated under paragraph (1), may be deducted
from the value of the nonoriginating material:
(i) The costs of freight, insurance, packing,
and all other costs incurred in transporting the
material within or between the territory of Korea,
the United States, or both, to the location of the
producer.
(ii) Duties, taxes, and customs brokerage fees
on the material paid in the territory of Korea,
the United States, or both, other than duties or
taxes that are waived, refunded, refundable, or
otherwise recoverable, including credit against
duty or tax paid or payable.
(iii) The cost of waste and spoilage resulting
from the use of the material in the production of
the good, less the value of renewable scrap or
byproducts.
(iv) The cost of originating materials used in
the production of the nonoriginating material in
the territory of Korea, the United States, or
both.
(e) Accumulation.--
(1) Originating materials used in production of goods of the
other country.--Originating materials from the territory of
Korea or the United States that are used in the production of a
good in the territory of the other country shall be considered
to originate in the territory of such other country.
(2) Multiple producers.--A good that is produced in the
territory of Korea, the United States, or both, by 1 or more
producers, is an originating good if the good satisfies the
requirements of subsection (b) and all other applicable
requirements of this section.
(f) De Minimis Amounts of Nonoriginating Materials.--
(1) In general.--Except as provided in paragraphs (2) and
(3), a good that does not undergo a change in tariff
classification pursuant to Annex 6-A of the Agreement is an
originating good if--
(A) the value of all nonoriginating materials used
in the production of the good that do not undergo the
applicable change in tariff classification (set forth in
Annex 6-A of the Agreement) does not exceed 10 percent
of the adjusted value of the good;
(B) the good meets all other applicable requirements
of this section; and
(C) the value of such nonoriginating materials is
included in the value of nonoriginating materials for
any applicable regional value-content requirement for
the good.
(2) Exceptions.--Paragraph (1) does not apply to the
following:
[[Page 125 STAT. 439]]
(A) A nonoriginating material provided for in
chapter 3 that is used in the production of a good
provided for in chapter 3.
(B) A nonoriginating material provided for in
chapter 4, or a nonoriginating dairy preparation
containing over 10 percent by weight of milk solids
provided for in subheading 1901.90 or 2106.90, that is
used in the production of a good provided for in chapter
4.
(C) A nonoriginating material provided for in
chapter 4, or a nonoriginating dairy preparation
containing over 10 percent by weight of milk solids
provided for in subheading 1901.90, that is used in the
production of any of the following goods:
(i) Infant preparations containing over 10
percent by weight of milk solids provided for in
subheading 1901.10.
(ii) Mixes and doughs, containing over 25
percent by weight of butterfat, not put up for
retail sale, provided for in subheading 1901.20.
(iii) Dairy preparations containing over 10
percent by weight of milk solids provided for in
subheading 1901.90 or 2106.90.
(iv) Goods provided for in heading 2105.
(v) Beverages containing milk provided for in
subheading 2202.90.
(vi) Animal feeds containing over 10 percent
by weight of milk solids provided for in
subheading 2309.90.
(D) A nonoriginating material provided for in
chapter 7 that is used in the production of a good
provided for in subheading 0703.10, 0703.20, 0709.59,
0709.60, 0711.90, 0712.20, 0714.20, or any of
subheadings 0710.21 through 0710.80 or 0712.39 through
0713.10.
(E) A nonoriginating material provided for in
heading 1006, or a nonoriginating rice product provided
for in chapter 11 that is used in the production of a
good provided for in heading 1006, 1102, 1103, 1104, or
subheading 1901.20 or 1901.90.
(F) A nonoriginating material provided for in
heading 0805, or any of subheadings 2009.11 through
2009.39, that is used in the production of a good
provided for in any of subheadings 2009.11 through
2009.39, or in fruit or vegetable juice of any single
fruit or vegetable, fortified with minerals or vitamins,
concentrated or unconcentrated, provided for in
subheading 2106.90 or 2202.90.
(G) Nonoriginating peaches, pears, or apricots
provided for in chapter 8 or 20 that are used in the
production of a good provided for in heading 2008.
(H) A nonoriginating material provided for in
chapter 15 that is used in the production of a good
provided for in any of headings 1501 through 1508, or
heading 1512, 1514, or 1515.
(I) A nonoriginating material provided for in
heading 1701 that is used in the production of a good
provided for in any of headings 1701 through 1703.
[[Page 125 STAT. 440]]
(J) A nonoriginating material provided for in
chapter 17 that is used in the production of a good
provided for in subheading 1806.10.
(K) Except as provided in subparagraphs (A) through
(J) and Annex 6-A of the Agreement, a nonoriginating
material used in the production of a good provided for
in any of chapters 1 through 24, unless the
nonoriginating material is provided for in a different
subheading than the good for which origin is being
determined under this section.
(3) Textile or apparel goods.--
(A) In general.--Except as provided in subparagraph
(B), a textile or apparel good that is not an
originating good because certain fibers or yarns used in
the production of the component of the good that
determines the tariff classification of the good do not
undergo an applicable change in tariff classification,
set forth in Annex 4-A of the Agreement, shall be
considered to be an originating good if the total weight
of all such fibers or yarns in that component is not
more than 7 percent of the total weight of that
component.
(B) Certain textile or apparel goods.--A textile or
apparel good containing elastomeric yarns in the
component of the good that determines the tariff
classification of the good shall be considered to be an
originating good only if such yarns are wholly formed
and finished in the territory of Korea, the United
States, or both.
(C) Yarn, fabric, or fiber.--For purposes of this
paragraph, in the case of a good that is a yarn, fabric,
or fiber, the term ``component of the good that
determines the tariff classification of the good'' means
all of the fibers in the good.
(g) Fungible Goods and Materials.--
(1) In general.--
(A) Claim for preferential tariff treatment.--A
person claiming that a fungible good or fungible
material is an originating good may base the claim
either on the physical segregation of the fungible good
or fungible material or by using an inventory management
method with respect to the fungible good or fungible
material.
(B) Inventory management method.--In this
subsection, the term ``inventory management method''
means--
(i) averaging;
(ii) ``last-in, first-out'';
(iii) ``first-in, first-out''; or
(iv) any other method--
(I) recognized in the generally
accepted accounting principles of the
country in which the production is
performed (whether Korea or the United
States); or
(II) otherwise accepted by that
country.
(2) Election of inventory method.--A person selecting an
inventory management method under paragraph (1) for a particular
fungible good or fungible material shall continue to use that
method for that fungible good or fungible material throughout
the fiscal year of such person.
(h) Accessories, Spare Parts, or Tools.--
[[Page 125 STAT. 441]]
(1) In general.--Subject to paragraphs (2) and (3),
accessories, spare parts, or tools delivered with a good that
form part of the good's standard accessories, spare parts, or
tools shall--
(A) be treated as originating goods if the good is
an originating good; and
(B) be disregarded in determining whether all the
nonoriginating materials used in the production of the
good undergo the applicable change in tariff
classification set forth in Annex 6-A of the Agreement.
(2) <<NOTE: Applicability.>> Conditions.--Paragraph (1)
shall apply only if--
(A) the accessories, spare parts, or tools are
classified with and not invoiced separately from the
good; and
(B) the quantities and value of the accessories,
spare parts, or tools are customary for the good.
(3) Regional value content.--If the good is subject to a
regional value-content requirement, the value of the
accessories, spare parts, or tools shall be taken into account
as originating or nonoriginating materials, as the case may be,
in calculating the regional value-content of the good.
(i) Packaging Materials and Containers for Retail Sale.--Packaging
materials and containers in which a good is packaged for retail sale, if
classified with the good, shall be disregarded in determining whether
all the nonoriginating materials used in the production of the good
undergo the applicable change in tariff classification set forth in
Annex 4-A or Annex 6-A of the Agreement, and, if the good is subject to
a regional value-content requirement, the value of such packaging
materials and containers shall be taken into account as originating or
nonoriginating materials, as the case may be, in calculating the
regional value-content of the good.
(j) Packing Materials and Containers for Shipment.--Packing
materials and containers for shipment shall be disregarded in
determining whether a good is an originating good.
(k) Indirect Materials.--An indirect material shall be disregarded
in determining whether a good is an originating good.
(l) Transit and Transhipment.--A good that has undergone production
necessary to qualify as an originating good under subsection (b) shall
not be considered to be an originating good if, subsequent to that
production, the good--
(1) undergoes further production or any other operation
outside the territory of Korea or the United States, other than
unloading, reloading, or any other operation necessary to
preserve the good in good condition or to transport the good to
the territory of Korea or the United States; or
(2) does not remain under the control of customs authorities
in the territory of a country other than Korea or the United
States.
(m) Goods Classifiable as Goods Put up in Sets.--Notwithstanding the
rules set forth in Annex 4-A and Annex 6-A of the Agreement, goods
classifiable as goods put up in sets for retail sale as provided for in
General Rule of Interpretation 3 of the HTS shall not be considered to
be originating goods unless--
(1) each of the goods in the set is an originating good; or
(2) the total value of the nonoriginating goods in the set
does not exceed--
[[Page 125 STAT. 442]]
(A) in the case of textile or apparel goods, 10
percent of the adjusted value of the set; or
(B) in the case of goods, other than textile or
apparel goods, 15 percent of the adjusted value of the
set.
(n) Definitions.--In this section:
(1) Adjusted value.--The term ``adjusted value'' means the
value determined in accordance with Articles 1 through 8,
Article 15, and the corresponding interpretive notes, of the
Agreement on Implementation of Article VII of the General
Agreement on Tariffs and Trade 1994 referred to in section
101(d)(8) of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(8)), adjusted, if necessary, to exclude any costs,
charges, or expenses incurred for transportation, insurance, and
related services incident to the international shipment of the
merchandise from the country of exportation to the place of
importation.
(2) Class of motor vehicles.--The term ``class of motor
vehicles'' means any one of the following categories of motor
vehicles:
(A) Motor vehicles provided for in subheading
8701.20, 8704.10, 8704.22, 8704.23, 8704.32, or 8704.90,
or heading 8705 or 8706, or motor vehicles for the
transport of 16 or more persons provided for in
subheading 8702.10 or 8702.90.
(B) Motor vehicles provided for in subheading
8701.10 or any of subheadings 8701.30 through 8701.90.
(C) Motor vehicles for the transport of 15 or fewer
persons provided for in subheading 8702.10 or 8702.90,
or motor vehicles provided for in subheading 8704.21 or
8704.31.
(D) Motor vehicles provided for in any of
subheadings 8703.21 through 8703.90.
(3) Fungible good or fungible material.--The term ``fungible
good'' or ``fungible material'' means a good or material, as the
case may be, that is interchangeable with another good or
material for commercial purposes and the properties of which are
essentially identical to such other good or material.
(4) Generally accepted accounting principles.--The term
``generally accepted accounting principles''--
(A) means the recognized consensus or substantial
authoritative support given in the territory of Korea or
the United States, as the case may be, with respect to
the recording of revenues, expenses, costs, assets, and
liabilities, the disclosure of information, and the
preparation of financial statements; and
(B) may encompass broad guidelines for general
application as well as detailed standards, practices,
and procedures.
(5) Good wholly obtained or produced entirely in the
territory of korea, the united states, or both.--The term ``good
wholly obtained or produced entirely in the territory of Korea,
the United States, or both'' means any of the following:
(A) Plants and plant products grown, and harvested
or gathered, in the territory of Korea, the United
States, or both.
(B) Live animals born and raised in the territory of
Korea, the United States, or both.
[[Page 125 STAT. 443]]
(C) Goods obtained in the territory of Korea, the
United States, or both from live animals.
(D) Goods obtained from hunting, trapping, fishing,
or aquaculture conducted in the territory of Korea, the
United States, or both.
(E) Minerals and other natural resources not
included in subparagraphs (A) through (D) that are
extracted or taken from the territory of Korea, the
United States, or both.
(F) Fish, shellfish, and other marine life taken
from the sea, seabed, or subsoil outside the territory
of Korea or the United States by--
(i) a vessel that is registered or recorded
with Korea and flying the flag of Korea; or
(ii) a vessel that is documented under the
laws of the United States.
(G) Goods produced on board a factory ship from
goods referred to in subparagraph (F), if such factory
ship--
(i) is registered or recorded with Korea and
flies the flag of Korea; or
(ii) is a vessel that is documented under the
laws of the United States.
(H)(i) Goods taken by Korea or a person of Korea
from the seabed or subsoil outside the territory of
Korea, the United States, or both, if Korea has rights
to exploit such seabed or subsoil; or
(ii) Goods taken by the United States or a person of
the United States from the seabed or subsoil outside the
territory of the United States, Korea, or both, if the
United States has rights to exploit such seabed or
subsoil.
(I) Goods taken from outer space, if the goods are
obtained by Korea or the United States or a person of
Korea or the United States and not processed in the
territory of a country other than Korea or the United
States.
(J) Waste and scrap derived from--
(i) manufacturing or processing operations in
the territory of Korea, the United States, or
both; or
(ii) used goods collected in the territory of
Korea, the United States, or both, if such goods
are fit only for the recovery of raw materials.
(K) Recovered goods derived in the territory of
Korea, the United States, or both, from used goods, and
used in the territory of Korea, the United States, or
both, in the production of remanufactured goods.
(L) Goods, at any stage of production, produced in
the territory of Korea, the United States, or both,
exclusively from--
(i) goods referred to in any of subparagraphs
(A) through (J); or
(ii) the derivatives of goods referred to in
clause (i).
(6) Identical goods.--The term ``identical goods'' means
goods that are the same in all respects relevant to the rule of
origin that qualifies the goods as originating goods.
(7) Indirect material.--The term ``indirect material'' means
a good used in the production, testing, or inspection of another
good but not physically incorporated into that other
[[Page 125 STAT. 444]]
good, or a good used in the maintenance of buildings or the
operation of equipment associated with the production of another
good, including--
(A) fuel and energy;
(B) tools, dies, and molds;
(C) spare parts and materials used in the
maintenance of equipment or buildings;
(D) lubricants, greases, compounding materials, and
other materials used in production or used to operate
equipment or buildings;
(E) gloves, glasses, footwear, clothing, safety
equipment, and supplies;
(F) equipment, devices, and supplies used for
testing or inspecting the good;
(G) catalysts and solvents; and
(H) any other good that is not incorporated into the
other good but the use of which in the production of the
other good can reasonably be demonstrated to be a part
of that production.
(8) Material.--The term ``material'' means a good that is
used in the production of another good, including a part or an
ingredient.
(9) Material that is self-produced.--The term ``material
that is self-produced'' means an originating material that is
produced by a producer of a good and used in the production of
that good.
(10) Model line of motor vehicles.--The term ``model line of
motor vehicles'' means a group of motor vehicles having the same
platform or model name.
(11) Net cost.--The term ``net cost'' means total cost minus
sales promotion, marketing, and after-sales service costs,
royalties, shipping and packing costs, and non-allowable
interest costs that are included in the total cost.
(12) Nonallowable interest costs.--The term ``nonallowable
interest costs'' means interest costs incurred by a producer
that exceed 700 basis points above the applicable official
interest rate for comparable maturities of the country in which
the producer is located.
(13) Nonoriginating good or nonoriginating material.--The
term ``nonoriginating good'' or ``nonoriginating material''
means a good or material, as the case may be, that does not
qualify as originating under this section.
(14) Packing materials and containers for shipment.--The
term ``packing materials and containers for shipment'' means
goods used to protect another good during its transportation and
does not include the packaging materials and containers in which
the other good is packaged for retail sale.
(15) Preferential tariff treatment.--The term ``preferential
tariff treatment'' means the customs duty rate, and the
treatment under article 2.10.4 of the Agreement, that are
applicable to an originating good pursuant to the Agreement.
(16) Producer.--The term ``producer'' means a person who
engages in the production of a good in the territory of Korea or
the United States.
(17) Production.--The term ``production'' means growing,
mining, harvesting, fishing, breeding, raising, trapping,
[[Page 125 STAT. 445]]
hunting, manufacturing, processing, assembling, or disassembling
a good.
(18) Reasonably allocate.--The term ``reasonably allocate''
means to apportion in a manner that would be appropriate under
generally accepted accounting principles.
(19) Recovered goods.--The term ``recovered goods'' means
materials in the form of individual parts that are the result
of--
(A) the disassembly of used goods into individual
parts; and
(B) the cleaning, inspecting, testing, or other
processing that is necessary for improvement to sound
working condition of such individual parts.
(20) Remanufactured good.--The term ``remanufactured good''
means a good that is classified under chapter 84, 85, 87, or 90
or heading 9402, and that--
(A) is entirely or partially comprised of recovered
goods; and
(B) has a similar life expectancy and enjoys a
factory warranty similar to such a good that is new.
(21) Total cost.--
(A) In general.--The term ``total cost''--
(i) means all product costs, period costs, and
other costs for a good incurred in the territory
of Korea, the United States, or both; and
(ii) does not include profits that are earned
by the producer, regardless of whether they are
retained by the producer or paid out to other
persons as dividends, or taxes paid on those
profits, including capital gains taxes.
(B) Other definitions.--In this paragraph:
(i) Product costs.--The term ``product costs''
means costs that are associated with the
production of a good and include the value of
materials, direct labor costs, and direct
overhead.
(ii) Period costs.--The term ``period costs''
means costs, other than product costs, that are
expensed in the period in which they are incurred,
such as selling expenses and general and
administrative expenses.
(iii) Other costs.--The term ``other costs''
means all costs recorded on the books of the
producer that are not product costs or period
costs, such as interest.
(22) Used.--The term ``used'' means utilized or consumed in
the production of goods.
(o) Presidential Proclamation Authority.--
(1) In general.--The President is authorized to proclaim, as
part of the HTS--
(A) the provisions set forth in Annex 4-A and Annex
6-A of the Agreement; and
(B) any additional subordinate category that is
necessary to carry out this title consistent with the
Agreement.
(2) Modifications.--
(A) In general.--Subject to the consultation and
layover provisions of section 104, the President may
proclaim modifications to the provisions proclaimed
under the
[[Page 125 STAT. 446]]
authority of paragraph (1)(A), other than provisions of
chapters 50 through 63 (as included in Annex 4-A of the
Agreement).
(B) Additional proclamations.--Notwithstanding
subparagraph (A), and subject to the consultation and
layover provisions of section 104, the President may
proclaim--
(i) such modifications to the provisions
proclaimed under the authority of paragraph (1)(A)
as are necessary to implement an agreement with
Korea pursuant to article 4.2.5 of the Agreement;
and
(ii) <<NOTE: Time period.>> before the end of
the 1-year period beginning on the date on which
the Agreement enters into force, modifications to
correct any typographical, clerical, or other
nonsubstantive technical error regarding the
provisions of chapters 50 through 63 (as included
in Annex 4-A of the Agreement).
(3) Fibers, yarns, or fabrics not available in commercial
quantities in the united states.--
(A) In general.--Notwithstanding paragraph (2)(A),
the list of fibers, yarns, and fabrics set forth in the
list of the United States in Appendix 4-B-1 of the
Agreement may be modified as provided for in this
paragraph.
(B) Definitions.--In this paragraph:
(i) Interested entity.--The term ``interested
entity'' means the Government of Korea, a
potential or actual purchaser of a textile or
apparel good, or a potential or actual supplier of
a textile or apparel good.
(ii) Day; days.--All references to ``day'' and
``days'' exclude Saturdays, Sundays, and legal
holidays observed by the Government of the United
States.
(C) Requests to add fibers, yarns, or fabrics.--
(i) In general.--An interested entity may
request the President to determine that a fiber,
yarn, or fabric is not available in commercial
quantities in a timely manner in the United States
and to add that fiber, yarn, or fabric to the list
of the United States in Appendix 4-B-1 of the
Agreement.
(ii) Determination.--After receiving a request
under clause (i), the President may determine
whether--
(I) the fiber, yarn, or fabric is
available in commercial quantities in a
timely manner in the United States; or
(II) any interested entity objects
to the request.
(iii) Proclamation authority.--The President
may, within the time periods specified in clause
(iv), proclaim that the fiber, yarn, or fabric
that is the subject of the request is added to the
list of the United States in Appendix 4-B-1 of the
Agreement, if the President has determined under
clause (ii) that--
(I) the fiber, yarn, or fabric is
not available in commercial quantities
in a timely manner in the United States;
or
[[Page 125 STAT. 447]]
(II) no interested entity has
objected to the request.
(iv) Time periods.--The time periods within
which the President may issue a proclamation under
clause (iii) are--
(I) not later than 30 days after the
date on which a request is submitted
under clause (i); or
(II) not later than 60 days after
the request is submitted, if the
President determines, within 30 days
after the date on which the request is
submitted, that the President does not
have sufficient information to make a
determination under clause (ii).
(v) Effective date.--Notwithstanding section
103(a)(2), a proclamation made under clause (iii)
shall take effect on the date on which the text of
the proclamation is published in the Federal
Register.
(D) Deemed <<NOTE: Deadline.>> denial of request.--
If, after an interested entity submits a request under
subparagraph (C)(i), the President does not, within 30
days of the expiration of the applicable time period
specified in subparagraph (C)(iv), make a determination
under subparagraph (C)(ii) regarding the request, the
request shall be considered to be denied.
(E) Requests to remove fibers, yarns, or fabrics.--
(i) In general.--An interested entity may
request the President to remove from the list of
the United States in Appendix 4-B-1 of the
Agreement, any fiber, yarn, or fabric that has
been added to that list pursuant to subparagraph
(C)(iii).
(ii) <<NOTE: Deadline.>> Proclamation
authority.--Not later than 30 days after the date
on which a request under clause (i) is submitted,
the President may proclaim that the fiber, yarn,
or fabric that is the subject of the request is
removed from the list of the United States in
Appendix 4-B-1 of the Agreement if the President
determines that the fiber, yarn, or fabric is
available in commercial quantities in a timely
manner in the United States.
(iii) Effective date.--A proclamation issued
under clause (ii) may not take effect earlier than
the date that is 6 months after the date on which
the text of the proclamation is published in the
Federal Register.
(F) Procedures.--The President shall establish
procedures--
(i) governing the submission of a request
under subparagraphs (C) and (E); and
(ii) providing an opportunity for interested
entities to submit comments and supporting
evidence before the President makes a
determination under subparagraph (C)(ii) or
(E)(ii).
SEC. 203. CUSTOMS USER FEES.
Section 13031(b) of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (19 U.S.C. 58c(b)) is amended by adding after paragraph (18)
the following:
[[Page 125 STAT. 448]]
``(19) No fee may be charged under subsection (a) (9) or (10) with
respect to goods that qualify as originating goods under section 202 of
the United States-Korea Free Trade Agreement Implementation Act. Any
service for which an exemption from such fee is provided by reason of
this paragraph may not be funded with money contained in the Customs
User Fee Account.''.
SEC. 204. DISCLOSURE OF INCORRECT INFORMATION; FALSE
CERTIFICATIONS OF ORIGIN; DENIAL OF
PREFERENTIAL TARIFF TREATMENT.
(a) Disclosure of Incorrect Information.--Section 592 of the Tariff
Act of 1930 (19 U.S.C. 1592) is amended--
(1) in subsection (c)--
(A) by redesignating paragraph (11) as paragraph
(12); and
(B) by inserting after paragraph (10) the following
new paragraph:
``(11) Prior disclosure regarding claims under the united
states-korea free trade agreement.--An <<NOTE: Regulations.>>
importer shall not be subject to penalties under subsection (a)
for making an incorrect claim that a good qualifies as an
originating good under section 202 of the United States-Korea
Free Trade Agreement Implementation Act if the importer, in
accordance with regulations issued by the Secretary of the
Treasury, promptly and voluntarily makes a corrected declaration
and pays any duties owing with respect to that good.''; and
(2) by adding at the end the following new subsection:
``(j) False Certifications of Origin Under the United States-Korea
Free Trade Agreement.--
``(1) In general.--Subject to paragraph (2), it is unlawful
for any person to certify falsely, by fraud, gross negligence,
or negligence, in a KFTA certification of origin (as defined in
section 508 of this Act) that a good exported from the United
States qualifies as an originating good under the rules of
origin provided for in section 202 of the United States-Korea
Free Trade Agreement
Implementation <<NOTE: Applicability.>> Act. The procedures and
penalties of this section that apply to a violation of
subsection (a) also apply to a violation of this subsection.
``(2) Prompt <<NOTE: Notice.>> and voluntary disclosure of
incorrect information.--No penalty shall be imposed under this
subsection if, promptly after an exporter or producer that
issued a KFTA certification of origin has reason to believe that
such certification contains or is based on incorrect
information, the exporter or producer voluntarily provides
written notice of such incorrect information to every person to
whom the certification was issued.
``(3) Exception.--A person shall not be considered to have
violated paragraph (1) if--
``(A) the information was correct at the time it was
provided in a KFTA certification of origin but was later
rendered incorrect due to a change in circumstances; and
``(B) the person promptly and voluntarily provides
written notice of the change in circumstances to all
persons to whom the person provided the
certification.''.
(b) Denial of Preferential Tariff Treatment.--Section 514 of the
Tariff Act of 1930 (19 U.S.C. 1514) is amended by adding at the end the
following new subsection:
[[Page 125 STAT. 449]]
``(j) Denial of Preferential Tariff Treatment Under the United
States-Korea Free Trade Agreement.--If U.S. Customs and Border
Protection or U.S. Immigration and Customs Enforcement of the Department
of Homeland Security finds indications of a pattern of conduct by an
importer, exporter, or producer of false or unsupported representations
that goods qualify under the rules of origin provided for in section 202
of the United States-Korea Free Trade Agreement Implementation Act, U.S.
Customs and Border Protection, in accordance with regulations issued by
the Secretary of the Treasury, may suspend preferential tariff treatment
under the United States-Korea Free Trade Agreement Implementation Act to
entries of identical goods covered by subsequent representations by that
importer, exporter, or producer until U.S. Customs and Border Protection
determines that representations of that person are in conformity with
such section 202.''.
SEC. 205. RELIQUIDATION OF ENTRIES.
Section 520(d) of the Tariff Act of 1930 (19 U.S.C. 1520(d)) is
amended in the matter preceding paragraph (1)--
(1) by striking ``or''; and
(2) by striking ``for which'' and inserting ``, or section
202 of the United States-Korea Free Trade Agreement
Implementation Act for which''.
SEC. 206. RECORDKEEPING REQUIREMENTS.
Section 508 of the Tariff Act of 1930 (19 U.S.C. 1508) is amended--
(1) by redesignating subsection (i) as subsection (j);
(2) by inserting after subsection (h) the following new
subsection:
``(i) Certifications of Origin for Goods Exported Under the United
States-Korea Free Trade Agreement.--
``(1) Definitions.--In this subsection:
``(A) Records and supporting documents.--The term
`records and supporting documents' means, with respect
to an exported good under paragraph (2), records and
documents related to the origin of the good, including--
``(i) the purchase, cost, and value of, and
payment for, the good;
``(ii) the purchase, cost, and value of, and
payment for, all materials, including indirect
materials, used in the production of the good; and
``(iii) the production of the good in the form
in which it was exported.
``(B) KFTA certification of origin.--The term `KFTA
certification of origin' means the certification
established under article 6.15 of the United States-
Korea Free Trade Agreement that a good qualifies as an
originating good under such Agreement.
``(2) Exports <<NOTE: Regulations. Records.>> to korea.--
Any person who completes and issues a KFTA certification of
origin for a good exported from the United States shall make,
keep, and, pursuant to rules and regulations promulgated by the
Secretary of the Treasury, render for examination and inspection
all records and supporting documents related to the origin of
the good (including the certification or copies thereof).
``(3) Retention period.--The person who issues a KFTA
certification of origin shall keep the records and supporting
[[Page 125 STAT. 450]]
documents relating to that certification of origin for a period
of at least 5 years after the date on which the certification is
issued.''; and
(3) in subsection (j), as so redesignated, by striking
``(g), or (h)'' and inserting ``(g), (h), or (i)''.
SEC. 207. ENFORCEMENT RELATING TO TRADE IN TEXTILE OR APPAREL
GOODS.
(a) Action During Verification.--
(1) In general.--If the Secretary of the Treasury requests
the Government of Korea to conduct a verification pursuant to
article 4.3 of the Agreement for purposes of making a
determination under paragraph (2), the President may direct the
Secretary to take appropriate action described in subsection (b)
while the verification is being conducted.
(2) Determination.--A determination under this paragraph is
a determination of the Secretary that--
(A) an exporter or producer in Korea is complying
with applicable customs laws, regulations, procedures,
requirements, and practices affecting trade in textile
or apparel goods; or
(B) a claim that a textile or apparel good exported
or produced by such exporter or producer--
(i) qualifies as an originating good under
section 202, or
(ii) is a good of Korea,
is accurate.
(b) Appropriate Action Described.--Appropriate action under
subsection (a)(1) includes--
(1) suspension of liquidation of the entry of any textile or
apparel good exported or produced by the person that is the
subject of a verification under subsection (a)(1) regarding
compliance described in subsection (a)(2)(A), in a case in which
the request for verification was based on a reasonable suspicion
of unlawful activity related to such goods; and
(2) suspension of liquidation of the entry of a textile or
apparel good for which a claim has been made that is the subject
of a verification under subsection (a)(1) regarding a claim
described in subsection (a)(2)(B).
(c) Action When Information Is Insufficient.--If the Secretary of
the Treasury determines that the information obtained within 12 months
after making a request for a verification under subsection (a)(1) is
insufficient to make a determination under subsection (a)(2), the
President may direct the Secretary to take appropriate action described
in subsection (d) until such time as the Secretary receives information
sufficient to make the determination under subsection (a)(2) or until
such earlier date as the President may direct.
(d) Appropriate Action Described.--Appropriate action under
subsection (c) includes--
(1) denial of preferential tariff treatment under the
Agreement with respect to--
(A) any textile or apparel good exported or produced
by the person that is the subject of a verification
under subsection (a)(1) regarding compliance described
in subsection (a)(2)(A); or
[[Page 125 STAT. 451]]
(B) the textile or apparel good for which a claim
has been made that is the subject of a verification
under subsection (a)(1) regarding a claim described in
subsection (a)(2)(B); and
(2) denial of entry into the United States of--
(A) any textile or apparel good exported or produced
by the person that is the subject of a verification
under subsection (a)(1) regarding compliance described
in subsection (a)(2)(A); or
(B) a textile or apparel good for which a claim has
been made that is the subject of a verification under
subsection (a)(1) regarding a claim described in
subsection (a)(2)(B).
(e) Publication of Name of Person.--In accordance with article
4.3.11 of the Agreement, the Secretary of the Treasury may publish the
name of any person that the Secretary has determined--
(1) is engaged in circumvention of applicable laws,
regulations, or procedures affecting trade in textile or apparel
goods; or
(2) has failed to demonstrate that it produces, or is
capable of producing, textile or apparel goods.
(f) Certificate of Eligibility.--The Commissioner responsible for
U.S. Customs and Border Protection of the Department of Homeland
Security may require an importer to submit at the time the importer
files a claim for preferential tariff treatment under Annex 4-B of the
Agreement a certificate of eligibility, properly completed and signed by
an authorized official of the Government of Korea.
(g) Verifications in the United States.--If the government of a
country that is a party to a free trade agreement with the United States
makes a request for a verification pursuant to that agreement, the
Secretary of the Treasury may request a verification of the production
of any textile or apparel good in order to assist that government in
determining whether--
(1) a claim of origin under the agreement for a textile or
apparel good is accurate; or
(2) an exporter, producer, or other enterprise located in
the United States involved in the movement of textile or apparel
goods from the United States to the territory of the requesting
government is complying with applicable customs laws,
regulations, and procedures regarding trade in textile or
apparel goods.
SEC. 208. REGULATIONS.
The Secretary of the Treasury shall prescribe such regulations as
may be necessary to carry out--
(1) subsections (a) through (n) of section 202;
(2) the amendment made by section 203; and
(3) any proclamation issued under section 202(o).
TITLE III--RELIEF FROM IMPORTS
SEC. 301. DEFINITIONS.
In this title:
[[Page 125 STAT. 452]]
(1) Korean article.--The term ``Korean article'' means an
article that qualifies as an originating good under section
202(b).
(2) Korean motor vehicle article.--The term ``Korean motor
vehicle article'' means a good provided for in heading 8703 or
8704 of the HTS that qualifies as an originating good under
section 202(b).
(3) Korean textile or apparel article.--The term ``Korean
textile or apparel article'' means a textile or apparel good (as
defined in section 3(5)) that is a Korean article.
Subtitle A--Relief From Imports Benefitting From the Agreement
SEC. 311. COMMENCING OF ACTION FOR RELIEF.
(a) Filing of Petition.--
(1) In general.--A petition requesting action under this
subtitle for the purpose of adjusting to the obligations of the
United States under the Agreement may be filed with the
Commission by an entity, including a trade association, firm,
certified or recognized union, or group of workers, that is
representative of an industry. The Commission shall transmit a
copy of any petition filed under this subsection to the United
States Trade Representative.
(2) Provisional relief.--An entity filing a petition under
this subsection may request that provisional relief be provided
as if the petition had been filed under section 202(a) of the
Trade Act of 1974 (19 U.S.C. 2252(a)).
(3) Critical circumstances.--Any allegation that critical
circumstances exist shall be included in the petition.
(b) Investigation and Determination.--Upon the filing of a petition
under subsection (a), the Commission, unless subsection (d) applies,
shall promptly initiate an investigation to determine whether, as a
result of the reduction or elimination of a duty provided for under the
Agreement, a Korean article is being imported into the United States in
such increased quantities, in absolute terms or relative to domestic
production, and under such conditions that imports of the Korean article
constitute a substantial cause of serious injury or threat thereof to
the domestic industry producing an article that is like, or directly
competitive with, the imported article.
(c) Applicable Provisions.--The following provisions of section 202
of the Trade Act of 1974 (19 U.S.C. 2252) apply with respect to any
investigation initiated under subsection (b):
(1) Paragraphs (1)(B) and (3) of subsection (b).
(2) Subsection (c).
(3) Subsection (d).
(4) Subsection (i).
(d) Articles Exempt From Investigation.--No investigation may be
initiated under this section with respect to any Korean article if,
after the date on which the Agreement enters into force, import relief
has been provided with respect to that Korean article under this
subtitle.
[[Page 125 STAT. 453]]
SEC. 312. COMMISSION ACTION ON PETITION.
(a) <<NOTE: Deadline.>> Determination.--Not later than 120 days
(180 days if critical circumstances have been alleged) after the date on
which an investigation is initiated under section 311(b) with respect to
a petition, the Commission shall make the determination required under
that section.
(b) Applicable Provisions.--For purposes of this subtitle, the
provisions of paragraphs (1), (2), and (3) of section 330(d) of the
Tariff Act of 1930 (19 U.S.C. 1330(d) (1), (2), and (3)) shall be
applied with respect to determinations and findings made under this
section as if such determinations and findings were made under section
202 of the Trade Act of 1974 (19 U.S.C. 2252).
(c) Additional Finding and Recommendation if Determination
Affirmative.--
(1) In general.--If the determination made by the Commission
under subsection (a) with respect to imports of an article is
affirmative, or if the President may consider a determination of
the Commission to be an affirmative determination as provided
for under paragraph (1) of section 330(d) of the Tariff Act of
1930 (19 U.S.C. 1330(d)(1)), the Commission shall find, and
recommend to the President in the report required under
subsection (d), the amount of import relief that is necessary to
remedy or prevent the injury found by the Commission in the
determination and to facilitate the efforts of the domestic
industry to make a positive adjustment to import competition.
(2) Limitation on relief.--The import relief recommended by
the Commission under this subsection shall be limited to the
relief described in section 313(c).
(3) Voting; separate views.--Only those members of the
Commission who voted in the affirmative under subsection (a) are
eligible to vote on the proposed action to remedy or prevent the
injury found by the Commission. Members of the Commission who
did not vote in the affirmative may submit, in the report
required under subsection (d), separate views regarding what
action, if any, should be taken to remedy or prevent the injury.
(d) Report to President.--Not later than the date that is 30 days
after the date on which a determination is made under subsection (a)
with respect to an investigation, the Commission shall submit to the
President a report that includes--
(1) the determination made under subsection (a) and an
explanation of the basis for the determination;
(2) if the determination under subsection (a) is
affirmative, any findings and recommendations for import relief
made under subsection (c) and an explanation of the basis for
each recommendation; and
(3) any dissenting or separate views by members of the
Commission regarding the determination referred to in paragraph
(1) and any finding or recommendation referred to in paragraph
(2).
(e) Public Notice.--Upon submitting a report to the President under
subsection (d), the Commission shall promptly make public the report
(with the exception of information which the Commission determines to be
confidential) and shall publish a summary of the report in the Federal
Register.
[[Page 125 STAT. 454]]
SEC. 313. PROVISION OF RELIEF.
(a) <<NOTE: Deadline. President.>> In General.--Not later than the
date that is 30 days after the date on which the President receives a
report of the Commission in which the Commission's determination under
section 312(a) is affirmative, or which contains a determination under
section 312(a) that the President considers to be affirmative under
paragraph (1) of section 330(d) of the Tariff Act of 1930 (19 U.S.C.
1330(d)(1)), the President, subject to subsection (b), shall provide
relief from imports of the article that is the subject of such
determination to the extent that the President determines necessary to
remedy or prevent the injury found by the Commission and to facilitate
the efforts of the domestic industry to make a positive adjustment to
import competition.
(b) Exception.--The President is not required to provide import
relief under this section if the President determines that the provision
of the import relief will not provide greater economic and social
benefits than costs.
(c) Nature of Relief.--
(1) In general.--Except as provided in paragraph (2), the
import relief that the President is authorized to provide under
this section with respect to imports of an article is as
follows:
(A) The suspension of any further reduction provided
for under Annex 2-B of the Agreement in the duty imposed
on the article.
(B) An increase in the rate of duty imposed on the
article to a level that does not exceed the lesser of--
(i) the column 1 general rate of duty imposed
under the HTS on like articles at the time the
import relief is provided; or
(ii) the column 1 general rate of duty imposed
under the HTS on like articles on the day before
the date on which the Agreement enters into force.
(2) Duties applied on a seasonal basis.--In the case of
imports of an article to which a duty is applied on a seasonal
basis, the import relief that the President is authorized to
provide under this section is as follows:
(A) The suspension of any further reduction provided
for under Annex 2-B of the Agreement in the duty imposed
on the article.
(B) An increase in the rate of duty imposed on the
article to a level that does not exceed the lesser of--
(i) the column 1 general rate of duty imposed
under the HTS on like articles for the
corresponding season immediately preceding the
date the import relief is provided; or
(ii) the column 1 general rate of duty imposed
under the HTS for the corresponding season
immediately preceding the date on which the
Agreement enters into force.
(3) Progressive liberalization.--If the period for which
import relief is provided under this section is greater than 1
year, the President shall provide for the progressive
liberalization (described in article 10.2.7 of the Agreement) of
such relief at regular intervals during the period of its
application.
(d) Period of Relief.--
[[Page 125 STAT. 455]]
(1) In general.--Subject to paragraph (2), any import relief
that the President provides under this section may not be in
effect for more than 2 years.
(2) Extension.--
(A) In general.--Subject to subparagraph (C), the
President, after receiving a determination from the
Commission under subparagraph (B) that is affirmative,
or which the President considers to be affirmative under
paragraph (1) of section 330(d) of the Tariff Act of
1930 (19 U.S.C. 1330(d)(1)), may extend the effective
period of any import relief provided under this section
by up to 1 year, if the President determines that--
(i) the import relief continues to be
necessary to remedy or prevent serious injury and
to facilitate adjustment by the domestic industry
to import competition; and
(ii) there is evidence that the industry is
making a positive adjustment to import
competition.
(B) Action by commission.--
(i) <<NOTE: Deadlines.>> Investigation.--Upon
a petition on behalf of the industry concerned
that is filed with the Commission not earlier than
the date that is 9 months, and not later than the
date that is 6 months, before the date on which
any action taken under subsection (a) is to
terminate, the Commission shall conduct an
investigation to determine whether action under
this section continues to be necessary to remedy
or prevent serious injury and whether there is
evidence that the industry is making a positive
adjustment to import competition.
(ii) <<NOTE: Federal Register, publication.>>
Notice and hearing.--The Commission shall publish
notice of the commencement of any proceeding under
this subparagraph in the Federal Register and
shall, within a reasonable time thereafter, hold a
public hearing at which the Commission shall
afford interested parties and consumers an
opportunity to be present, to present evidence,
and to respond to the presentations of other
parties and consumers, and otherwise to be heard.
(iii) Report.--The Commission shall submit to
the President a report on its investigation and
determination under this subparagraph not later
than 60 days before the action under subsection
(a) is to terminate, unless the President
specifies a different date.
(C) Period of import relief.--Any import relief
provided under this section, including any extensions
thereof, may not, in the aggregate, be in effect for
more than 3 years.
(e) <<NOTE: Effective date.>> Rate After Termination of Import
Relief.--Beginning on the date on which import relief under this section
is terminated with respect to an article, the rate of duty on that
article shall be the rate that would have been in effect but for the
provision of such relief.
(f) Articles Exempt From Relief.--No import relief may be provided
under this section on any article that is subject to import relief
under--
(1) subtitle B or C; or
[[Page 125 STAT. 456]]
(2) chapter 1 of title II of the Trade Act of 1974 (19
U.S.C. 2251 et seq.).
SEC. 314. TERMINATION OF RELIEF AUTHORITY.
(a) General Rule.--Subject to subsection (b), no import relief may
be provided under this subtitle after the date that is 10 years after
the date on which the Agreement enters into force.
(b) Exception.--If an article for which relief is provided under
this subtitle is an article for which the period for tariff elimination,
set forth in the Schedule of the United States to Annex 2-B of the
Agreement, is greater than 10 years, no relief under this subtitle may
be provided for that article after the date on which that period ends.
(c) Presidential Determination.--Import relief may be provided under
this subtitle in the case of a Korean article after the date on which
such relief would, but for this subsection, terminate under subsection
(a) and (b), if the President determines that Korea has consented to
such relief.
SEC. 315. COMPENSATION AUTHORITY.
For purposes of section 123 of the Trade Act of 1974 (19 U.S.C.
2133), any import relief provided by the President under section 313
shall be treated as action taken under chapter 1 of title II of such Act
(19 U.S.C. 2251 et seq.).
SEC. 316. CONFIDENTIAL BUSINESS INFORMATION.
Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C. 2252(a)(8)) is
amended in the first sentence--
(1) by striking ``and''; and
(2) by inserting before the period at the end ``, and title
III of the United States-Korea Free Trade Agreement
Implementation Act''.
Subtitle B--Motor Vehicle Safeguard Measures
SEC. 321. MOTOR VEHICLE SAFEGUARD MEASURES.
The <<NOTE: Applicability.>> provisions of subtitle A shall apply
with respect to a Korean motor vehicle article to the same extent that
such provisions apply to Korean articles, except as follows:
(1) Section 311(d) and paragraphs (2) and (3) of 313(c)
shall not apply.
(2) Section 313(d)(2)(A) shall be applied and administered
by substituting ``2 years'' for ``1 year''.
(3) Section 313(d)(2)(C) shall be applied and administered
by substituting ``4 years'' for ``3 years''.
(4) Section 313(f)(1) shall be applied and administered by
substituting ``subtitle A'' for ``subtitle B or C''.
(5) Section 314(b) shall be applied and administered as if
such section read as follows:
``(b) Exception.--Import relief may be provided under this subtitle
with respect to a Korean motor vehicle article during any period before
the date that is 10 years after the date on which duties on the article
are eliminated, as set forth in section 201(d), or, if the article is
not referred to in section 201(d), the Schedule of the United States to
Annex 2-B of the Agreement.''.
[[Page 125 STAT. 457]]
Subtitle C--Textile and Apparel Safeguard Measures
SEC. 331. <<NOTE: President.>> COMMENCEMENT OF ACTION FOR RELIEF.
(a) In <<NOTE: Review.>> General.--A request for action under this
subtitle for the purpose of adjusting to the obligations of the United
States under the Agreement may be filed with the President by an
interested party. Upon the filing of a request, the President shall
review the request to determine, from information presented in the
request, whether to commence consideration of the request.
(b) Publication <<NOTE: Federal Register, publication.>> of
Request.--If the President determines that the request under subsection
(a) provides the information necessary for the request to be considered,
the President shall publish in the Federal Register a notice of
commencement of consideration of the request, and notice seeking public
comments regarding the request. The notice shall include a summary of
the request and the dates by which comments and rebuttals must be
received.
SEC. 332. <<NOTE: President.>> DETERMINATION AND PROVISION OF
RELIEF.
(a) Determination.--
(1) In general.--If a positive determination is made under
section 331(b), the President shall determine whether, as a
result of the reduction or elimination of a duty under the
Agreement, a Korean textile or apparel article is being imported
into the United States in such increased quantities, in absolute
terms or relative to the domestic market for that article, and
under such conditions as to cause serious damage, or actual
threat thereof, to a domestic industry producing an article that
is like, or directly competitive with, the imported article.
(2) Serious damage.--In making a determination under
paragraph (1), the President--
(A) shall examine the effect of increased imports on
the domestic industry, as reflected in changes in such
relevant economic factors as output, productivity,
utilization of capacity, inventories, market share,
exports, wages, employment, domestic prices, profits,
and investment, no one of which is necessarily decisive;
and
(B) shall not consider changes in technology or
consumer preference as factors supporting a
determination of serious damage or actual threat
thereof.
(b) Provision of Relief.--
(1) In general.--If a determination under subsection (a) is
affirmative, the President may provide relief from imports of
the article that is the subject of such determination, as
provided in paragraph (2), to the extent that the President
determines necessary to remedy or prevent the serious damage and
to facilitate adjustment by the domestic industry.
(2) Nature of relief.--The relief that the President is
authorized to provide under this subsection with respect to
imports of an article is--
(A) the suspension of any further reduction provided
for under Annex 2-B of the Agreement in the duty imposed
on the article; or
(B) an increase in the rate of duty imposed on the
article to a level that does not exceed the lesser of--
[[Page 125 STAT. 458]]
(i) the column 1 general rate of duty imposed
under the HTS on like articles at the time the
import relief is provided; or
(ii) the column 1 general rate of duty imposed
under the HTS on like articles on the day before
the date on which the Agreement enters into force.
SEC. 333. PERIOD OF RELIEF.
(a) In General.--Subject to subsection (b), the import relief that
the President provides under section 332(b) may not be in effect for
more than 2 years.
(b) Extension.--
(1) In general.--Subject to paragraph (2), the President may
extend the effective period of any import relief provided under
this subtitle for a period of not more than 2 years, if the
President determines that--
(A) the import relief continues to be necessary to
remedy or prevent serious damage and to facilitate
adjustment by the domestic industry to import
competition; and
(B) there is evidence that the industry is making a
positive adjustment to import competition.
(2) Limitation.--Any relief provided under this subtitle,
including any extensions thereof, may not, in the aggregate, be
in effect for more than 4 years.
SEC. 334. ARTICLES EXEMPT FROM RELIEF.
The President may not provide import relief under this subtitle with
respect to an article if--
(1) import relief previously has been provided under this
subtitle with respect to that article; or
(2) the article is subject to import relief under--
(A) subtitle A; or
(B) chapter 1 of title II of the Trade Act of 1974
(19 U.S.C. 2251 et seq.).
SEC. 335. RATE AFTER TERMINATION OF IMPORT RELIEF.
On the date on which import relief under this subtitle is terminated
with respect to an article, the rate of duty on that article shall be
the rate that would have been in effect but for the provision of such
relief.
SEC. 336. TERMINATION OF RELIEF AUTHORITY.
No import relief may be provided under this subtitle with respect to
any article after the date that is 10 years after the date on which
duties on the article are eliminated pursuant to the Agreement.
SEC. 337. COMPENSATION AUTHORITY.
For purposes of section 123 of the Trade Act of 1974 (19 U.S.C.
2133), any import relief provided by the President under this subtitle
shall be treated as action taken under chapter 1 of title II of such Act
(19 U.S.C. 2251 et seq.).
SEC. 338. CONFIDENTIAL BUSINESS INFORMATION.
The President may not release information received in connection
with an investigation or determination under this subtitle which the
President considers to be confidential business information unless the
party submitting the confidential business information had notice, at
the time of submission, that such information
[[Page 125 STAT. 459]]
would be released by the President, or such party subsequently consents
to the release of the information. To the extent a party submits
confidential business information, the party shall also provide a
nonconfidential version of the information in which the confidential
business information is summarized or, if necessary, deleted.
Subtitle D--Cases Under Title II of the Trade Act of 1974
SEC. 341. FINDINGS AND ACTION ON KOREAN ARTICLES.
(a) Effect <<NOTE: Reports.>> of Imports.--If, in any investigation
initiated under chapter 1 of title II of the Trade Act of 1974 (19
U.S.C. 2251 et seq.), the Commission makes an affirmative determination
(or a determination which the President may treat as an affirmative
determination under such chapter by reason of section 330(d) of the
Tariff Act of 1930 (19 U.S.C. 1330(d))), the Commission shall also find
(and report to the President at the time such injury determination is
submitted to the President) whether imports of the Korean article are a
substantial cause of serious injury or threat thereof.
(b) Presidential Determination Regarding Korean Articles.--In
determining the nature and extent of action to be taken under chapter 1
of title II of the Trade Act of 1974 (19 U.S.C. 2251 et seq.), the
President may exclude from the action Korean articles with respect to
which the Commission has made a negative finding under subsection (a).
TITLE IV--PROCUREMENT
SEC. 401. ELIGIBLE PRODUCTS.
Section 308(4)(A) of the Trade Agreements Act of 1979 (19 U.S.C.
2518(4)(A)) is amended--
(1) by striking ``or'' at the end of clause (vi);
(2) by striking the period at the end of clause (vii) and
inserting ``; or''; and
(3) by adding at the end the following new clause:
``(viii) a party to the United States-Korea
Free Trade Agreement, a product or service of that
country or instrumentality which is covered under
that agreement for procurement by the United
States.''.
TITLE V--OFFSETS
SEC. 501. INCREASE IN PENALTY ON PAID PREPARERS WHO FAIL TO COMPLY
WITH EARNED INCOME TAX CREDIT DUE
DILIGENCE REQUIREMENTS.
(a) In General.--Section 6695(g) of the Internal Revenue Code
of <<NOTE: 26 USC 6695.>> 1986 is amended by striking ``$100'' and
inserting ``$500''.
(b) Effective Date.--The amendment made by this section shall apply
to returns required to be filed after December 31, 2011.
[[Page 125 STAT. 460]]
SEC. 502. REQUIREMENT FOR PRISONS LOCATED IN THE UNITED STATES TO
PROVIDE INFORMATION FOR TAX
ADMINISTRATION.
(a) In General.--Subchapter B of chapter 61 of the Internal Revenue
Code of 1986 is amended by redesignating section 6116 as section
6117 <<NOTE: 26 USC 6117.>> and by inserting after section 6115 the
following new section:
``SEC. 6116. <<NOTE: 26 USC 6116.>> REQUIREMENT FOR PRISONS
LOCATED IN UNITED STATES TO PROVIDE
INFORMATION FOR TAX ADMINISTRATION.
``(a) In <<NOTE: Deadline. Lists. Time period.>> General.--Not later
than September 15, 2012, and annually thereafter, the head of the
Federal Bureau of Prisons and the head of any State agency charged with
the responsibility for administration of prisons shall provide to the
Secretary in electronic format a list with the information described in
subsection (b) of all the inmates incarcerated within the prison system
for any part of the prior 2 calendar years or the current calendar year
through August 31.
``(b) Information.--The information with respect to each inmate is--
``(1) first, middle, and last name,
``(2) date of birth,
``(3) institution of current incarceration or, for released
inmates, most recent incarceration,
``(4) prison assigned inmate number,
``(5) the date of incarceration,
``(6) the date of release or anticipated date of release,
``(7) the date of work release,
``(8) taxpayer identification number and whether the prison
has verified such number,
``(9) last known address, and
``(10) any additional information as the Secretary may
request.
``(c) Format.--The Secretary shall determine the electronic format
of the information described in subsection (b).''.
(b) Clerical Amendment.--The table of sections for such subchapter
is amended by striking the item relating to section 6116 and by adding
at the end the following new items:
``Sec. 6116. Requirement for prisons located in United States to provide
information for tax administration.
``Sec. 6117. Cross reference.''.
SEC. 503. <<NOTE: Time period. Applicability.>> RATE FOR
MERCHANDISE PROCESSING FEES.
For the period beginning on December 1, 2015, and ending on June 30,
2021, section 13031(a)(9) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)) shall be applied and
administered--
(1) in subparagraph (A), by substituting ``0.3464'' for
``0.21''; and
(2) in subparagraph (B)(i), by substituting ``0.3464'' for
``0.21''.
SEC. 504. EXTENSION OF CUSTOMS USER FEES.
(a) In General.--Section 13031(j)(3)(A) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A)) is amended by
striking ``January 7, 2020'' and inserting ``August 2, 2021''.
[[Page 125 STAT. 461]]
(b) Other Fees.--Section 13031(j)(3)(B)(i) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(B)(i)) is
amended by striking ``January 14, 2020'' and inserting ``December 8,
2020''.
SEC. 505. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
Notwithstanding section 6655 of the Internal Revenue Code of 1986,
in the case of a corporation with assets of not less than $1,000,000,000
(determined as of the end of the preceding taxable year)--
(1) the amount of any required installment of corporate
estimated tax which is otherwise due in July, August, or
September of 2012 shall be increased by 0.25 percent of such
amount (determined without regard to any increase in such amount
not contained in such Code);
(2) the amount of any required installment of corporate
estimated tax which is otherwise due in July, August, or
September of 2016 shall be increased by 2.75 percent of such
amount (determined without regard to any increase in such amount
not contained in such Code); and
(3) the amount of the next required installment after an
installment referred to in paragraph (1) or (2) shall be
appropriately reduced to reflect the amount of the increase by
reason of such paragraph.
Approved October 21, 2011.
LEGISLATIVE HISTORY--H.R. 3080 (S. 1642):
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HOUSE REPORTS: No. 112-239 (Comm. on Ways and Means).
CONGRESSIONAL RECORD, Vol. 157 (2011):
Oct. 11, considered in House.
Oct. 12, considered and passed House and Senate.
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