ITA Issues Interim Procedures for HOPE II "3 for 1" Program for Haiti Apparel
The International Trade Administration has issued interim procedures, effective September 30, 2008, for the implementation of the "3 for 1" Earned Import Allowance Program for certain Haiti apparel. Written comments are due by November 14, 2008.
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This program is mandated by the 2008 Farm Bill (Public Law 110-234), which amended the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006 (HOPE I) by requiring the ITA to create an un-capped duty-free benefit for apparel wholly assembled or knit-to-shape in Haiti (without regard to the source of the fabrics, fabric components, components knit-to-shape, or yarns) for qualifying apparel producers that have earned "3 for 1" import allowance credits (HOPE II provision).
1 SME Credit Earned for Every 3 SMEs of "Qualifying Fabric" Used
Under the HOPE II "3 for 1" program, one square meter equivalent (SME) credit will be issued to a qualifying apparel producer for every three SMEs of "qualifying woven fabric" or "qualifying knit fabric" that the qualifying apparel producer can demonstrate it purchased for the manufacture of apparel wholly assembled or knit-to-shape in Haiti.
(A "qualifying apparel producer" is an entity or group that exercises direct, daily operational control over the apparel production process in Haiti; or an entity that is not a producer and that controls the apparel production process in Haiti through a contractual relationship or other indirect means.)
Extensive Program Requirements for "Qualifying Fabric"
"Qualifying woven fabric" and "qualifying knit fabric" (knit fabric or knit-to-shape components) must be formed or knit from yarn wholly formed in the U.S., and purchased on or after October 1, 2008 expressly for the production of apparel wholly assembled or knit-to-shape in Haiti. In addition:
"Qualifying knit fabric." The knit fabric or knit-to-shape components must be wholly formed or knit-to-shape in any country or any combination of countries described in Section 213A(1)(B)(iii) of the Caribbean Basin Economic Recovery Act (CBERA), as amended by HOPE II.
"Qualifying woven fabric." The woven fabric must be wholly formed in the U.S. from yarns wholly formed in the U.S.
(See ITA notice for de minimis exception for qualifying fabric, other definitions, etc.)
Other Haiti Apparel May Use the Earned Credits to Enter U.S. Duty-Free
Apparel that is wholly assembled or knit-to-shape in Haiti from any combination of fabrics, fabric components, components knit-to-shape, or yarns and imported directly from Haiti or the Dominican Republic shall enter the U.S. free of duty, without regard to the source of the fabrics, fabric components, components knit-to-shape or yarns from which the articles are made, if such apparel articles are accompanied by an earned import allowance certificate that reflects the amount of credits equal to the total SME of such apparel articles, in accordance with the program.
OTEXA to Open Producer Accounts, Administer Program Using On-Line System
The ITA's Office of Textiles and Apparel (OTEXA) intends to promptly begin the process of opening and administering qualifying apparel producers' accounts to issue certificates as appropriate.
On-line system. Requests for deposits of credits for purchases of qualifying woven fabrics and qualifying knit fabrics as well as redemption of such credits for earned import allowance certificates will be made through a dedicated on-line system, known as the Haiti HOPE II Earned Import Allowance Online System. (See notice for instructions on requesting an account, submitting a request to deposit credits, etc. Note that the system is not yet available.)
Submitting certificate requests. A qualifying apparel producer may request the issuance of an earned import allowance certificate via the HOPE II online system. As long as there are sufficient credits available, a certificate will be automatically generated by the system, and the credits will be automatically withdrawn from the qualifying apparel producer's account. If there are insufficient credits in the qualifying apparel producer's account, the request for a certificate will automatically be denied by the HOPE II online system.
Webinar Planned, FAQs Expected
OTEXA sources noted that OTEXA plans to hold a webinar on these interim procedures soon, which should include screen shots and an explanation of how to use the HOPE II system. Sources add that a frequently asked questions document will soon be issued on the procedures.
(The ITA notes that these interim procedures may be modified in the future to address concerns that may arise as OTEXA gains experience in implementing them.)
(See ITT's Online Archives or 06/20/08 news, 08062025, for BP summary of the International Trade Commission's finding that the impact of Haiti HOPE I has been minimal, which gives brief overview of HOPE II.
See ITT's Online Archives or 05/19/08 news, 08051905, for BP summary of the Farm Bill, with information on HOPE II.)
- comments are due by November 14, 2008
ITA (OTEXA) contact - Maria Dybczak (202) 482-3651
ITA interim procedures (FR Pub 09/15/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-21481.pdf