CSMS Message: 00-000096

TO: ALL ABI BROKERS.
FROM: HQ. QUOTA

SUBJECT: TEX-OUTWARD PROCESSING PROGRAM

DATE: 02/09/2000
DATE: 01/01/2000

SPE-2 FO:TP:TA:TT AKD

CATEGORY: TEX

TO: ALL DIRECTORS, FIELD OPERATIONS, PORT DIRECTORS,
ASSISTANT PORT DIRECTORS, TRADE PROGRAMS AND
STRATEGIC TRADE CENTER (STC) DIRECTORS

FROM: DIRECTOR, TRADE PROGRAMS

PASS TO: IMPORT SPECIALISTS, NATIONAL IMPORT SPECIALISTS,
ENTRY OFFICERS, INSPECTORS, INTERNATIONAL TRADE
SPECIALISTS, AND INTERESTED PARTIES

SUBJECT: TBT-99-058 - OUTWARD PROCESSING PROGRAM (OPP)

COUNTRY: ALL OPP COUNTRIES (CURRENTLY MACEDONIA AND
ROMANIA)

BACKGROUND:

THE GOVERNMENT OF THE UNITED STATES SIGNED MEMORANDA OF
UNDERSTANDING WITH THE GOVERNMENT OF ROMANIA (SEPTEMBER 10,
1999) AND THE GOVERNMENT OF THE FORMER YUGOSLAV REPUBLIC
OF MACEDONIA (SEPTEMBER 17, 1999) PROVIDING FOR AN OUTWARD
PROCESSING PROGRAM FOR CERTAIN WOOL APPAREL PRODUCTS.

UNDER THE OUTWARD PROCESSING PROGRAM, THESE TEXTILE PRODUCTS
WILL NOT BE SUBJECT TO QUANTITATIVE RESTRICTIONS (QUOTA)
UPON IMPORTATION INTO THE UNITED STATES IF THEY EITHER (A)
ARE ASSEMBLED IN A PARTICIPATING COUNTRY OF FABRICS FORMED AND
CUT IN THE UNITED STATES OR (B) ARE CUT AND ASSEMBLED IN A
PARTICIPATING COUNTRY OF FABRIC FORMED IN THE UNITED STATES.

PRODUCTS THAT QUALIFY FOR OUTWARD PROCESSING PROGRAM TREATMENT
MUST BE CERTIFIED BY THE PARTICIPATING GOVERNMENT AND WILL BE
MONITORED BY THE U.S. CUSTOMS SERVICE. EACH SHIPMENT MUST BE
CERTIFIED WITH AN ORIGINAL SQUARE-SHAPED STAMPED MARKING IN
BLUE INK ON THE FRONT OF THE COMMERCIAL INVOICE. MERCHANDISE
THAT DOES NOT QUALIFY FOR THE OUTWARD PROCESSING PROGRAM MAY BE
SUBJECT TO VISA OR EXEMPT CERTIFICATE REQUIREMENTS.

PRODUCTS EXPORTED FROM MACEDONIA OR ROMANIA AND ENTERED
OR WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION ON OR AFTER
JANUARY 1, 2000, MAY BE IMPORTED PURSUANT TO THE OUTWARD
PROCESSING PROGRAM. REFER TO TBT-99-059 AND TBT-99-060
FOR FURTHER INFORMATION ABOUT QUALIFYING PRODUCTS FROM
MACEDONIA AND ROMANIA RESPECTIVELY.

GENERAL REQUIREMENTS: QUALIFYING PRODUCTS

IN ORDER TO QUALIFY FOR OUTWARD PROCESSING PROGRAM
TREATMENT, QUALIFYING WOOL APPAREL PRODUCTS MUST MEET THE
FOLLOWING REQUIREMENTS:

(1) THE PRODUCT MUST BE EITHER MANUFACTURED FROM U.S. FORMED
FABRIC THAT IS BOTH CUT AND ASSEMBLED IN A PARTICIPATING COUNTRY,
OR FROM U.S. FORMED FABRIC THAT IS CUT IN THE UNITED STATES AND
ASSEMBLED IN A PARTICIPATING COUNTRY. THE PRODUCT MAY BE
PARTIALLY CUT OR PARTIALLY ASSEMBLED IN EITHER COUNTRY, BUT ALL
ASSEMBLY AND CUTTING OPERATIONS MUST BE PERFORMED IN EITHER THE
PARTICIPATING COUNTRY OR THE UNITED STATES. A PARTICIPATING
COUNTRY IS A COUNTRY WITH WHICH THE UNITED STATES HAS ENTERED
INTO A BILATERAL AGREEMENT REGARDING THE OUTWARD PROCESSING PROGRAM.

(2) THE PRODUCT MUST BE ASSEMBLED OR MANUFACTURED (THAT IS, BOTH
CUT AND ASSEMBLED) FROM FABRIC WHICH IS FORMED IN THE UNITED
STATES; I.E., ALL FABRIC COMPONENTS OF THE PRODUCT MUST BE U.S.
FORMED. THIS REQUIREMENT APPLIES TO ALL TEXTILE COMPONENTS OF
THE PRODUCT, INCLUDING LININGS AND POCKETING, EXCEPT AS PROVIDED
IN (4) BELOW. GREIGE GOODS IMPORTED INTO, AND THEN FINISHED IN,
UNITED STATES ARE NOT CONSIDERED FABRIC FORMED IN THE UNITED
STATES. FABRIC THAT IS WOVEN OR KNITTED IN THE UNITED STATES
FROM FOREIGN YARN IS CONSIDERED U.S. FORMED;

(3) THE IMPORTER OF THE QUALIFYING WOOL APPAREL PRODUCT AND THE
EXPORTER OF THE U.S. FORMED FABRIC OR THE COMPONENT PARTS MUST
BE THE SAME ENTITY OR PERSON;

(4) FINDINGS AND TRIMMINGS OF NON-U.S. ORIGIN MAY BE INCORPORATED
INTO THE PRODUCT, PROVIDED THEY DO NOT EXCEED 25 PERCENT OF THE
COST OF THE FABRIC IN THE PRODUCT. FINDINGS AND TRIMMINGS INCLUDE
SEWING THREAD, HOOKS AND EYES, SNAPS, BUTTONS, "BOW BUDS",
DECORATIVE LACE TRIM, ZIPPERS, INCLUDING ZIPPER TAPES, AND LABELS;

NOTHING IN THESE REQUIREMENTS PRECLUDES PERFORMING ANY OPERATION
IN THE UNITED STATES.

RECORD KEEPING REQUIREMENTS

THE FOLLOWING DOCUMENTS SHALL BE MAINTAINED AND MADE AVAILABLE FOR
REVIEW BY THE U.S. CUSTOMS SERVICE AND CITA:

(1) ENTRY DOCUMENTS MADE DURING THE QUARTER;

(2) DESIGN STYLE COSTING SHEETS OR SIMILAR DOCUMENTS PROVIDING
A COMPLETE DESCRIPTION OF THE ASSEMBLED PRODUCTS;

(3) CUTTING TICKETS (IF THE FABRIC IS CUT IN THE UNITED STATES),
INCLUDING THE NAME AND LOCATION OF THE CUTTING FACILITY
FOR THOSE ENTRIES;

(4) MILL INVOICES, INCLUDING THE NAME OF THE MILL WHERE THE
THE FABRIC WAS FORMED. IF THE FABRIC WAS PURCHASED FROM A
THIRD PARTY, THE PARTICIPANT IS RESPONSIBLE FOR OBTAINING
THE MILL INVOICE. THE PARTICIPANT MUST ALSO OBTAIN A
SIGNED STATEMENT FROM A PRINCIPAL AT THE MILL THAT THE
FABRIC IS OF U.S. ORIGIN. THIS CAN BE STATED DIRECTLY ON
THE INVOICE OR ON A SEPARATE DOCUMENT THAT RELATES TO EACH
SPECIFIC SHIPMENT OF FABRIC. VERTICALLY INTEGRATED PARTICI-
PANTS, I.E., PARTICIPANTS THAT BOTH FORM AND CUT FABRIC,
MUST RETAIN AN INTERNAL TRANSFER DOCUMENT OR OTHER DOCUMENTARY
PROOF THAT THEY FORMED THE FABRIC IN THE UNITED STATES;

(5) TRANSPORTATION DOCUMENTS IF FABRIC IS CUT IN THE UNITED STATES
(MILL TO CUTTING FACILITY; CUTTING FACILITY TO BORDER/
ASSEMBLER); AND

(6) EXPORT DOCUMENTATION

THE ABOVE DOCUMENTS SHALL BE MAINTAINED BY CALENDAR QUARTER,
BY COUNTRY, AND BY CATEGORY. THE DOCUMENTS SHALL BE
ORGANIZED AND FILED (PREFERABLY IN A SINGLE LOCATION TO
FACILITATE U.S. CUSTOMS REVIEW).

ACTION:

THE U.S. CUSTOMS SERVICE WILL MONITOR ALL SHIPMENTS ENTERED
PURSUANT TO THE OUTWARD PROCESSING PROGRAM. IN ORDER TO ENSURE
THAT PARTICIPANTS IN THE OUTWARD PROCESSING PROGRAM COMPLY FULLY
WITH THE REQUIREMENTS SET FORTH IN THIS NOTICE, CUSTOMS WILL
CONDUCT POST ENTRY COMPLIANCE REVIEWS. THESE REVIEWS WILL BE
CONDUCTED FOR ENTRIES MADE FOR THE FIRST QUARTER OF 2000 AND SHALL
CONTINUE FOR EACH SUCCESSIVE QUARTER. DURING THE COURSE OF
SUCH REVIEW, THE PARTICIPANT MUST PROVIDE CUSTOMS OFFICIALS
WITH EVIDENCE, THROUGH THE DOCUMENTS DESCRIBED ABOVE, THAT ALL
PRODUCTS ENTERED UNDER THE OUTWARD PROCESSING PROGRAM QUALIFY
FOR OUTWARD PROCESSING PROGRAM TREATMENT. CUSTOMS HEADQUARTERS
WILL NOTIFY CUSTOMS PORTS WHEN COMPLIANCE REVIEWS WILL BE CONDUCTED.

FALSE OR INACCURATE REPRESENTATIONS MADE IN THE CONTEXT OF THE
OUTWARD PROCESSING PROGRAM MAY RESULT IN LIABILITY UNDER U.S.
LAWS PROHIBITING FALSE OR MISLEADING STATEMENTS, INCLUDING
18 U.S.C. 1001 AND 19 U.S.C. 1592. CUSTOMS WILL NOTIFY CITA
OF ANY VIOLATIONS OF TERMS OF THIS PROGRAM. CITA MAY SUSPEND
PARTICIPATION IN THE OUTWARD PROCESSING PROGRAM FOR SUCH
REPRESENTATIONS, FOR FAILING TO ABIDE BY THE OUTWARD PROCESSING
PROGRAM'S RECORDKEEPING REQUIREMENTS, OR FOR OTHERWISE VIOLATING
THE TERMS OF THE PROGRAM.

IN THE EVENT OF CREDIBLE EVIDENCE THAT A PARTICIPANT HAS
VIOLATED THE TERMS OF THE OUTWARD PROCESSING PROGRAM, THE CHAIRMAN
OF CITA WILL NOTIFY THE PARTICIPANT IN WRITING OF THE ALLEGED
VIOLATION. THE PARTICIPANT WILL HAVE 30 DAYS TO RESPOND AND/OR
REQUEST A MEETING WITH CITA REPRESENTATIVES TO DISCUSS THE ALLEGED
VIOLATION. AFTER REVIEWING THE EVIDENCE AND THE PARTICIPANT'S
RESPONSE, CITA WILL DETERMINE WHETHER A VIOLATION OCCURRED AND
WHAT PENALTY, IF ANY, IS APPROPRIATE. PENALTIES MAY INCLUDE
TEMPORARY OR PERMANENT SUSPENSION FROM PARTICIPATION IN
THE OUTWARD PROCESSING PROGRAM. IN DETERMINING THE APPROPRIATE
PENALTY, CITA WILL CONSIDER ALL RELEVANT FACTORS, INCLUDING THE
SERIOUSNESS OF THE VIOLATION, PREVIOUS VIOLATIONS BY THE PARTICIPANT,
THE EXPERIENCE OF THE PARTICIPANT WITH THE OUTWARD PROCESSING
PROGRAM, AND THE STEPS TAKEN BY THE PARTICIPANT TO PREVENT FUTURE
VIOLATIONS.

ENTRY PROCEDURES:

(1) MERCHANDISE SUBJECT TO THE OUTWARD PROCESSING PROGRAM
MUST BE ENTERED AS A TYPE 02 (QUOTA AND/OR VISA) ENTRY OR
TYPE 07 (QUOTA AND/OR VISA AND COUNTERVAILING DUTY AND/OR
ANTIDUMPING DUTY) ENTRY.

(2) UPON ENTRY INTO THE UNITED STATES, (A) THE PRODUCT MUST BE
CLASSIFIED UNDER HTS 9802.00.8016 IF ASSEMBLED ABROAD OF
COMPONENTS FROM U.S. FORMED FABRIC CUT IN THE UNITED STATES,
OR (B) QUALIFY FOR THE SPECIAL "S" PREFIX INDICATING THE
THE ITEM WAS CUT AND ASSEMBLED IN A PARTICIPATING COUNTRY
AND PRODUCED WITH U.S. FORMED FABRIC. THE "S" SPECIAL
PROGRAM INDICATOR (SPI) IS PLACED IN RECORD 50, POSITION 80,
OF THE ABI TRANSMISSION AND PRECEDES THE HTS NUMBER ON THE
CF 7501.

(3) THESE SHIPMENTS ARE NOT SUBJECT TO QUOTA AND ARE NOT TO BE
PROCESSED THROUGH THE QUOTA MODULE (QSUP NOT REQUIRED).

(4) LIVE ENTRY PROCESSING, I.E., ENTRY/ENTRY SUMMARY, WITH
DUTIES ATTACHED, IS REQUIRED.

(5) IMPORT SPECIALIST REVIEW IS REQUIRED PRIOR TO EXAMINATION
TO VERIFY THAT THE GOODS QUALIFY FOR THIS PROGRAM AND
THAT PROPER CERTIFICATION FROM THE GOVERNMENT OF THE
EXPORTING COUNTRY IS PROVIDED.

INFORMATION:

IF YOU HAVE ANY QUESTIONS CONCERNING THIS MATTER, PLEASE CONTACT
BOB DORSETT, (202) 927-7002, OR ALLEN KENT (202) 927-0057 IN
IN TRADE PROGRAMS.