CSMS Message: 98-000289

TO : ALL ABI BROKERS.
FROM : CARLA ZZ-DONOFRIO

SUBJECT : SAP-ITA 370P ELIMINATION

DATE : 04/06/98

APRIL 1, 1997

SPE-2 FO:TC:I:E CDD

CATEGORY: TEX

TO : ALL PORT DIRECTORS, CUSTOMS MANAGEMENT CENTER (CMC)
DIRECTORS AND STRATEGIC TRADE CENTER (STC) DIRECTORS

FROM : DIRECTOR, TRADE COMPLIANCE

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

SUBJECT: TBT-98-025-IMPLEMENTATION AND ENFORCEMENT OF THE
SPECIAL ACCESS PROGRAM FOR CARIBBEAN BASIN INITIATIVE
AND ANDEAN TRADE PREFERENCE ACT COUNTRIES

BACKGROUND:

IN A COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS
(CITA) DIRECTIVE DATED MARCH 30, 1998 AMENDED THE REQUIREMENTS
FOR PARTICIPATION IN THE SPECIAL ACCESS PROGRAM (SAP) FOR THE
CARIBBEAN BASIN INITIATIVE (CBI) AND THE ANDEAN TRADE PREFERENCE
ACT (ATPA) COUNTRIES BY TERMINATING THE FORM ITA-370P, EFFECTIVE
MAY 4, 1998.

ON FEBRUARY 20, 1986, THE SAP WAS DEVELOPED TO GUARANTEE ACCESS
TO THE U.S. MARKET FOR CARIBBEAN-PRODUCED TEXTILE PRODUCTS
ASSEMBLED FROM FABRIC FORMED AND CUT IN THE UNITED STATES UNDER
WHICH GUARANTEED LEVELS OF ACCESS WERE ESTABLISHED FOR THEIR
EXPORTS OF QUALIFYING ASSEMBLED TEXTILE PRODUCTS. THESE
GUARANTEED ACCESS LEVELS ARE DISTINCT FROM THE QUOTAS OR
DESIGNATED CONSULTATION LEVELS WHICH APPLY TO TEXTILE PRODUCTS
THAT DO NOT MEET THE REQUIREMENTS OF THE SAP. TEXTILE PRODUCTS
THAT MEET THE REQUIREMENTS OF THE SAP MUST BE ENTERED UNDER
HEADING 9802.00.8015 OF THE HARMONIZED TARIFF SCHEDULE OF THE
UNITED STATES (HTSUS), WHICH APPLIES TO ARTICLES ASSEMBLED ABROAD
FROM U.S. COMPONENTS, AND ARE SUBJECT TO DUTY ON THE VALUE OF THE
ASSEMBLED TEXTILE PRODUCT LESS THE VALUE OF THE U.S. COMPONENTS.

IN AUGUST 30, 1995, A SIMILAR SAP PROGRAM WAS ESTABLISHED FOR
TEXTILE PRODUCTS ASSEMBLED IN ANDEAN TRADE PREFERENCE ACT (ATPA)
DESIGNATED COUNTRIES FROM FABRIC FORMED AND CUT IN THE UNITED
STATES. IN THIS NOTICE, THE TWO PROGRAMS ARE COLLECTIVELY
REFERRED TO AS THE "SPECIAL ACCESS PROGRAM."

UNDER SAP, TEXTILE PRODUCTS ASSEMBLED IN CBI AND ATPA COUNTRIES
FROM FABRIC FORMED AND CUT IN THE UNITED STATES THAT MEET THE
REQUIREMENTS OF THE SAP ARE GUARANTEED ACCESS TO THE U.S. MARKET.
TEXTILE PRODUCTS THAT MEET THE REQUIREMENTS OF THE SAP ARE
ELIGIBLE FOR TARIFF TREATMENT AS ARTICLES ASSEMBLED ABROAD FROM
U.S. COMPONENTS. CURRENTLY, PARTICIPANTS IN THE SAP ARE REQUIRED
TO FILE A SPECIAL ACCESS-SPECIAL REGIME EXPORT DECLARATION (FORM
ITA-370P) PRIOR TO THE EXPORTATION OF QUALIFYING PARTS AND TO
PRESENT A COMPLETED FORM ITA-370P AS PART OF THE ENTRY PACKAGE
WHEN THE ASSEMBLED PRODUCTS ARE IMPORTED INTO THE UNITED STATES.
FOR PRODUCTS ASSEMBLED FROM U.S. FORMED AND CUT FABRIC THAT ARE
EXPORTED FROM THE UNITED STATES ON OR AFTER MAY 4, 1998,
PARTICIPANTS WILL NO LONGER BE REQUIRED TO FILE AND PRESENT A
FORM ITA-370P. HOWEVER, FAILURE TO COMPLY WITH THE REQUIREMENTS
SET FORTH IN THIS NOTICE MAY RESULT IN SUSPENSION OF ELIGIBILITY
TO PARTICIPATE IN THE SAP. THIS NOTICE SUPERSEDES CERTAIN
PREVIOUS NOTICES SETTING FORTH THE REQUIREMENTS FOR PARTICIPATION
IN THE SAP.

ACTION:

EFFECTIVE ON MAY 4, 1998, PRODUCTS ASSEMBLED FROM U.S. FORMED AND
CUT FABRIC THAT ARE EXPORTED FROM THE UNITED STATES, THE FORM ITA-
370P WILL NOT BE REQUIRED.

IN ORDER TO QUALIFY FOR SPECIAL ACCESS PROGRAM TREATMENT, A
TEXTILE PRODUCT MUST MEET THE FOLLOWING REQUIREMENTS:

(1) THE PRODUCT MUST BE ASSEMBLED IN A CBI OR ATPA COUNTRY WITH
WHICH THE UNITED STATES HAS ENTERED INTO A BILATERAL AGREEMENT
REGARDING GUARANTEED ACCESS LEVELS UNDER THE SPECIAL ACCESS
PROGRAM;

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

(3) THE IMPORTER OF THE PRODUCT AND THE EXPORTER OF THE COMPONENT
PARTS FROM WHICH THE PRODUCT IS ASSEMBLED MUST BE THE SAME ENTITY
OR PERSON; AND

(4) FINDINGS AND TRIMMINGS OF NON-U.S. ORIGIN MAY BE INCORPORATED
INTO THE ASSEMBLED PRODUCT PROVIDED THEY DO NOT EXCEED 25 PERCENT
OF THE COST OF THE COMPONENTS OF THE ASSEMBLED PRODUCT. FINDINGS
AND TRIMMINGS INCLUDE SEWING THREAD, HOOKS AND EYES, SNAPS,
BUTTONS, ``BOW BUDS,'' DECORATIVE LACE TRIM, ELASTIC STRIPS,
ZIPPERS, INCLUDING ZIPPER TAPES, AND LABELS. ELASTIC STRIPS ARE
CONSIDERED FINDINGS OR TRIMMINGS ONLY IF LESS THAN ONE INCH IN
WIDTH AND USED IN THE PRODUCTION OF BRASSIERES. CERTAIN NON-U.S.
FORMED, U.S. CUT INTERLININGS FOR SUIT JACKETS AND SUIT-TYPE
JACKETS MAY CURRENTLY QUALIFY AS FINDINGS AND TRIMMINGS UNDER A
TEMPORARY AMENDMENT TO THE SPECIAL ACCESS PROGRAM. SEE 62 FR
49206 (SEPTEMBER 23, 1997) AND 62 FR 66057 (DECEMBER 17, 1997);

(5) UPON ENTRY INTO THE UNITED STATES, THE PRODUCT MUST BE
CLASSIFIED UNDER HEADING 9802.00.8015 OF THE HTSUS.

RECORDKEEPING 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, INCLUDING THE NAME AND LOCATION OF THE
CUTTING FACILITY FOR THOSE ENTRIES;

(4) MILL INVOICES, INCLUDING THE NAME OF THE MILL WHERE 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 PARTICIPANTS, I.E., PARTICIPANTS WHICH BOTH
FORM AND CUT FABRIC, SHOULD RETAIN AN INTERNAL TRANSFER DOCUMENT
OR OTHER DOCUMENTARY PROOF THAT THEY FORMED THE FABRIC IN THE
UNITED STATES.

(5) TRANSPORTATION DOCUMENTS (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; AND SHALL BE RETAINED FOR THREE YEARS
FROM THE DATE OF THE EXPORTATION OF THE U.S. FORMED AND CUT
FABRIC. THE DOCUMENTS SHALL BE ORGANIZED AND FILED (PREFERABLY
IN A SINGLE LOCATION) TO FACILITATE CUSTOMS REVIEW.

SPECIAL ACCESS-SPECIAL REGIME EXPORT DECLARATION (FORM ITA-370P)

CITA HAS DETERMINED THAT THE SPECIAL ACCESS-SPECIAL REGIME EXPORT
DECLARATION (FORM ITA-370P) IS NO LONGER NECESSARY FOR THE
EFFICIENT ADMINISTRATION OF THE SPECIAL ACCESS PROGRAM. FOR
COMPONENT PARTS EXPORTED FROM THE UNITED STATES ON OR AFTER MAY
4, 1998, PARTICIPANTS IN THE SPECIAL ACCESS PROGRAM WILL NO
LONGER BE REQUIRED TO FILE AND PRESENT THIS FORM. FOR ASSEMBLED
PRODUCTS IMPORTED INTO THE UNITED STATES THAT WERE MADE FROM
COMPONENT PARTS EXPORTED FROM THE UNITED STATES ON OR AFTER MAY
4, 1998, PARTICIPANTS IN THE SPECIAL ACCESS PROGRAM WILL NO
LONGER BE REQUIRED TO FILE AND PRESENT THIS FORM. PARTICIPANTS
SHOULD BE AWARE, HOWEVER, THAT THE REPRESENTATIONS MADE AT THE
TIME OF ENTRY OF PRODUCTS ALLEGED TO QUALIFY UNDER THE SPECIAL
ACCESS PROGRAM CONTINUE TO BE SUBJECT TO FEDERAL LAW PROHIBITING
FALSE OR MISLEADING STATEMENTS (SEE BELOW).

ENFORCEMENT PROCEDURES AND PENALTIES

IN ORDER TO DETERMINE THAT PARTICIPANTS IN THE SPECIAL ACCESS
PROGRAM COMPLY FULLY WITH THE SPECIAL ACCESS PROGRAM REQUIREMENTS
SET FORTH IN THIS NOTICE, CUSTOMS WILL CONTINUE TO CONDUCT A
SERIES OF POST ENTRY COMPLIANCE REVIEWS. THESE REVIEWS WILL BE
CONDUCTED FOR ENTRIES MADE FOR THE FIRST QUARTER OF 1998 AND
SHALL CONTINUE FOR EACH SUCCESSIVE QUARTER. DURING THE COURSE OF
SUCH A REVIEW, THE PARTICIPANT MUST PROVIDE CUSTOMS OFFICIALS
WITH EVIDENCE, THROUGH THE DOCUMENTS DESCRIBES ABOVE, THAT ALL
PRODUCTS ENTERED UNDER THE SPECIAL ACCESS PROGRAM QUALIFY FOR
SPECIAL ACCESS PROGRAM TREATMENT.

FALSE OR INACCURATE REPRESENTATIONS MADE IN THE CONTEXT OF THE
SPECIAL ACCESS 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. MOREOVER, PARTICIPANTS MAY BE SUSPENDED
FROM PARTICIPATION IN THE SPECIAL ACCESS PROGRAM FOR SUCH
REPRESENTATIONS, FOR FAILING TO ABIDE BY THE SPECIAL ACCESS
PROGRAM'S RECORD KEEPING 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 SPECIAL ACCESS 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
SPECIAL ACCESS 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 SPECIAL
ACCESS PROGRAM, AND THE STEPS TAKEN BY THE PARTICIPANT TO PREVENT
FUTURE VIOLATIONS.

INFORMATION:

IF YOU HAVE ANY QUESTIONS CONCERNING THIS VISA REQUIREMENT,
PLEASE DON'T HESITATE TO CONTACT CARLA D'ONOFRIO AT (202) 927-
0424, JUNE PERGOLA AT (202) 927-0705, OR BOB DORSETT AT (202) 927-
7002.

PHILIP METZGER