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H.R. 3080 (112th): United States-Korea Free Trade Agreement Implementation Act


The text of the bill below is as of Oct 13, 2011 (Passed Congress).


IB

One Hundred Twelfth Congress of the United States of America

At the First Session

H. R. 3080

AN ACT

To implement the United States–Korea Free Trade Agreement.

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.

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.

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.

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)).

I

Approval of, and general provisions relating to, the Agreement

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 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.

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

(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.

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 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.

104.

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)

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—

(A)

the action proposed to be proclaimed and the reasons therefor; and

(B)

the advice obtained under paragraph (1);

(3)

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).

105.

Administration of dispute settlement proceedings

(a)

Establishment 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.

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.

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 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.

II

Customs provisions

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

(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.

(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.

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 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

(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 =—————× 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 =—————× 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 =—————× 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 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 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 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:

(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.

(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

(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)

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—

(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.

(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 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, 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 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)

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

(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 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)

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).

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:

(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.

.

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 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 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 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:

(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.

.

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.

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 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 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).

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

(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.

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).

III

Relief from imports

301.

Definitions

In this title:

(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.

A

Relief from imports benefitting from the Agreement

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.

312.

Commission action on petition

(a)

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.

313.

Provision of relief

(a)

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

(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)

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)

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)

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

(2)

chapter 1 of title II of the Trade Act of 1974 (19 U.S.C. 2251 et seq.).

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.

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.).

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.

B

Motor vehicle safeguard measures

321.

Motor vehicle safeguard measures

The 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.

.

C

Textile and apparel safeguard measures

331.

Commencement of action for relief

(a)

In 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 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.

332.

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—

(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.

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.

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.).

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.

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.

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.).

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 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.

D

Cases under title II of the Trade Act of 1974

341.

Findings and action on Korean articles

(a)

Effect 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).

IV

Procurement

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.

.

V

Offsets

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 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.

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 and by inserting after section 6115 the following new section:

6116.

Requirement for prisons located in United States to provide information for tax administration

(a)

In 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.

.

503.

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.

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.

(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.

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.

Speaker of the House of Representatives.

Vice President of the United States and President of the Senate.