Sec. 5. Duty-free treatment for certain nontextile and nonapparel articles
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The President may proclaim duty-free treatment for— any article from a Reconstruction Opportunity Zone that the President has designated as an eligible article under section 503(a)(1)(A) of the Trade Act of 1974 ( 19 U.S.C. 2463(a)(1)(A) ); any article from a Reconstruction Opportunity Zone located in Afghanistan that the President has designated as an eligible article under section 503(a)(1)(B) of the Trade Act of 1974 ( 19 U.S.C. 2463(a)(1)(B) ); or any article from a Reconstruction Opportunity Zone that is not a textile or apparel article, regardless of whether the article has been designated as an eligible article under subparagraph
(A)or
(B)of section 503(a)(1) of the Trade Act of 1974 ( 19 U.S.C. 2463(a)(1) ), if, after receiving the advice of the United States International Trade Commission pursuant to subsection (b), the President determines that the article is not import-sensitive in the context of imports from a Reconstruction Opportunity Zone. Before proclaiming duty-free treatment for an article pursuant to subsection (a)(3), the President shall publish in the Federal Register and provide to the United States International Trade Commission a list of articles that may be considered for such treatment. The provisions of sections 131 through 134 of the Trade Act of 1974 ( 19 U.S.C. 2151 through 2154) shall apply to any designation under subsection (a)(3) in the same manner as such sections apply to action taken under section 123 of the Trade Act of 1974 ( 19 U.S.C. 2133 ) regarding a proposed trade agreement. The duty-free treatment proclaimed with respect to an article described in paragraph
(1)or
(3)of subsection
(a)shall apply to any article subject to such proclamation that is the growth, product, or manufacture of 1 or more Reconstruction Opportunity Zones if— that article is imported directly from a Reconstruction Opportunity Zone into the customs territory of the United States; and with respect to an article that is an article of a Reconstruction Opportunity Zone in Pakistan, the sum of— the cost or value of the materials produced in 1 or more Reconstruction Opportunity Zones in Pakistan or Afghanistan, the direct costs of processing operations performed in 1 or more Reconstruction Opportunity Zones in Pakistan or Afghanistan, and the cost or value of materials produced in the United States, determined in accordance with paragraph (2), is not less than 35 percent of the appraised value of the article at the time it is entered into the United States; or with respect to an article that is an article of a Reconstruction Opportunity Zone in Afghanistan, the sum of— the cost or value of the materials produced in 1 or more Reconstruction Opportunity Zones in Pakistan or Afghanistan, the cost or value of the materials produced in 1 or more countries that are members of the South Asian Association for Regional Cooperation, the direct costs of processing operations performed in 1 or more Reconstruction Opportunity Zones in Pakistan or Afghanistan, and the cost or value of materials produced in the United States, determined in accordance with paragraph (2), is not less than 35 percent of the appraised value of the article at the time it is entered into the United States. If the cost or value of materials produced in the customs territory of the United States is included with respect to an article described in paragraph (1), for purposes of determining the 35-percent appraised value requirement under that paragraph, not more than 15 percent of the appraised value of the article at the time the article is entered into the United States may be attributable to the cost or value of such United States materials. The duty-free treatment proclaimed with respect to an article described in subsection (a)(2) shall apply to any article subject to such proclamation that is the growth, product, or manufacture of 1 or more Reconstruction Opportunity Zones in Afghanistan if— that article is imported directly from a Reconstruction Opportunity Zone in Afghanistan into the customs territory of the United States; and with respect to that article, the sum of— the cost or value of the materials produced in 1 or more Reconstruction Opportunity Zones in Afghanistan, the cost or value of the materials produced in 1 or more countries that are members of the South Asian Association for Regional Cooperation, the direct costs of processing operations performed in 1 or more Reconstruction Opportunity Zones in Afghanistan, and the cost or value of materials produced in the United States, determined in accordance with paragraph (2), is not less than 35 percent of the appraised value of the product at the time it is entered into the United States. If the cost or value of materials produced in the customs territory of the United States is included with respect to an article described in paragraph (1)(B), for purposes of determining the 35-percent appraised value requirement under that paragraph, not more than 15 percent of the appraised value of the article at the time the article is entered into the United States may be attributable to the cost or value of such United States materials. An article shall not be treated as the growth, product, or manufacture of 1 or more Reconstruction Opportunity Zones, and no material shall be included for purposes of determining the 35-percent appraised value requirement under subsection (c)(1) or (d)(1), by virtue of having merely undergone— simple combining or packaging operations; or mere dilution with water or with another substance that does not materially alter the characteristics of the article or material. For purposes of subsections
(c)and (d), the term direct costs of processing operations includes— all actual labor costs relating to the growth, production, manufacture, or assembly of the article, including— fringe benefits; on-the-job training; and costs of engineering, supervisory, quality control, and similar personnel; and costs relating to dyes, molds, tooling, and depreciation on machinery and equipment that are allocable to the article. For purposes of subsections
(c)and (d), the term direct costs of processing operations does not include costs that are not directly attributable to the article or are not costs of manufacturing the article, such as— profit; and general expenses of doing business that are either not allocable to the article or are not related to the growth, production, manufacture, or assembly of the article, such as administrative salaries, casualty and liability insurance, advertising, and salesmen’s salaries, commissions, or expenses. The Secretary of the Treasury, after consultation with the United States Trade Representative, shall prescribe such regulations as may be necessary to carry out this section. The regulations may provide that, in order for an article to be eligible for duty-free treatment under this section, the article shall be— wholly the growth, product, or manufacture of 1 or more Reconstruction Opportunity Zones; or a new or different article of commerce that has been grown, produced, or manufactured in 1 or more Reconstruction Opportunity Zones.
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Sec. 5
Duty-free treatment for certain nontextile and nonapparel articles
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