Sec. 202. Application of foreign pollution fee in partnerships
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In accordance with section 4694 of the Internal Revenue Code of 1986, as added by title I, no fee shall be applied under section 4691 of such Code with respect to a covered product imported from a country that is a party to an international partnership agreement entered into under this title if production of the covered product has a pollution intensity difference that is less than or equal to 50 percent. If a covered product is produced in a country that is a party to an international partnership agreement entered into under this title but does not meet the requirement described in subsection (a), the fee applied under section 4691 of the Internal Revenue Code of 1986, as added by title I, with respect to the covered product shall be determined based on the applicable tier (as described in paragraph
(2)of section 4692(e) of the Internal Revenue Code of 1986, as added by title I) associated with— the pollution intensity difference; reduced by 50 percentage points. During the 5-year period following the entry into force of an international partnership agreement under this title between the United States and a low-income country or lower-middle-income country— the pollution intensity requirement described in subsection
(a)shall be considered to be met with respect to covered products produced in the country; and no fee shall be applied to covered products imported from that country. During the 10-year period beginning after the completion of the 5-year period described in paragraph (1), the pollution intensity requirement described in subsection
(a)shall be considered to be met with respect to a covered product produced in a country described in paragraph
(1)if new capacity in that country for the production of the covered product developed during the 10-year period described in paragraph
(1)is not more than 50 percent more pollution intense than the baseline pollution intensity at the time of the entry into force of the international partnership agreement. For the 10-year period beginning after the completion of the 10-year period described in subparagraph (A), and each 10-year period thereafter, the pollution intensity requirement described in subsection
(a)shall be considered to be met with respect to a covered product produced in a country described in paragraph
(1)if new capacity in that country for the production of the covered product developed during the preceding 10-year period is not more than 25 percent more pollution intense than the baseline pollution intensity at the beginning of such preceding 10-year period. If the requirements described in paragraph
(1)or (2), as applicable, are not met with respect to a covered product, the fee specified in subsection
(b)shall apply. Nothing in this section shall supersede section 4693(g) of the Internal Revenue Code of 1986, as added by title I, with respect to potential circumvention of the fee assessed under section 4691 of such Code if— a determination is made under such section 4693(g) with respect to a producer; and the producer is owned, operated, or financed in or by a country that is not a party to an international partnership agreement entered into under this title.