CITA Finalizes its Procedures for DR-CAFTA Commercial Availability Requests

(In February 2006, CITA issued a notice setting forth the interim procedures that it would follow in implementing the Commercial Availability provision of the DR-CAFTA. (See ITT's Online Archives or 03/06/06 news, 06030610, for BP summary.))

Under its DR-CAFTA Commercial Availability procedures, CITA considers requests to allow additional non-originating fabrics, yarns, or fibers to be treated as if they are originating goods, if they are not available in commercial quantities in a timely manner in the U.S. or the other DR-CAFTA countries. Those approved for treatment as originating goods are added to the Commercial Availability List in Annex 3.25 of the DR-CAFTA in either an unrestricted or a restricted quantity.

Although fabrics, yarns and fibers on the Commercial Availability List are treated as if they are originating goods for purposes of the specific rules of origin in Annex 4.1 of the DR-CAFTA, regardless of the actual origin of those inputs, all other fabrics, yarns, or fibers of the component that determines the classification of the good must meet the specific rules of origin in Annex 4.1.

Highlights of Changes from Interim Procedures

The following are highlights of the changes made in CITA's finalized procedures from its interim procedures (partial list, see notice for complete details):

Proceedings based on changed circumstances. CITA removed section 8(c)(6) of its interim procedures which had allowed for proceedings based upon changed circumstances. CITA states that several commenters had requested that this section be clarified or eliminated. According to CITA, its final procedures clarify when it is appropriate for it to conduct a proceeding based on changed circumstances. CITA notes that its intention at this time is to exercise its inherent authority to reconsider, and/or subsequently amend, commercial availability determinations that may have been procured by error, fraud, similar faults, etc.

DR-CAFTA supplier definition added. CITA's final procedures add the definition for a DR-CAFTA supplier, which is a potential or actual supplier of a textile or apparel good in the territory of any Party.

Clarifying, technical changes, etc. CITA's final procedures also (1) make various clarifying and technical changes, (2) update Web site addresses, (3) etc.

Highlights of Final Procedures on Commercial Availability Requests

CITA's notice on its final procedures describes the process it will follow when considering requests to have fibers, yarns, or fabrics placed on the Commercial Availability List. Of note are the following features of this process:

Ways in which CITA can respond to commercial availability requests. Under these final procedure guidelines, CITA may respond to a commercial availability request with the following types of determinations (see notice for details):

Approval in unrestricted quantity. An approval in unrestricted quantities means that CITA has determined that the subject product is not available in commercial quantities in a timely manner in the DR-CAFTA countries or that no interested entity has objected to the request.

Approval in restricted quantity. An approval in a Restricted Quantity means that CITA has determined to add the subject product to the Commercial Availability List in Annex 3.25 with a specified restricted quantity. CITA may approve the request in a restricted quantity if CITA determines that the DR-CAFTA supplier(s) can partially fulfill the request for the subject product. The restricted quantity specifies the amount of the subject product that can be provided by the DR-CAFTA supplier(s).

CITA adds that not later than six months after adding a product to the Commercial Availability List in Annex 3.25 in a restricted quantity, CITA may eliminate the restriction if it determines that the subject product is not available in commercial quantities in a timely manner in the DR-CAFTA countries.

Deemed approval. In the event that CITA does not make a determination in response to a Commercial Availability Request to add a product to Annex 3.25 within the statutory deadlines provided, not later than 45 business days after the official receipt of the Commercial Availability Request or not later than 60 business days after the official receipt of the Commercial Availability Request that was determined to lack sufficient information pursuant to subsection (c)(4), the requested subject product shall be added to the Commercial Availability List in Annex 3.25, in an unrestricted quantity, in accordance with the requirements of section 203(o)(4)(D) of the DR-CAFTA Implementation Act. CITA states that it will notify the public of the deemed approval by publication in the FederalRegister and posting on the Office of Textiles and Apparel's (OTEXA's) Web site.

Denial. A denial means that CITA has determined that the subject product is available in commercial quantities in a timely manner in the DR-CAFTA countries. If a request is denied, notice of the denial will be posted on the DR-CAFTA Commercial Availability Web site at http://web.ita.doc.gov/tacgi/CaftaReqTrack.nsf.

Insufficient information to determine. CITA will extend its time period for consideration of the Commercial Availability Request by an additional 14 business days in the event that CITA determines, not later than 30 business days after official receipt of a Commercial Availability Request, that it has insufficient information to make a determination regarding the ability of a DR-CAFTA supplier to supply the subject products of the Commercial Availability Request based on the submitted information.

Requests to remove item or restrict a quantity six months after listed. No earlier than six months after a product has been added to the Commercial Availability List in Annex 3.25 in an unrestricted quantity, an interested entity may submit a request to CITA requesting that a product be either removed or that a quantity restriction be introduced.

If CITA determines that the product is available in commercial quantities in a timely manner in the DR-CAFTA countries, e.g., that a DR-CAFTA supplier is capable to supply the entire subject product requested originally, then that product will be removed from the Commercial Availability List in Annex 3.25.

If CITA determines that the product is available in restricted quantities in a timely manner in the DR-CAFTA countries, e.g., that a DR-CAFTA supplier is capable to supply part of the subject product requested originally, then a restricted quantity will be introduced for that product.

Due Diligence Certification required for each factual submission. An interested entity must file a Due Diligence Certification with each submission containing factual information. If the interested entity has legal counsel or other representative, the legal counsel or other representative must file a Due Diligence Certification with each submission containing factual information.

In the case of commercial availability requests, CITA notes that due diligence means the requestor has made reasonable efforts to obtain subject product from DR-CAFTA suppliers. Requestors must provide certain specified information in order to demonstrate this requirement.

(See CITA's notice for description of the commercial availability request and determination process including: requirements for filing requests and submissions, CITA's consideration and acceptance of a commercial availability request, etc.)

CITA Provides FAQs on Several Provisions Included in the Procedures

According to the comment section of the final procedures, several commenters asked that CITA elaborate on several of the provisions included in the procedures, including "deemed approval," approvals with restricted quantities, the contents of commercial availability requests, responses with offers to supply, and rebuttal comments.

CITA states that it has adopted this suggestion and has provided further explanations in a frequently asked question (FAQ) document that has been made available via its Web site. (CITA notes that its FAQs are not the official procedures and should only be used as an aid to the DR-CAFTA short supply procedures.)

¹ The DR-CAFTA is also abbreviated as "CAFTA-DR"

CITA contact: Richard Stetson (202) 482-3400

CITA Final Procedures (FR Pub 03/21/07) available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-5102.pdf

OTEXA's Web site that lists all Commercial Availability Petitions (approved, denied, etc.) available at http://web.ita.doc.gov/tacgi/CaftaReqTrack.nsf

Current Commercial Availability List (Annex 3.25) available at http://web.ita.doc.gov/tacgi/CaftaReqTrack.nsf/Annex3.25

CITA's FAQs available at http://web.ita.doc.gov/tacgi/CaftaReqTrack.nsf/faq?openpage.