81 FR 44555 - North American Free Trade Agreement; Preference Override

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY

Federal Register Volume 81, Issue 131 (July 8, 2016)

Page Range		44555-44557
FR Document		2016-16088
The United States, Canada and Mexico have agreed to liberalize provisions of the North American Free Trade Agreement (NAFTA) preference rules of origin that relate to certain goods, including certain spices. However, such liberalization cannot take effect unless U.S. Customs and Border Protection (CBP) amends its regulations to allow the NAFTA preference override to apply to certain spice products and other food products. This document proposes such an amendment.
Federal Register, Volume 81 Issue 131 (Friday, July 8, 2016)
[Federal Register Volume 81, Number 131 (Friday, July 8, 2016)]
[Proposed Rules]
[Pages 44555-44557]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16088]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 81, No. 131 / Friday, July 8, 2016 / Proposed 
Rules

[[Page 44555]]



DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR PART 102

[Docket No. USCBP-2016-0041]
RIN 1515-AD78


North American Free Trade Agreement; Preference Override

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The United States, Canada and Mexico have agreed to liberalize 
provisions of the North American Free Trade Agreement (NAFTA) 
preference rules of origin that relate to certain goods, including 
certain spices. However, such liberalization cannot take effect unless 
U.S. Customs and Border Protection (CBP) amends its regulations to 
allow the NAFTA preference override to apply to certain spice products 
and other food products. This document proposes such an amendment.

DATES: Comments must be received on or before September 6, 2016.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2016-0041.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of International Trade, Customs and Border 
Protection, 90 K Street NE., 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may be inspected during regular business days between the hours of 9 
a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of International Trade, Customs and 
Border Protection, 90 K Street NE., 10th Floor, Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Mr. Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Monika Brenner, Chief, Valuation and 
Special Programs Branch, Regulations and Rulings, Office of 
International Trade, (202) 325-0038.

SUPPLEMENTARY INFORMATION:

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
proposed rule. CBP also invites comments that relate to the economic, 
environmental, or federalism effects that might result from this 
proposed rulemaking. Comments that will provide the most assistance to 
CBP will reference a specific portion of the proposed rulemaking, 
explain the reason for any recommended change, and include data, 
information, or authority that support such recommended change. See 
ADDRESSES above for information on how to submit comments.

Background

    On December 17, 1992, the United States, Canada, and Mexico (the 
parties) entered into the North American Free Trade Agreement (NAFTA). 
The provisions of the NAFTA were adopted by the United States with 
enactment of the North American Free Trade Agreement Implementation 
Act, Public Law 103-182, 107 Stat. 2057 (December 8, 1993). Under 
Article 401 of the NAFTA, an imported good qualifies as an originating 
good of a NAFTA party if: (1) It is wholly obtained or produced in one 
or more of the NAFTA parties; (2) it is produced entirely in one or 
more of the NAFTA parties exclusively from materials that originate in 
those parties; or (3) each of the non-originating materials used in the 
production of the good undergoes an applicable change in tariff 
classification as a result of production occurring entirely in the 
territory of one or more of the parties and satisfies any other 
applicable requirement (which may include a regional value-content 
requirement). The NAFTA preference change in tariff classification (or 
``tariff-shift'') rules are set forth in General Note 12(t) of the 
Harmonized Tariff Schedule of the United States (HTSUS).
    General Note 12(a), HTSUS, provides that an imported good is 
eligible for preferential tariff treatment under the NAFTA only if it 
is an originating good of a NAFTA party and it qualifies to be marked 
as a good of Canada or Mexico under the rules for determining the 
country of origin of a good for purposes of Annex 311 of the NAFTA. The 
rules for determining the country of origin for marking in such cases 
are included in part 102, CBP regulations (19 CFR part 102). In 
situations in which an imported good is determined under Article 401 of 
the NAFTA to be originating but fails to qualify as a good of Canada or 
Mexico under the other applicable provisions set forth in 19 CFR part 
102, the NAFTA preference override in Sec.  102.19 may provide a basis 
for enabling the good to qualify as a good of Canada or Mexico. Under 
Sec.  102.19, if a good which has NAFTA originating status is not 
determined to be a good of Canada or Mexico under Sec.  102.11(a) or 
(b) or Sec.  102.21, the country of origin of the good is determined to 
be the last NAFTA country in which the good underwent production other 
than minor processing, provided that a NAFTA Certificate of Origin has 
been completed and signed for the good (emphasis added). ``Production'' 
is broadly defined in Sec.  102.1(n) as ``growing, mining, harvesting, 
fishing, trapping, hunting, manufacturing, processing or assembling a 
good.'' ``Minor processing'' is defined in Sec.  102.1(m) and includes 
``[p]utting up in measured doses, packing, repacking, packaging, 
repackaging.''

[[Page 44556]]

    Thus in certain instances Sec.  102.19 allows the originating 
status of a good to ``override'' a determination that it is not a good 
of Canada or Mexico. In other words, it allows NAFTA preferential 
tariff treatment to be granted to certain goods that otherwise would be 
ineligible for such treatment due to the General Note 12(a)'s 
requirement that originating goods qualify to be marked as goods of 
Canada or Mexico under the NAFTA Marking Rules. However, under Sec.  
102.19, as it currently reads, minor processing would not be a type of 
production that would qualify a good to be labeled as a product of the 
country in which the labeling took place and thus would not enable the 
good to take advantage of NAFTA tariff preferences.

Explanation of Amendments

    Since the NAFTA entered into effect, the three parties to the 
Agreement have agreed to liberalizations to the NAFTA preference rules 
of origin for various goods. As a result, a lesser degree of processing 
in a NAFTA party is required to constitute ``production'' which will 
confer originating status to certain non-NAFTA materials. The United 
States took steps to implement these changes by amending the NAFTA 
preference tariff-shift rules in General Note 12(t), HTSUS, through 
Presidential Proclamations 7870 dated February 9, 2005 (published in 
the Federal Register on February 14, 2005 (70 FR 7611)), 8067 dated 
October 11, 2006 (published in the Federal Register on October 13, 2006 
(71 FR 60649)), and 8405 dated August 31, 2009 (published in the 
Federal Register on September 2, 2009 (74 FR 45529)).
    For spices and certain other food products, Presidential 
Proclamation 7870 specifically liberalized various rules of origin in 
General Note 12(t) to permit minor processing operations in a NAFTA 
party, such as packaging, to confer originating status on a good. For 
example, the NAFTA preference rule for tea (heading 0902, HTSUS) was 
changed to permit blending and/or packaging to confer NAFTA originating 
status. Similarly, changes to the preference rules of origin for 
products such as peppers (subheading 0904.12, HTSUS), cloves (heading 
0907, HTSUS), poppy seeds (subheading 1207.91, HTSUS), and certain 
other spices were also liberalized by Proclamation 7870 to allow these 
goods to become NAFTA originating as a result of packaging operations 
in a NAFTA party. It is noted that blending is considered to be more 
than a minor processing operation for purposes of the NAFTA Marking 
Rules. See, for example, CBP Headquarters Ruling Letter (HQ) 561986 
dated August 21, 2001.
    However, contrary to the intentions of the NAFTA parties, these 
goods are not receiving NAFTA preferential tariff treatment when 
imported into the United States from Canada or Mexico because they do 
not qualify to be marked as goods of Canada or Mexico under the NAFTA 
Marking Rules in 19 CFR part 102, as required by General Note 12(a), 
HTSUS. This anomalous result stems, in part, from the fact that, in 
regard to those goods that obtain originating status as a result of 
minor processing in a NAFTA party, the pertinent NAFTA marking rules in 
19 CFR 102.20 are more stringent than the comparable liberalized NAFTA 
preference rules set forth in General Note 12(t), HTSUS. As discussed 
above, the NAFTA preference override provision in Sec.  102.19(a) fails 
to resolve this problem since, as discussed above, this provision 
overrides a determination that a good is not a good of Canada or Mexico 
only in situations in which the good undergoes production other than 
minor processing, in a NAFTA country.
    CBP notes that 19 CFR 102.17 provides that a foreign material will 
not be considered to have undergone an applicable change in tariff 
classification specified in Sec.  102.20 or Sec.  102.21 or to have met 
any other applicable requirements of those sections merely by reason of 
having been subjected to certain specified operations, including 
``[s]imple packing, repacking or retail packaging without more than 
minor processing.'' This provision clearly is not an impediment to the 
proposed amendment set forth in this document as the ``non-qualifying 
operations'' specified in Sec.  102.17 relate only to the application 
of the rules set forth in Sec. Sec.  102.20 and 102.21 and not to the 
NAFTA preference override in Sec.  102.19.
    CBP understands that, as a result of actions taken or 
interpretations adopted by the Governments of Canada and Mexico, the 
above-referenced spices and other food products subject to the NAFTA 
liberalizations are receiving NAFTA preferential tariff treatment when 
imported from the United States into Canada and Mexico (assuming 
compliance with all applicable requirements). To rectify the problem 
discussed above with respect to imports from Canada and Mexico, CBP is 
proposing to amend Sec.  102.19 by adding a new paragraph (c) to allow 
the NAFTA preference override to apply to these specific goods. This 
proposed change, if finalized, will give effect to the intentions of 
the NAFTA parties by extending NAFTA preferential tariff treatment to 
certain goods imported from Canada and Mexico that, under the 
liberalized rules of origin in General Note 12(t), are considered NAFTA 
originating as a result of minor processing operations (e.g., 
packaging) performed in a NAFTA party.

Statutory and Regulatory Requirements

A. Executive Order 13563 and Executive Order 12866

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rulemaking is not a ``significant regulatory 
action,'' under section 3(f) of the Executive Order 12866. Accordingly, 
OMB has not reviewed this proposed rule.

B. Regulatory Flexibility Act

    This section examines the impact of the rule on small entities as 
required by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as 
amended by the Small Business Regulatory Enforcement and Fairness Act 
of 1996 (SBREFA). A small entity may be a small business (defined as 
any independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people).
    The proposed rule, if finalized, will extend NAFTA preferential 
tariff treatment to certain goods imported from Mexico and Canada that 
currently are not receiving such treatment, despite the fact that these 
goods presently qualify as NAFTA originating under General Note 12(t), 
HTSUS. Therefore, the proposed amendment would benefit importers of 
such goods from Canada and Mexico by eliminating the customs duties and 
merchandise processing fees that presently are due for these 
importations. To the extent that this rulemaking affects small 
entities, these entities would experience a cost savings. Therefore, 
CBP certifies that the proposed rule would not have a significant 
economic impact on a substantial number of small entities.

[[Page 44557]]

Paperwork Reduction Act

    As there is no collection of information proposed in this document, 
the provisions of the Paperwork Reduction Act (44 U.S.C. 3507) are 
inapplicable.

Signing Authority

    This document is being issued in accordance with Sec.  0.1(a)(1) of 
the CBP Regulations (19 CFR 0.1(a)(1)) pertaining to the authority of 
the Secretary of the Treasury (or his/her delegate) to approve 
regulations related to certain customs revenue functions.

List of Subjects in 19 CFR Part 102

    Canada, Customs duties and inspections, Imports, Mexico, Reporting 
and recordkeeping requirements, Trade agreements.

Proposed Amendments to the CBP Regulations

    For the reasons set forth above, part 102 of title 19 of the Code 
of Federal Regulations (19 CFR part 102) is proposed to be amended as 
set forth below.

PART 102--RULES OF ORIGIN

0
1. The authority citation for part 102, CBP regulations, continues to 
read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States (HTSUS)), 1624, 3314, 3592.


Sec.  102.19  [Amended]

0
2. In Sec.  102.19:
0
a. Paragraph (a) is amended by adding the words ``or (c)'' after the 
words ``paragraph (b)''; and
0
b. Paragraph (c) is added to read as follows:
    (c) If a good classifiable under heading 0907, 0908, 0909, or 
subheading 0910.11, 0910.12, 0910.30, 0910.99 or 1207.91, HTSUS, is 
originating within the meaning of section 181.1(q) of this chapter, but 
is not determined under section 102.11(a) or (b) to be a good of a 
single NAFTA country, the country of origin of such good is the last 
NAFTA country in which that good underwent production, provided that a 
Certificate of Origin (see Sec.  181.11 of this Chapter) has been 
completed and signed for the good.

R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
    Approved: July 1, 2016.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2016-16088 Filed 7-7-16; 8:45 am]
 BILLING CODE P
44555

Proposed Rules Federal Register
Vol. 81, No. 131

Friday, July 8, 2016

This section of the FEDERAL REGISTER www.regulations.gov, including any an originating good of a NAFTA party
contains notices to the public of the proposed personal information provided. For if: (1) It is wholly obtained or produced
issuance of rules and regulations. The detailed instructions on submitting in one or more of the NAFTA parties;
purpose of these notices is to give interested comments and additional information (2) it is produced entirely in one or
persons an opportunity to participate in the on the rulemaking process, see the
rule making prior to the adoption of the final
more of the NAFTA parties exclusively
rules.
‘‘Public Participation’’ heading of the from materials that originate in those
SUPPLEMENTARY INFORMATION section of parties; or (3) each of the non-
this document. originating materials used in the
DEPARTMENT OF HOMELAND Docket: For access to the docket to production of the good undergoes an
SECURITY read background documents or applicable change in tariff classification
comments received, go to http:// as a result of production occurring
U.S. Customs and Border Protection www.regulations.gov. Submitted entirely in the territory of one or more
comments may be inspected during of the parties and satisfies any other
DEPARTMENT OF THE TREASURY regular business days between the hours applicable requirement (which may
of 9 a.m. and 4:30 p.m. at the Trade and include a regional value-content
19 CFR PART 102 Commercial Regulations Branch, requirement). The NAFTA preference
Regulations and Rulings, Office of change in tariff classification (or ‘‘tariff-
[Docket No. USCBP–2016–0041]
International Trade, Customs and shift’’) rules are set forth in General
RIN 1515–AD78 Border Protection, 90 K Street NE., 10th Note 12(t) of the Harmonized Tariff
Floor, Washington, DC. Arrangements to Schedule of the United States (HTSUS).
North American Free Trade inspect submitted comments should be
Agreement; Preference Override made in advance by calling Mr. Joseph General Note 12(a), HTSUS, provides
Clark at (202) 325–0118. that an imported good is eligible for
AGENCY: U.S. Customs and Border preferential tariff treatment under the
Protection, Department of Homeland FOR FURTHER INFORMATION CONTACT:
NAFTA only if it is an originating good
Security; Department of the Treasury. Monika Brenner, Chief, Valuation and
of a NAFTA party and it qualifies to be
Special Programs Branch, Regulations
ACTION: Notice of proposed rulemaking. marked as a good of Canada or Mexico
and Rulings, Office of International
under the rules for determining the
SUMMARY: The United States, Canada Trade, (202) 325–0038.
country of origin of a good for purposes
and Mexico have agreed to liberalize SUPPLEMENTARY INFORMATION:
of Annex 311 of the NAFTA. The rules
provisions of the North American Free Public Participation for determining the country of origin for
Trade Agreement (NAFTA) preference marking in such cases are included in
rules of origin that relate to certain Interested persons are invited to
participate in this rulemaking by part 102, CBP regulations (19 CFR part
goods, including certain spices. 102). In situations in which an imported
However, such liberalization cannot submitting written data, views, or
arguments on all aspects of the good is determined under Article 401 of
take effect unless U.S. Customs and the NAFTA to be originating but fails to
Border Protection (CBP) amends its proposed rule. CBP also invites
comments that relate to the economic, qualify as a good of Canada or Mexico
regulations to allow the NAFTA under the other applicable provisions
preference override to apply to certain environmental, or federalism effects that
might result from this proposed set forth in 19 CFR part 102, the NAFTA
spice products and other food products. preference override in § 102.19 may
This document proposes such an rulemaking. Comments that will provide
the most assistance to CBP will provide a basis for enabling the good to
amendment. qualify as a good of Canada or Mexico.
reference a specific portion of the
DATES: Comments must be received on proposed rulemaking, explain the Under § 102.19, if a good which has
or before September 6, 2016. reason for any recommended change, NAFTA originating status is not
ADDRESSES: You may submit comments, and include data, information, or determined to be a good of Canada or
identified by docket number, by one of authority that support such Mexico under § 102.11(a) or (b) or
the following methods: recommended change. See ADDRESSES § 102.21, the country of origin of the
• Federal eRulemaking Portal: http:// above for information on how to submit good is determined to be the last
www.regulations.gov. Follow the comments. NAFTA country in which the good
instructions for submitting comments underwent production other than minor
via docket number USCBP–2016–0041. Background processing, provided that a NAFTA
• Mail: Trade and Commercial On December 17, 1992, the United Certificate of Origin has been completed
Regulations Branch, Regulations and States, Canada, and Mexico (the parties) and signed for the good (emphasis
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS

Rulings, Office of International Trade, entered into the North American Free added). ‘‘Production’’ is broadly defined
Customs and Border Protection, 90 K Trade Agreement (NAFTA). The in § 102.1(n) as ‘‘growing, mining,
Street NE., 10th Floor, Washington, DC provisions of the NAFTA were adopted harvesting, fishing, trapping, hunting,
20229–1177. by the United States with enactment of manufacturing, processing or
Instructions: All submissions received the North American Free Trade assembling a good.’’ ‘‘Minor processing’’
must include the agency name and Agreement Implementation Act, Public is defined in § 102.1(m) and includes
docket number for this rulemaking. All Law 103–182, 107 Stat. 2057 (December ‘‘[p]utting up in measured doses,
comments received will be posted 8, 1993). Under Article 401 of the packing, repacking, packaging,
without change to http:// NAFTA, an imported good qualifies as repackaging.’’

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44556 Federal Register / Vol. 81, No. 131 / Friday, July 8, 2016 / Proposed Rules

Thus in certain instances § 102.19 Ruling Letter (HQ) 561986 dated August from Canada and Mexico that, under the
allows the originating status of a good 21, 2001. liberalized rules of origin in General
to ‘‘override’’ a determination that it is However, contrary to the intentions of Note 12(t), are considered NAFTA
not a good of Canada or Mexico. In other the NAFTA parties, these goods are not originating as a result of minor
words, it allows NAFTA preferential receiving NAFTA preferential tariff processing operations (e.g., packaging)
tariff treatment to be granted to certain treatment when imported into the performed in a NAFTA party.
goods that otherwise would be ineligible United States from Canada or Mexico
for such treatment due to the General because they do not qualify to be Statutory and Regulatory Requirements
Note 12(a)’s requirement that originating marked as goods of Canada or Mexico
A. Executive Order 13563 and Executive
goods qualify to be marked as goods of under the NAFTA Marking Rules in 19
Order 12866
Canada or Mexico under the NAFTA CFR part 102, as required by General
Marking Rules. However, under Note 12(a), HTSUS. This anomalous Executive Orders 13563 and 12866
§ 102.19, as it currently reads, minor result stems, in part, from the fact that, direct agencies to assess the costs and
processing would not be a type of in regard to those goods that obtain benefits of available regulatory
production that would qualify a good to originating status as a result of minor alternatives and, if regulation is
be labeled as a product of the country processing in a NAFTA party, the necessary, to select regulatory
in which the labeling took place and pertinent NAFTA marking rules in 19
approaches that maximize net benefits
thus would not enable the good to take CFR 102.20 are more stringent than the
(including potential economic,
advantage of NAFTA tariff preferences. comparable liberalized NAFTA
environmental, public health and safety
preference rules set forth in General
Explanation of Amendments Note 12(t), HTSUS. As discussed above, effects, distributive impacts, and
the NAFTA preference override equity). Executive Order 13563
Since the NAFTA entered into effect, emphasizes the importance of
the three parties to the Agreement have provision in § 102.19(a) fails to resolve
this problem since, as discussed above, quantifying both costs and benefits, of
agreed to liberalizations to the NAFTA reducing costs, of harmonizing rules,
preference rules of origin for various this provision overrides a determination
that a good is not a good of Canada or and of promoting flexibility. This
goods. As a result, a lesser degree of rulemaking is not a ‘‘significant
processing in a NAFTA party is required Mexico only in situations in which the
good undergoes production other than regulatory action,’’ under section 3(f) of
to constitute ‘‘production’’ which will
minor processing, in a NAFTA country. the Executive Order 12866.
confer originating status to certain non-
CBP notes that 19 CFR 102.17 Accordingly, OMB has not reviewed
NAFTA materials. The United States
provides that a foreign material will not this proposed rule.
took steps to implement these changes
be considered to have undergone an
by amending the NAFTA preference B. Regulatory Flexibility Act
applicable change in tariff classification
tariff-shift rules in General Note 12(t),
specified in § 102.20 or § 102.21 or to This section examines the impact of
HTSUS, through Presidential
have met any other applicable the rule on small entities as required by
Proclamations 7870 dated February 9,
requirements of those sections merely
2005 (published in the Federal Register the Regulatory Flexibility Act (5 U.S.C.
by reason of having been subjected to
on February 14, 2005 (70 FR 7611)), 601 et seq.), as amended by the Small
certain specified operations, including
8067 dated October 11, 2006 (published ‘‘[s]imple packing, repacking or retail Business Regulatory Enforcement and
in the Federal Register on October 13, packaging without more than minor Fairness Act of 1996 (SBREFA). A small
2006 (71 FR 60649)), and 8405 dated processing.’’ This provision clearly is entity may be a small business (defined
August 31, 2009 (published in the not an impediment to the proposed as any independently owned and
Federal Register on September 2, 2009 amendment set forth in this document operated business not dominant in its
(74 FR 45529)). as the ‘‘non-qualifying operations’’ field that qualifies as a small business
For spices and certain other food specified in § 102.17 relate only to the per the Small Business Act); a small not-
products, Presidential Proclamation application of the rules set forth in for-profit organization; or a small
7870 specifically liberalized various §§ 102.20 and 102.21 and not to the governmental jurisdiction (locality with
rules of origin in General Note 12(t) to NAFTA preference override in § 102.19. fewer than 50,000 people).
permit minor processing operations in a CBP understands that, as a result of The proposed rule, if finalized, will
NAFTA party, such as packaging, to actions taken or interpretations adopted extend NAFTA preferential tariff
confer originating status on a good. For by the Governments of Canada and treatment to certain goods imported
example, the NAFTA preference rule for Mexico, the above-referenced spices and from Mexico and Canada that currently
tea (heading 0902, HTSUS) was changed other food products subject to the
are not receiving such treatment, despite
to permit blending and/or packaging to NAFTA liberalizations are receiving
confer NAFTA originating status. the fact that these goods presently
NAFTA preferential tariff treatment
Similarly, changes to the preference when imported from the United States qualify as NAFTA originating under
rules of origin for products such as into Canada and Mexico (assuming General Note 12(t), HTSUS. Therefore,
peppers (subheading 0904.12, HTSUS), compliance with all applicable the proposed amendment would benefit
cloves (heading 0907, HTSUS), poppy requirements). To rectify the problem importers of such goods from Canada
seeds (subheading 1207.91, HTSUS), discussed above with respect to imports and Mexico by eliminating the customs
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS

and certain other spices were also from Canada and Mexico, CBP is duties and merchandise processing fees
liberalized by Proclamation 7870 to proposing to amend § 102.19 by adding that presently are due for these
allow these goods to become NAFTA a new paragraph (c) to allow the NAFTA importations. To the extent that this
originating as a result of packaging preference override to apply to these rulemaking affects small entities, these
operations in a NAFTA party. It is noted specific goods. This proposed change, if entities would experience a cost
that blending is considered to be more finalized, will give effect to the savings. Therefore, CBP certifies that the
than a minor processing operation for intentions of the NAFTA parties by proposed rule would not have a
purposes of the NAFTA Marking Rules. extending NAFTA preferential tariff significant economic impact on a
See, for example, CBP Headquarters treatment to certain goods imported substantial number of small entities.

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Federal Register / Vol. 81, No. 131 / Friday, July 8, 2016 / Proposed Rules 44557

Paperwork Reduction Act DEPARTMENT OF THE TREASURY Paperwork Reduction Act
As there is no collection of The collection of information
information proposed in this document, Internal Revenue Service contained in this notice of proposed
the provisions of the Paperwork rulemaking has been submitted to the
Reduction Act (44 U.S.C. 3507) are 26 CFR Parts 1 and 301 Office of Management and Budget in
inapplicable. accordance with the Paperwork
[REG–109086–15] Reduction Act of 1995 (44 U.S.C.
Signing Authority 3507(d)). Comments on the collection of
This document is being issued in RIN 1545–BN50 information should be sent to the Office
accordance with § 0.1(a)(1) of the CBP of Management and Budget, Attn: Desk
Regulations (19 CFR 0.1(a)(1)) Premium Tax Credit NPRM VI Officer for the Department of the
pertaining to the authority of the AGENCY: Internal Revenue Service (IRS), Treasury, Office of Information and
Secretary of the Treasury (or his/her Treasury. Regulatory Affairs, Washington, DC
delegate) to approve regulations related 20503, with copies to the Internal
ACTION: Notice of proposed rulemaking.
to certain customs revenue functions. Revenue Service, Attn: IRS Reports
SUMMARY: This document contains Clearance Officer,
List of Subjects in 19 CFR Part 102
proposed regulations relating to the SE:W:CAR:MP:T:T:SP, Washington, DC
Canada, Customs duties and health insurance premium tax credit 20224. Comments on the collection of
inspections, Imports, Mexico, Reporting (premium tax credit) and the individual information should be received by
and recordkeeping requirements, Trade shared responsibility provision. These September 6, 2016. Comments are
agreements. proposed regulations affect individuals specifically requested concerning:
who enroll in qualified health plans Whether the proposed collection of
Proposed Amendments to the CBP
through Health Insurance Exchanges information is necessary for the proper
Regulations
(Exchanges, also called Marketplaces) performance of the functions of the IRS,
For the reasons set forth above, part including whether the information will
and claim the premium tax credit, and
102 of title 19 of the Code of Federal have practical utility;
Exchanges that make qualified health
Regulations (19 CFR part 102) is How the quality, utility, and clarity of
plans available to individuals and
proposed to be amended as set forth the information to be collected may be
employers. These proposed regulations
below. enhanced;
also affect individuals who are eligible How the burden of complying with
PART 102—RULES OF ORIGIN for employer-sponsored health coverage the proposed collection of information
and individuals who seek to claim an may be minimized, including through
■ 1. The authority citation for part 102, exemption from the individual shared the application of automated collection
CBP regulations, continues to read as responsibility provision because of techniques or other forms of information
follows: unaffordable coverage. Although technology; and
Authority: 19 U.S.C. 66, 1202 (General employers are not directly affected by Estimates of capital or start-up costs
Note 3(i), Harmonized Tariff Schedule of the rules governing the premium tax credit, and costs of operation, maintenance,
United States (HTSUS)), 1624, 3314, 3592. these proposed regulations may and purchase of services to provide
indirectly affect employers through the information.
§ 102.19 [Amended] employer shared responsibility The collection of information in these
■ 2. In § 102.19: provisions and the related information proposed regulations is in § 1.36B–5.
■ a. Paragraph (a) is amended by adding reporting provisions. The collection of information is
the words ‘‘or (c)’’ after the words DATES: Written (including electronic) necessary to reconcile advance
‘‘paragraph (b)’’; and comments and requests for a public payments of the premium tax credit and
■ b. Paragraph (c) is added to read as determine the allowable premium tax
hearing must be received by September
follows: 6, 2016. credit. The collection of information is
(c) If a good classifiable under required to comply with the provisions
ADDRESSES: Send submissions to:
heading 0907, 0908, 0909, or of section 36B of the Internal Revenue
subheading 0910.11, 0910.12, 0910.30, CC:PA:LPD:PR (REG–109086–15), Room
5203, Internal Revenue Service, P.O. Code (Code). The likely respondents are
0910.99 or 1207.91, HTSUS, is Marketplaces that enroll individuals in
originating within the meaning of Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions qualified health plans.
section 181.1(q) of this chapter, but is The burden for the collection of
not determined under section 102.11(a) may be hand-delivered Monday through
Friday between the hours of 8 a.m. and information contained in these
or (b) to be a good of a single NAFTA proposed regulations will be reflected in
country, the country of origin of such 4 p.m. to CC:PA:LPD:PR (REG–109086–
15), Courier’s Desk, Internal Revenue the burden on Form 1095–A, Health
good is the last NAFTA country in Insurance Marketplace Statement,
which that good underwent production, Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically which is the form that will request the
provided that a Certificate of Origin (see information from the Marketplaces in
§ 181.11 of this Chapter) has been via the Federal eRulemaking Portal at
http://www.regulations.gov (REG– the proposed regulations.
completed and signed for the good. An agency may not conduct or
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS

109086–15).
R. Gil Kerlikowske, sponsor, and a person is not required to
FOR FURTHER INFORMATION CONTACT:
Commissioner, U.S. Customs and Border
respond to, a collection of information
Concerning the proposed regulations, unless it displays a valid control
Protection. Shareen Pflanz, (202) 317–4727;
Approved: July 1, 2016.
number assigned by the Office of
concerning the submission of comments Management and Budget.
Timothy E. Skud, and/or requests for a public hearing,
Deputy Assistant Secretary of the Treasury. Oluwafunmilayo Taylor, (202) 317–6901 Background
[FR Doc. 2016–16088 Filed 7–7–16; 8:45 am] (not toll-free calls). Beginning in 2014, under the Patient
BILLING CODE P SUPPLEMENTARY INFORMATION: Protection and Affordable Care Act,

VerDate Sep<11>2014 17:45 Jul 07, 2016 Jkt 238001 PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 E:\FR\FM\08JYP1.SGM 08JYP1
Document Created: 2016-07-08 00:17:45
Document Modified: 2016-07-08 00:17:45
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Notice of proposed rulemaking.
Dates		Comments must be received on or before September 6, 2016.
Contact		Monika Brenner, Chief, Valuation and Special Programs Branch, Regulations and Rulings, Office of International Trade, (202) 325-0038.
FR Citation		81 FR 44555
RIN Number		1515-AD78
CFR Associated		Canada; Customs Duties and Inspections; Imports; Mexico; Reporting and Recordkeeping Requirements and Trade Agreements
81 FR 44555 - North American Free Trade Agreement; Preference Override

DEPARTMENT OF HOMELAND SECURITYU.S. Customs and Border ProtectionDEPARTMENT OF THE TREASURY

Federal Register Volume 81, Issue 131 (July 8, 2016)

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
