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Import Duty Relief for Pima Cotton Users, Wool Apparel Makers Modified

Friday, November 18, 2016
Sandler, Travis & Rosenberg Trade Report

The Department of Agriculture has amended its March 2015 final rule implementing the Pima Agriculture Cotton Trust Fund and the Agriculture Wool Apparel Manufacturers Trust Fund established in the 2014 Farm Bill.

The Agriculture Pima Trust provides for one payment annually for domestic users of pima cotton, pima cotton yarn spinners, and pima cotton trade associations for the years 2015-2018. The purpose is to provide monetary relief to certain persons in the U.S. that have incurred economic injury through the importation of pima cotton and have incurred tariffs on pima cotton fabric that are higher than tariffs on certain imported apparel articles made of pima cotton fabric.

The Agriculture Wool Trust provides annually for four payments.

Payments to manufacturers of certain worsted wool fabrics – This payment provides financial assistance to persons in the U.S. that manufactured worsted wool fabrics during 1999, 2000, and 2001. The 2014 Farm Bill authorizes USDA to continue to make these payments to the same persons that, during the calendar year immediately preceding the payment and during calendar years 1999, 2000, and 2001, were manufacturers of at least one of two kinds of worsted wool fabrics: described in HTSUS subheading 9902.51.11, containing 85 percent or more by weight of wool, with average fiber diameters greater than 18.5 microns; and described in HTSUS subheading 9902.51.15, containing 85 percent or more by weight of wool, with average fiber diameters of 18.5 microns or less.

Monetization of the wool TRQ – The wool tariff-rate quota provided for lower duty rates on limited quantities of two categories of worsted wool fabrics suitable for use in making suits, suit-type jackets, or trousers for men and boys, but authority for this TRQ expired Dec. 31, 2014. This payment monetizes the wool TRQ by compensating importers of worsted wool fabric of the kind covered by the three HTSUS subheadings covered by the TRQ for the additional cost of the increased tariff.

Wool yarn, wool fiber, and wool top duty compensation payment – The suspension of duty on imported wool yarn (HTSUS 9902.51.13) and wool fiber and wool top (HTSUS 9902.51.14) expired Dec. 31, 2014. This payment will be made to processors of such wool yarn, fiber, and top in the amounts they would have saved if the duty suspension had remained in effect.

Refund of duties paid on imports of certain wool products – This payment is to U.S. manufacturers and processors of wool for duties paid on the imported wool in 2000, 2001, and 2002.

USDA is now making the following changes to this rule.

- Beginning in 2017, IRS forms W-9 and 1199A will only need to be filed if changes in the information have occurred.

- The scope of entities eligible for the monetization of the wool TRQ or the wool yarn, fiber, and top duty compensation payment is expanded to include those operating within a foreign-trade zone.

- When reporting the annual dollar value and quantity of imported qualifying worsted wool fabric, an eligible person may either have cut and sewn the wool on its own behalf or had another person cut and sew the wool on its behalf, provided the eligible person owned the wool at the time it was cut and sewn.

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