Skip to Content

Notice

Request for Public Comment on the Due Diligence Requirement Under the Commercial Availability Procedures of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR)

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble November 28, 2007.

AGENCY:

Committee for the Implementation of Textile Agreements (“CITA”).

ACTION:

Request for Public Comment on the Due Diligence Requirement Under the CAFTA-DR Commercial Availability Procedures.

SUMMARY:

CITA requests public comment on the due diligence requirement under the CAFTA-DR Commercial Availability procedures. Comments should be submitted no later than January 2, 2008 to the attention of: R. Matthew Priest, Chairman, Committee for the Implementation of Textile Agreements, Room 3001, Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC 20230.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Richard Stetson, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-2582.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Start Authority

Authority: Authority: Section 203(o)(4) of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (“CAFTA-DR”); CAFTA-DR Commercial Availability Final Procedures (72 FR 13256, published March 21, 2007) (“Final Procedures”).

End Authority

BACKGROUND:

The CAFTA-DR Commercial Availability provision permits the use of non-originating CAFTA-DR products by implementing procedures that allow products to be placed on or removed from a product list, on a timely basis, Start Printed Page 67917and in a manner that is consistent with normal business practice. The Final Procedures provide that the procedures may be modified to address concerns that may arise as CITA gains experience in implementing them. CITA notes that these are administrative procedures rather than regulations, and can be modified as needed.

A critical component to the efficient functioning of the Commercial Availability process is the requirement that a requester and a potential supplier engage in due diligence efforts, as provided under the Final Procedures, to determine whether a product is available in commercial quantities in a timely manner in the region. The due diligence provisions require communications between the requester and potential suppliers, supported by documentation, to ensure that a proper inquiry into a product's commercial availability has been undertaken prior to the filing of the request.

Based on CITA's experience, there is a concern that, in certain cases, due diligence efforts have fallen short of those expected when the procedures were drafted; that product descriptions may not meet recognized standards; that potential suppliers may not be adequately substantiating their claims that they are to be able to supply requested products; and that CITA is not receiving complete information from interested entities regarding meaningful contact between requesters and potential suppliers necessary for CITA to make informed determinations.

Therefore, CITA requests public comment and proposals on the operation of the due diligence requirement under the CAFTA-DR Commercial Availability procedures, including the following areas of concern:

Communications between Requesters and Potential Suppliers: Past proceedings have exposed issues with regard to the nature of the communications between requesters and potential suppliers. Specifically, CITA notes that there is a lack of substantive dialogue between requesters and potential suppliers. CITA requests public comment as to how such communications should be conducted, in keeping with normal business practice, as well as the role that third party counsels and advisors should play in the communications between requesters and potential suppliers; whether only certain employees of the requester and potential supplier should be deemed as the appropriate contacts for communication regarding potential sales; and whether there should be direct dialogue between those appropriate personnel prior to submission of requests to CITA.

Identification of Potential Suppliers: CITA is concerned that methods being used to identify potential suppliers and the means of contacting requesters and the potential suppliers have not been effective. For example, CITA has received requests that contain a general inquiry sent via email to all manufacturers within the CAFTA-DR region without regard to actual potential for supply. In prior cases, CITA has noted a concern regarding the detailed and confidential information requested of potential suppliers concerning their business plans. CITA seeks public comment regarding what methods of communications should be employed to satisfactorily determine whether there are potential suppliers and the types of information that can be requested of potential suppliers.

Content of Communications between Requesters and Potential Suppliers: In the course of various proceedings, CITA notes that there have been issues regarding the content of communications between requesters and potential suppliers, namely the description of the product, such as production specifications and performance criteria. CITA seeks public comment regarding the requirements for a description of product specifications; whether industry accepted standards, such as ASTM (American Society for Testing and Materials) or AATCC (American Association of Textile Chemists and Colorists), should be referenced; and whether only measurable criteria and performance standards may be referenced in product descriptions. In the course of past proceedings, CITA has also noted a concern regarding potentially unreasonable demands regarding time lines for supplying requested products, and the provision of samples. CITA seeks public comment regarding whether and under what conditions potential requesters and potential suppliers should provide samples to each other; how reasonable time frames should be determined; and whether consideration should be given to time needed to develop a product new to a potential supplier.

Substitutability of Products: In the course of past proceedings, CITA has noted concerns as to whether products similar to the requested product are substitutable. CITA seeks public comment regarding how potential suppliers should identify and describe potentially substitutable products; which specifications and performance criteria a potentially substitutable product would have to be meet; and reasonable justifications for rejecting potentially substitutable products.

Commercial Availability of a Production Input vs. Downstream Product: CITA has found there is concern that a request actually is for a downstream product, but it is a production input whose commercial availability is in question. CITA seeks public comment regarding whether it should reject or deny requests when it becomes clear that a production input is not available in commercial quantities in a timely manner rather than the downstream product.

Potential Suppliers' Responses to Requester's Inquiry: CITA has found that there is concern regarding the information provided by potential suppliers in responses with offers to supply and that potential suppliers are not demonstrating a legitimate intent to do business by providing a clear, detailed response to a request. CITA seeks public comment regarding what information a potential supplier should provide to substantiate an objection to a request and an offer to supply; whether a potential supplier should have produced the requested product within the past 24 months; what information is needed to substantiate that a potential supplier has the ability to supply; whether types of equipment, capacity, and other production information should be business confidential; and what constitutes a timely response to an inquiry and a legitimate interest to do business.

CITA requests public comment on the operation of the due diligence requirement under the CAFTA-DR Commercial Availability procedures and the issues identified above. Comments must be in English, and must be received no later than January 2, 2008. Comments must be submitted electronically AND in writing.

(1) An electronic mail (“email”) version of the comments must be either in PDF, Word, or Word-Perfect format, and sent to the following email address: OTEXA CAFTA@ita.doc.gov. Comments must have a bolded heading stating “Public Version”, and all business confidential information must be deleted and substituted with asterisks. No business confidential information should be submitted in the “email” version of the document.

(2) The original signed comments must be mailed to the Chairman, Committee for the Implementation of Textile Agreements, Room H3001A, U.S. Department of Commerce, 14th and Constitution Avenue N.W., Washington, DC 20230. Any business confidential information upon which an interested person wishes to rely must be included Start Printed Page 67918in the original signed comments only. Brackets must be placed around all business confidential information. Comments containing business confidential information must have a bolded heading stating “Confidential Version.” Attachments considered business confidential information must have a heading stating “Business Confidential Information”. The Committee will protect from disclosure any business confidential information that is marked “business confidential” to the full extent permitted by law. Except for the inclusion of business confidential information, the two versions of comments should be identical.

(3) All comments submitted via “email” will be made available for public inspection at the Office of Textile and Apparel, Room H3001A, the Department of Commerce, 14th and Constitution Avenue N.W., Washington, DC, between the hours of 8:30 a.m. and 5:00 p.m. on business days. In addition, the “email” version of the comments will be posted for public review on the Office of Textile and Apparel, CAFTA-DR Free Trade Agreement website http://otexa.ita.doc.gov/​tradeagree2007.htm.

Start Signature

R. Matthew Priest,

Chairman, Committee for the Implementation of Textile Agreements.

End Signature End Supplemental Information

[FR Doc. E7-23410 Filed 11-30-07; 8:45 am]

BILLING CODE 3510-DS