U.S.-Bahrain PL

PUBLIC LAW 109–169—JAN. 11, 2006

119 STAT. 3581

Public Law 109–169
109th Congress
An Act
To implement the United States-Bahrain Free Trade Agreement.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘United StatesBahrain Free Trade Agreement Implementation Act’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:

Jan. 11, 2006
[H.R. 4340]
United StatesBahrain Free
Trade Agreement
Implementation
Act.
19 USC 3805
note.

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE
AGREEMENT
Sec. 101. Approval and entry into force of the Agreement.
Sec. 102. Relationship of the agreement to United States and State law.
Sec. 103. Implementing actions in anticipation of entry into force and initial regulations.
Sec. 104. Consultation and layover provisions for, and effective date of, proclaimed
actions.
Sec. 105. Administration of dispute settlement proceedings.
Sec. 106. Effective dates; effect of termination.
Sec.
Sec.
Sec.
Sec.
Sec.

201.
202.
203.
204.
205.

TITLE II—CUSTOMS PROVISIONS
Tariff modifications.
Rules of origin.
Customs user fees.
Enforcement relating to trade in textile and apparel goods.
Regulations.
TITLE III—RELIEF FROM IMPORTS

Sec. 301. Definitions.

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Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

311.
312.
313.
314.
315.
316.

Subtitle A—Relief From Imports Benefiting From the Agreement
Commencing of action for relief.
Commission action on petition.
Provision of relief.
Termination of relief authority.
Compensation authority.
Confidential business information.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

321.
322.
323.
324.
325.
326.
327.
328.

Subtitle B—Textile and Apparel Safeguard Measures
Commencement of action for relief.
Determination and provision of relief.
Period of relief.
Articles exempt from relief.
Rate after termination of import relief.
Termination of relief authority.
Compensation authority.
Confidential business information.

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119 STAT. 3582

PUBLIC LAW 109–169—JAN. 11, 2006

TITLE IV—PROCUREMENT
Sec. 401. Eligible products.
19 USC 3805
note.

SEC. 2. PURPOSES.

19 USC 3805
note.

SEC. 3. DEFINITIONS.

The purposes of this Act are—
(1) to approve and implement the Free Trade Agreement
between the United States and Bahrain entered into under
the authority of section 2103(b) of the Bipartisan Trade Promotion Authority Act of 2002 (19 U.S.C. 3803(b));
(2) to strengthen and develop economic relations between
the United States and Bahrain for their mutual benefit;
(3) to establish free trade between the 2 nations through
the reduction and elimination of barriers to trade in goods
and services; and
(4) to lay the foundation for further cooperation to expand
and enhance the benefits of such Agreement.
In this Act:
(1) AGREEMENT.—The term ‘‘Agreement’’ means the United
States-Bahrain Free Trade Agreement approved by Congress
under section 101(a)(1).
(2) HTS.—The term ‘‘HTS’’ means the Harmonized Tariff
Schedule of the United States.
(3) TEXTILE OR APPAREL GOOD.—The term ‘‘textile or
apparel good’’ means a good listed in the Annex to the Agreement on Textiles and Clothing referred to in section 101(d)(4)
of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).

TITLE I—APPROVAL OF, AND GENERAL
PROVISIONS
RELATING
TO,
THE
AGREEMENT
19 USC 3805
note.

SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE AGREEMENT.

(a) APPROVAL OF AGREEMENT AND STATEMENT OF ADMINISTRAACTION.—Pursuant to section 2105 of the Bipartisan Trade
Promotion Authority Act of 2002 (19 U.S.C. 3805) and section
151 of the Trade Act of 1974 (19 U.S.C. 2191), Congress approves—
(1) the United States-Bahrain Free Trade Agreement
entered into on September 14, 2004, with Bahrain and submitted to Congress on November 16, 2005; and
(2) the statement of administrative action proposed to
implement the Agreement that was submitted to Congress on
November 16, 2005.
(b) CONDITIONS FOR ENTRY INTO FORCE OF THE AGREEMENT.—
At such time as the President determines that Bahrain has taken
measures necessary to bring it into compliance with those provisions
of the Agreement that are to take effect on the date on which
the Agreement enters into force, the President is authorized to
exchange notes with the Government of Bahrain providing for the
entry into force, on or after January 1, 2006, of the Agreement
with respect to the United States.

TIVE

President.
Effective date.

19 USC 3805
note.

SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES
AND STATE LAW.

(a) RELATIONSHIP

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119 STAT. 3583

(1) UNITED STATES LAW TO PREVAIL IN CONFLICT.—No provision of the Agreement, nor the application of any such provision
to any person or circumstance, which is inconsistent with any
law of the United States shall have effect.
(2) CONSTRUCTION.—Nothing in this Act shall be
construed—
(A) to amend or modify any law of the United States;
or
(B) to limit any authority conferred under any law
of the United States,
unless specifically provided for in this Act.
(b) RELATIONSHIP OF AGREEMENT TO STATE LAW.—
(1) LEGAL CHALLENGE.—No State law, or the application
thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application
is inconsistent with the Agreement, except in an action brought
by the United States for the purpose of declaring such law
or application invalid.
(2) DEFINITION OF STATE LAW.—For purposes of this subsection, the term ‘‘State law’’ includes—
(A) any law of a political subdivision of a State; and
(B) any State law regulating or taxing the business
of insurance.
(c) EFFECT OF AGREEMENT WITH RESPECT TO PRIVATE REMEDIES.—No person other than the United States—
(1) shall have any cause of action or defense under the
Agreement or by virtue of congressional approval thereof; or
(2) may challenge, in any action brought under any provision of law, any action or inaction by any department, agency,
or other instrumentality of the United States, any State, or
any political subdivision of a State, on the ground that such
action or inaction is inconsistent with the Agreement.
SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO
FORCE AND INITIAL REGULATIONS.

(a) IMPLEMENTING ACTIONS.—
(1) PROCLAMATION AUTHORITY.—After the date of the enactment of this Act—
(A) the President may proclaim such actions, and
(B) other appropriate officers of the United States
Government may issue such regulations,
as may be necessary to ensure that any provision of this Act,
or amendment made by this Act, that takes effect on the
date on which the Agreement enters into force is appropriately
implemented on such date, but no such proclamation or regulation may have an effective date earlier than the date on which
the Agreement enters into force.
(2) EFFECTIVE DATE OF CERTAIN PROCLAIMED ACTIONS.—
Any action proclaimed by the President under the authority
of this Act that is not subject to the consultation and layover
provisions under section 104 may not take effect before the
15th day after the date on which the text of the proclamation
is published in the Federal Register.
(3) WAIVER OF 15-DAY RESTRICTION.—The 15-day restriction
in paragraph (2) on the taking effect of proclaimed actions
is waived to the extent that the application of such restriction
would prevent the taking effect on the date on which the

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note.
Effective date.

Federal Register,
publication.

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119 STAT. 3584

Deadlines.

President.
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note.

Reports.

Deadline.

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note.
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note.

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PUBLIC LAW 109–169—JAN. 11, 2006

Agreement enters into force of any action proclaimed under
this section.
(b) INITIAL REGULATIONS.—Initial regulations necessary or
appropriate to carry out the actions required by or authorized
under this Act or proposed in the statement of administrative
action submitted under section 101(a)(2) to implement the Agreement shall, to the maximum extent feasible, be issued within 1
year after the date on which the Agreement enters into force.
In the case of any implementing action that takes effect on a
date after the date on which the Agreement enters into force,
initial regulations to carry out that action shall, to the maximum
extent feasible, be issued within 1 year after such effective date.
SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, AND EFFECTIVE DATE OF, PROCLAIMED ACTIONS.

If a provision of this Act provides that the implementation
of an action by the President by proclamation is subject to the
consultation and layover requirements of this section, such action
may be proclaimed only if—
(1) the President has obtained advice regarding the proposed action from—
(A) the appropriate advisory committees established
under section 135 of the Trade Act of 1974 (19 U.S.C.
2155); and
(B) the United States International Trade Commission;
(2) the President has submitted to the Committee on
Finance of the Senate and the Committee on Ways and Means
of the House of Representatives a report that sets forth—
(A) the action proposed to be proclaimed and the reasons therefor; and
(B) the advice obtained under paragraph (1);
(3) a period of 60 calendar days, beginning on the first
day on which the requirements set forth in paragraphs (1)
and (2) have been met has expired; and
(4) the President has consulted with the Committees
referred to in paragraph (2) regarding the proposed action
during the period referred to in paragraph (3).
SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS.

(a) ESTABLISHMENT OR DESIGNATION OF OFFICE.—The President
is authorized to establish or designate within the Department of
Commerce an office that shall be responsible for providing administrative assistance to panels established under chapter 19 of the
Agreement. The office may not be considered to be an agency
for purposes of section 552 of title 5, United States Code.
(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated for each fiscal year after fiscal year 2005 to
the Department of Commerce such sums as may be necessary
for the establishment and operations of the office established or
designated under subsection (a) and for the payment of the United
States share of the expenses of panels established under chapter
19 of the Agreement.
SEC. 106. EFFECTIVE DATES; EFFECT OF TERMINATION.

(a) EFFECTIVE DATES.—Except as provided in subsection (b),
the provisions of this Act and the amendments made by this Act
take effect on the date on which the Agreement enters into force.

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119 STAT. 3585

(b) EXCEPTIONS.—Sections 1 through 3 and this title take effect
on the date of the enactment of this Act.
(c) TERMINATION OF THE AGREEMENT.—On the date on which
the Agreement terminates, the provisions of this Act (other than
this subsection) and the amendments made by this Act shall cease
to be effective.

TITLE II—CUSTOMS PROVISIONS
SEC. 201. TARIFF MODIFICATIONS.

(a) TARIFF MODIFICATIONS PROVIDED FOR IN THE AGREEMENT.—
(1) PROCLAMATION AUTHORITY.—The President may
proclaim—
(A) such modifications or continuation of any duty,
(B) such continuation of duty-free or excise treatment,
or
(C) such additional duties,
as the President determines to be necessary or appropriate
to carry out or apply articles 2.3, 2.5, 2.6, 3.2.8, and 3.2.9,
and Annex 2–B of the Agreement.
(2) EFFECT ON BAHRAINI GSP STATUS.—Notwithstanding section 502(a)(1) of the Trade Act of 1974 (19 U.S.C. 2462(a)(1)),
the President shall, on the date on which the Agreement enters
into force, terminate the designation of Bahrain as a beneficiary
developing country for purposes of title V of the Trade Act
of 1974 (19 U.S.C. 2461 et seq.).
(b) OTHER TARIFF MODIFICATIONS.—Subject to the consultation
and layover provisions of section 104, the President may proclaim—
(1) such modifications or continuation of any duty,
(2) such modifications as the United States may agree
to with Bahrain regarding the staging of any duty treatment
set forth in Annex 2–B of the Agreement,
(3) such continuation of duty-free or excise treatment, or
(4) such additional duties,
as the President determines to be necessary or appropriate to
maintain the general level of reciprocal and mutually advantageous
concessions with respect to Bahrain provided for by the Agreement.
(c) CONVERSION TO AD VALOREM RATES.—For purposes of subsections (a) and (b), with respect to any good for which the base
rate in the Tariff Schedule of the United States to Annex 2–
B of the Agreement is a specific or compound rate of duty, the
President may substitute for the base rate an ad valorem rate
that the President determines to be equivalent to the base rate.
SEC. 202. RULES OF ORIGIN.

(a) APPLICATION AND INTERPRETATION.—In this section:
(1) TARIFF CLASSIFICATION.—The basis for any tariff classification is the HTS.
(2) REFERENCE TO HTS.—Whenever in this section there
is a reference to a heading or subheading, such reference shall
be a reference to a heading or subheading of the HTS.
(b) ORIGINATING GOODS.—
(1) IN GENERAL.—For purposes of this Act and for purposes
of implementing the preferential tariff treatment provided for
under the Agreement, a good is an originating good if—
(A) the good is imported directly—

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PUBLIC LAW 109–169—JAN. 11, 2006
(i) from the territory of Bahrain into the territory
of the United States; or
(ii) from the territory of the United States into
the territory of Bahrain; and
(B)(i) the good is a good wholly the growth, product,
or manufacture of Bahrain or the United States, or both;
(ii) the good (other than a good to which clause (iii)
applies) is a new or different article of commerce that
has been grown, produced, or manufactured in Bahrain
or the United States, or both, and meets the requirements
of paragraph (2); or
(iii)(I) the good is a good covered by Annex 3–A or
4–A of the Agreement;
(II)(aa) each of the nonoriginating materials used in
the production of the good undergoes an applicable change
in tariff classification specified in such Annex as a result
of production occurring entirely in the territory of Bahrain
or the United States, or both; or
(bb) the good otherwise satisfies the requirements
specified in such Annex; and
(III) the good satisfies all other applicable requirements
of this section.
(2) REQUIREMENTS.—A good described in paragraph
(1)(B)(ii) is an originating good only if the sum of—
(A) the value of each material produced in the territory
of Bahrain or the United States, or both, and
(B) the direct costs of processing operations performed
in the territory of Bahrain or the United States, or both,
is not less than 35 percent of the appraised value of the good
at the time the good is entered into the territory of the United
States.
(c) CUMULATION.—
(1) ORIGINATING GOOD OR MATERIAL INCORPORATED INTO
GOODS OF OTHER COUNTRY.—An originating good, or a material
produced in the territory of Bahrain or the United States,
or both, that is incorporated into a good in the territory of
the other country shall be considered to originate in the territory of the other country.
(2) MULTIPLE PRODUCERS.—A good that is grown, produced,
or manufactured in the territory of Bahrain or the United
States, or both, by 1 or more producers, is an originating
good if the good satisfies the requirements of subsection (b)
and all other applicable requirements of this section.
(d) VALUE OF MATERIALS.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
value of a material produced in the territory of Bahrain or
the United States, or both, includes the following:
(A) The price actually paid or payable for the material
by the producer of the good.
(B) The freight, insurance, packing, and all other costs
incurred in transporting the material to the producer’s
plant, if such costs are not included in the price referred
to in subparagraph (A).
(C) The cost of waste or spoilage resulting from the
use of the material in the growth, production, or manufacture of the good, less the value of recoverable scrap.

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(D) Taxes or customs duties imposed on the material
by Bahrain or the United States, or both, if the taxes
or customs duties are not remitted upon exportation from
the territory of Bahrain or the United States, as the case
may be.
(2) EXCEPTION.—If the relationship between the producer
of a good and the seller of a material influenced the price
actually paid or payable for the material, or if there is no
price actually paid or payable by the producer for the material,
the value of the material produced in the territory of Bahrain
or the United States, or both, includes the following:
(A) All expenses incurred in the growth, production,
or manufacture of the material, including general expenses.
(B) A reasonable amount for profit.
(C) Freight, insurance, packing, and all other costs
incurred in transporting the material to the producer’s
plant.
(e) PACKAGING AND PACKING MATERIALS AND CONTAINERS FOR
RETAIL SALE AND FOR SHIPMENT.—Packaging and packing materials
and containers for retail sale and shipment shall be disregarded
in determining whether a good qualifies as an originating good,
except to the extent that the value of such packaging and packing
materials and containers has been included in meeting the requirements set forth in subsection (b)(2).
(f) INDIRECT MATERIALS.—Indirect materials shall be disregarded in determining whether a good qualifies as an originating
good, except that the cost of such indirect materials may be included
in meeting the requirements set forth in subsection (b)(2).
(g) TRANSIT AND TRANSSHIPMENT.—A good shall not be considered to meet the requirement of subsection (b)(1)(A) if, after exportation from the territory of Bahrain or the United States, the
good undergoes production, manufacturing, or any other operation
outside the territory of Bahrain or the United States, other than
unloading, reloading, or any other operation necessary to preserve
the good in good condition or to transport the good to the territory
of Bahrain or the United States.
(h) TEXTILE AND APPAREL GOODS.—
(1) DE MINIMIS AMOUNTS OF NONORIGINATING MATERIALS.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), a textile or apparel good that is not an originating
good because certain fibers or yarns used in the production
of the component of the good that determines the tariff
classification of the good do not undergo an applicable
change in tariff classification set out in Annex 3–A of
the Agreement shall be considered to be an originating
good if the total weight of all such fibers or yarns in
that component is not more than 7 percent of the total
weight of that component.
(B) CERTAIN TEXTILE OR APPAREL GOODS.—A textile
or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification
of the good shall be considered to be an originating good
only if such yarns are wholly formed in the territory of
Bahrain or the United States.
(C) YARN, FABRIC, OR GROUP OF FIBERS.—For purposes
of this paragraph, in the case of a textile or apparel good

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that is a yarn, fabric, or group of fibers, the term ‘‘component of the good that determines the tariff classification
of the good’’ means all of the fibers in the yarn, fabric,
or group of fibers.
(2) GOODS PUT UP IN SETS FOR RETAIL SALE.—Notwithstanding the rules set forth in Annex 3–A of the Agreement,
textile or apparel goods classifiable as goods put up in sets
for retail sale as provided for in General Rule of Interpretation
3 of the HTS shall not be considered to be originating goods
unless each of the goods in the set is an originating good
or the total value of the nonoriginating goods in the set does
not exceed 10 percent of the value of the set determined for
purposes of assessing customs duties.
(i) DEFINITIONS.—In this section:
(1) DIRECT COSTS OF PROCESSING OPERATIONS.—
(A) IN GENERAL.—The term ‘‘direct costs of processing
operations’’, with respect to a good, includes, to the extent
they are includable in the appraised value of the good
when imported into Bahrain or the United States, as the
case may be, the following:
(i) All actual labor costs involved in the growth,
production, or manufacture of the good, including
fringe benefits, on-the-job training, and the cost of
engineering, supervisory, quality control, and similar
personnel.
(ii) Tools, dies, molds, and other indirect materials,
and depreciation on machinery and equipment that
are allocable to the good.
(iii) Research, development, design, engineering,
and blueprint costs, to the extent that they are allocable to the good.
(iv) Costs of inspecting and testing the good.
(v) Costs of packaging the good for export to the
territory of the other country.
(B) EXCEPTIONS.—The term ‘‘direct costs of processing
operations’’ does not include costs that are not directly
attributable to a good or are not costs of growth, production,
or manufacture of the good, such as—
(i) profit; and
(ii) general expenses of doing business that are
either not allocable to the good or are not related
to the growth, production, or manufacture of the good,
such as administrative salaries, casualty and liability
insurance, advertising, and sales staff salaries,
commissions, or expenses.
(2) GOOD.—The term ‘‘good’’ means any merchandise,
product, article, or material.
(3) GOOD WHOLLY THE GROWTH, PRODUCT, OR MANUFACTURE
OF BAHRAIN OR THE UNITED STATES, OR BOTH.—The term ‘‘good
wholly the growth, product, or manufacture of Bahrain or the
United States, or both’’ means—
(A) a mineral good extracted in the territory of Bahrain
or the United States, or both;
(B) a vegetable good, as such a good is provided for
in the HTS, harvested in the territory of Bahrain or the
United States, or both;

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(C) a live animal born and raised in the territory
of Bahrain or the United States, or both;
(D) a good obtained from live animals raised in the
territory of Bahrain or the United States, or both;
(E) a good obtained from hunting, trapping, or fishing
in the territory of Bahrain or the United States, or both;
(F) a good (fish, shellfish, and other marine life) taken
from the sea by vessels registered or recorded with Bahrain
or the United States and flying the flag of that country;
(G) a good produced from goods referred to in subparagraph (F) on board factory ships registered or recorded
with Bahrain or the United States and flying the flag
of that country;
(H) a good taken by Bahrain or the United States
or a person of Bahrain or the United States from the
seabed or beneath the seabed outside territorial waters,
if Bahrain or the United States, as the case may be, has
rights to exploit such seabed;
(I) a good taken from outer space, if such good is
obtained by Bahrain or the United States or a person
of Bahrain or the United States and not processed in the
territory of a country other than Bahrain or the United
States;
(J) waste and scrap derived from—
(i) production or manufacture in the territory of
Bahrain or the United States, or both; or
(ii) used goods collected in the territory of Bahrain
or the United States, or both, if such goods are fit
only for the recovery of raw materials;
(K) a recovered good derived in the territory of Bahrain
or the United States from used goods and utilized in the
territory of that country in the production of remanufactured goods; and
(L) a good produced in the territory of Bahrain or
the United States, or both, exclusively—
(i) from goods referred to in subparagraphs (A)
through (J), or
(ii) from the derivatives of goods referred to in
clause (i),
at any stage of production.
(4) INDIRECT MATERIAL.—The term ‘‘indirect material’’
means a good used in the growth, production, manufacture,
testing, or inspection of a good but not physically incorporated
into the good, or a good used in the maintenance of buildings
or the operation of equipment associated with the growth,
production, or manufacture of a good, including—
(A) fuel and energy;
(B) tools, dies, and molds;
(C) spare parts and materials used in the maintenance
of equipment and buildings;
(D) lubricants, greases, compounding materials, and
other materials used in the growth, production, or manufacture of a good or used to operate equipment and buildings;
(E) gloves, glasses, footwear, clothing, safety equipment, and supplies;
(F) equipment, devices, and supplies used for testing
or inspecting the good;

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(G) catalysts and solvents; and
(H) any other goods that are not incorporated into
the good but the use of which in the growth, production,
or manufacture of the good can reasonably be demonstrated
to be a part of that growth, production, or manufacture.
(5) MATERIAL.—The term ‘‘material’’ means a good,
including a part or ingredient, that is used in the growth,
production, or manufacture of another good that is a new or
different article of commerce that has been grown, produced,
or manufactured in Bahrain or the United States, or both.
(6) MATERIAL PRODUCED IN THE TERRITORY OF BAHRAIN
OR THE UNITED STATES, OR BOTH.—The term ‘‘material produced
in the territory of Bahrain or the United States, or both’’
means a good that is either wholly the growth, product, or
manufacture of Bahrain or the United States, or both, or a
new or different article of commerce that has been grown,
produced, or manufactured in the territory of Bahrain or the
United States, or both.
(7) NEW OR DIFFERENT ARTICLE OF COMMERCE.—
(A) IN GENERAL.—The term ‘‘new or different article
of commerce’’ means, except as provided in subparagraph
(B), a good that—
(i) has been substantially transformed from a good
or material that is not wholly the growth, product,
or manufacture of Bahrain or the United States, or
both; and
(ii) has a new name, character, or use distinct
from the good or material from which it was transformed.
(B) EXCEPTION.—A good shall not be considered a new
or different article of commerce by virtue of having undergone simple combining or packaging operations, or mere
dilution with water or another substance that does not
materially alter the characteristics of the good.
(8) RECOVERED GOODS.—The term ‘‘recovered goods’’ means
materials in the form of individual parts that result from—
(A) the complete disassembly of used goods into individual parts; and
(B) the cleaning, inspecting, testing, or other processing
of those parts that is necessary for improvement to sound
working condition.
(9) REMANUFACTURED GOOD.—The term ‘‘remanufactured
good’’ means an industrial good that is assembled in the territory of Bahrain or the United States and that—
(A) is entirely or partially comprised of recovered goods;
(B) has a similar life expectancy to, and meets similar
performance standards as, a like good that is new; and
(C) enjoys a factory warranty similar to that of a
like good that is new.
(10) SIMPLE COMBINING OR PACKAGING OPERATIONS.—The
term ‘‘simple combining or packaging operations’’ means operations such as adding batteries to devices, fitting together a
small number of components by bolting, gluing, or soldering,
and repacking or packaging components together.
(11) SUBSTANTIALLY TRANSFORMED.—The term ‘‘substantially transformed’’ means, with respect to a good or material,

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changed as the result of a manufacturing or processing operation so that—
(A)(i) the good or material is converted from a good
that has multiple uses into a good or material that has
limited uses;
(ii) the physical properties of the good or material
are changed to a significant extent; or
(iii) the operation undergone by the good or material
is complex by reason of the number of different processes
and materials involved and the time and level of skill
required to perform those processes; and
(B) the good or material loses its separate identity
in the manufacturing or processing operation.
(j) PRESIDENTIAL PROCLAMATION AUTHORITY.—
(1) IN GENERAL.—The President is authorized to proclaim,
as part of the HTS—
(A) the provisions set forth in Annex 3–A and Annex
4–A of the Agreement; and
(B) any additional subordinate category that is necessary to carry out this title, consistent with the Agreement.
(2) MODIFICATIONS.—
(A) IN GENERAL.—Subject to the consultation and layover provisions of section 104, the President may proclaim
modifications to the provisions proclaimed under the
authority of paragraph (1)(A), other than provisions of chapters 50 through 63 of the HTS (as included in Annex
3–A of the Agreement).
(B) ADDITIONAL PROCLAMATIONS.—Notwithstanding
subparagraph (A), and subject to the consultation and layover provisions of section 104, the President may
proclaim—
(i) modifications to the provisions proclaimed under
the authority of paragraph (1)(A) as are necessary
to implement an agreement with Bahrain pursuant
to article 3.2.5 of the Agreement; and
(ii) before the end of the 1-year period beginning
on the date of the enactment of this Act, modifications
to correct any typographical, clerical, or other nonsubstantive technical error regarding the provisions of
chapters 50 through 63 of the HTS (as included in
Annex 3–A of the Agreement).
SEC. 203. CUSTOMS USER FEES.

Section 13031(b) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)) is amended—
(1) in each of paragraphs (13) and (15), by moving the
text 2 ems to the left; and
(2) by adding after paragraph (15) the following:
‘‘(16) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under section
202 of the United States-Bahrain Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be funded
with money contained in the Customs User Fee Account.’’.

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SEC. 204. ENFORCEMENT RELATING TO TRADE IN TEXTILE AND
APPAREL GOODS.

(a) ACTION DURING VERIFICATION.—
(1) IN GENERAL.—If the Secretary of the Treasury requests
the Government of Bahrain to conduct a verification pursuant
to article 3.3 of the Agreement for purposes of making a determination under paragraph (2), the President may direct the
Secretary to take appropriate action described in subsection
(b) while the verification is being conducted.
(2) DETERMINATION.—A determination under this paragraph is a determination—
(A) that an exporter or producer in Bahrain is complying with applicable customs laws, regulations, procedures, requirements, or practices affecting trade in textile
or apparel goods; or
(B) that a claim that a textile or apparel good exported
or produced by such exporter or producer—
(i) qualifies as an originating good under section
202; or
(ii) is a good of Bahrain, is accurate.
(b) APPROPRIATE ACTION DESCRIBED.—Appropriate action under
subsection (a)(1) includes—
(1) suspension of liquidation of the entry of any textile
or apparel good exported or produced by the person that is
the subject of a verification referred to in subsection (a)(1)
regarding compliance described in subsection (a)(2)(A), in a
case in which the request for verification was based on a
reasonable suspicion of unlawful activity related to such good;
and
(2) suspension of liquidation of the entry of a textile or
apparel good for which a claim has been made that is the
subject of a verification referred to in subsection (a)(1) regarding
a claim described in subsection (a)(2)(B).
(c) ACTION WHEN INFORMATION IS INSUFFICIENT.—If the Secretary of the Treasury determines that the information obtained
within 12 months after making a request for a verification under
subsection (a)(1) is insufficient to make a determination under
subsection (a)(2), the President may direct the Secretary to take
appropriate action described in subsection (d) until such time as
the Secretary receives information sufficient to make a determination under subsection (a)(2) or until such earlier date as the President may direct.
(d) APPROPRIATE ACTION DESCRIBED.—Appropriate action
referred to in subsection (c) includes—
(1) publication of the name and address of the person
that is the subject of the verification;
(2) denial of preferential tariff treatment under the Agreement to—
(A) any textile or apparel good exported or produced
by the person that is the subject of a verification referred
to in subsection (a)(1) regarding compliance described in
subsection (a)(2)(A); or
(B) a textile or apparel good for which a claim has
been made that is the subject of a verification referred
to in subsection (a)(1) regarding a claim described in subsection (a)(2)(B); and
(3) denial of entry into the United States of—

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(A) any textile or apparel good exported or produced
by the person that is the subject of a verification referred
to in subsection (a)(1) regarding compliance described in
subsection (a)(2)(A); or
(B) a textile or apparel good for which a claim has
been made that is the subject of a verification referred
to in subsection (a)(1) regarding a claim described in subsection (a)(2)(B).
SEC. 205. REGULATIONS.

The Secretary of the Treasury shall prescribe such regulations as may be necessary to carry out—
(1) subsections (a) through (i) of section 202;
(2) the amendment made by section 203(2); and
(3) proclamations issued under section 202(j).

19 USC 3805
note.

TITLE III—RELIEF FROM IMPORTS
SEC. 301. DEFINITIONS.

In this title:
(1) BAHRAINI ARTICLE.—The term ‘‘Bahraini article’’ means
an article that—
(A) qualifies as an originating good under section
202(b); or
(B) receives preferential tariff treatment under paragraphs 8 through 11 of article 3.2 of the Agreement.
(2) BAHRAINI TEXTILE OR APPAREL ARTICLE.—The term
‘‘Bahraini textile or apparel article’’ means an article that—
(A) is listed in the Annex to the Agreement on Textiles
and Clothing referred to in section 101(d)(4) of the Uruguay
Round Agreements Act (19 U.S.C. 3511(d)(4)); and
(B) is a Bahraini article.
(3) COMMISSION.—The term ‘‘Commission’’ means the
United States International Trade Commission.

19 USC 3805
note.

Subtitle A—Relief From Imports Benefiting
From the Agreement
SEC. 311. COMMENCING OF ACTION FOR RELIEF.

(a) FILING OF PETITION.—A petition requesting action under
this subtitle for the purpose of adjusting to the obligations of
the United States under the Agreement may be filed with the
Commission by an entity, including a trade association, firm, certified or recognized union, or group of workers, that is representative of an industry. The Commission shall transmit a copy of any
petition filed under this subsection to the United States Trade
Representative.
(b) INVESTIGATION AND DETERMINATION.—Upon the filing of
a petition under subsection (a), the Commission, unless subsection
(d) applies, shall promptly initiate an investigation to determine
whether, as a result of the reduction or elimination of a duty
provided for under the Agreement, a Bahraini article is being
imported into the United States in such increased quantities, in
absolute terms or relative to domestic production, and under such

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conditions that imports of the Bahraini article constitute a substantial cause of serious injury or threat thereof to the domestic industry
producing an article that is like, or directly competitive with, the
imported article.
(c) APPLICABLE PROVISIONS.—The following provisions of section
202 of the Trade Act of 1974 (19 U.S.C. 2252) apply with respect
to any investigation initiated under subsection (b):
(1) Paragraphs (1)(B) and (3) of subsection (b).
(2) Subsection (c).
(3) Subsection (i).
(d) ARTICLES EXEMPT FROM INVESTIGATION.—No investigation
may be initiated under this section with respect to any Bahraini
article if, after the date on which the Agreement enters into force
with respect to the United States, import relief has been provided
with respect to that Bahraini article under this subtitle.
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SEC. 312. COMMISSION ACTION ON PETITION.

(a) DETERMINATION.—Not later than 120 days after the date
on which an investigation is initiated under section 311(b) with
respect to a petition, the Commission shall make the determination
required under that section.
(b) APPLICABLE PROVISIONS.—For purposes of this subtitle, the
provisions of paragraphs (1), (2), and (3) of section 330(d) of the
Tariff Act of 1930 (19 U.S.C. 1330(d) (1), (2), and (3)) shall be
applied with respect to determinations and findings made under
this section as if such determinations and findings were made
under section 202 of the Trade Act of 1974 (19 U.S.C. 2252).
(c) ADDITIONAL FINDING AND RECOMMENDATION IF DETERMINATION AFFIRMATIVE.—
(1) IN GENERAL.—If the determination made by the
Commission under subsection (a) with respect to imports of
an article is affirmative, or if the President may consider a
determination of the Commission to be an affirmative determination as provided for under paragraph (1) of section 330(d)
of the Tariff Act of 1930 (19 U.S.C. 1330(d)(1)), the Commission
shall find, and recommend to the President in the report
required under subsection (d), the amount of import relief that
is necessary to remedy or prevent the injury found by the
Commission in the determination and to facilitate the efforts
of the domestic industry to make a positive adjustment to
import competition.
(2) LIMITATION ON RELIEF.—The import relief recommended
by the Commission under this subsection shall be limited to
that described in section 313(c).
(3) VOTING; SEPARATE VIEWS.—Only those members of the
Commission who voted in the affirmative under subsection
(a) are eligible to vote on the proposed action to remedy or
prevent the injury found by the Commission. Members of the
Commission who did not vote in the affirmative may submit,
in the report required under subsection (d), separate views
regarding what action, if any, should be taken to remedy or
prevent the injury.
(d) REPORT TO PRESIDENT.—Not later than the date that is
30 days after the date on which a determination is made under
subsection (a) with respect to an investigation, the Commission
shall submit to the President a report that includes—

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(1) the determination made under subsection (a) and an
explanation of the basis for the determination;
(2) if the determination under subsection (a) is affirmative,
any findings and recommendations for import relief made under
subsection (c) and an explanation of the basis for each recommendation; and
(3) any dissenting or separate views by members of the
Commission regarding the determination and recommendation
referred to in paragraphs (1) and (2).
(e) PUBLIC NOTICE.—Upon submitting a report to the President
under subsection (d), the Commission shall promptly make public
such report (with the exception of information which the Commission determines to be confidential) and shall cause a summary
thereof to be published in the Federal Register.
SEC. 313. PROVISION OF RELIEF.

(a) IN GENERAL.—Not later than the date that is 30 days
after the date on which the President receives the report of the
Commission in which the Commission’s determination under section
312(a) is affirmative, or which contains a determination under
section 312(a) that the President considers to be affirmative under
paragraph (1) of section 330(d) of the Tariff Act of 1930 (19 U.S.C.
1330(d)(1)), the President, subject to subsection (b), shall provide
relief from imports of the article that is the subject of such determination to the extent that the President determines necessary
to remedy or prevent the injury found by the Commission and
to facilitate the efforts of the domestic industry to make a positive
adjustment to import competition.
(b) EXCEPTION.—The President is not required to provide import
relief under this section if the President determines that the provision of the import relief will not provide greater economic and
social benefits than costs.
(c) NATURE OF RELIEF.—
(1) IN GENERAL.—The import relief that the President is
authorized to provide under this section with respect to imports
of an article is as follows:
(A) The suspension of any further reduction provided
for under Annex 2–B of the Agreement in the duty imposed
on such article.
(B) An increase in the rate of duty imposed on such
article to a level that does not exceed the lesser of—
(i) the column 1 general rate of duty imposed under
the HTS on like articles at the time the import relief
is provided; or
(ii) the column 1 general rate of duty imposed
under the HTS on like articles on the day before the
date on which the Agreement enters into force.
(2) PROGRESSIVE LIBERALIZATION.—If the period for which
import relief is provided under this section is greater than
1 year, the President shall provide for the progressive liberalization of such relief at regular intervals during the period in
which the relief is in effect.
(d) PERIOD OF RELIEF.—
(1) IN GENERAL.—Subject to paragraph (2), any import relief
that the President provides under this section may not, in
the aggregate, be in effect for more than 3 years.
(2) EXTENSION.—

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publication.

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(A) IN GENERAL.—If the initial period for any import
relief provided under this section is less than 3 years,
the President, after receiving a determination from the
Commission under subparagraph (B) that is affirmative,
or which the President considers to be affirmative under
paragraph (1) of section 330(d) of the Tariff Act of 1930
(19 U.S.C. 1330(d)(1)), may extend the effective period of
any import relief provided under this section, subject to
the limitation under paragraph (1), if the President determines that—
(i) the import relief continues to be necessary to
remedy or prevent serious injury and to facilitate
adjustment by the domestic industry to import competition; and
(ii) there is evidence that the industry is making
a positive adjustment to import competition.
(B) ACTION BY COMMISSION.—
(i) INVESTIGATION.—Upon a petition on behalf of
the industry concerned that is filed with the Commission not earlier than the date which is 9 months,
and not later than the date which is 6 months, before
the date any action taken under subsection (a) is to
terminate, the Commission shall conduct an investigation to determine whether action under this section
continues to be necessary to remedy or prevent serious
injury and to facilitate adjustment by the domestic
industry to import competition and whether there is
evidence that the industry is making a positive adjustment to import competition.
(ii) NOTICE AND HEARING.—The Commission shall
publish notice of the commencement of any proceeding
under this subparagraph in the Federal Register and
shall, within a reasonable time thereafter, hold a public
hearing at which the Commission shall afford
interested parties and consumers an opportunity to
be present, to present evidence, and to respond to
the presentations of other parties and consumers, and
otherwise to be heard.
(iii) REPORT.—The Commission shall transmit to
the President a report on its investigation and determination under this subparagraph not later than 60
days before the action under subsection (a) is to terminate, unless the President specifies a different date.
(e) RATE AFTER TERMINATION OF IMPORT RELIEF.—When import
relief under this section is terminated with respect to an article,
the rate of duty on that article shall be the rate that would have
been in effect, but for the provision of such relief, on the date
on which the relief terminates.
(f) ARTICLES EXEMPT FROM RELIEF.—No import relief may be
provided under this section on any article that has been subject
to import relief under this subtitle after the date on which the
Agreement enters into force.
SEC. 314. TERMINATION OF RELIEF AUTHORITY.

(a) GENERAL RULE.—Subject to subsection (b), no import relief
may be provided under this subtitle after the date that is 10
years after the date on which the Agreement enters into force.

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(b) PRESIDENTIAL DETERMINATION.—Import relief may be provided under this subtitle in the case of a Bahraini article after
the date on which such relief would, but for this subsection, terminate under subsection (a), if the President determines that Bahrain
has consented to such relief.
SEC. 315. COMPENSATION AUTHORITY.

For purposes of section 123 of the Trade Act of 1974 (19
U.S.C. 2133), any import relief provided by the President under
section 313 shall be treated as action taken under chapter 1 of
title II of such Act (19 U.S.C. 2251 et seq.).
SEC. 316. CONFIDENTIAL BUSINESS INFORMATION.

Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C. 2252(a)(8))
is amended in the first sentence—
(1) by striking ‘‘and’’; and
(2) by inserting before the period at the end ‘‘, and title
III of the United States-Bahrain Free Trade Agreement
Implementation Act’’.

19 USC 3805
note.

19 USC 3805
note.

Subtitle B—Textile and Apparel Safeguard
Measures
SEC. 321. COMMENCEMENT OF ACTION FOR RELIEF.

(a) IN GENERAL.—A request under this subtitle for the purpose
of adjusting to the obligations of the United States under the
Agreement may be filed with the President by an interested party.
Upon the filing of a request, the President shall review the request
to determine, from information presented in the request, whether
to commence consideration of the request.
(b) PUBLICATION OF REQUEST.—If the President determines that
the request under subsection (a) provides the information necessary
for the request to be considered, the President shall cause to be
published in the Federal Register a notice of commencement of
consideration of the request, and notice seeking public comments
regarding the request. The notice shall include a summary of the
request and the dates by which comments and rebuttals must
be received.
SEC. 322. DETERMINATION AND PROVISION OF RELIEF.

(a) DETERMINATION.—
(1) IN GENERAL.—If a positive determination is made under
section 321(b), the President shall determine whether, as a
result of the reduction or elimination of a duty under the
Agreement, a Bahraini textile or apparel article is being
imported into the United States in such increased quantities,
in absolute terms or relative to the domestic market for that
article, and under such conditions as to cause serious damage,
or actual threat thereof, to a domestic industry producing an
article that is like, or directly competitive with, the imported
article.
(2) SERIOUS DAMAGE.—In making a determination under
paragraph (1), the President—
(A) shall examine the effect of increased imports on
the domestic industry, as reflected in changes in such relevant economic factors as output, productivity, utilization

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19 USC 3805
note.

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Notice.

19 USC 3805
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of capacity, inventories, market share, exports, wages,
employment, domestic prices, profits, and investment, none
of which is necessarily decisive; and
(B) shall not consider changes in technology or consumer preference as factors supporting a determination
of serious damage or actual threat thereof.
(b) PROVISION OF RELIEF.—
(1) IN GENERAL.—If a determination under subsection (a)
is affirmative, the President may provide relief from imports
of the article that is the subject of such determination, as
described in paragraph (2), to the extent that the President
determines necessary to remedy or prevent the serious damage
and to facilitate adjustment by the domestic industry to import
competition.
(2) NATURE OF RELIEF.—The relief that the President is
authorized to provide under this subsection with respect to
imports of an article is an increase in the rate of duty imposed
on the article to a level that does not exceed the lesser of—
(A) the column 1 general rate of duty imposed under
the HTS on like articles at the time the import relief
is provided; or
(B) the column 1 general rate of duty imposed under
the HTS on like articles on the day before the date on
which the Agreement enters into force.

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19 USC 3805
note.

SEC. 323. PERIOD OF RELIEF.

19 USC 3805
note.

SEC. 324. ARTICLES EXEMPT FROM RELIEF.

19 USC 3805
note.

SEC. 325. RATE AFTER TERMINATION OF IMPORT RELIEF.

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(a) IN GENERAL.—Subject to subsection (b), any import relief
that the President provides under subsection (b) of section 322
may not, in the aggregate, be in effect for more than 3 years.
(b) EXTENSION.—If the initial period for any import relief provided under section 322 is less than 3 years, the President may
extend the effective period of any import relief provided under
that section, subject to the limitation set forth in subsection (a),
if the President determines that—
(1) the import relief continues to be necessary to remedy
or prevent serious damage and to facilitate adjustment by the
domestic industry to import competition; and
(2) there is evidence that the industry is making a positive
adjustment to import competition.
The President may not provide import relief under this subtitle
with respect to any article if—
(1) the article has been subject to import relief under
this subtitle after the date on which the Agreement enters
into force; or
(2) the article is subject to import relief under chapter
1 of title II of the Trade Act of 1974 (19 U.S.C. 2251 et
seq.).
When import relief under this subtitle is terminated with
respect to an article, the rate of duty on that article shall be
the rate that would have been in effect, but for the provision
of such relief, on the date on which the relief terminates.

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SEC. 326. TERMINATION OF RELIEF AUTHORITY.

No import relief may be provided under this subtitle with
respect to any article after the date that is 10 years after the
date on which duties on the article are eliminated pursuant to
the Agreement.
SEC. 327. COMPENSATION AUTHORITY.

For purposes of section 123 of the Trade Act of 1974 (19
U.S.C. 2133), any import relief provided by the President under
this subtitle shall be treated as action taken under chapter 1
of title II of such Act.
SEC. 328. CONFIDENTIAL BUSINESS INFORMATION.

The President may not release information that is submitted
in a proceeding under this subtitle and that the President considers
to be confidential business information unless the party submitting
the confidential business information had notice, at the time of
submission, that such information would be released, or such party
subsequently consents to the release of the information. To the
extent a party submits confidential business information to the
President in a proceeding under this subtitle, the party shall also
submit a nonconfidential version of the information, in which the
confidential business information is summarized or, if necessary,
deleted.

19 USC 3805
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19 USC 3805
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19 USC 3805
note.

TITLE IV—PROCUREMENT
SEC. 401. ELIGIBLE PRODUCTS.

Section 308(4)(A) of the Trade Agreements Act of 1979 (19
U.S.C. 2518(4)(A)) is amended—
(1) by striking ‘‘or’’ at the end of clause (iii);
(2) by striking the period at the end of clause (iv) and
inserting ‘‘; or’’; and
(3) by adding at the end the following new clause:
‘‘(v) a party to a free trade agreement that entered
into force with respect to the United States after
December 31, 2005, and before July 2, 2006, a product
or service of that country or instrumentality which

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is covered under the free trade agreement for procurement by the United States.’’.

Approved January 11, 2006.

LEGISLATIVE HISTORY—H.R. 4340 (S. 2027):
HOUSE REPORTS: No. 109–318 (Comm. on Ways and Means).
SENATE REPORTS: No. 109–199 accompanying S. 2027 (Comm. on Finance).
CONGRESSIONAL RECORD, Vol. 151 (2005):
Dec. 7, considered and passed House.
Dec. 13, considered and passed Senate.

Æ

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