United States-Israel Free Trade Area Implementation Act; Designation of Qualifying Industrial Zones

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice.

SUMMARY:

Under the Unites—Israel Free Trade Area Implementation Act (“the “IFTA Act”), products of qualifying industrial zones encompassing portions of Israel and Jordan or Israel and Egypt are eligible to receive duty-free treatment. Effective upon publication of this notice, the United States Trade Representative, pursuant to authority delegated by the President, is designating the Industry and Information Technology Park Development Co. (Jordan Cyber City Co.), and the Aqaba Industrial Estate as qualifying industrial zones under the IFTA Act.

FOR FURTHER INFORMATION CONTACT:

Adam Shub, Director for the Middle East and Mediterranean, (202) 395-9569, Office of USTR, 600 17th Street, NW, Washington, D.C. 20508.

SUPPLEMENTARY INFORMATION:

Pursuant to authority granted under section 9 of the United States-Israel Free Trade Area Implementation Act of 1985, as amended (19 U.S.C. 2112 note), the President proclaimed certain tariff treatment for the West Bank, the Gaza Strip, and qualifying industrial zones (Proclamation 6955 of November 13, 1996 (61 FR 58761)). In particular, the President proclaimed modifications to general notes 3 and 8 of the Harmonized Tariff Schedule of the United States: (a) To provide duty-free treatment to qualifying articles that are the product of the West Bank or Gaza Strip or a qualifying industrial zone and are entered in accordance with the provisions of section 9 of the IFTA Act; (b) to provide that articles of Israel may be treated as though they were articles directly shipped from Israel for the purposes of the United States—Israel Free Trade Area Agreement (“the Agreement”) even if shipped to the United States from the West Bank, the Gaza Strip, or a qualifying industrial zone, if the articles otherwise meet the requirements of the Agreement; and (c) to provide that the cost or value of materials produced in the West Bank, the Gaza Strip, or a qualifying industrial zone may be included in the cost or value of materials produced in Israel under section 1(c)(i) of Annex 3 of the Agreement, and that the direct costs of processing operations performed in the West Bank, the Gaza Strip, or a qualifying industrial zone may be included in the direct costs of processing operations performing in Israel under section 1(c)(ii) of Annex 3 of the Agreement.

Section 9(e) of the IFTA Act defines a “qualifying industrial zone” as an area that “(1) encompasses portions of the territory of Israel and Jordan or Israel and Egypt; (2) has been designated by local authorities as an enclave where merchandise may enter without payment of duty or exercise taxes; and (3) has been specified by the President as a qualifying industrial zone.” In Proclamation 6955, the President delegated to the United States Trade Representative the authority to designate qualifying industrial zones.

On March 13, 1998 (63 FR 12572), I designated the Irbid Qualifying Industrial Zone as a qualifying industrial zone under section 9 of the IFTA Act. On March 19, 1999 (64 FR 113623), I designated the Gateway Projects Industrial Zone and the expanded Irbid Qualifying Industrial Zone as qualifying industrial zone under section 9 of the IFTA Act. On October 15, 1999 (64 FR 56015) I designated Al-Kerak Industrial Estate, the Ad-Dulayl Industrial Park, and the Al-Tajamouat Industrial City as qualifying industrial zones under section 9 of the IFTA Act.

In a agreement dated August 6, 2000, the Government of Israel and the Government of the Hashemite Kingdom of Jordan agreed to the creation of two additional Qualifying Industrial Zones: Industry and Information Technology Park Development Co. (Jordan Cyber City Co.), and the Aqaba Industrial Estate. These zones encompass areas under the customs control of the respective Governments. The Government of Israel and the Government of Jordan further agreed that merchandise may enter these areas without payment of duty or excise taxes. Accordingly, the Industry and Information Technology Park Development Co. (Jordan Cyber City Co.), and the Aqaba Industrial estate meet the criteria under paragraphs 9(e)(1) and (2) of the IFTA Act.

Therefore, pursuant to the authority delegated to may by the President in Proclamation 6955, I hereby designate the Industry and Information Technology Park Development Co. (Jordan Cyber City Co.), and the Aqaba Industrial Estate as qualifying industrial zones under section 9 of the IFTA Act, effective upon the date of publication of this notice, applicable to goods shipped from these Qualifying Industrial Zones after such date.