Pakistan-Afghanistan Economic Development Act

II 117TH CONGRESS 1ST SESSION S. 1481 To provide duty-free treatment for certain goods from designated Reconstruc- tion Opportunity Zones in Pakistan and Afghanistan, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 29, 2021 Mr. VAN HOLLEN (for himself, Mr. YOUNG, and Ms. CANTWELL) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide duty-free treatment for certain goods from des- ignated Reconstruction Opportunity Zones in Pakistan and Afghanistan, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Pakistan-Afghanistan 4 Economic Development Act’’. 5 SEC. 2. PURPOSES. 6 The purposes of this Act are— 7 (1) to stimulate economic activity and develop- 8 ment in Afghanistan and the border region of Paki- 9 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 1481 IS stan, critical fronts in the struggle against violent 1 extremism; 2 (2) to reflect the strong support that the 3 United States has pledged to Pakistan and Afghani- 4 stan to build regional stability; and 5 (3) to offer a vital opportunity— 6 (A) to improve livelihoods of indigenous 7 populations of Reconstruction Opportunity 8 Zones; and 9 (B) to promote good governance in the re- 10 gion. 11 SEC. 3. DEFINITIONS. 12 In this Act: 13 (1) AGREEMENT ON TEXTILES AND CLOTH- 14 ING.—The term ‘‘Agreement on Textiles and Cloth- 15 ing’’ means the Agreement on Textiles and Clothing 16 referred to in section 101(d)(4) of the Uruguay 17 Round Agreements Act (19 U.S.C. 3511(d)(4)). 18 (2) CATEGORY; TEXTILE AND APPAREL CAT- 19 EGORY NUMBER.—The terms ‘‘category’’ and ‘‘tex- 20 tile and apparel category number’’ mean the number 21 assigned under the U.S. Textile and Apparel Cat- 22 egory System of the Office of Textiles and Apparel 23 of the Department of Commerce, as listed in the 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 1481 IS HTS under the applicable heading or subheading (as 1 in effect on January 22, 2020). 2 (3) CORE LABOR STANDARDS.—The term ‘‘core 3 labor standards’’ means— 4 (A) freedom of association; 5 (B) the effective recognition of the right to 6 bargain collectively; 7 (C) the elimination of all forms of compul- 8 sory or forced labor; 9 (D) the effective abolition of child labor 10 and a prohibition on the worst forms of child 11 labor; and 12 (E) the elimination of discrimination in re- 13 spect of employment and occupation. 14 (4) ENTERED.—The term ‘‘entered’’ means en- 15 tered, or withdrawn from warehouse for consump- 16 tion, in the customs territory of the United States. 17 (5) ENTITY.—The term ‘‘entity’’ means— 18 (A) a natural person, corporation, com- 19 pany, business association, partnership, society, 20 trust, or any other nongovernmental entity, or- 21 ganization, or group, whether or not for-profit; 22 (B) any governmental entity or instrumen- 23 tality of a government; and 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 1481 IS (C) any successor, subunit, or subsidiary of 1 any entity described in subparagraph (A) or 2 (B). 3 (6) HTS.—The term ‘‘HTS’’ means the Har- 4 monized Tariff Schedule of the United States. 5 (7) RECONSTRUCTION OPPORTUNITY ZONE.— 6 (A) IN GENERAL.—The term ‘‘Reconstruc- 7 tion Opportunity Zone’’ means any area de- 8 scribed in subparagraph (B) that— 9 (i) has been designated by the com- 10 petent authorities in Pakistan or Afghani- 11 stan, as the case may be, as an area in 12 which merchandise may be introduced 13 without payment of duty or excise tax; and 14 (ii) has been designated by the Presi- 15 dent as a Reconstruction Opportunity Zone 16 pursuant to section 4(a). 17 (B) AREA DESCRIBED.—An area described 18 in this subparagraph is an area that solely en- 19 compasses portions of the territory of the fol- 20 lowing: 21 (i) Afghanistan. 22 (ii) One or more of the following areas 23 of Pakistan: 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 1481 IS (I) The 7 tribal agencies formerly 1 known as the Federally Administered 2 Tribal Areas and also known as the 3 ‘‘newly merged districts’’. 4 (II) Khyber Pakhtunkhwa. 5 (III) Areas of Baluchistan that 6 are within 100 miles of the border be- 7 tween Pakistan and Afghanistan. 8 (8) USMCA.—The term ‘‘USMCA’’ means the 9 Agreement between the United States of America, 10 the United Mexican States, and Canada, which is— 11 (A) attached as an Annex to the Protocol 12 Replacing the North American Free Trade 13 Agreement with the Agreement between the 14 United States of America, the United Mexican 15 States, and Canada, done at Buenos Aires on 16 November 30, 2018, as amended by the Pro- 17 tocol of Amendment to the Agreement Between 18 the United States of America, the United Mexi- 19 can States, and Canada, done at Mexico City 20 on December 10, 2019; and 21 (B) approved by Congress under section 22 101(a)(1) of the United States-Mexico-Canada 23 Agreement Implementation Act. 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 1481 IS SEC. 4. DESIGNATION OF RECONSTRUCTION OPPORTUNITY 1 ZONES. 2 (a) AUTHORITY TO DESIGNATE.—The President may 3 designate an area within Pakistan or Afghanistan de- 4 scribed in subparagraph (A)(i) of section 3(8) as a Recon- 5 struction Opportunity Zone if— 6 (1) after consideration of the factors set forth 7 in subsection (c) of section 502 of the Trade Act of 8 1974 (19 U.S.C. 2462(c)), the President determines 9 that Pakistan or Afghanistan, as the case may be, 10 is eligible for designation as a beneficiary developing 11 country under that section and is not ineligible 12 under subsection (b) of such section; and 13 (2) the President determines that— 14 (A) Pakistan or Afghanistan, as the case 15 may be, meets the eligibility criteria set forth in 16 subsection (b); and 17 (B) designation of the area as a Recon- 18 struction Opportunity Zone is appropriate tak- 19 ing into account the factors listed in subsection 20 (c). 21 (b) ELIGIBILITY CRITERIA.—Pakistan or Afghani- 22 stan meets the eligibility criteria set forth in this sub- 23 section if Pakistan or Afghanistan, as the case may be— 24 (1) has established, or is making continual 25 progress toward establishing— 26 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 1481 IS (A) a market-based economy that— 1 (i) protects private property rights; 2 (ii) incorporates an open rules-based 3 trading system; and 4 (iii) minimizes government inter- 5 ference in the economy through measures 6 such as price controls, subsidies, and gov- 7 ernment ownership of economic assets; 8 (B) the rule of law, political pluralism, and 9 the right to due process, a fair trial, and equal 10 protection under the law; 11 (C) economic policies— 12 (i) to reduce poverty; 13 (ii) to increase the availability of 14 health care and educational opportunities; 15 (iii) to expand physical infrastructure; 16 (iv) to promote the development of 17 private enterprise; and 18 (v) to encourage the formation of cap- 19 ital markets through microcredit or other 20 programs; 21 (D) a system to combat corruption and 22 bribery, such as a system involving ratification 23 and implementation of the United Nations Con- 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 1481 IS vention Against Corruption, done at New York 1 October 31, 2003; and 2 (E) the protection of core labor standards; 3 (2) is eliminating or has eliminated barriers to 4 trade and investment, including— 5 (A) by providing national treatment and 6 measures to create an environment conducive to 7 domestic and foreign investment; 8 (B) by protecting intellectual property; and 9 (C) by resolving bilateral trade and invest- 10 ment disputes; 11 (3) does not engage in activities that undermine 12 the national security or foreign policy interests of 13 the United States; 14 (4) does not engage in gross violations of inter- 15 nationally recognized human rights; 16 (5) does not provide support for acts of inter- 17 national terrorism; and 18 (6) cooperates in international efforts to elimi- 19 nate human rights violations and terrorist activities. 20 (c) ADDITIONAL FACTORS.—In determining whether 21 to designate an area in Pakistan or Afghanistan as a Re- 22 construction Opportunity Zone, the President shall take 23 into account— 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 1481 IS (1) an expression by the Government of Paki- 1 stan or Afghanistan, as the case may be, of its de- 2 sire to have a particular area designated as a Recon- 3 struction Opportunity Zone under this Act; 4 (2) whether that Government has provided the 5 United States with a monitoring and enforcement 6 plan outlining specific actions that Government will 7 take to cooperate with the United States— 8 (A) to facilitate legitimate cross-border 9 commerce; 10 (B) to ensure that articles for which duty- 11 free treatment is sought pursuant to this Act 12 satisfy the applicable rules of origin described 13 in sections 5 and 6; and 14 (C) to prevent unlawful transshipment, as 15 described in section 7(b)(4); 16 (3) the potential for such designation to create 17 local employment and to promote local and regional 18 economic development; 19 (4) the physical security of the proposed Recon- 20 struction Opportunity Zone; 21 (5) the economic viability of the proposed Re- 22 construction Opportunity Zone, including— 23 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 1481 IS (A) whether there are commitments to fi- 1 nance economic activity proposed for the Recon- 2 struction Opportunity Zone; and 3 (B) whether there is existing or planned 4 infrastructure for power, water, transportation, 5 and communications in the area; 6 (6) whether such designation would be compat- 7 ible with and contribute to the foreign policy and na- 8 tional security objectives of the United States, tak- 9 ing into account the information provided under sub- 10 section (d); and 11 (7) the comments of interested persons sub- 12 mitted pursuant to subsection (e). 13 (d) INFORMATION RELATING TO COMPATIBILITY 14 WITH AND CONTRIBUTION TO FOREIGN POLICY AND NA- 15 TIONAL SECURITY OBJECTIVES OF THE UNITED 16 STATES.— 17 (1) IN GENERAL.—In determining whether des- 18 ignation of a Reconstruction Opportunity Zone 19 would be compatible with and contribute to the for- 20 eign policy and national security objectives of the 21 United States in accordance with subsection (c)(6), 22 the President shall take into account whether the 23 Government of Pakistan or Afghanistan, as the case 24 may be, has provided the United States with a plan 25 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 1481 IS outlining specific actions that Government will take 1 to verify the ownership and nature of the activities 2 of entities to be located in the proposed Reconstruc- 3 tion Opportunity Zone. 4 (2) ELEMENTS.—The specific actions outlined 5 in a plan described in paragraph (1) shall include 6 methods— 7 (A) to annually register each entity by a 8 competent authority in Pakistan or Afghani- 9 stan, as the case may be; 10 (B) to collect information from each entity 11 operating in, or proposing to operate in, a Re- 12 construction Opportunity Zone, including— 13 (i) the name and address of the enti- 14 ty; 15 (ii) the name and location of all facili- 16 ties owned or operated by the entity that 17 are operating in, or proposed to be oper- 18 ating in, a Reconstruction Opportunity 19 Zone; 20 (iii) the name, nationality, date and 21 place of birth, and position title of each 22 person who is an owner, director, or officer 23 of the entity; and 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 1481 IS (iv) the nature of the activities of each 1 entity; 2 (C) to update the information required 3 under subparagraph (B) as changes occur; and 4 (D) to provide such information promptly 5 to the Secretary of State. 6 (e) OPPORTUNITY FOR PUBLIC COMMENT.—Before 7 the President designates an area as a Reconstruction Op- 8 portunity Zone pursuant to subsection (a), the President 9 shall provide an opportunity for interested persons to sub- 10 mit comments concerning the designation. 11 (f) NOTIFICATION TO CONGRESS.—Before the Presi- 12 dent designates an area as a Reconstruction Opportunity 13 Zone pursuant to subsection (a), the President shall notify 14 Congress of the President’s intention to make the designa- 15 tion and the reasons for making the designation. 16 SEC. 5. DUTY-FREE TREATMENT FOR CERTAIN NONTEX- 17 TILE AND NONAPPAREL ARTICLES. 18 (a) IN GENERAL.—The President may proclaim duty- 19 free treatment for— 20 (1) any article from a Reconstruction Oppor- 21 tunity Zone that the President has designated as an 22 eligible article under section 503(a)(1)(A) of the 23 Trade Act of 1974 (19 U.S.C. 2463(a)(1)(A)); 24 VerDate Sep 11 2014 22:59 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1481.IS S1481 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 1481 IS (2) any article from a Reconstruction Oppor- 1 tunity Zone located in Afghanistan that the Presi- 2 dent has designated as an eligible article under sec- 3 tion 503(a)(1)(B) of the Trade Act of 1974 (19 4 U.S.C. 2463(a)(1)(B)); or 5 (3) any article from a Reconstruction Oppor- 6 tunity Zone that is not a textile or apparel article, 7 regardless of whether the article has been designated 8 as an eligible article under subparagraph (A) or (B) 9 of section 503(a)(1) of the Trade Act of 1974 (19 10 U.S.C. 2463(a)(1)), if, after receiving the advice of 11 the United States In [Text truncated for display. 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