[Federal Register Volume 61, Number 12 (Thursday, January 18, 1996)]
[Proposed Rules]
[Pages 1233-1252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-329]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 61, No. 12 / Thursday, January 18, 1996 /
Proposed Rules
[[Page 1233]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 6
Dairy Tariff-Rate Import Quota Licensing
AGENCY: Office of the Secretary, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would supersede Import Regulation 1,
Revision 7, which governs the administration of the import licensing
system for certain dairy products which are subject to in-quota tariff
rates established in the Harmonized Tariff Schedule of the United
States resulting from the entry into force of certain provisions in the
Uruguay Round Agreement.
DATES: Comments should be received on or before March 18, 1996 to be
assured of consideration. Comments on the change in information
collection should be received on or before March 18, 1996 to be assured
of consideration.
ADDRESSES: Comments should be sent to Richard Warsack, Dairy Import
Quota Manager, Import Policies and Programs Division, Room 5531-S,
Foreign Agricultural Service, U.S. Department of Agriculture, 14th and
Independence Avenue SW., Agricultural Box 1021, Washington, DC 20250-
1021. All comments received will be available for public inspection in
room 5541-S at the above address.
FOR FURTHER INFORMATION CONTACT: Diana Wanamaker, Group Leader, Import
Programs Group, Import Policies and Programs Division, room 5531-S,
Foreign Agricultural Service, U.S. Department of Agriculture, 14th and
Independence Avenue SW., Washington, DC 20250, or telephone (202) 720-
2916.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule is issued in conformance with Executive Order
12866. It has been determined to be economically significant for the
purposes of E.O. 12866 and, therefore, has been reviewed by the Office
of Management and Budget (OMB).
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this proposed rule since the Office of the Secretary is
not required by 5 U.S.C. 553 or any other provision of law to publish a
notice of proposed rulemaking with respect to the subject matter of
this rule.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which requires intergovernmental consultation with State and
local officials. See notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115 (June 24, 1983).
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will not have a significant impact on the quality of the human
environment. Therefore, neither an Environmental Assessment nor an
Environmental Impact Statement is needed.
Paperwork Reduction Act
In accordance with provisions of the Paperwork Reduction Act of
1995, the Department intends to amend the current information
collection approved by the Office of Management and Budget (OMB) under
OMB control number 0551-0001, expiring June 30, 1997.
Since this proposed rule provides for a substantial revision of the
existing Import Regulation, the currently approved information
collection needs to be amended to support the proposed rule.
Specifically, for the 1997 quota year and each quota year thereafter,
the amended ``certification'' form FAS-922 (Rev. 1-96) must be
submitted to the Department by applicants requesting historical,
nonhistorical rank-order lottery, and/or designated importer licenses
within the application period specified in the proposed rule. This form
requests applicants to certify that they are either importers,
designated importers, manufacturers, or exporters of certain dairy
products and that they meet the eligibility requirements of the
proposed rule. In addition, importers and exporters must submit the
supporting documentation required by Sec. 6.23 and Sec. 6.24 of the
proposed rule as proof of eligibility for an import license. The
proposed amendments to the form consist of technical changes in the
text which reflect technical changes in the proposed rule.
In addition, for the 1997 quota year and each quota year
thereafter, applicants for nonhistorical licenses must submit amended
application form FAS-922A (Rev. 1-96). This form requires applicants to
identify requests for nonhistorical rank-order licenses to import
cheese by cheese types and supplying country, and/or to import
noncheese dairy articles by the type of noncheese article. The
currently approved application form is being amended to limit its
applicability to requests for nonhistorical licenses, and to require
applicants to rank order their preferences for licenses to import
cheese in descending order of preference, as is currently done for
certain noncheese dairy articles.
The estimated total annual burden in the OMB inventory for the
currently approved information collection is 425 hours for the 1996
quota year. For the 1997 quota year and each quota year thereafter, the
estimated total annual burden is being reduced by 50 hours to 375
hours. The estimated reduction is based largely on the elimination of a
separate ``certification'' form for historical licenses, elimination of
the requirement that applicants for historical licenses must submit an
application form, and strengthened eligibility requirements and
increased disciplines in the proposed rule.
The estimated public reporting burden for the amended information
collection for 1997 quota year and each quota year thereafter is set
forth in the table below.
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FAS-922, FAS-
Form No. * 922A
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Estimated No. of respondents.............................. 500
Estimated responses per respondent........................ 1
Estimated hours per response.............................. .75
Estimated total annual burden in hours.................... 375
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* 922 and 922A are one form.
Copies of this information collection can be obtained from Pamela
Hopkins, the Agency Information Collection Coordinator, at (202) 720-
6713.
[[Page 1234]]
The Department requests comments regarding the accuracy of the
burden estimate, ways to minimize the burden, including the use of
automated collection techniques or other forms of information
technology, or any other aspect of the collection of information.
Comments should be submitted in accordance with the Dates and Addresses
sections above. All comments will be summarized and included in the
request for OMB approval, and will also become a matter of public
record.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778.
The provisions of this proposed rule would have preemptive effect with
respect to any state or local laws, regulations, or policies which
conflict with such provisions or which otherwise impede their full
implementation. The proposed rule would not have retroactive effect.
Background
This proposed rule would govern the administration of the import
licensing system for certain dairy products which are subject to in-
quota tariff rates proclaimed in the Harmonized Tariff Schedule of the
United States (HTS).
Prior to the conclusion of the Uruguay Round negotiations, the
regime governing the importation of certain articles of cheese and
other dairy products into the United States was a system of absolute
quotas imposed pursuant to section 22 of the Agricultural Adjustment
Act of 1933, as amended. Prior versions of the Import Regulation,
including Revision 7, as amended, established licensing systems
pursuant to which the privilege of importing the subject articles was
allocated among importers.
During the course of the Uruguay Round negotiations, the GATT
Contracting Parties agreed that all systems of absolute quotas for the
importation of agricultural products would be eliminated and would be
converted, through a process known as tariffication, to tariff-based
systems. For articles that had previously been subject to absolute
quotas, countries were permitted to implement systems of tariff-rate
quotas. A tariff-rate quota is a system whereby the importation of an
article is subject to a two-tiered tariff. A specified volume--commonly
referred to as the ``in-quota amount''--is subject to the applicable
low ``in-quota'' rate of duty; all imports beyond that amount are
subject to the applicable higher, ``over-quota'' rate of duty.
This proposed rule, which would be Revision 8 of the Import
Regulation, would implement a tariff-rate quota licensing system for
the importation of certain articles of cheese and other dairy products.
It is also intended to incorporate a number of administrative
improvements. The Import Regulation has not been substantially updated
since Revision 7 took effect in 1979.
In order to ensure public participation in the rulemaking process
at an early stage, and prior to the conclusion of the Uruguay Round,
the Department published an Advance Notice of Proposed Rulemaking
(ANPR) in the Federal Register on June 2, 1994 (59 Fed. Reg. 28495),
soliciting public comment with respect to various ways in which the
Import Regulation might be improved to provide greater economic and
administrative efficiencies. The Department also held a public hearing
on March 10, 1995, during which public witnesses had the opportunity to
present their views and proposals for revision of the Import
Regulation. Further comments have also been received from the public in
response to the Interim Rule published on January 6, 1995 (60 Fed. Reg.
1989-1996 amending Revision 7).
Comments were received in response to the ANPR from 42 entities:
four of them were trade associations; two, foreign exporting entities;
two, representatives of foreign governments; and the remainder,
importers or their legal counsel, most of them participants in the
existing import licensing program. Their comments focussed most heavily
on the allocation of in-quota quantities of cheese, although several
commentors had extensive comments on dairy articles other than cheese.
Most were directed at the problems with the existing license system.
Generally the solutions proposed to address them were adjustments to
the licensing system of varying scope. Many commentors proposed that a
revision of the rule deal with the lack of continuity and inadequate
availability of license to small businesses and recent entrants. Their
proposals ranged from creating set-asides for permanent new licenses
for certain categories of business or preventing companies which hold
more than a specified amount of license from obtaining any more, to
reduction or non-issuance of historical licenses which are not fully
utilized or, subsequent to license globalization, not utilized in the
country for which they were originally issued. A number proposed
eliminating the provision for exporting countries to designate
importers for license. A number of comments encouraged the tightening
of eligibility and performance requirements (particularly in regard to
sales-in-transit) to eliminate license-holders who broker licenses,
while others expressed the fear that such action would work against
small businesses. One commentor indicated all in-quota quantities which
were increased by more than 500 metric tons in the Uruguay Round should
be licensed. On the other hand, five entities proposed eliminating
import licensing, four of them suggesting they should be replaced with
some form of required exporting country control, while one suggested
raising the duty in lieu of licenses.
At the March 10, 1995 public hearing, ten entities gave testimony
and seven submitted rebuttal briefs subsequent to the hearing. The
substance of the testimony and of the rebuttal briefs paralleled the
responses submitted to the ANPR. Much of it dealt with the specifics of
reforming the existing licensing system. An additional entity proposed
eliminating the licensing system entirely.
Comments received by the Department in response to the ANPR, at the
public hearing, and in response to the Interim Rule which was published
on January 6 have generally supported the following recommendations for
revision of the Import Regulation: (1) Formulation of clearer and more
uniform eligibility requirements; (2) the establishment of clearer and
more uniform criteria for license use and minimal levels of utilization
for all license types; (3) an increase in the availability and
conditions of license to new entrants; and (4) refined provisions
governing suspension or revocation of licenses.
In developing this proposed rule and in response to the comments
received from the public, the Department considered three alternatives
for revision of the Import Regulation. The system of auctioning
importing licenses was not considered because the Statement of
Administrative Action accompanying the Uruguay Round Agreements Act
stated that imports of dairy products subject to TRQs would not be
administered through such a system. The three alternatives that were
considered are as follows:
(A) First-Come, First-Served. This alternative would eliminate
licensing for all dairy product imports except those quantities of
cheese products which have been subject to designation by exporting
countries and those which will be subject to designation as a result of
the Uruguay Round Bilateral Memoranda of Understanding that implement
the Agreement. Imports would occur at the in-quota duty rate until the
in-quota quantities were filled, at which point the over-quota duty
rate would be charged any further imports
[[Page 1235]]
for the rest of the quota period. This could be done on an annual or
quarterly basis. Six entities supported some variation of this type of
import system, four on condition it was accompanied by required
exporting country controls. Commentors felt such a system would be less
of an interference with the market and specific trade relationships
than the existing system. While most of the other commentors who
focussed on modifying the license system did not address or
specifically oppose a first-come, first-served system, their comments
frequently referenced the need for licenses in order to ensure the
continuity necessary for them to invest in the marketing and
distribution of imported product. Two commentors specifically stated
that not licensing the in-quota quantities of the TRQs allocated to
Mexico under the North American Free-Trade Agreement was a mistake for
that reason.
(B) Rank-Order Lottery. This alternative would provide for a rank-
order lottery for all licenses to be issued for all quantities not
designated, like that which already exists for certain dairy products
other than cheese. Quantities currently designated (including any new
Uruguay Round quantities) would continue to be so. While the concept of
a rank-order lottery to replace the existing random lottery was
suggested by comments received in response to the ANPR, extending such
an approach beyond the existing lottery quantities was not suggested in
any comments or testimony. Generally comments regarding the use of a
lottery to allocate license were negative, because of the lack of
continuity and insufficient license quantities such a system engenders.
These comments were directed at the existing random lottery and for the
quantities which are currently subject to it, rather than a rank-order
lottery which would cover roughly two-thirds of the in-quota amounts. A
comment received in response to the interim rule published on January
6, which implemented a rank-order lottery for dairy products other than
cheese, suggested that it would lead to entities receiving licenses
which were too small and of insufficient product coverage to permit
market development or longer term trading relationships, while the
entity which originally suggested the concept supported it as more fair
than a completely random approach.
(C) Mixed License System. This alternative would retain a modified
mixed licensing system, but make a number of significant changes which
will redefine eligibility in terms of higher performance standards and
streamline and improve administration of the system in response to
comments and recommendations received from the public, including
current license holders. Most of the comments received favored some
form of modifying the licensing system which would provide certainty of
license receipt to existing businesses and new entrants who are
regularly engaged in the importation or use of dairy products.
The Department believes the third alternative would be the most
effective approach for revising the Import Regulation, and this
proposed rule has been developed accordingly. Neither of the other
alternatives would provide a longer or more certain planning horizon
for entities in the importing business as desired by most of the
commentors. Among the primary factors which make the third alternative
preferable to the other two are: compared to a first-come, first-served
system, it would provide greater certainty to importing businesses that
they will be able to import at the in-quota duty throughout the year,
would be less distortive of competition between designated importers
and all others, and would better maintain the traditional importing
pattern, wherein more than half of the imports enter in the second half
of the calendar year; it does not have the disadvantage of the lottery
system of severely disrupting the business of the larger existing
entities and potentially mismatching licenses with the needs of a
particular entity.
An economic impact analysis, which discusses the effects of the
three alternatives in greater detail, has been prepared and can be
obtained from Richard Warsack, Dairy Import Quota Manager, Import
Policies and Programs Division, room 5531-S, Foreign Agricultural
Service, U.S. Department of Agriculture, 14th and Independence Avenue,
SW, Agricultural Box 1021, Washington, DC 20250-1021. While this
proposed rule is based on the third alternative, the Department invites
comments from the public on all three alternatives, as well as on the
provisions of the proposed rule itself.
The proposed rule is designed to address a number of specific
industry concerns which have been expressed during the ANPR, public
hearing, and Interim Rule stages of the Department's review of the
dairy import licensing system. These include the difficulty for new
businesses to establish themselves in the dairy import business; the
ease with which licenses can be obtained by persons not regularly in
the business of importing, which in turn diminishes what is available
to newcomers or existing businesses; the apparent lack of due process
in the license suspension and revocation procedures; the limited
provisions for action subsequent to a determination that a licensee has
violated a provision of the rule; the manner in which transfers of
license between persons take place subsequent to a sale of the entire
dairy products business related to the licenses; the inability of the
industry to avail themselves to immediate delivery of Customs
procedures; and certain other technical aspects of the rule.
The Department invites comments on the eligibility and performance
requirements in the proposal. We would be interested in the costs and
unintended market consequences to importers of these new requirements
as follows: (1) The higher volume and/or more frequent shipment
requirements than exist under the current rule; (2) the higher volume
of manufacturing required for applicants who seek eligibility on the
basis of being a manufacturer; (3) the requirement for direct shipments
to qualify for eligibility; (4) the limitation on the proportion of
license activity which may be made on the basis of purchases in
transit; (5) the requirement that licensees whose eligibility is based
on manufacturing, use the bulk of what they import in their own
facility; and (6) the provision for permanently reducing historical
licenses of those who surrender license in three consecutive or three
years out of five.
This proposed rule retains the current practice of not permitting
the sale of individual licenses and introduces a limitation on the use
of sales-in-transit. The Department invites comment on this approach.
Should the Department make it more difficult for persons not regularly
in the business of importing dairy products to obtain or keep a
license, effectively restricting a secondary market? How could this be
best accomplished and enforced? What are the benefits and costs of
doing so? With regard to sales-in-transit, what are their commercial
advantages and what are the costs and benefits of a limitation on their
use? Or should the Department encourage the development of a secondary
market? Should it allow the sale of individual licenses on an annual
basis, and if so how? What would the costs and benefits be?
In furtherance of the Administration's initiative on regulatory
reform, the proposed rule has also been substantially rewritten to be
clearer and more concise. Unnecessary definitions have been eliminated
and the rule has been substantially shortened, made more internally
consistent, and more compatible with other provisions of law.
[[Page 1236]]
The public is invited to provide its comments on all of these proposed
changes and to suggest further improvements.
Definitions
In the proposed Revision 8, many definitions from Revision 7 are
deleted and others are added, modified, or amended to deal with changes
in the operational parts of the rule or to update them. The definition
of ``cheese and cheese products'' is amended to conform with
classifications in the HTS, and a definition of ``dairy products'' is
added. A definition of ``sale-in-transit'' is added in order to clarify
eligibility criteria which will take effect for the 1997 quota year
(specifically: (1) Eligibility qualifying entries may not be based on
sales-in-transit and (2) no more than 25 percent of a licensee's total
licensed entries in the quota year preceding that for which application
is being made may be based on sales-in-transit). One comment proposed
that the definition of ``date of entry'' and ``enter'' be amended to
conform to U.S. Customs Service regulations. The definition of ``date
of entry'' is eliminated and the term ``enter'' or ``entry'' is so
defined since this proposed rule permits the U.S. Customs Service rules
regarding entry for TRQ's to govern the entry of articles subject to
this regulation. While the term ``entrepreneurial use'' is no longer
found in the definition section, the eligibility requirements of
Sec. 6.23 and the provisions of Sec. 6.27, ``Limitations on license
use'', replace and expand the concept. A definition of ``process'' or
``processing'' is added to clarify the eligibility requirements and
limitations on use of a license. Other definitions, not discussed here,
are also deleted, added or modified.
License Requirement and Exceptions
The change to a TRQ from an absolute quota requires that a license
be obtained only to enter articles at the applicable duty for in-quota
quantities under the TRQ. Over-quota duty treatment effectively
replaces the former prohibition of imports for articles in excess of
the absolute quota. Amounts entering without a license receive the
applicable over-quota duty treatment. Thus the section on prohibitions
and restrictions on imports in Revision 7 would be renamed in the
proposed Revision 8 and include exceptions to the requirement for a
license under certain prescribed conditions. Two entities suggested
that the level of imports allowed under this exception be raised. The
provision for this exception as found in Revision 7, as amended by the
Interim Rule dated January 6, 1995 is not changed substantively in this
proposed rule since it conforms to the exclusions in General Note 15 of
the HTS, including the limit on entry for personal use of not more than
five kilograms (changing the limit of ``not over $25'' in Revision 7).
In response to a question in the comments, the term ``importer'' as
used in this section continues to mean individuals who import the
article whether or not they are persons in the business of importing,
and ex-quota import permits will continue to be issued in a timely
manner.
Changes in the Licensing Structure
Changes in the licensing structure are proposed to streamline the
administration of the program, provide more uniform eligibility and
performance requirements, and facilitate license use. There would be
three license types under Revision 8 as proposed: (1) Appendix 1
historical licenses; (2) Appendix 2 nonhistorical rank-order lottery
licenses; and (3) Appendix 3 designated licenses. The following table
indicates how the licenses currently issued under Revision 7 would be
issued under Revision 8. The proposed Appendices to Revision 8 are
based on license type rather than the implementation date of the quota
or tariff-rate quota.
License Changes: Revision 7 Compared to Revision 8
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REV. 7 App. 1 REV. 7 App. 2 REV. 7 App. 3 REV. 8 App. 1 REV. 8 App. 2 REV. 8 App. 3
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Historical license--pre-Tokyo Round Historical license- ...................... Historical license.
Tokyo Round.
Non-Historical license--pre-Tokyo
Round.
Supplementary Supplementary ..................... ..................... Designated license-
designated license-- designated license-- Tokyo Round and
Tokyo Round. Uruguay Round. Uruguay Round.
Supplementary lottery Supplementary lottery ..................... Non-Historical rank-
license--Tokyo Round. license--Uruguay order lottery
Round. license..
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In summary, the basic changes are as follows:
(1) Appendix 1 (Revision 8) historical licenses would include all
license amounts issued as historical and nonhistorical licenses under
Revision 7, subject to any reduction requirements. Licensees who
currently have more than one historical license for the same article
from the same country, or one or more historical and a nonhistorical
license, would have those license amounts combined into a single
historical license, provided they remain eligible for such license.
(2) Appendix 2 (Revision 8) nonhistorical rank-order lottery
licenses would include all license amounts issued as supplementary
lottery licenses under Revision 7, any Uruguay Round increments not
designated by exporting countries and any amounts obtained through
reductions or revocations of historical license. License amounts
resulting from such reductions or revocations would be permanently
shifted to Appendix 2 from Appendix 1.
(3) Appendix 3 (Revision 8) designated licenses would include all
license amounts for which importers will be designated by the
government of the exporting country. Governments who designate
importers would be required to designate separately for quantities
resulting from the Tokyo Round and from the Uruguay Round. Cumulative
license amounts for an article may be shifted between Appendix 2 and
Appendix 3 to reflect changes in exporting countries' decisions
regarding the designation of importers. Changes in the Appendices, as
well as changes from additional Uruguay Round increments taking effect,
would be announced cumulatively in the Federal Register.
[[Page 1237]]
Eligibility
The proposed section on establishing eligibility (Sec. 6.23) has
been revised to try to ensure that the licenses will be awarded to
bona-fide import/distribution or manufacturing operations who will use
the imports under license in such distribution and manufacturing
facilities. The Department received numerous comments on the scarcity
of available license for new and growing businesses. Raising the
eligibility requirements, and increasing the economic risk an applicant
must take to become eligible, is intended to be a disincentive to
persons applying for license primarily for their value and not for
distributing or processing the imported product. The result should be a
decrease in the number of applicants for the reduced number of larger
licenses that result from the new allocation provisions in this
proposed rule. In general, the changes to eligibility reflect comments
which endorsed raising eligibility requirements and tightening
manufacturers' eligibility. The new eligibility requirements would be
implemented for the 1997 quota year.
The proposed revisions for establishing eligibility by license type
are as follows:
(1) For historical licenses--Appendix 1--(where eligibility was
originally established at the time that quotas were imposed under
Section 22), eligibility for 1997 license would be based on: (1)
Receipt of 1996 historical license under Revision 7; (2) meeting the
same performance threshold as applicants for nonhistorical rank-order
lottery licenses under Revision 8; and (3) meeting the utilization
requirements of the proposed rule. Eligibility in 1997 for existing
(Revision 7) nonhistorical licenses converted to historical licenses,
would also be based on 1996 receipt of such licenses, subject to the
utilization requirements of this proposed regulation. In quota years
subsequent to 1997, historical licenses would continue to be allocated
at the 1997 level, subject to a 90 percent utilization requirement and
a reduction provision based on the frequency of license surrenders.
This revision would no longer provide for temporary reductions of
historical licenses, which means that other historical licensees would
no longer benefit from reallocation of such reductions of other
historical licenses. A licensee would not be eligible for a historical
license if the utilization requirements are not met and that license
amount would be moved to Appendix 2 (nonhistorical rank-order lottery
licenses).
Requiring that applicants for historical license annually meet the
same threshold as all other licensees to reestablish their eligibility
is one of several major changes from the current rule which are
intended to create greater equity in the granting of license and to
reduce the ability of persons to acquire licenses solely for the
purpose of brokering them. Over time it should also serve to increase
the quantities available for Appendix 2 nonhistorical rank-order
licenses.
Two comments proposed that a certain portion of the Uruguay Round
increment for butter be granted to persons holding historical licenses
for butter. Since historical licenses for butter date as far back as
1953 and are not necessarily a good indicator of current interest in
marketing butter, this rule provides instead that butter licenses
issued as nonhistorical rank-order lottery licenses in the 1996 and
1997 quota years be converted to historical licenses in the subsequent
quota year if they are utilized at 95 percent or more. This is the only
instance where new historical licenses would be created, in an attempt
to provide the continuity required to encourage the importation and
marketing of specialty product rather than commodity butter. Persons
issued such converted historical licenses in the 1997 or 1998 quota
year would not be eligible for nonhistorical rank-order licenses for
butter in those quota years or any year thereafter so long as they are
issued a historical butter license converted in this manner. This is an
exception to the general rule that historical licensees may also apply
for nonhistorical license. It would be imposed because these licenses
will be significantly larger than the existing historical butter
licenses and receipt of such a new historical butter license would be
an exception to the treatment provided for other Uruguay Round dairy
product increases. In 1998 and thereafter, licenses for Uruguay Round
increments for butter would remain in the rank-order lottery.
Several other comments were received with regard to eligibility for
historical license, the implementation of which would not be not
feasible for administrative reasons and because of the limited
availability of tariff-rate quota amounts. One comment questioned the
basis for historical license amounts, proposed that the basis be
reviewed, and that any resultant amounts which might be taken from the
historical licenses be divided between manufacturers and distributors.
Another suggested that small businesses, in operation for five years,
be placed on a priority list for selection as historical licensees. Two
stated that no new licenses should be given to historical licensees,
and another, that unused historical licenses should be converted to
supplementary licenses with importers determined by exporting
countries.
(2) For nonhistorical rank-order lottery licenses--Appendix 2--for
cheese or cheese products, eligibility would be established for the
1997 and subsequent quota years for persons who apply as importers by
having entered at least 57 metric tons of cheese, or, for those who
apply as manufacturers by being listed as a processor in Section II of
``Dairy Plants Surveyed and Approved for USDA Grading Services'' and
having processed at least 450 metric tons of cheese during the
September 1 through August 31 period preceding the year for which
application for license is made. An alternative importer eligibility
threshold is proposed which would allow small businesses or those
seeking licenses smaller than some of the minimum sizes established in
this regulation to qualify for license: the threshold weight is
significantly lower, but it requires multiple shipments spread
throughout the year. Eligibility must be established for each quota
year. For non-cheese dairy products, qualifying shipments may include
dairy products other than cheese and exporters will also be permitted
to apply.
The changes from the existing eligibility criteria, which were
largely based on comments received, are: (1) The level of imports (or
in the case of non-cheese articles, also exports) required; (2) the
elimination beginning with the 1997 quota year of entries based on
sales-in-transit (including from warehouse) and warehouse withdrawals
as acceptable transactions for eligibility; and (3) the requirement
that manufacturers seeking eligibility for cheese license must process
cheese. All of these are aimed at narrowing eligibility to those
persons who directly purchase cheese to either market and distribute it
or to use it in their own processing operations.
(3) The third category of license proposed is that designated by
the government of the exporting country--Appendix 3. These licenses are
similar to the supplementary preferred importer licenses under Revision
7. The quantities to be designated consist of the portion of Tokyo-
Round increments eligible for designation in 1996 as well as Uruguay
Round market access increases for which governments have notified the
Licensing Authority of their intent to designate. To be eligible to
[[Page 1238]]
receive designated licenses an applicant would have to meet the same
requirements as an applicant for nonhistorical rank-order licenses,
much as an applicant for designated license under Revision 7 must meet
the nonhistorical eligibility requirements.
The designation provisions of this proposed rule are in part a
carryover from Revision 7 and in part the implementation of the
bilateral memoranda of understanding which resulted from the Uruguay
Round Agreements. Of the ten entities that commented on designation,
four suggested eliminating the concept; one recommended that it be
limited to entities not owned by foreign governmental bodies; several
did not approve of designation for the new quantities resulting from
the Uruguay Round; two considered designation a second best option if
export country certification was not an option; it was also suggested
that designation by exporting countries be extended to include non-
cheese products.
Other comments regarding eligibility requirements were as follows:
there was concern that performance levels not be increased to levels
detrimental to persons handling small volumes, or be set at levels
higher than the amount of license some persons receive. The proposed
alternative threshold should accomodate most of those situations. Four
comments suggested that in lieu of import licenses, exporting countries
should control trade via export certificates, an idea which goes beyond
what was agreed in the Uruguay Round.
A number of additional suggestions were not incorporated for
administrative reasons or can be handled through other provisions. Some
of these were: firms should be given seniority status for licenses
based on date of incorporation; eligibility should be based on periodic
audits rather than imports or manufacturing; and past performance
should show more than one customer. One comment suggested requiring
submission of customs invoices with applications. The Department
believes that the proposed requirement that eligibility qualifying
entries be direct imports (not in-transit or warehouse purchases or
warehouse withdrawals) as of the 1997 quota year responds to that
concern. Opinions varied on: basing eligibility on sales; limiting the
size of a given licensee's licenses for imports from a single country;
and requiring experience in the cheese business to be able to apply for
a license.
Conditions Under Which Eligibility May Not be Established: Insufficient
Utilization; Affiliation and Association
Under previous revisions of this rule one of the conditions for
continued eligibility was the fulfillment of a license utilization
level. The requirement varied by license type. In this rule a
utilization requirement is made a condition to establish eligibility
annually. Further, it is made uniform across all license types and the
level is raised from 85 to 90 percent, to take effect in the 1996 quota
year for establishing eligibility for the 1997 quota year.
As proposed in this rule, to establish eligibility for a license
for the 1997 and subsequent quota years, a licensee must have utilized
90 percent of the license amount not surrendered by September 1 for the
same article from the same country. The license amount not surrendered
would include any additional amounts issued to a licensee as a result
of any reallocations beginning in the 1996 quota year. If 90 percent
utilization is not achieved, then that license for an article from a
country would not be issued to that licensee in the following year. As
a consequence of the proposed eligibility requirement for historical
licenses that such a license must have been issued to that licensee in
the previous year, a person who is not issued a historical license
because of insufficient use in the previous quota year would not be
eligible for that historical license in any subsequent quota year. A
nonhistorical rank-order lottery license or designated license would
not be issued to the license-holder for the quota year subsequent to
that in which the utilization level was not met.
The proposed rule would provide more specific criteria under which
the utilization requirement may be waived than does Revision 7. Only
breach of suppliers' or carriers' contracts, or force majeure
situations would be considered. Further, an exemption is proposed for
historical and nonhistorical licenses where the country on the license
permits an export monopoly to control exports. This would replace the
provision in Revision 7 which gives the Licensing Authority the ability
to globalize a person's license or waive the utilization requirement if
that person can demonstrate discrimination by a country. It is intended
to provide an administratively simpler means to achieve a level playing
field for importers and exporters.
This proposed rule would introduce a further eligibility
requirement: a ceiling on the licensed volume which may be entered
based on sales-in-transit (including purchases from warehouse in the
United States). It is the Departments's view that the ability of
licensees to purchase all of their product in transit or from warehouse
encourages the practice of license brokerage. If a licensee's licensed
volume entered based on such indirect purchases in a quota year exceeds
25 percent of total licensed licensed volume entered, then such
licensee would not be eligible for any licenses in the following year.
The information necessary to make such determinations would be obtained
at the time each entry is made under the requirements of Sec. 6.29. The
conditions for waiving this eligibility requirement would be the same
as those for failure to use 90 percent of the license amount or license
amount not surrendered, as stated above. Further, the documentation
required with respect to sales-in-transit (including from warehouse in
the United States), is delineated in Sec. 6.29 in greater detail than
in Revision 7 to require evidence that the licensee has title to the
product at the time of entry.
Nine commentors had views on action regarding sales-in-transit.
Four indicated that some limitation could or should be placed on them.
The suggestions ranged from allowing 80 percent of entries to only 25
percent of entries to be based on sales-in-transit. One comment called
for banning sales-in-transit unless the licensee who made a purchase in
transit is the end-user. An additional two comments indicated they were
a necessary practice and should be retained. The Department proposes
that the more stringent limitation is the best way to ensure that
licensees import licensed dairy products for their own entrepreneurial
use. Suggestions that sales-in-transit by subsidiaries or agents of the
exporter not be counted in any limitation were not incorporated in this
proposal because of the difficulty of administering such an exemption
and the potential for evading the sale-in-transit limitation.
Four comments suggested that if licensees frequently underutilize
their license (in varying degrees), they should be subject to a penalty
or forfeit the licenses or some portion thereof. The Department does
not have statutory authority to assess a monetary penalty, but would
provide in this proposal, for a gradual reduction of a historical
license for which there is a surrender (1) in three consecutive years,
or (2) in three years out of five. In the first case the historical
license would be reduced to the average amount of an article entered in
the three years in which the surrender took place; in the second, to
[[Page 1239]]
the average amount of the article entered during the five years.
The Licensing Authority would not issue nonhistorical licenses for
the same article from the same country to applicants who are affiliated
or associated. The proposed provisions covering affiliation and
association have been shortened but cover substantially the same
interrelationships among companies as those of Revision 7. Employees of
a company are explicitly defined as being associated with it, limiting
the types of licenses they may receive, although not completely barring
them from eligibility as one commentor suggested. The reference to
remote contingent exemptions is deleted but would be considered upon
presentation to the Licensing Authority, and options to purchase stock
would no longer be considered as determining affiliation because
administratively it is impossible to enforce. Despite a comment to
raise the level of co-ownership with respect to affiliation to a range
of between 15 to 25 percent, it is the Department's view that 5 percent
is appropriate given the limited license amounts available.
Applications for License
Section 6.24 is modified to include a revised application period
from September 1 through October 15, beginning in quota year 1997. It
should be noted that the postmark no longer has a bearing on a person's
position in the lottery. The first day of the application period is
intended only to prevent receipt of applications prior to the time the
Licensing Authority can handle them. Given the technology available to
process the applications, it is no longer necessary to have a three-
month application period. Further, the proposed rule specifically
states that applications must be complete in order to be accepted by
that date.
Allocation of Licenses
A broad range of comments was received on allocating existing
licenses and licenses for the Uruguay Round quantities. Four comments
stated that auctioning should not be used. Opinions varied on whether
to: eliminate designated and supplementary licenses; distinguish
between industrial and table cheese; prevent license use for industrial
cheese; or permit licensees to hold more than one supplementary
license. Ten entities commented on the lack of continuity as a major
problem with the lottery licenses--the only ones available to new
entrants on a regular basis, short of a purchase of the complete assets
attendant to the business of a company which holds license for the
articles covered by this rule.
In the proposed changes to the allocation procedures of Revision 7,
the Department has taken into account the wide array of comments
received regarding the allocation of the annual in-quota quantities
under the TRQ. The proposed allocation rules are:
(1) Historical Licenses--For an existing historical license, the
license amount in 1997 would be the Basic Annual Allocation used by the
Licensing Authority in 1996, subject to the eligibility requirements of
the proposed rule. In subsequent quota years the license amount would
not exceed the amount issued for 1996. For an existing nonhistorical
license (Revision 7), the license amount for the 1997 quota year would
be the same amount issued in 1996, subject to the eligibility
requirements of the proposed rule. The license amounts from historical
licenses that are not used at least 90 percent or whose use does not
meet the other requirements of the proposed rule would be issued under
the rank-order lottery (Appendix 2) as of the 1997 quota year. If a
licensee held more than one historical license, or one or more
historical licenses and one nonhistorical license for the same article
from the same country in 1996 and would be eligible for those same
licenses in 1997, the licensee would be issued a single historical
license at a combined level determined through the above procedures.
(2) Nonhistorical rank-order lottery licenses--The significant
number of comments proposing more continuity in license allocation and
comments supporting the greater fairness of a rank-order lottery
system, introduced in the Interim Rule of January 6, 1995 for certain
non-cheese articles, led the Department to propose extending it to
those quantities of cheese not held in historical or designated
licenses (notwithstanding an opposing comment that it would introduce
greater volatility and trade in low-price merchandise). The rank-order
lottery would consist of a series of random draws on the basis of
licensee-expressed rankings. Once a licensee has received a
nonhistorical license, it would not be issued another until all other
applicants have received one nonhistorical license of their choice,
provided their choices have not already been completely issued. Under
the proposed Revision 8, licenses would be allocated on the basis of
minimum shares with proration of any excess, if such occurs. Therefore,
no license maximum would be required for nonhistorical rank-order
lottery licenses. The proposed rule would not change the size of the
existing historical and designated licenses, but would increase the
minimum size of most nonhistorical rank-order lottery licenses from
that of the equivalent supplementary licenses, to make them more
economically viable, and for ease of administration. The minimum size
of licenses would in most cases be more than double the size under
Revision 7. This would result in a decrease from the approximately 680
licenses which were awarded in 1994 under the lottery provisions of
Revision 7 to approximately 291 licenses for the same quantity of
cheese. Some Uruguay Round TRQ amounts will be added to this quantity
from the countries who do not designate, as would the amounts which are
available for global access. The rank-order lottery, while not a
guarantee of continuity of license, should increase the odds of
receiving a license for the same article in consecutive years. A
detriment, as pointed out in a comment to the interim rule, is that a
licensee would not receive as great a variety of licenses. With respect
to license size, four comments suggested that they be made larger,
three comments stated they should not be changed, and one comment
proposed that the minimum size of non-cheese licenses be increased to
at least 100 metric tons. Since the TRQ amounts are fixed, the system
must balance the size of license with the large number of requests for
license. The minimum license levels in this proposed regulation are
deemed reasonable in this context.
Under Revision 7, a historical licensee is generally ineligible for
nonhistorical license of the same article from the same country, but is
eligible for supplementary lottery license. The Department has proposed
making the new nonhistorical rank-order lottery licenses available to
all eligible licensees, subject to the limitations of the rules of
attribution in Sec. 6.23(c) (3)-(5). The rank-order provision would
prevent any one licensee from randomly getting significantly more
nonhistorical licenses than another.
A significant number of suggestions for providing renewability or
increasing continuity in the receipt of nonhistorical licenses had to
be rejected because of the limited quantities available for allocation.
For lottery license allocation, one comment suggested that if 85
percent of an entire license is used (as opposed to 85 percent of the
license retained at the end of the year) the licensee should receive
that same license the next year. Another suggested that licenses be
made available to companies on a rotating
[[Page 1240]]
basis over a period of years and two comments proposed licenses be made
available for longer than one year. While the latter proposals might
extend a business' planning horizon, it is doubtful that a business
would make or increase investments on the basis of licenses it knows
may be unavailable after 2, 3, 4, or 5 years--whatever multiple year
term might be provided. Two comments suggested a license exchange so
that licensees could swap licenses. Administrative difficulties make
this unfeasible.
With respect specifically to the new Uruguay Round cheese
quantities, two comments suggested that 50 percent of the non-
designated licenses be granted to importers of non-quota cheese.
However, virtually all of the cheese is likely to be designated. In
many cases the non-quota cheese importers are the same companies as the
license holders and the size of their license portfolio ranges from
small to large. Thus, such a proposal is not likely to give substantial
advantage to smaller businesses who find it difficult to increase the
size and continuity of their licenses. Another comment stated that
Uruguay Round quantities not yet designated by a country should be
issued through a lottery. This recommendation is contained in the
proposed rule. The following specific recommendations were also
submitted: three comments proposed the Uruguay Round increments in
cheese should be equally split among license types; one felt that the
licenses should be issued equally to manufacturers and importer
distributors; and one stated that 50 percent of the licenses should be
issued to businesses created after 1979. Other more complex formulas
were also submitted for allocating licenses.
(3) Designated licenses--Revision 8 would incorporate Uruguay Round
commitments on designated importers, provide a deadline for designation
by foreign governments, submission of the specific information required
by the Licensing Authority, and a deadline for notification of the
Licensing Authority by an exporting country if it intends to begin or
cease designating importers in the following quota year.
Surrender and Reallocation
Revision 8 would move the surrender date from October 1 to
September 1 beginning with the 1996 quota year, on the basis of several
comments. This would also entail moving the period forward for
requesting additional amounts from September 1-September 15 to August
1-August 15. Three comments suggested that requests for additional
license and the surrender of license be made one month earlier so as to
allow for earlier reallocation and better conditions for the shipment
of product in time for the end of the year. Two entities commented that
the current time frame was more appropriate as a September 1 date was
too early for decisions on non-use. We are particularly interested in
further comments on this provision in light of the increase in the
utilization level required to reestablish eligibility in the following
year, and the potential for loss of historical license if that level is
not met.
Surrendered licenses would be reallocated in a manner similar to
the method used for initial allocation of nonhistorical licenses (i.e.,
a rank-order lottery). However, the minimum license level would be
smaller.
One comment suggested that those who use 95 percent of their
combined license and reallocated quantities be given priority the
following year for reallocated amounts. The administrative complexity
of this proposal would slow down the reallocation process, defeating at
least in part the earlier surrender-reallocation period proposed.
Limitations on the Use of Licenses
Historically, an important goal of the licensing system has been to
grant licenses to those businesses which will employ them for their own
entrepreneurial use. It is not the goal of the system to award licenses
to license brokers who obtain licenses for the use by a third party.
This proposed rule reiterates the requirement that a licensee must use
its licenses in its own dairy importing or manufacturing business. This
is further reflected in the proposed limitation on sales-in-transit to
remain eligible for license in Sec. 6.23 and in the proposed
requirement that licensees who are eligible on the basis of
manufacturer status use a minimum of 75 percent of the licensed imports
in their own processing operations in the United States. This
requirement should better implement the original intent of the
provision introduced in Revision 7, to give manufacturers who have no
importing history the opportunity to have direct access to imported
inputs. Manufacturers would be expected to be able to document that
they have used 75 percent of their licensed imports in their own plant.
Another comment suggesting that importers must sell to more than two
unaffiliated or unassociated companies unless the importer of record
uses more than 50 percent of such imports in its own processing
facility, was viewed as a restriction whose intent could be
circumvented and has therefore not been incorporated into the proposed
rule.
Transfer of License
Several changes have been proposed for the provisions affecting
transfer of license upon sale or conveyence of a business involving
articles covered by this regulation. Licenses would be transferred by
the Licensing Authority to the person who has acquired a business
involving articles covered by this regulation, including complete
transfer of attendant assets, for the remainder of the quota year. In
subsequent quota years the person who has acquired the business could
reestablish eligibility for the historical licenses as provided in
Sec. 6.23 and also apply for nonhistorical and designated license. The
entries made under the licenses by the original licensee during the
year in which the sale or conveyence is made would be considered as
having been made by the person acquiring the business for the purpose
of establishing eligibility. In line with comments received, all
licenses would be permitted to be transferred to the person acquiring
the business in an asset purchase approved by the Licensing Authority
(as is now the case for those changes in ownership resulting from a
stock transfer). As a result, the person acquiring the business could,
under this revision, hold any duplicate nonhistorical rank-order
lottery licenses for the remainder of the quota year for which they are
issued. The person acquiring the business and any affiliates would be
eligible for only one such nonhistorical rank-order lottery license in
subsequent years. If the existing provision remained in effect,
nonhistorical amounts which could not be transferred through an asset
purchase would be held by the Licensing Authority until the
reallocation of surrendered amounts made in the fall of any given quota
year.
With respect to the requirement that the ``total assets'' related
to the business be transferred in order for the Licensing Authority to
transfer the licenses, one comment stated that it is onerous and
proposed the test be ``substantially all of the assets.'' In the
Department's view, the one-time burden is reasonable in view of the
benefits of the transfer to both parties of the transaction. In
addition, one comment suggested that a company be able to sell a
particular portion of its import business, and that licenses be
transferred on the basis of such a sale. The complexity of attempting
to define and audit the requirement of a partial transfer makes the
suggestion unfeasible.
[[Page 1241]]
In response to long-standing industry requests and a comment
received, the proposed rule provides for the Licensing Authority to
review, prior to its execution, a proposed contract for an asset
purchase for compliance with the requirement for conveying assets
attendant to the importing business. The prior submission of the
documents of conveyence would be made mandatory. The submission would
have to be received by the Licensing Authority at least 20 working days
before the conveyence takes place. Any alteration found in the
documents ultimately submitted would require a further determination.
Also proposed is a provision permitting an escrow clause in the
contract, but such escrow could only be returned if the Licensing
Authority determined that it will not transfer the licenses to the
buyer. Experience has caused the Department to propose a new
requirement for timely reporting and submission of the actual documents
conveying the assets of a company, with non-compliance leading to
suspension or revocation of license.
Use of Licenses
This section has been simplified and made more uniform for the
various types of entry. The intent of the proposed document
requirements is to ensure that at the time of entry the licensee is the
owner and importer of record of the licensed product, as is already
required under Revision 7.
One entity proposed replacing the through-bill-of-lading
requirement with a certificate of origin requirement so that the
license could be used to import cheese produced in a specific country
from another part of the world. This would increase the difficulty of
enforcing the country of origin requirements of the tariff-rate quotas.
In response to industry requests which pre-dated the ANPR, and in
conformance with Customs rules on tariff-rate quotas, the proposed rule
would provide for the use of immediate delivery for articles covered by
it.
Records and Inspection
Proposed Revision 8 would extend the two-year period for retaining
records for a quota year to five years after the end of a quota year.
Five years is standard for other Department regulations. It would also
require that all documentation related to transactions which establish
a licensee's eligibility be maintained for that period. It would
further clarify that documents must be made available to all officials
of the Department. Failure to provide information would be a violation
subject to suspension and revocation under Sec. 6.31.
Suspension and Revocation of License Eligibility
These proposed provisions have been entirely rewritten. They would
provide greater clarity regarding grounds for suspension or revocation;
give the Licensing Authority greater discretion as to the severity of
the action to be taken (by allowing partial or complete suspension or
revocation of the licenses held by a person); ensure that a decision to
revoke the ability to apply for license extends to the individual who
has violated the Import Regulation (or other government rule) as well
as to the named licensee; and provide for suspension and the
opportunity for a hearing prior to revocation--as proposed in a
recommendation received. It has been the Department's policy in recent
years to provide the opportunity for a hearing before revocation
administratively, even though Revision 7 only provides for an appeal
hearing after revocation. One comment proposed monetary fines for
certain infractions of the rule. The Department has no authority for
such action. Another stated that the licenses of a person violating the
Import Regulation or any Customs rules should be returned to the
lottery, and two others stated that a person be made ineligible for
licenses only upon conviction of wrongdoing. Persons found to be
violating the Import Regulation or Customs rules and regulations
applicable to the Import Regulation would be subject to Sec. 6.31
proceedings.
The proposed rule provides for a single administrative appeal of
determinations by the Licensing Authority to the Director of the Import
Policies and Programs Division, Foreign Agricultural Service, or his or
her designee. The Department believes that the two levels provided in
Revision 7 are duplicative and potentially burdensome for the licensee.
The rule would also require that the licensee exhaust its
administrative remedies before pursuing any other remedy.
Globalization of Licenses
The section on country of origin adjustments found in Revision 7
would be renamed to reflect the action which the Licensing Authority
actually takes when it determines that entries of an article from a
country will fall short of that country's allocated amount as indicated
in Appendices 1, 2 and 3, i.e., to globalize the remaining balance (or
an appropriate portion thereof) of licenses for an article from a
country. It would also continue the provision in the current interim
rule which implements the U.S. Uruguay Round commitment to obtain the
consent of the exporting country's government prior to globalization of
the TRQ amounts granted in Uruguay Round. While this section does not
specifically state that importers may request globalization and that
when they do they must supply information which would show to the best
of their ability the reasons why a supplying country will not be able
to fill its quota allocation, this provision would be implemented by
the Licensing Authority as it has been in the past. Further, such
requests must be submitted no later than August 1.
This section does not reflect the comments received on this issue
which would be administratively difficult to implement or where the
existing provisions are not considered deficient by the Department.
Several comments recommended some form of automatic or semi-automatic
country-of-origin adjustment if a supplying country had a poor record
of filling a TRQ in several consecutive years, and another proposed
that evaporated and sweetened/condensed milk be excluded from this
provision. One comment proposed that the provision permitting the
Licensing Authority to make a license-specific country-of-origin
adjustment (or waive the 85 percent utilization requirement) upon
determination that an exporting country has discriminated as to price
or availability be strengthened. The comment further recommended
provisions describing statutory export monopolies who export primarily
industrial type cheeses as anti-competitive, and, based on such a
description, revoking the exporting country's ability to designate
importers for license. The Department has instead provided in Sec. 6.23
an exemption to the 90 percent utilization requirement for licenses
where the product is purchased from an export monopoly.
License Fee
Proposed Revision 8 would require that license fee payments be made
by certified check or money order to minimize the Department's burden
in handling returned checks, and would continue the provision for
automatic suspension of licenses for non-payment of the fee by May 15.
It further states that revocation procedures would begin immediately
upon suspension. It is the Department's intent to enforce this
vigorously. There would be no grace period beyond the May 15 postmark
date, and late payment would continue
[[Page 1242]]
to lead to suspension and revocation procedures.
Two comments were submitted stating that the fee was too high, one
suggested it be based on the amount of licenses received, another said
it should be eliminated. The fee is required by an OMB Directive and
must be based on the cost of services rendered, not on the size of the
license. Another comment proposed splitting the fee into two payments
(a fee for processing the license and a fee for the license) in order
to discourage frivolous applications. This would double the
Department's processing, handling, and monitoring of payments and in
the Department's view would not be a sufficient disincentive to reduce
applications significantly.
Adjustment of Appendices
This section has been added to clarify that historical licenses
which are not issued to a licensee who has not met the eligibility
provisions of Sec. 6.23 or whose license has been revoked or
permanently surrendered would be moved to Appendix 2 for nonhistorical
rank-order licenses. The Licensing Authority would provide the
opportunity to apply for such licenses if the transfer to Appendix 2
added an article or an article from a country not previously listed
under that Appendix.
Miscellaneous
A provision has been added that all submissions required by mail in
this regulation would have to be made by registered or certified mail
with a postmarked receipt, and proper postage affixed. This is intended
to assure timely delivery and provide a means to verify that the
postmark deadline is met.
Appendices
Several comments addressed the types of cheeses under TRQ and the
contents of TRQ articles. Some welcomed the consolidation of licenses
for Italian-type and Edam and Gouda cheeses and recommended further
consolidation. Another comment suggested the mix of cheese be adjusted
to minimize the impact on domestic producers. One comment proposed
changing the tariff-rate quotas for evaporated and sweetened/condensed
milk to make them equal. These formulations are part of the Uruguay
Round Agreement and cannot be changed through regulatory action. They
would require legislative authority and in some cases renegotiation of
the Agreement.
Two comments recommended extending licensing to other non-cheese
dairy products, particularly those where the TRQ increased by more than
500 metric tons. The Department will be monitoring imports to determine
if further licensing is needed.
List of Subjects in 7 CFR Part 6
Agricultural commodities, Cheese, Dairy products, Imports,
Reporting and recordkeeping requirements.
Proposed Rule
Accordingly, for the reasons described in the preamble, 7 CFR Part
6 Subpart--Tariff Rate Quotas Secs. 6.20-6.34 and Appendix 1, Appendix
2 and Appendix 3 thereto, is revised to read as follows:
Subpart--Dairy Tariff-Rate Import Quota Licensing
Authority: Additional U.S. Notes 6, 7, 8, 12, 14, 16-23 and 25
to Chapter 4 and General Note 15 of the Harmonized Tariff Schedule
of the United States (19 U.S.C. 1202), Pub. L. 97-258, 96 Stat.
1051, as amended (31 U.S.C. 9701), and secs. 103 and 404, Pub. L.
103-465, 108 Stat. 4819.
Sec. 6.20 Introduction.
(a) Presidential Proclamation 6763 of December 23, 1994 (3 CFR,
1994 Comp., p. 147), modified the Harmonized Tariff Schedule of the
United States affecting the import regime for certain articles of dairy
products. The Proclamation terminated quantitative restrictions that
had been imposed pursuant to section 22 of the Agricultural Adjustment
Act of 1933, as amended (7 U.S.C. 624); proclaimed tariff-rate quotas
for such articles pursuant to Public Law 103-465; and specified which
of such articles may be entered only by or for the account of a person
to whom a license has been issued by the Secretary of Agriculture.
(b) Effective January 1, 1995, the prior regime of absolute quotas
for certain dairy products was replaced by a system of tariff-rate
quotas. The articles subject to licensing under the new tariff-rate
quotas are listed in Appendices 1, 2, and 3 of this subpart. The
provisions of this subpart are effective on [effective date of the
final rule]. Licenses are issued pursuant to its provisions for the
1997 and subsequent quota years. These licenses permit the holder to
import specified quantities of the subject articles into the United
States at the applicable in-quota rate of duty. If an importer has no
license for an article subject to a tariff-rate quota, such importer is
required, with certain exceptions, to pay the applicable over-quota
rate of duty.
(c) The Secretary of Agriculture has determined that this subpart,
to the fullest extent practicable, results in fair and equitable
allocation of the right to import articles subject to such tariff-rate
quotas. The subpart also maximizes utilization of the tariff-rate
quotas for such articles, taking due account of any special factors
which may have affected or may be affecting the trade in the articles
concerned.
Sec. 6.21 Definitions.
As used in this subpart and the Appendices thereto, the following
terms mean:
Cheese or cheese products--Articles in headings 0406, 1901.90.34
and 1901.90.36 of the Harmonized Tariff Schedule.
Commercial entry--Any entry except those made by or for the account
of the United States Government or for a foreign government, for the
personal use of the importer or for sampling, taking orders, research,
or the testing of equipment.
Country--Country of origin as determined in accordance with Customs
rules and regulations, except that ``EC-12'' and ``Other Countries''
shall each be treated as a country.
Customs--The United States Customs Service.
Dairy products--Articles in headings 0401 through 0406, margarine
cheese listed under headings 1901.90.34 and 1901.90.36, ice cream
listed under heading 2105, and casein listed under heading 3501 of the
Harmonized Tariff Schedule.
Department--The United States Department of Agriculture.
EC 12--Belgium, Denmark, the Federal Republic of Germany, France,
Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain
and the United Kingdom.
Enter or Entry--To make or making entry for consumption, or
withdrawal from warehouse for consumption in accordance with Customs
regulations and procedures.
Harmonized Tariff Schedule or HTS--The Harmonized Tariff Schedule
of the United States.
Licensee--A person to whom a license has been issued under this
subpart.
Licensing Authority--The Dairy Import Quota Manager, Import
Policies and Programs Division, Foreign Agricultural Service, U.S.
Department of Agriculture.
Other countries--Countries not listed by name as having separate
tariff-rate quota allocations for an article in the Additional U.S.
Notes to Chapter 4 of the Harmonized Tariff Schedule.
Person--An individual, firm, corporation, partnership, association,
trust, estate or other legal entity.
Postmark--The postage cancellation mark or date applied by the
United
[[Page 1243]]
States Postal Service. This does not include the date on ``same day or
next day'' mail delivered by the U.S. Postal Service (also known as
Express Mail), on metered postage affixed by the applicant, or on mail
delivered by private entities.
Process or Processing--Any additional preparation of a dairy
product, such as melting, grating, shredding, cutting and wrapping, or
blending with any additional ingredient.
Quota article--One of the products listed in Appendices 1, 2, or 3
of this subpart which are the same as those described in Additional
U.S. Notes 6, 7, 8, 12, 14, 16-23 and 25 to Chapter 4 of the Harmonized
Tariff Schedule.
Quota year--The 12-month period beginning on January 1 of a given
year.
Sale-in-transit--Any sale prior to entry that is not a direct sale,
including from a warehouse in the United States. A direct sale means a
sale by the exporter in a foreign country of an article to the licensee
or person seeking license.
Tariff-rate quota amount or TRQ amount--The amount of an article
subject to the applicable in-quota rate of duty established under a
tariff-rate quota.
United States--The customs territory of the United States, which is
limited to the fifty states, the District of Columbia, and Puerto Rico.
Sec. 6.22 Requirement for a license.
(a) General rule. A person who seeks to enter, or cause to be
entered, an article shall obtain a license, in accordance with this
subpart, except as provided in paragraph (b) of this section.
(b) Exceptions. Licenses are not required if:
(1) The article is imported by or for the account of any agency of
the U.S. Government;
(2) The article is imported for the personal use of the importer,
provided that the net weight does not exceed 5 kilograms in any one
shipment;
(3) The article imported will not enter the commerce of the United
States and is imported as a sample for taking orders, for exhibition,
for display or sampling at a trade fair, for research, for testing of
equipment; or for use by embassies of foreign governments. Written
approval of the Licensing Authority shall be obtained prior to entry,
and the importer of record (or a broker or agent acting on its behalf)
shall provide to the Licensing Authority, prior to the release of such
articles, the appropriate Customs documentation identifying the
article, quantity to be imported, its location, intended use, an entry
number and the importer of record. The Licensing Authority may also
require as a condition of import that the article be destroyed or re-
exported after such use; or
(4) Such person pays the applicable over-quota rate of duty.
Sec. 6.23 Eligibility to apply for a license.
(a) In general. To apply for any license, a person shall have:
(1) A business office, and be doing business, in the United States,
and
(2) An agent in the United States for service of process.
(b) Eligibility for the 1997 and subsequent quota years. (1)
Historical licenses (Appendix 1). Any person issued a historical or
nonhistorical license for the 1996 quota year for an article may apply
for a historical license (Appendix 1) for the same article from the
same country for the 1997 and subsequent quota years, if such person
was, during the 12-month period ending August 31 prior to the quota
year, either:
(i) Where the article is cheese or cheese product,
(A) The owner of and importer of record for at least three separate
commercial entries of cheese or cheese products totalling not less than
57,000 kilograms net weight, each of the three entries not less than
2,000 kilograms net weight, excluding entries made on the basis of a
sale-in-transit to the applicant and warehouse withdrawals;
(B) The owner of and importer of record for at least eight separate
commercial entries of cheese or cheese products totalling not less than
19,000 kilograms net weight, each of the eight entries not less than
450 kilograms net weight, excluding entries made on the basis of a
sale-in-transit to the applicant and warehouse withdrawals, with a
minimum of two entries in each of at least three quarters during that
period; or
(C) The owner or operator of a plant listed in Section II of the
most current issue of ``Dairy Plants Surveyed and Approved for USDA
Grading Service'' and had processed or packaged at least 450,000
kilograms of cheese or cheese products in its own plant in the United
States; or
(ii) Where the article is not cheese or cheese product,
(A) The owner of and importer of record for at least three separate
commercial entries of dairy products totalling not less than 57,000
kilograms net weight, each of the three entries not less than 2,000
kilograms net weight, excluding entries made on the basis of a sale-in-
transit to the applicant and warehouse withdrawals;
(B) The owner of and importer of record for at least eight separate
commercial entries of dairy products totalling not less than 19,000
kilograms net weight, each of the eight entries not less than 2,000
kilograms net weight, excluding entries made on the basis of a sale-in-
transit to the applicant and warehouse withdrawals, with a minimum of
two entries in each of at least three quarters during that period;
(C) The owner or operator of a plant listed in the most current
issue of ``Dairy Plants Surveyed and Approved for USDA Grading
Service'' and had manufactured, processed or packaged at least 450,000
kilograms of dairy products in its own plant in the United States; or
(D) The exporter of dairy products in the quantities and number of
shipments required under paragraphs (b)(1)(ii) (A) or (B) of this
section.
(2) Certain butter. A person issued a nonhistorical license for
butter for the 1996 or 1997 quota year may annually apply for a
historical license (Appendix 1) for the same quantity of butter for the
subsequent quota year and each year thereafter, provided that such
person has used at least 95 percent of the license issued for the
previous quota year and meets the requirements of paragraph (b)(1)(ii)
of this section. However, if a person is issued a historical license
pursuant to this paragraph, that person may not apply for a
nonhistorical license for butter for any quota year in which that
historical license is issued to that person.
(3) Nonhistorical licenses for cheese or cheese products (Appendix
2). A person may annually apply for a nonhistorical license for cheese
or cheese products (Appendix 2) for the 1997 quota year and each quota
year thereafter if such person meets the requirements of paragraph
(b)(1)(i) of this section.
(4) Nonhistorical licenses for articles other than cheese or cheese
products (Appendix 2). A person may annually apply for a nonhistorical
license for articles other than cheese or cheese products (Appendix 2)
for the 1997 quota year and each quota year thereafter if such person
meets the requirements of paragraph (b)(1)(ii) of this section.
(5) Designated license (Appendix 3). A person may annually apply
for a designated license (Appendix 3) for the 1997 quota year and for
each quota year thereafter, provided that such person meets the
requirements of paragraph (b)(1)(i) of this section, and provided
further that the government of the country has designated such person
for such license. The designating country
[[Page 1244]]
shall submit its selection of designated importers in writing directly
to the Licensing Authority not later than October 31 prior to the
beginning of the quota year.
(c) Exceptions. (1) A licensee that fails in a quota year to enter
at least 90 percent of the amount of an article permitted under a
license, shall not be eligible to receive a license for the same
article from the same country for the next quota year. For the purpose
of this paragraph, the amount of an article permitted under the license
will exclude any amounts surrendered pursuant to Sec. 6.26(a), but will
include any additional allocations received pursuant to Sec. 6.26(b).
This paragraph will not apply, however:
(i) Where the licensee demonstrates to the satisfaction of the
Licensing Authority that the failure resulted from breach by a carrier
of its contract of carriage, breach by a supplier of its contract to
supply the article, act of God or force majeure; or
(ii) To historical and nonhistorical licenses where the country
specified on the license maintains or permits an export monopoly to
control the product concerned. For the purpose of this paragraph,
``export monopoly'' means a privilege vested in one or more persons
consisting in the exclusive right to carry on the exportation of an
article of dairy products from a country to the United States. The
Licensing Authority may publish a notice in the Federal Register
indicating which countries export an article or articles through such a
monopoly, and revise it as necessary.
(2) A licensee who enters more than 25 percent of the total amount
entered under its licenses on the basis of sales-in-transit, shall not
be eligible to receive any license in the following year. This
paragraph will not apply, however, where the licensee demonstrates to
the satisfaction of the Licensing Authority that it exceeded that level
as a result of breach by a carrier of its contract of carriage, breach
by a supplier of its contract to supply the article, act of God or
force majeure.
(3) The Licensing Authority will not issue a nonhistorical license
(Appendix 2) for an article from a country during a quota year to an
applicant who is affiliated with another applicant to whom the
Licensing Authority is issuing a non-historical license for the same
article from the same country for that quota year. Further, the
Licensing Authority will not issue a nonhistorical license for butter
to an applicant who is affiliated with another applicant to whom the
Licensing Authority is issuing a historical butter license of 57,000
kilograms or greater. For the purpose of this paragraph, an applicant
will be deemed affiliated with another applicant if:
(i) The applicant is the spouse, brother, sister, parent, or
grandchild of such other applicant;
(ii) The applicant is the spouse, brother, sister, parent or
grandchild of an individual who owns or controls such other applicant;
(iii) The applicant is owned or controlled by the spouse, brother,
sister, parent, or grandchild of an individual who owns or controls
such other applicant;
(iv) Both applicants are 5 percent or more owned or controlled,
directly or indirectly, by the same person;
(v) The applicant, or a person who owns or controls the applicant,
benefits from a trust that controls such other applicant.
(4) The Licensing Authority will not issue a nonhistorical license
(Appendix 2) for an article from a country during a quota year to an
applicant who is associated with another applicant to whom the
Licensing Authority is issuing a nonhistorical license for the same
article from the same country for that quota year. Further, the
Licensing Authority will not issue a nonhistorical license for butter
to an applicant who is associated with another applicant to whom the
Licensing Authority is issuing a historical butter license for 57,000
kilograms or greater. For the purpose of this paragraph, an applicant
will be deemed associated with another applicant if:
(i) The applicant is an employee of, or is controlled by an
employee of, such other applicant;
(ii) The applicant economically benefits, directly or indirectly,
from the use of the license issued to such other applicant.
(5) The Licensing Authority will not issue a nonhistorical license
for an article from a country, for which the applicant receives a
designated license.
Sec. 6.24 Application for a license.
(a) Application for license shall be made on forms provided by the
Licensing Authority and shall be duly notarized and mailed in
accordance with Sec. 6.36(b). All parts of the application shall be
completed. Beginning with the 1997 quota year the application shall be
postmarked no earlier than September 1 and no later than October 15 of
the year preceding that for which license application is made. The
Licensing Authority will not accept incomplete or unpostmarked
applications.
(b)(1) Where the applicant seeks to establish eligibility on the
basis of imports, applications shall include:
(i) Customs Form 7501 showing the applicant as the importer of
record, and
(ii) The commercial invoice or bill of sale showing the applicant
as the owner and the original consignee for the number and level of
entries required under Sec. 6.23, during the 12-month period ending
August 31 prior to the quota year for which license is being sought.
(2) Where the applicant seeks to establish eligibility on the basis
of exports, applications shall include.
(i) Census Form 7525 or a copy of the electronic submission of such
form, and
(ii) The commercial invoice or bill of sale for the quantities and
number of exports required under Sec. 6.23, during the 12-month period
ending August 31 prior to the quota year for which license is being
sought.
(c) An applicant requesting more than one nonhistorical license
must rank order these requests by the applicable Additional U.S. Note
number. Cheese and cheese products must be ranked separately from dairy
articles which are not cheese or cheese products.
Sec. 6.25 Allocation of licenses.
(a) Historical licenses for the 1997 quota year (Appendix 1). (1) A
person issued a historical license for the 1996 quota year will be
issued a historical license for the 1997 quota year in an amount equal
to the Basic Annual Allocation level used by the Licensing Authority
for the 1996 quota year provided that such person meets the
requirements of Sec. 6.23(b)(1) and Sec. 6.23(c).
(2) A person issued a nonhistorical license for the 1996 quota year
will be issued a historical license for the 1997 quota year for the
same quantity as the license for the 1996 quota year, provided that
such person meets the requirements of Sec. 6.23.
(3) If a person was issued more than one historical license, or one
or more historical licenses and a nonhistorical license, for the same
article from the same country for the 1996 quota year, such person will
be issued a single historical license for the 1997 quota year, the
amount of which shall be determined in accordance with paragraphs (1)
and (2) above.
(b) Historical licenses for the 1998 and subsequent quota years
(Appendix 1). A person issued a historical license for the 1997 quota
year will be issued a historical license in the same amount for the
same article from the same country for the 1998 quota year and for each
subsequent quota year except that:
[[Page 1245]]
(1) Beginning with the 1998 quota year, a person who has
surrendered a portion of such historical license in each of the prior
three quota years will thereafter be issued a license in an amount
equal to the average annual quantity entered during those three quota
years; and
(2) Beginning with the quota year 2000, a person who has
surrendered a portion of such historical license in at least three of
the prior five quota years will thereafter be issued a license in an
amount equal to the average annual quantity entered during those five
quota years.
(c) Nonhistorical licenses (Appendix 2). The Licensing Authority
will allocate nonhistorical licenses on the basis of a rank-order
lottery system, which will operate as follows:
(1) The minimum license size shall be:
(i) Where the article is cheese or cheese product:
(A) The total amount available for nonhistorical license where such
amount is less than 9,500 kilograms;
(B) 9,500 kilograms where the total amount available for
nonhistorical license is between 9,500 kilograms and 500,000 kilograms,
inclusive;
(C) 19,000 kilograms where the total amount available for
nonhistorical license is between 500,001 kilograms and 1,000,000
kilograms,inclusive;
(D) 38,000 kilograms where the total amount available for
nonhistorical license is greater than 1,000,000 kilograms; or
(E) An amount less than the minimum license size established in
paragraphs (c)(1)(i) (A) through (D) of this section, if requested by
the licensee;
(ii) Where the article is not cheese or cheese product:
(A) The total amount available for nonhistorical license where such
amount is less than 19,000 kilograms;
(B) 19,000 kilograms where the total amount available for
nonhistorical license is between 19,000 kilograms and 550,000
kilograms, inclusive;
(C) 38,000 kilograms where the total amount available for
nonhistorical license is between 550,001 kilograms and 1,000,000
kilograms, inclusive; and
(D) 57,000 kilograms where the total amount available for
nonhistorical license is greater than 1,000,000 kilograms;
(E) An amount less than the minimum license sizes established in
paragraphs (c)(1)(ii) (A) through (D) of this section, if requested by
the licensee.
(2) Taking into account the order of preference expressed by each
applicant, as required by Sec. 6.24(c), the Licensing Authority will
allocate licenses for an article from a country by a series random
draws. A license of minimum size will be issued to each applicant in
the order established by such draws until the total amount of such
article in Appendix 2 has been allocated. An applicant that receives a
license for an article will be removed from the pool for subsequent
draws until every applicant has been allocated at least one license,
provided that the licenses for which they applied are not already fully
allocated. Any amount remaining after the random draws which is less
than the applicable minimum license size may, at the discretion of the
Licensing Authority, be prorated equally among the licenses awarded for
that article.
(d) Designated licenses (Appendix 3). (1) With respect to an
article listed in Appendix 3, the government of the applicable country
may, not later than October 31 prior to the beginning of a quota year,
submit directly and in writing to the Licensing Authority:
(i) The names and addresses of the importers that it is designating
to receive licenses; and
(ii) The amount, in percentage terms, of such article for which
each such importer is being designated. Where quantities for
designation result from both Tokyo Round and Uruguay Round concessions,
the designations should be made in terms of each.
(2) To the extent practicable, the Licensing Authority will issue
designated licenses to those importers, and in those amounts, indicated
by the government of the applicable country, provided that the importer
designated meets the eligibility requirements set forth in Sec. 6.23.
Consistent with the international obligations of the United States, the
Licensing Authority may disregard a designation if the Licensing
Authority determines that the person designated is not eligible for any
of the reasons set forth in Sec. 6.23(c) (1) or (2).
(3) If a government of a country which negotiated in the Uruguay
Round for the right to designate importers has not done so, but
determines to designate importers for the next quota year, it shall
indicate its intention to do so directly and in writing to the
Licensing Authority not later than July 1 prior to the beginning of
such next quota year. Furthermore, if a government that has designated
importers for a quota year determines that it will not continue to
designate importers for the next quota year, it shall so indicate
directly and in writing to the Licensing Authority, not later than July
1 prior to such next quota year.
Sec. 6.26 Surrender and reallocation.
(a) If a licensee determines that it will not enter the entire
amount of an article permitted under its license, such licensee shall
surrender its license right to enter the amount that it does not intend
to enter. Surrender shall be made to the Licensing Authority in
writing, mailed in accordance with Sec. 6.36(b) and postmarked not
later than September 1. Any surrender shall be final and shall be only
for that quota year, except as provided in Sec. 6.25(b). The amount of
the license not surrendered shall be subject to the license use
requirements of Sec. 6.23(c) (1) and (2).
(b) For each quota year, the Licensing Authority will, to the
extent practicable, reallocate any amounts surrendered.
(c) Any person who has been issued a license for a quota year may
apply to receive additional license, or addition to an existing license
for a portion of the amount being reallocated. The application shall be
submitted to the Licensing Authority by mail postmarked not later than
August 15, in accordance with Sec. 6.36(b), and shall specify:
(1) The name and control number of the applicant;
(2) The article and country being requested, the applicable
Additional U.S. Note number and, if more than one article is requested,
a rank-order by Additional U.S. Note number; and
(3) If applicable, the number of the license issued to the
applicant for that quota year permitting entry of the same article from
the same country.
(d) The Licensing Authority will reallocate surrendered amounts
among applicants as follows:
(1) The minimum license size, or addition to an existing license,
will be the total amount of the article from a country surrendered, or
10,000 kilograms, whichever is less;
(2) Minimum size licenses, or additions to an existing license,
will be allocated among applicants requesting articles on the basis of
the rank-order lottery system described in Sec. 6.25(c);
(3) If there is any amount of an article from a country left after
minimum size licenses have been issued, the Licensing Authority may
allocate the remainder in any manner it determines equitable among
applicants who have requested that article; and
(4) No amount will be reallocated to a licensee who has surrendered
a portion of its license for the same article from the same country
during that quota year;
(e) However, if the government of an exporting country chooses to
designate eligible importers for surrendered amounts under Appendix 3,
the Licensing Authority shall issue the
[[Page 1246]]
licenses in accordance with Sec. 6.25(d)(2), provided that the
government of the exporting country notifies the Licensing Authority of
its designations no later than September 1. Such notification shall
contain the names and addresses of the importers that it is designating
and the amount in percentage terms of such article for which each
importer is being designated. In such case the requirements of
paragraph (c) of this section shall not apply.
Sec. 6.27 Limitations on use of license.
(a) A licensee shall not use its license to import articles for the
benefit of another person, nor shall it permit any other person to use
such license.
(b) A person who is eligible as a manufacturer or processor,
pursuant to Sec. 6.23, shall process at least 75 percent of its
licensed imports in such person's own facilities and maintain the
records necessary to so substantiate.
Sec. 6.28 Transfer of license.
(a) If a licensee sells or conveys its business involving articles
covered by this subpart to another person, including the complete
transfer of the attendant assets, the Licensing Authority will transfer
to such other person the historical, nonhistorical or designated
license issued for that quota year. Such sale or conveyence must be
unconditional, except that it may be in escrow with the sole condition
for return of escrow being that the Licensing Authority determines that
such sale does not meet the requirements of this paragraph.
(b) The parties seeking transfer of license shall give written
notice to the Licensing Authority of the intended sale or conveyence
described in paragraph (a) of this section by mail as required in
Sec. 6.36(b). The notice must be received by the Licensing Authority at
least 20 working days prior to the intended consummation of the sale or
conveyence. Such written notice shall include copies of the documents
of sale or conveyence. The Licensing Authority will review the
documents for compliance with the requirement of paragraph (a) of this
section and advise the parties of its findings. The parties shall have
the burden of demonstrating the sale or conveyence, and complete
transfer of assets to the satisfaction of the Licensing Authority.
Within 15 days of the consummation of the sale or conveyence, the
parties shall mail copies of the final documents to the Licensing
Authority, in accordance with Sec. 6.36(b). The Licensing Authority
will not transfer the licenses unless the documents are submitted in
accordance with this paragraph.
(c) For the purposes of Sec. 6.23 the person to whom a business is
sold or conveyed shall be deemed to be the person to whom the
historical licenses were issued during the quota year in which the sale
or conveyence occurred. In all other respects, that person's
eligibility to apply for a license for any subsequent quota year will
be determined in accordance with Sec. 6.23.
(d) For the purposes of this subpart, the entries made under such
licenses by the original licensee during the year in which the sale or
conveyence is made, shall be considered as having been made by the
person to whom the business was sold or conveyed.
Sec. 6.29 Use of licenses.
(a) An article entered under a license shall be the article
produced in the country specified on the license.
(b) An article entered or withdrawn from warehouse for consumption
under a license must be entered in the name of the licensee as the
importer of record by the licensee or its agent, and must be owned by
the licensee at the time of such entry.
(c) If the article entered or withdrawn from warehouse for
consumption was purchased by the licensee through a direct sale from a
foreign supplier, the licensee shall present, at the time of entry:
(1) A true and correct copy of a through bill-of-lading from the
country; and
(2) A commercial invoice or bill of sale from the seller, showing
the quantity and value of the product, the date of purchase and the
country.
(d) If the article entered was purchased by the licensee via sale-
in-transit, the licensee shall present, at the time of entry:
(1) A true and correct copy of a through bill-of-lading endorsed by
the original consignee of the goods;
(2) A certified copy of the commercial invoice or bill of sale from
the foreign supplier to the original consignee of the goods; and
(3) A commercial invoice or bill of sale from the original
consignee to the licensee.
(e) If the article entered was purchased by the licensee in
warehouse, the licensee shall present, at the time of entry:
(1) Customs Form 7501 endorsed by the original consignee of the
goods;
(2) A certified copy of the commercial invoice or bill of sale from
the foreign supplier to the original consignee of the goods; and
(3) A commercial invoice or bill of sale from the original
consignee to the licensee.
(f) The Licensing Authority may waive the requirements of
paragraphs (c), (d) or (e) of this section, if it determines that
because of strikes, lockouts or other unusual circumstances, compliance
with those requirements would unduly interfere with the entry of such
articles.
(g) Nothing in this subpart shall prevent the use of immediate
delivery in accordance with the provisions of Customs regulations
relating to tariff-rate quotas.
Sec. 6.30 Record maintenance and inspection.
A licensee shall retain all records relating to its purchases,
sales and transactions governed by this subpart, including all records
necessary to establish the licensee's eligibility, for five years
subsequent to the end of the quota year in which such purchases, sales
or transactions occurred. During that period, the licensee shall, upon
reasonable notice and during ordinary hours of business, grant
officials of the U.S. Department of Agriculture full and complete
access to the licensee's premises to inspect, audit or copy such
records.
Sec. 6.31 Suspension or revocation of a license.
(a) The Licensing Authority may determine to suspend or revoke a
license for a quota year, or not to issue a license to a person for no
more than three subsequent quota years, for any of the following
reasons:
(1) Failure to pay a license fee in accordance with Sec. 6.33;
(2) Submission of false or misleading information in connection
with an application or with the use of a license;
(3) Indictment or conviction for a felony which indicates moral
turpitude, lack of business integrity or business honesty;
(4) Violation of a provision of this subpart; or
(5) Ownership, control or management by, or employment of, a person
whose license has been suspended or revoked or who has been debarred or
suspended from contracting with the government or from participating in
U.S. Government programs.
(b) The Licensing Authority shall determine whether to suspend or
revoke a license and shall give written notice of such determination to
the licensee. Where the Licensing Authority determines that adequate
grounds exist, the notice shall state that the license has been
suspended, shall give a plain and concise explanation of the factual
basis and grounds for the determination, shall
[[Page 1247]]
specify the length of revocation proposed and a date on which such
revocation will become effective if there is no appeal, and shall
advise the licensee of its right to appeal the determination, including
its right to a hearing.
(c) Any action taken by the Licensing Authority to suspend or
revoke a license is without prejudice to the rights of the U.S.
Government to pursue any other available legal recourse, civil,
criminal or administrative.
(d) A licensee whose license is suspended or revoked is required to
exhaust its administrative remedies before pursuing any other remedy.
Sec. 6.32 Administrative appeals.
(a) General. This section provides for administrative appeal of a
determination by the Licensing Authority to suspend or revoke a
license. The decision on such appeal shall be made by the Director,
Import Policies and Programs Division, Foreign Agricultural Service
(``Director''), or his or her designee.
(b) Filing of appeal. The licensee may appeal the Licensing
Authority's determination by filing a written notice of appeal, signed
by the licensee or the licensee's agent, with the Director. The appeal
may be filed by mail, postmarked no later than 30 calendar days after
the date of the Licensing Authority's determination, in accordance with
Sec. 6.36(b), or filed directly in the office of the Director. If the
licensee files the notice of appeal directly with the office of the
Director, two copies must be submitted. Both copies will be date-
stamped by the office of the Director and one copy will be returned to
the licensee. The licensee may make a written submission of its
position at the time it files its appeal. If the licensee does not
timely appeal, any suspension or revocation proposed will take effect
in accordance with the Licensing Authority's determination. If the
licensee seeks a hearing, it shall so request in its notice of appeal.
The licensee may request that the hearing be scheduled within 30 days
of the postmark date of its notice of appeal.
(c) Appeal process and hearing. (1) Ordinarily, hearings will be
held only at the request of the licensee. If no hearing is requested,
the Director will make his or her determination on the basis of written
submission and any other available information. The hearing shall be
held at the place and time determined by the Director, except that it
shall be held within 30 days of the postmark date of the notice of
appeal if the licensee so requests.
(2) Hearings will be conducted by the Director in a manner as
informal as practicable, consistent with the principles of fundamental
fairness.
(3) The licensee may be represented by counsel.
(4) The licensee shall have full opportunity to present any
relevant evidence, documentary or testimonial, and to make argument in
support of its position. The Director may permit other individuals to
present evidence at the hearing, and the licensee shall have an
opportunity to question those witnesses.
(5) If requested, the Director shall make available to the licensee
all documentation considered by the Director in reaching its
determination.
(6) A verbatim transcript of the hearing may be made at the
direction of the Director, or at the request of the licensee. If the
licensee requests a transcript be made, it shall be responsible for
arranging for a professional reporter and shall pay all attendant
expenses.
(d) Determination on appeal. The Director shall make the
determination on appeal, and may affirm, reverse, modify or remand the
Licensing Authority's determination. The Director shall notify the
licensee in writing of the determination on appeal and of the basis
therefore. The determination on appeal exhausts the licensee's
administrative remedies.
Sec. 6.33 Globalization of licenses.
If the Licensing Authority determines that entries of an article
from a country are likely to fall short of that country's allocated
amount as indicated in Appendices 1, 2, and 3, the Licensing Authority
may permit, with the approval of the Office of the United States Trade
Representative, the applicable licensees to enter the remaining balance
or a portion thereof from any country during that quota year. Requests
for consideration of such adjustments must be submitted to the
Licensing Authority no later than August 1. The Licensing Authority
will obtain prior consent for such an adjustment of licenses from the
government of the exporting country for quantities in accordance with
the Uruguay Round commitment of the United States.
Sec. 6.34 License fee.
(a) A fee will be assessed each quota year for each license to
defray the Department's costs of administering the licensing system. To
the extent practicable, the fee will be announced by the Licensing
Authority in a notice published in the Federal Register no later than
August 31 of the year preceding the quota year for which the fee is to
be assessed.
(b) The license fee for each license is due and payable in full by
mail, postmarked no later than May 15 of the year for which the license
is issued, in accordance with Sec. 6.36(b). The fee for any license
issued after May 15 of any quota year is due and payable in full by
mail, postmarked no later than 30 days from the date of issuance of the
license, in accordance with Sec. 6.36(b). Fee payments shall be made by
certified check or money order payable to the Treasurer of the United
States.
(c) If the license fee is not paid by the final payment date, the
Licensing Authority will suspend that license and begin revocation
procedures. If, after granting opportunity for an administrative
appeal, the Licensing Authority determines that a person has not paid
its fee as required by this paragraph and there is no indication that
non-payment was for reasons beyond that person's control, the Licensing
Authority will revoke the license for the remainder of the quota year
and will not issue to such person a license for the same article from
the same country for the next quota year. Where the license at issue is
a historical license, this will result, pursuant to Sec. 6.23(c), in
the person's loss of historical eligibility for such license.
(d) Prior to the final payment date, licensees may elect not to
accept certain licenses issued to them; however, the Licensing
Authority must be so notified by mail, postmarked no later than the May
15 payment deadline, in accordance with Sec. 6.36(b).
Sec. 6.35 Adjustment of Appendices.
(a) Whenever a historical license (Appendix 1) is not issued to an
applicant pursuant to the provisions of Sec. 6.23 or subsequent to the
permanent surrender to or revocation of such license by the Licensing
Authority, the amount of such license will be transferred to Appendix
2.
(b) The cumulative annual transfers to Appendix 2 made in
accordance with paragraph (a) of this section will be published in a
Notice in the Federal Register. If such a transfer results in the
addition of a new article, or an article from a country not previously
listed in Appendix 2, the Licensing Authority shall afford all eligible
applicants for that quota year the opportunity to apply for a license
for such article.
Sec. 6.36 Miscellaneous.
(a) If any deadline date in this subpart falls on a Saturday,
Sunday or a Federal holiday, then the deadline shall be the next
business day.
[[Page 1248]]
(b) All submissions required by mail in this subpart shall be by
registered or certified mail, return receipt requested, with a
postmarked receipt, with the proper postage affixed and properly
addressed to the Dairy Import Licensing Group, AG Box 1021, Import
Policies and Programs Division, Foreign Agricultural Service, U.S.
Department of Agriculture, Washington D.C. 20250-1021.
Sec. 6.37 Supersedure of Import Regulation 1, Revision 7.
This subpart supersedes the provisions of Import Regulation 1,
Revision 7. With respect to any violation of the provisions of that
regulation by a licensee prior to [the effective date of the final
rule] the provisions of that Regulation will be deemed to continue in
full force. Any determination of the Licensing Authority to suspend or
revoke a license for a violation of a provision of that Regulation
shall be in accordance with Sec. 6.31 of this subpart. Any
administrative appeal shall be conducted in accordance with Sec. 6.32
of this subpart.
Appendix 1--Articles Subject to the Historical Provisions of Import
Regulation 1, Revision 8, and Respective Annual Tariff-Rate In-Quota
Quantities For Each Quota Year.\1\
------------------------------------------------------------------------
1997 Historical
tariff-rate in-
Article by additional U.S. note number quota quantity
(kilograms)
------------------------------------------------------------------------
NON-CHEESE ARTICLES
BUTTER (Note 6)...................................... 320,689
EU............................................... 96,161
NEW ZEALAND...................................... 150,593
OTHER COUNTRIES.................................. 73,935
DRIED SKIM MILK (Note 7)............................. 819,641
AUSTRALIA........................................ 600,076
CANADA........................................... 219,565
DRIED WHOLE MILK (Note 8)............................ 3,175
NEW ZEALAND...................................... 3,175
DRIED BUTTERMILK AND WHEY (Note 12).................. 224,981
CANADA........................................... 161,161
NEW ZEALAND...................................... 63,820
------------------
TOTAL: NON-CHEESE ARTICLES..................... 1,368,486
CHEESE ARTICLES
CHEESE AND SUBSTITUTES FOR CHEESE (EXCEPT CHEESE NOT
CONTAINING COW'S MILK AND SOFT RIPENED COW'S MILK
CHEESE, CHEESE (EXCEPT COTTAGE CHEESE) CONTAINING
0.5 PERCENT OR LESS BY WEIGHT OF BUTTERFAT AND
ARTICLES WITHIN THE SCOPE OF OTHER IMPORT QUOTAS
PROVIDED FOR IN THIS SUBCHAPTER)
(Note 16)........................................ 26,016,085
ARGENTINA...................................... 7,690
AUSTRALIA...................................... 541,170
AUSTRIA........................................ 369,747
CANADA......................................... 1,141,000
SWITZERLAND.................................... 652,841
EU............................................. 15,032,240
FINLAND........................................ 814,903
ISRAEL......................................... 79,696
ICELAND........................................ 294,000
NORWAY......................................... 150,000
NEW ZEALAND.................................... 4,815,472
POLAND......................................... 936,224
PORTUGAL....................................... 129,309
SWEDEN......................................... 915,473
OTHER COUNTRIES................................ 136,320
BLUE-MOLD CHEESE (EXCEPT STILTON PRODUCED IN THE
UNITED KINGDOM) AND CHEESE AND SUBSTITUTES FOR
CHEESE CONTAINING, OR PROCESSED FROM, BLUE-MOLD
CHEESE:
(Note 17)........................................ 2,366,029
ARGENTINA........................................ 2,000
EU............................................... 2,364,028
OTHER COUNTRIES.................................. 1
CHEDDAR CHEESE, AND CHEESE AND SUBSTITUTES FOR CHEESE
CONTAINING, OR PROCESSED FROM, CHEDDAR CHEESE:
(Note 18)........................................ 4,183,856
AUSTRALIA...................................... 984,499
EU............................................. 263,000
NEW ZEALAND.................................... 2,796,468
OTHER COUNTRIES................................ 139,889
AMERICAN-TYPE CHEESE, INCLUDING COLBY, WASHED CURD
AND GRANULAR CHEESE (BUT NOT INCLUDING CHEDDAR) AND
CHEESE AND SUBSTITUTES FOR CHEESE CONTAINING, OR
PROCESSED FROM, SUCH AMERICAN- TYPE CHEESE:
(Note 19)........................................ 3,065,553
AUSTRALIA...................................... 880,998
EU............................................. 254,000
NEW ZEALAND.................................... 1,761,999
[[Page 1249]]
OTHER COUNTRIES................................ 168,556
EDAM AND GOUDA CHEESE, AND CHEESE AND SUBSTITUTES FOR
CHEESE CONTAINING, OR PROCESSED FROM, EDAM AND GOUDA
CHEESE:
(Note 20)........................................ 5,606,402
ARGENTINA...................................... 125,000
EU............................................. 5,248,000
SWEDEN......................................... 41,000
NORWAY......................................... 167,000
OTHER COUNTRIES................................ 25,402
ITALIAN-TYPE CHEESES, MADE FROM COW'S MILK, (ROMANO
MAKE FROM COW'S MILK, REGGIANO, PARMESAN, PROVOLONE,
PROVOLETTI AND SBRINZ AND GOYA, NOT IN ORIGINAL
LOAVES) AND CHEESE AND SUBSTITUTES FOR CHEESE
CONTAINING, OR PROCESSED FROM, SUCH ITALIAN-TYPE
CHEESES, WHETHER OR NOT IN ORIGINAL LOAVES:
(Note 21)........................................ 6,733,376
ARGENTINA...................................... 4,125,483
EU............................................. 2,594,829
OTHER COUNTRIES................................ 13,064
SWISS OR EMMENTHALER CHEESE OTHER THAN WITH EYE
FORMATION, GRUYERE-PROCESS CHEESE AND CHEESE AND
SUBSTITUTES FOR CHEESE CONTAINING, OR PROCESSED
FROM, SUCH CHEESES:
(Note 22)........................................ 6,120,089
AUSTRIA........................................ 778,994
SWITZERLAND.................................... 1,421,787
EU............................................. 3,091,475
FINLAND........................................ 748,000
OTHER COUNTRIES................................ 79,833
CHEESE AND SUBSTITUTES FOR CHEESE, CONTAINING 0.5
PERCENT OF LESS BY WEIGHT OF BUTTERFAT, PROVIDED FOR
IN (EXCEPT ARTICLES WITHIN THE SCOPE OF OTHER IMPORT
QUOTAS PROVIDED FOR IN THIS SUBCHAPTER), AND
MARGARINE CHEESE:
(Note 23)........................................ 4,181,944
EU............................................. 3,882,352
POLAND......................................... 174,907
SWEDEN......................................... 124,684
OTHER COUNTRIES................................ 1
SWISS OR EMMENTHALER CHEESE WITH EYE FORMATION:
(Note 25)........................................ 20,258,803
ARGENTINA...................................... 9,115
AUSTRIA........................................ 5,004,491
AUSTRALIA...................................... 209,698
SWITZERLAND.................................... 1,747,315
EU............................................. 3,736,262
FINLAND........................................ 5,477,074
ISRAEL......................................... 27,000
ICELAND........................................ 149,999
NORWAY......................................... 3,812,573
OTHER COUNTRIES................................ 85,276
------------------
TOTAL: CHEESE ARTICLES......................... 78,532,137
------------------------------------------------------------------------
\1\ This appendix combines articles for which historical and
nonhistorical licenses were issued under Appendix 1 and Appendix 2 of
Import Regulation 1, Revision 7 and for which USDA issued annual
import licenses identified by the numeric identification prefix 1, 2,
or 3.
Appendix 2--Articles Subject to the Nonhistorical Provisions of Import
Regulation 1, Revision 8, and Respective Annual Tariff-Rate In-Quota
Quantities for Each Quota Year \1\
------------------------------------------------------------------------
1997
Nonhistorical
Article by Additional U.S. Note number tariff-rate in-
quota quantity
(kilograms)
------------------------------------------------------------------------
NON-CHEESE ARTICLES
BUTTER (Note 6)...................................... \2\ 4,856,311
DRIED SKIM MILK (Note 7)............................. 2,041,359
DRIED WHOLE MILK (Note 8)............................ 1,548,125
BUTTER SUBSTITUTES CONTAINING OVER 45% OF BUTTERFAT
AND BUTTEROIL (Note 14)............................. 4,520,500
------------------
TOTAL: NON-CHEESE ARTICLES..................... 12,966,295
[[Page 1250]]
CHEESE ARTICLES
CHEESE AND SUBSTITUTES FOR CHEESE (EXCEPT CHEESE NOT
CONTAINING COW'S MILK AND SOFT RIPENED COW'S MILK
CHEESE, CHEESE (EXCEPT COTTAGE CHEESE) CONTAINING
0.5 PERCENT OR LESS BY WEIGHT OF BUTTERFAT AND
ARTICLES WITHIN THE SCOPE OF OTHER IMPORT QUOTAS
PROVIDED FOR IN THIS SUBCHAPTER):
(Note 16)........................................ 5,436,075
EU............................................. 5,070,760
OTHER COUNTRIES................................ 65,315
ANY............................................ 300,000
BLUE-MOLD CHEESE (EXCEPT STILTON PRODUCED IN THE
UNITED KINGDOM) AND CHEESE AND SUBSTITUTES FOR
CHEESE CONTAINING, OR PROCESSED FROM, BLUE-MOLD
CHEESE:
(Note 17)........................................ 154,972
EU............................................. 114,972
CHILE.......................................... 40,000
CHEDDAR CHEESE, AND CHEESE AND SUBSTITUTES FOR CHEESE
CONTAINING, OR PROCESSED FROM, CHEDDAR CHEESE:
(Note 18)........................................ 210,000
CHILE.......................................... 110,000
ANY............................................ 100,000
ITALIAN-TYPE CHEESES, MADE FROM COW'S MILK, (ROMANO
MAKE FROM COW'S MILK, REGGIANO, PARMESAN, PROVOLONE,
PROVOLETTI AND SBRINZ AND GOYA, NOT IN ORIGINAL
LOAVES) AND CHEESE AND SUBSTITUTES FOR CHEESE
CONTAINING, OR PROCESSED FROM, SUCH ITALIAN-TYPE
CHEESES, WHETHER OR NOT IN ORIGINAL LOAVES:
(Note 21)........................................ 1,037,171
EU............................................. 787,171
ROMANIA........................................ 250,000
SWISS OR EMMENTHALER CHEESE OTHER THAN WITH EYE
FORMATION, GRUYERE-PROCESS CHEESE AND CHEESE AND
SUBSTITUTES FOR CHEESE CONTAINING, OR PROCESSED
FROM, SUCH CHEESES:
(Note 22)........................................ 533,525
EU............................................. 533,525
CHEESE AND SUBSTITUTES FOR CHEESE, CONTAINING 0.5
PERCENT OF LESS BY WEIGHT OF BUTTERFAT, PROVIDED FOR
IN (EXCEPT ARTICLES WITHIN THE SCOPE OF OTHER IMPORT
QUOTAS PROVIDED FOR IN THIS SUBCHAPTER), AND
MARGARINE CHEESE:
(Note 23)........................................ 117,648
EU............................................. 117,648
SWISS OR EMMENTHALER CHEESE WITH EYE FORMATION:
(Note 25)........................................ 2,263,738
EU............................................. 2,263,783
------------------
TOTAL: CHEESE ARTICLES......................... 9,753,129
------------------------------------------------------------------------
\1\ This appendix includes (1) articles for which supplementary lottery
licenses were issued under Appendix 2 of Import Regulation 1, Revision
7 in 1995, and (2) increased quantities of certain articles as
provided for in the Uruguay Round Trade Agreements Act (Public Law 103-
465). The articles and quantities included in this appendix for
certain cheese may be modified as provided in Sec. 6.25(d)(3).
\2\ Butter licenses issued as nonhistorical licenses for quota years
1996 and 1997 will be converted to historical licenses in the
following quota year as provided in Sec. 6.23(a)(2).
Appendix 3.--Articles Subject to the Designated Importer Provisions of
Import Regulation 1, Revision 8, and Respective Annual Tariff-Rate In-
Quota Quantities For Each Quota Year \1\
------------------------------------------------------------------------
1997 Designated
tariff-rate in-
Article by additional U.S. note number quota quantity
(kilograms)
------------------------------------------------------------------------
CHEESE AND SUBSTITUTES FOR CHEESE (EXCEPT CHEESE NOT
CONTAINING COW'S MILK AND SOFT RIPENED COW'S MILK
CHEESE, CHEESE (EXCEPT COTTAGE CHEESE) CONTAINING
0.5 PERCENT OR LESS BY WEIGHT OF BUTTERFAT) AND
ARTICLES WITHIN THE SCOPE OF OTHER TARIFF-RATE
QUOTAS PROVIDED FOR IN THIS SUBCHAPTER:
(Note 16)........................................ 14,877,699
ARGENTINA...................................... 92,310
AUSTRALIA...................................... 1,633,830
AUSTRIA........................................ 553,253
SWITZERLAND.................................... 817,159
EU............................................. 900,000
FINLAND........................................ 485,097
ISRAEL......................................... 593,304
ICELAND........................................ 29,000
NEW ZEALAND.................................... 6,506,528
[[Page 1251]]
POLAND......................................... 300,000
PORTUGAL....................................... 223,691
SWEDEN......................................... 143,527
COSTA RICA..................................... 1,550,000
CZECH REPUBLIC................................. 200,000
SLOVAK REPUBLIC................................ 600,000
URUGUAY........................................ 250,000
BLUE-MOLD CHEESE (EXCEPT STILTON PRODUCED IN THE
UNITED KINGDOM) AND CHEESE AND SUBSTITUTES FOR
CHEESE CONTAINING, OR PROCESSED FROM, BLUE-MOLD
CHEESE:
(Note 17)........................................ 200,000
EU............................................. 150,000
CZECH REPUBLIC................................. 50,000
CHEDDAR CHEESE, AND CHEESE AND SUBSTITUTES FOR CHEESE
CONTAINING, OR PROCESSED FROM, CHEDDAR CHEESE:
(Note 18)........................................ 4,244,033
AUSTRALIA...................................... 840,501
EU............................................. 500,000
NEW ZEALAND.................................... 2,853,532
CZECH REPUBLIC................................. 50,000
AMERICAN-TYPE CHEESE, INCLUDING COLBY, WASHED CURD
AND GRANULAR CHEESE (BUT NOT INCLUDING CHEDDAR) AND
CHEESE AND SUBSTITUTES FOR CHEESE CONTAINING, OR
PROCESSED FROM, SUCH AMERICAN-TYPE CHEESE:
(Note 19)........................................ 407,003
AUSTRALIA...................................... 119,002
EU............................................. 50,000
NEW ZEALAND.................................... 238,001
EDAM AND GOUDA CHEESE, AND CHEESE AND SUBSTITUTES FOR
CHEESE CONTAINING, OR PROCESSED FROM, EDAM AND GOUDA
CHEESE:
(Note 20)........................................ 710,000
ARGENTINA...................................... 110,000
AUSTRIA........................................ 200,000
EU............................................. 300,000
CZECH REPUBLIC................................. 100,000
ITALIAN-TYPE CHEESES, MADE FROM COW'S MILK (ROMANO
MADE FROM COW'S MILK, REGGIANO, PARMESAN, PROVOLONE,
PROVOLETTI AND SBRINZ AND GOYA), AND CHEESE AND
SUBSTITUTES FOR CHEESE CONTAINING, OR PROCESSED
FROM, SUCH ITALIAN-TYPE CHEESES, WHETHER OR NOT IN
ORIGINAL LOAVES:
(Note 21)........................................ 5,285,517
ARGENTINA...................................... 2,257,517
EU............................................. 350,000
URUGUAY........................................ 1,178,000
HUNGARY........................................ 400,000
POLAND......................................... 1,325,000
SWISS OR EMMENTHALER CHEESE OTHER THAN WITH EYE
FORMATION, GRUYERE-PROCESS CHEESE AND CHEESE AND
SUBSTITUTES FOR CHEESE CONTAINING, OR PROCESSED
FROM, SUCH CHEESES:
(Note 22)........................................ 1,011,219
AUSTRIA........................................ 181,006
EU............................................. 150,000
SWITZERLAND.................................... 428,213
FINLAND........................................ 252,000
CHEESE AND SUBSTITUTES FOR CHEESE, CONTAINING 0.5
PERCENT OR LESS BY WEIGHT OF BUTTERFAT, PROVIDED FOR
IN (EXCEPT ARTICLES WITHIN THE SCOPE OF OTHER IMPORT
QUOTAS PROVIDED FOR IN THIS SUBCHAPTER), AND
MARGARINE CHEESE:
(Note 23)........................................ 1,175,316
SWEDEN......................................... 125,316
ISRAEL......................................... 50,000
NEW ZEALAND.................................... 1,000,000
SWISS OR EMMENTHALER CHEESE WITH EYE FORMATION:
(Note 25)........................................ 10,992,735
ARGENTINA...................................... 70,885
AUSTRIA........................................ 1,345,509
AUSTRALIA...................................... 290,302
CANADA......................................... 70,000
SWITZERLAND.................................... 1,782,685
EU............................................. 350,000
FINLAND........................................ 2,722,926
ICELAND........................................ 150,001
NORWAY......................................... 3,070,427
CZECH REPUBLIC................................. 400,000
[[Page 1252]]
HUNGARY........................................ 400,000
SWEDEN......................................... 300,000
------------------
TOTAL: CHEESE ARTICLES......................... 38,903,522
------------------------------------------------------------------------
\1\ This Appendix includes articles for which countries of origin
designate importers. The articles and quantities included in this
appendix for certain cheese may be modified as provided in Sec.
6.25(d)(3).
Signed at Washington, DC on January 2, 1996.
Dan Glickman,
Secretary of Agriculture.
[FR Doc. 96-329 Filed 1-17-96; 8:45 am]
BILLING CODE 3410-10-P
