E6-8402. Mexican Cement Import Licensing System

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Proposed rule and request for public comment.

SUMMARY:

The Department of Commerce (Commerce) requests public comment on a proposed rule to establish a Mexican Cement Import Licensing System in accordance with the Agreement Between the Office of the United States Trade Representative and the Department of Commerce of the United States of America and the Ministry of Economy of the United Mexican States (Secretaria de Economia) on Trade in Cement (Agreement), dated March 6, 2006. This cement licensing system is intended to enable Commerce to monitor the sub-regional export limits established by the Agreement for the three year duration of the Agreement.

DATES:

Written comments must be received on or before 5 p.m., Eastern daylight savings time on June 30, 2006.

ADDRESSES:

Written comments should be sent to Jonathan Herzog, Senior International Trade Policy Analyst, Import Administration, Room 1870, Department of Commerce, 14th and Constitution Ave., NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT:

Sally C. Gannon [phone]; Judith Wey Rudman [phone]; or Jonathan Herzog [phone].

SUPPLEMENTARY INFORMATION:

On March 6, 2006, the Office of the United States Trade Representative (USTR), Commerce, and Secretaria de Economia signed a bilateral agreement concerning trade in cement between the United States and Mexico. A copy of the Agreement is available on the Commerce Web site: http://www.ia.ita.doc.gov/​download/​mexico-cement/​cement-final-agreement.pdf. This Agreement settles ongoing litigation before the North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) dispute resolution panels, and provides for export limits for three years. This Agreement applies only to cement from Mexico as defined in Section I.L. of the Agreement.

The Agreement provides that Commerce shall establish an import licensing system in order to implement the terms of this Agreement. Consistent with Reorganization Plan No. 5 of 1950, effective May 24 (1950 15 FR 3174, 64 Stat. 1263), the Secretary of Commerce has delegated the authority for establishing and operating such a system, as provided under 13 U.S.C. 301(a) and 302, to the International Trade Administration (ITA) under Delegation of Authority 10-3. In order to implement this authority, ITA is today publishing this proposed rule and request for comment to establish an internet-based cement licensing system called the Mexican Cement Import Licensing System. The Mexican Cement Import Licensing System is designed to allow Commerce to gain all of the real-time information it needs to meet its obligations under this important bilateral trade agreement with Mexico. The system would be comprised of two parts:

(1) An online registration system for cement importers; and

(2) An automatic cement license issuance system.

All importers of cement products from Mexico would be required to obtain an import license and provide that license number to U.S. Customs and Border Protection (CBP) on the entry summary (CBP Form 7501). In addition to the standard information required to be reported on CBP Form 7501, the Mexican Cement Import License application will require the importer of record to report the Sub-region of Final Destination, the Final Destination, and the Mexican Export License Number, and to state whether the shipment is being made for disaster relief, as defined in the Agreement. The information gathered by the Mexican Cement Import Licensing System will provide Commerce with specific, reliable, and real-time data which will be used to monitor imports pursuant to the Agreement.

The Agreement is complex and involves sub-regional export limits which are in effect for a maximum of three years. Without access to import data on a real-time basis through the Mexican Cement Import Licensing System, Commerce will not be able to effectively monitor and administer the Agreement. If an allegation of circumvention of the Agreement is raised, Commerce may be required to conduct an accelerated changed circumstances review within 90 days. Currently, it can take up to 60 days to obtain from CBP and the Bureau of the Census the information necessary to determine whether Commerce needs to conduct such a review. In addition, certain of the information required by Commerce is not available from CBP (i.e., sub-region of final destination, statement of use for the purposes of disaster relief, and Mexican Export License number). To ensure that Commerce has the ability to fully monitor imports pursuant to this Agreement and to enable Commerce to make a timely determination as to whether a changed circumstances review is appropriate, it is necessary to have access to real-time information on imports of Mexican cement. Therefore, due to the relatively short duration of the Agreement, the level of detail of the monitoring requirements, and Commerce's obligations under the terms of the Agreement, it is essential that Commerce implement the Mexican Cement Import Licensing System.

Mexican Cement Import Licensing System

The Mexican Cement Import Licensing System would include both the online registration system for importers and the automatic cement import license issuance system. In order to obtain a cement import license, an importer, or the importer's agent or customs broker, must first register with Commerce and be assigned a user identification number. This identification number would be required to log on to the cement import license issuance system. A single user identification number would be issued to an importing company or brokerage house. Operating units within the company (e.g., individual branches, divisions or employees) would all use the same user identification code. The cement import license issuance system would be designed to allow multiple users of a single identification number from different locations within the company to enter information simultaneously.

Any company or broker with a United States address may register and obtain a user identification number. There is no fee to register and a user identification number would be issued within two (2) business days. As part of the registration process, the importer, agent or customs broker would be required to provide certain general information. Such information would include the applicant company name, Employer Identification Number (EIN) or the CBP ID number (where no EIN is available), address, phone number, contact information and e-mail address for both the company headquarters and any branch offices that would be applying for cement import licenses. This information would be used solely for the purposes of administering the Mexican Cement Import Licensing System. The information would not be released by Commerce, except as permitted by U.S. law. Commerce would begin registering and issuing user identification numbers at least one week prior to the implementation date of the Mexican Cement Import Licensing System. The user ID would be needed to apply for the license.

Cement import licenses would be issued to registered importers, customs brokers or their agents through an automatic Mexican Cement Import Licensing System. The separately-issued user identification number discussed above would be required to access the system. There would be no fee charged to apply for the import licenses. Cement import licenses would be issued automatically after the completion of the application form. In order to obtain a license, the applicant must report the following information about the cement import transaction:

(1) Applicant company name and address;

(2) Applicant contact name, phone number, fax number and e-mail address;

(3) Importer name;

(4) Exporter name;

(5) Manufacturer name;

(6) Country of origin;

(7) Country of exportation;

(8) Expected date of export;

(9) Expected date of import;

(10) Expected port of entry;

(11) Sub-Region of Final Destination: Indicate the Sub-region where either the Mexican Cement will be consumed by an affiliated company to make concrete or concrete products or the Sub-region of the first unaffiliated purchaser of the Mexican Cement.

(12) Final Destination: Indicate the complete name and address (including county) of either the affiliated company that will consume the Mexican Cement or the first unaffiliated purchaser of the Mexican Cement. If either is not known when the Import License is applied for, indicate the address (including county) where the Mexican Cement will be siloed/warehoused until the time of shipment to the first unaffiliated purchaser.

(13) CBP entry number, if known;

(14) Current Harmonized Tariff System of the United States (HTSUS) number (from Chapter 25 of the HTSUS);

(15) Quantity (in metric tons);

(16) Customs value (U.S. $);

(17) Whether the entry is made pursuant to the disaster relief provisions of the Agreement; and

(18) Mexican Export License Number.

Much of the information requested on the application form will be filled out automatically based on information provided during the registration process (e.g., applicant company name and address) or will be self-generated from other information reported in the form (e.g., product description or average unit value). Other information will be available from drop-down lists in the application form (e.g., HTSUS numbers covered by the Agreement, country of origin, port of entry). A sample copy of the cement import license application form is available for viewing on Import Administration's Web site at http://ia.ita.doc.gov/​cement-agreement/​index.html. As currently proposed, a CBP entry number will not be required to be reported in order to obtain a license, but applicants would be encouraged to do so if the CBP entry number is known at the time of filing for the license.

Upon completion of the application form, the importer, customs broker or the importer's agent would certify as to the accuracy and completeness of the information and submit the form electronically. After refreshing the page, the system will automatically issue a cement import license number. The refreshed form containing the submitted information and the newly issued import license number will appear on the screen (the “license form”). Applicants can print the import license form only at that time. For security purposes, users will not be able to retrieve licenses from the license system at a later date for reprinting. If needed, copies of completed license forms can be requested from Commerce during normal business hours.

The cement import license will be required for every entry summary (CBP Form 7501) submitted for covered cement products. As currently envisioned, a single license could cover multiple products as long as the importer, exporter, manufacturer, first unaffiliated customer, sub-region, and final destination of the product, and country of origin and exportation are the same. However, separate licenses would be required if any of the above information differed with respect to a given set of covered imported cement products. As a result, a single CBP entry summary may require more than one cement import license. The applicable license number(s) must cover the total quantity of cement entered and should match the information provided on the CBP Form 7501. There is no requirement to present physical copies of the license forms at the time of submitting CBP Form 7501; however, parties must maintain copies in accordance with CBP's normal requirements.

Certain aggregate information collected from the license application system will be posted on the Import Administration website. Only certain aggregate information will be available to the public. All other information, including copies of the licenses and the names of importers, exporters, and manufacturers, will be considered business proprietary information and will not be released to the public. The use of this information will be strictly limited to the administration of the Agreement and it will not be kept longer than the period of time legally required beyond the expiration or termination of the Agreement.

Duration of the Cement Import License

The cement import license can be applied for up to 30 days prior to the expected date of importation and until the date of filing of CBP Form 7501. The cement import license is valid for up to 60 days; however, import licenses that were valid on the date of importation but expired prior to the filing of CBP Form 7501 will be accepted. Special timing issues surrounding withdrawal of products from a warehouse, Foreign Trade Zone (FTZ) issues, and temporary imports will be handled separately, as they arise.

Handling of Cement to Foreign Trade Zones

Commerce proposes to require a license for cement shipped into a United States FTZ. Because a CBP entry number would not be available for shipments entering the FTZ, the code “FTZ” would be entered on the license application. There is no requirement to present physical copies of the license forms at the time of the FTZ admission; however, copies must be maintained in accordance with CBP's normal requirements. FTZ admission documents submitted without the required license number(s) will be considered to be in circumvention of the Agreement. A further Mexican cement license will not be required for shipments from FTZs into the commerce of the United States.

Mexican Export License Requirement

Pursuant to Section IV.C. of the Agreement, each importer is required to submit a valid Mexican Export License to CBP with its 7501 entry summary. For multiple shipments at multiple ports, or multiple entries at one port, the original Mexican Export License shall be presented with the first entry summary and a copy of the Export License shall be presented with each subsequent entry summary.

CBP Requirements

CBP intends to publish a separate Notice of Proposed Rulemaking (NPRM), setting requirements for the timely filing of the cement import license information at entry.

Hours of Operation

As currently proposed, parties will be able to access the system 24 hours a day, 7 days a week. If the system is down for an extended period of time, parties will be able to obtain licenses from Commerce via fax during regular business hours.

Duration

The licensing program will be in effect for the duration of the Agreement only. The licenses, however, will be valid for 10 business days after the expiration or termination of the Agreement to allow for the final filing of required CBP documentation.

Regulatory Flexibility Act

The Chief Counsel for Regulation certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, will not have a significant impact on a substantial number of small entities as that term is defined in the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. A summary of the factual basis for this certification is below.

Commerce is unable to determine the number of brokerage companies and importers that would be impacted by this rule as Commerce does not collect this information. However, based on historical data, Commerce estimates that there are few brokerage companies and importers that would be considered small entities under Small Business Administration's standard (5 U.S.C. 603(b)(3)). Typically, larger brokers handle Mexican cement shipments because of the capital that is needed upfront to handle bonds and other costs. Each importer or broker must fill out the license form for each entry of the subject merchandise. Based on CBP entry summary information, we estimate that 12,150 licenses will be issued each year. Of this number, only a small percentage of licenses would be requested by a small entity as a result of this rule.

Even if this rule impacted a large number of small entities, these entities would not incur significant costs to comply with the proposed regulations. Most brokerage companies that are currently involved in filing required documentation for importing goods into the United States, specifically CBP documentation, are accustomed to CBP's automated systems. Today, more than 99 percent of the CBP filings are handled electronically. Therefore, the web-based nature of this simple license application should not impose a significant cost to any firm in completing this new requirement. However, should a company prefer or need to apply for an ID or license by other than electronic means, a fax/phone option will be available at Commerce during regular business hours. There is no cost to register for a company-specific user identification number and no cost to file for the license.

Each license form is expected to take at most about 10 minutes to complete using much of the same information the brokers will use to complete their CBP entry summary documentation. The response time should not vary widely because the same information is used to fill out other required CBP documents. The estimated average cost to private sector respondents is $20.00 per hour.

Based on the estimated 12,150 licenses that will be issued each year, the total cost to respondents as a result of this rule is $40,500.00. Based on historic CBP information, there are few small entities that would be affected by this rule. Therefore, of this amount, only a small percentage of the total cost would be incurred by small entities. Based on this factual basis, this action will not have a significant economic impact on a substantial number of small entities.

Paperwork Reduction Act

This proposed rule contains collection-of-information requirements subject to review and approval by OMB under the Paperwork Reduction Act (PRA). These requirements have been submitted to OMB for approval. The public reporting burden for these collections of information is estimated at 10 minutes. Parties must maintain copies in accordance with CBP's existing requirements. The licensing system requests information already required of an importer, approval is automatic, and the importer will have ample opportunity and time to apply. These estimates of time required to complete an application include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments on the reporting burden estimate or any other aspect of the requirements in this proposed rule to ITA Office of Policy at the addresses above and to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 (Attention: ITA Desk Officer).

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the Paperwork Reduction Act unless that collection displays a valid OMB Control Number.

Executive Order 12866

It has been determined that this rule is significant for purposes of Executive Order 12866 of September 30, 1993 (“Regulatory Planning and Review”) (58 FR 51735 (October 4, 1993)).

Executive Order 13132

This rule does not contain policies with federalism implications as that term is defined in Section 1(a) of Executive Order 13132, dated August 4, 1999 (64 FR 43255 (August 10, 1999)).

List of Subjects in 19 CFR Part 360

• Customs duties and inspection
• Imports
• Reporting and recordkeeping requirements
• Textiles

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For the reasons set out in the preamble, 19 CFR part 360 is proposed to be added to read as follows:

PART 360—MEXICAN CEMENT IMPORT LICENSING SYSTEM

360.201

Mexican Cement Import Licensing System.

360.202

Online registration.

360.203

Automatic issuance of import licenses.

360.204

Fees.

360.205

Hours of operation.

Authority: 13 U.S.C. 301(a) and 302.

§ 360.201

Mexican Cement Import Licensing System.

(a) In general. (1) On March 6, 2006, the Agreement Between the Office of the United States Trade Representative and the Department of Commerce of the United States of America and the Ministry of Economy of the United Mexican States (Secretaria de Economia) on Trade in Cement (Agreement) was signed. Pursuant to the Agreement, the United States has agreed to implement an import licensing system that covers imports of merchandise covered by the scope of the antidumping duty order on Cement from Mexico. Some of the data to be collected is in addition to data currently collected by U.S. Customs and Border Patrol. The data collected by the Mexican Cement Import Licensing system will be used by the Department of Commerce to monitor imports of Mexican Cement, as the imports occur.

(2) Mexican Cement is defined as gray portland cement and clinker from Mexico. Gray portland cement is a hydraulic cement and the primary component of concrete. Clinker, an intermediate material produced when manufacturing cement, has no use other than being ground into finished cement. Specifically included within the scope of this definition are pozzolanic blended cements and oil well cements. Specifically excluded are white cement and Type “S” masonry cement. Gray portland cement is currently classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) item number 2523.29 and cement clinker is currently classifiable under HTSUS item number 2523.10. Gray portland cement has also been entered under HTSUS item number 2523.90 as “other hydraulic cements.” These HTSUS subheadings are provided for convenience and USCBP purposes; the written definition is controlling for purposes of this Agreement.

(3) The Mexican Cement Import Licensing System includes an online registration system. All imports of Mexican cement, are subject to the Mexican Cement Import Licensing requirements. Information gathered from these licenses will be used to ensure that the terms of the Agreement are complied with and enforced.

(4) A single license may cover multiple products as long as certain information on the license (e.g., importer, exporter, manufacturer, and sub-region of final destination) remains the same. However, separate licenses for Mexican cement entered under a single entry will be required if the information differs. As a result, a single CBP entry summary may require more than one Mexican cement import license. The applicable license(s) must cover the total quantity of Mexican cement entered and should cover the same information provided on CBP Form 7501.

(b) Entries for consumption. All entries for consumption of covered Mexican cement products will require an import license prior to the filing of CBP Form 7501. The license(s) number must be reported on CBP Form 7501 at the time of filing. There is no requirement to present physical copies of the license forms at the time of filing CBP Form 7501; however, copies must be maintained in accordance with CBP's existing requirements. If CBP Form 7501 is submitted without the required license number(s) it will be considered circumvention of the Agreement.

(c) Foreign Trade Zone entries. All shipments of covered Mexican cement into FTZs, known as FTZ admissions, will require an import license prior to the filing of FTZ admission documents. The license number(s) must be reported on the application for FTZ admission and/or status designation (CBP Form 214) at the time of filing. There is no requirement to present physical copies of the license forms at the time of FTZ admission; however, copies must be maintained in accordance with CBP's existing requirements. FTZ admission documents submitted without the required license number(s) will be considered to be in circumvention of the Agreement. A further Mexican cement license will not be required for shipments from FTZs into the commerce of the United States.

(d) Mexican Export License Requirement. Each importer is required to submit a valid Mexican Export License to CBP with its 7501 entry summary. For multiple shipments at multiple ports, or multiple entries at one port, the original Mexican Export License shall be presented with the first 7501 entry summary and a copy of the Export License shall be presented with each subsequent 7501 entry summary.

§ 360.202

Online registration.

(a) In General. (1) Any importer, importing company, customs broker or importer's agent with a U.S. street address may register and obtain the user identification number necessary to log on to the automatic Mexican cement import license issuance system. Foreign companies may obtain a user identification number if they have a U.S. address through which they may be reached; P.O. Boxes will not be accepted. A user identification number normally will be issued within two business days. Companies will be able to register online through the import licensing Web site. However, should a company prefer to apply for a user identification number non-electronically, a phone/fax option will be available at Commerce during regular business hours.

(2) This user identification number will be required in order to log on to the Mexican cement import license issuance system. A single user identification number will be issued to an importing company, brokerage house or importer's agent. Operating units within the company (e.g., individual branches, divisions, or employees) will all use the same company user identification number. The Mexican cement import license issuance system will be designed to allow multiple users of a single identification number from different locations within the company to enter information simultaneously.

(b) Information required to obtain a user identification number. In order to obtain a user identification number, the importer, importing company, customs broker or importer's agent will be required to provide general information. This information will include: The filer's company name, employer identification number (EIN) or CBP ID number (where no EIN is available), U.S. street address, telephone number, contact information and e-mail address for both the company headquarters and any branch offices that will be applying for Mexican cement import licenses. This information will not be released by Commerce, except as required by U.S. law.

§ 360.203

Automatic issuance of import licenses.

(a) In general. Mexican cement import licenses will be issued to registered importers, customs brokers or their agents through an automatic Mexican cement import license issuance system. The licenses will be issued automatically after the completion of the form.

(b) CBP entry number. Filers are not required to report a CBP entry number to obtain an import license but are encouraged to do so if the CBP entry number is known at the time of filing for the license.

(c) Information required to obtain an import license. (1) The following information is required to be reported in order to obtain an import license (if using the automatic licensing system, some of this information will be provided automatically from information submitted as part of the registration process):

(i) Applicant company name and address;

(ii) Applicant contact name, phone number, fax number and e-mail address;

(iii) Importer name;

(iv) Exporter name;

(v) Manufacturer name;

(vi) Country of origin;

(vii) Country of exportation;

(viii) Expected date of export;

(ix) Expected date of import;

(x) Expected port of entry;

(xi) Sub-Region of Final Destination: Indicate the Sub-region where either the Mexican Cement will be consumed by an affiliated company to make concrete or concrete products or the Sub-region of the first unaffiliated purchaser of the Mexican Cement.

(xii) Final Destination: Indicate the complete name and address (including county) of either the affiliated company that will consume the Mexican Cement or the first unaffiliated purchaser of the Mexican Cement. If either is not known when the Import License is issued, indicate the address (including county) where the Mexican Cement will be siloed/warehoused until the time of shipment to the first unaffiliated purchaser.

(xiii) CBP entry number, if known;

(xiv) Current Harmonized Tariff System of the United States (HTSUS) number (from Chapter 25 of the HTSUS);

(xv) Quantity (in metric tons);

(xvi) Customs value (U.S. $);

(xvii) Whether the entry is made pursuant to the disaster relief provisions of the Agreement; and

(xviii) Mexican Export License Number.

(2) Certain fields will be automatically filled out by the automatic license system based on information submitted by the filer (e.g., product category, unit value). Filers should review these fields to help confirm the accuracy of the submitted data.

(3) Upon completion of the form, the importer, customs broker or the importer's agent will certify as to the accuracy and completeness of the information and submit the form electronically. After submitting the completed form, the system will automatically issue a Mexican cement import license number. The refreshed form containing the submitted information and the newly issued license number will appear on the screen (the “license form”). Filers can print the license form only at that time. For security purposes, users will not be able to retrieve licenses from the license system at a later date for reprinting. If needed, copies of completed license forms can be requested from Commerce during normal business hours.

(d) Duration of the Mexican cement import license. The Mexican cement import license can be applied for up to 30 days prior to the expected date of importation and until the date of filing of CBP Form 7501, or in the case of FTZ entries, the filing of CBP Form 214. The Mexican cement import license is valid for 60 days; however, import licenses that were valid on the date of importation but expired prior to the filing of CBP Form 7501 will be accepted.

(e) Correcting submitted license information. Due to data security issues, it will not be possible to alter an existing license electronically once it has been issued. However, prior to the entry date listed on CBP Form 7501, filers will be able to cancel previously issued licenses and file for a new license with the correct information. If the filer prefers to have Commerce personnel change the license, there will be a telephone/fax option.

§ 360.204

Fees.

No fees will be charged for obtaining a user identification number, issuing a Mexican cement import license.

§ 360.205

Hours of operation.

The automatic licensing system will generally be accessible 24 hours a day, 7 days a week but may be down at selected times for server maintenance. If the system is down for an extended period of time, parties will be able to obtain licenses from Commerce directly via fax during regular business hours.

Dated: May 22, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.