[WPRT 105-6]
[From the U.S. Government Publishing Office]
105th Congress WMCP:
1st Session COMMITTEE PRINT 105-6
_______________________________________________________________________
SUBCOMMITTEE ON TRADE
OF THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
__________
WRITTEN COMMENTS
ON
MISCELLANEOUS CORRECTIONS TO TRADE LEGISLATION AND MISCELLANEOUS DUTY
SUSPENSION BILLS
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13
DECEMBER 30, 1997
Printed for the use of the Committee on Ways and Means by its staff
---------
U.S. GOVERNMENT PRINTING OFFICE
43-686 CC WASHINGTON : 1997
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Trade
PHILIP M. CRANE, Illinois, Chairman
BILL THOMAS, California ROBERT T. MATSUI, California
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
AMO HOUGHTON, New York RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
WALLY HERGER, California
JIM NUSSLE, Iowa
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are published in
electronic form. The printed hearing record remains the official
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printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
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include materials which were not submitted in an electronic format.
These materials are kept on file in the official Committee records.
C O N T E N T S
__________
Page
Advisory of Monday, June 30, 1997, announcing request for written
comments on miscellaneous corrections to trade legislation and
miscellaneous duty suspension bills............................ 1
______
Proposed Miscellaneous Corrections #1:
American Association of Exporters and Importers, New York,
NY, statement.............................................. 10
Customs and International Trade Bar Association, New York,
NY, Rufus E. Jarman, Jr. and Bernard J. Babb, letter....... 10
Stewart and Stewart, Terence P. Stewart, statement........... 12
Proposed Miscellaneous Corrections #2:
Customs and International Trade Bar Association, New York,
NY, Rufus E. Jarman, Jr. and Bernard J. Babb, letter....... 10
Stewart and Stewart, Terence P. Stewart, statement........... 12
Proposed Miscellaneous Corrections #3:
Aectra Refining & Marketing, Inc., Houston, TX, Anthony J.
Voigt, letter.............................................. 16
Ackell, Joseph J., Northville Industries Corp., Melville, NY,
letter..................................................... 47
Adam, Jane, ARCO Products Company, Los Angeles, CA, letter... 18
American Petroleum Institute, Charles J. DiBona, letter...... 17
ARCO Chemical Company, Newton Square, PA, Clarisse G.
McCormick, letter.......................................... 18
ARCO Products Company, Los Angeles, CA, Jane Adam, letter.... 18
Babb, Bernard J., and Rufus E. Jarman, Jr., Customs and
International Trade Bar Association, New York, NY, letter.. 10
Bailey, Jim, Fina Oil and Chemical Company, Dallas, TX,
letter..................................................... 29
Basis Clearing, Inc., Houston, TX, Kenneth J. Stockel, letter 19
Basis Petroleum, Inc., Houston, TX, Georganne Hodges, letter. 20
Berniard, L.J., III, Exxon Company, U.S.A., Houston, TX,
letter..................................................... 28
BP Chemicals Inc., Cleveland, OH, Ann Carter, letter......... 20
BP Oil Company, Cleveland, OH, Kevin M. Carr, letter......... 21
Cain, Mark, Statoil North America Inc., Stamford, CT, letter. 51
Cargill/Northeast Petroleum, Beverly, MA, Barb Ducat, letter. 22
Carr, Kevin M., BP Oil Company, Cleveland, OH, letter........ 21
Carter, Ann, BP Chemicals Inc., Cleveland, OH, letter........ 20
Chevron Chemical Company, Houston, TX, Robert E. Kennedy,
letter..................................................... 22
Chevron Products Company, Concord, CA, Pat E. Yarrington,
letter..................................................... 23
CITGO Petroleum Corporation, Tulsa, OK, Ezra C. Hunt, letter. 24
Clawson, James B., JBC International, letter................. 37
Conoco Inc., Ponca City, OK, James A. McDonald, letter....... 24
Customs and International Trade Bar Association, New York,
NY, Rufus E. Jarman, Jr. and Bernard J. Babb, letter....... 10
Dalsin, Michelle S., Northwest Airlines, Inc., St. Paul, MN,
letter..................................................... 47
Delta Air Lines, Inc., Atlanta, GA, Thomas J. Roeck, Jr.,
letter..................................................... 25
Denninger, Edward P., Sr., J.G. Eberlein & Co., Inc., New
York, NY, letter........................................... 38
Der Hagopian, David J., Entec Polymers, Inc., Maitland, FL,
letter..................................................... 28
DiBona, Charles J., American Petroleum Institute, letter..... 17
Dow Chemical Company, Lake Jackson, TX, John D. Williams,
Jr., letter................................................ 26
Ducat, Barb, Cargill/Northeast Petroleum, Beverly, MA, letter 22
Dugan, Michael, National Customs Brokers & Forwarders
Association of America, letter............................. 45
E.I. du Pont de Nemours and Company, Wilmington, DE, Janet S.
Kempf, letter.............................................. 27
Enron Corp., E. Joseph Hillings, letter...................... 27
Entec Polymers, Inc., Maitland, FL, David J. Der Hagopian,
letter..................................................... 28
Exxon Company, U.S.A., Houston, TX, L.J. Berniard III, letter 28
Faneuil, Edward J., Global Petroleum Corp., Waltham, MA,
letter..................................................... 32
Fina Oil and Chemical Company, Dallas, TX, Jim Bailey, letter 29
Galaxy Energy (U.S.A.), Inc., Houston, TX, Paul A. Strong,
letter..................................................... 30
George E. Warren Corporation, Vero Beach, FL, Jonathan W.
Taylor, letter............................................. 30
Georgia Gulf Corporation, Plaquemine, LA, Janice Owens,
letter..................................................... 31
Global Petroleum Corp., Waltham, MA, Edward J. Faneuil,
letter..................................................... 32
Gulf Coast Drawback Services, Inc., Katy, TX, Bobby Waid,
letter..................................................... 32
Hattunen, Mauri, Neste Oy, Houston, TX, letter............... 46
Hillings, E. Joseph, Enron Corp., letter..................... 27
Hirako, Hideaki, ITOCHU International, Inc., Houston, TX,
letter..................................................... 37
H. Muehlstein & Company, Inc., Norwalk, CT, Jerry J.
Johnston, letter........................................... 33
Hodges, Georganne, Basis Petroleum, Inc., Houston, TX, letter 20
Holden, Wayne, NOVA Chemicals Inc., Houston, TX, letter...... 48
Houston Marine Services, Inc., Houston, TX, James S. Riley,
Jr., letter................................................ 34
Hunt, Ezra C., CITGO Petroleum Corporation, Tulsa, OK, letter 24
Hurwitz, Geoffrey B., Rohm and Haas Company, Philadelphia,
PA, letter................................................. 50
Independent Fuel Terminal Operators Association, statement... 34
ITOCHU International, Inc., Houston, TX, Hideaki Hirako,
letter..................................................... 37
Ivy, Kim M., Matrix Marine Fuels, L.L.C., Houston, TX, letter 41
Jarman, Rufus E., Jr., and Bernard J. Babb, Customs and
International Trade Bar Association, New York, NY, letter.. 10
JBC International, James B. Clawson, letter.................. 37
J.G. Eberlein & Co., Inc., New York, NY, Edward P. Denninger,
Sr., letter................................................ 38
J.M. Rodgers Co., Inc., New York, NY, Frank McCarthy, letter. 39
Johnston, Jerry J., H. Muehlstein & Company, Inc., Norwalk,
CT, letter................................................. 33
Keating, James J., Petro-Diamond Incorporated, Irvine, CA,
letter..................................................... 49
Kempf, Janet S., E.I. du Pont de Nemours and Company,
Wilmington, DE, letter..................................... 27
Kennedy, Robert E., Chevron Chemical Company, Houston, TX,
letter..................................................... 22
Lowell, Richard E., MIECO Inc., Long Beach, CA, letter....... 42
Lyondell Petrochemical Company, Houston, TX, P. Beth
McCutcheon, letter......................................... 40
Magnuson, William J., Jr., Sterling Chemicals, Inc., Houston,
TX, letter................................................. 52
MAPCO Alaska Petroleum, Inc., Anchorage, AK, Randy M.
Newcomer, letter........................................... 41
Matrix Marine Fuels, L.L.C., Houston, TX, Kim M. Ivy, letter. 41
McCarthy, Frank, J.M. Rodgers Co., Inc., New York, NY, letter 39
McCormick, Clarisse G., ARCO Chemical Company, Newton Square,
PA, letter................................................. 18
McCutcheon, P. Beth, Lyondell Petrochemical Company, Houston,
TX, letter................................................. 40
McDonald, James A., Conoco Inc., Ponca City, OK, letter...... 24
MIECO Inc., Long Beach, CA, Richard E. Lowell, letter........ 42
Millennium Petrochemicals Inc., Cincinnati, OH, Henley R.
Webb, letter............................................... 43
Montell USA, Inc., Wilmington, DE, Randall W. Simpson, letter 43
National Council on International Trade Development, Ray
Shaw, letter............................................... 44
National Customs Brokers & Forwarders Association of America,
Michael Dugan, letter...................................... 45
Neste Oy, Houston, TX, Mauri Hattunen, letter................ 46
Newcomer, Randy M., MAPCO Alaska Petroleum, Inc., Anchorage,
AK, letter................................................. 41
Northville Industries Corp., Melville, NY, Joseph J. Ackell,
letter..................................................... 47
Northwest Airlines, Inc., St. Paul, MN, Michelle S. Dalsin,
letter..................................................... 47
NOVA Chemicals Inc., Houston, TX, Wayne Holden, letter....... 48
O'Toole, Joseph W., Phillips Petroleum Company, Bartlesville,
OK, letter................................................. 49
Owens, Janice, Georgia Gulf Corporation, Plaquemine, LA,
letter..................................................... 31
Palumbo, Michael J., Trans World Airlines, Inc., St. Louis,
MO, letter................................................. 53
Petro-Diamond Incorporated, Irvine, CA, James J. Keating,
letter..................................................... 49
Phillips Petroleum Company, Bartlesville, OK, Joseph W.
O'Toole, letter............................................ 49
Riley, James S., Jr., Houston Marine Services, Inc., Houston,
TX, letter................................................. 34
Roeck, Thomas J., Jr., Delta Air Lines, Inc., Atlanta, GA,
letter..................................................... 25
Rohm and Haas Company, Philadelphia, PA, Geoffrey B. Hurwitz,
letter..................................................... 50
Rossi, Roberta M., Valero Refining Company, Houston, TX,
letter..................................................... 54
Shaw, Ray, National Council on International Trade
Development, letter........................................ 44
Shell Oil Company, Houston, TX, Steven C. Stryker, letter.... 51
Simpson, Randall W., Montell USA, Inc., Wilmington, DE,
letter..................................................... 43
Sines, James V., United Airlines, Chicago, IL, letter........ 54
Statoil North America Inc., Stamford, CT, Mark Cain, letter.. 51
Sterling Chemicals, Inc., Houston, TX, William J. Magnuson,
Jr., letter................................................ 52
Stockel, Kenneth J., Basis Clearing, Inc., Houston, TX,
letter..................................................... 19
Strong, Paul A., Galaxy Energy (U.S.A.), Inc., Houston, TX,
letter..................................................... 30
Stryker, Steven C., Shell Oil Company, Houston, TX, letter... 51
Taylor, Jonathan W., George E. Warren Corporation, Vero
Beach, FL, letter.......................................... 30
Thompson, J.W., Venture Coke Company L.L.C., Houston, TX,
letter..................................................... 55
Trans World Airlines, Inc., St. Louis, MO, Michael J.
Palumbo, letter............................................ 53
Ultramar Diamond Shamrock Corporation, San Antonio, TX, W.
Reed Williams, letter...................................... 53
United Airlines, Chicago, IL, James V. Sines, letter......... 54
Valero Refining Company, Houston, TX, Roberta M. Rossi,
letter..................................................... 54
Venture Coke Company L.L.C., Houston, TX, J.W. Thompson,
letter..................................................... 55
Voigt, Anthony J., Aectra Refining & Marketing, Inc.,
Houston, TX, letter........................................ 16
Waid, Bobby, Gulf Coast Drawback Services, Inc., Katy, TX,
letter..................................................... 32
Webb, Henley R., Millennium Petrochemicals Inc., Cincinnati,
OH, letter................................................. 43
Williams, John D., Jr., Dow Chemical Company, Lake Jackson,
TX, letter................................................. 26
Williams, W. Reed, Ultramar Diamond Shamrock Corporation, San
Antonio, TX, letter........................................ 53
Yarrington, Pat E., Chevron Products Company, Concord, CA,
letter..................................................... 23
Proposed Miscellaneous Corrections #4:
BASF Corporation, Mount Olive, NJ, Richard J. Salamone,
letter..................................................... 56
Customs and International Trade Bar Association, New York,
NY, Rufus E. Jarman, Jr. and Bernard J. Babb, letter....... 10
Gulf Coast Drawback Services, Inc., Katy, TX, Bobby Waid,
letter..................................................... 57
JBC International, James B. Clawson, letter.................. 37
J.G. Eberlein & Co., Inc., New York, NY, Edward P. Denninger,
Sr., letter................................................ 38
J.M. Rodgers Co., Inc., New York, NY, Frank McCarthy, letter. 39
National Customs Brokers & Forwarders Association of America,
Michael Dugan, letter...................................... 45
Proposed Miscellaneous Corrections #5:
IMS Worldwide, Inc., Friendswood, TX, statement.............. 58
JBC International, James B. Clawson, letter.................. 37
Massachusetts Port Authority, Ralph F. Cox, letter........... 59
Proposed Miscellaneous Corrections #6:
Inflight Duty Free Shop, Inc., Jamaica, NY:
Peter J. Cathey, letter.................................. 60
Mario Scorcia, letter.................................... 62
Inflight Duty Free Shop, Inc., Chicago Station, Schiller
Park, IL, Celeste Moran, letter............................ 62
Inflight Duty Free Shop, Inc., Detroit Station, Romulus, MI,
Robert Papelian, letter.................................... 63
Proposed Miscellaneous Corrections #7:
Air Courier Conference of America, Falls Church, VA, Evelyn
M. Suarez, statement....................................... 64
Air Transport Association, William Van Deventer, statement... 65
American Automobile Manufacturers Association, statement..... 68
American Watch Association, Coalition to Preserve the
Integrity of American Trademarks, and the International
Anticounterfeiting Coalition; Charles E. Buffon, Laurie C.
Self, John S. Bliss, and Emilio G. Collado, joint letter
and attachments............................................ 70
Customs and International Trade Bar Association, New York,
NY, Rufus E. Jarman, Jr. and Bernard J. Babb, letter....... 10
Eastman Kodak Company, statement and attachments............. 77
International Trademark Association, David Stimson, letter... 83
JBC International, James B. Clawson, letter.................. 37
Stewart and Stewart, Terence P. Stewart, statement........... 12
Proposed Miscellaneous Corrections #8:
American Automobile Manufacturers Association, statement..... 68
JBC International, James B. Clawson, letter.................. 37
Joint Industry Group, statement.............................. 85
Proposed Miscellaneous Corrections #9:
JBC International, James B. Clawson, letter.................. 37
Joint Industry Group, statement.............................. 85
Proposed Miscellaneous Corrections #10:
American Automobile Manufacturers Association, statement..... 68
JBC International, James B. Clawson, letter.................. 37
Joint Industry Group, statement.............................. 85
Stewart and Stewart, Terence P. Stewart, statement........... 12
Proposed Miscellaneous Corrections #11:
American Association of Exporters and Importers, New York,
NY, statement.............................................. 10
Stewart and Stewart, Terence P. Stewart, statement........... 12
H.R. 1097: No comments submitted.
H.R. 1214: No comments submitted.
H.R. 1304: Ahlstrom Filtration, Inc., Mt. Holly Springs, PA,
Kelly Rennels, letter.......................................... 89
H.R. 1548: No comments submitted.
H.R. 1606: No comments submitted.
H.R. 1607: No comments submitted.
H.R. 1677: No comments submitted.
H.R. 1678: No comments submitted.
H.R. 1742:
Hoechst Corporation, W. Anthony Shaw, letter................. 91
ICF Industries, Inc., New York, NY, statement and attachment. 91
National Knitwear & Sportswear Association, New York, NY,
Seth M. Bodner, letter..................................... 97
North American Corporation, Elizabethton, TN, Charles K.
Green, letter.............................................. 98
H.R. 1793: No comments submitted.
H.R. 1852: Hoechst Corporation, W. Anthony Shaw, letter.......... 100
H.R. 1875:
Chocolate Manufacturers Association and National
Confectioners Association, McLean, VA, Lawrence T. Graham,
joint letter............................................... 101
Golden Peanut Company, Alpharetta, GA, James W. Dorsett,
statement.................................................. 102
H.R. 1876: No comments submitted.
H.R. 1879: No comments submitted.
H.R. 1882: No comments submitted.
H.R. 1886: Uniroyal Chemical Company, Inc., Middlebury, CT, James
B. Clawson, letter............................................. 103
H.R. 1887: Uniroyal Chemical Company, Inc., Middlebury, CT, James
B. Clawson, letter............................................. 104
H.R. 1888:
Hoechst Corporation, W. Anthony Shaw, letter................. 91
ICF Industries, Inc., New York, NY, statement and attachment. 91
National Knitwear & Sportswear Association, New York, NY,
Seth M. Bodner, letter..................................... 97
North American Corporation, Elizabethton, TN, Charles K.
Green, letter.............................................. 98
H.R. 1889:
K2 Corporation, Vashon, WA, statement........................ 105
Profiles, Inc., Ware, MA, Robert L. Brock, statement......... 107
H.R. 1890: K2 Corporation, Vashon, WA, statement................. 105
H.R. 1893: No comments submitted.
H.R. 1897: No comments submitted.
H.R. 1907: No comments submitted.
H.R. 1919: No comments submitted.
H.R. 1920: No comments submitted.
H.R. 1921: No comments submitted.
H.R. 1922: No comments submitted.
H.R. 1923: No comments submitted.
H.R. 1924: No comments submitted.
H.R. 1925: No comments submitted.
H.R. 1926: No comments submitted.
H.R. 1927: No comments submitted.
H.R. 1928: No comments submitted.
H.R. 1929: No comments submitted.
H.R. 1930: No comments submitted.
H.R. 1931: No comments submitted.
H.R. 1932: No comments submitted.
H.R. 1933: No comments submitted.
H.R. 1934: No comments submitted.
H.R. 1935: No comments submitted.
H.R. 1936: No comments submitted.
H.R. 1937: No comments submitted.
H.R. 1938: Ciba Specialty Chemicals Corporation, Tarrytown, NY,
Michelle F. Forte, letter...................................... 111
H.R. 1940: No comments submitted.
H.R. 1945:
Cooper Tire & Rubber Company, Findlay, OH, statement......... 112
Dunlop Tire Corporation, Buffalo, NY, Robert J. Schrecongost,
statement.................................................. 112
Goodyear Tire & Rubber Company, Akron, OH, statement......... 113
H.R. 1947: LTV Steel Company, Inc., Cleveland, OH, Daniel R.
Minnick, letter................................................ 114
H.R. 1954:
Hoechst Corporation, W. Anthony Shaw, letter................. 91
ICF Industries, Inc., New York, NY, statement and attachment. 91
National Knitwear & Sportswear Association, New York, NY,
Seth M. Bodner, letter..................................... 97
North American Corporation, Elizabethton, TN, Charles K.
Green, letter.............................................. 98
H.R. 1973: No comments submitted.
H.R. 2041: No comments submitted.
H.R. 2042: No comments submitted.
H.R. 2043: No comments submitted.
H.R. 2044: No comments submitted.
H.R. 2045: No comments submitted.
H.R. 2046: No comments submitted.
H.R. 2047: No comments submitted.
H.R. 2048: No comments submitted.
H.R. 2049: No comments submitted.
H.R. 2058: AgrEvo USA Company, Wilmington, DE, statement......... 116
H.R. 2059: AgrEvo USA Company, Wilmington, DE, statement......... 116
H.R. 2060: AgrEvo USA Company, Wilmington, DE, statement......... 116
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON TRADE
CONTACT: (202) 225-6649
FOR IMMEDIATE RELEASE
June 30, 1997
No. TR-10
Crane Announces Request for Written Comments
on Miscellaneous Corrections to
Trade Legislation and
Miscellaneous Duty Suspension Bills
Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade
of the Committee on Ways and Means, today announced that the
Subcommittee is requesting written public comments for the record from
all parties interested in technical corrections to recent trade
legislation and miscellaneous duty suspension proposals.
BACKGROUND:
During the 104th Congress, a number of technical amendments were
proposed to facilitate the implementation of the major trade
legislation passed during the 103rd Congress, including the North
American Free Trade Agreements Implementation Act [P.L. 103-182] and
the Uruguay Round Agreements Act [P.L. 103-465]. As a result of
consideration of these proposals and miscellaneous tariff measures,
Congress passed the Miscellaneous Trade and Technical Corrections Act
of 1996 [P.L. 104-295], which was signed into law by the President on
October 11, 1996.
As part of the ongoing process of identifying technical changes to
improve the efficiency of the trade laws, several proposals have been
submitted to the Subcommittee by the Administration and the business
community for possible consideration in future legislation. In
addition, Members have introduced legislation to provide temporary
suspension of duty or duty-free treatment for specific products.
Chairman Crane is requesting submission of written comments on these
proposed changes to U.S. trade law.
PROPOSED MISCELLANEOUS CORRECTIONS:
1. Amend 19 U.S.C. 1515(a) to provide that within 30 days from the
date an application for further review is filed, the appropriate
customs officer shall allow or deny the application and, if allowed,
forward the protest to the customs officer who will be conducting the
further review.
2. Require the Commissioner of Customs to provide no less than 30
days public notice for changes in regulations, except to avoid
excessive costs or to meet emergency requirements of the Customs
Service.
3. Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) was
amended by the North American Free Trade Agreements (NAFTA)
Implementation Act [P.L. 103-182] to provide special accounting and
attribution rules for drawback on petroleum products. The provision was
to allow the petroleum industry to account for selected petroleum
products on a quantitative basis, relieving Customs and industry from
the problem of ``tracking molecules'' for the attribution of drawback.
However, Customs current interpretation of 19 U.S.C. (p)(2)(a)(iv)
relating to substitution drawback for finished petroleum derivatives
requires companies to track delivery of the actual imported petroleum
in possession of the exporter, in effect requiring the tracing of
molecules. The proposed amendment would clarify the original intention
of the Customs Modernization Act that selected petroleum products
should be tracked on a quantitative basis for purposes of substitution
drawback.
4. Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) was
amended by the North American Free Trade Agreements Implementation Act
[P.L. 103-182] to insert a new subsection (q) allowing drawback on
packaging materials, where the packaging is ``used'' by filling prior
to exportation. Customs interprets ``use'' by filling to be limited to
the manufacturer of the packaging material and that filling may not be
performed by another company. Customs proposes to reverse or modify
Headquarters ruling 225658 of January 17, 1995, allowing such
treatment. This proposed provision would amend section 313(q) of the
Tariff Act of 1930 (19 U.S.C. 1313(q)) by inserting a new section for
drawback eligible packing material filled prior to exportation. The
proposed provision would provide that packaging materials produced in
the United States, which are used by the manufacturer or any other
person for articles which are exported or destroyed shall be eligible
for a drawback refund of 99 percent of any duty, tax, or fee imposed on
the importation of materials used to manufacture the packing materials.
The proposed amendment would provide that U.S.-produced packaging
material may be ``used'' by the manufacturer or any other person and,
thus, will remain eligible for drawback payment.
5. Amend section 411 et seq. of the Tariff Act of 1930 (19 U.S.C.
1411 et seq.) relating to the National Customs Automation Program to
require Customs to establish and implement the means by which foreign-
trade zone admission data can be electronically filed.
6. Amend section 491(a) of the Tariff Act of 1930 (19 U.S.C.
1491(a)) to extend the retention period for International Travel
Merchandise (ITM) held at Customs-approved storage rooms (CASR) to five
years, identical to the period for all classes of Customs-approved
bonded warehouses. ITM consists of in-flight merchandise sold on board
international air carriers after departure from U.S. Customs territory.
Presently, ITM is imported to the United States under bond and is moved
to centralized, Customs-approved bonded warehouses. The merchandise is
further distributed to CASRs near the airports where it is stored,
manipulated, and exported under Customs' supervision. The CASRs are
regulated as if the merchandise were being held ``on dock'' awaiting
exportation. Prior to the Customs Modernization Act, ITM had been held
at the CASRs in 90-day increments for up to one year. However, Customs
believes that, under the terms of a revision provided in the Customs
Modernization Act relating to unclaimed merchandise in General Order
warehouses, the maximum period may now be six months. The proposed
revision would extend the retention period to five years and extend to
CASRs the same treatment which is given to Customs-approved bonded
warehouses.
7. Section 431 of the Tariff Act of 1930 outlines the requirements,
form, and content of manifest information which must be publicly
disclosed. Section 431(c) outlines the requirements for public
disclosure of manifest information. On July 2, 1996, the President
signed the Anticounterfeiting and Consumer Protection Act of 1996 [P.L.
104-153], which amended section 431(c)(1) to require public disclosure
of vessel and aircraft manifest information, as well as additional
requirements as to the content of such information. On October 11,
1996, the President signed into law the Miscellaneous Trade and
Technical Corrections Act of 1996 [P.L. 104-295], which amended section
431(c)(1) to require public disclosure of vessel manifest information
only, and makes no additions to the law regarding the content of such
information. Given the potentially conflicting interpretations of these
laws, legislation may be needed to clarify that the language contained
in the Miscellaneous Trade and Technical Corrections Act of 1996
reflects Congressional intent.
8. Amend section 505(c) of the Tariff Act of 1930 (19 U.S.C.
1505(c)) to clarify that Customs must refund interest payable on
refunds of duty arising from NAFTA claims under 19 U.S.C. 1520(c) for
the full period from the date of payment to the Government to the date
of liquidation or reliquidation. Under current law, Customs is required
to refund interest only for the period from the date of filing the
claim to the date of reliquidation.
9. Amend section 520(d) of the Tariff Act of 1930 (19 U.S.C.
1520(d)), relating to goods qualifying under NAFTA rules of origin, to
clarify that merchandise processing fees (MPFs) may be refunded along
with excess duties if NAFTA-eligibility is proven. Under the NAFTA
Implementation Act [P.L. 103-182], MPFs are not imposed on goods
originating in NAFTA countries. To claim a NAFTA preference, an
importer must provide a valid certificate of origin. In practice,
certificates of origin are not always available at the time of
importation. Importers often pay duties and the MPF on a good they know
is NAFTA-eligible, with the expectation that the MPF will be refunded
later as an excess duty when NAFTA-eligibility is proven. Customs has
taken the position that MPFs are not refundable excess duties under 19
U.S.C. 1520(d).
10. Amend section 514(a) of the Tariff Act of 1930 (19 U.S.C.
1514(a)) to ensure that if an importer is entitled to a NAFTA
preference, there is a method for obtaining a refund of the duties paid
at the time of entry. It is a violation of law for an importer to claim
a NAFTA preference before receiving a valid certificate of origin
issued by the exporter. Many importers do not have a certificate of
origin at the time goods are entered, and subsequently file post-entry
claims when a valid certificate of origin is received. If the entry is
liquidated before receiving a certificate of origin, importers
generally protest the liquidation under 19 U.S.C. 1514. This action
prevents the liquidation from becoming final before the valid NAFTA-
eligibility claim is made. Customs position is that protests under 19
U.S.C. 1514 are inapplicable to NAFTA claims, that such claims must be
filed under 19 U.S.C. 1520(d) within one year from the date of entry.
The provision would clarify that importers may use the protest
procedure under 19 U.S.C. 1514 to claim the NAFTA preference.
11. Amend 19 U.S.C. 2083 and 19 U.S.C. 2071 to eliminate the
requirement that Customs provide Congress with three annual reports:
(1) the Violation Estimates Report, which contains estimates on the
number and extent of violations of trade, customs and illegal drug
control laws, and the relative incidence of violations estimated among
the various ports of entries; (2) the Enforcement Strategy Report,
which outlines a nationally uniform enforcement strategy for dealing
with violations 90 days after the Violation Estimates Report; and (3)
the Merchandise Damaged Statistics, which provides statistics on the
incidence, nature, and extent of damage to merchandise resulting from
Customs examinations.
DUTY SUSPENSION AND DUTY-FREE ENTRY BILLS:
1. Amend chapter 99, subchapter II of the Harmonized Tariff
Schedule (HTS) by inserting a new heading 9902.32.22 for the chemical
3-acetyloxy)-2-methyl-Benzoic acid (CAS No. 168899-58-9)(provided for
in subheading 2916.39.75) used in the production of anti-HIV/anti-AIDS
drugs, as temporarily duty free. (H.R. 2048)
2. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.16 for the chemical (S)-N--[[5-[2-(2-amino-4,6,7,8-
tetrahydro-4-oxo-1H-pyrimido[5,4-b][1,4]thiazin-6-yl)ethyl]-2-
thianyl]carbonyl-L-glutamic acid diethyl ester (CAS No. 177575-19-
8)(provided for in subheading 2930.90.90) used in the production of
anti-cancer drugs, as temporarily duty free. (H.R. 2041)
3. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.20 for the chemical 2-amino-5-bromo-6-methyl-4(1H)-
Quinazolinone (CAS No. 147149-89-1)(provided for in subheading
2921.51.50) used in the production of anti-cancer drugs, as temporarily
duty free. (H.R. 2046)
4. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.21 for the chemical 2-amino-6-methyl-5-(4-
pyridinylthio)4(1H)-Quinazolinone (CAS No. 147149-76-6)(provided for in
subheading 2921.51.50) used in the production of anti-cancer drugs, as
temporarily duty free. (H.R. 2045)
5. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.20 for 2-Amino-5-Nitrothiazole (CAS No. 121-66-
4)(provided for in subheading 2934.10.90.00) as temporarily duty free.
(H.R. 1926)
6. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.32 for Benzenesulfonic acid, 2-amino-5-nitro-,
monosodium salt (CAS No. 30693-53-9)(provided for in subheading
2921.42.90.00) as temporarily duty free. (H.R. 1933)
7. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.34 for Benzenesulfonic acid, 2-amino-5-nitro-,
monoammonium salt (CAS No. 4346-51-4)(provided for in subheading
2921.42.90.00) as temporarily duty free. (H.R. 1930)
8. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.36 for Benzenesulfonic acid, 2-amino-5-nitro, (CAS No.
96-75-3)(provided for in subheading 2921.42.90.00) as temporarily duty
free. (H.R. 1934)
9. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.38 for Benzenesulfonic acid, 3-(4,5,-dihydro-3-methyl-
5-oxo-1H-pyrazol-1-yl)- (CAS No. 119-17-5)(provided for in subheading
2933.19.43.00) as temporarily duty free. (H.R. 1935)
10. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.44 for Benzenesulfonic acid, 2,2' -(1,2-ethenediyl)bis
[5-nitro- (CAS No. 128-42-7)(provided for in subheading 2904.90.35.00)
as temporarily duty free. (H.R. 1938)
11. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.48 for Benzenesulfonic acid, 4-chloro-3-nitro (CAS No.
121-18-6)(provided for in subheading 2904.90.47.00) as temporarily duty
free. (H.R. 1919)
12. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.50 for Benzenesulfonic acid, 4-chloro-3-nitro-,
potassium salt (CAS No. 6671-49-4)(provided for in subheading
2904.90.47.00) as temporarily duty free. (H.R. 1920)
13. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.52 for Benzenesulfonic acid, 4-chloro-3-nitro-, sodium
salt (CAS No. 17691-19-9)(provided for in subheading 2904.90.40.00) as
temporarily duty free. (H.R. 1922)
14. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.54 for Benzenesulfonic acid, 2-methyl-5-nitro (CAS No.
121-03-9)(provided for in subheading 2904.90.20.00) as temporarily duty
free. (H.R. 1923)
15. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.22 for 6-Bromo-2,4,Dinitroaniline (CAS No. 1817-73-
8)(provided for in subheading 2921.42.90.00) as temporarily duty free.
(H.R. 1927)
16. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.34.02 for Caprolactam blocked methylene-bis-(4-
phnylisocyanate)(CAS No. 54112-23-1)(provided for in subheading
3402.90.30) as temporarily duty free. Amend chapter 99, subchapter II
of the HTS by inserting a new subheading 9902.38.24 for N,N,N\1\,N\1\-
tetrakis (2-hydroxyethyl)-heaxane diamide (referred to as Beta
Hydroxyalkylamide)(CAS No. 6334-25-4)(provided for in subheading
3824.90.90) as temporarily duty free. (H.R. 1677)
17. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.17 for the chemical 4-Chloropyridine hydrochloride (CAS
No. 7379-35-3) (provided for in heading 2933.90.82) used in the
production of anti-cancer drugs, as temporarily duty free. (H.R. 2042)
18. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.14 for carbamic acid (U-9069) [3-((dimethylsomino)
carbonyl)-2-pyridinyl sulfonyl]-phenyl ester (CAS No. 112-006-94-7)
(provided for in heading 2935.00.75) as temporarily duty free. (H.R.
1606)
19. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.31.12 for 3-ethoxycarbonyl-aminophenyl carbanilate
(referred to as desmedipham)(CAS No. 13684-56-5)(provided for in
subheading 2924.29.41) as temporarily duty free. (H.R. 2060)
20. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.24 for 3(Diethylamino) Propylamine (CAS No. 104-78-
9)(provided for in subheading 2921.29.00.55) as temporarily duty free.
(H.R. 1928)
21. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.23 for the chemical [S-(R*,R*)]-2,3-dihydroxy-
Butanedioic acid (CAS No. 147-71-7)(provided for in subheading
2918.19.90) used in the production of anti-HIV/anti-AIDS drugs, as
temporarily duty free. (H.R. 2047)
22. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.19 for the chemical (3S)-2,2-Dimethyl-3-thiomorphiline
carboxylic acid (CAS No. 84915-43-5)(provided for in heading
2921.30.50) used in the production of anti-cancer drugs, as temporarily
duty free. (H.R. 2044)
23. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.90 for Diiodomethyl-p-tolylsulfone (CAS No. 20018-09-
1)(provided for in heading 2930.90.10) as temporarily duty free. (H.R.
1548)
24. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.26 for 3(Dimethylamino) Propylamine (CAS No. 109-55-
7)(provided for in subheading 2921.29.00.55) as temporarily duty free.
(H.R. 1929)
25. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.31.12 for 2-ethoxy-2,3-dihydro-3,3-dimethyl-5-benzofuranyl
methanesulfonate (referred to as ethofumesate)(CAS No. 26255-79-
6)(provided for in subheadings 2932.99.08 and 3808.30.15) as
temporarily duty free. (H.R. 2059)
26. Amend General Note 16 of the HTS to allow duty-free entry of an
additional quantity of green peanuts that are the product of Mexico.
General Note 16 of the HTS outlines exemptions to the application of
General Note 1, which states generally that all goods provided for in
the HTS are subject to duty. The bill would amend General Note 16 to
increase by 453,597 kilograms the quantity of peanuts in immature form
entered from January 1 to April 30 for consumption as boiled peanuts
that are qualifying goods under subheading 9906.12.01, which outlines
goods from Mexico covered under General Note 12 of the HTS (General
Notes of interpretation for NAFTA). (H.R. 1907)
27. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.54.03 for high tenacity single yarn of viscose rayon
(provided for in subheading 5403.10.30) as temporarily duty free. (H.R.
1954)
28. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.64.04 for skating boots for use in the manufacture of in-
line roller skates (provided for in subheading 6404.11.90) as
temporarily duty free. (H.R. 1882).
29. Amend chapter 99, subchapter II of the HTS by inserting a new
subheading under heading 9902.30 for 2-4-dichlon-5-hydrozyhydrazine
hydrochloride (referred to as KN001)(CAS No. 189-573-21-5)(provided for
in subheading 2928.00.25.00) as temporarily duty free. (H.R. 1897)
30. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.79 for calendaring or other rolling machines for rubber
(provided for in subheadings 8420.10.90, 8420.91.90, or 8420.99.90) and
material holding devices or similar attachments thereto, as temporarily
duty free. (H.R. 1945)
Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.81 for shearing machines used to cut metallic tissue
capable of a straight cut of 5 m or more (provided for in subheading
8462.31.00). (H.R. 1945)
Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.83 for machine tools for working wire of iron or steel
for use in products provided for in subheading 4011.20.10 (provided for
in subheading 8463.30.00). (H.R. 1945)
Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.85 for extruders of a type used for processing rubber
(provided for in subheading 8477.20.00 or 8477.90.80). (H.R. 1945)
Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.87 for machinery for molding, retreading, or otherwise
forming uncured, unvulcanized rubber for use in processing rubber
products provided for in subheading 4011.22.10 (provided for in
subheading 8477.51.00 or 8477.90.80). (H.R. 1945)
Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.89 for sector mold press machines used for curing or
vulcanizing rubber (provided for in subheading 8477.90.80). (H.R. 1945)
Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.84.91 for sawing machines for working cured, vulcanized
rubber described in heading 4011 (provided for in subheading
8465.91.00). (H.R. 1945)
31. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.18 for a chemical 3-Mercapto-D-valine (CAS No. 52-67-
5)(provided for in subheading 2927.49.40) used in the production of
anti-cancer drugs, as temporarily duty free. (H.R. 2043)
32. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.14 for 1,3-Napthalenedisulfonic acid, 6-amino- (CAS No.
118-33-2)(provided for in subheading 2921.45.90.90) as temporarily duty
free. (H.R. 1921)
33. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.16 for 1,3-Napthalenedisulfonic acid, 6-amino-,disodium
salt (CAS No. 50976-35-7)(provided for in subheading 2921.45.90.90) as
temporarily duty free. (H.R. 1924)
34. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.30 for 2-Napthalenesulfonic acid, 7-(acetylamino)-4-
hydroxy-, monosodium salt (CAS No. 42360-29-2)(provided for in
subheading 2924.29.70.00) as temporarily duty free. (H.R. 1932)
35. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.40 for 2,7-napthalenedisulfonic acid, 4-(benzoylamino)-
5-hydroxy-, (CAS No. 117-46-4)(provided for in subheading
2924.29.75.90) as temporarily duty free. (H.R. 1936)
36. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.42 for 2,7-napthalenedisulfonic acid, 4-(benzoylamino)-
5-hydroxy-,sodium salt, (CAS No. 79873-39-5)(provided for in subheading
2924.29.70.00) as temporarily duty free. (H.R. 1937)
37. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.56.03 for nonwoven fiber sheet (provided for in subheading
5603.13.00) as temporarily duty free, and by inserting a new U.S. Note
relating to the interpretation of term ``nonwoven fiber sheet'' under
that new heading. (H.R. 1304)
38. Amend chapter 55 of the HTS by striking subheading 5501.30.00
and inserting new subheadings with the same degree of indentation as
the article description for subheading 5501.20.00 to provide duty-free
treatment for oxidized polyacrylonitrile fibers for use in aircraft
brake components. (H.R. 1973)
39. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.31.12 for Para ethyl phenol (referred to as PEP)(provided
for in subheading 2907.19.20) as temporarily duty free. (H.R. 1678)
40. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.29.09 for (+/-tetrahydrofurfuryl (R)-2-[4-(6-
chloroquinoxaline-2-yloxy) phenoxyl propanoate (referred to as
Pantera)(CAS No. 119738-06-6)(provided for in subheading 2909.30.40) as
temporarily duty free. (H.R. 1886)
41. Amend the HTS to allow entry of peanut butter and peanut butter
paste manufactured from Mexican peanuts in foreign trade zones, without
being subject to a tariff-rate quota. General Note 15 of the HTS
outlines products which are not counted against the quantity specified
as the in-quota quantity for agricultural products of chapters 2
through 52, inclusive, if the product is of a type (i) subject to
tariff-rate quota, and (ii) subject to the provisions of subchapter IV
of chapter 99. The provision would add a new subparagraph to General
Note 15 as follows: ``(f) peanut butter and paste manufactured in, and
entered from, a foreign-trade zone, provided that (i) any peanuts that
are not qualifying goods under General Note 12, and (ii) any peanut
butter or paste, imported for use in such manufacturing are entered for
consumption prior to admission to the foreign trade zone.'' (H.R. 1875)
42. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.31.12 for 3-methylcarbonyl-aminophenyl-3-methyl-
carbanilate (referred to as phenmedipham)(CAS No. 13684-63-4)(provided
for in subheading 2924.29.47) as temporarily duty free. (H.R. 2058)
43. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.18 for Phenol, 2-amino-4-methyl- (CAS No. 95-84-
1)(provided for in subheading 2922.29.10.00) as temporarily duty free.
(H.R. 1925)
44. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.15 for the chemical 4-Phenoxypyridine (CAS No. 4783-86-
2)(provided for in subheading 2933.90.82) used in the production of
anti-cancer drugs, as temporarily duty free. (H.R. 2049)
45. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.14 for P-nitrobenzoic (CAS No. 62-23-7)(provided for in
subheading 2916.89.45) as temporarily duty free. (H.R. 1940)
46. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.39.20 for polyethylene base materials that are sanded on
one side and surface-treated for use in the manufacture of skis and
snowboards (provided for in heading 3920.10.00) as temporarily free of
duty. (H.R. 1890)
47. Amend chapter 39 of the HTS by striking heading 3907.99.00 and
inserting new headings 3907.99 having the same degree of indentation as
the article description for heading 3907.91. The new heading would
reduce to 3.5 percent the duty on a polymer of alkanediols, monocyclic
dicarboxylic acid dimethyl ester, monocyclic monosulfonated
dicarboxylic acid dimethyl ester monosodium salt and hydroxy
alkoxyalkanesulfonic acid sodium salt. (H.R. 1852)
48. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.14 for P-Toluenesulfonamide (CAS No. 70-55-3)(provided
for in heading 2935.00.95) as temporarily duty free. (H.R. 1214)
49. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.30 for Sodium 2-chloro-6-[(4,6-dimethoxy pyrimdin-2-
yl)thio] benzoate)(referred to as Pyrithiobac Sodium)(CAS No. 123-343-
16-8)(provided for in heading 2933.59.10.00) as temporarily duty free.
(H.R. 1793)
50. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.16 for N-[(4,6-Dimethoxypyrimidin-2-yl) aminocarbonyl]-
3-(ethylsulfonyl)-2-pyridine--sulfonamide (referred to as
Rimsulfuron)(EPA Reg. No. 352-555)(provided for in heading 2933.59.10)
as temporarily duty free. (H.R. 1607)
51. Amend U.S. Note 6, subchapter X, chapter 98 of the HTS to
clarify that certain large components of certain scientific instruments
and apparatus shall be provided the same tariff treatment as those
scientific instruments and apparatus. The bill would provide that the
term ``instruments and apparatus'' under subheading 9810.00.60 would
include separable components of an instrument or apparatus that are
imported for assembly in cases in which the instrument or apparatus,
due to its size and complexity, cannot be imported in its assembled
state. The bill would also provide for a single expedited hearing at
the discretion of the Secretary of Commerce to determine whether or not
to grant such duty treatment. (H.R. 1876)
52. Amend chapter 72 of the HTS by inserting several new
subheadings providing duty-free treatment for various qualities of
steel used in making aperture masks for cathode-ray tube video
displays. (H.R. 1947)
53. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.72.17 for L-shaped edges of spring steel for use in the
manufacture of skis and snowboards (provided for in heading 7217.10.90)
as temporarily free of duty. (H.R. 1889)
54. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.28 for Tannic acid (CAS No. 1401-55)(provided for in
subheading 3201.90.10.00) as temporarily duty free. (H.R. 1931)
55. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.39.04 for Tetrafluoroethylene, Hexafluoropropylene, and
Vinylidene flouride (provided for in subheading 3904.69.50) as
temporarily duty free. (H.R. 1893)
56. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.32.04 for Benzene sulfonic acid,2,2'-((1,1'-biphenyl)-
4,4'-diyldi-2.1-ethenediyl)bis-disodium salt (referred to as Tinopal
CBS-X )(CAS No. 27344-41-8)(provided for in heading 3204.20.80.00) as
temporarily free of duty. (H.R. 1097)
57. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.29.34 for 4-piperzone 2,2,6 tetramethyl (referred to as
Triacetonamine)(CAS No. 826-36-8)(provided for in heading 2933.39.61)
as temporarily free of duty. (H.R. 1887)
58. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.38.08 for Methyl 2-[[[[[4-(dimethylamino)-6-(2,2,2-
trifluoroethoxy)-1,3,5-triazin-2-yl]-amino]carbonyl]-amino]sulfonyl]-3-
methylbenzoate (referred to as Triflusulfuron Methyl)(CAS No. 126-535-
15-7)(provided for in heading 3808.30.15) as temporarily free of duty.
(H.R. 1879)
59. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902.54.03 for artificial filament yarn (other than sewing
thread) of viscose rayon (provided for in subheading 5403.10.30,
5403.31.00, or 5403.32.00) as temporarily free of duty. (H.R. 1742)
60. Amend chapter 99, subchapter II of the HTS by inserting a new
heading 9902 for viscose rayon yarn with a twist exceeding 120 turns/m
(provided for in subheading 5403.32.00) as temporarily free of duty.
(H.R. 1888)
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August 15, 1997, to A.L. Singleton, Chief of Staff, Committee on Ways
and Means, U.S. House of Representatives, 1102 Longworth House Office
Building, Washington, D.C. 20515.
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but will be maintained in the Committee files for review and use by the
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Note: All Committee advisories and news releases are available on
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Proposed Miscellaneous Corrections #1
To amend 19 U.S.C. 1515(a) to provide that within 30 days
from the date an application for further review is filed, the
appropriate customs officer shall allow or deny the application
and, if allowed, forward the protest to the customs officer who
will be conducting the further review.
Comments of the American Association of Exporters and Importers (AAEI)
The American Association of Exporters and Importers' (AAEI)
over 1000 members export, import, distribute and manufacture a
complete spectrum of products, including chemicals,
electronics, machinery, footwear, autos/parts, food, household
consumer goods, toys, specialty items, textiles and apparel.
Members also include firms which serve the international trade
community, such as customs brokers, freight forwarders, banks,
attorneys, insurance firms and carriers. AAEI members conduct
operations in all fifty states, employing millions of U.S.
workers. Together, AAEI companies account for a large majority
of non-military, commercial U.S. trade.
AAEI is pleased to respond to Chairman Crane's June 30,
1997 Advisory, requesting comments on Miscellaneous Corrections
to Trade Legislation and Miscellaneous Duty Suspension Bills:
Proposed Miscellaneous Correction #1
Amendment of 19 USC Sec. 1515(a)--a concomitant amendment
should be made to Sec. 1515(c), requiring the Commissioner of
Customs to act within 30 days (rather than 60) to review a
request to set aside the denial of further review.
Proposed Miscellaneous Correction #11
The three annual reports (Violations Estimate Report,
Enforcement Strategy Report and Merchandise Damaged Statistics)
provided by Customs to Congress which are proposed to be
eliminated provide valuable information to the importing
community. AAEI asks that they be retained.
AAEI thanks you for the opportunity to submit its comments.
Customs and International Trade Bar Association
New York, New York 10016
August 14, 1997
A.L. Singleton, Chief of Staff
Committee on Ways and Means,
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Miscellaneous Corrections to Trade Legislation and Miscellaneous Duty
Suspension Bills
Dear Mr. Singleton:
These comments are submitted on behalf of the Customs and
International Trade Bar Association (``CITBA'') in response to the
invitation of the Subcommittee on Trade, House Ways and Means
Committee, issued on June 30, 1997 (No. TR-10). CITBA is a national bar
association of over 400 lawyers whose primary law practice involves the
federal tariff, revenue and international trade laws. The member
lawyers devote a substantial amount of their time in the representation
of the importing community as well as domestic producers and other
domestic interests.
While, after review, CITBA supports the efforts and the aims to be
effected by the Proposed Miscellaneous Corrections, comments about
certain proposals are necessary. These comments are directed to certain
specific proposals; however, we support the proposals, generally, where
no comment has been proffered.
Proposed Miscellaneous Corrections:
1. The first proposal would amend 19 U.S.C. Sec. 1515(a) to
provide that within 30 days following the filing of an
application for further review, the appropriate customs officer
shall allow or deny the application and, if allowed, shall
forward the accompanying protest to the customs officer
conducting the further review. Thus, a denial of the
application for further review means that the first echelon
customs officer will deny the request and the protest and will
not forward the application to the next level of review. The
first echelon customs officer may grant the application for
further review even though the customs officer may oppose the
requested relief.
CITBA is concerned that the 30 day period may not be
sufficient to provide a meaningful review of the contentions
and issues presented by the application for further review. For
example, if the time pressures experienced are such as to
prevent the customs officer from conducting a meaningful review
within the prescribed 30 day period, the application and its
accompanying protest may be denied out of hand in order to
comply with the proposed statutory requirements. If a denial
occurs in such circumstances, the protesting applicant must
commence a civil action in the U.S. Court of International
Trade without any administrative review.
CITBA urges that the time within which the first
appropriate customs officer may review an application for
further review before the customs officer must allow or deny
the application be set at 60 days. With more time, the chances
of a meaningful review of an application increase.
Further, this proposal suggests that the appropriate
customs officer at the port of entry would be granted a
statutory authority to deny, for any reason, the protestant's
application for further review by the Customs Service
Headquarters as one of the options that the customs officer at
the port must exercise within the time prescribed in the
statutory proposal. We assume that the intent of this proposal
is to define the time in which action on the application for
further review shall be accomplished and that a grant of
authority to deny such an application and thereby prevent
further review of the protest by the Customs Service
Headquarters is not intended by this proposal. Therefore, the
proposal should be amended to make clear that the customs
officers at the port of entry may not deny the protestant's
application (and right) to further review by the Customs
Service Headquarters. Alternatively, if the customs officers at
the port of entry are to be granted any authority to dispose of
an application for further review before any Headquarters
review, that authority should be limited to a rejection of the
application for non-substantive, procedural issues, without
denying the protest, to allow the applicant to cure the
objection.
2. The second proposal would require the Commissioner of
Customs to give not less than 30 days notice for changes in the
customs regulations, except where excessive costs would be
incurred or in the case of an emergency.
CITBA notes that the Administrative Procedures Act provides
for timely public notice for changes in the customs regulations
which constitute rule-making. Therefore, this proposal appears
to be redundant. In any event, a 30 day notice time period for
changes to the customs regulations is normally insufficient.
3. The third proposal would change the special accounting
and attribution rules for drawback on certain petroleum
products under section 313 of the Tariff Act of 1930, as
amended by NAFTA [P.L. 103-182]. The NAFTA provision was
designed to allow the accounting for drawback purposes for
certain petroleum products on a quantitative basis. Since the
Customs Service, in interpreting section 313(p)(2)(iv)
regarding substitution drawback, requires the tracing of
molecules, correction is proposed to assure that the
appropriate petroleum products are tracked on a quantitative
basis.
The fourth proposal add a new subsection (q) to section 313
which would allow drawback for U.S. produced packaging
materials if used by ``filling'' prior to exportation by the
manufacturer of the packaging materials or any other person to
package articles to be exported or destroyed. This amendment
would change the current Customs practice which limits
eligibility for drawback on the exportation or destruction of
the packaging materials to the manufacturer of such materials.
CITBA supports both proposed technical corrections since
they assert the original Congressional intent to allow the
payment of drawback for U.S. packaging materials used by anyone
to package eligible articles for exportation or destruction.
4. With respect to some proposals, such as seventh proposal
relating to public disclosure of manifest information, CITBA
takes no position because of a lack of consensus.
Very truly yours,
Rufus E. Jarman, Jr.
President
Bernard J. Babb
Chairman, Committee on
Customs and Tariffs
REJ/BJB/b
Comments of Terence P. Stewart, On Behalf of the Law Firm of Stewart
and Stewart
A. Introduction
The following written comments are submitted by Terence P.
Stewart on behalf of the law firm of Stewart and Stewart in
response to the Subcommittee on Trade's request for written
comments regarding proposed miscellaneous corrections to trade
legislation. See Ways and Means Committee Advisory (TR-10)
dated June 30, 1997. Stewart and Stewart is a firm with a long
and rich experience in trade and customs matters. In the
following comments, we support proposed measures 1, 2, and 10
because we believe they will improve Customs operations and
service to the trading community. We oppose proposed measures 7
and 11 because we believe they will undermine service to the
trading community, limit transparency, and restrict public
disclosure of vital trade information.
B. Proposed Correction No. 1: Amendment to 19 U.S.C. 1515(a)
19 U.S.C. Sec. 1515(a) provides that Customs shall, within
two years from the date a protest is filed, accept or deny the
protest in whole or in part. That subsection also provides that
a protesting party may, within the time allowed for the filing
of a protest under 19 U.S.C. Sec. 1514, request that the
protest be subject to further review by another appropriate
Customs officer. The current statute does not require Customs
to accept or deny the application for further review within a
prescribed time period.
The first proposed correction would amend 19 U.S.C.
Sec. 1515(a) to provide that within 30 days from the date that
a protesting party files its application for further review,
the appropriate Customs officer shall allow or deny the
application, and, if allowed, forward the protest to the
Customs officer that will conduct the further review.
Stewart and Stewart supports the apparent goal of this
proposal, that is, to provide adequate time for a meaningful
further review of a protest. However, a requirement that
Customs act on the request for further review within 30 days
may effectively preclude substantive review of the protest at
the port level. At present, the statute allows Customs two
years to act upon a protest, whether or not a request for
further review is filed. Thus, even where a protesting party
files a protest and a timely request for further review,
Customs is not obligated to respond to the request for further
review at any time before the two year period for protest
disposition expires. Although the proposed amendment would
expedite Customs' decision with respect to the application for
further review, thus allowing the Customs officer conducting
further review sufficient time within the two year period to
review the protest, such a short period as 30 days allowed to
the port for its initial review of the protest may preclude
anything but a superficial review by the port. Stewart and
Stewart supports an amendment that would improve the efficient
handling of customs protests but also would ensure that
sufficient time is allowed, within the two year period, for an
adequate and meaningful review by both the port initially and
by headquarters on further review.
C. Proposed Correction No. 2: 30 Days Notice for Change In Customs
Regulations
The second proposal would require the Commissioner of
Customs to provide no less than 30 days public notice for
changes in customs regulations, except to avoid excessive costs
or to meet emergency requirements of the Customs Service.
Stewart and Stewart supports this proposal. The requirement
of 30 days notice to the public of changes in customs
regulations is reasonable and would allow the trading community
and general public adequate lead time to prepare for regulatory
changes and comply with any new regulatory requirements.
Moreover, a 30-day public notice requirement comports with
the Administrative Procedure Act's general rule that
administrative agencies shall provide 30 days notice of rule
making prior to the rule's effective date. 5 U.S.C. Sec. 553(d)
provides:
(d) The required publication or service of a substantive
rule shall be made not less than 30 days before its effective
date, except--
(1) a substantive rule which grants or recognizes an
exemption or relieves a restriction;
(2) interpretive rules and statements of policy; or
(3) as otherwise provided by the agency for good cause
found and published with the rule.
D. Proposed Correction No. 7: Public Disclosure of Vessel and Aircraft
Manifest Information
19 U.S.C. Sec. 1431(c) outlines the requirements, form, and
content of manifest information which must be publicly
disclosed. In the Anticounterfeiting and Consumer Protection
Act of 1996 (P.L. 104-153, 110 Stat. 1389, July 2, 1996),
Congress amended 19 U.S.C. Sec. 1431(c)(1) to require public
disclosure of certain information contained in vessel and
aircraft manifests, and added additional requirements as to the
content of those manifests. Thus, Congress amended section
1431(c)(1) of the statute to provide as follows:
(1) Except as provided in subparagraph (2), the following
information, when contained in such vessel or aircraft
manifest, shall be available for public disclosure:
(A) The name and address of each importer or consignee and
the name and address of the shipper to such importer or
consignee, unless the importer or consignee has made a biennial
certification, in accordance with procedures adopted by the
Secretary of the Treasury, claiming confidential treatment of
such information.
(B) The general character of the cargo.
(C) The number of packages and gross weight.
(D) The name of the vessel, aircraft, or carrier.
(E) The seaport or airport of loading.
(F) The seaport or airport of discharge.
(G) The country of origin of the shipment.
(H) The trademarks appearing on the goods or packages.
19 U.S.C.S. Sec. 1431(a)(1) (1997) (underscored text
indicates language added by the amendment). Prior to amendment,
the introductory language preceding subparagraph (A) had
referred to ``such manifest,'' without particularity as to type
of manifest.
In contrast to the provisions of the Anticounterfeiting and
Consumer Protection Act, section 3 of the Miscellaneous Trade
and Technical Corrections Act of 1996 (P.L. 104-295, 101 Stat.
3515, Oct. 11, 1996) amended 19 U.S.C. Sec. 1431(c)(1) as
follows:
Section 431(c)(1) of the Tariff Act of 1930 (19 U.S.C.
1431(c)(1)) is amended in the matter preceding subparagraph (A)
by striking ``such manifest'' and inserting ``a vessel
manifest.''
Also, the Miscellaneous Trade and Technical Corrections Act
did not provide for any additional requirements as to manifest
content.
There is an apparent conflict between the manifest
disclosure and reporting requirements of the Anticounterfeiting
and Consumer Protection Act of 1996 and the provisions of the
Miscellaneous Trade and Technical Corrections Act of 1996 with
respect to section 1431(c)(1). The Committee's Advisory (TR-10)
states that ``given the potentially conflicting interpretations
of these laws, legislation may be needed to clarify that the
language in the Miscellaneous Trade and Technical Corrections
Act reflects Congressional intent.'' Stewart and Stewart
opposes such clarification.
Stewart and Stewart strongly supports the manifest
disclosure and reporting requirements enacted by Congress in
the Anticounterfeiting and Consumer Protection Act of 1996. We
urge the Committee to endorse the vessel and aircraft manifest
disclosure and reporting requirements provided in the
Anticounterfeiting and Consumer Protection Act and to clarify
that those provisions, not the language in the Miscellaneous
Trade and Technical Corrections Act, express the intent of
Congress.
In the legislative history to the Anticounterfeiting and
Consumer Protection Act of 1996, Congress explained the purpose
and necessity for requiring public disclosure of aircraft
manifest information:
This section amends section 431(c)(1) of the Tariff Act to
permit public disclosure of aircraft manifests under the same
terms currently allowed for sea shipments. Under current law,
the U.S. Customs Service routinely discloses information
relating to the nature of shipments imported by sea. This
information has proven to be extremely valuable to U.S.
trademark holders who are trying to trace or interdict the
entry of counterfeit goods.
Additional authority is needed, however, to disclose the
same information for shipments by air. Since most low-weight,
high value counterfeits are shipped by air, trademark holders
need access to air shipment data as well as sea shipment data
if they are to be able to better assist enforcement officials
in identifying counterfeiters and stopping the flow of
fraudulent goods transported in this manner. Moreover, this
provision eliminates the unwarranted and out-of-date
distinction between information required about goods shipped by
sea as compared to goods shipped by air.
S. Rep. No. 104-177, 104th Cong., 1st Sess. 11 (1995).
Given such a clear and emphatic statement of Congressional
purpose and intent, a ``clarification'' such as that proposed
would not ``reflect'' Congressional intent but negate and
undermine it. The Committee should not allow a ``technical''
amendment provision to override the plain language of the
Anticounterfeiting and Consumer Protection Act and the
expressed will of Congress.
As the Senate Judiciary Committee report observed, there is
no valid reason for distinguishing between vessel and aircraft
manifests with respect to the requirements of public disclosure
of their contents. See S. Rep. No. 104-177 at 11. There are,
however, compelling reasons for imposing the same public
disclosure requirements on both vessel and aircraft manifests.
As the Senate report noted, counterfeit goods often are
transported to the United States by aircraft. Id. As such, lack
of public disclosure of aircraft manifest information hampers
the ability of trademark holders to monitor trade in
counterfeit goods and assist enforcement of their trademark
rights.
Moreover, public access to information contained in
aircraft manifests in addition to vessel manifests permits
domestic industries to monitor imports of unfairly-traded
merchandise. For example, without access to aircraft manifest
information, domestic producers are incapable of monitoring
imports of merchandise that is subject to antidumping or
countervailing duty orders and that is routinely transported to
the United States by aircraft (e.g., flowers). The requirement
of public disclosure of aircraft manifest information addresses
this problem as well as the problem of counterfeit goods.
Finally, as the Senate report acknowledged, there is simply
no logical reason for treating vessel and aircraft manifest
information differently. The Anticounterfeiting and Consumer
Protection Act amendment was intended to ``eliminate the
unwarranted and out-of-date distinction'' between vessel and
aircraft manifests. S. Rep. No. 104-177 at 11. Endorsement of
the language of the Miscellaneous Trade and Technical
Corrections Act, however, would reimpose this ``unwarranted and
out-of-date distinction.'' Accordingly, we urge the Committee
to reject legislative proposal No. 7.
E. Proposed Correction No. 10: Use of Customs Protest Procedures for
NAFTA Preference Claims
Proposal No. 10 would amend 19 U.S.C. Sec. 1514(a) to
clarify that importers may employ customs protest procedures to
obtain refunds of excess duties paid on the entry of goods that
qualify for NAFTA preference. Stewart and Stewart supports this
proposal. The statute clearly provides that both the protest
procedure pursuant to 19 U.S.C. Sec. 1514 and the procedure
provided in 19 U.S.C. Sec. 1520(d) are available to importers
as means to obtain refunds of excess duties paid on NAFTA-
eligible goods.
As explained in the Committee's Advisory (TR-10), it is a
violation of law for an importer to claim a NAFTA preference
without first obtaining a valid certificate of origin from the
exporter. However, because importers are often unable to obtain
a certificate of origin before entry of the goods, they must
file NAFTA preference claims after entry once a valid
certificate of origin has been acquired. In cases where Customs
liquidates the entry before the importer has obtained the
certificate of orign and filed for NAFTA preference, importers
have attempted to obtain refunds of excess duties paid on entry
by filing protests under 19 U.S.C. Sec. 1514. Customs position,
however, is that importers may obtain refunds of excess duties
paid on goods qualifying for NAFTA preference only under 19
U.S.C. Sec. 1520(d), not under 19 U.S.C. Sec. 1514. The
proposed amendment would clarify that customs protest
procedures under section 1514 are available to importers as a
means to obtain refunds of excess duties paid on goods eligible
for NAFTA preference.
19 U.S.C. Sec. 1514(a) provides that the decisions of the
Customs Service as to classification, amount of duties
chargeable, etc. are final and conclusive unless a protest is
filed within 90 days of liquidation. The language of section
1514 does not restrict the right of importers to file protests
with respect to Customs decisions regarding goods eligible for
NAFTA preference.
19 U.S.C. Sec. 1520(d) provides that:
Notwithstanding the fact that a valid protest was not
filed, the Customs Service may ... reliquidate an entry to
refund excess duties paid on a good qualifying under the
[NAFTA] rules of origin ... for which no claim for preferential
tariff treatment was made at the time of importation if the
importer, within 1 year after the date of importation, files
... a claim that includes--
(1) a written declaration that the good qualified under
those rules at the time of importation;
(2) copies of all applicable NAFTA Certificates of Origin
...;
(3) such other documentation relating to the importation of
the goods as the Customs Service may require. [Emphasis added]
It is evident from the introductory clause of subsection
1520(d)--``Notwithstanding the fact that a valid protest was
not filed''--that the filing of protests to obtain refunds of
excess duties paid on NAFTA-eligible goods is contemplated by
the statute. The procedure outlined in section 1520(d) is
provided in addition to the protest procedure under section
1514 as a means for importers to obtain refunds of excess
duties paid of goods that qualify for NAFTA preference.
Clearly, Customs interpretation that importers are restricted
to the procedure prescribed in section 1520(d) conflicts with
the plain language of that provision and section 1514.
F. Proposed Correction No. 11: Customs Reports to Congress
Present law requires the Commissioner of the Customs
Service to submit the following three reports to Congress on an
annual basis:
(1) Violation Estimates Report--19 U.S.C. Sec. 2083(a)
requires that no later than 30 days before the fiscal year
begins, the Commissioner shall submit a report estimating ``the
number and extent of violations of the trade, customs, and
illegal drug control laws ... that will likely occur during the
fiscal year'' and the ``relative incidence of violations
estimated ... among the various ports of entry.''
(2) Enforcement Strategy Report--19 U.S.C. Sec. 2083(c)
requires that, within 90 days after submitting the Violation
Estimates Report, the Commissioner shall submit a report
detailing a ``nationally uniform enforcement strategy'' for
dealing with the estimated violations.
(3) Merchandise Damaged Statistics--19 U.S.C. Sec. 2071
(note) requires that the Commissioner shall keep accurate
statistics on the incidence, nature, and extent of damage to
merchandise resulting from customs examinations and shall
submit an annual report summarizing such statistics.
Proposed Correction No. 11 would amend 19 U.S.C.
Sec. 2083(a) and (c) as well as 19 U.S.C. Sec. 2071 to
eliminate the requirement that Customs submit each of the three
annual reports outlined above.
Stewart and Stewart opposes this proposed change. These
annual reports provide information that is vital to the
enforcement of the nation's trade, customs, and illegal drug
control laws and to Congress' effective oversight of the
Customs Service, as well as contributing to the valuable goal
of an informed trading public. The current requirements that
Customs submit these annual reports should be maintained and
Customs should comply with Congress' mandate.
Proposed Miscellaneous Corrections #2
To require the Commissioner of Customs to provide no less
than 30 days public notice for changes in regulations, except
to avoid excessive costs or to meet emergency requirements of
the Customs Service.
see Customs and International Trade Bar Association under Proposed
Miscellaneous Corrections #1
see Stewart and Stewart under Proposed Miscellaneous Corrections #1
Proposed Miscellaneous Corrections #3
Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) was
amended by the North American Free Trade Agreements (NAFTA)
Implementation Act [P.L. 103-182] to provide special accounting
and attribution rules for drawback on petroleum products. The
provision was to allow the petroleum industry to account for
selected petroleum products on a quantitative basis, relieving
Customs and industry from the problem of ``tracking molecules''
for the attribution of drawback. However, Customs current
interpretation of 19 U.S.C. (p)(2)(a)(iv) relating to
substitution drawback for finished petroleum derivatives
requires companies to track delivery of the actual imported
petroleum in possession of the exporter, in effect requiring
the tracing of molecules. The proposed amendment would clarify
the original intention of the Customs Modernization Act that
selected petroleum products should be tracked on a quantitative
basis for purposes of substitution drawback.
see also Customs and International Trade Bar Association under Proposed
Miscellaneous Corrections #1
Aectra Refining & Marketing, Inc.
Houston, Texas 77056
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Aectra Refining & Marketing, Inc. wishes
to express our strong support for Item 3, relating to the accounting
and attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules'' a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Anthony J. Voigt
Treasurer
American Petroleum Institute
Washington, DC 20005-4070
August 15, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
The American Petroleum Institute (API) represents over 350
companies involved in all aspects of the oil and gas industry,
including exploration, production, transportation, refining, and
marketing. Because petroleum products make up a significant part of the
U.S. domestic and foreign trade, API and its members have extensive
dealings with the U.S. Customs Service (Customs) on which they rely
heavily for information and guidance. API strongly supports the
proposed miscellaneous corrections to trade legislation as described in
your advisory from the Committee on Ways and Means, Subcommittee on
Trade, dated June 30, 1997, specifically item 3 which pertains to the
accounting and attribution rules for duty drawback on petroleum
products.
This issue was addressed in detail in Title VI--Customs
Modernization, Section 632, of the North American Free Trade Agreement
(NAFTA) Implementation Act [P.L. 103-182]. That law provided special
rules to allow the petroleum industry to account for selected petroleum
products on a quantitative basis for purposes of duty drawback claims.
Without that provision, in order to file certain drawback claims for a
product that is exported, our member companies would have to track the
actual molecules of certain petroleum derivatives as the product
travels through a series of pipelines and tanks, commingled with like
products from other sources. This, of course, would be an impossible
accounting feat that in effect would prevent us from obtaining duty
drawback for exports of various petroleum products.
The need for a legislative correction stems from Customs'
interpretation of 19 U.S.C. Sec. 1313(p)(2)(a)(iv) which reads
``purchased or exchanged, directly or indirectly, an imported qualified
article from an importer in a quantity equal to or greater than the
quantity of the exported article.'' Customs' interpretation that the
``imported qualified article'' cannot be an article of the same kind
and quality as the imported qualified article, or any combination
thereof, in order to qualify for drawback, violates the intent of the
statute, in effect requiring the tracking of actual molecules which
P.L. 103-182 intended to eliminate.
We believe that a technical amendment with the following language
would correct this misinterpretation: Sec. 1313(p)(2)(A)(iv) is amended
to read as follows: ``purchased or exchanged, directly or indirectly,
from an importer, an imported qualified article, an article of the same
kind and quality as the imported qualified article, or any combination
thereof, equal to or greater than the quantity of the exported
article.''
Thank you for your interest in this issue. We urge your
Subcommittee to approve this proposal at the earliest opportunity.
Sincerely,
Charles J. DiBona
President
ARCO Chemical Company
Newton Square, Pennsylvania 19073-2387
August 13, 1997
The Honorable Philip M. Crane
Chairman, Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, ARCO Chemical Company wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for export products, ARCO Chemical Company would have
to track the actual molecules of certain petroleum derivatives as the
product travels through a series of pipelines and tanks, commingled
with like products from other sources. This would be a difficult
accounting feat that in effect would prevent us from obtaining duty
drawback for exports of many petroleum products.
We thought the Customs Modernization Act provision settled the
matter once and for all. However, there appears to be confusion at
Customs on how to implement this provision. Their apparent
interpretation would once again require the ``tracking of molecules''--
a result clearly not intended by the Custom Modernization Act. That is
why the proposed technical correction in your June 30, 1997 press
release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thank you for your interest with respect to this issue. We urge
your subcommittee to approve this proposal at the earliest opportunity.
Sincerely,
Clarisse G. McCormick
Assistant Secretary
ARCO Products Company
Los Angeles, CA 90071-1406
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, ARCO Products Company wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tank, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Jane Adam
Managing Tax Counsel
ARCO Products is a Division of AtlanticRichfieldCompany
Basis Clearing, Inc.
Houston, Texas 77002
August 6, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Basis wishes to express our strong
support for Item 3, relating to the accounting and attribution rules
for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible account feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Kenneth J. Stockel
Controller
Basis Petroleum, Inc.
Houston, Texas 77002
August 8, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Basis wishes to express our strong
support for Item 3, relating to the accounting and attribution rules
for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible account feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Georganne Hodges
Assistant Controller
BP Chemicals Inc.
Cleveland, OH 44128-2837
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, BP Chemicals Inc. wishes to express our
strong support for Item 3, relating to the accounting and attribution
rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customer Modernization
Act provision settled the matter once and for all. However, there
appears to be confusion at Customs on how to implement this provision.
Their apparent interpretation would once again require the ``tracking
of molecules''--a result clearly not intended by the Customer
Modernization Act. That is why the proposed technical correction in
your June 30, 1997 press release is needed--to clarify the original
intent of the Customs Modernization Act that selected petroleum
products should be tracked on a quantitative basis for purposes of
substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Ann Carter
Customer Service Manager
BP Oil Company
Cleveland, OH 44114
August 12, 1997
The Honorable Philip M. Crane
Chairman, House Subcommittee on Trade
Committee on Ways and Means
1102 Longworth House Office Building
Washington, D. C. 20515
Dear Chairman Crane:
I am responding to the Committee on Ways and Means Advisory dated
30 June 1997 wherein comments were requested regarding Miscellaneous
Corrections to Trade Legislation and Miscellaneous Duty Suspension
Bills.
BP Oil Company, an operating subsidiary of BP Exploration & Oil
Inc., expresses its strong support for item #3 regarding accounting &
attribution rules for drawback on petroleum products.
Accounting for petroleum products on a quantitative basis for
substitution drawback purposes is consistent with the way the industry
operates physically. This is to say that fungible products are
commingled in storage tanks and pipelines. The ``molecule'' based
tracking methodology espoused by Customs is impractical and results in
no additional benefit to the U. S. Treasury. Indeed, molecule tracking
only results in additional costs that will end up being passed on to
the public.
We understand how Customs can interpret the vague, existing
language to mean molecule tracking of drawback qualifying product, but
we believe that it was not the intent of the drafters of the Customs
Modernization Act to make things more complicated and costly. The
technical corrections proposed by your Subcommittee Advisory No. TR-10
are needed to clarify matters.
We support the amendment to clarify the original intention of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thank you for the opportunity to comment.
Sincerely,
Kevin M. Carr
Vice President Control & Administration
Cargill/Northeast Petroleum
Beverly, MA 01915-0790
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Cargill/Northeast Petroleum wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Custom
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Barb Ducat
Controller
Chevron Chemical Company
U.S. Chemicals Division
Houston, TX 77010-3030
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington. D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Chevron Chemical Company wishes to
express its strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum and chemical products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely
Robert E. Kennedy
General Manager, Olefins
Chevron Products Company
Concord, CA 94524-2073
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Chevron Products Company wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Pat E. Yarrington
Comptroller
CITGO Petroleum Corporation
Tulsa, OK 74102-3758
August 13, 1997
A.L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, DC 20515
RE: June 30, 1997 Advisory from the Committee on Ways and Means,
Miscellaneous Corrections to Trade Legislation.
Dear Mr. Singleton,
CITGO is a major refining, marketing and transportation company
with 5,800 employees, 6 major manufacturing facilities, ownership of 52
marketing terminals and a product supplier to more than 14,000 branded
gasoline stations. We also currently operate in five foreign trade
zones, and thus have an ongoing relationship with the U.S. Customs
Service.
CITGO was pleased to note that the Committee has included in their
proposed miscellaneous corrections, a provision that is important to
help provide clarity to U.S. Customs practice. Item 3 listed in the
proposal will clarify the intention of the Customs Modernization Act
that selected petroleum products should be tracked on a quantitative
basis for purposes of substitution drawback. This provision is
necessary to ensure that private industry and the government are
working from the same rules. The provision recognizes the fungibility
of petroleum products, a long time practice by all petroleum companies
in the nation and an absolute necessity to supplying petroleum products
throughout the nation.
The American Petroleum Institute has submitted language amending
1313(p)(2)(a)(iv) of the Customs Modernization Act that will correct
current Customs interpretations of ``qualified imported article.''
CITGO strongly supports this language, and urges that it be included in
legislation reported out of the Committee. Thank you for your support.
Sincerely,
Ezra C. Hunt
Senior Vice President
Chief Financial Officer
Conoco Inc.
UPNA--Leveraged Services
Ponca City, OK 74602
August 12, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Conoco Inc. wishes to express our strong
support for Item 3, relating to the accounting and attribution rules
for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely.
James A. McDonald
Director--Excise Tax Division
UPNA--Leveraged Services
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
August 13, 1997
The Honorable Philip M. Crane
Chairman, Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 30514
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Delta Air Lines, Inc. wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. The law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like Delta
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thank you for your interest in this issue. We urge your
Subcommittee to approve this proposal at the earliest opportunity.
Very truly yours,
Thomas J. Roeck, Jr.
Senior Vice President--Finance
and Chief Financial Officer
DOW CHEMICAL COMPANY
LAKE JACKSON, TX 77566
THE HONORABLE PHILIP M. CRANE
CHAIRMAN
SUBCOMMITTEE ON TRADE
HOUSE COMMITTEE ON WAYS AND MEANS
1102 LONGWORTH HOUSE OFFICE BUILDING
WASHINGTON, D.C. 20515
DEAR CHAIRMAN CRANE:
IN RESPONSE TO YOUR JUNE 30,1997 REQUEST FOR COMMENTS ON
MISCELLANEOUS TRADE PROPOSALS, THE DOW CHEMICAL COMPANY WISHES TO
EXPRESS OUR STRONG SUPPORT FOR ITEM 3, RELATING TO THE ACCOUNTING AND
ATTRIBUTION RULES FOR DUTY DRAWBACK ON PETROLEUM PRODUCTS.
THIS ISSUE WAS ADDRESSED IN DETAIL AS PART OF THE CUSTOMS
MODERNIZATION ACT, ENACTED DECEMBER, 1993. THAT LAW PROVIDED SPECIAL
ACCOUNTING RULES TO ALLOW THE PETROLEUM INDUSTRY TO ACCOUNT FOR
SELECTED PETROLEUM PRODUCTS ON A QUANTITATIVE BASIS FOR PURPOSES OF
DUTY DRAWBACK CLAIMS. WITHOUT THAT PROVISION, IN ORDER TO FILE CERTAIN
DRAWBACK CLAIMS FOR PRODUCT THAT IS EXPORTED, COMPANIES LIKE OUR OWN
WOULD HAVE TO TRACK THE ACTUAL MOLECULES OF CERTAIN PETROLEUM
DERIVATIVES AS THE PRODUCT TRAVELS THROUGH A SERIES OF PIPELINES AND
TANKS, COMINGLED WITH LIKE PRODUCTS FROM OTHER SOURCES. THIS, OF
COURSE, WOULD BE AN IMPOSSIBLE ACCOUNTING FEAT THAT IN EFFECT WOULD
PREVENT US FROM OBTAINING DUTY DRAWBACK FOR EXPORTS OF MANY PETROLEUM
PRODUCTS.
WE AND OTHERS IN INDUSTRY THOUGHT THE CUSTOMS MODERNIZATION ACT
PROVISION SETTLED THE MATTER ONCE AND FOR ALL. HOWEVER, THERE APPEARS
TO BE CONFUSION AT CUSTOMS ON HOW TO IMPLEMENT THIS PROVISION. THEIR
APPARENT INTERPRETATION WOULD ONCE AGAIN REQUIRE THE ``TRACKING OF
MOLECULES''--A RESULT CLEARLY NOT INTENDED BY THE CUSTOMS MODERNIZATION
ACT. THAT IS WHY THE PROPOSED TECHNICAL CORRECTION IN YOUR JUNE 30,1997
PRESS RELEASE IS NEEDED--TO CLARIFY THE ORIGINAL INTENT OF THE CUSTOMS
MODERNIZATION ACT THAT SELECTED PETROLEUM PRODUCTS SHOULD BE TRACKED ON
A QUANTITATIVE BASIS FOR PURPOSES OF SUBSTITUTION DRAWBACK.
THANKS, FOR YOUR INTEREST IN THIS ISSUE. WE URGE YOUR SUBCOMMITTEE
TO APPROVE THIS PROPOSAL AT THE EARLIEST OPPORTUNITY.
SINCERELY,
JOHN D. WILLIAMS JR.
IMPORT SERVICES MANAGER
080897
E.I. du Pont de Nemours and Company
Wilmington, DE 19898
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, E. I. DuPont wishes to express our
support for Item 3, relating to the accounting and attribution rules
for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies would have to
track the actual molecules of certain petroleum derivatives as the
product travels through a series of pipelines and tanks, commingled
with like products from other sources. This, of course, would be an
impossible accounting feat that in effect would prevent the filing of
duty drawback for exports of many petroleum products.
The Customs Modernization Act provision was intended to finally
settle the matter. However, there now appears to be a difference in
interpretation on how to implement this provision. Customs' apparent
interpretation would once again require the ``tracking of molecules''--
a result clearly not intended by the Customs Modernization Act. That is
why the proposed technical correction in your June 30, 1997 press
release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We request your
Subcommittee to approve this proposal at the earliest opportunity.
Sincerely,
JANET S. KEMPF
DUTY DRAWBACK MANAGER
Enron Corp.
Washington, D.C. 20006-4607
August 12, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Attn: Mr. A.L. Singleton, Chief of Staff
Re: Customs Modernization Act--Drawback Clauses--Item 3
Dear Mr. Chairman:
Enron wishes to associate itself with others supporting the need to
clarify that the original intent of the Customs Modernization Act was
that selected petroleum products should be tracked on a quantitative
basis for purposes of substitution drawback.
Therefore, we are submitting this statement of position as part of
your record.
Sincerely,
E. Joseph Hillings
Vice President and General Manager--Federal Government Affairs
Entec Polymers, Inc.
Maitland, FL 32751
August 7, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Entec Polymers, Inc. wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
David J. Der Hagopian
President
Exxon Company, U.S.A.
Houston, Texas 77252-2180
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Exxon Company U.S.A. wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
L. J. Berniard III
Coordinator
Fina Oil and Chemical Company
Dallas, Texas 75221-2159
August 12, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Re: Fina Oil and Chemical Company's Response to Your June 30, 1997
Request for Comments on Miscellaneous Corrections to Trade
Legislation--Item 3 relating to 19 USC 1313(p)(2(a)(iv) (``Item
3'')
Dear Representative Crane:
Fina Oil and Chemical Company supports the passage of Item 3. Item
3 will continue to allow for the refund of duties that an importer pays
to the U.S. Customs Service on certain petroleum products when similar
products are exported. Item 3 clarifies and codifies the current
practice and prevents the U.S. Customs Service from imposing unworkable
accounting rules on companies that deserve and rely upon drawback.
To promote our nation's exports and economic well-being, Congress
has long promoted programs to refund duties importers pay on certain
products if those products are again exported (some of those programs
are almost as old as our country). ``Substitution'' drawback allows for
a duty refund on products of the same kind and quantity under 19 USC
1313(p). The exported product does not have to be the same exact
article that was imported--an article of the same kind and quantity
will do. Substitution drawback is particularly important for the
petroleum industry because such products are moved through countless
miles of pipes and commingled in common storage facilities with like
products from various sources.
By passing 19 USC 1313(p)(2(a)(iv), and clarifying its reach in the
Customs Modernization Act of 1993 (``Mod Act''), Congress allowed
drawback claimants to use ``quantitative'' accounting to avoid the
bureaucratic and accounting nightmare if a company had to directly
track the disposition of imported petroleum products. As the
legislative history makes clear, Congress was seeking to ``permit the
effective use of present law and substantially reduce paperwork for the
industry and administrative costs for the Government.'' Congress did
not worry that companies would abuse their drawback privileges because
the Customs Service ``will be able to ensure greater compliance through
the use of enhanced penalty and informed compliance provisions''
elsewhere in the Mod Act.
For several years now, the U.S. Customs Service abided by this
clear congressional mandate, but now threatens to impose unwieldy and
expensive administrative burdens on petroleum companies. This
unanticipated and unneeded policy change will not make the substitution
drawback program more secure, but will only result in needless
paperwork, lost exports, and lost jobs.
Item 3 will ensure that this does not happen, and will make certain
that companies continue to receive the duty refunds owed to them.
I welcome your questions and, if asked, will gladly supplement this
comment with additional information.
Sincerely,
Jim Bailey
Manager, Unbranded Fuels and Business Development,
Southeastern Business Unit, Fina Oil and Chemical Company
Galaxy Energy (U.S.A.), Inc.
Houston, Texas 77060
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Galaxy Energy (U.S.A.), Inc. wishes to
express our strong supports Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Paul A. Strong
Operations Manager
George E. Warren Corporation, Energy
Vero Beach, Florida 32960-5518
August 7, 1997
The Honorable Philip M. Crane, Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, George E. Warren Corporation wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Jonathan W. Taylor
Treasurer
Georgia Gulf Corporation
Plaquemine, LA 70765-0629
August 8, 1997
The Honorable Philip M. Crane
Chairman
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Georgia Gulf Corporation wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting task that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Janice Owens
Customs Administrator
cc: Will Hinson, Manager Legislative, Community & Public Affairs
Global Petroleum Corp.
Waltham, MA 02254-9161
August 6, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Global Petroleum Corp. wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duly drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies would have to
track the actual molecules of certain petroleum derivatives as the
product travels through a series of pipelines and tanks, commingled
with like products from other sources. Such tracking would be an
impossible accounting feat that in effect would prevent us from
obtaining duty drawback for exports of many petroleum products.
Global Petroleum Corp. thought the Customs Modernization Act
provision settled the above-identified matter once and for all.
However, there appears to be confusion at Customs on how to implement
this provision. The apparent interpretation of Customs would once again
require the ``tracking of molecules''--a result clearly not intended by
the Customs Modernization Act. The proposed technical correction in
your June 30, 1997 press release is needed to clarify the original
intent of the Customs Modernization Act that selected petroleum
products should be tracked on a quantitative basis for purposes of
substitution drawback.
Thank you for your interest in this issue. We urge your
Subcommittee to approve this proposal at its earliest opportunity.
Very truly yours,
Edward J. Faneuil
General Counsel
EJF/mdc
Gulf Coast Drawback Services, Inc.
Katy, Texas 77450
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Gulf Coast Drawback Services, Inc.
wishes to express our strong support of Item 3, relating to the
accounting and attribution rules for duty drawback on petroleum
products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Bobby Waid
President
H. Muehlstein & Company, Inc.
Norwalk, CT 06854-1631
August 8, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, H. Muehlstein & Company, Inc. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Jerry J. Johnston
Vice President
jw
Houston Marine Services, Inc.
Houston, Texas 77007
August 6, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Houston Marine Services wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
James S. Riley, Jr.
Vice President
Comments of the Independent Fuel Terminal Operators Association
The Independent Fuel Terminal Operator Association
(``IFTOA'') hereby submits these comments to the Subcommittee
on Trade of the House Committee on Ways and Means in response
to its ``Request for Written Comments on Miscellaneous
Corrections to Trade Legislation and Miscellaneous Duty
Suspension Bills.''
I. Introduction
IFTOA is an association of independent companies which own
or control oil terminals, located along the East Coast from
Maine to Florida, capable of receiving ocean-going tankers.
Members are primarily importers, exporters and marketers of
home heating oil, gasoline, and residual fuel oils at the
wholesale and retail levels. As a result of their import and
export activities, they participate at times in the duty
drawback program. Accordingly, Members would be significantly
affected by the recent debate between the petroleum industry
and the U.S. Customs Service regarding the proper means of
implementing ``Substitution Duty Drawback'' for refined
petroleum products.
In 1990 and 1993, Congress adopted amendments addressing
``Substitution Duty Drawback'' consistent with a position of
the petroleum industry: (1) the refunds would be based on
exported volumes not exceeding the volumes imported, and (2)
only a quantitative ``match-up'' of imported and exported
material would be required. However, Customs has repeatedly
interpreted the law in a more restrictive manner. Earlier this
year Customs informally indicated that it may once again impose
a restrictive interpretation. In response, the Association
urges Congress to adopt a clarifying amendment to resolve the
matter.
II. Background
A. Duty Drawback
``Duty Drawback'' is the procedure whereby 99 percent of
duties paid on an imported entry may be refunded if the goods
or a product made from the imported material are exported. 19
U.S.C. section 1313(a). ``Substitution Duty Drawback'' occurs
when there is the exportation of a product that is of the same
``kind and quality'' as an imported product; in such a case,
the exported product is substituted for the imported product,
and the refund is permitted. In addition, the quantity of the
exported product does not exceed that of the imported product.
19 U.S.C. section 1313(b).
B. Pre-1987 Practice
Prior to 1987, ``Substitution Duty Drawback'' permitted an
exporter to qualify for a refund if, measured on a monthly
basis, the exported petroleum products were of the same kind
and quality and quantity of the imported petroleum products.
Customs permitted the exporter to calculate exports from an
entire tank farm operated as a single facility. Industry
supported this interpretation and found compliance relatively
easy.
C. 1987 Ruling
In 1987, Customs issued Customs Service Decision 88-1.\1\
That ruling permitted ``Substitution Duty Drawback'' if
exported product withdrawn from a single commingled tank on a
monthly basis did not exceed the quantity of the imports.
However, petroleum products commingled in separate tanks in a
common storage facility were required to be accounted for on a
daily and per tank basis pursuant to an acceptable accounting
method such as ``First In-First Out.'' The petroleum industry
found this requirement to be too burdensome and seldom used the
procedure.
---------------------------------------------------------------------------
\1\ 22 Cust. B. & Dec. No. 307 (June 29, 1987).
---------------------------------------------------------------------------
D. 1990 Trade Act
In 1990, the petroleum industry urged Congress to amend the
law to make clear that ``Substitution Duty Drawback'' could be
used if (1) imported and exported goods of like kind and
quality were substituted for one another; (2) the exported
products did not quantitatively exceed the imported products;
and (3) calculations for compliance purposes could be made on a
monthly basis.
Pursuant to that request, Congress enacted Section 484A of
the ``Customs and Trade Act of 1990.'' \2\ It embodied the
industry position and was enacted after 18 months of
negotiations among Congress, the industry and the U.S. Customs
Service. However, Section 484A required that the product be
commingled in a common facility, and industry members could not
use the procedure for petroleum products stored at different
facilities. Because petroleum products frequently are stored at
a number of common storage facilities before reaching the point
of export, the ``common facility'' requirement proved to be an
obstacle, and the procedure fell into disuse.
---------------------------------------------------------------------------
\2\ P.L. 101-382 (August 20, 1990).
---------------------------------------------------------------------------
E. 1993 Statute
Accordingly, in 1993 the petroleum industry again urged
Congress to address the matter by adopting a revised or
clarifying provision. Section 632(a)(6) of the North American
Free Trade Agreement Implementation Act was designed to
simplify the ``Substitution Duty Drawback'' procedure for
petroleum.\3\ It was intended to require that an exporter only
match the quantity of his export with the quantity of the
import of material of the same kind and quality.
---------------------------------------------------------------------------
\3\ P.L. 103-182 (December 8, 1993).
---------------------------------------------------------------------------
However, the section was not precisely drafted. It provided
that a drawback claim may be made for petroleum products
exported in the same or greater quantity as a ``qualified
article'' if the exporter:
(i) manufactured or produced the qualified article;
(ii) purchased or exchanged the qualified article from a
manufacturer or producer;
(iii) imported the qualified article; or
(iv) purchased or exchanged, directly or indirectly, an
imported qualified article from an importer.\4\
---------------------------------------------------------------------------
\4\ 19 U.S.C. section 1313(p)(2)(A) (emphasis added).
---------------------------------------------------------------------------
The ``qualified article,'' as defined in subparagraph 3(A),
must be either manufactured or produced in the United States or
imported duty-paid.
III. Current Customs Interpretation
A. Subsection (A)(iv)
As indicated, in subparagraph (A)(iv) of the 1993
provision, unlike subparagraphs (i) through (iii), ``qualified
article'' is described as an ``imported qualified article.''
The U.S. Customs Service has informally indicated to industry
that it may interpret this distinction as a requirement that
the product imported by a person, other than the exporter, must
be tracked and identifiable ``molecule for molecule'' when it
is sold to the exporter. The exporter would then have the
ability to substitute another product for exportation. Such an
interpretation would be inconsistent with the statutory intent
of the 1993 law. The legislative history makes clear that the
1993 amendment was designed to provide greater flexibility to
industry when claiming duty drawback and to reduce paperwork
for the industry and administrative costs for the government.
Thus, while the language of the provision is not clear, the
interpretation that Customs is considering would negate the
very purpose of the measure.
B. Retroactivity
In addition, Section 632(b) of the North American Free
Trade Agreement Implementation Act provides for retroactive
application of the petroleum drawback provisions to all claims
filed or liquidated on or after January 1, 1988 and
unliquidated, under protest or in litigation as of December 8,
1993. Industry representatives believe that Customs may take a
restrictive position to prevent the expensive refund of duties
over such a long period of time.
However, of particular concern is the applicability of
Customs' restrictive interpretation on certain claims that may
have already been paid. Under section 191.72 of the Customs
regulations, an exporter can post a bond and have a duty
drawback refund accelerated within three weeks of submitting
the claim. Customs then takes additional time to finish
processing the claim and may require repayment if it is not
substantiated. Many exporters are currently receiving duty
drawback money pursuant to this expedited procedure. If Customs
were to apply its restrictive position retroactively to those
claims, recipients would have to return the money to Customs.
Indeed, it has been suggested that companies would even have to
refund money from claims liquidated after December 8, 1993. In
either case, claimants have relied in good faith on the intent
of the law, and the economics of the numerous transactions
would be undone, thereby creating financial hardship for those
companies.
IV. Conclusion
Accordingly, the Independent Fuel Terminal Operators
Association respectfully requests that Congress include a
``Substitution Duty Drawback'' amendment in any bill addressing
``Miscellaneous Corrections to Trade Legislation.'' Such an
amendment should provide a drawback mechanism based strictly on
a ``quantitative'' basis: (1) the volume of exported product
qualifying for the drawback refund could not exceed the volume
of ``qualified product'' that was imported into the country;
and (2) the petroleum industry would not have to trace the
molecules of the imported product from the importer to the
exporter. A quantitative provision would be a practical and
commercially realistic means of applying the ``Substitution
Duty Drawback'' provision.
The Association appreciates the opportunity to provide
these comments and would be pleased to assist the Subcommittee
on this issue.
Thank you very much.
ITOCHU International, Inc.
Houston, Texas 77057-3009
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, ITOCHU International, Inc. wishes to
express its strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted December 8, 1993. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Hideaki Hirako
General Manager
JBC International
Washington, D.C. 20006
August 15, 1997
Mr. A.L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office
Washington, D.C. 20515
Re: Comments on Proposed Miscellaneous Corrections to US Trade Laws
Dear Mr. Singleton:
On behalf of JBC International and a number of its clients, I wish
to comment on several of the proposed miscellaneous corrections
published in your release of June 30, 1997, No. TR-10. We offer our
support for items 3, 4, 5, 7, 8, 9, and 10. We have no comment on the
other items.
As an active participant in the development of the Customs
Modernization Act (ModAct) and Chairman of the Industry Functional
Advisory Committee for Customs matters, I have a keen interest in the
facilitation of merchandise processing and rigorous enforcement of US
trade laws. A number of these corrections remove ambiguities and
confusion about the intention of NAFTA and the ModAct for the benefit
of US Customs officials who are administering the law. For example, if
a product is found to be eligible for NAFTA preference, it should enjoy
all of the benefits of that eligibility, including exemption from the
Merchandise Processing Fee.
On another item, confidential treatment of company information is
becoming even more critical with the development of international
automation. We fully support the Committee's efforts to clarify the
language as outlined in the notice.
Lastly, all aspects of Customs clearance must come under a program
of electronic filing. The issue of the progress of the implementation
of the National Customs Automation Program is much bigger than foreign-
trade zone filings. We are looking forward to working with the
Committee and others in Congress and the Administration to expedite the
development and implementation of the Customs Automated Environment.
We thank you for the opportunity to submit these comments. We are
prepared to respond to any questions Committee members or staff may
have about our views.
Sincerely,
James B. Clawson
J.G. Eberlein & Co., Inc.
New York, N.Y. 10006
August 14, 1997
Hon. Philip M. Crane, Chairman
House Ways & Means Subcommittee on Trade
1035 Longworth House Office Bldg.
Washington, D.C. 20515
Dear Chairman Crane:
We appreciate the opportunity to express our support for two of the
technical trade proposals announced in your press release dated June
30, 1997.
Item 3--ACCOUNTING RULES FOR DRAWBACK ON PETROLEUM PRODUCTS
The Customs Modernization Act (P.L. 103-182) amended the drawback
statute (19 U.S.C. Section 1313(p) to provide for special accounting
and attribution rules for drawback on petroleum products. The purpose
of the amendment was to permit the accounting of selected petroleum
products on a ``quantitative basis'' rather than a molecule for
molecule basis for attribution of substitution drawback thereby
alleviating the arduous task of tracing molecules.
Since the enactment of the Customs Modernization Act, Customs has
been giving inconsistent and conflicting signals on the implementation
of this amendment. Customs now is apparently of the opinion that the
actual imported petroleum must be tracked to the possession of the
exporter, in effect, mandating the tracing of molecules under Section
1313(p)(2)(A)(iv). This interpretation is diametrically opposed to the
intent of the statute, and furthermore is in direct conflict with
Customs own written guidance procedures.
This technical amendment will serve to rectify Customs
misinterpretation by providing the needed clarification as to the
meaning of original provision and is revenue neutral.
Item 4--DRAWBACK ELIGIBLE CONTAINERS ``FILLED'' PRIOR TO EXPORTATION
This technical amendment is needed to clarify that drawback
eligible containers manufactured in the United States will not be
considered to have been ``used'' in the United States (and thereby
disqualified for drawback) if, prior to exportation such containers are
filled by someone other than the manufactures of such containers.
In general, drawback is allowable upon the exportation of articles
manufactured in the United States with the use of imported materials,
``provided that such articles have not been'' used prior to
exportation. A number of manufacturers in the United States produce
packing containers with the use of imported materials. Recently, an
issue has been raised by Customs as to whether the ``filling'' of the
container prior to its exportation constitute a use of such container
making it ineligible for drawback.
The Customs Modernization Act added a new subsection (q) to Section
313 of the Tariff Act providing for drawback on packaging materials
under manufacturing or same condition drawback (subsections (a), (b),
(c) or (j) of Section 313) where the packaging is ``used'' by filling
with a substance prior to exportation.
However, in Customs Headquarters, Ruling 227276 dated April 7, 1997
restricts this provision to the filling of containers by the
manufacturer of such containers. Customs interpretation of the statute
is that the filling of a container by anyone other than the
manufacturer of the container constitutes a disqualifying use and
renders the container ineligible for drawback upon its exportation.
Customs interpretation reverses its prior position (Customs
Headquarters Ruling 225658 dated January 17, 1995) allowing drawback on
containers regardless of who filled the container.
We are of the opinion that these results were unintended by the
statute and constitute a major policy change.
This technical amendment would rectify this situation by providing
that packing material may be used by the manufacturer or any other
person prior to export and remain eligible for drawback.
This change is revenue neutral as it merely clarifies the intent of
Congress in passing the Customs Modernization Act on this provision.
We respectfully request that your Subcommittee advance both these
measures at the earliest possible time.
Very truly yours,
Edward P. Denninger, Sr.
Executive Vice President
EPD,Sr.:pa
J.M. Rodgers Co., Inc.
New York, NY 10006-1039
August 14, 1997
Committee on Ways and Means
U.S. House of Representatives
Dear Chairman Crane:
J. M. Rodgers Co., Inc. appreciates the opportunity to express our
wholehearted support for two technical trade proposals included in your
June 30 press release.
Drawback-Eligible Containers ``Filled'' Prior to Exportation
The first is item number 4, which would make a technical change in
the drawbackstatute to clarify that drawback-eligible containers
manufactured in the UnitedStates, will not be considered to have been
``used'' in the United States (and thereby disqualified for drawback)
if, prior to exportation, such containers are filled by someone other
than the manufacturer.
Generally, duty drawback is allowed upon the export of articles
manufactured or produced within the U.S. with the use of imported
materials, provided that those articles have not been used prior to
exportation. A number of manufacturers throughout the United States
produce packaging products (bottles, cartridges, etc.) made from
imported materials. In recent years, the issue has arisen as to whether
``filling'' the container prior to its export constitutes a ``use'' of
the article, which would make it ineligible for duty drawback.
To address this situation, the Customs Modernization Act added a
new subsection (q) to Section 313 f the Tariff Act, specifically
allowing drawback on packaging materials, under manufacturing or same
condition drawback [subsections (a), (b), (c) or (j) of Section 313]
where the packaging is ``used'' by filling with a substance prior to
exportation.
However, a recent Customs ruling [Customs Headquarters Ruling
227276 of April 7, 1997] limits this provision only to ``filling'' of a
container by the manufacturer of the container. According to Customs
interpretation, filling of a container by anyone other than the
manufacturer is a disqualifying ``use'' and, therefore, the container
is not eligible for drawback upon export. Customs position reverses a
prior ruling [Customs Headquarters Ruling 225658 f January 17, 1995]
allowing drawback for the container or packaging material, regardless
of who filled it.
J.M. Rodgers Co. Inc. believes that this result was unintended by
Congress and represents a major change in policy. The proposed
amendment in Item 4 of your press release would ameliorate the problem
by providing that U. S.-produced packaging material may be ``used'' by
the manufacturer or any other person and, thus, will remain eligible
for duty drawback upon export. This is a non controversial change and
one that is revenue-neutral, since it simply clarifies what Congress
intended to accomplish in passing the Customs Modernization Act
provision on this issue.
Acounting Rules for Drawback on Petroleum Products
The second proposal we support is Item 3 of the press release. The
current drawback statute [19 U.S.C. Section 1313(p)] was amended by the
Customs Modernization Act [P.L. 103-182] to provide special accounting
and attribution rules for drawback on petroleum products. The purpose
of the amended petroleum provisions was to allow the industry to
account for selected petroleum products on a quantitative basis,
relieving the industry from the impossible task of ``tracing
molecules'' for the attribution of drawback.
Since passage of the Customs Modernization Act, Congress has given
conflicting signals on how they will implement the provision. It now
appears Customs will be taking the position that companies are required
to track delivery of the actual Imported petroleum to the possession of
the exporter, in effect requiring the tracing of molecules under
Section 1313(p)(2)(A)(iv). This interpretation is flatly inconsistent
with the intent of the statute, as well as with Customs' own interim
guidance procedures.
The proposed technical change in Item 3 would remedy this
situation, providing needed clarification as to the meaning of the
original Customs Modernization provision. Again, this is a non
controversial change in the accounting rules for attribution of duty
drawback and is also revenue neutral.
J.M. Rodgers co. Inc. strongly supports both of these technical
trade provisions and urge your subcommittee to advance both measures at
the earliest opportunity.
Sincerely,
Frank McCarthy
Vice President
Lyondell Petrochemical Company
Houston, Texas 77253-3646
August 15, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997, request for comments on
miscellaneous trade proposals, Lyondell Petrochemical Company wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997, press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thank you for your interest in this issue. We urge your
subcommittee to approve this proposal at the earliest opportunity.
Sincerely,
P. Beth McCutcheon
General Tax Officer
JFA/mcs
cc: B. Wade-Gulf Coast Drawback Services
MAPCO Alaska Petroleum, Inc.
Anchorage, Alaska 99503-3960
August 7, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, MAPCO Alaska Petroleum, Inc. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Randy M. Newcomer
President
RMN/kar
Matrix Marine Fuels, L.L.C.
Houston, Texas 77213-6290
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Matrix Marine Fuels, L.L.C. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Kim M. Ivy
Vice President, Finance
KMI/cdr
MIECO Inc.
Long Beach, CA 90802-4828
August 8, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, MIECO Inc. wishes to express our strong
support for Item 3, relating to the accounting and attribution rules
for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Very truly yours,
Richard E. Lowell
Director of Administration and Counsel
Millennium Petrochemicals Inc.
A Millennium Chemicals Company
Cincinnati, OH 45249
August 8, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Millennium Petrochemicals Inc. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Henley R. Webb
Vice President and General Counsel
Montell USA, Inc.
Montell Polyolefins
Wilmington, DE 19850-5439
August 12, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Montell USA, Inc. wishes to express our
strong support for Item 3, relating to the accounting and attribution
rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Randall W. Simpson
Supervisor--Transportation, Distribution & Fleet Systems/Services
CMAct
RWS:pk
National Council on International Trade Development (NCITD)
Washington, DC 20006
August 15, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on the
miscellaneous trade proposals, the National Council on International
Trade Development (NCITD) wishes to express our strong support for Item
3, relating to the accounting and attribution rules for duty drawback
on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. The law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, the companies in our
association would be forced to track the actual molecules of certain
petroleum derivatives as the product travels through a series of
pipelines and tanks, commingled with like products from other sources.
This, of course, would be an impossible accounting feat that would
effectively prevent us from obtaining duty drawback for exports of many
petroleum products.
The NCITD, and others involved with the industry, thought the Mod
Act provision settled the matter once and for all. However, there
appears to be confusion at Customs on how to implement this provision.
Their apparent interpretation would once again require the ``tracking
of molecules''--a result clearly not intended by the Mod Act. For this
reason, the proposed technical correction in your June 30, 1997 press
release is needed to clarify the original intent of the Mod Act, that
selected petroleum products should be tracked on a quantitative basis
for purposes of substitution drawback.
We thank you for your interest in this issue. We urge the
Subcommittee to approve this proposal at the earliest opportunity.
Sincerely,
Ray Shaw
Chairman, Drawback Committee
National Customs Brokers & Forwarders Association of
America
Washington, DC 20036
August 15, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
The National Customs Brokers and Forwarders Association of America
(NCBFAA) appreciates the opportunity to express our wholehearted
support for two technical trade proposals included in your June 30
press release.
Drawback-Eligible Containers ``Filled'' Prior To Exportation
The first is item number 4, which would make a technical change in
the drawback statute to clarify that drawback-eligible containers,
manufactured in the United States, will not be considered to have been
``used'' in the United States (and thereby disqualified for drawback)
if, prior to exportation, such containers are filled by someone other
than the manufacturer.
Generally, duty drawback is allowed upon the export of articles
manufactured or produced within the U.S. with the use of imported
materials, provided that those articles have not been used prior to
exportation. A number of manufacturers throughout the United States
produce packaging products (bottles, cartridges, etc.) made from
imported materials. In recent years, the issue has arisen as to whether
``filling'' the container prior to its export constitutes a ``use'' of
the article, which would make it ineligible for duty drawback.
To address this situation, the Customs Modernization Act added a
new subsection (q) to Section 313 of the Tariff Act, specifically
allowing drawback on packaging materials, under manufacturing or same
condition drawback [subsections (a), (b),(c) or (j) of Section 313]
where the packaging is ``used'' by filling with a substance prior to
exportation.
However, a recent Customs ruling [Customs Headquarters Ruling
227276 of April 7, 1997] limits this provision only to ``filling'' of a
container by the manufacturer of the container. According to Customs
interpretation, filling of a container by anyone other than the
manufacturer is a disqualifying ``use'' and, therefore, the container
is not eligible for drawback upon export. Customs position reverses a
prior ruling [Customs Headquarters Ruling 225658 of January 17, 1995]
allowing drawback for the container or packaging material, regardless
of who filled it.
NCBFAA believes that this result was unintended by Congress and
represents a major change in policy. The proposed amendment in Item 4
of your press release would ameliorate the problem by providing that
U.S.-produced packaging material may be ``used'' by the manufacturer or
any other person and, thus, will remain eligible for duty drawback upon
export. This is a noncontroversial change and one that is revenue-
neutral, since it simply clarifies what Congress intended to accomplish
in passing the Customs Modernization Act provision on this issue.
Accounting Rules for Drawback on Petroleum Products
The second proposal we support is Item 3 of the press release. The
current drawback statute [19 U.S.C. Section 1313(p)] was amended by the
Customs Modernization Act [P.L. 103-182] to provide special accounting
and attribution rules for drawback on petroleum products. The purpose
of the amended petroleum provisions was to allow the industry to
account for selected petroleum products on a quantitative basis,
relieving the industry from the impossible task of ``tracing
molecules'' for the attribution of drawback.
Since passage of the Customs Modernization Act, Customs has given
conflicting signals on how they will implement the provision. It now
appears Customs will be taking the position that companies are required
to track delivery of the actual imported petroleum to the possession of
the exporter, in effect requiring the tracing of molecules under
Section 1313(p)(2)(A)(iv). This interpretation is flatly inconsistent
with the intent of the statute, as well as with Customs' own interim
guidance procedures.
The proposed technical change in Item 3 would remedy this
situation, providing needed clarification as to the meaning of the
original Customs Modernization provision. Again, this is a
noncontroversial change in the accounting rules for attribution of duty
drawback and is also revenue neutral.
NCBFAA strongly supports both of these technical trade provisions
and urge your Subcommittee to advance both measures at the earliest
opportunity.
Sincerely,
Michael Dugan
President
Neste Oy
Houston, TX 77027
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
RE: Miscellaneous Corrections to Trade Legislation
Dear Chairman Crane,
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Neste Oy wishes to express our strong
support for Item 3, relating to the accounting and attribution rules
for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought that Customs Modernization
Act provision settled the matter once and for all. However, there
appears to be confusion at Customs on how to implement this provision.
Their apparent interpretation would once again require the ``tracking
of molecules''--a result clearly not intended by the Customs
Modernization Act. That is why the proposed technical correction in
your June 30, 1997 press release is needed--to clarify the original
intent of the Customs Modernization Act that selected petroleum
products should be tracked on a quantitative basis for purposes of
substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Respectfully submitted,
Mauri Hattunen
Vice President
KHB/bap
Northville Industries Corp.
Melville, New York 11747-0398
August 7, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Northville Industries Corp. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with the products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Joseph J. Ackell
Senior Vice President,
Chief Legal and Public Affairs Officer
Northwest Airlines, Inc.
Department A4192
St. Paul, MN 55111-3034
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Northwest Airlines wishes to express our
strong support for Item 3, relating to the accounting and attribution
rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and or all. However, there appears to
be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Michelle S. Dalsin
Manager Fuel Control
NOVA Chemicals Inc.
Houston, Texas 77060
August 7, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, NOVA Chemicals Inc. wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Wayne Holden
Business Segment Leader, Styrene Monomer
WH:hrh
Petro-Diamond Incorporated
Irvine, California 92713-9617
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments of
miscellaneous trade proposals, Petro-Diamond Incorporated wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as a part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that if exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the tracking of
molecules--a result clearly not intended by the Customs Modernization
Act. That if why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thank you for your interest in this issue. We urge Your
Subcommittee to approve this proposal at the earliest opportunity.
Sincerely,
James J. Keating
President
Phillips Petroleum Company
Bartlesville, Oklahoma 74004
August 12, 1997
The Honorable Philip M. Crane
Chairman, Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
This is in response to your June 30, 1997 request for comments on
miscellaneous trade proposals. Phillips Petroleum Company strongly
supports Item 3, relating to the accounting and attribution rules for
duty drawback on petroleum products.
We and others in the industry feel that the Customs Modernization
Act, enacted in December of 1993, addressed and settled the issue. This
law provided special accounting rules to allow the petroleum industry
to account for certain specific petroleum products on a quantitative
basis for purposes of claiming duty drawbacks. Without these special
rules Phillips and other companies in the industry would not be able to
file for duty drawback on many exports, unless we could perform the
effectively impossible accounting feat of tracking the actual molecules
of specific petroleum derivatives as they pass through various tanks
and pipelines and are commingled with like products from other sources.
Clearly, the intent of the Customs Modernization Act was to facilitate
the claiming of duty drawback, not to hamper it. Yet in the confusion
of how to implement the law, Customs appears to have reverted back to
the philosophy of tracking molecule by molecule.
The proposed technical correction in your June 30, 1997 press
release is most definitely needed in order to clarify the original
intent of the Customs Modernization Act (that selected petroleum
products should be tracked on a quantitative basis for purposes of
substitution drawback).
We thank you for your interest in this issue and we urge your
Subcommittee to approve this proposal as soon as possible.
Sincerely,
Joseph W. O'Toole
Vice President and General Tax Officer
Rohm and Haas Company
Philadelphia, PA 19106-2399
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Rohm and Haas Company wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical corrections in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Geoffrey B. Hurwitz
Director of Government Relations
Shell Oil Company
Houston, Texas 77252
August 6, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Shell Oil Company wishes to express our
strong support for Item 3, relating to the accounting and attribution
rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Steven C. Stryker
Vice President, General Tax Counsel
Statoil North America Inc.
Stamford, CT 06905
August 14, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Statoil North America wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Mark Cain
MC/js
Sterling Chemicals, Inc.
Houston, Texas 77002-4312
August 6, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Sterling Chemicals, Inc. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
The issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
William J. Magnuson, Jr.
Tax Manager
Trans World Airlines, Inc.
St. Louis, Missouri 63101
August 7, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Trans World Airlines wishes to express
our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travel's through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of jet fuel.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at your earliest opportunity.
Sincerely,
Michael J. Palumbo
Senior Vice President & CFO
Ultramar Diamond Shamrock Corporation
San Antonio, Texas 78269-6000
The Honorable Philip M. Crane
Chairman
Subcommittee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Ultramar Diamond Shamrock wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the customs Modernization
Act. That is why the proposed technical correction in your June 30,
1997 press release is needed--to clarify the original intent of the
Customs Modernization Act that selected petroleum products should be
tracked on a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
W. Reed Williams
Vice President, Product Supply
United Airlines
World Headquarters
Chicago, Illinois 60666
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, United Airlines wishes to express our
strong support for Item 3, relating to the accounting and attribution
rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
James V. Sines
Vice President Purchasing
Valero Refining Company
Houston, Texas 77052-3720
August 11, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Valero Refining Company wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Roberta M. Rossi
Vice President and Managing Attorney
Venture Coke Company L.L.C.
Houston, TX 77079
August 6, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Venture Coke Company L.L.C. wishes to
express our strong support for Item 3, relating to the accounting and
attribution rules for duty drawback on petroleum products.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided special
accounting rules to allow the petroleum industry to account for
selected petroleum products on a quantitative basis for purposes of
duty drawback claims. Without that provision, in order to file certain
drawback claims for product that is exported, companies like our own
would have to track the actual molecules of certain petroleum
derivatives as the product travels through a series of pipelines and
tanks, commingled with like products from other sources. This, of
course, would be an impossible accounting feat that in effect would
prevent us from obtaining duty drawback for exports of many petroleum
products.
We and others in the industry thought the Customs Modernization Act
provision settled the matter once and for all. However, there appears
to be confusion at Customs on how to implement this provision. Their
apparent interpretation would once again require the ``tracking of
molecules''--a result clearly not intended by the Customs Modernization
Act. That is why the proposed technical correction in your June 30,1997
press release is needed--to clarify the original intent of the Customs
Modernization Act that selected petroleum products should be tracked on
a quantitative basis for purposes of substitution drawback.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
J.W. Thompson
Chief Financial Officer
Proposed Miscellaneous Corrections #4
Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) was
amended by the North American Free Trade Agreements
Implementation Act [P.L. 103-182] to insert a new subsection
(q) allowing drawback on packaging materials, where the
packaging is ``used'' by filling prior to exportation. Customs
interprets ``use'' by filling to be limited to the manufacturer
of the packaging material and that filling may not be performed
by another company. Customs proposes to reverse or modify
Headquarters ruling 225658 of January 17, 1995, allowing such
treatment. This proposed provision would amend section 313(q)
of the Tariff Act of 1930 (19 U.S.C. 1313(q)) by inserting a
new section for drawback eligible packing material filled prior
to exportation. The proposed provision would provide that
packaging materials produced in the United States, which are
used by the manufacturer or any other person for articles which
are exported or destroyed shall be eligible for a drawback
refund of 99 percent of any duty, tax, or fee imposed on the
importation of materials used to manufacture the packing
materials. The proposed amendment would provide that U.S.-
produced packaging material may be ``used'' by the manufacturer
or any other person and, thus, will remain eligible for
drawback payment.
see also Customs and International Trade Bar Association under Proposed
Miscellaneous Corrections #1
see also JBC International under Proposed Miscellaneous Corrections #3
see also J.G. Eberlein & Co., Inc. under Proposed Miscellaneous
Corrections #3
see also J.M. Rodgers Co., Inc. under Proposed Miscellaneous
Corrections #3
see also National Customs Brokers & Forwarders Association of America
under Proposed Miscellaneous Corrections #3
BASF Corporation
Mount Olive, New Jersey 07828-1234
August 11, 1997
Mr. A.L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Re: Miscellaneous Corrections to Trade Legislation: Section 313(q) of
the Tariff Act of 1930 (19 U.S.C. 1313(q))
Dear Mr. Singleton:
We are writing in support of the proposed correction to Section
313(q) of the Tariff Act of 1930, which deals with drawback eligible
packing material filled prior to exportation. BASF Corporation is one
of the largest chemical manufacturers in the United States and, as a
major importer and exporter, is an active participant in duty drawback
programs.
The proposed amendment to Section 313(q) of the Tariff Act of 1930
would provide that packaging materials produced in the United States,
which are used by the manufacturer or any other person for articles
which are exported or destroyed shall be eligible for dury drawback
refunds of 99% of the duty paid on the imported materials used to
manufacture the packaging materials. The proposed amendment would
provide that packaging material produced in the United States may be
``used'' by the manufacturer or any other person, thereby remaining
eligible for duty drawback refunds (italics added).
We support this proposed amendment as it will provide logistical
flexibility in the filling of containers with product for exportation.
The eligibility for duty drawback for these containers will enable both
the exported products and their containers to continue to compete
effectively in international markets. The current limitation to
containers ``used'' solely by the manufacturer of the packaging
material is far too restrictive and has an inimical effect upon
drawback and, therefore, upon the competitiveness of U.S. products sold
abroad.
We thank you for your kind consideration of these comments.
Very truly yours,
Richard J. Salamone
Manager, Customs & International Regulatory Compliance
Gulf Coast Drawback Services, Inc.
Katy, Texas 77450
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
In response to your June 30, 1997 request for comments on
miscellaneous trade proposals, Gulf Coast Drawback Services, Inc.
wishes to express our strong support of Item 4, relating to drawback on
packaging material.
This issue was addressed in detail as part of the Customs
Modernization Act, enacted several years ago. That law provided for
drawback on packaging material. A recent ruling by U.S. Customs impacts
the availability of drawback.
The proposed technical correction in your June 30,1997 press
release is needed so that packaging material produced in the United
States may be ``used'' by the manufacturer or any other person and,
thus, be eligible for drawback when the ultimate product is exported.
Thanks for your interest in this issue. We urge your Subcommittee
to approve this proposal at the earliest opportunity.
Sincerely,
Bobby Waid
President
Proposed Miscellaneous Corrections #5
To amend section 411 et seq. of the Tariff Act of 1930 (19
U.S.C. 1411 et seq.) relating to the National Customs
Automation Program to require Customs to establish and
implement the means by which foreign-trade zone admission data
can be electronically filed.
see also JBC International under Proposed Miscellaneous Corrections #3
Written Comments of IMS Worldwide, Inc., Friendswood, Texas
Pursuant to the United States House of Representatives'
Committee on Ways and Means' Subcommittee on Trade's request
for written public comments for the record from all parties
interested in technical corrections to recent trade
legislation, IMS Worldwide, Inc. (IMSW) submits the following
statement:
The particular technical correction this statement concerns
is the automation of Foreign-Trade Zone admission procedures,
namely the ability to electronically submit Customs Form 214
(CF 214). This form is used when goods are brought,
``admitted'' in Zone terms, into a Foreign-Trade Zone and is
the only Customs Form used in large quantities across the
country that cannot be transmitted to Customs electronically.
As a Foreign-Trade Zone consulting firm, IMSW both works
and has worked with a number of Foreign-Trade Zone operators
who deal with recordkeeping and Customs issues on a daily
basis. Consequently, we are well aware of the Customs forms and
other methods of reporting required in Zones and have even
operated Zones ourselves.
One of our clients operating in an FTZ undertakes weekly
Customs entries, and they send information to their Customs
Broker through EDI. Correctly completing and submitting their
CF 214 requires five people. Our client must fill out the form
and physically take it to Customs, since the local Customs
office refuses to accept faxes. Additionally, if the 214 is
used as a dray ticket, the trucker has to physically take it to
the port.
We are aware that, internal to Customs, a draft electronic
214 has been created by an internal ad hoc team, but Customs'
ACE Team has not yet agreed to use it. We feel the U.S.
Congress should do everything in its power to force Customs to
use the electronic 214. A model exists; let's use it or modify
it.
Additionally, under the recent Customs reorganization, the
automation of FTZ admission procedures will most likely not
occur within the next five years. This is an unreasonable time
period. Due to the rapidly increasing level of international
trade, more companies than ever operate in Foreign-Trade Zones
(over 300,000 employed by FTZ's in 1996!). Companies are
trading more goods faster than ever, and they've found Zones
often make importing and exporting easier, in addition to the
increased revenues FTZ operation can generate. These companies
need the U.S. Government on their side, helping them compete
with foreign firms in our fast-paced world of international
commerce. One small step by which government can assist is
making it possible to electronically file CF 214's.
Under automated admission procedures, a firm could both
fill out and submit the form much more rapidly than under
today's manual procedures. Most modern companies automate all
of their recordkeeping processes, and being able to
electronically submit the CF 214 would help them streamline
their procedures and better maintain records. Electronic files
are rarely misplaced, can be easily backed up, and, due to the
use of a keyboard rather than a pen, are often easier to read.
Additionally, the issue of American dominance in the
international trade arena cannot be ignored. Anything we can do
to facilitate trade will add an extra weight to our side of the
trade balance scales. Automating FTZ entry procedures makes
every involved party's task simpler. Customs will no longer
have to manually type information, the U.S. Census Bureau and
the Food and Drug Administration will no longer have to wait
for information, and FTZ operators will be able to streamline
and simplify their recordkeeping procedures.
Massachusetts Port Authority
Port Department, Boston, MA 02210
July 28, 1997
Mr. A. L. Singleton
Chief of Staff
Committee on Ways and Means
U. S. House of Representatives
1102 Longworth House Office Building
Washington, DC 20515
REF: Technical Correction Amending Section 411 et seq. of the Tariff
Act of 1930 (19 USC 1411 et seq.)
Dear Mr. Singleton,
As Grantee/Administrator of Foreign Trade Zone #27 in Boston, the
Massachusetts Port Authority supports the technical correction to the
above-referenced act, which has been submitted by the National
Association of Foreign Trade Zones.
The Port of Boston faces very stiff competition from Canadian ports
such as Montreal and Halifax, who market themselves very aggressively
as North American gateways to the U.S. importers and exporters.
A Foreign Trade Zone is a distinct advantage to certain importers
and exporters who might otherwise be tempted to use Canadian ports.
User interest in our Foreign Trade Zone is on the rise, and for these
reasons we want to make using the Foreign Trade Zone as smooth as
possible.
The Foreign Trade Zone Admission Process is essential in our case
to facilitating the use of Boston's zone by U.S. importers and
exporters.
We therefore ask that you prioritize the automation of the Foreign
Trade Zone Admission Process by supporting the referenced technical
change as submitted by the National Association of Foreign Trade Zones.
Thank you for your assistance and consideration.
Sincerely,
Ralph F. Cox
Port Director
Proposed Miscellaneous Corrections #6
To amend section 491(a) of the Tariff Act of 1930 (19
U.S.C. 1491(a)) to extend the retention period for
International Travel Merchandise (ITM) held at Customs-approved
storage rooms (CASR) to five years, identical to the period for
all classes of Customs-approved bonded warehouses. ITM consists
of in-flight merchandise sold on board international air
carriers after departure from U.S. Customs territory.
Presently, ITM is imported to the United States under bond and
is moved to centralized, Customs-approved bonded warehouses.
The merchandise is further distributed to CASRs near the
airports where it is stored, manipulated, and exported under
Customs' supervision. The CASRs are regulated as if the
merchandise were being held ``on dock'' awaiting exportation.
Prior to the Customs Modernization Act, ITM had been held at
the CASRs in 90-day increments for up to one year. However,
Customs believes that, under the terms of a revision provided
in the Customs Modernization Act relating to unclaimed
merchandise in General Order warehouses, the maximum period may
now be six months. The proposed revision would extend the
retention period to five years and extend to CASRs the same
treatment which is given to Customs-approved bonded warehouses.
Inflight Duty Free Shop, Inc.
Jamaica, New York 11413
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
ATTN: A.L. Singleton, Chief of Staff
Dear Chairman Crane:
Thank you for the opportunity to comment on the various technical
trade bills and proposals being considered by your Subcommittee. On
behalf of Inflight Duty Free Shop, Inc., I am pleased to submit the
following comments on Item #6, which clarifies the intent of Congress
in passing the Customs Modernization Act and extends the retention
period for International Travel Merchandise held at customs-approved
storage rooms (CASRs).
As the largest operator in the in-flight duty free industry, IDFS
has a significant interest in this issue, and we fully support this
proposal.
What Is A CASR?
It may be helpful to review what a CASR is. CASRs are
utilized in the in-flight business. The merchandise stored in a
CASR is often called International Travel Merchandise (ITM)--
gift items, jewelry, liquor and similar merchandise that is
offered for sale on board aircraft to passengers upon their
departure from the U.S.
Customs has allowed the importation and entry of these
items for retention under continuous customs custody at a
facility at an airport for future delivery to aircraft for
exportation. The facility where the international travel
merchandise is stored is referred to as a ``Customs-approved
storeroom,'' or CASR.
To provide an example of how this works, the International
Travel Merchandise is taken from a CASR and loaded as a ``kit''
onto a departing airplane, where goods are sold to passengers.
At the end of the flight, the remaining merchandise is often
stored overnight or for some period at the foreign destination
point and is likely to be loaded on to a return flight and
further depleted. Once it arrives back in the U.S., the ``kit''
is taken to the CASR and replenished.
The movement of merchandise into and out of a CASR, as well
as the inventories of merchandise remaining in the CASR, must
be strictly accounted for and reported to Customs.
How a CASR Is Defined Under Customs Law
A CASR is presently different from a customs bonded
warehouse. In fact, there is no requirement that the CASR
itself be bonded--rather the merchandise itself is covered
under a transportation bond by the carrier. Under Customs law,
a CASR is a creature of 19 U.S.C. 1553--entry for
transportation in bond and exportation--as implemented by 19
CFR 18.24. This regulatory provision, entitled ``Retention of
Goods on Dock,'' allows ``in-transit merchandise to remain on
the dock'' for renewable periods of 90 days. A Customs
Directive states that the total length of time in a CASR cannot
exceed one year.
The basis for this one year period was 19 U.S.C. 1491,
which stated in part that ``any entered or unentered
merchandise (including merchandise entered for transportation
in bond or exportation) which shall remain in Customs custody
for one year...shall be considered unclaimed.''
In the Customs Modernization Act, Section 1491 was changed
in two respects: 1) the time period for merchandise to be
considered ``unclaimed'' property was shortened to six months;
and 2) the scope of this section was narrowed from ``any
merchandise in Customs custody'' to ``any merchandise
which...remain(s) in a bonded warehouse pursuant to section
1490.''
Since a CASR is not a bonded warehouse and the merchandise
in a CASR is not entered pursuant to section 1490 (which is a
section dealing with General Order warehouses, where
merchandise goes if ``entry'' of the merchandise cannot be
completed for some reason, such as lack of documentation or
some other deficiency), the section 1490 time limits no longer
apply to CASRs.
Customs Interpretation of Modernization Act Changes
There is disagreement at Customs, however, in the
implementation of this provision. They are of the opinion that
the section 1490 change from one year to six months requires
Customs to apply this same time limit to merchandise stored in
a CASR. Yet, in arriving at this conclusion, they are simply
ignoring the plain words of the revised statute, which very
clearly narrowed the scope of the statute to General Order
merchandise stored in a bonded warehouse.
To support their conclusion, Customs continues to cling to
a footnote which has appeared in the regulations (19 CFR 18.24,
footnote 9) dealing with CASRs. That footnote references 19
U.S.C. 1491 as the basis for limiting merchandise in a CASR to
one year. While that may have been the basis for the one-year
limitation for many years, once the Customs Modernization Act
narrowed the scope of section 1491, the footnote became invalid
and inappropriate. It references a section of the law that no
longer applies to the situation at hand.
Customs interpretation would mean that a footnote to a
regulation takes precedence over the words of the statute
itself. This is a curious, somewhat twisted method of statutory
construction.
The Trade Subcommittee Proposal
That is the reason the proposal in your June 30 press release is
needed--to make it even more explicit in the statute that Customs has
the authority to allow merchandise to remain in a CASR beyond the six
month limit established in section 1491. The proposal provides maximum
flexibility to Customs by giving the agency the authority to allow the
merchandise to remain in a CASR for up to five years--the same period
that applies to the storage of goods in a Customs bonded warehouse.
Without this provision, Customs apparently will insist that no
International Travel Merchandise remain in a CASR longer than six
months--a requirement that serves no useful purpose, while triggering
enormous, duplicative paperwork and accounting requirements. Goods will
have to be moved at the end of six months for no other purpose than to
comply with an erroneous interpretation of the law. This moves us in
the opposite direction of where the Customs Service is trying to go--
eliminating unnecessary, paper-generating reporting requirements,
thereby freeing Customs to target their resources to higher risk
activities. Furthermore, it will be extremely costly to our industry
and interfere in our ability to sell these products.
We urge you to work towards swift passage of this technical, but
highly important provision, which is non-controversial and revenue
neutral. We would be pleased to provide you with any additional
information.
Sincerely,
Peter J. Cathey
President
Inflight Duty Free Shop, Inc.
JFK Division
Jamaica, NY., 11413
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
ATTN: A.L. Singleton, Chief of Staff
Dear Chairman Crane:
On behalf of the New York office of the Inflight Division of Duty
Free International, I wish to express our support for the CASR proposal
[Number 6] in your press release of June 30, 1997. This provision would
clarify the current law as to the length of time merchandise can be
held in a customs-approved storage room (CASR), and extend the time
period so that it is equal to the retention period for merchandise in a
customs bonded warehouse.
We are very pleased you are considering this proposal. Customs
wants to enforce their unusual interpretation of the law, which will
result in a six-month retention period for merchandise stored in a
CASR. Such a requirement would needlessly interfere with the conduct of
our business, necessitating the movement of goods out of a CASR for no
other reason than to comply with Customs' mistaken interpretation. It
also would generate reams of excessive reporting and prove very costly
to the industry.
At a time when Customs is trying to reduce unnecessary and
duplicative paper in their processes and focus their resources on
higher risk areas, such a requirement runs completely counter to that
goal.
Thanks for the opportunity to comment on this proposal.
Sincerely,
Mario Scorcia
Vice President, Operations
Inflight Duty Free Shop, Inc.
Chicago Station
Schiller Park, IL 60176
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
ATTN: A.L. Singleton, Chief of Staff
Dear Chairman Crane:
The Chicago office of the Inflight Division of Duty Free
International is pleased to provide the following comments on the
proposal in Item 6 of your June 30, 1997 press release, which relates
to the retention period for merchandise in a customs-approved storage
room (CASR). We strongly support this proposal.
Without this change, which explicitly provides the authority for
merchandise to remain in a CASR for up to five years, Customs will
require in-flight businesses like our own to either fully deplete or
else move all of our inventory located in a CASR at the end of six
months. This is just plain foolishness. It results from an erroneous
interpretation by Customs of current law and serves the agency no
useful purpose. Moreover, it creates enormous and unnecessary paperwork
requirements for our industry, not to mention the major cost to in-
flight to move inventory in six month cycles.
We appreciate your interest in this issue and hope you can gain
passage of this provision in the near future.
Sincerely,
Celeste Moran
Manager
Inflight Duty Free Shop, Inc.
Detroit Station
Romulus, MI., 48174
August 13, 1997
The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
House Committee on Ways and Means
1102 Longworth House Office Building
Washington, D.C. 20515
ATTN: A.L. Singleton, Chief of Staff
Dear Chairman Crane:
The Detroit office of the Inflight Division of Duty Free
International strongly endorses the trade proposal in your press
release of June 30, 1997 that relates to the retention period for
merchandise held in a customs-approved storage room (CASR).
This is a technical, but highly necessary, change. Without it, my
company and others like it will be forced to arbitrarily move product
every six months for no particular purpose, other than Customs'
erroneous interpretation of current law. While some items move quickly
in and out of inventory, other items do not. To comply with a six month
retention limit would be extremely costly to business, create mountains
of additional paperwork and reporting and interfere with our ability to
sell these products.
We applaud your efforts to correct this situation and look forward
to seeing this proposal passed by Congress.
Sincerely,
Robert Papelian
Director, Regulatory Compliance
Proposed Miscellaneous Corrections #7
Section 431 of the Tariff Act of 1930 outlines the
requirements, form, and content of manifest information which
must be publicly disclosed. Section 431(c) outlines the
requirements for public disclosure of manifest information. On
July 2, 1996, the President signed the Anticounterfeiting and
Consumer Protection Act of 1996 [P.L. 104-153], which amended
section 431(c)(1) to require public disclosure of vessel and
aircraft manifest information, as well as additional
requirements as to the content of such information. On October
11, 1996, the President signed into law the Miscellaneous Trade
and Technical Corrections Act of 1996 [P.L. 104-295], which
amended section 431(c)(1) to require public disclosure of
vessel manifest information only, and makes no additions to the
law regarding the content of such information. Given the
potentially conflicting interpretations of these laws,
legislation may be needed to clarify that the language
contained in the Miscellaneous Trade and Technical Corrections
Act of 1996 reflects Congressional intent.
see also Customs and International Trade Bar Association under Proposed
Miscellaneous Corrections #1
see also JBC International under Proposed Miscellaneous Corrections #3
see also Stewart and Stewart under Proposed Miscellaneous Corrections
#1
Comments of the Air Courier Conference of America, Falls Church,
Virginia
On behalf of the Air Courier Conference of America
(``ACCA'') International Committee (``IC''), we hereby submit
these comments concerning Section 11 of the Anticounterfeiting
Consumer Protection Act of 1996, Pub. Law 104-153, which allows
public access to air carrier cargo manifests.
ACCA is the trade association representing the express
carrier industry; ACCA-IC is the section of ACCA representing
those express carrier companies with significant international
operations. ACCA-IC members include large firms with global
delivery networks, such as DHL, Federal Express, TNT and United
Parcel Service, as well as smaller businesses with strong
regional delivery networks, such as Global Mail, Midnite
Express and Quick International. Together, ACCA-IC members
employ approximately 415,000 American workers and earned global
revenues of $45 billion in 1996. ACCA-IC members constitute a
significant volume of import business. In 1996, we accounted
for roughly 10.2 million entries into the United States with an
approximate value of $23 billion.
ACCA supports the position set forth in the comments
submitted by the Air Transport Association (``ATA''). We concur
that implementation of Section 11 will unintentionally aid
those involved in terrorist activities as well as assist those
in the counterfeiting business. As succinctly noted by the ATA,
the Act will unintentionally produce:
added security risks for all shippers, passengers,
air carriers and other modes of transportation from a better
educated criminal or terrorist;
an environment that fosters corporate espionage;
smarter and more opportune counterfeiters; and
overwhelming computer development costs for air
carriers.
We concur with ATA that it would be advisable to establish
a working group to address the counterfeiting problem. We would
be pleased to work with other carrier groups to improve
counterfeiting detection while not compromising security.
Respectfully Submitted,
Evelyn M. Suarez
Counsel, Ross & Hardies
Communications regarding these comments should be addressed to:
Evelyn M. Suarez, Counsel, Ross & Hardies, 202-835-7450; or Sue
Presti, Executive Director, Air Courier Conference of America,
703-204-9677.
Comments of the Air Transport Association
The Air Transport Association of America (ATA), on behalf
of its member airlines, submits these comments concerning the
referenced Public Law to amend 19 USC 1431 regarding public
access to air carrier manifest.
ATA's membership consists of 22 scheduled airlines of the
United States and three international, scheduled air carriers.
Together these airlines carry more than half of the air cargo
that arrives in the United States from foreign locations; they
are thereby responsible for collecting at least half of the air
cargo manifest data. Of particular interest to ATA are the
proposals that require U.S. Customs to make all air cargo
manifest data available to the public.
While ATA appreciates the fact that current Federal law is
not adequate to protect consumers and American businesses from
the crime of counterfeiting legitimate trademark products,
there are parts of Public Law 104-153, Anti-counterfeiting
Consumer Protection Act of 1996, to which Customs contributed
and for which it is currently drafting proposed regulations,
that we feel will unintentionally aid those involved in
terrorist activities as well as assist those in the
counterfeiting business. In fact, the Act will contribute
unique opportunities for terrorists and counterfeiters to the
detriment of the general public.
Overall, ATA supports the concept and goal of the
Anticounterfeiting Act. However, we believe Section 11 that
allows public access to air carrier cargo manifest data will
produce results contrary to its original objective.
Specifically, the Act will unintentionally produce (1) added
security risks for all shippers, passengers, air carriers and
other modes of transportation from a better educated criminal
or terrorist; (2) an environment that fosters corporate
espionage; (3) smarter and more opportune counterfeiters and;
(4) overwhelming computer development costs for air carriers.
Security Risks
Public access to air cargo manifest data as stated in
Public Law 104-153 will allow previously confidential
information to pass through the hands of the very criminal
element, such as organized crime or terrorists, from which the
law is trying to protect the American public. Sensitive data
such as shipper and consignee, commodity description, routing
details, number of pieces and weight, when placed in an
automated environment, can produce very revealing information
that could foster criminal activity.
Air cargo is typically used by shippers who need to get
sensitive, high value goods to retail outlets quickly to take
advantage of current consumer trends. Air carrier cargo
manifests, if made public, will reveal shipper and consignee
name and address, commodity description, number of pieces and
weight, name of the air carrier, port of loading, port of
discharge, country of origin, and trademarks. Simple analysis
of this data will reveal to terrorists, organize crime, and
others, shipping habits of global companies, security and risk
assessment, customer lists, current popular consumer products,
shipping trends, quantity and value of goods, shipping
schedules, location of goods and other marketing data. This
part of the Act educates the terrorist or criminal enabling
them to make intelligent decisions of what flight or goods to
target based on the shipper, commodity descriptions, quantity,
transportation schedule, location, and value the goods would
produce on the street.
Moreover, from a safety and security perspective the
consequences are much more significant. The public availability
of cargo manifest information is a road map for any potential
terrorist. This data can provide them with particularly
sensitive information in order to overcome current security
procedures by revealing shipping habits of legitimate
manufactures. For example, a terrorist will be able to
determine origin, destination, flight numbers, commodity
descriptions, and frequency used by legitimate manufacturers.
This gives the terrorist an opportunity to mask a detonating
substance in a shipment that uses similar information from a
legitimate manufacturer. Each component, on its own is
harmless, together they are lethal.
Public access to manifest data presents other security
risks to the public and transportation staff as well. Commodity
descriptions for goods such as precious metals, diamonds,
currency and bank notes, high value goods, and prone to theft
goods such as VCR's, portable electronics, leather goods, and
garments, all identified by trademarks, create security risks
for these types of shipments, the personnel handling them, and
the general public. For example, on August 14, 1996, gunmen
robbed a fully loaded passenger airliner while on the runway in
southern France. The Airbus A-320 was stopped on the runway and
the thieves went directly to the rear cargo hatch and unloaded
60 pounds of French bank notes. The captain of plane reported
that they appeared to know exactly what they were looking for.
One can reasonably expect that this type of incident will
increase if manifest data is made public and the criminal
element transforms innocent data into precision strike
capabilities. Additionally, as air carriers routinely use
ground transportation to complete the transportation cycle, the
same can be said about increases in truck hijacking.
Corporate Espionage
The second problem created by the Anticounterfeiting Act
will be corporate espionage. Historically, the shipper and
forwarder community have maintained that the identities of
shipper and consignee are confidential information. In essence,
public access to this type of data will allow the
reconstruction of customer lists. No company or industry would
produce and publicly post its customer list, yet this is what
Public Law 104-153 will accomplish.
For years shippers have found comfort in the
confidentiality of their customer information when shipping by
air. In fact, in 1989 when Customs introduced regulations that
required shipper and consignee information to appear on air
cargo manifests, exporters and importers vehemently opposed it.
Although it is a legal responsibility of the carriers to
manifest goods, Customs officials conceded to the industry
objections by allowing confidential and direct submission of
shipper and consignee data to Customs.
Although there is a provision for shippers to request
customer confidentiality, that provision is weak in that it
requires the request to be made every two years. Additionally,
shippers have criticized Customs' ability to maintain
confidentiality as the mechanism to do so is based on an exact
spelling of the customer's name. Further, other vital data such
as commodity description and transportation details remain
public.
Aiding the Counterfeiter
Those involved in trafficking of counterfeit goods or
services will find favor with the provisions cited in the
Anticounterfeiting Act. Not only will this amendment provide
little assistance in the interdiction of counterfeit goods but
it will furnish valuable trademark data that can be used to
create useful marketing summary information that will enable
counterfeiters and thieves to work smarter and more
efficiently.
Simple analysis of air cargo manifest data outfits the
counterfeiter with very useful market information such as
current product popularity, consumer preferences, potential
future products, and other market trends. The result is the
counterfeiter will do what he or she is doing today only better
and smarter, with enhanced accuracy. For example, someone
interested in pirating a legitimate product needs only to view
public manifest data that bears trademark information to see
which goods are currently popular in the market place.
Air Carrier Development Costs
Cargo manifest regulations have never obligated air
carriers to report shipment trademark information. Therefore,
carriers do not posses the ability to capture, manage and
report this level of information. Cargo reservation and
tracking system modifications required to comply with the law
would result in unrecoverable development costs totaling in the
millions of dollars. That expense, without benefit to the
customer or the carrier, cannot be justified. Moreover, in the
interest of maintaining the highest possible level of cargo
security, it is questionable that shippers would willingly
provide trademark information to air carriers and other
transportation entities.
Conclusion
As the Anticounterfeiting Consumer Protection Act of 1996
cites organized crime activity as one of the principal concerns
of counterfeiting, it must look at the potential misuse of
public manifest data. Clearly the likelihood of increased
criminal activity, fostering of corporate espionage and
augmenting the counterfeiter's capabilities outweigh the hoped
for achievements by the Act. Other options to achieve secure
marketing opportunities for legitimate businesses while at the
same time protecting the transportation industry from criminal
activity must be given a chance to be explored.
As most of the data required in the Act, except trademark
information, is provided to U.S. Customs in a secure
environment today, the air industry is not overly concerned
with data elements. It is public access to which strongly
object. Further, the Act does not state how owners of
copyrighted and trademarked products would use the information
and why public access is necessary to achieve the objective.
Opening manifest data to the universe so that a select group
can review it for its own purposes will produce a Pandora's box
of issues.
Furthermore, the owners of trademark and copyright products
have never approached the air cargo industry to investigate a
cooperative and coordinated effort to prevent the
transportation of counterfeit goods. At a minimum, the
opportunity to explore mutually beneficial strategies needs to
takes place before laws and regulations are passed. Clearly
this is not the case with the events leading to Public Law 104-
153, and the notice of proposed rule making imposing the needs
of one industry on another is premature and unwarranted.
It is therefore ATA's recommendation that representatives
of the owners or authorized users of trademarks and air cargo
industry representatives establish a working group to address
these issues. Industries working together can create a balanced
solution that achieves mutually beneficial results. One
possible solution is that trademark owners work directly with
Customs in private as needed to review manifest data rather
than implement total public access.
We would be pleased to head up this working group and to
discuss these comments and recommendations in more detail. ATA
looks forward to working with the trademark industry and
government agencies to improve counterfeiting detection while
maintaining a secure information environment.
Respectfully submitted:
Air Transport Association of America
William Van Deventer
Director, Cargo Facilitation
Dated: August 15, 1997
Communications regarding this testimony should be addressed to: William
Van Deventer, Director, Cargo Facilitation, 202-626-4216 or Janet
Thomas, Director, Passenger Facilitation, 202-626-4236
Comments of the American Automobile Manufacturers Association
The American Automobile Manufacturers Association
(``AAMA'') and its member companies--Chrysler Corporation, Ford
Motor Company and General Motors Corporation--appreciate the
opportunity to comment on several pieces of legislation which
would correct certain technical deficiencies in recently
enacted trade legislation.
Three pieces of legislation which the Subcommittee is
considering are of particular interest to AAMA. The first bill
would amend section 505(c) of the Tariff Act of 1930 (19 U.S.C.
1505(c)) to clarify that Customs must refund interest payable
on refunds of duty arising from NAFTA claims under 19 U.S.C.
1520(d) for the full period from the date of payment to the
Government to the date of liquidation. Under current law,
Customs is required to refund interest only for the period from
the date of filing the claim to the date of liquidation.
Section 505(c) of the Tariff Act of 1930 (19 U.S.C.
1505(c)), as amended by section 642 of Customs Modernization
Act (enacted as Title VI of the North American Free Trade
Agreement (NAFTA) Implementation Act), sets forth the rules for
calculating interest on underpayments and overpayment of
duties, fees and taxes arising out of the importation of
merchandise. With respect to overpayments, prior to enactment
of Public Law 104-295 last year, the law provided that interest
on the deposited duties, fees and taxes accrued from the date
of deposit to the date of liquidation or reliquidation of the
entries in question.
Section 2 of the Miscellaneous Trade and Technical
Corrections Act of 1996, Public Law 104-295, amended section
1505(c) to provide an exception with respect to the payment of
interest for a single class of overpayments; monies paid on
goods that are later determined to be eligible for NAFTA
preferential tariffs. For these overpayments interest runs from
the date on which the claim for the preferential tariff was
filed to the date of liquidation or reliquidation.
The proposed legislation would reverse the change that
resulted from the amendment made by Public Law 104-295. The
amendment upset a fair and equitable arrangement in which both
importers and the Government were placed on equal footing when
it came to paying interest. Moreover, the law does not permit
importers to claim the NAFTA tariff preference until the
importer has a certificate of origin in its possession. Thus,
at the time of entry, the importer is required to post the full
duties on the merchandise and the Government has full use of
that money until it is refunded. There is nothing that
distinguishes a refund of duties arising from a valid claim for
a NAFTA preference from the refund of duties arising from any
other valid claim. The provision would reinstate the original
language.
AAMA member companies often file valid claims for the NAFTA
preferential duties after merchandise is imported.
Consequently, our members are not being paid interest for the
full period that the Government has the use of their money.
AAMA supports this corrective legislation.
The second bill amends section 520(d) of the Tariff Act of
1930 (19 U.S.C. 1520(d)), relating to goods qualifying under
NAFTA rules of origin, to clarify that merchandise processing
fees (MPFs) may be refunded along with excess duties if NAFTA-
eligibility is proved.
Sections 201 and 202 of the North American Free Trade
Agreement (NAFTA) Implementation Act, Public Law 103-182,
provide a tariff preference for qualifying goods. Section 204
of the Act exempts Canadian-origin goods, and after June 29,
1999, Mexican-origin goods, from customs user fees (19 U.S.C.
58c). Section 206 of the Act added Section 520(d) of the Tariff
Act of 1930 (19 U.S.C. 1520(d)). It authorizes the Customs
Service to reliquidate an entry to refund any ``excess duties''
paid on a good qualifying under the rules of origin for which
no claim for preferential tariff treatment was made at the time
of importation. Customs takes the position that the reference
to ``excess duties'' precludes it from refunding the customs
user fees that were paid at the time of entry, even though the
exemption from fees, like the claim for preferential tariff
treatment, could not have been made at that time. The
legislation makes clear that the Customs Service is authorized
to refund any fees imposed under 19 U.S.C. 58c that were paid
at the time of entry.
In a ruling issued by the Customs Service, the agency took
the position that the term ``excess duties'' in section 520(d)
should be construed to exclude the refund of customs user fees.
Customs has interpreted the law in a way that is inconsistent
with the clear Congressional mandate that neither duties nor
customs user fees are payable on imported Canadian goods that
qualify for the NAFTA preference (and, in the future, Mexican
goods that so qualify). The amendment would leave no doubt that
such fees may be refunded pursuant to a claim filed under
section 520(d).
AAMA member companies import more goods subject to NAFTA
preferential tariff treatment than any other industry and file
more post-importation claims for refunds of duties and MPFs.
Customs position that MPFs are not refundable is depriving each
company of a very significant amount of money. Thus, AAMA
supports this legislation which would clarify the law.
The third bill would amend section 514(a) of the Tariff Act
of 1930 (19 U.S.C. 1514(a)) to ensure that if an importer is
entitled to a NAFTA tariff preference, there is a method for
obtaining a refund of duties paid at the time of entry. Under
the bill, the NAFTA tariff preference and exemption from
customs user fees under 19 U.S.C. 58c would be listed as one of
the specific categories of decisions that an importer may
protest.
Under 19 U.S.C 1514, decisions of the Customs Service are
final and conclusive on all persons, including the United
States, unless a protest is filed. However, Customs has taken
the position with respect to post-importation claims for the
tariff preference under NAFTA, that the protest procedure under
section 514 is not available to importers; that the only
available remedy is to file a claim for a refund under section
520(d).
Traditionally, the liquidation or reliquidation of any
entry embodies all Customs decisions, including the
admissibility of the goods, and the correctness of the
valuation, classification, rate and amount of duty, and
entitlement to a tariff preference. Even where Customs'
decision is based on information provided by the importer, the
liquidation or reliquidation may be protested. The filing of a
protest prevents the liquidation from becoming final. Customs'
position that the protest procedure is not available to
importers who do not claim the NAFTA tariff preference at the
time of entry is questionable. Existing section 520(d), added
to the law by the NAFTA Implementation Act, begins with the
statement, ``Notwithstanding the fact that a valid protest was
not filed, the Customs Service may reliquidate an entry to
refund any excess duties . . . .'' This statement has been
interpreted in other instances to mean that, if a valid protest
was filed, Customs could have considered and allowed the
importer's claim under the protest procedure. The amendment to
section 514 make absolutely clear that section 514 is the
primary remedy available to importers for making post-
importations NAFTA preference claims, and that section 520(d)
is, like section 520(c), an extraordinary remedy that may be
used when a liquidation has become final and the protest
procedure is not available.
Although AAMA members generally have no problem obtaining
refunds of duties using the 520(d) procedure, there are
instances when the required certificate of origin is received
more than a year after importation, thus precluding the filing
of a 520(d) claim. Where a certificate of origin establishes
that the Government is not entitled to the duties paid at the
time of entry, there should be a method for obtaining a refund
of those duties. Thus, AAMA supports this amendment which would
make clear that the protest procedure under section 514 could
be used to obtain a refund of such duties.
American Watch Association
Coalition to Preserve the Integrity of American Trademarks
International Anticounterfeiting Coalition
August 15, 1997
A.L. Singleton, Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Re: Comments on Item 7 of Miscellaneous Corrections to Trade
Legislation and Miscellaneous Duty Suspension Bills
Dear Mr. Singleton:
Members of IACC, COPIAT and AWA Strongly Oppose any Legislation to
Limit or Repeal the Manifest Disclosure Requirements of the
Anticounterfeiteing Act.
We are writing on behalf of the International
Anticounterfeiting Coalition (``IACC''), the Coalition to
Preserve the Integrity of American Trademarks (``COPIAT''), and
the American Watch Association (``AWA'') to oppose the manifest
disclosure legislation referenced in item 7 of the Proposed
Miscellaneous Corrections. Specifically, item 7 states the
following--
``Section 431 of the Tariff Act of 1930 outlines the
requirements for public disclosure of manifest information. On
July 2, 1996, the President signed the Anticounterfeiting and
Consumer Protection Act of 1996 [P.L. 104-153], which amended
section 431(c)(1) to require public disclosure of vessel and
aircraft manifest information, as well as additional
requirements as to the content of such information. On October
11, 1996, the President signed into law the Miscellaneous Trade
and Technical Corrections Act of 1996 [P.L. 104-295], which
amended section 431(c)(1) to require public disclosure of
vessel manifest information only, and makes no additions to the
law regarding the content of such information. Given the
potentially conflicting interpretations of these laws,
legislation may be needed to clarify that the language
contained in the Miscellaneous Trade and Technical Corrections
Act of 1996 reflects Congressional intent.'' (emphasis added)
Contrary to the statement made in the final sentence of
item 7, any amendment that would prohibit public disclosure of
aircraft manifests or trademark information under section
431(c)(1) of the Tariff Act or eliminate the new Customs entry
documentation requirements under section 484(d)(2) would
directly contravene clear Congressional intent under the
Anticounterfeiting Consumer Protection Act of 1996 (the
``Anticounterfeiting Act'').
The Anticounterfeiting Act Reflects Clear Congressional Intent to
Combat Counterfeit Imports through Disclosure of Air Manifests and
Trademark Information Appearing on Imported Merchandise.
The Anticounterfeiting Act amended Section 431(c)(1) of the
Tariff Act \1\ to require the Customs Service to disclose
aircraft manifests, in addition to sea vessel manifests, and to
disclose the trademark information contained in such manifests.
As a related measure, the Act also amended section 484(d)(2) of
the Tariff Act \2\ to require importers to disclose on entry
documentation any information necessary to determine whether
imported merchandise bears an infringing trademark, including
the trademarks appearing on goods or packaging. Both amendments
to the Tariff Act reflect Congress's clear and well-reasoned
decision to facilitate identification of counterfeit imports by
increasing public access to Customs import information. To
repeal these recent amendments--and thereby override clear
Congressional intent--in the context of a technical corrections
law would be wholly inappropriate without opportunity for
debate and public hearings.
---------------------------------------------------------------------------
\1\ 19 U.S.C.Sec. 1431(c)(1).
\2\ 19 U.S.C.Sec. 1484(d)(2).
---------------------------------------------------------------------------
On July 2, 1996, the President signed the
Anticounterfeiting Act following unanimous approval by the
House and Senate. This law represents the most important
anticounterfeiting legislation in over a decade, significantly
strengthening the remedies and enforcement tools available to
combat counterfeit imports, including increased public access
to manifest information filed by importers of potentially
infringing goods. IACC, COPIAT and AWA, which each represent
many of America's leading manufacturers, strongly endorsed the
Anticounterfeiting Act, as did the International Trademark
Association, the Business Software Alliance, the National
Consumers League and several other associations and
manufacturers. Over the past several years, IACC, COPIAT and
AWA have actively promoted laws, regulations and directives
designed to render theft of intellectual property undesirable
and unprofitable.
Congress enacted the Anticounterfeiting Act to combat what
has become a multi-billion dollar parasite on legitimate U.S.
businesses, workers and taxpayers and a continuing source of
consumer injury. In the legislative history accompanying the
Anticounterfeiting Act, the House Judiciary Committee reported
that counterfeiting costs U.S. businesses more than $200
billion each year. Much of the counterfeit trade is now
operated through the same crime syndicates involved in drug
smuggling, prostitution and illegal arms sales. For these
organized criminals, counterfeiting represents a low-risk and
highly profitable source of illegal income, as well as a
convenient channel to launder proceeds from other illegal
activities.
Counterfeiting also poses very serious dangers to the
consumer. Counterfeit automobile and aircraft parts have been
linked to fatal crashes. Consumer injuries have also resulted
from sales of counterfeit shampoos, pharmaceuticals, and toys.
One of the more recent and disturbing cases of criminal
counterfeiting involved the distribution of counterfeit baby
formula.
Despite the growing seriousness of the problem, the laws
and resources available prior to the Anticounterfeiting Act
were completely inadequate to halt the flow of counterfeit
imports. Because of limited resources and despite its best
efforts, the U.S. Customs Service was able to stop only a small
fraction of the counterfeit merchandise imported into the
United States each year. In addition, while criminal penalties
existed, the deterrent effect was minimal because federal
prosecutors rarely initiated criminal counterfeiting actions.
Finally, trademark and copyright owners, who regularly invest
millions of dollars in private enforcement actions, often could
not obtain the Customs information necessary to identify
counterfeit imports.
By enacting the Anticounterfeiting Act, Congress sought to
remedy each of these defects in existing law, including
inadequate disclosure of Customs import information. Congress
approved the Tariff Act amendments in order to facilitate both
Customs and private enforcement against counterfeiters through
greater disclosure of the information necessary to identify
potentially infringing imports.
The Disclosure of Air Manifests and Trademark Information Is Critical
to the Identification and Seizure of Counterfeit Imports.
IACC, COPIAT and AWA members rely heavily on the manifest
disclosure requirements of Section 431(c)(1) of the Tariff Act
to protect their intellectual property rights and the consumer
against counterfeit imports. The manifest information compiled
and published by trade publications is often the manufacturer's
only notice that infringing imports have entered the United
States, and their only opportunity to prevent distribution
throughout the country.
Despite the critical importance of manifest information to
anti-counterfeiting enforcement efforts, the Customs Service
has limited disclosure in at least two important respects: (i)
by narrowly interpreting Section 431(c)(1) of the Tariff Act to
require disclosure of sea manifests only (See 19 C.F.R.
Sec. 103.14); and (ii) by not requiring importers to disclose
the specific trademarks appearing on imported goods or
packaging (See Customs Form 3461 (``Entry/Immediate
Delivery'')).
Air manifest disclosure under Section 431(c)(1):
Prior to the Anticounterfeiting Act, Section 431 read as
follows--
``(a) In general.
Every vessel required to make entry under Section 1434 of
this title or obtain clearance under section 91 of the Appendix
to Title 46 shall have a manifest that complies with the
requirements prescribed under subsection (d) of this section.
(b) Production of manifest
Any manifest required by the Customs Service shall be
signed, produced, delivered or electronically transmitted by
the master or person in charge of the vessel, aircraft, or
vehicle . . . in accordance with the requirements prescribed
under subsection (d) of this section . . . If any irregularity
or omission or commission occurs in any way in respect to any
manifest or bill of lading data, the owner or operator of the
vessel, aircraft or vehicle . . . shall be liable for any fine
or penalty prescribed by law with respect to such irregularity
. . .
(c) Public disclosure of information.
(1) Except as provided in subparagraph (2), the following
information, when contained in such manifest, shall be
available for public disclosure.'' (emphasis added) \3\
---------------------------------------------------------------------------
\3\ Subsection (c)(2) denies disclosure upon an appropriate finding
of confidentiality; subsection (d) authorizes Customs to prescribe by
regulation the form of the manifest.
---------------------------------------------------------------------------
The Customs Service historically has construed the phrase
``such manifest'' in Section 431(c)(1) to mean a sea vessel
manifest, even though the reference to ``vessel, aircraft or
vehicle'' manifests in subsection (b) arguably warrants a
broader interpretation. In fact, the different treatment
between sea and air manifests is without self-evident
justification or statutory support. Certainly, nothing in the
respective natures of sea as opposed to air transport suggests
a basis for disparate treatment. Moreover, the legislative
history to Section 431(c)(1) fails to distinguish between sea
and air manifests, suggesting that the omission of the word
``aircraft'' results from historical artifact, inadvertent
omission or both. From an enforcement perspective, the failure
to dislose air manifests has left a gaping hole in border
control and provided counterfeiters with a ``safe'' means of
transport into the country.
Nevertheless, the Customs Service has steadfastly refused
to deviate from its narrow interpretation of Section 431(c)(1),
despite the compelling policy reasons for doing so. Indeed,
prior to the Anticounterfeiting Act, COPIAT members petitioned
the Customs Service to amend its regulations to permit air
manifest disclosure. The Customs Service rejected the petition,
arguing (unconvincingly in COPIAT's view) that the Service
lacked the statutory authority to make such a regulatory
change.
Customs entry disclosure:
Similarly, COPIAT petitioned Customs to modify its customs
entry documentation to require disclosure of trademark and
other information necessary to identify counterfeit imports
(and deter counterfeiters). (At present, importers are required
to disclose only the generic category of goods.) The requested
change could easily have been accomplished through minor
revisions to current documentation. Nevertheless, the Customs
Service again refused the request, arguing that the
administrative costs and burdens of implementing the proposal
outweighed the potential benefits.
Accordingly, IACC, COPIAT and AWA sought disclosure of air
manifests and trademark information under the
Anticounterfeiting Act. Prior to enactment, the Senate and
House Judiciary Committees carefully considered the proposed
amendments to the Tariff Act and unanimously decided that the
benefits of improved enforcement--in terms of consumer health
and safety, law enforcement, and intellectual property
protection--more than justified the relatively minor increase
in administrative costs and burden.
Significantly, the Customs Service reviewed the
Anticounterfeiting bill in its entirety prior to the Senate and
House hearings and failed to submit any comments or testimony
opposing the manifest disclosure requirements. In fact, a
Customs official, Deputy Assistant Commissioner of
Investigations Leonard S. Walton, testified in support of the
Anticounterfeiting bill during both hearings. Similarly, it is
our recollection that, prior to the enactment of the
Anticounterfeiting bill, John Bliss, President of the IACC, met
with and personally discussed all provisions of the bill
(including the manifest disclosure requirements) with Steve
Whittaker, trade counsel for House Ways and Means Trade
Subcommittee Chairman, Rep. Philip Crane.
The Miscellaneous Trade Act Does Not Affect Congressional Intent to
Require Disclosure of Air Manifests and Trademark Information under the
Anticounterfeiting Act. Thus, the Proposed Amendments to the Tariff Act
Are Unnecessary and Inappropriate.
Given Congress' unanimous and carefully considered decision
to require increased manifest disclosure, it is unclear why the
Miscellaneous Trade Act retained the Section 431(c)(1)
amendment, particularly since the Trade Act does nothing to
alter the effect of the Anticounterfeiting Act. The
Miscellaneous Trade Act amendment does nothing more than add
the word ``vessel'' to Section 431(c)(1) without limiting the
disclosure of ``aircraft'' manifests or the trademark
information contained in aircraft or vessel manifests.
Moreover, the Miscellaneous Trade Act makes no change
whatsoever to the new entry documentation requirements of
Section 484(d)(2). Accordingly, it could not have been
Congress' intent to repeal the Anticounterfeiting Act
amendment, as suggested by the House Ways and Means Committee
Advisory.
To the contrary, the Anticounterfeiting Act remains the
definitive statement of Congressional intent with respect to
Sections 431(c)(1) and 484(d)(2) of the Tariff Act. As evidence
of this, the United States Code Service gave full effect to the
Anticounterfeiting Act amendments when publishing these revised
sections of the Tariff Act.
Following enactment of the Miscellaneous Trade Act, the
House Subcommittee on Courts and Intellectual Property took
immediate steps to address and conclusively resolve any
conflict between the Anticounterfeiting Act and the
Miscellaneous Trade Act. Specifically, Chairman Carlos Moorhead
on December 4, 1996 sent a letter (attached as Exhibit 1) to
Commissioner of Customs George Weise to confirm Congressional
intent to require public disclosure of aircraft manifests. The
letter directed Commissioner Weise to construe the
Miscellaneous Trade Act amendment to Section 431(c)(1) as a
``minor change that should not affect the interpretation of the
Anticounterfeiting Law.'' The letter further stated--
``However, to the extent that there is any ambiguity, I can
assure you that it was the intent of the Congress in passing
the Anticounterfeiting bill that the public disclosure of
certain manifest information applies to both aircraft and
vessel manifests. This issue was fully explored at the
Subcommittee hearing held on December 7, 1995. After careful
consideration, the Members of the Subcommittee, and ultimately
the entire Congress, voted unanimously to approve the bill with
that provision. Although it could possibly lead to slightly
higher administrative costs of record keeping, Members of
Congress clearly believed that this potential cost is more than
outweighed by the benefits of better enforcement.'' (emphasis
added)
On June 9, 1997, the new Chairman of the Intellectual
Subcommittee Howard Coble, together with full Committee
Chairman Hyde and other Members of Congress, sent a second
letter to Commissioner Weise (attached as Exhibit 2),
confirming once again Congressional intent to require air
manifest disclosure, as well as the disclosure of trademarks on
entry documentation. This second letter also reminded
Commissioner Weise of the Service's obligation under the
Anticounterfeiting Act to promulgate implementing regulations.
The House Ways and Means Committee Advisory now suggests
under item 7 that the Miscellaneous Trade Act might be
construed as a deliberate decision by Congress to override
these important, substantive provisions of the
Anticounterfeiting Act. Clearly, this interpretation of the
Miscellaneous Trade Act does not reflect Congressional intent,
nor can it be justified on the basis of statutory language or
any other grounds. Moreover, in the absence of hearings or
formal consideration of the issue, a technical corrections law
is not the appropriate vehicle to propose what constitutes a
controversial amendment that clearly contravenes prior
Congressional intent.
Accordingly, IACC, COPIAT and AWA urge the House Ways and
Means Committee to abandon the legislative proposal referenced
in item 7. In addition, to avoid any further debate or doubt
regarding Congressional intent, we ask the Committee to repeal
the amendment to Section 431(c)(1) under the Miscellaneous
Trade Act.
We appreciate the opportunity to comment on the proposed
legislation.
Very truly yours,
Charles E. Buffon
Laurie C. Self
Counsel to COPIAT & AWA
John S. Bliss
President of IACC
Emilio G. Collado
Executive Director of COPIAT
& AWA
[The attachments follow:]
Comments of Eastman Kodak Company
1. The Anticounterfeiting Act of 1996 provisions on information
disclosure should remain in the law and should be implemented.
Eastman Kodak Company (Kodak) submits this statement in
support of vigorous implementation of the air manifest
provisions of the Anticounterfeiting Consumer Protection Act of
1996, (Pub. L. No. 104-153, 110 Stat. 1386 (1996)), and against
the proposed amendment suggested in Item 7 of the Proposed
Miscellaneous Corrections in the Committee's Advisory of June
30, 1997, No. TR-10. The Anticounterfeiting Act of 1996 amended
19 U.S.C. Sec. 1431(c)(1) to require public disclosure of
aircraft as well as vessel manifest information and to specify
additional information (including trademarks on goods or
packages) to be disclosed when contained in a manifest. These
amendments were designed to enhance protection for intellectual
property in the form of trademarks, an objective consistent
with the U.S. Government's increased recognition of the
importance of intellectual property to U.S. competitiveness.
Kodak recognizes that another bill, the Miscellaneous Trade
and Technical Corrections Act of 1996, (Pub. L. No. 104-295,
110 Stat 3514 (1996)) touched on the manifest issue. However,
the specific provision of the Anticounterfeiting Act of 1996
requiring disclosure of air manifest information reflected
Congressional intent, and the Miscellaneous Trade bill did not
alter this mandate. Accordingly, we strongly disagree with the
suggestion in Item 7 of the Committee Advisory that
``legislation may be needed to clarify that the language
contained in the Miscellaneous Trade and Technical Corrections
Act of 1996 reflects Congressional intent.'' As explained
below, further amendment is unnecessary.
While there may be differing views from our own on this
issue, we submit that a technical corrections bill would be an
inappropriate vehicle for addressing those differences, since
the change suggested in Item 7 of the Advisory is not
uncontroversial.
2. The disclosure provisions of the Anticounterfeiting Act of 1996 are
necessary for effective Customs Service enforcement and to protect
trademarks and their contribution to U.S. competitiveness.
The defense of U.S. industry against trademark
counterfeiting is essential to the competitiveness and strength
of our economy. If counterfeiting is tolerated, the efforts of
companies that have built a reputation for excellence are
unfairly undercut by producers and purveyors of low quality
knockoffs. It is now universally understood that U.S.
competitiveness rests on solid protection for the intellectual
property of U.S. citizens and firms.
Kodak is the leading manufacturer of consumer imaging
products, with a brand-name recognized worldwide. That
universal recognition requires us to be on guard against
counterfeiters who frequently seek to misappropriate our
trademarks and mislead our customers with fraudulent products.
Previously, U.S. law did not provide law enforcement officials
with sufficiently adequate tools to confront this problem
effectively, nor did it provide us with the ability to obtain
sufficient information necessary to assist enforcement
officials. In fact, the anomaly that sea cargo manifest
information, but not air manifest information, was disclosed
has often led counterfeiters to exploit this loophole by using
aircraft as their transportation means of choice. The
Anticounterfeiting Act of 1996 addressed this situation, among
others. We were particularly pleased with the Act's expanded
Customs reporting requirements.
Kodak and other firms supported the disclosure provisions
of the Anticounterfeiting Act of 1996 in order to achieve the
same public disclosure of air cargo manifest information as
previously required for sea cargo manifests and to have
shippers specify the trademarks appearing on the goods or
packages. It is generally understood that enforcement by the
Customs Service against infringing products requires the
cooperation of industry. Kodak has cooperated with U.S. Customs
whenever questionable shipments were discovered, to help keep
goods with counterfeit trademarks from entering the country.
The new information required to be disclosed under the
Anticounterfeiting Act of 1996 would further assist us in our
work with Customs to identify counterfeit merchandise and the
location of the counterfeiters.
3. Congressional intent to strengthen information disclosure
requirements to protect trademarks is reflected in the
Anticounterfeiting Act of 1996 and was not disturbed by the
Miscellaneous Trade Act.
Item 7 of the Committee's Advisory implies that there is a
question whether Congressional intent on disclosure of
information is reflected in the provisions of the
Anticounterfeiting Act of 1996 requiring disclosure of air
manifest information. We believe that the Anticounterfeiting
Act of 1996 does express Congressional intent.
Apparently, for historical reasons, the Customs Service
routinely disclosed information on goods shipped by sea but not
by air. There was no evident policy basis for drawing this
distinction. We believe that the matter could have been
corrected administratively, but Congress put the question
beyond doubt by enacting the Anticounterfeiting Act of 1996
amendment explicitly adding to the law a reference to
disclosure of air manifest information.
The original law stated that certain information, ``when
contained in such manifest, shall be available for public
disclosure.'' The Anticounterfeiting Act of 1996 added the
phrase ``vessel or aircraft'' before the word ``manifest'' to
make clear that disclosure is required of information when
contained in a ``vessel or aircraft manifest.'' (Pub. L. No.
104-153, Sec. 11, 110 Stat. 1386 (1996)). A technical provision
of the Miscellaneous Trade and Technical Corrections Act of
1996 directed the substitution of ``a vessel manifest'' for
``such manifest.'' (Pub. L. No. 104-295, Sec. 3, 110 Stat. 3514
(1996). This provision had an effective date of December 8,
1993, prior to Pub. L. No. 104-153, Sec. 11, 110 Stat. 1386
(1996)). The Congressional intent reflected in the
Anticounterfeiting Act of 1996 to require disclosure of air
manifest information was not disturbed by the amending process.
The statute has been codified in the United States Code
Annotated as providing that the specified information ``when
contained in a vessel manifest or aircraft manifest, shall be
available for public disclosure.'' (See 19 U.S.C.A.
Sec. 1431(c)(1) (Supp. 1997) and accompanying note on
Codification).
Whether the imprecision of the amendment contained in the
Miscellaneous Trade bill was inadvertent or reflected an
ineffective attempt to achieve a different result, when the
dust settled, it remained that disclosure of air manifest
information is what Congress intended and what is required. (In
support of this conclusion regarding Congressional intent, see
also the attached letters from Congressional sponsors of the
Anticounterfeiting Act of 1996.) Accordingly, the issue of a
possible conflict between the Anticounterfeiting Act of 1996
and the Miscellaneous Trade Act raised in Item 7 of the
Committee Advisory should not arise, and the question implied
in Item 7 whether legislation is needed to reflect some intent
on information disclosure other than that of the
Anticounterfeiting Act of 1996 must be answered in the
negative.
We note also that the Miscellaneous Trade Act did not
address at all the new requirements added by the
Anticounterfeiting Act of 1996 relating to the disclosure of
additional information (including trademarks on goods or
packages) contained in a manifest. (See e.g., 19 U.S.C.A.
Sec. 1431(c)(1)(H) (Supp. 1997); 19 U.S.C.A. Sec. 1484(d)(2)
(Supp. 1997)). Therefore, for this additional reason, if Item 7
of the Committee Advisory was intended to pose the question of
whether there is a need for legislation on this issue, the
answer should also be in the negative.
4. Nullification of the Anticounterfeiting Act of 1996's strengthened
disclosure requirements should not be considered on a technical
corrections bill.
Those who believe that the statute should not require
disclosure of air manifest information are, of course, free to
pursue normal channels to make their case for change. Such
normal channels would entail full Congressional deliberations
in which Kodak and others would again make the case for
disclosure. At the end of that process, we are confident that
Congress would again conclude that the approach of the
Anticounterfeiting Act of 1996 was correct and would reject any
effort to delete from the law the requirement to disclose air
manifest information. However, consistent with normal practice,
we hope the Committee will agree that it is inappropriate to
include such a controversial proposal in the technical,
Miscellaneous Corrections legislation which is the subject of
the Committee's Advisory of June 30, 1997.
Conclusion
Protection of trademarks from the predations of
counterfeiters is vital to the health of American industry and
the American economy. The law is designed to prevent the
erosion of incentives for industry efforts to establish and
maintain a reputation for excellence. The more successful
American companies are, the more we become targets for
counterfeiters who seek to misappropriate our trademarks and to
mislead our customers with fraudulent products. Success in the
global marketplace, therefore, makes protection of U.S.
trademarks all the more important. Disclosure of air manifest
information with the contents specified in the law, as amended
by the Anticounterfeiting Act of 1996, is a vital part of the
regime protecting trademarks and the benefit to both the U.S.
economy and American consumers that flows from properly branded
products. Efforts to defeat the Congressional intent underlying
the Anticounterfeiting Act of 1996 should be rejected and
vigorous implementation of the Act should proceed.
[The attachments follow:]
International Trademark Association
Washington Office
Washington, D.C. 20036
August 15, 1997
The Honorable Philip M. Crane, Chairman
Subcommittee on Trade
Committee on Ways and Means
U.S. House of Representatives
233 Cannon House Office Building
Washington, D.C. 20515
Dear Chairman Crane:
The International Trademark Association (INTA) is responding to
your Subcommittee's request for comment on Proposal Number # 7 in your
June 30 press release, which would eliminate a provision of the
Anticounterfeiting Consumer Protection Act of 1996 that relates to the
public disclosure of aircraft manifests. In keeping with INTA's support
for the entire Act during the 104th Congress, we urge that you take no
action to remove the aircraft manifest provision.
INTA is a 119 year-old not-for-profit organization with over 3,400
members in 120 countries. Membership in INTA is open to trademark
owners and those who serve trademark owners in their efforts to avoid
confusion, deception and unfair trade practices in commerce.. Our
members include corporations, law firms, advertising agencies, and
professional and trade associations. Despite this diversity, all of
INTA's members share a common interest in trademarks and a recognition
of the importance of trademarks to their owners, to the general public,
and to the economy of the United States.
While INTA is sympathetic to those in the airline industry who are
concerned about the delays which might be caused by the public
disclosure of aircraft manifests, we are concerned about the fact that
counterfeiting of intellectual property remains a $200 billion world-
wide industry. The Anticounterfeiting Consumer Protection Act of 1996
continues to represent a positive step forward in the efforts of the
public and private sector to combat pirates who prey on the good names
of American companies.
Proof of the Act's success can be found in a report on the results
of a nationwide law enforcement crackdown on trademark and copyright
fraud released in May, 1997, by the U.S. Department of Justice and the
Federal Bureau of Investigation (FBI). The report states that 35
indictments were returned in April and May of 1997, and, to date, three
individuals have been convicted of conspiracy and trafficking in goods
bearing infringing trademarks. In April alone, eight persons pleaded
guilty to more than 20 counts of criminal trademark and copyright
violations.
The air manifest disclosure provision is an important element of
the Act. It was the clear intent of Congress to include this provision,
as the following Senate Committee Report language indicates:
``Under current law, the U.S. Customs Service routinely discloses
information relating to the nature of shipments imported by sea. This
information has proven to be extremely valuable to U.S. trademark
holders who are trying to trace or interdict the entry of counterfeit
goods.
``Additional authority is needed, however, to disclose the same
information for shipments by air. Since most low-weight, high value
counterfeits are shipped by air, trademark owners need access to air
shipment data as well as sea shipment data if they are to be able to
better assist enforcement officials in identifying counterfeiters and
stopping the flow of fraudulent goods transported in this manner.
Moreover, this provision eliminates the unwarranted and out-of-date
distinction between information required about goods shipped by sea as
compared to goods shipped by air [emphasis added].''
If the Anticounterfeiting Consumer Protection Act is to remain an
effective weapon, then all of its components, including the public
disclosure of aircraft manifests, must stay firmly in place. We cannot
afford to give away any ground to those who would seek to steal the
good names of American companies that have worked so hard to establish
a reputation of quality and consistency.
In any event, a substantive change to the Anticounterfeiting Act of
this kind should not be considered as part of a process reserved for
noncontroversial, technical trade measures. The ramifications of this
proposal are far-reaching and impact the effectiveness of the
Anticounterfeiting Act. It is not a mere technical clarification. Nor
is it noncontroversial.
Should you have any questions or comments concerning INTA's
position on this or any other trademark issue, please contact Jon Kent,
INTA's Washington Representative, at (202) 223-6222.
Thank you for considering our submission.
Sincerely,
David Stimson
President
Proposed Miscellaneous Corrections #8
To amend section 505(c) of the Tariff Act of 1930 (19
U.S.C. 1505(c)) to clarify that Customs must refund interest
payable on refunds of duty arising from NAFTA claims under 19
U.S.C. 1520(c) for the full period from the date of payment to
the Government to the date of liquidation or reliquidation.
Under current law, Customs is required to refund interest only
for the period from the date of filing the claim to the date of
reliquidation.
see also American Automobile Manufacturers Association under Proposed
Miscellaneous Corrections #7
see also JBC International under Proposed Miscellaneous Corrections #3
Comments of the Joint Industry Group
The Joint Industry Group (``JIG'') appreciates the
opportunity to comment on several pieces of legislation which
would correct certain technical deficiencies in recently
enacted trade legislation.
JIG is a coalition of more than 100 companies, trade
associations, professionals and businesses actively involved in
international trade. We both examine and reflect the concerns
of the business community relative to current and proposed
customs-related policies, actions, legislation and regulations,
and undertake to improve them through dialogue with the Customs
Service, other government agencies and the Congress.
All of the proposed miscellaneous corrections bills for
which comments were solicited appear to be meritorious and JIG
supports their passage. Some of the bills have been proposed by
and would have an immediate benefit to specific industries,
particularly the two bills that would amend the drawback law,
19 U.S.C. 1313, but in our view the proposed changes would
ultimately benefit many importers and would be consistent with
the changes made to the drawback law by Public Law 103-182.
Other bills, such as the proposed amendment to 19 U.S.C.
1515(a) dealing with Customs' consideration of an application
for further review, and the proposal to require Customs to
provide no less than a 30 day comment period for regulatory
changes, would benefit all our members.
Three pieces of legislation which the Subcommittee is
considering are of particular interest to our members. The
first bill would amend section 505(c) of the Tariff Act of 1930
(19 U.S.C. 1505(c)) to clarify that Customs must refund
interest payable on refunds of duty arising from NAFTA claims
under section 520(d) (19 U.S.C. 1520(d)) for the period
beginning on the date of payment to the Government and ending
on the date of liquidation. Under current law, Customs is
required to refund interest only for the period beginning on
the date of filing the claim and ending on the date of
liquidation.
Section 505(c) as amended by section 642 of Customs
Modernization Act (enacted as Title VI of the North American
Free Trade Agreement (NAFTA) Implementation Act), sets forth
the rules for calculating interest on underpayments and
overpayment of duties, fees and taxes arising out of the
importation of merchandise. Prior to enactment of Public Law
104-295 last year, the law provided that interest on the
deposited duties, fees and taxes accrued from the date of
deposit to the date of liquidation or reliquidation of the
entries in question.
Section 2 of the Miscellaneous Trade and Technical
Corrections Act of 1996, Public Law 104-295, amended section
505(c) to provide an exception with respect to the payment of
interest for a single class of overpayments; monies paid on
goods that are later determined to be eligible for NAFTA
preferential tariffs. For these overpayments interest runs from
the date on which the claim for the preferential tariff was
filed to the date of liquidation or reliquidation.
The proposed legislation would reverse the change that
resulted from the amendment made by Public Law 104-295. The
amendment upset a fair and equitable arrangement in which both
importers and the Government were placed on equal footing when
it came to paying interest. Moreover, the law does not permit
importers to claim the NAFTA tariff preference until the
importer has a certificate of origin in its possession. Thus,
at the time of entry, the importer is required to post the full
duties on the merchandise and the Government has full use of
that money until it is refunded. There is nothing that
distinguishes a refund of duties arising from a valid claim for
a NAFTA preference from the refund of duties arising from any
other valid claim. The provision would reinstate the original
language.
JIG members often file valid claims for the NAFTA
preferential duties after merchandise is imported.
Consequently, our members are not being paid interest for the
full period that the Government has the use of their money. JIG
supports this corrective legislation.
The second bill amends section 520(d) of the Tariff Act of
1930 (19 U.S.C. 1520(d)), relating to goods qualifying under
NAFTA rules of origin, to clarify that merchandise processing
fees (MPFs) may be refunded along with excess duties if NAFTA-
eligibility is proved.
Sections 201 and 202 of the North American Free Trade
Agreement (NAFTA) Implementation Act, Public Law 103-182,
provide a tariff preference for qualifying goods. Section 204
of the Act exempts Canadian-origin goods, and after June 29,
1999, Mexican-origin goods, from customs user fees (19 U.S.C.
58c). Section 206 of the Act added Section 520(d) of the Tariff
Act of 1930 (19 U.S.C. 1520(d)). It authorizes the Customs
Service to reliquidate an entry to refund any ``excess duties''
paid on a good qualifying under the rules of origin for which
no claim for preferential tariff treatment was made at the time
of importation. Customs takes the position that the reference
to ``excess duties'' precludes it from refunding the customs
user fees that were paid at the time of entry, even though the
exemption from fees, like the claim for preferential tariff
treatment, could not have been made at that time. The
legislation makes clear that the Customs Service is authorized
to refund any fees imposed under 19 U.S.C. 58c that were paid
at the time of entry.
In a ruling issued by the Customs Service, the agency took
the position that the term ``excess duties'' in section 520(d)
should be construed to exclude the refund of customs user fees.
Customs has interpreted the law in a way that is inconsistent
with the clear Congressional mandate that neither duties nor
customs user fees are payable on imported Canadian goods that
qualify for the NAFTA preference (and, in the future, Mexican
goods that so qualify). The amendment would leave no doubt that
such fees may be refunded pursuant to a claim filed under
section 520(d).
The third bill would amend section 514(a) of the Tariff Act
of 1930 (19 U.S.C. 1514(a)) to ensure that if an importer is
entitled to a NAFTA tariff preference, there is a method for
obtaining a refund of duties paid at the time of entry. Under
the bill, the NAFTA tariff preference and exemption from
customs user fees under 19 U.S.C. 58c would be listed as one of
the specific categories of decisions that an importer may
protest.
Under 19 U.S.C 1514, decisions of the Customs Service are
final and conclusive on all persons, including the United
States, unless a protest is filed. However, Customs has taken
the position with respect to post-importation claims for the
tariff preference under NAFTA, that the protest procedure under
section 514 is not available to importers; that the only
available remedy is to file a claim for a refund under section
520(d).
Traditionally, the liquidation or reliquidation of any
entry embodies all Customs decisions, including the
admissibility of the goods, and the correctness of the
valuation, classification, rate and amount of duty, and
entitlement to a tariff preference. Even where Customs'
decision is based on information provided by the importer, the
liquidation or reliquidation may be protested. The filing of a
protest prevents the liquidation from becoming final. Customs'
position that the protest procedure is not available to
importers who do not claim the NAFTA tariff preference at the
time of entry is questionable. Existing section 520(d), added
to the law by the NAFTA Implementation Act, begins with the
statement, ``Notwithstanding the fact that a valid protest was
not filed, the Customs Service may reliquidate an entry to
refund any excess duties . . . .'' This statement has been
interpreted in other instances to mean that, if a valid protest
was filed, Customs could have considered and allowed the
importer's claim under the protest procedure. The amendment to
section 514 make absolutely clear that section 514 is the
primary remedy available to importers for making post-
importations NAFTA preference claims, and that section 520(d)
is, like section 520(c), an extraordinary remedy that may be
used when a liquidation has become final and the protest
procedure is not available.
Proposed Miscellaneous Corrections #9
To amend section 520(d) of the Tariff Act of 1930 (19
U.S.C. 1520(d)), relating to goods qualifying under NAFTA rules
of origin, to clarify that merchandise processing fees (MPFs)
may be refunded along with excess duties if NAFTA-eligibility
is proven. Under the NAFTA Implementation Act [P.L. 103-182],
MPFs are not imposed on goods originating in NAFTA countries.
To claim a NAFTA preference, an importer must provide a valid
certificate of origin. In practice, certificates of origin are
not always available at the time of importation. Importers
often pay duties and the MPF on a good they know is NAFTA-
eligible, with the expectation that the MPF will be refunded
later as an excess duty when NAFTA-eligibility is proven.
Customs has taken the position that MPFs are not refundable
excess duties under 19 U.S.C. 1520(d).
see JBC International under Proposed Miscellaneous Corrections #3
see Joint Industry Group under Proposed Miscellaneous Corrections #8
Proposed Miscellaneous Corrections #10
To amend section 514(a) of the Tariff Act of 1930 (19
U.S.C. 1514(a)) to ensure that if an importer is entitled to a
NAFTA preference, there is a method for obtaining a refund of
the duties paid at the time of entry. It is a violation of law
for an importer to claim a NAFTA preference before receiving a
valid certificate of origin issued by the exporter. Many
importers do not have a certificate of origin at the time goods
are entered, and subsequently file post-entry claims when a
valid certificate of origin is received. If the entry is
liquidated before receiving a certificate of origin, importers
generally protest the liquidation under 19 U.S.C. 1514. This
action prevents the liquidation from becoming final before the
valid NAFTA-eligibility claim is made. Customs position is that
protests under 19 U.S.C. 1514 are inapplicable to NAFTA claims,
that such claims must be filed under 19 U.S.C. 1520(d) within
one year from the date of entry. The provision would clarify
that importers may use the protest procedure under 19 U.S.C.
1514 to claim the NAFTA preference.
see American Automobile Manufacturers Association under Proposed
Miscellaneous Corrections #7
see JBC International under Proposed Miscellaneous Corrections #3
see Joint Industry Group under Proposed Miscellaneous Corrections #8
see Stewart and Stewart under Proposed Miscellaneous Corrections #1
Proposed Miscellaneous Corrections #11
To amend 19 U.S.C. 2083 and 19 U.S.C. 2071 to eliminate the
requirement that Customs provide Congress with three annual
reports: (1) the Violation Estimates Report, which contains
estimates on the number and extent of violations of trade,
customs and illegal drug control laws, and the relative
incidence of violations estimated among the various ports of
entries; (2) the Enforcement Strategy Report, which outlines a
nationally uniform enforcement strategy for dealing with
violations 90 days after the Violation Estimates Report; and
(3) the Merchandise Damaged Statistics, which provides
statistics on the incidence, nature, and extent of damage to
merchandise resulting from Customs examinations.
see American Association of Exporters and Importers under Proposed
Miscellaneous Corrections #1
see Stewart and Stewart under Proposed Miscellaneous Corrections #1
H.R. 1097
To suspend temporarily the duty on Tinopal CBS-X.
No comments submitted.
H.R. 1214
To suspend temporarily the duty on the chemical P-
Toluenesulfonamide.
No comments submitted.
H.R. 1304
To provide for the temporary suspension of duty on certain
plastic web sheeting.
Ahlstrom Filtration, Inc.
Mt. Holly Springs, PA
August 15, 1997
Chairman Bill Archer
House Ways and Means Committee
1102 Longworth House Office Building
Washington, D.C. 20515
Reference: Public Comment on H.R. 1304
Dear Mr. Archer:
I am writing on behalf of Ahlstrom Filtration, Inc., a paper and
nonwoven roll goods manufacturer in Mt. Holly Springs, PA. We import a
polyester nonwoven fiber sheet produced by our sister company in France
which is further processed and converted at our facility and then sold
in the water filtration market.
Legislation recently introduced by Rep. Jim Ramstad (H.R. 1304)
would exempt from duty, a similar product imported by the Japan-based
Awa Paper Company, our primary competitor. Duty exemption for the
Japanese product would be a serious barrier to competition for us, as
our product is technically and economically competitive with the
product produced by Awa Paper.
The FilmTec Corporation, an Edina, MN-based subsidiary of Dow
Chemical, is a major importer of the Awa Paper product. In 1989,
FilmTec was successful in having this same Japanese product exempted
from duty under H.R. 1428 during the 101st Congress. At that time,
FilmTec Corporation argued that there was no comparable quality product
available in the U.S. As a result, Awa's product was able to gain a
significant marketing advantage over our products, significantly
damaging our business. Although FilmTec's claims may have had some
merit at that time, production and quality enhancements in our product
have enabled it to become a comparable alternative that is competitive
in all aspects. Qualitative developments in Ahlstrom's merchandise have
invalidated FilmTec's ``no comparable product'' argument in today's
market, and our sales record reflects it.
Major differences between Ahlstrom and FilmTec's products lie in
the location of processing. The Awa product used by FilmTec is a
polyester nonwoven fiber sheet that has been thermally calendered in
Japan to meet the specific demands for certain filtration products. Our
product is imported into the U.S. in a ``raw'' state and thermally
calendered in our Pennsylvania plant before it is applicable for the
same end use as the Japanese product. After importing the nonwoven
material in a ``raw'' form, Ahlstrom adds significant value to the
product by processing it in the U.S. H.R. 1304 does not apply to the
``raw'' polyester nonwoven fiber sheet, but only to the product that is
imported into the U.S. in its finished form.
The product described by the legislative language in H.R. 1304 will
not apply to our product due to the ``calendered'' provision. The
uncalendered product we import is currently classified in HTS
5911.40.000 and we pay a duty rate of 12% (we have a classification
review pending). The Awa product has recently had a HTS
reclassification into 5911.40.000 (the same as ours) from 5603.00.000.
Please note that H.R. 1304 refers to products o be modified to include
our product in order to provide for equal treatment and competition.
We have sold more than 1,000,000 yards of our product into the U.S.
market during the last twelve months. Duty exemption for only the
Japanese product would cause serious damage to our business in Mt.
Holly Springs, threatening nearly one-third of our total sales and
jeopardizing 30 or more jobs.
Our product and the Japanese-processed product should receive equal
treatment. Duty exemptions should be granted to both products or
neither product. While we would enjoy having an advantageous duty
classification, all we ask for is equal treatment that will allow for
fair competition based on the attributes and quality of the product. We
only seek to ensure a level playing field in our market that does not
provide significant artificial benefits to any party.
Sincerely,
Kelly Rennels
Director of Technology
H.R. 1548
To suspend until January 1, 2001, the duty on Diiodomethyl-
p-tolylsulfone.
No comments submitted.
H.R. 1606
To suspend temporarily the duty on carbamic acid (U-9069).
No comments submitted.
H.R. 1607
To suspend temporarily the duty on rimsulfuron.
No comments submitted.
H.R. 1677
To suspend temporarily the duty on certain chemicals.
No comments submitted.
H.R. 1678
To suspend temporarily the duty on Para ethyl phenol (PEP).
No comments submitted.
H.R. 1742
To suspend temporarily the duty on certain viscose rayon
yarn.
Hoechst Corporation
Washington, DC 20005
August 15, 1997
Mr. A.L. Singleton
Chief of Staff
Committee on Ways & Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, DC 20515
Dear Mr. Singleton:
I am writing for the official record to express opposition to the
following miscellaneous tariff bills currently being reviewed by the
Ways & Means Committee.
H.R. 1954
H.R. 1742
H.R. 1888
H.R. 2148
The specific yarns covered under these various bills are like and
directly competitive products to items manufactured in the United
States by Celanese Acetate, a member of the Hoechst group. As a result,
the temporary elimination of these tariffs would hamper the ability of
domestic manufacturers to compete in our own home market. In addition,
tariffs on these same items remain prohibitive in several lucrative
foreign markets such as the Peoples Republic of China. It is our strong
belief that the U.S should not lower or eliminate tariff on These
products until commensurate duty reductions are obtained from major
trading partners.
Thank you for your consideration of our views in regard to these
bills, and if we can provide you with any additional information please
do not hesitate to contact me.
Sincerely,
W. Anthony Shaw
Government Relations Department
TS/sb
Comments of ICF Industries, Inc. of New York, New York
Chairman Archer and Members of the Committee:
ICF Industries, Inc. (``ICF'') very much appreciates the
opportunity to comment in detail on proposed duty suspension
legislation that is vital to the interests of several important
U.S. industries and many U.S. companies.
ICF is a U.S. merchant distributor of filament yarn
products headquartered at 111 West 40th Street, New York, New
York 10018. We very strongly support the enactment of a three-
year suspension of the duties on certain viscose rayon yarn,
also known as ``rayon filament yarn,'' as embodied in H.R.
1742. If, in the judgment of the Committee on Ways and Means, a
full suspension of the duties is not feasible, ICF would
support, as an alternative, enactment of the following three
bills as incremental steps toward the ultimate suspension of
these tariffs: H.R. 1888, H.R. 1954, and H.R. 2148.
With the exception of a very small and specialized category
of yarn manufactured for ``carbonizing,'' rayon filament yarn
is no longer manufactured in the United States. As set forth
below, ICF endorses an exception to the proposed duty
suspension for carbonizable yarn.
The Product
Rayon filament yarn is used by the apparel, home
furnishings and automotive industries for both textile and
industrial purposes.
Rayon filament yarn is a synthetic fiber extruded by what
is known as the viscose process in which cellulose is liquefied
via dilution in a caustic alkali solution, heated with carbon
disulfide and then forced through tiny spinneret holes into a
bath where it coagulates to form extremely fine jetsnt yarn.
The product has a wide variety of end uses ranging from
delicate, silk-like fabrics made for apparel out of fine denier
textile yarn; to lining, velvet and other more durable textile
fabrics for apparel; to embroidery, monogramming and other
decorative stitching threads; to drapery, upholstery and other
fabrics for home furnishings; to industrial strength hose for
cars and trucks made of heavy denier yarn.
The Proposed Legislation
ICF wishes to express its deep gratitude to those Members
of the House who have expressed a keen interest in seeking a
constructive solution to the problems posed by the existing
general duty on rayon filament yarn, and who have responded to
the concerns shared by the apparel, home furnishings and
automotive industries by introducing or cosponsoring the
legislation described below. ICF appreciates the leadership and
continuing support of these Members and the hard work of their
respective staffs.
H.R. 1742, introduced on May 22, 1997 by Representative
Steven Rothman (D-NJ), applies to three categories of rayon
filament yarn for textile end uses as described in subheadings
5403.31.00 and 5403.32.00 of The Harmonized Tariff Schedule
(``HTS'') and two categories of rayon filament yarn for
industrial end uses as described in subheading 5403.10.30 of
the HTS. Representative Rothman's bill would suspend the duty
for all three subheadings for three years, until December 31,
2000. More specifically, the categories of yarn that would be
affected are as follows:
HTS #5403.10.30 (Industrial Yarn): High tenacity
yarn of viscose rayon: single yarn monofilament; multifilament,
untwisted or with twist of less than 5 turns per meter
(#5403.10.30.20) multifilament, with twist of 5 turns or more
per meter (#5403.10.30.40)
The general duty rate applicable to these yarns is ten
percent. The current duty rate for imports from Mexico is six
percent. Imports from Canada and Israel are exempt from duty.
HTS #5403.31.00 (Textile Yarn): Other yarn;
single: of viscose rayon, untwisted or with a twist not
exceeding 120 turns per meter monofilament; multifilament,
untwisted or ss than 5 turns per meter (#5403.31.00.20)
multifilament, with twist of 5 turns or more per meter
(#5403.31.00.40)
The general duty rate applicable to these yarns is ten
percent. The current duty rate for imports from Mexico is six
percent. The duty rate for imports from Canada is one percent.
Imports from Israel are exempt from duty.
HTS #5403.32.00 (Textile Yarn): Other yarn,
single: of viscose rayon, with a twist exceeding 120 turns per
meter
The general duty rate applicable to this yarn category is
ten percent. The current duty rate for imports from Mexico is
six percent. The duty rate for imports from Canada is one
percent. Imports from Israel are exempt from duty.
ICF wholeheartedly supports H.R. 1742 and urges the House
Ways and Means Committee to approve the bill. Since there is no
longer any domestic producer of the rayon filament yarn
products for which tariff suspension is being sought, there is
no longer any economic justification for the duties. In
addition, duty suspension will create very real benefits to
U.S. industry. In the alternative, ICF would support enactment
of H.R. 1888, H.R. 1954 and H.R. 2148 as incremental steps
toward the ultimate suspension of these tariffs.
H.R. 1888, introduced on June 12, 1997 by Representative
Peter King (R-NY), would suspend the duty for three years,
through December 31, 2000, for the category of textile yarn
described at HTS #5403.32.00 (see above).
H.R. 1954, introduced on June 18, 1997 by Representative
William L. Jenkins (R-TN), would suspend the duty for two
years, through December 31, 1999, for industrial yarn as
described at HTS# 5403.10.30 (see above).
H.R. 2148, introduced on July 10, 1997 by Representatives
Floyd Spence (R-SC) and Norman Sisisky (D-VA), would reduce the
existing general duty from ten percent to 7.5 percent for one
year, until December 31, 1998, on the category of textile yarn
described at HTS# 5403.31.00 (see above).on also includes an
exception from the duty reduction for rayon filament yarn that
is manufactured for the purpose of carbonizing.
Absence of General Domestic Production
According to data compiled by the Textile Organon, a
respected industry publication, 658 million pounds of rayon
filament yarn were produced in the United States during the
year 1953. Thereafter, a combination of environmental and
economic constraints forced producers in this country to reduce
capacity or to shut down altogether. By 1965 U.S. production
had been reduced to 434 million pounds. By 1975 U.S. production
had dropped to 65 million pounds. By 1984, production in the
United States was down to 41 million pounds.
By the late 1980's there was only one remaining producer of
rayon filament yarn in the United States. This company was the
North American Rayon Corporation (``North American'') of
Elizabethton, Tennessee. In 1996 North American sold only 9.5
million pounds of rayon filament yarn and was being crushed by
the massive financial burden of attempted compliance with the
stringent federal and state environmental regulations
applicable to the environmentally ``dirty'' rayon filament yarn
extrusion process. In late 1996, North American decided to
follow the lead of all other U.S. producers and ceased the
greater part of its rayon filament yarn manufacturing
activities.
North American's termination of all but its carbonizable
rayon filament yarn production means that there is no longer
any producer in the United States of the type of rayon filament
yarn distributed by ICF to the textile trade, nor of the
industrial yarn used by the automotive industry. Further, the
high costs which would be associated with the construction in
the United States of a new rayon filament yarn manufacturing
facility that could meet this country's stringent environmental
standards, coupled with the historically low margins resulting
from intense inter-fiber competition, assure that domestic
users of rayon filament yarn will not be able to obtain these
yarns from U.S. producers during coming years.
Exception Proposed for Carbonizable Yarn
North American Rayon Corporation's successor company, North
American Corporation, now produces only a small category of
rayon filament yarn that is manufactured for a specialized
process known as carbonizing. ICF endorses an exception to the
proposed duty reduction that would allow any imported
carbonizable yarn to remain subject to the existing ten percent
duty. As stated above, this exception is included in H.R. 2148.
With respect to H.R. 1742 or any other bill which includes a
suspension or reduction of the tariff for products that fall
within HTS #5403.31.00, we recommend that the Committee include
the following specific exception: ``except for medium tenacity
rayon filament yarn (2.8 to 4.1 grams per denier) manufactured
solely for the purpose of carbonizing.''
The U.S. Market for Rayon Filament Yarn
U.S. consumption of rayon filament yarn for textile and
industrial end uses during the year 1995 amounted to
approximately 29,380,000 pounds. North American supplied
approximately 12,900,000 of these pounds, representing
approximately 44% of combined U.S. demand. In dollars, North
American's sales accounted for approximately $40 million, or 44
percent, of the combined $91.5 million 1995 United States
market. U.S. consumption of rayon filament yarn for textile and
industrial end uses during the year 1996 amounted to
approximately 22,500,000 pounds. North American supplied
approximately 9,500,000 of these pounds, representing
approximately 42 percent of combined U.S. demand. In dollars,
North American's sales accounted for approximately $32 million,
or 44.5 percent, of the combined $72 million 1996 United States
market.
The Consumers
The consumers of rayon filament yarn for textile end uses
fall into three general categories: weavers, knitters and
processors. ICF customers who consume textile rayon filament
yarn include the following companies:
Weavers:
Bally Ribbon Mills, Inc., Bloomsburg Mills, Inc., Carthage
Fabrics Corp., CMI Industries Inc., Doran Textiles, Inc.,
Fabric Resources Ltd., Hoffman Mills Inc., Frank Ix & Sons,
Inc., JPS Converter & Industrial Corp., Keystone Weaving Mills,
Inc., J.B. Martin Company, Inc., McGinley Mills, Inc., Meder
Textile Company, Inc., C.M. Offray & Sons, Inc., Lawrence
Schiff Silk Mills, Schneider Mills, Inc., Stonecutter Mills
Corporation, Trimtex Company Inc., Wear Best Sil-Tex Mills, A.
Wimpfheimer & Brothers, Inc.
Knitters:
Allied Fabrics Inc., Andrex Industries, H.H. Fessler
Knitting co., Inc., Hope Industries, Ge-Ray Fabrics, Guilford
Mills, I.G. Textile Mills Inc., Johnson & Johnson (Ethicon Co.
Inc. Division), Jomac Inc., Kentex Industries Inc., Kronfli
Spundale Mills Inc., Liberty Fabrics, Lida Stretch Fabrics,
Inc., Metritek Corporation , Mohawk Fabric Co., Inc., Native
Textiles, Richland Mills, Shara-Tex Inc., Universal Connection
Corp.
Processors:
Barbour Threads, Clifton Yarn Mills, Danville Chenille Co.,
Inc., Decorative Aides Inc., Excel Elastic Corp., Huntingdon
Yarn Mills, Ideal Braid Corporation, Kent Manufacturing Co.,
Lending Textile Co., Inc., London Yarn Co., Moki Yarns, Div. of
Lacy Lace Co., Novita Yarns (Division of St. John Knits),
Robison-Anton Textile Co., Twistex Yarns Inc., William Wright
Co.
The consumers of high tenacity, industrial strength rayon
filament yarn are engaged principally in the manufacture of
radiator hoses, hydraulic hoses, chemical transfer hoses and
other durable hose products for the automotive industry.
Significant users of industrial rayon filament yarn in the
manufacture of automotive hoses include the following
companies:
Aeroquip Corporation, Beaver Manufacturing Co., The Bibb
Company, Boston Industrial Products, Cooper Tire & Rubber
Company, Dayco Products, Inc, Dunlop Tire Corporation, The
Gates Rubber Company, Goodyear Tire & Rubber Company, Michelin
Tire Corporation, Nephi Rubber Products Corp.
The State of the Industry
The U.S. weaving, knitting and yarn processing industries
have been hit hard by intense competition from overseas
suppliers of fabrics and stitching threads containing rayon
filament yarn, and by the importation of low priced apparel and
home furnishings. Selling prices are down. Employment is down.
And looms, knitting machines and twisting and other processing
machines are standing idle.
For instance, according to industry sources, domestic
weavers once controlled approximately 95 percent of the U.S.
market for woven goods containing filament rayon. Today,
domestic weavers control only approximately 25-30 percent of
this domestic market, and they do so only by selling at very
low prices. Industry sources also indicate that the converters
who arrange for the dying and finishing of textile greige goods
are now prone to look to U.S. weavers only for initial orders
requiring innovation or for quick response, and that volume
business is being given to overseas suppliers in China, Korea,
India, Indonesia, Pakistan and Turkey whose quality generally
does not match that of the U.S. weavers but whose manufacturing
costs and prices are considerably lower. This has reduced U.S.
employment at some weavers.
Similarly, the recent influx of low priced velvet fabrics
from Korea and elsewhere has cic weavers' share of the market
for rayon velvet fabrics to decline over the last few years
from approximately 70 percent of the market to less than 50
percent. Employment has declined and this decline has been
attributable in large part to the high price of rayon filament
yarn.
Similarly, U.S. manufacturers of embroidery and other
decorative yarns and threads have maintained market share in
the face of intense Korean and other foreign competition only
by slashing prices. Despite dramatic investment in new
equipment to ensure that quality and productivity remain at the
highest levels, average selling prices per unit today are
significantly lower than they were some ten years ago.
Industry Supports the Proposed Duty Suspension
There is considerable support for the proposed duty
suspension among the users of textile and industrial rayon
yarn, as evidenced by the public comment received by the House
Ways and Means Committee since the issuance of Advisory No. TR-
10 of June 30, 1997. Industry associations as well as
individual companies have advised the Committee of their
support for H.R. 1742, H.R. 1888, H.R. 1954 and H.R. 2148.
Attached as Table I is a list of supporters of the proposed
duty suspensions for rayon filament yarn based on letters sent
to the Committee as of this date.
There Is No Opposition to the Legislation
Public comment addressed to the Committee as of this date
which we have reviewed shows no opposition to the proposed duty
suspension. Given that there is no longer any domestic producer
of rayon filament yarn (other than carbonizable yarn as
described above), this is not an unexpected development.
Indeed, earlier this year the Commerce Department completed a
changed circumstances antidumping duty administrative review
and subsequently revoked the antidumping order on high-tenacity
rayon filament yarn from Germany. According to the Federal
Register notice dated May 30, 1997 (55 F.R. 29329), the
Commerce Department's determination was based on the fact that
North American, which had been the petitioner in the original
underlying investigation, ``states that it has no further
interest in the order.'' The Commerce Department finding
further stated: ``We are now revoking the order based on the
fact that the order is no longer of interest to domestic
interested parties.''
There were no submissions to the Commerce Department, and
thus no opposition from the public, in response to the notice
of preliminary determination to revoke the antidumping order,
which had included an opportunity for public comment. We
believe that the absence of any opposition to the revocation of
the antidumping order and the absence of any public comment to
this Committee in opposition to the proposed duty suspension
provide a clear indication that continuation of the existing
duty serves no useful commercial or public policy purpose.
Conclusion
While not a complete panacea, the suspension of the ten
percent duty on rayon filament yarns would lower the cost of
these yarns to domestic producers no longer able to buy a U.S.-
made, duty-free rayon filament yarn product. Such a duty
suspension would thus go a long way toward enhancing the
ability of U.S. companies manufacturing fabrics for apparel and
home furnishings and embroidery and similar decorative yarns--
and of their customers in the apparel and home furies--to
compete more effectively in their U.S. home market against
imported products and in the world market generally.
Although the U.S. automotive industry is not adversely
affected by foreign competition to the same extent as the
textile and home furnishings industries, the U.S. producers of
industrial strength hose for cars and trucks tend to be large
companies with large work forces and multiple locations. These
companies are likewise no longer able to buy U.S. made, duty
free rayon filament yarn and thus also favor duty suspension
now that the last remaining U.S. manufacturer of rayon filament
yarn has ceased production of all but its carbonizable rayon
filament yarn products.
ICF urges the Committee to approve the proposed duty
suspension for rayon filament yarn and to bring the matter to a
vote in the full House of Representatives as soon as possible.
Table 1
------------------------------------------------------------------------
DATE OF
SUPPORTER LOCATION(S) LETTER
------------------------------------------------------------------------
Akzo Nobel Industrial Fibers, Inc.. Scottsboro, AL 8/14/97
Allied Fabrics, Inc................ Belmont, NC 7/30/97
Bally Ribbon Mills................. Bally, PA 7/31/97
Beaver Manufacturing............... Mansfield, GA 8/4/97
The Bibb Company................... Atlanta, GA 8/4/97
Porterdale, GA
Bloomsburg Mills, Inc............. New York, NY 7/24/97
Bloomsburg, PA
Monroe, NC
Carthage Fabrics Corp............. Carthage, NC 8/1/97
New York, NY
Clifton Yarn Mills................ Clifton Heights, PA 7/24/97
CMI Industries Inc................ Greensboro, NC 8/5/97
Clarkesville, GA
New York, NY
Columbia, SC
Clinton, SC
Elkin, NC
Geneva, AL
Stuart, VA
Danville Chenille Co., Inc......... So. Danville, NH 8/8/97
Ethicon (Div. of Johnson & Somerville, NJ 8/4/97
Johnson). Curooo, PR
Cagous, PR
Excel Elastic Corporation......... Northvale, NJ 8/5/97
Pawtucket, RI
Fabric Resources Ltd.............. Great Neck, NY 7/31/97
Rock Hill, SC
Mullins, SC
Frank Ix & Sons, Inc.............. New York, NY 7/30/97
Lexington, NC
Charlottesville, VA
Ge-Ray Fabrics.................... Morganville, NJ 8/6/97
Asheville, NC
Augusta, GA
New York, NY
Hoffman Mills Inc................. New York, NY 7/25/97
Shippensburg, PA
Hope Industries.................... Nashua, NH 8/6/97
Huntingdon Yarn Mills, Inc........ Philadelphia, PA 7/30/97
I.G.Textile Mills, Inc............ New York, NY 8/1/97
Jomac Inc......................... Warrington, PA 8/8/97
JPS Converter & Industrial Corp.... New York, NY 8/5/97
Greenville, SC
South Boston, VA
Rocky Mount, VA
Lincolnton, NC
Kingsport, TN
Slater, SC
Stanley, NC
Laurens, SC
Kent Manufacturing Co.............. Pickens, SC 8/6/97
Kentex Industries, Inc............. Hudson, NH 7/31/97
Keystone Weaving Mills, Inc........ Lebanon, PA 8/5/97
York, PA
Lawrence Schiff Silk Mills, Inc.... Quakertown, PA 7/24/97
Bethlehem, PA
Allentown, PA
Carlisle, PA
Newville, PA
Lending Textile Co., Inc........... New York, NY 7/29/97
Montgomery, PA
Lida Stretch Fabrics, Inc.......... New York, NY 8/14/97
Charlotte, NC
J.B. Martin Company, Inc........... New York, NY 7/29/97
Leesville, SC
McGinley Mills, Inc................ Easton, PA 7/23/97
Phillipsburg, NJ
Meder Textile Co., Inc............. Port Washington, NY 7/17/97
Kings Mountain, NC
Metritek Corp..................... Boca Raton, FL 8/6/97
Mohawk Fabric Co., Inc............ Amsterdam, NY 7/17/97
Native Textiles................... New York, NY 7/28/97
Glens Falls, NY
North American Corporation........ Elizabethton, TN 8/12/97
C.M. Offray & Son, Inc............ Chester, NJ 7/24/97
Hagerstown, MD
Anniston, AL
Leesville, SC
Watsontown, PA
Danville, VA
Richland Mills.................... Hialeah, FL 7/31/97
Robison-Anton Textile Company..... Fairview, NJ 7/23/97
Clark Summit, PA
Schneider Mills, Inc.............. New York, NY 7/17/97
Taylorsville, NC
Forest City, NC
Shara-Tex Inc..................... Vernon, CA 7/30/97
St. John Knits.................... Irvine, CA 8/6/97
Stonecutter Mills Corporation..... Spindale, NC 8/4/97
New York, NY
Trimtex Company, Inc.............. Williamsport, PA 8/12/97
Twistex Yarns..................... Oceanside, CA 7/22/97
Universal Connection.............. Los Angeles, CA 7/31/97
Wearbest Sil-Tex Mills Ltd........ Garfield, NJ 8/7/97
A. Wimpfheimer & Bro., Inc......... New York, NY 7/11/97
Stonington, CT
Orange, VA
Blackstone, VA
Wm. E. Wright L.P................. West Warren, MA 8/11/97
ASSOCIATIONS:
American Textile Mfgrs. Institute. Washington, D.C. 8/13/97
Nat'l Knitwear & Sportwear Ass'n.. New York, NY 8/12/97
Textile Distributors Association.. New York, NY 7/23/97
------------------------------------------------------------------------
National Knitwear & Sportswear Association
New York City, NY 10016
August 12, 1997
Mr. Phil Crane, Chairman
Trade Subcommittee
Committee on Ways and Means
Room 1150 Longworth Building
U.S. House of Representatives
Washington, DC
Dear Mr. Chairman:
On June 30, 1997 the Committee invited comment on various
miscellaneous tariff bills including several to suspend the duty on
artificial filament yarn of viscose rayon (H.R. 1742) and similar
legislation. (HR 1954, H.R. 1888 and, on a more extensive bill, H.R.
2148 which would reduce the duty for one year on a broader variety of
viscose yarns.)
The National Knitwear & Sportswear Association represents a variety
of garment manufacturing companies generally specializing in the
production of knitted garments, including sweaters. Our members are
located in many states, including New York, New Jersey, California,
Minnesota, Ohio, the Carolinas, Massachusetts, Pennsylvania. We also
count among our members a number of fabric knitting companies
manufacturing circular knit fabrics principally for apparel end uses.
While the yarns covered under the subject bills are a relatively
minor element in the apparel scene, and many are for industrial uses
unrelated to apparel and therefore outside of our areas of interest
and/or expertise, viscose is a fashion element in many garments and is
therefore of interest to a number of our members. Apparel containing
these yarns is imported into the United States in competition with our
members, and they need to be able to obtain these materials at a
competitive price for use in the manufacture of garments in the United
States. Additionally, we believe that recent action by the Committee
involving yarns of all fibers warrants a more complete consideration of
the existing yarn tariff and quota situation, and that this
reexamination should apply to all yarns rather than solely those
referred to in the bills noted above.
During the current session, the Committee approved legislation
granting what was referred to as ``parity'' to the Caribbean basin
countries (Sec. 981 of the Tax bill). That legislation granted duty and
quota free status to a variety of Caribbean made apparel products,
provided only that they were made of United States origin yarn (Sec.
984). (NKSA opposed that legislation for a variety of reasons not
recounted again here.) We understand that legislation along those lines
will be proposed again shortly, perhaps in conjunction with, or as part
of, the Fast Track legislation.
In light of the Committee's previous endorsement of CBI ``parity''
legislation, we urge that any new legislation along those lines include
the elimination of duties and quotas on yarns, regardless of origin,
for use in the manufacture of apparel in the United States. If the
Committee continues to believe that providing immediate and special
tariff and quota benefits for the Caribbean industry is good policy,
hopefully it will be interested in contributing a small offset to that
policy so that domestic garment manufacturers and fabric manufacturers,
with employees far outnumbering those in the apparel-yarn industry,
might be better able to cope with the garment import flow that a CBI
bill would generate.
For the domestic knitted garment manufacturing industry to have a
reasonable chance for survival in the face of a totally open apparel
door from the Caribbean, duty and quota free access to yarns from world
markets will be essential. The American industry cannot accept a
circumstance in which the most import sensitive apparel is permitted
what amounts to a seven year advance on the scheduled elimination of
the international quota system, while yarn essential to the
manufacturing process remains subject to duties and quotas. This
creates the classic tariff anomaly in which the raw materials are taxed
and subject to quotas, thereby burdening domestic producers, while the
higher value added products they make are encouraged to be imported. A
reverse situation should apply.
We recognize that the elimination of yarn duties would add to the
revenue cost of the pending legislation, but believe that the benefits
to domestic manufacturers would enable some to survive who might not
otherwise, thereby saving on unemployment insurance and welfare claims.
The Committee should examine these issues fully.
For these reasons we support the instant legislation calling for
elimination or suspension of duties on viscose yarns, while urging the
Committee to consider the entire yarn import situation more fully at
its earliest opportunity.
Thank you for including this comment in the record of the
Committee.
Sincerely yours,
Seth M. Bodner
Executive Director
North American Corporation
Elizabethton, Tennessee 37643
August 12, 1997
Honorable Bill Archer
Chairman
Committee on Ways and Means
1102 Longworth Building
U.S. House of Representatives
Washington, D.C. 20515-6348
ATTENTION: A. L. Singleton, Chief of Staff
RE: H.R. 1742, H.R. 1888, H.R. 1954 and H.R. 2148
Dear Mr. Chairman:
On behalf of North American Fibers (successor to North American
Rayon Corporation) (``North American'') and its employees, I want to
express strong support for the above legislation to suspend or reduce
the tariff on both industrial and textile rayon filament yarn. With
respect to H.R. 1742 or any bill which includes a suspension or
reduction of the tariff for products that fall within HTS #5403.31.00,
I request that the Committee include the following exception: ``except
for medium tenacity rayon filament yarn (2.8 to 4.1 grams per denier)
manufactured solely for the purpose of carbonizing.''
For many years until the end of 1996, North American was the sole
U.S. manufacturer of rayon filament yarn. Because of the continuous
increase in low cost imported fabrics and garments, North American
ceased production in early 1997 of the rayon filament yarn cited in the
above legislation, except for carbonizable yarn as described above. We
believe it highly unlikely that any U.S. company would initiate a
venture in the future for the general manufacture of rayon filament
yarn because of the economic and environmental factors that limit its
profitability.
In addition to the manufacture of carbonizable yarn, North American
continues to process imported high tenacity industrial yarn for
customers who in turn manufacture radiator hoses, hydraulic hoses,
chemical transfer hoses and other durable hose products.
North American and our customers are under significant pressure
from overseas competitors that can obtain this yarn at much lower
duties, are not as carefully regulated with respect to labor and
environmental conditions and generally have lower production costs.
These foreign manufacturers can then export products made from such
yarn to the United States at prices that create an unfair advantage for
imports. Suspending or reducing the duty on both industrial and textile
rayon filament yarn will not fully resolve this problem, but it will
help significantly in keeping U.S. products competitive with imports,
thereby preserving U.S. jobs and industrial capacity.
North American believes that the public record of comment on this
legislation will demonstrate that there is no opposition to its
enactment. For instance, in response to our request in another matter
involving high tenacity rayon filament yarn, the Commerce Department
recently completed a changed circumstances antidumping duty
administrative review and revoked the antidumping order on high-
tenacity rayon filament yarn from Germany in a Federal Register notice
dated May 30, 1997. The Commerce Department's determination was based
on the fact that North American, which had been the petitioner in the
original underlying investigation, ``has expressed no interest in the
continuation of the antidumping duty order.'' In addition, there were
no submissions to the Commerce Department, and thus no opposition from
the public, in response tpreliminary determination to revoke the
antidumping order.
We at North American hope the Committee will approve H.R. 1742.
While this bill involves relatively substantial revenue losses for a
tariff suspension, there is no longer any economic justification for
the tariff, and its suspension will create very real benefits to U.S.
industry. In the alternative, we support H.R. 1888, H.R. 1954 and H.R.
2148 as incremental steps toward ultimate suspension of these tariffs.
Sincerely,
Charles K. Green
President and Chief Executive Officer
H.R. 1793
To suspend temporarily the duty on Pyrithiobac Sodium.
No comments submitted.
H.R. 1852
To reduce the duty on a polymer of alkanediols, monocyclic
dicarboxylic acid dimethyl ester, monocyclic monosulfonated
dicarboxylic acid dimethyl ester monosodium salt and hydroxy
alkoxyalkanesulfonic acid sodium salt.
Hoechst Corporation
Washington, DC 20005
August 15, 1997
Mr. A. L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
SUBJECT: Support of H.R. 1852
Dear Mr. Singleton:
On behalf of Hoechst Corporation, I am pleased to submit these
comments in response to the Subcommittee on Trade's Advisory TR-10,
dated June 30, 1997. The Hoechst Corporation supports H.R. 1852,
legislation introduced by Rep. Sue Myrick (R-NC), which would reduce to
3.5 percent ad valorem the tariff on a polymer of alkanediols,
monocyclic dicarboxylic acid dimethyl ester, monocyclic monosulfonated
dicarboxylic acid dimethyl ester monosodium salt and hydroxy
alkoxyalkanesulfonic.
The product is imported from Germany and is used in a variety of
home care products to improve their effectiveness. Its enactment would
enhance the competitiveness of the Hoechst Corporation in the US., as
well as benefit the ultimate consumers by the production of a more cost
effective product. There are no manufacturers of this product in the
United States or other countries, and as a result no U.S. manufacturers
or workers would be negatively impacted by its enactment.
This product is currently imported under Harmonized Tariff Schedule
of the U.S. subheading 3907.90.50 at a specific duty rate of 2.2 cents
per kilogram plus 8.2 percent ad valorem. The estimated adjusted loss
of revenue from enactment of this bill would be approximately $440,000
per year, based on import figures for 1996.
We are currently working with the International Trade Commission
and the U.S. Customs Service to refine the chemical name description
for the product and will work with the Trade Subcommittee in any
subsequent markup to ensure that this legislation can be effectively
administered by the Customs Service.
We would be happy to work with the Subcommittee to ensure enactment
of this legislation and appreciate this opportunity to comment and the
Subcommittee's continued commitment to miscellaneous tariff
legislation.
Best Regards,
W. Anthony Shaw
Government Relations
H.R. 1875
To amend the Harmonized Tariff Schedule of the United
States to allow entry of peanut butter and paste manufactured
from Mexican peanuts in foreign trade zones, without being
subject to a tariff-rate quota.
Chocolate Manufacturers Association
National Confectioners Association
McLean, Virginia 22102-4203
August 8, 1997
Mr. A. L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Mr. Singleton:
The National Confectioners Association (NCA) and the Chocolate
Manufacturers Association (CMA) would like to submit these comments
regarding H.R. 1875 for your committee record.
Together our associations represent 175 companies that manufacture
the vast majority of chocolate and non-chocolate products in the United
States and another 250 companies that supply those manufacturers. At
times the confectionery industry is the second largest user of peanuts
in the United States, so we are very interested in issues that affect
this valuable commodity.
While the passage of H.R. 1875 would not have a major impact on the
trade activity of peanuts between Mexico and the United States, we do
support approval of the measure.
As you know, our federal government restricts the supply of peanuts
in this country to guarantee an artificially high price for those who
grow the commodity. These steps taken by our own government have not
really served to help our domestic peanut growers, but instead have
caused the demand for this important product to decline.
In addition, the members of our associations are forced to compete
with confectionery products from abroad whose manufacturers are able to
purchase peanuts at the much less expensive world market price. Such
economic trends force our members to consider locating jobs outside the
U.S.
Until more significant steps are taken to change these restrictive
trade policies of the American government and to bring about a more
market oriented system of selling peanuts in the United States, the
peanut industry will continue to decline. But in the meantime, the
measures called for in H.R. 1875 are positive steps that would bring
about increased use of peanuts and could save American jobs by allowing
the processing of some Mexican peanuts in our country.
Please let us know if we can provide your committee with any
further information on this issue.
Sincerely,
Lawrence T. Graham
President
LTG/sgl
Comments of James W. Dorsett, President, Golden Peanut Company,
Alpharetta, Georgia
Mr. Chairman, I am pleased to submit to the Subcommittee on
Trade, Committee on Ways and Means, this statement in support
of H.R. 1875, which would amend the Harmonized Tariff Schedule
of the United States to allow the manufacturing of peanut
butter and paste in U.S. foreign-trade zones, subject to
certain conditions. Golden Peanut Company commends Chairman
Crane for introducing this important legislation and
appreciates the opportunity to provide its views.
Golden Peanut Company is the largest sheller of peanuts in
the United States,U.S. operating shelling plants in all three
of the major U.S. peanut producing areas of the U.S., i.e., the
Southwest, Southeast, and the Virginia-Carolina areas. We also
operate further processing plants manufacturing further
processed products, including peanut butter, which includes the
manufacturing of peanut butter in Georgia and Texas. Because
Since all of our physical assets are in the United States, U.S.
we are very concerned about the non-competitive position in
which certain provisions of that the North American Free Trade
Agreement placeplaces on U.S. peanut shellers and growers.
Golden Peanut Company strongly supports H.R. 1875 as a
measure urgently needed to address a defect in current tariff
law that places U.S. producers of peanut butter and paste, such
as Golden Peanut Company, at a competitive disadvantage
relative to competitors in Mexico. Current law grants quota-
free tariff access to the U.S. market to Mexican producers of
NAFTA-qualifying peanut butter and paste but restricts, under a
tariff-rate quota, the U.S. industry's access to Mexican-grown
peanuts that would be used to manufacture peanut butter and
paste in the United States. If not corrected, this
disadvantageous tariff relationship will result in competitive
harm to U.S. peanut butter and paste producers. It also will
encourage the discontinuation of U.S. peanut butter and paste
production in favor of new production facilities in Mexico.
H.R. 1875 would allow U.S. peanut butter and paste plants
to use foreign-trade zone procedures for the limited purpose of
processing Mexican-origin peanuts into peanut butter and paste.
Because the finished product would be made with U.S. labor, the
change in tariff law made by the bill would preserve economic
activity and jobs in the United States. Because imports under
the new provision could not be withdrawn from foreign-trade
zones to enter the U.S. market in the form of peanuts (or in
any form other than as peanut butter or paste), the bill would
have no adverse effect on the peanut program administered by
the U.S. Department of Agriculture.
Because Mexico is the only country in the world that has
quota-free access to the U.S. peanut butter and paste market,
current U.S. tariff treatment of peanut butter and paste
products will encourage the growth of an export-oriented peanut
butter and paste industry in Mexico. Given U.S. international
trade commitments, we must expect this result whether or not
H.R. 1875 is enacted. However, H.R. 1875, which is fully
consistent with our country's international trade obligations,
will prevent unnecessary economic harm to the U.S. peanut
butter and paste industry. Absent the remedy to be effected by
the bill, U.S. tariff law will continue to treat Mexican peanut
butter and paste producers more favorably than it treats Golden
Peanut and the other peanut butter and paste producers in the
United States.
For all these reasons, Golden Peanut Company urges the
enactment of H.R. 1875 as soon as possible.
H.R. 1876
To clarify that certain large components of certain
scientific instruments and apparatus shall be provided the same
tariff treatment as those scientific instruments and apparatus.
No comments submitted.
H.R. 1879
To suspend temporarily the duty of Triflusulfuron Methyl.
No comments submitted.
H.R. 1882
To suspend temporarily the duty on certain parts for in-
line skates.
No comments submitted.
H.R. 1886
To suspend the duties on Pantera.
Uniroyal Chemical Company, Inc.
Middlebury, CT
August 15, 1997
Mr. A.L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office
Washington, D.C. 20515
Re: A bill to temporarily suspend the duty on Pantera Technical (+/
-tetrahydro-furfuryl-2-[4-(6-chloroquinoxaline-2-
yloxy) phenoxyl propanoate)--H.R. 1886
Dear Mr. Singleton:
On behalf of Uniroyal Chemical Company, Inc., we are writing to
submit comments regarding H.R. 1886, a bill to temporarily suspend the
duty on Pantera Technical (+/-tetrahydro-furfuryl-2-[4-(6-
chloroquinoxaline-2-yloxy) phenoxyl propanoate). Uniroyal strongly
endorses this House Bill as a means to provide to the US agriculture
industry at more competitive prices a highly effective graminicide for
the control of many annual and perennial grass weeds.
There are substantial economic benefits to farmers and growers
producing a wide range of important food and ornamental crops in the US
from the use of Pantera Technical. This product is used to control
weeds in growing cotton, dry bean, flax, forests, tree nurseries, fruit
trees, grapevine, lentils, lupins, melons, mustard, onion, oilseed
rape, peas, peanuts, potatoes, red beets, soybeans, sugar beets and
sunflowers.
Pantera Technical is a post emergence graminicide, which eliminates
pests in a wide range of annual and perennial grass weeds, as well as
in many broad leafed crops. It does not require oil based adjuvant to
be effective and is more environmentally friendly than other
graminicides and herbicides. Compared to other similar products, it is
friendlier because it is effective in controlling regrowth of the
weeds. As a result, the need for multiple applications during a growing
season is significantly reduced.
In conclusion, we support this legislation as beneficial to the
agriculture community. There should be no opposition from US chemical
manufacturers since this is a proprietary chemical not produced in the
US. The savings from the elimination of the duty can be passed along,
in whole or in part, to customers worldwide who purchase this product.
We thank you for the opportunity to submit these comments. We are
prepared to respond to any questions Committee members or staff may
have about this product.
Sincerely,
James B. Clawson
JBC International
H.R. 1887
To suspend the duties on Triacetonamine.
Uniroyal Chemical Company, Inc.
Middlebury, CT
August 15, 1997
Mr. A.L. Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office
Washington, D.C. 20515
Re: A bill to temporarily suspend the duty on triacetonamine (4-
piperzone 2,2,6,6-tetramethyl)--H.R. 1887
Dear Mr. Singleton:
On behalf of Uniroyal Chemical Company, Inc., we are writing to
submit comments regarding H.R. 1887, a bill to temporarily suspend the
duty on triacetonamine (4-piperzone 2,2,6,6-tetramethyl). Uniroyal
strongly endorses this House Bill as a means to improve the competitive
position of Uniroyal in the worldwide sales of its new proprietary
product NAUGARD SFR.
Triacetonamine is a proprietary nitroxyl free radical mixture with
ethylbenzene. It is used as a raw material in the manufacture of
Uniroyal Chemical Company's new line of NAUGARD SFR (stable free
radical) polymerization inhibitor chemicals. These chemicals inhibit
the development of polymers during the curing of rubbers and plastics.
Uniroyal's NAUGUARD SFR product line is unique in that it is
characterized by very low usage levels (approximately 20% as much as
other inhibitor chemicals), does not require air injection, and has
high storage stability. These products have low toxicity and
environmental impact; they are available in solution form and have
demonstrated an excellent cost/performance ratio.
The use of triacetonamine in manufacturing the NAUGARD SFR
polymerization inhibitors as recently has been tested with excellent
and highly promising results. Uniroyal has already invested heavily to
upgrade the capital production equipment in the US and will invest
significant additional funds for processing improvements over the next
three years should the cost of inputs such as triacetonamine be
reduced.
This new investment is creating new jobs with hopes of much further
expansion over the next two to five years. Uniroyal is using three
shifts five days a week now to produce NAUGARD SFR. Production can be
expanded to four shifts seven days a week if NAUGARD SFR is as
successful in its global sales as believed. Triacetonamine is the key
to that success. It is not manufactured in the US since it is a
proprietary product produced by Huls, Inc. in Germany.
In conclusion, Uniroyal supports passage of this legislation, which
will allow Uniroyal to reduce its cost of production of the new line of
NAUGARD SFR chemicals. These savings can be passed along, in whole or
in part, to rubber chemical manufacturers worldwide who purchase this
product. There should be no opposition from US chemical manufacturers
since this is a proprietary chemical not produced in the US.
We thank you for the opportunity to submit these comments. We are
prepared to respond to any questions Committee members or staff may
have about this product.
Sincerely,
James B. Clawson
JBC International
On behalf of Uniroyal Chemical Company, Inc., we submit these comments
regarding H.R. 1887, a bill to temporarily suspend the duty on
triacetonamine (4-piperzone 2,2,6,6-tetramethyl). Uniroyal endorses
this bill since it will promote worldwide sales of NAUGARD SFR, a
chemical that inhibits the development of polymers during the curing of
rubbers and plastic. This legislation will help Uniroyal reduce the
cost of its production and thereby the cost to consumers.
H.R. 1888
To suspend temporarily the duty on certain twisted yarn of
viscose rayon.
see Hoechst Corporation under H.R. 1742
see ICF Industries, Inc. under H.R. 1742
see National Knitwear & Sportswear Association under H.R. 1742
see North American Corporation under H.R. 1742
H.R. 1889
To suspend temporarily the duty on spring steel.
Comments of K2 Corporation
H.R. 1889 and H.R. 1890: Duty Suspensions for Steel Edges and Base
Materials
K2 Corporation (``K2''), a U.S. manufacturer of skis and
snowboards, supports legislation to suspend U.S. customs duty
on imports of two key raw materials used in the production of
its skis and snowboards: (1) steel edges and (2) polyethylene
base materials. K2 believes the duty suspension legislation is
necessary to maintain K2's competitiveness in the U.S. and
global marketplace.
I. Background: K2 Is the Principal Employer on Vashon Island and
Performs Significant Manufacturing Operations There.
K2 manufactures skis and snowboards on Vashon Island,
Washington. K2 employs over 700 people at its Vashon facility,
which makes it the principal employer on the island. K2's
employees perform all significant manufacturing processes
required to produce its skis and snowboards. All K2 snowboards
and virtually all K2 and Olin-brand skis sold throughout the
world are individually crafted by skilled K2 technicians on
Vashon Island.
K2 sources most key components of its skis and snowboards
from Seattle-area companies.
With regard to the imported steel edges and base materials,
K2 technicians perform the following operations in making the
skis or snowboards. First, the steel edges are bent to the
shape of one of the several K2 ski or snowboard designs. The
steel edges are then attached to the other main components of
the ski or snowboard. These components include: (1) the ski/
snowboard core, which consists of several thin pieces of wood
glued together, (2) layers of fiberglass mixed with resins, (3)
polyethylene base material and (4) the ski cap or snowboard top
that encloses the core and fiberglass and binds together the
base material and steel edges to form the ski/snowboard. The
base material, ski caps and snowboard tops are made of
polyethylene and contain graphics which are designed and
applied by K2 technicians. Thereafter, the entire assembly is
fitted into a press and heated to accelerate the curing
process.
II. Reasons Why the Duty Suspensions for Steel Edges and Base Materials
for Skis and Snowboards Are Needed
A. There Is Currently No Supplier of Steel Edges or Base
Materials in the United States that Meets K2's Requirements.
1. Steel Edges
Until very recently, K2 has imported all of its
requirements of steel edges for skis and snowboards from
Europe.
K2 has continually attempted to identify U.S. suppliers of
steel edges; however, until recently, no suppliers in the
United States could meet K2's requirements for this product.\1\
This lack of U.S. supply may be attributed to the fact that
steel producers consider steel edges for skis and snowboards as
specialty steel products. Except for a small ski manufacturer
in Colorado known as Volant, K2 is the only U.S. manufacturer
of skis. Because virtually all of the world's remaining ski
manufacturing capacity is located in Europe, where
manufacturers already have an established European source of
supply of steel edges, U.S. steel producers have been unwilling
to produce a specialty product in order to meet K2's relatively
small requirement for steel edges at a reasonable price.
---------------------------------------------------------------------------
\1\ K2 is currently running extensive tests and production samples
of steel edges produced by Bekaert Steel Company, a Belgian-owned steel
company that has recently begun manufacturing in the U.S.
---------------------------------------------------------------------------
2. Base Materials
K2 currently imports all of its base material requirements
for skis and snowboards. K2 imports two kinds of base
materials: sintered and extruded. Sintered base material is
more durable and has better gliding capability than extruded
base material. It is generally used in skis. All of K2's skis
and approximately 15% of its snowboards are made of sintered
base material.
At the present time, and to the best of our knowledge,
there is no U.S. supplier of sintered ski base material, and
there is only one supplier of sintered snowboard base material
in the United States.\2\
---------------------------------------------------------------------------
\2\ K2 has made repeated efforts to use domestically-sourced,
sintered base material for snowboards. However, it has not been of the
production quality necessary to meet K2's needs.
---------------------------------------------------------------------------
Similarly, K2 is not aware of any United States supplier of
extruded base material. (Extruded base material is cheaper and
easier to fabricate than sintered base materials, and is used
mostly in low end products.) 85% of K2's snowboards are made of
extruded base material.
B. The Duty Suspension Would Increase K2's Competitiveness in
the U.S. and Foreign Markets.
1. K2 Is a Major Exporter of U.S.-Made Skis and Snowboards.
K2 is major exporter of U.S.-made skis and snowboards. It
bears repeating that K2's exports of U.S. skis are the only
major exports of U.S. skis. K2's U.S. ski exports compete with
other foreign-made skis such as Rossignol, Elan, Salomon and
Atomic. Moreover, K2 is one of the three principal exporters of
U.S.-made snowboards. Thus, K2's U.S.-made ski and snowboard
exports represent a substantial percentage of U.S.-made skis
and snowboards.
2. The Duty Suspension Would Increase K2's Competitiveness.
K2 competes with several European manufacturers in the U.S.
and throughout the world in a market that is characterized by
significant over capacity. It is estimated that the world
capacity for the manufacture of skis is 11 million pairs,
whereas only 4.5 million pairs were sold worldwide in 1995. As
a result, price competition is severe.\3\ Additionally,
European governments are known to provide direct or indirect
financial incentives to their ski manufacturers.
---------------------------------------------------------------------------
\3\ According to Ski Industries America (SIA), approximately
850,000 pairs of skis and 450,000 snowboards were sold in the United
States during the 1995-6 season. Approximately 650,000 pairs of skis
and 300,000 snowboards were imported during the same period.
During the 1995-6 season, the major importers of skis to the U.S.
were Rossignol (160,000 pairs, France), Elan (120,000 pairs, Austria),
Salomon (100,000 pairs, France) and Atomic (80,000 pairs, Austria).
---------------------------------------------------------------------------
In contrast, K2 is required to pay significant amounts in
U.S. customs duties on its importations of steel edges and base
materials for products that it cannot source domestically.
The fierce level of competition in the ski industry has
left K2 as the last remaining major U.S. ski manufacturer and
one of only three major U.S. snowboard manufacturers.\4\
---------------------------------------------------------------------------
\4\ U.S. ski manufacturers that have gone out of business in the
last 10 years due to increased competition in the industry include:
Century--Tacoma, WA; Hexel--Carson City, NV; The Ski--Sun Valley, ID;
Head--Boulder, CO; Hart--St. Paul, MN.
C. The Duty Suspension Would Secure Current Jobs and Encourage
---------------------------------------------------------------------------
Growth at K2's Vashon Facility.
The duty suspension would generate approximately $100,000
to $200,000 dollars in duty savings annually. K2 would like to
use the savings to secure current jobs at its Vashon facility
and to continue to encourage development of innovative new
products.
III. Conclusions and Recommendation
In sum, K2 is currently unable to identify a United States
supplier that would satisfy its requirements of base materials
and only recently has a identified a U.S.-based manufacturer of
steel edges willing to work with it to explore U.S. production
possibilities to meet K2's needs. Consequently, K2 requests
legislation to amend the Harmonized Tariff Schedules of the
United States that would suspend duty on imported steel edges
and base materials used in manufacture of skis and snowboards.
Such duty suspensions, which will account for significant
customs duty savings per year, are vital to K2's continued
economic competitiveness in an already tight market. Moreover,
these savings will contribute significantly to K2's future
growth and expansion in Vashon.
Comments of Robert L. Brock, Executive Vice President, Profiles, Inc.,
Ware, Massachusetts
Premise for the elimination of this duty is that it does
not protect any U.S. industry as there are no U.S. companies
that produce this material.
Profiles, Inc. has been in the past and continues today to
be in the business of producing just such material. We
presently are a supplier of this material to one of the major
manufacturers of snowboards in this country. We have the
capacity to produce higher volumes for other customers and are
actively pursuing that possibility.
When skis were more abundantly produced in this country, we
were a major supplier. The majority of skis are now produced in
Europe and until the advent of the snowboard industry, we were
a small producer.
We presently must compete with European suppliers of this
material who not only have the advantage of producing large
quantities of this product, but we understand may enjoy
government subsidies. Price competition is very intense and
with our relatively small volumes, we have to be extremely
efficient to compete.
We would urge careful consideration of this amendment with
the understanding that there is an American manufacturer of
this edge material who will be affected by your decisions.
We appreciate the opportunity of commenting on this
resolution.
Submitted on: 28 July 1997
H.R. 1890
To suspend temporarily the duty on polyethylene base
materials.
see K2 Corporation under H.R. 1889
H.R. 1893
To suspend until January 1, 2000, the duty on
Tetrafluoroethylene, Hexafluoropropylene, and Vinylidene
fluoride.
No comments submitted.
H.R. 1897
To suspend temporarily the duty on KN001 (a hydrochloride).
No comments submitted.
H.R. 1907
To amend the Harmonized Tariff Schedule of the United
States to allow the duty-free entry of an additional quantity
of green peanuts that are the product of Mexico.
No comments submitted.
H.R. 1919
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1920
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1921
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1922
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1923
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1924
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1925
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1926
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1927
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1928
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1929
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1930
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1931
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1932
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1933
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1934
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1935
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1936
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1937
To suspend until January 1, 2001, the duty on a chemical.
No comments submitted.
H.R. 1938
To suspend until January 1, 2001, the duty on a chemical.
Ciba Specialty Chemicals Corporation
Tarrytown, New York 10591
August, 14, 1997
A.L. Singleton
Chief Of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Re: H.R. 1938
Dear Mr. Singleton:
This letter is submitted in response to the Committee's request for
comments regarding proposed duty suspension bills. Ciba Specialty
Chemicals requests that this letter serve as its objection to the
passage into law of H.R. 1938.
The subject bill seeks to temporarily suspend the duty on a product
described as benzenesulfonic acid, 2,2'-(1,2-ethenediyl)bis [5-nitro-
(CAS No. 128-42-7), currently classified in the tariff under subheading
2904.90.35.00 (4,4'-Dinitrostilbene-2,2'-disulfonic acid). The product
is also known as di-nitro stilbene (DNS).
DNS is a direct intermediate in the production of certain stilbenic
dyes and fluorescent whitening agents. Ciba is a U.S. manufacturer of
these stilbenic dyes and fluorescent whitening agents (FWA). DNS is
produced by Ciba as an intermediate in its manufacture of these
products. In other certain instances we also sell DNS commercially.
Duty elimination on DNS would allow ease of production of the
finished goods, in the case of the stilbenic dyes; and, would allow
extreme ease in production of DAS, which is the next intermediate in
FWA manufacture. Ciba is the only U.S. manufacturer of the entire
stilbene train consisting of DNS and DAS.
The consequences of this action on Ciba would be great. The company
has invested over 25 million dollars in our manufacturing facilities
and processes for the production of DNS. Additionally, many employees
are involved in the production of the DNS, and the resultant products
we manufacture. This is a sizeable investment at risk. Ciba would face
an extreme competitive disadvantage should imports of DNS enter duty
free. Should it be necessary we would be willing to provide additional
data relating to the impact of this proposed measure.
Accordingly, we request that HR 1938 not be passed into law. Please
feel free to contact me in connection with any questions or additional
information you may need.
Very truly yours,
Michelle F. Forte
International Trade Counsel
H.R. 1940
To suspend temporarily the duty on the chemical P-
nitrobenzoic.
No comments submitted.
H.R. 1945
To amend the Harmonized Tariff Schedule of the United
States to suspend temporarily the duty on certain manufacturing
equipment.
Comments of Cooper Tire & Rubber Company, Findlay, Ohio
Cooper Tire & Rubber Company (``Cooper'') submits these
comments in opposition to that portion of the proposed duty
suspension bill (H.R. 1945) which relate to equipment
classified under Harmonized Tariff Schedule (``HTS'') Numbers
8420.10.90, 8420.91.90, 8420.99.90, 8462.31.00, 8463.30.00,
8477.20.00, 8477.51.00, 8477.90.80, and 8465.91.00.
Cooper operates ten manufacturing facilities in the United
States with 9,066 employees on our payroll. We are a U.S.
company with four tire manufacturing plants in the United
States. Our automobile and truck tires and inner tubes comprise
the largest portion of Cooper's business but we also
manufacture vibration control products, hoses and hose
assemblies and automotive sealing systems.
We find no introductory statement of H.R. 1945, but in the
companion bill introduced in the Senate, the proposed
legislation has been represented as temporary duty suspension
on certain equipment used to manufacture earthmoving tires.
However, in reviewing the descriptions under the listed HTS
numbers, it is clear the equipment is such as is used to
manufacture any type of tires and other rubber products.
In the past, Cooper has equipped its plants by building or
importing equipment for manufacturing. Over a period of many
years, we have paid the full duty on all imported equipment.
It appears this bill will benefit only one manufacturer for
a period of time needed to allow the manufacturer to bring into
the U.S. equipment to meet future planned development and/or
expansion. Cooper is opposed to the bill because it will place
those companies who have paid the duty on past imported
equipment at a competitive disadvantage. As you may know, the
tire industry is extremely competitive and a mature industry.
Legislation which will benefit one company and has no dollar
limit on the value of equipment to be imported duty free is not
fair.
Finally, this legislation could amount to a significant
loss of revenue to the U.S. Treasury. Equipment of the type
described is expensive and the duty is as high as 4.4%. Such a
potential loss to the government should not be overlooked in
evaluating the proposed bill.
For all the above reasons, Cooper is opposed to H.R. 1945
as written and asks that these comments be given serious
consideration.
Comments of Robert J. Schrecongost, Vice President Technical, Dunlop
Tire Corporation, Buffalo, New York
Dunlop Tire Corporation with Headquarters in Buffalo, New
York manufactures original equipment and replacement tires for
markets in the United States. Dunlop has two (2) tire
manufacturing plants in the U.S., one in Alabama, the other in
New York State. These plants employ 3197 individuals.
Dunlop opposes the passage of H.R. 1945, because it would
place us at a competitive disadvantage. In reviewing the tariff
classifications that are specified in H.R. 1945, Dunlop
technical staff have determined that the manufacturing
equipment involved could be used for the manufacture of
automobile, truck, and other tires. This equipment is also
capable of producing a wide spectrum of tire components and
other rubber products. This equipment is not unique to
earthmover tires. Even if the equipment involved were used only
for earthmover tires, it is still a segment of the larger
industry in which Dunlop participates. A temporary suspension
of tariffs as proposed would represent a disadvantage to Dunlop
in this industry because tire manufacture would be accomplished
with equipment that was duty free.
If this temporary bill were passed it would be in effect
for three years. There is no ceiling on the amount of machinery
that can be imported during this period and the capability of
the machinery covered includes products of our business,
therefore, Dunlop would unfairly be placed at a significant
financial disadvantage. Duty has always been paid by Dunlop on
the machinery it imports.
Passage of this bill would also cause a large tariff
revenue loss potential to the U.S. Treasury.
Dunlop is opposed to H.R. 1945 as it is currently written
because it makes it possible to manufacture tires, earthmover
and others, with equipment on which no duty is being paid. This
bill is unfair to manufacturers like ourselves who have paid
duty on imported tire manufacturing equipment.
Comments of The Goodyear Tire & Rubber Company, Akron, Ohio
The Goodyear Tire & Rubber Company, headquartered in Akron,
Ohio, is the last remaining U.S. tire company to manufacture
for both the original equipment and replacement markets here in
the United States. Goodyear has 34 tire and rubber products
plants within the U.S., employing more than 40,000 associates
in 19 states.
As currently drafted, Goodyear opposes passage of H.R.
1945, a bill which would suspend temporarily the duty on tire
and rubber-related manufacturing equipment, because of its
broad scope. While no floor statement accompanied the
introduction of H.R. 1945, when a companion bill was introduced
in the Senate (S. 915), Senator Thurmond indicated it was for
the manufacture of earthmover tires. However, in reviewing the
tariff classifications that are specified in H.R. 1945,
Goodyear's technical staff has determined that the machinery in
question could be used for any type of tire manufacture from
auto passenger through earthmover tires, including farm
equipment tires. These machines would also be capable of
producing a wide range of engineered and automotive rubber
products.
Because of the broad scope of machinery for tire and
related rubber products that could be imported into the U.S.
duty-free under this bill, Goodyear opposes H.R. 1945 because
it would place us at a competitive disadvantage. If passed,
this temporary duty suspension bill would be in effect for
three years, retroactive to May 1, 1997 as specified in the
bill. Since there is no cap on the amount of machinery that can
be imported into the U.S. during that three-year period and the
scope of machinery covered includes all aspects of our
business, Goodyear would be placed at a significant financial
disadvantage. Goodyear, like many other tire companies,
purchases its machines primarily from U.S. manufacturers and
also imports some of its machinery from abroad. Goodyear has
always paid duty on the machinery it imports.
If this bill were to pass, there would be significant
tariff revenue potentially lost to the U.S. Treasury. Any
tariff revenue loss of over $500,000 is considered significant
by your Committee and would have to have a budget offset. The
tariff classifications covered under H.R. 1945 represent a
significant portion of the machines needed for a typical
earthmover plant whose total cost is a couple of hundred
million dollars. The average U.S. tariff rate on this type of
equipment is 3.4 percent. If the duty were to be suspended on
these imported machines, the U.S. Treasury would lose more than
$2.5 million.
In conclusion, The Goodyear Tire & Rubber Company is
opposed to H.R. 1945 as currently drafted because the scope of
the machinery involved is so broad that it could cover not only
the example referenced above, a portion of the typical
equipment for an earthmover plant, but could well include
equipment for the manufacture of a wide range of tire and
rubber-related products. Therefore, the $2.5 million revenue
loss to the U.S. Treasury must be considered as the minimum and
would in all probability be much more.
H.R. 1947
To amend the Harmonized Tariff Schedule of the United
States with respect to shadow mask steel.
LTV Steel Company, Inc.
Law Department
Cleveland, OH 44114-2308
July 25, 1997
The Honorable Philip M. Crane
Chairman
Sub Committee on Trade
House Ways and Means Committee
1102 Longworth House Office Building
Washington, D.C. 20515
Re: House of Representative Bill 1947
Dear Mr. Crane:
LTV Steel Company is strongly opposed to the adoption of House of
Representative Bill 1947 which proposes to eliminate all tariffs on
steel used for ``shadow masks.''
LTV Steel is a U.S. producer of steel used for ``shadow masks.'' We
sell this product to our customers including one of the few remaining
U.S. companies who still produce steel product for aperture masks for
television sets in the United States. The steel produced for our
customers is in direct competition with imports of shadow mask steel
from Japan. The elimination of the tariff on shadow mask steel would
only encourage additional imports and would adversely affect sales.
I would appreciate your taking appropriate action to defeat this
bill.
Very truly yours,
Daniel R. Minnick
Senior Attorney
DRM/ltk/11694
H.R. 1954
To suspend temporarily the duty on certain high tenacity
single yarn of viscose rayon.
see Hoechst Corporation under H.R. 1742
see ICF Industries, Inc. under H.R. 1742
see National Knitwear & Sportswear Association under H.R. 1742
see North American Corporation under H.R. 1742
H.R. 1973
To amend the Harmonized Tariff Schedule of the United
States to provide for duty-free treatment of oxidized
polyacrylonitrile fibers for use in aircraft brake components.
No comments submitted.
H.R. 2041
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2042
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2043
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2044
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2045
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2046
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2047
To suspend temporarily the duty on the production of anti-
HIV/anti-AIDS drugs.
No comments submitted.
H.R. 2048
To suspend temporarily the duty on the production of anti-
HIV/anti-AIDS drugs.
No comments submitted.
H.R. 2049
To suspend temporarily the duty on the production of anti-
cancer drugs.
No comments submitted.
H.R. 2058
To suspend temporarily the duty on phenmedipham.
Comments of AgrEvo USA Company, Wilmington, Delaware
AgrEvo USA Company (``AgrEvo'') appreciates the opportunity
to submit to the Subcommittee on Trade of the Committee on Ways
and Means of the United States House of Representatives the
following statement in support of H.R. 2058, H.R. 2059 and H.R.
2060.
I. The Purpose of H.R. 2058, H.R. 2059 and H.R. 2060.
H.R. 2058 (pertaining to AgrEvo's agricultural chemical
products containing Phenmedipham), H.R. 2059 (pertaining to
AgrEvo product containing Ethofumesate) and H.R. 2060
(pertaining to AgrEvo's agricultural chemical products
containing Desmedipham) would suspend on a temporary basis the
import duty on Phenmedipham Ethofumesate and Desmedipham (in
bulk and packaged form). There are no other manufacturers in
the United States of these three active ingredients. These
bills have the support of Zeneca, Inc. and DuPont Agricultural
Products, domestic competitors of AgrEvo, and are non-
controversial.
II. Background.
AgrEvo is involved in the manufacture, distribution and
sale of proprietary and/or patented agrichemical products
including a wide range of defoliants, herbicides, insecticides
and fungicides. These products are designed to assist American
farmers in dealing with various weed species, crop-damaging
insects and other threats to crop yield and product quality and
are used in a wide variety of products, including tree fruit,
sugar beets, cotton, corn and cereals.
AgrEvo and its predecessors in interest have been in the
agricultural chemicals business for many decades. AgrEvo
operates an active ingredient manufacturing and formulation
facility in Muskegon, Michigan, laboratory facilities in
Goldsboro, North Carolina, product-testing farms in three
states, regional and sales offices in five (ND,CA,FL,IL,NC)
states and a corporate headquarters in Wilmington, Delaware.
AgrEvo's products are sold in all fifty states.
Phenmedipham, Desmedipham and Ethofumesate are proprietary
and/or patented herbicides belonging to AgrEvo which are used
extensively by farmers through out the United States. They are
assets to farmers because they control a wide variety of weeds
in sugar beets, grass seed, spinach and red table beets thereby
promoting higher yields and quality crops. In order to deliver
products containing Phenmedipham, Desmedipham and Ethofumesate
in a safer (reduced user exposure) manner and in a more
environmentally sound fashion, AgrEvo has introduced closed
system, refillable, returnable containers which reduce the
dependence on plastic disposable containers which are discarded
in land fills, while also virtually eliminating any user
product exposure.
III. The Need for Duty Exemption for Phenmedipham, Ethofumesate and
Desmedipham.
The agrichemical business in the United States is fiercely
competitive. The temporary suspension of the duties on
Phenmedipham, Ethofumesate and Desmedipham would allow AgrEvo
to compete in the marketplace more effectively by reducing the
Company's production costs; additionally, it would permit the
Company to spend more money on product development and plant
and human resources enhancement.
IV. The Active Ingredients Phenmedipham, Ethofumesate and Desmedipham:
The Products and Their Utility.
AgrEvo's products Phenmedipham, Ethofumesate and
Desmedipham are registered with the United States Environmental
Protection Agency (``EPA'') and cannot be sold in the United
States without such registration. In an effort to better
satisfy sugar beet grower's need to control specific weed
problems AgrEvo currently sells seven products containing one
or more of these active ingredients: BETANEX,
BETAMIX, Betamix PROGRESS (now registered
as ProgressTM), NORTRON SC, SPIN-
AID and PROGRASS. The EPA-approved labels
for these products are attached at Exhibit 1.
BETANEX is a post emergence sugar beet
herbicide which contains a single active ingredient
Desmedipham. It is used for control of a range of problematic
broadleaf weeds especially redroot pigweed which is a specific
weed problem in sugar beets grown in the Red River Valley of
North Dakota and Minnesota.
SPIN-AID, which contains Phenmedipham,
is used as a post-emergence herbicide for the control of weeds
found in spinach seed production and for weeds found in red
beet production
BETAMIX is a sugar beet herbicide which
contains a mixture of two active ingredients Desmedipham
(BETANEX) Phenmedipham (SPIN-AID).
BETAMIX is a post-emergence herbicide which controls
a broader spectrum of weeds than either Betanex or Spin-Aid
used alone.
Betamix PROGRESS (PROGRESSTM)
is a post-emergence herbicide, containing Phenmedipham,
Ethofumesate and Desmedipham as active ingredients. Betamix
PROGRESS controls the broadest spectrum of weeds
encountered in the production of sugar beets.
NORTRON SC contains the active
ingredient Ethofumesate alone and is used to control weeds in
sugar beets and is used as a grass seed herbicide for selective
control of weeds in certain grass seed crops and in commercial
sod production in the Pacific Northwest. It is especially
effective against annual broadleaf weeds found in sugar beet
fields and against other annual grass weeds. NORTRON
SC can be used as a pre-emergence herbicide or in post-
emergence situations, depending upon the weeds found and can be
used in conjunction with the above products and with products
manufactured by other entities.
PROGRASS contains the active ingredient
Ethofumesate alone and is used by professional applicators as a
selective herbicide on ornamental turf only.
The use of AgrEvo products containing one or more of the
active ingredients referenced above is effective against a wide
variety of persistent weeds which are extremely harmful to
sugar beets and certain grass seed and spinach seed crops. The
unique aspect of these AgrEvo products is that they are potent
herbicides, alone or in combination with one another.
Competitive products are less efficacious against the wide
spectrum of weeds controlled by the AgrEvo products; thus, use
of AgrEvo products results in the application of fewer chemical
treatments of the farmers' land (thus reducing the volume of
active ingredient necessary per acre).
Also, all of these products can be applied using re-usable
containers. The use of a re-usable container with the ``dry-
lock'' closed delivery coupler system limits farmer exposure to
the active ingredient and is significantly less resource
intensive than the use of disposable containers. AgrEvo devoted
substantial resources to the development of a fleet of its re-
usable containers which utilize 15 gallon stainless steel SVR
(small volume returnable) containers.
V. The Benefits of Tariff Removal
In a larger competitive sense, removing costly import
tariffs on Phenmedipham, Ethofumesate and Desmedipham will
provide greater flexibility for AgrEvo to utilize its
production facility in Muskegon, Michigan to formulate new,
complementary products at that facility and to continue its
research and development of delivery systems that reduce worker
exposure and reduce the environmental loading from the disposal
of non-reusable packaging. The AgrEvo facility in Muskegon was
the beneficiary of past duty exemption legislation which
enabled the plant to maintain a stable and growing work force.
In fact, AgrEvo is in the process of building a multi-million
dollar plant expansion and enhancement for its Muskegon,
Michigan facility, which will permit it to expand into the
production of other proprietary products. Duty exemption for
Phenmedipham, Ethofumesate and Desmedipham could serve as a
substantial enhancement to AgrEvo to perform formulation work
at its Muskegon facility for which would complement the
existing AgrEvo product line and would thus further enhance the
competitive viability--and longevity--of that facility.
Additionally, the projected savings on the reduction of import
duties for these products will enable AgrEvo to engage in
enhanced product formulation and metabolic testing functions
for these and other products at its Goldsboro facility, thus
enhancing its viability and utility to AgrEvo, and to the
community of Goldsboro.
VI. Summation
In summary, the temporary elimination of import tariffs on
Phenmedipham, Ethofumesate and Desmedipham will enable AgrEvo
to shore up its competitive footing in the industry, produce
product on a more cost-efficient basis and pass these savings
along to the farmer, who, in turn, will enhance production
capabilities and farming efficiencies. These savings will be
passed along to the consumer in direct product savings and in
secondary savings of soil and environmental conservation. Since
there are no other domestic manufacturers of these active
ingredients, this legislation will have no adverse impact on
U.S. producers. The reduction of these tariffs will also permit
AgrEvo to better utilize and expand its production facilities
at Muskegon, Michigan and at its testing facilities in
Goldsboro, North Carolina, conserving, and possibly promoting,
employment opportunities at those facilities.
[Attachments are being retained in the Committee's files.]
H.R. 2059
To suspend temporarily the duty on ethofumesate.
see AgrEvo USA Company under H.R. 2058.
H.R. 2060
To suspend temporarily the duty on desmedipham.
see AgrEvo USA Company under H.R. 2058.