[Federal Register Volume 63, Number 191 (Friday, October 2, 1998)]
[Rules and Regulations]
[Pages 52967-52968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26417]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 4

[T.D. 98-79]


Removal of Brazil From the List of Nations Entitled to Reciprocal 
Exemption From the Payment of Special Tonnage Taxes

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document amends the Customs Regulations by removing 
Brazil from the list of nations whose vessels are entitled to 
reciprocal exemption from the payment of special tonnage taxes and 
light money. The Department of State has informed Customs that Brazil 
has implemented a law that discriminates against U.S. vessels in its 
preferential tax treatment of cargoes carried on certain specially-
registered Brazilian vessels; thus, Brazil no longer qualifies for the 
exemption. Accordingly, Customs is withdrawing the exemption privileges 
formerly granted Brazil.

EFFECTIVE DATE: This amendment is effective, and the reciprocal 
privileges extended to all Brazilian-registered vessels are withdrawn, 
as of October 2, 1998.

FOR FURTHER INFORMATION CONTACT: Gerry O'Brien, Entry Procedures and 
Carrier Rulings Branch, (202-927-2320).

SUPPLEMENTARY INFORMATION:

Background

    Generally, the United States imposes regular and special tonnage 
taxes, and a duty of a specified amount per ton denominated ``light 
money'', on all foreign vessels which enter U.S. ports (46 U.S.C. App. 
121 and 128).
    Vessels of a foreign nation, however, may be exempted from the 
payment of such special tonnage taxes and light money upon presentation 
of satisfactory proof that no discriminatory duties of tonnage or 
impost are imposed by that foreign nation on U.S. vessels or their 
cargoes (46 U.S.C. App. 141).
    The list of nations whose vessels have been found to be 
reciprocally exempt from the payment of any higher tonnage duties than 
are applicable to vessels of the U.S. and from the payment of light 
money is found at Sec. 4.22, Customs Regulations (19 CFR 4.22). Nations 
granted these commercial privileges that subsequently impose 
discriminatory duties are subject to retaliatory suspension of the 
exemption from payment of special tonnage tax and light money (46 
U.S.C. App. 141).
    Brazil is currently listed among the nations exempt from the 
payment of such special tonnage taxes and light money.
    The Department of State, however, has informed Customs that Brazil 
implemented a new tax law, effective as of July 30, 1998, that 
discriminates against U.S. vessels and the vessels of other countries 
in its preferential tax treatment of cargoes carried by certain 
specially-registered Brazilian vessels. Specifically, the law 
establishes a second commercial shipping register whereby the dutiable 
value of imported merchandise carried by Brazilian vessels so 
registered does not include freight charges. However, identical imports 
carried by U.S. vessels or the vessels of other countries are subject 
to duty on the freight charges as well as the value of the merchandise. 
Because this circumstance violates the reciprocal nature of the 
exemption privilege granted, Brazil no longer qualifies for the 
exemption.
    As a result, the Department of State, in accordance with 46 U.S.C. 
App. 141 and Executive Order 10289 of September 17, 1951 (16 FR 9499, 3 
CFR 1949-1953 Comp. p. 787, as amended, see 3 U.S.C.A. 301 note), has 
recommended to the Secretary of the Treasury, through Customs, that 
Brazil be removed from the list of nations found at Sec. 4.22.

Finding

    The Customs Service has determined that the vessels of Brazil are 
no longer exempt from the payment of special tonnage taxes and light 
money, effective as of October 2, 1998, and that Sec. 4.22 of the 
Customs Regulations should be amended accordingly. The authority to 
amend this section of the Customs Regulations has been delegated to the 
Chief, Regulations Branch.

In Applicability of Public Notice and Comment and Delayed Effective 
Date Requirements, the Regulatory Flexibility Act and Executive 
Order 12866

    Because this amendment concerns a foreign affairs function of the 
United States, merely implements a statutory mandate, and involves a 
matter in which the general public has no significant interest, 
pursuant to 5 U.S.C. 553, notice and public procedure thereon are 
considered unnecessary; further, for the same reason, good cause exists 
for dispensing with a delayed effective date under 5 U.S.C. 553(d)(3). 
Since this document is not subject to the notice and public procedure 
requirements of 5 U.S.C. 553, it is not subject to the provisions of 
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Nor does the 
amendment meet the criteria for a ``significant regulatory action'' 
under E.O. 12866.

List of Subjects in 19 CFR Part 4

    Cargo vessels, Customs duties and inspection, Entry, Maritime 
carriers, Vessels.

Amendment to the Regulations

    Part 4, Customs Regulations (19 CFR part 4), is amended as set 
forth below.

[[Page 52968]]

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES

    1. The general authority citation for part 4 and the specific 
authority citation for Sec. 4.22 continue to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624; 
46 U.S.C. App. 3, 91.
* * * * *
    Section 4.22 also issued under 46 U.S.C. App. 121, 128, 141;
* * * * *


Sec. 4.22  [Amended]

    2. Section 4.22 is amended by removing ``Brazil'' from the list of 
nations entitled to exemption from special tonnage taxes and light 
money.

    Dated: September 29, 1998.
Harold M. Singer,
Chief, Regulations Branch
[FR Doc. 98-26417 Filed 10-1-98; 8:45 am]
BILLING CODE 4820-02-P