[Federal Register Volume 66, Number 171 (Tuesday, September 4, 2001)]
[Rules and Regulations]
[Pages 46217-46218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-22112]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 148

[T.D. 01-61]
RIN 1515-AC90


Change in Flat Rate of Duty on Articles Imported for Personal or 
Household Use or as Bona Fide Gifts

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations to reflect a 
provision of the Tariff Suspension and Trade Act of 2000 which sets 
forth a staged reduction of the flat rate of duty on articles imported 
for personal or household use or as bona fide gifts.

EFFECTIVE DATE: September 4, 2001.

FOR FURTHER INFORMATION CONTACT: Ralph L. Hackney, Passenger Programs, 
Office of Field Operations; telephone (202) 927-2931.

SUPPLEMENTARY INFORMATION:

Background

    Persons entering the United States with noncommercial importations 
of limited value, i.e., articles for personal or household use or as 
bona fide gifts not imported for sale nor for the account of another 
person and valued in the aggregate at not over $ 1,000 fair retail 
value in the country of acquisition, are assessed a flat rate of duty 
on the articles, provided the person claiming the tariff benefit(s) has 
not received such benefit(s) within the 30 days immediately preceding 
the present arrival. Depending on how and from where the articles are 
imported, the entry may be made under either or both subheadings 
9816.00.20 and 9816.00.40 of the Harmonized Tariff Schedule of the 
United States (HTSUS) (19 U.S.C. 1202).
    A particular flat rate of duty under HTSUS subheading 9816.00.20 is 
applicable to articles (exclusive of duty-free articles and articles 
acquired in American Samoa, Guam or the Virgin Islands of the United 
States) that accompany a person arriving in the United States. A 
different particular flat rate of duty is applicable under HTSUS 
subheading 9816.00.40 to articles imported by or for the account of a 
person (whether or not accompanying the person) who arrives directly or 
indirectly from American Samoa, Guam or the Virgin Islands of the 
United States if the articles were acquired in those insular 
possessions as an incident of the person's physical presence.
    While a person can use both subheadings for entering goods during 
one arrival in the United States, it is noted that the person may enter 
goods under HTSUS subheading 9816.00.40 only if the imported goods are 
acquired in the insular possessions as an incident of the traveler's 
physical presence there.
    Prior to January 1, 2000, the flat rates of duty were 10 percent of 
the fair retail value for articles entered under HTSUS subheading 
9816.00.20 and 5 percent of the fair retail value for articles entered 
under HTSUS subheading 9816.00.40.
    On November 9, 2000, the President signed into law the Tariff 
Suspension and Trade Act of 2000 (Pub.L. 106-476, 114 Stat. 2101, 19 
U.S.C. 1200 note). Section 1455 of this Act amended the tariff 
provisions at HTSUS subheadings 9816.00.20 and 9816.00.40 to provide 
for staged reductions of the flat-duty rates. Section 1455 amended 
HTSUS subheading 9816.00.20 to provide that effective January 1, 2000, 
the 10 percent flat-duty rate is reduced to 5 percent; that effective 
January 1, 2001, the 5 percent flat-duty rate is reduced to 4 percent; 
and that effective January 1, 2002, the 4 percent flat-duty rate is 
reduced to 3 percent. Section 1455 amended HTSUS subheading 9816.00.40 
to provide that effective January 1, 2000, the 5 percent flat-duty rate 
is reduced to 3 percent; that effective January 1, 2001, the 3 percent 
flat-duty rate is reduced to 2 percent; and that effective January 1, 
2002, the 2 percent flat-duty rate is reduced to 1.5 percent.
    The flat rates of duty of HTSUS subheadings 9816.00.20 and 
9816.00.40 are reflected and explained in Secs. 148.101 and 148.102, 
Customs Regulations (19 CFR 148.101 and 148.102). These regulations now 
provide out-dated flat duty percentage rates. Accordingly, these 
regulations need to be revised to reflect these staged reductions of 
the flat-duty rates.
    It is noted that these regulatory provisions pertain not only to 
the three insular possessions expressly provided for in the tariff 
provisions discussed above--American Samoa, Guam, and the Virgin 
Islands of the United States; they also pertain to the Commonwealth of 
the Northern Mariana Islands. This is because, pursuant to section 
603(c) of the Covenant to Establish a Commonwealth of the Northern 
Mariana Islands in Political Union With the United States of America 
(Pub.L. 94-241, 90 Stat. 263, 270), goods imported from the 
Commonwealth of the Northern Mariana Islands are entitled to the same 
tariff treatment as imports from Guam. See, Sec. 7.2(a) of the Customs 
Regulations (19 CFR 7.2(a)).
    In this document, Customs is revising Secs. 148.101 and 148.102 to 
conform the Customs Regulations to section 1455 of the Tariff 
Suspension and Trade Act of 2000.
    Section 148.102(a) is amended to provide that the rate of duty on 
articles accompanying any person, including a crewmember, arriving in 
the United States (exclusive of duty-free articles and articles 
acquired in American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, or the Virgin Islands of the United States) shall be 4 
percent, effective January 1, 2001, and 3 percent, effective January 1, 
2002, of the fair retail value in the country of acquisition.
    Section 148.102(b) is amended to provide that the rate of duty on 
articles accompanying any person, including a crewmember, arriving in 
the United States directly or indirectly from American Samoa, Guam, the 
Commonwealth of the Northern Mariana Islands, or the Virgin Islands of 
the United States (exclusive of duty-free articles), acquired in these 
locations as an incident of the person's physical presence there, shall 
be 2 percent, effective January 1, 2001, and 1.5 percent, effective 
January 1, 2002, of the fair retail value in the location in which 
acquired.
    The parenthetical reference to Canada is removed from 
Sec. 148.102(a); and Sec. 148.102(c) is removed. These changes are made 
because the U.S.-Canada Free-Trade Agreement Implementation Act has 
been suspended. All originating goods from Canada are now duty-free 
pursuant to the North American Free Trade Agreement.
    In addition, Sec. 148.101 is amended by revising the two examples 
of the application of the flat rate of duty to reflect the staged 
reductions.

Inapplicability of Public Notice and Comment Requirement and 
Delayed Effective Date Requirement

    Because this rule conforms the regulations to reflect new statutory 
requirements that confer a benefit in the form of lower duty rates, it 
has been determined, pursuant to 5 U.S.C. 553(b)(B), that notice and 
public procedure are unnecessary and contrary to the public interest. 
For the same reasons, a delayed effective date is not

[[Page 46218]]

required, pursuant to 5 U.S.C. 553(d)(1) and (d)(3).

The Regulatory Flexibility Act and Executive Order 12866

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply. This document does not meet the criteria for a ``significant 
regulatory action'' as specified in E.O. 12866.

List of Subjects for 19 CFR Part 148

    Customs duties and inspection, Declarations, Reporting and 
recordkeeping requirements, Trade agreements (North American Free Trade 
Agreement).

Amendments to the Regulations

    For the reasons stated in the preamble, part 148 of the Customs 
Regulations (19 CFR part 148) is amended as set forth below:

PART 148--PERSONAL DECLARATIONS AND EXEMPTIONS

    1. The general authority citation for part 148 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1496, 1498, 1624. The provisions of 
this part, except for subpart C, are also issued under 19 U.S.C. 
1202 (General Note 22, Harmonized Tariff Schedule of the United 
States);
* * * * *

    2. In Sec. 148.101, the reference in the first sentence of Example 
1 to ``$1,050'' is removed and the reference ``$1,950'' is added in its 
place; and the tables in Examples 1 and 2 are revised, respectively, to 
read as follows:


Sec. 148.101  Applicability.

* * * * *
    Example 1: * * *

------------------------------------------------------------------------
                                                 Fair retail
                                                    value         Duty
------------------------------------------------------------------------
(a) The $400 personal exemption..............            $400  .........
(b) Articles which carry a free rate of duty.             100  .........
(c) The $1,000 flat rate of duty allowance              1,000  .........
 calculated at:..............................
    4 percent (effective 01/01/01 through 12/  ..............        $40
     31/01)..................................
    3 percent (effective from 01/01/02)......  ..............         30
(d) Balance of articles subject to duty at            \1\ 450      (\1\)
 rates other than flat rate..................
                                              --------------------------
        Total................................       \1\ 1,950     (\1\)
------------------------------------------------------------------------
\1\ The articles not covered by exemptions, allowances, and duty-free
  rates will be valued under section 402, Tariff Act of 1930, as
  amended, and duty calculated at rates other than the flat rate.

    Example 2: * * *

------------------------------------------------------------------------
                                                 Fair retail
                                                    value         Duty
------------------------------------------------------------------------
(a) The $1,200 personal exemptions for                 $2,400  .........
 residents returning from the U.S. Virgin
 Islands are grouped for a total of..........
(b) Articles which carry a free rate of duty.             100  .........
(c) The $1,000 flat rate of duty allowance              2,000  .........
 calculated at:..............................
    2 percent (effective 01/01/01 through 12/  ..............        $40
     31/01)..................................
    1.5 percent (effective from 01/01/02)....  ..............         30
(d) Balance of articles subject to duty at            \1\ 400      (\1\)
 rates other than flat rate..................
                                              --------------------------
        Total................................       \1\ 4,900     (\1\)
------------------------------------------------------------------------
\1\ The articles not covered by exemptions, allowances, and duty-free
  rates will be valued under section 402, Tariff Act of 1930, as
  amended, and duty calculated at rates other than the flat rate.


    3. Section 148.102 is revised to read as follows:


Sec. 148.102  Flat rate of duty.

    (a) Generally. The rate of duty on articles accompanying any 
person, including a crewmember, arriving in the United States 
(exclusive of duty-free articles and articles acquired in American 
Samoa, Guam, the Commonwealth of the Northern Mariana Islands, or the 
Virgin Islands of the United States) shall be 4 percent, effective 
January 1, 2001, and 3 percent, effective January 1, 2002, of the fair 
retail value in the country of acquisition.
    (b) American Samoa, Guam, the Northern Mariana Islands, and the 
Virgin Islands. The rate of duty on articles accompanying any person, 
including a crewmember, arriving in the United States directly or 
indirectly from American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, or the Virgin Islands of the United States (exclusive 
of duty-free articles), acquired in these locations as an incident of 
the person's physical presence there, shall be 2 percent, effective 
January 1, 2001, and 1.5 percent, effective January 1, 2002, of the 
fair retail value in the location in which acquired.

Charles W. Winwood,
Acting Commissioner of Customs.
    Approved: August 29, 2001.
Timothy E. Skud,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 01-22112 Filed 8-31-01; 8:45 am]
BILLING CODE 4820-02-P