[Federal Register Volume 68, Number 135 (Tuesday, July 15, 2003)]
[Notices]
[Pages 41845-41846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17823]


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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-50,129 and TA-W-50,129A]


IBM Corporation, Global Services Division, Piscataway, NJ, and 
IBM Corporation, Global Services Division, Middletown, NJ; Notice of 
Negative Determination Regarding Application for Reconsideration

    By application of April 29, 2003, a petitioner requested 
administrative reconsideration of the Department's negative 
determination regarding eligibility for workers and former workers of 
the subject firm to apply for Trade Adjustment Assistance (TAA). The 
denial notice applicable to workers of IBM Corporation, Global Services 
Division, Piscataway and Middletown, New Jersey was signed on March 26, 
2003, and published in the Federal Register on April 7, 2003 (68 FR 
16834).
    Pursuant to 29 CFR 90.18(c) reconsideration may be granted under 
the following circumstances:
    (1) If it appears on the basis of facts not previously considered 
that the determination complained of was erroneous;
    (2) if it appears that the determination complained of was based on 
a mistake in the determination of facts not previously considered; or
    (3) if in the opinion of the Certifying Officer, a 
misinterpretation of facts or of the law justified reconsideration of 
the decision.
    The TAA petition was filed on behalf of workers at IBM Corporation, 
Global Services Division, Piscataway and Middletown, New Jersey engaged 
in analysis and maintenance of computer software and information 
systems. The petition was denied because the petitioning workers did 
not produce an article within the meaning of section 222 of the Act.
    The petitioner asserts that the negative decision for the 
petitioning worker group came as a result of an overly narrow and 
antiquated interpretation of production as stipulated in the Trade Act. 
The petitioner also asserts that software is different from services in 
that one does not need a software ``worker'' to operate software.
    Software and information systems are not listed on the Harmonized 
Tariff Schedule of the United States (HTSUS), published by the United 
States International Trade Commission (USITC), Office of Tariff Affairs 
and Trade Agreements, which describes all ``articles'' imported to or 
exported from the United States. This codification represents an 
international standard maintained by most industrialized countries as 
established by the International Convention on the Harmonized Commodity 
Description and Coding (also known as the HS Convention).
    The Trade Adjustment Assistance (TAA) program was established to 
help workers who produce articles and who lose their jobs as a result 
of increases in imports of articles like or directly competitive with 
those produced at the workers' firm.
    Throughout the Trade Act an article is often referenced as 
something that can be subject to a duty. To be subject to a duty on a 
tariff schedule, an article will have a value that makes it marketable, 
fungible and interchangeable for commercial purposes. But, although a 
wide variety of tangible products are described as articles and 
characterized as dutiable in the HTSUS, software and associated 
information technology

[[Page 41846]]

services are not listed in the HTSUS. Such products are not the type of 
employment work products that Customs officials inspect and that the 
TAA program was generally designed to address.
    A National Import Specialist was contacted at the U.S. Customs 
Service to address whether software could be described as an import 
commodity. The Import Specialist confirmed that electronically 
transferred material is not a tangible commodity for U.S. Customs 
purposes. In cases where software is encoded on a medium (such as a CD 
Rom or floppy diskette), the software is given no import value, but 
rather evaluated exclusively on the value of the carrier medium. This 
standard is based on Treasury Decision 85-124 as issued on July 8, 1985 
by the U.S. Customs Service. In conclusion, this decision states that 
``in determining the customs value of imported carrier media bearing 
data or instructions, only the cost or value of the carrier medium 
itself shall be taken into account. The customs value shall not, 
therefore, include the cost or value of the data or instructions, 
provided that this is distinguished from the cost or the value of the 
carrier medium.''
    Finally, the North American Industry Classification System (NAICS), 
published by the U.S. Department of Commerce, designates all manner of 
custom software applications and software systems, including analysis, 
development, programming, and integration as ``Services'' (see NAICS 
541511 and 541512.)
    Only in very limited instances are service workers certified for 
TAA, namely the worker separations must be caused by a reduced demand 
for their services from a parent or controlling firm or subdivision 
whose workers produce an article and who are currently under 
certification for TAA.

Conclusion

    After review of the application and investigative findings, I 
conclude that there has been no error or misinterpretation of the law 
or of the facts which would justify reconsideration of the Department 
of Labor's prior decision. Accordingly, the application is denied.

    Signed at Washington, DC, this 26th day of June, 2003.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 03-17823 Filed 7-14-03; 8:45 am]
BILLING CODE 4510-30-P