[Federal Register Volume 86, Number 7 (Tuesday, January 12, 2021)]
[Notices]
[Pages 2479-2480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00425]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2019-0009]


Notice of Modification of Section 301 Action: Investigation of 
France's Digital Services Tax

AGENCY: Office of the United States Trade Representative (USTR).

ACTION: Notice.

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SUMMARY: The U.S. Trade Representative has determined to modify the 
action being taken in this investigation by suspending, until further 
notice, the additional duties on products of France scheduled to take 
effect on January 6, 2021.

DATES: The additional duties on products of France are suspended 
indefinitely, as of the previously scheduled effective date of 12:01 
a.m. eastern standard time on January 6, 2021.

FOR FURTHER INFORMATION CONTACT: For questions concerning the 
investigation, please contact Thomas Au or Patrick Childress, Assistant 
General Counsels at (202) 395-0380 and (202) 385-9531, respectively, 
Robert Tanner, Director, Services and Investment at (202) 395-6125, or 
Michael Rogers, Director for Europe at (202) 395-2684. For specific 
questions on customs classification or implementation of additional 
duties on products, contact [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On July 10, 2019, the U.S. Trade Representative initiated the 
investigation of France's digital services tax (DST) pursuant to 
section 302(b)(1)(A) of the Trade Act of 1974, as amended (Trade Act). 
See 84 FR 34042 (July 16, 2019) (July 16, 2019 notice). The July 16, 
2019 notice invited public comment on France's DST, including whether 
the tax would discriminate against U.S. companies, the retroactive 
application of the new tax, and whether France's DST diverged from 
norms reflected in the U.S. and international tax system. Witnesses 
provided testimony at an August 19, 2019 public hearing and interested 
persons filed written submissions.
    Following a request by the U.S. Trade Representative, consultations 
were held with the Government of France on November 14, 2019.
    On December 2, 2019, USTR published a comprehensive report on 
France's DST which is available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-frances-digital-services-tax. On December 6, 2019, based on the information obtained 
during the investigation and the advice of the Section 301 Committee, 
and as reflected in the December 2, 2019 report on the findings in the 
investigation, the U.S. Trade Representative published a determination 
that France's DST is unreasonable or discriminatory and burdens or 
restricts U.S. commerce, and therefore is actionable under sections 
301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a)). See 
84 FR 66956 (December 6, 2019) (December 6, 2019 notice).
    The December 6, 2019 notice proposed that appropriate action would 
include additional ad valorem duties of up to 100 percent on products 
of France to be drawn from a list of 63 tariff subheadings of the 
Harmonized Tariff Schedule of the United States (HTSUS) included in the 
annex to that notice. The December 6, 2019 notice requested comments on 
the proposed action, as well as on other potential actions, including 
the imposition of fees or restrictions on services of France. Witnesses 
provided testimony at a January 7-8, 2020 public hearing and interested 
persons filed written comments. Transcripts from the August 2019 and 
January 2020 hearings are available on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-frances-digital-services-tax. The written public submissions are 
available on www.regulations.gov under docket number USTR-2019-0009.
    In a notice published on July 16, 2020, the U.S. Trade 
Representative determined to impose ad valorem duties of 25 percent on 
specified products of France. See 85 FR 43292 (July 16, 2020 notice). 
The U.S. Trade Representative also determined to suspend the additional 
duties for up to 180 days (that is, until January 6, 2021) to allow 
additional time for bilateral and multilateral discussions that could 
lead to a satisfactory resolution of this matter.

II. Determination To Modify Action

    Section 307(a)(1) of the Trade Act authorizes the U.S. Trade 
Representative to modify or terminate any action, subject to the 
specific direction, if any, of the President with respect to such 
action, that is being taken under Section 301, if, inter alia, the 
action being taken is no longer appropriate. Pursuant to sections 
301(b)-(c) and 307(a) of the Trade Act (19 U.S.C. 2417(a)), the U.S. 
Trade Representative has determined that the imposition of duties on 
the current effective date of January 6, 2021 no longer is appropriate.
    Subsequent to the initiation of this investigation, the U.S. Trade 
Representative initiated Section 301 investigations of DSTs adopted or 
under consideration by Austria, Brazil, the Czech Republic, the 
European Union, India, Indonesia, Italy, Spain, Turkey, and the United 
Kingdom. See 85 FR 34709 (June 5, 2020). These investigations involve 
similar DST measures, either in effect or under consideration, in ten 
additional jurisdictions. Given that these DST investigations are 
ongoing and have not yet reached any determinations on what, if any, 
trade action should be taken, the U.S. Trade Representative has 
determined that it is appropriate to suspend the action in the France 
DST investigation indefinitely.
    In making this determination, the U.S. Trade Representative 
considered the public comments submitted in the investigation, as well 
as advice of advisory committees.
    To give effect to the U.S. Trade Representative's determination, 
the additional duties set out in Annex A of the July 16, 2020 notice 
are suspended indefinitely, as of the scheduled

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effective date of 12:01 a.m. eastern standard time on January 6, 2021. 
The U.S. Trade Representative will continue to monitor the developments 
in the France DST investigation and the additional DST investigations 
in considering the trade action in this investigation. If a further 
modification to the action is appropriate, the U.S. Trade 
Representative will consider the comments and testimony previously 
provided.

Joseph Barloon,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2021-00425 Filed 1-11-21; 8:45 am]
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