[Federal Register Volume 86, Number 60 (Wednesday, March 31, 2021)]
[Notices]
[Pages 16813-16816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06617]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2021-0005]


Proposed Action in Section 301 Investigation of Spain's Digital 
Services Tax

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments and notice of public hearing.

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SUMMARY: The Office of the United States Trade Representative (USTR) 
requests written comments regarding a potential trade action in 
connection with the Section 301 investigation of Spain's Digital 
Services Tax (DST). USTR also will convene virtual public hearings and 
accept rebuttal comments in relation to the potential action.

DATES: 
    April 21, 2021: To be assured of consideration, submit requests to 
appear at a hearing, along with a summary of the testimony, by this 
date.
    April 30, 2021: To be assured of consideration, submit written 
comments by this date.
    May 3, 2021: Multi-jurisdictional virtual hearing on proposed 
actions.
    May 6, 2021 at 9:30 a.m.: Virtual hearing on Spain DST proposed 
action.
    May 10, 2021: To be assured of consideration, submit multi-
jurisdictional hearing rebuttal comments by this date.
    May 13, 2021: To be assured of consideration, submit Spain DST 
hearing rebuttal comments by this date.

ADDRESSES: Submit documents in response to this notice, including 
written comments and hearing appearance requests, through the online 
USTR portal: https://comments.ustr.gov/s/.

FOR FURTHER INFORMATION CONTACT: For questions concerning the 
investigation, please contact Ben Allen or Patrick Childress, Assistant 
General Counsels at (202) 395-9439 and (202) 395-9531,

[[Page 16814]]

respectively; Robert Tanner, Director, Services and Investment at (202) 
395-6125; or Michael Rogers, Director, Europe and the Middle East at 
(202) 395-2684. For issues with on-line submissions, please contact the 
USTR Section 301 line at (202) 395-5725.

SUPPLEMENTARY INFORMATION:

I. Proceedings in the Investigation

    Spain has adopted a DST that applies a three percent tax on certain 
digital services revenues related to online advertising services, 
online intermediary services, and data transmission services. Companies 
with worldwide revenues of [euro]750 million or more and [euro]3 
million in certain digital services revenues are subject to the DST.
    On June 2, 2020, the U.S. Trade Representative initiated an 
investigation of Spain's DST pursuant to section 302(b)(1)(A) of the 
Trade Act of 1974, as amended (Trade Act). See 85 FR 34709 (June 5, 
2020) (notice of initiation). The notice of initiation solicited 
written comments on, inter alia, the following aspects of Spain's DST: 
Discrimination against U.S. companies; retroactivity; and possibly 
unreasonable tax policy. With respect to tax policy, USTR solicited 
comments on, inter alia, whether the DST diverged from principles 
reflected in the U.S. and international tax systems including 
extraterritoriality; taxing revenue not income; and a purpose of 
penalizing particular technology companies for their commercial 
success. Interested persons filed over 380 written submissions in 
response. The public submissions are available on www.regulations.gov 
in docket number USTR-2020-0022.
    Under section 303 of the Trade Act, the U.S. Trade Representative 
requested consultations with the government of Spain regarding the 
issues involved in the investigation. Consultations were held on 
December 17, 2020.
    Based on information obtained during the investigation, USTR 
prepared a comprehensive report on Spain's DST (Spain DST Report). The 
Spain DST Report is posted on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes. The report includes a full description of Spain's DST, 
and supports findings that Spain's DST is unreasonable and 
discriminatory and burdens or restricts U.S commerce.
    On January 14, 2021, based on the information obtained during the 
investigation and the advice of the Section 301 Committee, the U.S. 
Trade Representative determined that Spain'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 86 FR 6407 (January 21, 2021).

II. Proposed Action

    Section 301(b) provides that upon determining that the acts, 
policies, and practices under investigation are actionable and that 
action is appropriate, the U.S. Trade Representative shall take all 
appropriate and feasible action authorized under section 301(c), 
subject to the specific direction, if any, of the President regarding 
such action, and all other appropriate and feasible action within the 
power of the President that the President may direct the U.S. Trade 
Representative to take under section 301(b), to obtain the elimination 
of that act, policy, or practice.
    Section 301(c)(1)(B) of the Trade Act authorizes the U.S. Trade 
Representative to impose duties on the goods of the foreign country 
subject to the investigation. Pursuant to sections 301(b) and (c), USTR 
proposes that the U.S. Trade Representative should determine that 
action is appropriate and that appropriate action would include the 
imposition of additional ad valorem tariffs on certain products of 
Spain.
    In particular, USTR proposes to impose additional tariffs of up to 
25 percent ad valorem on an aggregate level of trade that would collect 
duties on goods of Spain in the range of the amount of the DST that 
Spain is expected to collect from U.S. companies. Initial estimates 
indicate that the value of the DST payable by U.S.-based company groups 
to Spain will be up to approximately $155 million per year.
    USTR further proposes that the goods of Spain subject to additional 
tariffs would be drawn from the preliminary list of products in the 
Annex to this notice, as specified by the listed eight-digit tariff 
subheadings.

III. Request for Public Comments

    In accordance with section 304(b) of the Trade Act (19 U.S.C. 
2414(b)), USTR invites comments from interested persons with respect to 
whether action is appropriate, and if so, the appropriate action to be 
taken.
    USTR requests comments with respect to any issue related to the 
action to be taken in this investigation. With respect to the proposed 
tariff action outline above, USTR specifically invites comments 
regarding:
     The level of the burden or restriction on U.S. commerce 
resulting from Spain's DST, including the amount of DST payments owed 
by U.S. companies, the annual growth rate of such payments, and other 
effects, such as compliance costs.
     The appropriate aggregate level of trade to be covered by 
additional duties.
     The level of the increase, if any, in the rate of duty.
     The specific products to be subject to increased duties, 
including whether the tariff subheadings listed in the Annex should be 
retained or removed, or whether tariff subheadings not currently on the 
list should be added.
    In commenting on the inclusion or removal of particular products on 
the preliminary list of products subject to the proposed additional 
duties, USTR requests that commenters address specifically whether 
imposing increased duties on a particular product would be practicable 
or effective to obtain the elimination of Spain's acts, policies, and 
practices, and whether imposing additional duties on a particular 
product would cause disproportionate economic harm to U.S. interests, 
including small- or medium-size businesses and consumers.
    Simultaneously with this notice, USTR also is requesting public 
comments on proposed trade actions in five other DST investigations 
initiated at the same time as the Spain DST investigation. Certain 
interested persons may wish to provide written comments or oral 
testimony on multi-jurisdictional issues common to two or more 
investigations. To avoid duplication, the USTR portal will have a 
separate docket for multi-jurisdictional submissions, and USTR will 
hold a separate multi-jurisdictional hearing.
    To be assured of consideration, you must submit written comments on 
the proposed action by April 30, 2021, and post-hearing rebuttal 
comments by May 10, 2021 for the multi-jurisdictional hearing, and by 
May 13, 2021 for the Spain DST hearing.

IV. Hearing Participation

    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to the Spain DST proposed action on May 6, 2021, 
beginning at 9:30 a.m. Those requesting to appear at this hearing 
should have comments applicable only to the Spain DST proposed action.
    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to multiple jurisdictions on May 3, 2021, beginning 
at 9:30 a.m. Those requesting to appear at the multi-jurisdictional 
hearing should have comments that are applicable to two or more DST 
investigations.

[[Page 16815]]

    For either hearing, you must submit a request to appear at the 
specific hearing using the electronic portal at https://comments.ustr.gov/s/. You will be able to view a docket entitled 
`Request to Appear at Hearing on Proposed Actions in Section 301 
Investigation of Spain's Digital Services Tax.' Requests to appear must 
include a summary of testimony, and may be accompanied by a pre-hearing 
submission. Remarks at the hearing are limited to five minutes to allow 
for possible questions from the Section 301 Committee. All submissions 
must be in English. To be assured of consideration, USTR must receive 
your request to appear by April 21, 2021.

V. Procedures for Written Submissions

    You must submit written comments, rebuttal comments, and requests 
to appear at the hearing using the electronic portal at https://comments.ustr.gov/s. You will be able to view a docket entitled 
`Comments Concerning Proposed Action in Section 301 Investigation of 
Spain's Digital Services Tax' on the portal, docket number USTR-2021-
0005.
    You do not need to establish an account to submit comments. Fields 
with a gray (BCI) notation are for Business Confidential Information 
and the information entered will not be publicly available. Required 
fields are marked `Required' and will have a red asterisk (*). Fields 
with a green (Public) notation will be viewable by the public.
    The first screen of the portal requires you to enter identification 
and contact information. Third party organizations such as law firms, 
trade associations, or customs brokers, should identify the full legal 
name of the organization they represent, and identify the primary point 
of contact for the submission. The remaining fields of the form are 
optional.
    After entering the identification and contact information, you can 
complete the remainder of the questionnaire, or any portion of it by 
clicking `Next.' You can comment on multiple products in a single 
entry, or submit multiple comments. You will be able to navigate 
through each screen of the form by clicking `Next,' with or without 
entering a response to each field on an individual screen or page. 
Additionally, you will be able to upload documents at the end of the 
form and designate whether USTR should treat the documents as business 
confidential or public information.
    For uploads containing BCI, the file name of the business 
confidential version should begin with the characters `BCI'. Any page 
containing BCI must be clearly marked `BUSINESS CONFIDENTIAL' on the 
top of that page and the submission should clearly indicate, via 
brackets, highlighting, or other means, the specific information that 
is BCI. If you request business confidential treatment, you must 
certify in writing that disclosure of the information would endanger 
trade secrets or profitability, and that the information would not 
customarily be released to the public. Parties uploading attachments 
containing BCI also must submit a public version of their comments. The 
file name of the public version, which must be uploaded on https://comments.ustr.gov/s/, should begin with the character `P'. The `BCI' 
and `P' should be followed by the name of the person or entity 
submitting the comments or rebuttal comments. If these procedures are 
not sufficient to protect BCI or otherwise protect business interests, 
please contact the USTR Section Hotline 301 line at (202) 395-5725 to 
discuss whether alternative arrangements are possible. USTR will post 
attachments uploaded to the docket for public inspection, except for 
attachments marked as business confidential.
    You can view all public submissions on the USTR portal at https://comments.ustr.gov/s.

Greta Peisch,
General Counsel, Office of the United States Trade Representative.

Annex

    Note: All products that are classified in the eight-digit 
subheadings of the Harmonized Tariff Schedule of the United States 
(HTSUS) that are listed in this Annex are covered by the proposed 
action. The product descriptions that are contained in this Annex 
are provided for informational purposes only, and are not intended 
to delimit in any way the scope of the proposed action. Any 
questions regarding the scope of a particular HTSUS subheading 
should be referred to U.S. Customs and Border Protection. In the 
product descriptions, the abbreviation ``nesoi'' means ``not 
elsewhere specified or included''.


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      HTSUS subheading                   Product description
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0306.16.00.................  Cold-water shrimps and prawns, cooked in
                              shell or uncooked, dried, salted or in
                              brine, frozen.
0306.17.00.................  Other shrimps and prawns, cooked in shell
                              or uncooked, dried, salted or in brine,
                              frozen.
0307.51.00.................  Octopus, live, fresh or chilled.
0307.52.00.................  Octopus, frozen.
0307.59.01.................  Octopus, dried, salted or in brine.
1605.21.05.................  Shrimp & prawns not in airtight containers:
                              Fish meat and prepared meals.
1605.21.10.................  Shrimp & prawns not in airtight containers:
                              Other than fish meat and prepared meals.
1605.55.05.................  Octopus, as containing fish meat or
                              prepared meals.
1605.55.60.................  Octopus, prepared or preserved.
4202.21.90.................  Handbags, with or without shoulder strap or
                              without handle, with outer surface of
                              leather, composition or patent leather,
                              nesoi, over $20 ea.
4202.22.15.................  Handbags, with or without shoulder straps
                              or without handle, with outer surface of
                              sheeting of plastics.
4203.30.00.................  Belts and bandoliers with or without
                              buckles, of leather or of composition
                              leather.
6402.99.31.................  Footwear w/outer soles & uppers of rubber
                              or plastics, nesoi, n/cov. ankle, w/ext.
                              surf. of uppers o/90% rubber or plastics,
                              nesoi.
6403.51.30.................  Footwear w/outer soles and uppers of
                              leather, nesoi, covering the ankle, welt.
6403.51.60.................  Footwear w/outer soles and uppers of
                              leather, nesoi, covering the ankle, n/
                              welt, for men, youths and boys.
6403.51.90.................  Footwear w/outer soles and uppers of
                              leather, nesoi, covering the ankle, n/
                              welt, for persons other than men, youths
                              and boys.
6403.59.15.................  Turn or turned footwear w/outer soles and
                              uppers of leather, not covering the ankle.
6403.59.30.................  Footwear w/outer soles and uppers of
                              leather, not covering the ankle, welt,
                              nesoi.
6403.59.60.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for men,
                              youths and boys.
6403.59.90.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for
                              persons other than men, youths and boys.
6403.91.90.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, cov.
                              ankle, n/welt, for persons other than men/
                              youths/boys.
6403.99.60.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, n/cov.
                              ankle, n/welt, for men, youths and boys,
                              nesoi.

[[Page 16816]]

 
6403.99.90.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, n/cov.
                              ankle, for women/child./infants, val. over
                              $2.50/pair.
6404.19.39.................  Footwear w/outer sole rub./plast. & upp.
                              textile, nesoi, w/open toes/heels or slip-
                              on, >10% by wt. rub./plast. not subj note
                              5 ch 64.
6404.20.40.................  Footwear w/outer soles of leather/comp.
                              leath., n/o 50% by wt. rub./plast. or rub./
                              plast./text. & 10%+ by wt. rub./plast.,
                              val. o/$2.50/pr.
6404.20.60.................  Footwear w/outer soles of leather/comp.
                              leather & uppers of textile, nesoi.
6405.90.90.................  Footwear, nesoi, w/outer soles and uppers o/
                              than leather or comp. leather, not
                              disposable.
6504.00.60.................  Hats and headgear, plaited or assembled
                              from strips of veg. fibers or unspun
                              fibrous veg. materials and/or paper yarn,
                              not sewed.
6505.00.04.................  Hats and headgear of fur felt made from hat
                              forms and hat bodies of 6501.
6505.00.08.................  Hats and headgear made from hat forms and
                              hat bodies of 6501, except of fur felt.
6505.00.15.................  Hats and headgear, of cotton and/or flax,
                              knitted.
6505.00.30.................  Hats and headgear, of wool, knitted or
                              crocheted or made up from knitted or
                              crocheted fabric.
6505.00.60.................  Hats and headgear, of man-made fibers,
                              knitted or crocheted or made up from
                              knitted or crocheted fabrics, not in part
                              of braid.
7013.99.50.................  Glassware for toilet/office/indoor decor.
                              or similar purposes, nesoi, valued over
                              $0.30 but n/over $3 each.
7013.99.80.................  Glassware for toilet/office/indoor decor.
                              or similar purposes, nesoi, n/cut or
                              engraved, valued over $3 but n/over $5
                              each.
7013.99.90.................  Glassware for toilet/office/indoor decor.
                              or similar purposes, nesoi, n/cut or
                              engraved, valued over $5 each.
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[FR Doc. 2021-06617 Filed 3-30-21; 8:45 am]
BILLING CODE 3290-F1-P