[Federal Register Volume 86, Number 60 (Wednesday, March 31, 2021)]
[Notices]
[Pages 16822-16824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06626]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2021-0006]


Proposed Action in Section 301 Investigation of Turkey'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 Turkey'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 7, 2021 at 9:30 a.m.: Virtual hearing on Turkey DST proposed 
action.
    May 10, 2021: To be assured of consideration, submit multi-
jurisdictional hearing rebuttal comments by this date.
    May 14, 2021: To be assured of consideration, submit Turkey 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, 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

    Turkey has adopted a DST that applies to companies that during the 
previous calendar year, generated [euro]750 million or more in 
worldwide revenues and TRY 20 million or more in revenues deriving from 
the provision of digital services in Turkey.
    On June 2, 2020, the U.S. Trade Representative initiated an 
investigation of Turkey'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 Turkey'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 Turkey regarding the 
issues involved in the investigation. Consultations were held on 
September 29, 2020.
    Based on information obtained during the investigation, USTR 
prepared a comprehensive report on Turkey's DST (Turkey DST Report). 
The Turkey 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 
Turkey's DST, and supports findings that Turkey's DST is unreasonable 
and discriminatory and burdens or restricts U.S commerce.
    On January 6, 2021, based on the information obtained during the 
investigation and the advice of the Section 301 Committee, the U.S. 
Trade Representative determined that Turkey'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 2480 (January 12, 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 
Turkey.
    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 Turkey in the range of the amount of the DST that 
Turkey 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 Turkey will be up to approximately $160 million per year.
    USTR further proposes that the goods of Turkey 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:

[[Page 16823]]

     The level of the burden or restriction on U.S. commerce 
resulting from Turkey'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 Turkey'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 Turkey 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 14, 2021 for the Turkey DST hearing.

IV. Hearing Participation

    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to the Turkey DST proposed action on May 7, 2021, 
beginning at 9:30 a.m. Those requesting to appear at this hearing 
should have comments applicable only to the Turkey 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.
    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 Action in Section 301 
Investigation of Turkey'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 
Turkey's Digital Services Tax' on the portal, docket number USTR-2021-
0006.
    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 8-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''.


[[Page 16824]]



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      HTSUS subheading                   Product description
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5701.10.16.................  Carpets & other textile floor coverings,
                              hand-knotted or hand-inserted, w/ov 50% by
                              weight of the pile of fine animal hair,
                              nesoi.
5701.10.40.................  Carpets and other textile floor coverings,
                              of wool or fine animal hair, hand-hooked
                              (tufts were inserted and knotted by hand
                              or hand tool).
5701.10.90.................  Carpets and other textile floor coverings,
                              of wool or fine animal hair, not hand-
                              hooked, not hand knotted during weaving.
5701.90.10.................  Carpet and other textile floor covering,
                              knotted, of text. materials (not wool/
                              hair) nesoi, pile inserted & knotted
                              during weaving or knitting.
5702.10.90.................  Kelem, Schumacks, Karamanie and similar
                              hand-woven rugs, other than certified hand-
                              loomed and folklore products.
5702.31.10.................  Wilton, velvet and like floor coverings of
                              pile construction, woven, not tufted or
                              flocked, not made up, of wool or fine
                              animal hair.
5702.31.20.................  Carpets and other textile floor coverings
                              of pile construction, woven, not tufted or
                              flocked, not made up, of wool/fine animal
                              hair, nesoi.
5702.42.10.................  Wilton, velvet and like floor coverings of
                              pile construction, woven, not tufted or
                              flocked, made up, of man-made textile
                              materials.
5702.49.10.................  Carpets not other textile floor coverings
                              of pile construction, woven, not tufted or
                              flocked, made up, of cotton.
5702.92.10.................  Hand-loomed carpet & other textile floor
                              coverings, not of pile construction,
                              woven, made up, of man-made textile
                              materials, nesoi.
5702.92.90.................  Carpet & other textile floor coverings, not
                              of pile construction, woven, made up, of
                              man-made textile materials, nesoi.
5702.99.05.................  Hand-loomed carpets and other textile floor
                              coverings, not of pile construction,
                              woven, made up, of cotton.
5702.99.15.................  Carpets and other textile floor coverings,
                              not of pile construction, woven, made up,
                              of cotton, nesoi.
5703.20.20.................  Carpets and other textile floor coverings,
                              tufted, whether or not made up, of nylon
                              or other polyamides, nesoi.
5703.30.80.................  Carpets & other textile floor coverings,
                              tufted, whether or not made up, of man-
                              made textile materials (not nylon/other
                              polyamides), nesoi.
5703.90.00.................  Carpets and other textile floor coverings,
                              tufted, whether or not made up, of other
                              textile materials nesoi.
6302.22.20.................  Bed linen, not knitted or crocheted,
                              printed, of manmade fibers, nesoi.
6302.32.20.................  Bed linen, not knitted or crocheted, not
                              printed, of manmade fibers, nesoi.
6303.91.00.................  Curtains (including drapes), interior
                              blinds and valances of cotton, not knitted
                              or crocheted.
6802.10.00.................  Tiles/cubes/similar arts. of natural stone,
                              enclosable in a sq. w/a side less than 7
                              cm; artificially colored granules,
                              chippings & powder.
6802.21.10.................  Monumental or building stone & arts.
                              thereof, of travertine, simply cut/sawn, w/
                              flat or even surface.
6802.21.50.................  Monumental or building stone & arts.
                              thereof, of marble & alabaster, simply cut/
                              sawn, w/flat or even surface.
6802.92.00.................  Monumental or building stone & arts.
                              thereof, of calcareous stone, nesoi,
                              further worked than simply cut/sawn,
                              nesoi.
6907.21.10.................  Unglazed ceramic tiles, other than those of
                              subheading 6907.30 and 6907.40, of H2O
                              absorp coeff by wt <=0.5%.
6907.21.40.................  Glazed ceramic tiles having surface area
                              >=38.7cm2, , surf area in sq w/side <7cm,
                              of a H2O absorp coeff by wt <=0.5%.
6907.21.90.................  Glazed ceramic tiles nesoi, of a H2O absorp
                              coeff by wt <=0.5%.
6907.23.90.................  Glazed ceramic tiles nesoi, of a H2O absorp
                              coeff by wt >10%.
6907.30.20.................  Glazed ceramic mosaic cubes having <=3229
                              tiles per m2, surf area in sq w/side <7cm.
6907.30.30.................  Glazed ceramic mosaic cubes having surface
                              area <38.7cm2, surf area in sq w/side
                              <7cm.
6907.30.90.................  Glazed ceramic mosaic cubes nesoi, o/t
                              subheading 6907.40.
6907.40.90.................  Glazed finishing ceramics nesoi.
6910.10.00.................  Porcelain or china ceramic sinks,
                              washbasins, baths, bidets, water closet
                              bowls, urinals & siml. sanitary fixtures.
6910.90.00.................  Ceramic (o/than porcelain or china) sinks,
                              washbasins, baths, bidets, water closet
                              bowls, urinals & siml. sanitary fixtures.
6913.10.50.................  Porcelain or china (o/than bone china)
                              statuettes and other ornamental articles,
                              nesoi.
6913.90.50.................  Ceramic (o/than porcelain, china or
                              earthenware) ornamental articles, nesoi.
7113.11.20.................  Silver articles of jewelry and parts
                              thereof, nesoi, valued not over $18 per
                              dozen pieces or parts.
7113.11.50.................  Silver articles of jewelry and parts
                              thereof, nesoi, valued over $18 per dozen
                              pieces or parts.
7113.19.25.................  Gold mixed link necklaces and neck chains.
7113.19.30.................  Precious metal (o/than silver) clasps and
                              parts thereof.
7113.19.50.................  Precious metal (o/than silver) articles of
                              jewelry and parts thereo, whether or not
                              plated or clad with precious metal, nesoi.
7113.20.29.................  Base metal clad w/gold necklaces and neck
                              chains, nesoi.
7113.20.50.................  Base metal clad w/precious metal articles
                              of jewelry and parts thereof, nesoi.
7116.20.05.................  Jewelry articles of precious or
                              semiprecious stones, valued not over $40
                              per piece.
7117.19.90.................  Imitation jewelry (o/than toy jewelry &
                              rope, curb, cable, chain, etc.), of base
                              metal (wheth. or n/plated w/prec.metal),
                              nesoi.
7117.90.90.................  Imitation jewelry not of base metal or
                              plastics, nesoi, over 20 cents/dozen pcs
                              or pts.
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[FR Doc. 2021-06626 Filed 3-30-21; 8:45 am]
BILLING CODE 3290-F1-P