Sugar Import Licensing

SUMMARY: The Foreign Agricultural Service (FAS) is requesting

suggestions for revising the regulations and other program provisions

for the sugar import licensing programs in order to improve program

efficiency and compliance as well as to carry out relevant provisions

of the North American Free Trade Agreement (NAFTA).

DATES: Interested persons are invited to submit written comments

concerning the rules or administration of these programs. All written

comments must be received on or before June 3, 1994, in order to be

assured of consideration.

ADDRESSES: Comments should be mailed or delivered to the Team Leader,

Import Quota Programs, Foreign Agriculture Service, room 5531, South

Building, U.S. Department of Agriculture, Washington, DC 20250.

FOR FURTHER INFORMATION CONTACT:

Fred R. Kessel, (202) 720-5676.

SUPPLEMENTARY INFORMATION: Paragraphs 21 and 22 of Annex 703.2 of

Chapter 7 of the NAFTA relate to the trade of sugar and sugar

containing products which receive benefits under re-export programs.

Paragraph 21 requires that the United States notify Mexico, in writing,

of any export to Mexico is not obligated to grant NAFTA duty

preferences for such products. However, paragraph 22(b) provides that

Mexico shall accord duty-free treatment to imports of (i) U.S. raw

sugar that will be refined in Mexico and re-exported to the United

States, and (ii) refined sugar that has been refined in the United

States from Mexican raw sugar. Moreover, imports qualifying for duty-

free treatment pursuant to paragraph 22(b) will not be subject to, or

counted under, any tariff rate quota. Comments with respect to

implementation of these provisions will be considered in drafting

proposed regulations.

Interested persons are encouraged to consider the rules relating to

the maximum license sizes (7 CFR 1530.102(c) and 1530.202(c)) and

provide comments supporting any change. FAS is considering having all

programs conform to the metric system. This change would revise the

maximum license sizes from short tons to metric tons.

Another rule change being considered relates to changes in the

notice of transfer submission to the Licensing Authority. The

provisions at 7 CFR 1530.106(c) and 1530.204(c) relating to the

original notice of transfer being submitted to the Licensing Authority

within 10 days of the transfer date will be reviewed for possible

changes. The agency is considering having the refiner licensee transmit

to FAS the original notice of transfer within X days of the shipment

date and then simply receive and store confirmations from the

manufacturer licensees. Information concerning numerous transfers

within an X-day period could be submitted to the Licensing Authority,

either by mail or by electronic means.

FAS is also considering modifying the rule concerning licensee

certifications in 7 CFR 1530.105(b). The additional requirement the

agency is considering is having the licensee provide certification to

the Licensing Authority within 95 days of the date of export or last

certification which ever comes first. An alternative could be to have

periodic reports (e.g., weekly, monthly, or quarterly depending on the

volume of license activity). This change would allow the Licensing

Authority to establish greater compliance safeguards.

Licensees in the Refined Sugar Re-export program have been informed

by FAS that during the time domestic marketing allotments are in

effect, licensees' sugar export shipments could not be certified to the

Licensing Authority as being eligible for license credit except when

any domestic sugar can be verified as being counted against marketing

allotment allocations. FAS is interested in developing appropriate

rules that would incorporate this limitation.

FAS also is interested in comments addressing the creation of a

program to provide for imports of raw cane sugar exempt from the

tariff-rate quota on condition that an equivalent quantity of raw sugar

is exported. Currently, subheading 1701.11.02 and additional U.S. note

3(c) to chapter 17 of the Harmonized Tariff Schedule of the United

States (HTS) authorizes the sugar licensing programs but provides only

for imports of raw sugar ``to be used for the production (other than by

distillation) of polyhydric alcohols, except polyhydric alcohols for

use as a substitute for sugar in human food consumption, or to be

refined and re-exported in refined form or in sugar-containing

products.'' This provision would need to be amended to permit a raw

sugar swap program.

FAS is interested in comments relating to the implementation of an

automated data system linking licensees with the Licensing Authority.

Automated data processing procedures relating to the use of

standardized forms for notices of transfer and certifications for

export credit are of particular interest. Rule change suggestions for

providing a structured data reporting format to enhance program

administration and assist in verifying program compliance are also

requested.

FAS will give major consideration to the suggestions of

manufacturer licensees in the sugar to be re-exported in sugar

containing products program with respect to contractual manufacturing

arrangements with co-packers. Comments should center on the control of

quota-exempt sugar to prevent diversion onto the domestic market and

the means by which manufacturer licensees would establish eligibility

to receive credit for sugar containing product exports for products

manufactured and exported by a co-packer.

FAS is also considering changing the licenses used under the Sugar

for the Production of Polyhydric Alcohol program from a license to

import raw sugar to a license to receive transfers of refined sugar.

Since this will be the best opportunity to modify program

regulations, program participants should address any other issues that

they deem appropriate.

Signed at Washington, DC on March 31, 1994.

Richard B. Schroeter,

Acting Administrator, Foreign Agricultural Service.

[FR Doc. 94-10621 Filed 5-3-94; 8:45 am]

BILLING CODE 3410-10-M