Amendment of International Mail Manual Subchapter 790

POSTAL SERVICE

39 CFR Part 20

Amendment of International Mail Manual Subchapter 790

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: The Postal Service is adopting amendments of International

Mail Manual Subchapter 790 to clarify when a mailing in a foreign

country is by or on behalf of a United States resident for purposes of

collecting United States domestic postage and to authorize the

collection of United States domestic postage on certain mail posted in

a foreign country by or on behalf of persons who do not reside in that

country.

EFFECTIVE DATE: 12:01 a.m., March 10, 1994.

FOR FURTHER INFORMATION CONTACT:

Walter J. Grandjean, (202) 268-5180.

SUPPLEMENTARY INFORMATION: On April 28, 1993, the Postal Service

published in the Federal Register (58 FR 25959) a proposed rule that

would amend Subchapter 790 of the International Mail Manual to clarify

when mail is posted in a foreign country is by or on behalf of a United

States resident (ABA remail) for purposes of collecting United States

domestic postage. The proposed rule would also authorize the Postal

Service to collect United States domestic postage on certain mailings

posted in countries with which the Postal Service has not negotiated

cost-based terminal dues arrangements by or on behalf of persons who

reside in countries with which the Postal Service has negotiated cost-

based terminal dues arrangements (ABC remail). The Post Service

proposed a broad definition of United States resident that would allow

it to collect United States domestic postage on mailings posted in

another country not only by firms or entities organized in the United

States, but also by firms or entities organized under the laws of other

countries when there was a substantial connection between such firms or

entities and individuals or firms in the United States. The Postal

Service also proposed to define when a mailing was by or on behalf of a

United States resident as those mailings in which a United States

resident seeks or expects to receive an economic advantage. The Postal

Service also proposed a definition of resident of a country with which

the Postal Service has cost-based terminal dues arrangements and a

definition of when a mailing was by or on behalf of such a resident.

Comments were due on or before June 1, 1993, and ten comments were

received by that date. Of those comments, six opposed and four

supported the proposed rule. In view of the comments, the Postal

Service has decided to adopt the proposed rule with amendments to take

into account some of the criticisms of the proposal.

Legal Authority

One commenter, an association of companies that compete with the

Postal Service, asserts that this rulemaking violates the separation of

powers and due process principles of the Constitution because the rule

would regulate companies that compete with the Postal Service. The

Postal Service disagrees. The commenter cited no cases or other

authority to support its assertion, and the Postal Service is not aware

of any authority which would support such an assertion. Moreover, the

rule does not regulate competitors of the Postal Service who do not use

the Postal Service's services, but only specifies when mailers must pay

U.S. domestic postage to secure delivery of their mail. Mailers can

continue to use remailers and can deposit their mail in any country

they choose. They will be required, however, to pay the full cost of

the services they obtain from the Postal Service.

Two commenters, a competitor of the Postal Service and the

association of competitors, assert that the proposed rule violates the

Postal Reorganization Act because it would extend the application of

the Private Express Statutes beyond the United States and to mailable

matter other than letters. These commenters also assert that the

proposed rule would either impose the Postal Service's bilateral cost-

based terminal dues arrangements on third countries or boycott mail

from non-cost-based terminal dues countries unless the mailer agreed to

pay United States domestic postage. They further assert that the Postal

Service is not authorized to adopt an interpretation of the Universal

Postal Convention without the approval of the President. The Postal

Service disagrees.

The proposed rule would not extend the territorial reach of the

Private Express Statutes. The Private Express Statutes, 18 U.S.C. 1694-

99, 39 U.S.C. 601-06, generally prohibit the private carriage of

letters on post routes without paying postage. There are exceptions to

this prohibition, and the Postal Service has suspended the prohibition

in some cases, e.g., for extremely urgent letters and for outbound

international remail. 39 CFR 320.6, 320.8.

The proposed rule would not require that anything be sent by mail,

or that United States postage be paid on non-letter mail sent by a

private carrier. It simply prescribes when United States postage must

be paid to the Postal Service when the mailer chooses to use the Postal

Service to deliver items in the United States. Mailers are free,

subject to the internal legislation of the countries where they are, to

use any carrier they want for both letter and non-letter mailable

matter. The Private Express Statutes would come into play only when a

mailer chooses to send letters to the United States via a private

carrier. When those letters arrive in the United States, unless they

come within an exception or suspension of the Statutes, they must be

entered into the mails or have United States postage affixed. That is

entirely different from the requirement in this rule that U.S. domestic

postage be paid on matter entering the United States through the

international mail system and which is tendered to the Postal Service

for delivery by choice.

The proposed rule would not impose bilateral terminal dues

arrangements on third countries nor would it constitute a boycott of

mail from countries with which the Postal Service does not have cost-

based terminal dues arrangements. The rule does not alter the terms

under which the Postal Service exchanges mail with any other country.

Countries that are part of the UPU terminal dues system will continue

to pay UPU terminal dues. Mail from those countries will continue to be

accepted and processed, except for mail posted by or on behalf of

mailers who reside in the United States or one of the countries with

which the Postal Service has cost-based terminal dues arrangements.

That mail will be held for postage or returned as authorized by Article

25 of the Universal Postal Convention (Washington 1989).

The Postal Service is not required to obtain the approval of the

President to adopt this rule. Section 407 of title 39, United States

Code, provides in pertinent part, ``The decisions of the Postal Service

construing or interpreting the provisions of any treaty or convention

which has been or may be negotiated and concluded shall, if approved by

the President, be conclusive on all officers of the Government of the

United States.'' This provision does not limit the authority to adopt

regulations, 39 U.S.C. 401(2), but establishes the conditions under

which any interpretation of a postal convention will be binding on all

officers of the Government. Indeed, the absence of Presidential

approval does not make the Postal Service's interpretation invalid, it

merely leaves open the possibility that there might be a disagreement

with some other interested agency. Presidential approval simply

provides a mechanism for resolving disagreements in favor of the Postal

Service.

One commenter asserted that the proposed rule would impermissibly

extend the territorial jurisdiction of the Postal Service and could

cause conflicts between it and the internal legislation of other

countries in which mailers are present. The Postal Service disagrees.

The basis of the proposed rule is Article 25 of the Universal Postal

Convention. That article authorizes postal administrations to collect

domestic postage on certain international mail and the decline to

deliver certain international mail. Thus, the proposed rule is not

based on domestic law alone, but is based on an international agreement

to which virtually all countries adhere. That is far different from the

case of purporting to apply domestic legislation to conduct outside the

United States. That the Postal Service has decided to apply Article 25

selectively to avoid interference with mailers' decisions which do not

adversely affect it does not change the application of Article 25 into

an extraterritorial extension of United States jurisdiction.

One commenter asserts that the proposed rule exceeds the authority

given by Article 25 because the proposed rule would allow the Postal

Service to collect domestic postage on remail posted in a country other

than the country where the mailer resides, and Article 25 provides only

that postal administrations ``shall not be bound to accept, forward, or

deliver'' such mail and ``may send back such items to origin or return

them to the senders without repaying the prepaid charge.'' This comment

is accurate insofar as there is no express authorization to collect

domestic postage on ABC remail as there is for ABA remail. However, the

Postal Service does not believe that the absence of an express

authorization precludes it from providing mailers an alternative that

can be much less onerous than returning the mail to origin. The purpose

of Article 25 and IMM 790 is not to punish remail per se, or for that

matter, disrupt commercial activities via the mails. As viewed by the

Postal Service, Article 25 is intended to ensure that postal

administrations receive appropriate compensation for the services they

render. Returning mail to origin can take time, and the mail being

returned may be time sensitive. The mailer may also have invested more

in a mailing than the postage that has been or will have to be paid. In

these cases, the option of securing delivery by paying United States

domestic postage can be much more desirable than incurring the expense

of waiting for the mail to come back, preparing the mail for posting in

a third country, and paying new postage to a third postal

administration. Moreover, since United States domestic postage rates

are among the lowest in the world, there is some likelihood that the

mail would simply come back to the United States prepared as United

States mail. This being the case, there appears to be no good reason to

require mailers to incur the additional expense of re-preparing the

mail, shipping it to the United States or some other country, and then

paying new postage.

One commenter asserts that the proposed rule would be a repudiation

of the Universal Postal Convention's basic terminal dues arrangements.

The Postal Service disagrees. The Convention contains both terminal

dues provisions and Article 25 which authorizes administrations not to

accept or deliver ABA or ABC remail. As both those provisions are in

the Convention, they must be understood as being consistent with one

another. In this respect, the existence of Article 25 is a recognition

that terminal dues arrangements that are appropriate, and even

essential, for the efficient exchange of mails between many countries

can be unfairly exploited for individual gain. Enforcement of Article

25 is not a repudiation of the terminal dues system, it is a

recognition of a vulnerability that permits administrations to protect

themselves and their customers from unfair exploitation.

One commenter asserts that the Postal Service is not exempt from

the Administrative Procedures Act (APA) and that the Supreme Court has

rejected the Postal Service's claim to be exempt from the APA. The

Postal Service disagrees. Section 410 of title 39, United States Code,

provides expressly that ``Except as provided by subsection (b) of this

section, and except as otherwise provided in this title * * * no

Federal law dealing with public or Federal contracts, property, works,

officers, employees, budgets, or funds, including the provisions of

chapters 5 and 7 of title 5, shall apply to the exercise of the powers

of the Postal Service.'' 39 U.S.C. 410(a). This language plainly

exempts the Postal Service from the APA, which is in chapters 5 and 7

of title 5. In subsection (b) of section 410, only sections 552 (public

information), 552a (records about individuals), 552b (open meetings) of

title 5 are made applicable. Elsewhere in title 39, only section 3001

makes the APA applicable to the Postal Service and then only for

mailability proceedings. Thus, nothing in the statute makes the APA

applicable to this rulemaking. As for the Supreme Court, in the case

mentioned by the commenter, Air Courier Conference of America v.

American Postal Workers Union, the Court did not rule on the merits of

whether the Postal Service was subject to the APA, but refused to

consider an argument based on exemption from the APA because that

argument had not been presented to the court below. Not considering an

argument is far different from considering an argument and rejecting

it.

Definition of United States Resident and of Other Country Resident

Several commenters assert that the proposed rule, insofar as it

attempts to elaborate criteria for determining whether a firm or

business is resident in the United States in terms of the percentage of

ownership of that firm or business by persons who reside in the United

States or by other firms or organizations incorporated or organized in

the United States, is unreasonable and that it is too broad and could

result in legitimate international mailings having to pay twice or

having to pay a different compensation rate than the one they are

entitled to under the Universal Postal (UPU) Convention. They further

assert that it is ambiguous, that it would require a knowledge of

corporate information which would be too burdensome for a foreign

private carrier or postal administration to ascertain, that it would

have adverse consequences operationally and for customers, that efforts

to apply the rule will lead to arbitrary actions and disputes, and that

it would erect a trade barrier. Similar objections are raised regarding

the application of such percentage of ownership criteria to determine

the resident status of a sender in another country. In response to

these views, the Postal Service is eliminating the percentage of

ownership criteria from its proposed rulemaking.

Trade Policy

Two commenters have asserted that the proposed rule is contrary to

U.S. trade interests and anti-competitive and that the European

Commission has recently started proceedings against enforcement of

Article 25. One of the commenters has asserted that Article 25 itself

is an anti-competitive, market-allocation scheme. The Postal Service

does not agree with these assertions. These commenters have also

asserted that President Reagan had instructed the Postal Service not to

apply UPU Convention Article 25(4) in an anti-competitive manner. The

Postal Service does not consider the proposed rule to be inconsistent

with the position President Reagan communicated to the Postal Service

or to be anti-competitive. First, the Postal Service sees no

inconsistency between U.S. trade interests and its own efforts to

assure that it is fairly and adequately compensated for the costs of

handling mail from other countries. It would not agree with the

implication that remail companies, which target a specific, high-

density type of mailing for their services, are entitled to subsidized,

below-cost delivery of their mailings by postal administrations or that

efforts to assure adequate compensation for the cost of delivery of

such mailings are anti-competitive. To the extent that remail companies

depend upon such below-cost delivery for the services they offer, they

are engaged in an abuse of the international mail system and of U.S.

mailers whose payments in effect subsidize such services. Article 25

permits postal administrations to take action which, rather than being

anti-competitive, serves to protect themselves against such abuse. To

the extent that private carriers provide end-to-end delivery services,

Article 25 simply does not apply to their activities. Furthermore, the

contention that the European Commission is proceeding against

enforcement of Article 25 is ambiguous. The manner in which actions

were taken by some European administrations in the past has been

challenged by the European Commission. However, there are postal

administrations in Europe, such as the German postal administration,

which are now aggressively applying Article 25 and these actions are

not being challenged by the European Commission.

Improvements in the Terminal Dues System

Three commenters assert that the Postal Service should deal with

the problem of uneconomic remail by correcting the flaws of the UPU

terminal dues system instead of taking administrative action. The

Postal Service agrees that the best way of dealing with uneconomic

remail would be to correct the flaws of the terminal dues system, but

it has concerns about whether the 186 member countries of the Universal

Postal Union, many of which have a vested interest in the current

structure, can agree on a system that will adequately solve the

problem.

The Postal Service is, nevertheless, working to establish a fully

cost-based terminal dues system, that is, a system to cover the

specific costs of each delivering postal administration which agrees to

participate in the new system, thus providing fair and equal

reimbursement for delivery services regardless of where mail is entered

in the new system by participating administrations. Fewer than thirty

industrialized countries, however, have an interest in developing such

a system. Although these countries have made progress in achieving

consensus on the requirements for and operation of such a system, the

problem of ``unequal access'' is likely to be exacerbated. The majority

of countries which will continue to apply a simplified, lower-rate UPU

system in all their mail exchanges will have more favorable access to

the industrialized countries participating in the cost-based system

than the industrialized countries will have with each other.

To permit a new country-specific cost-based system to operate

equitably and without the unfair arbitrage experienced between the

current cost-related system and the UPU terminal dues system would

require a majority of the member countries of the Universal Postal

Union to agree either to a global country-specific cost-based terminal

dues system or to an interface or ``bridge'' arrangement between the

simpler UPU terminal dues system and the country-specific cost-based

system. In considering the difficulties of persuading the UPU of the

market-influenced reasons for cost-based terminal dues, it should be

noted that a majority of UPU member countries, many of which are

developing countries, would lose significant terminal dues revenues

under a country-specific cost-based system which would require payment

of higher prices for delivery services to the industrialized countries

and lower prices for the same services to approximately 160 other

countries.

Despite the obstacles, the Postal Service is working toward the

adoption at UPU Congress of proposals which, if approved, will

significantly reduce the flaws in the current terminal dues system.

Although the Postal Service is optimistic about the adoption of some of

these proposals, it has only one of approximately 186 votes at UPU

Congress and cannot guarantee the outcome.

Furthermore, the Postal Service is obligated to comply with the

terms of the Acts of the Universal Postal Union currently in effect.

Outside of the framework of these Acts, the Postal Service can

negotiate other terminal dues arrangements only with the agreement of

another country or group of countries; it cannot impose a particular

cost-based terminal dues arrangement on other countries nor can it

unilaterally impose a particular level of terminal dues on inbound

international mail.

The UPU meets in Congress every five years, and the next

opportunity to achieve the agreement necessary to implement an

equitable and fully cost-based terminal dues system among the

industrialized countries will arise at the Seoul Congress in late 1994.

The Acts of the Universal Postal Union adopted at that Congress will

take effect in 1996.

In the meantime, therefore, the application of the proposed rule is

the only means of providing protection against the abuse of the current

terminal dues system.

Administration of Proposed Rule

One commenter asserted that enforcement of the rule is bound to be

arbitrary and capricious, that it cannot be strictly enforced without

incurring excessive costs, and that, if selectively enforced, it would

be enforced only against competitors of the Postal Service. The Postal

Service disagrees with this assertion. The elimination of the criteria

for determining resident status which relates to percentage of

ownership will simplify enforcement activity. Although excessive costs

might be incurred if one-hundred percent effectiveness were required,

enforcement can still be undertaken in a sufficiently vigorous and

cost-effective manner to maintain a credible deterrent to abuse of the

system. Furthermore, the effort to distinguish so-called competitors

from non-competitors engaged in efforts to evade fair payment of

delivery costs would, even if it were possible, certainly lead to

excessive administrative costs and be self-defeating. As the purpose of

the rule is solely to assure fair and adequate reimbursement of

delivery costs, there is no incentive to make such an effort.

One commenter asserts that there has been no independent

verification that UPU terminal dues do not adequately compensate the

Postal Service for its expense in delivering foreign-origin mail and

that participation in a study of international costs and revenues by

the Postal Rate Commission should be a prerequisite to implementing the

proposed rule. The Postal Service disagrees. The Postal Service alone

is responsible international mail services, and there is no legal

requirement that its determinations be subject to verification by any

other agency. The Postal Rate Commission, in particular, has no

jurisdiction over international rates or services, so any study

conducted by the Commission would have no legal significance. The

Postal Service has concluded that the proposed rule, as amended, would

benefit users of United States mail. No persuasive reason has been put

forward why implementation of that rule should be deferred while an

agency with no responsibility for international services conducts a

cost study that would have no legal significance. Accordingly, the

Postal Service will not defer implementation of the proposed rule.

One commenter asserts that the Postal Service has offered no data

on the losses against which the proposed rule would provide protection

and no support of the need for such a rulemaking. The assertion that

the Postal Service has not attempted to precisely quantify all losses

is correct as far as it goes. However, based upon mailings already

found to be in violation of Subchapter 790 and upon the continuing

nature of these activities, the Postal Service considers that it has an

adequate basis for its estimate that it has already suffered

significant losses and for its judgment that it will continue to incur

such losses unless more effective remedial action is taken. Therefore,

by giving the sender the option of either paying domestic postage to

secure delivery or accepting their return to origin, such losses can be

avoided or significantly reduced.

One commenter asserted that, under the proposed rule, the Postal

Service could decide at its own discretion whether mail was of

legitimate international origin or whether it should have been entered

as domestic mail and that it could make such decisions without prior

consultation with regulators, other postal administrations, or other

administrative bodies. The Postal Service agrees that it will exercise

its own discretion in implementing the proposed rule, but disagrees

with any implication that this will be done in an arbitrary manner and

without opportunity for consultation. The Postal Service considers the

exercise of this responsibility to be fully consistent with its

statutory authority and responsibility to assure that it is

appropriately and adequately compensated for the costs of the services

it provides. The purpose of the proposed rule is to provide senders and

foreign postal administrations with information about Postal Service

enforcement activities which will help assure that mailings comply with

Postal Service regulations and are not subject to such decisions. It is

the responsibility of the sender to be informed about these regulations

and to comply with them. The elimination of the percentage of ownership

criteria should simplify compliance with these Postal Service

regulations. If the sender or a foreign postal administration remains

uncertain about whether a mailing complies with Postal Service

regulations, then it is the responsibility of the sender or the foreign

postal administration to consult with the Postal Service in advance of

the mailing. In any event, when the Postal Service determines that it

is appropriate to apply the proposed rule, it will attempt to consult

with the sender and to give the sender an opportunity to pay the

required domestic postage or to explain why the mailing should be

delivered without such payment. The sending administration will then

also have an opportunity to comment on the enforcement of the rule by

the Postal Service.

One commenter asserts that the proposed rule is inconsistent with

the policy of allowing outbound remail from the United States, that it

would deny to foreign firms the opportunities for remail to the United

States that the Postal Service allows to firms in the United States,

that it does not take into account remailing opportunities to the

United States ``between countries not listed in Exhibit 792.1,'' that,

if adopted by other countries, the rule would eliminate the possibility

of sending ``prepaid mailshots'' from the country of choice of the

sender, and that the proposed ruling would disturb the climate for

establishing cost-based terminal dues. The Postal Service disagrees

with these assertions, at least to the extent that they refer to

mailings for which the country of destination will be adequately

compensated for its delivery costs. It is true that the suspension of

the Private Express Statutes for outbound international mail will

permit private delivery services, including remail companies, to carry

mail to other countries without Postal Service constraint. In such

circumstances, however, the Postal Service itself incurs no costs and

suffers no cost disadvantage. The purpose of the proposed rule is to

provide protection only in those circumstances where the Postal Service

does incur costs and would suffer a cost disadvantage. Furthermore, the

fact that Postal Service has suspended its own Private Express Statutes

with respect to outbound international mail does not mean that private

delivery services or remail companies are not subject to the

corresponding statutes of other countries or to the actions which other

postal administrations may take to enforce Article 25 or to assure

adequate compensation for the delivery of mail from senders in the

United States sent indirectly by way of third countries providing

access to the international mail system at below-cost postage rates.

With respect to remail opportunities to the United States ``between

countries not listed in Exhibit 792.1,'' as long as the sender is a

resident of such a country, the Postal Service suffers no cost

disadvantage for such mailings. With respect to the threat to ``prepaid

mailshots'' from the country of choice of the sender, there is no

threat to ``prepaid mailshots'' as long as there has been no evasion of

the payment to the delivering country of appropriate postage rates or

terminal dues. With respect to the assertion that the proposed rule

would disturb the climate for establishing cost-based terminal dues,

the Postal Service is of the view that such a rule vigorously enforced

will strengthen the incentive to adopt a cost-based terminal dues

system in order to reduce the need for such enforcement activity.

One commenter suggested what he considered to be clarifying changes

to sections 792.31 and 792.32 of the proposed rule, which explain that

a mailing is ``by or on behalf of a person or firm who resides in the

United States'' or ``by or on behalf of a person or firm who resides in

a country listed in Exhibit 792.1'' where ``such a person or firm seeks

or expects to derive economic benefit or advantage from that mailing''

in relation to activities or to ``operations physically conducted'' in

the United States or in one of the countries listed in Exhibit 792.1.

The commenter suggested the addition of ``with respect to the cost of

postage'' after ``if such a person seeks or expects to derive economic

benefit or advantage from that mailing'' to clarify that the economic

benefit is with respect to the cost of the postage for the mailing and

not because of the content of the mailing. The Postal Service has not

adopted this suggestion because the ``economic benefit or advantage''

noted in Sec. 792.31 and 792.32 refers to the gains which are the

result of the addressees response to the mailings expected by the

person or firm engaged in the mailing and not gain which result from

avoiding the cost of postage.

The Postal Service adopts the following amendments to the

International Mail Manual, which is incorporated by reference in the

Code of Federal Regulations. See 39 CFR 20.1.

List of Subjects in 39 CFR Part 20

Foreign relations, international postal services.

PART 20--[AMENDED]

1. The authority citation for 39 CFR part 20 continues to read as

follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407, 408.

2. Chapter 7 of the International Mail Manual is amended by

revising section 790 to read as follows:

CHAPTER 7--TREATMENT OF INBOUND MAIL

* * * * *

790 Items Mailed Abroad by or on Behalf of Senders in the U.S. and

Certain Other Countries.

791 Postage Payment Required.

Payment of United States postage is required to secure delivery of

mail described in 792 under the following circumstances:

a. The mailing is by or on behalf of a person or firm that resides

in the United States and the foreign rate of postage applied to such

items is lower than the comparable United States domestic rate of

postage, or 1000 or more such items are mailed in a 30 day period

regardless of whether the foreign postage is lower than the comparable

United States postage; or

b. The mailing is by or on behalf of a person or firm that resides

in a country listed in Exhibit 792.1, is posted in a country not listed

in Exhibit 792.1, and 1000 or more items are mailed in a 30 day period.

792 Mailings Affected.

792.1 Special Conditions. The special conditions apply to items of

mail which are posted in foreign countries:

a. By or on behalf of persons or firms who reside in the United

States; or

b. By or on behalf of persons or firms who reside in one of the

countries listed in Exhibit 792.1.

792.2 Residency

792.21 Criteria for U.S. Residency. A firm is a resident of the

United States if it meets the following criteria:

a. It has a place of business in the United States; or

b. It is incorporated or otherwise in the United States, its

territories, or possessions.

792.22 Criteria for Countries Listed in Exhibit 792.1 A firm is a

resident of a country listed in Exhibit 792.1 if it meets the following

criteria:

a. It has its principal place of business in that country; or

b. It is incorporated or otherwise in that country, its territories

or possessions.

792.3 By or on Behalf

792.31 United States Resident. A mailing is by or on behalf of a

person or firm who resides in the United States if such a person or

firm seeks or expects to derive economic benefit or advantage from that

mailing.

792.32 Resident of a County Listed in Exhibit 972.1. A mailing is

by or on behalf of a person or firm who resides in a country listed in

Exhibit 792.1 if such a person or firm seeks or expects to derive

economic benefit or advantage from that mailing related to operations

physically conducted in any of those countries. These operations

include, but are not limited to, selling goods manufactured in those

countries and selling services provided in those countries.

792.4 Place of Business. A place of business in the United States

is any location in the United States, its territories, or possessions

where a firm's employees or agents regulatory have personal contact

with other individuals for the purpose of conducting the firm's

business. For the purposes of this section, a firm whose employees or

agents have personal contact with others for the purpose of conducting

the firm's business in different places in the United States for short

periods of time, e.g., at hotels in different cities for one or two

days at a time, has a place of business in the United States if the

aggregate amount of time spent in the United States is 180 days or more

during a one year period.

792.5 Agents. The use of a non-exclusive agent in the United

States for the sole purposes of accepting orders and remissions for

transmission to a firm in another country or of distributing

merchandise manufactured in another country and shipped to the United

States in bulk does not by itself constitute establishment of a place

in the United States.

793 Advance Payment Required.

793.1 Sample of Envelope. Senders affected by 791 must submit a

sample of the proposed mailing (envelope and contents) with (1) a

statement as to the number of items to be mailed, (2) when and where

the mailing will take place, and (3) a check, made payable to the U.S.

Postal Service, to cover the amount of the applicable U.S. postage, to

the:

Manager, Business Mail Acceptance, Customer Service and Sales, U.S.

Postal Service, 475 L'Enfant Plaza SW., Washington, DC 20260-6808.

793.2 Headquarters Notification. Notification of postage

acceptance and approval of the mailing will be given by Headquarters to

the sender and to the appropriate U.S. receiving exchange office. This

will permit the items in the mailing to go forward to the addresses

without delay when the items reach the United States.

794 Treatment if Advance Payment Not Made.

794.1 Return or Disposal of Items. Items may be returned to origin

or disposed of in accordance with postal regulations if U.S. postage is

not paid.

794.2 Mailings Received Without Advance Payment. A mailing subject

to 791 received without advance payment of U.S. domestic postage will

be held at the receiving exchange office. The exchange office will

report all such mailings to the:

Manager, Business Mail Acceptance, Customer Service and Sales, U.S.

Postal Service, 475 L'Enfant Plaza SW., Washington, DC 20260-6808.

Reports must contain (1) title and/or nature of the items, (2)

identity of sender, (3) number of items detained, (4) weight of a

single item, (5) foreign postage paid per item, and (6) office of

mailing. The exchange office will be advised to release the mail when

the applicable postage has been paid.

795 Report of Mailings.

Any mail appearing to be subject to the conditions of this

subchapter must be reported to Business Mail Acceptance, at USPS

Headquarters, by the U.S. receiving exchange office.

Exhibit 792.1

Canada

Denmark

Finland

France

Germany

Great Britain and Northern Ireland

Iceland

Ireland

Italy

Luxembourg

Netherlands

Norway

Spain

Sweden

Stanley F. Mires,

Chief Counsel, Legislative.

[FR Doc. 94-5428 Filed 3-9-94; 8:45 am]

BILLING CODE 7710-12-M