Dairy Tariff-Rate Import Quota Licensing

DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 6

Dairy Tariff-Rate Import Quota Licensing

AGENCY: Office of the Secretary, USDA.

ACTION: Interim rule.

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SUMMARY: This rule amends Import Regulation 1, Revision 7 which governs

the administration of the import licensing system for certain dairy

products. A license qualifies imports of certain dairy products for

entry at the in-quota tariff rates established in the Harmonized Tariff

Schedule of the United States (HTS). This rule implements the Uruguay

Round Agreements Market access concessions.

DATES: This interim rule will be effective upon September 13, 1995.

Comments should be submitted on or before October 30, 1995 to be

assured of consideration.

ADDRESSES: Comments should be sent to the Dairy Import Quota Manager,

Import Policies and Programs Division, AG Box 1021, Foreign

Agricultural Service, U.S. Department of Agriculture, 14th and

Independence Avenue, S.W., Washington, D.C. 20250-1021. All comments

received will be available for public inspection in room 5541-S at the

above address.

FOR FURTHER INFORMATION CONTACT: Richard Warsack, Import Programs

Group, Import Policies and Programs Division, AG Box 1021, Foreign

Agricultural Service, U.S. Department of Agriculture, 14th and

Independence Avenue, S.W., Washington, D.C. 20250-1021, or telephone

(202) 720-2916.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This interim rule is issued in conformance with Executive Order

12866. It has been determined to be significant for the purposes of

E.O. 12866 and, therefore, has been reviewed by the Office of

Management and Budget (OMB).

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable to this interim rule since the Office of the Secretary is

not required by 5 U.S.C. 553 or any other provision of law to publish a

notice of proposed rulemaking with respect to the subject matter of

this rule.

Executive Order 12372

This program is not subject to the provisions of Executive Order

12372, which requires intergovernmental consultation with State and

local officials. See notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115 (June 24, 1983).

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Environmental Evaluation

It has been determined by an environmental evaluation that this

action will not have a significant impact on the quality of the human

environment. Therefore, neither an Environmental Assessment nor an

Environmental Impact Statement is needed.

Paperwork Reduction Act

This information collection for this interim rule was approved by

the Office of Management and Budget (OMB) pursuant to the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501 et seq.), under OMB control

number 0551-0001, expiring June 30, 1997.

Executive Order 12778

This interim rule has been reviewed under Executive Order 12778.

The provisions of this interim rule would have preemptive effect with

respect to any state or local laws, regulations, or policies which

conflict with such provisions or which otherwise impede their full

implementation. The interim rule would not have retroactive effect.

Background

This interim rule amends Import Regulation 1, Revision 7

(``Revision 7''), 7 CFR Part 6, which prescribes a system for licensing

importation of certain articles of dairy products which are subject to

tariff-rate quotas. Importers who hold licenses issued pursuant to

Revision 7 may enter these articles at the applicable lower in-quota

tariff rate; importers without license may enter these articles, but

are required to pay duty at the applicable higher over-quota rate.

Tariff-rate quotas for certain articles of dairy products resulted

from the Uruguay Round negotiations, and have been proclaimed in the

Harmonized Tariff System of the United States (``HTS''). This interim

rule is authorized by sections 103 and 404 of the Uruguay Round

Agreements Act, and the notes to Chapter 4 and General Note 15 of the

HTS.

In the Uruguay Round negotiations, the United States agreed to

liberalize access to the U.S. market for imports of certain articles of

dairy products. The United States agreed to convert the prior system of

absolute quotas to a system of tariff-rate quotas. The United States

also committed to increase, each year over a six-year period, the

quantities of those articles that would be eligible for the lower in-

quota rate of duty beyond the amounts that had been permitted to enter

under the prior absolute quota system. Finally, the United States

agreed to allocate those increased quantities among specified supplier

countries.

The United States agreed to implement these commitments as of the

dates on which the various supplier countries began to implement their

own Uruguay Round Agreements market access concessions. For most

supplier countries, this was January 1, 1995; however, there were six

countries that did not begin to implement their Uruguay Round

concessions until July 1, 1995.

The Uruguay Round concessions and access commitments on dairy

products have required the United States to make changes in its system

for regulating imports of dairy products. Under the prior regime of

absolute quotas, an importer had to obtain a license in order to import

an article of dairy products subject to a quota; with very limited

exceptions no imports were permitted without a license. The new tariff-

rate quota system will continue to operate on the basis of licenses but

with a basic difference. A tariff-rate quota is essentially a two-

tiered tariff system. An importer that obtains a license may enter a

specified quantity of an article at the lower, in-quota rate of duty.

An importer without a license will no longer be precluded from entering

an article; he or she may enter the article, but will be assessed duty

at the higher over-quota rate.

USDA began to implement the post-Uruguay Round system when it

published an interim rule on January 6, 1995 (60 Fed. Reg. 1989-1996)

amending Revision 7. That interim rule added a new Appendix 3 which

specified the quantities of articles of dairy products that, effective

January 1, 1995, had become available for supplementary licenses during

quota year 1995. The quantities specified reflected U.S. commitments to

those supplier countries who had implemented their own Uruguay Round

access commitments on January 1, 1995. The January 6 interim rule also

established new eligibility requirements for applicants seeking

licenses for non-cheese articles listed in Appendix 3, and prescribed

methods for allocating such non-cheese licenses. Finally, the January 1

interim rule changed various references in the text of the rule to

reflect the conversion in the U.S. tariff system from the old Tariff

Schedules of the United States (``TSUS'') to the HTS.

On May 2, 1995, USDA published a second interim rule (60 FR 21425-

28), again amending Revision 7 by revising Appendix 3 to reflect

additional amounts of dairy products that became available, effective

July 1, 1995, for supplementary licenses. These increases implemented

U.S. access commitments to the six countries who had begun to implement

their own access commitments effective July 1, 1995.

This interim rule again amends Appendix 3 to reflect additional

quantities of cheese and cheese products that will be eligible,

effective January 1, 1996, for supplementary license. These increases

reflect the additional amounts of access required to fulfill the second

year of the six-year commitment. This interim rule also changes, from

August 1 to October 1, the first day on which an application for

nonhistorical and supplementary license may be postmarked to receive

consideration. Finally, it modifies the eligibility requirements for

supplementary licenses for non-cheese articles by changing the time

period during which entries or exports of dairy products have to occur.

Although this interim rule, like the two previous interim rules,

reflects only modest adjustments in the basis operation of the dairy

products import system, USDA anticipates that it will soon propose more

fundamental changes to the system. On June 2, 1994, USDA published an

Advance Notice of Proposed Rulemaking (59 Fed. Reg. 28495) seeking

public comment and suggestions about ways to operate the system of

dairy product importation. Subsequently, on March 10, 1995, USDA held a

public hearing at which interested parties voiced their views and

comments on the current system and presented their suggestions about

changes or revisions to the system. Having had the benefit of these

public comments, USDA plans to publish a proposed rule in the near

future.

List of Subjects in 7 CFR Part 6

Agricultural commodities, Cheese, Dairy products, and Imports.

Interim Rule

Accordingly, 7 CFR Part 6, Subpart--Tariff-Rate Quotas is amended

as follows:

1. The authority citation is revised to read as follows:

Authority: Additional U.S. Notes 6, 7, 8, 12, 14, 16-23 and 25

to Chapter 4 and General Note 15 of the Harmonized Tariff Schedule

of the United States (19 U.S.C. 1202), Pub. L. 97-258, 96 Stat.

1051, as amended (31 U.S.C. 9701), and secs. 103 and 404, Pub. L.

103-465, 108 Stat. 4819 and 4959 (19 U.S.C. 3513 and 3601).

2. Section 6.25 is amended by revising paragraph (b)(4), removing

paragraph (c)(2), and redesignating paragraph (c)(3) as paragraph

(c)(2) and revising redesignated paragraph (c)(2)(ii) to read as

follows:

[[Page 47455]]

Sec. 6.25 Eligibility.

* * * * *

(b) * * *

(4) An application will not be approved if the submission of the

evidence and certifications required to establish nonhistorical

eligibility is postmarked before October 1 or later than November 1 of

the year preceding the quota year for which the license is requested.

If October 1 falls on a Saturday, Sunday, Federal holiday or day which

is not a full workday for the United States Postal Service,

applications postmarked on October 1 or any subsequent day(s) up to and

including the next full workday for the United States Postal Service

will be treated the same in determining priority in the issuance of

licenses, in the issuance of the import licenses.

(c) * * *

(2) * * *

(ii) Providing documentary evidence that the applicant has made at

least two separate commercial entries or exports of any dairy product

totaling not less than 38,000 kilograms during the 12 month period

ending August 1, 1995; or at least eight separate commercial entries or

exports totaling not less than 18,000 kilograms, each entry or export

being a minimum of 2,200 kilograms, with a minimum of two transactions

taking place in each of at least three quarters of the 12 month period

ending August 1, 1995.

* * * * *

3. Appendix 3 is revised to read as follows:

Appendix 3--Articles Subject to the Supplementary Licensing Provisions

of Import Regulation 1, Revision 7, and Respective Annual Tariff-Rate

Import Quotas for the 1996 Quota Year

Annual

supplementary

Article by HTS note number quota

(kilograms)

Butter (Note 6).......................................... 4,256,311

Dried Skim Milk (Note 7)................................. 1,241,359

Dried Whole Milk (Note 8)................................ 958,125

Butter Substitutes Containing over 45% by weight of

butterfat and butteroil (Note 14)....................... 4,000,500

Cheese and substitutes for cheese (except cheese not

containing cow's milk and soft ripened cow's milk

cheese, cheese (except cottage cheese) containing 0.5

percent or less by weight of butterfat, and articles

within the scope of other tariff-rate quotas provided

for in this subchapter) (Note 16)....................... 4,882,000

Australia............................................ 833,333

Austria.............................................. 182,000

Costa Rica........................................... 1,550,000

Czech Republic....................................... 200,000

EC................................................... 600,000

Poland............................................... 300,000

Slovak Republic...................................... 600,000

Switzerland.......................................... 166,667

Uruguay.............................................. 250,000

Any Country.......................................... 200,000

Blue-mold cheese (except Stilton produced in the United

Kingdom) and cheese and substitutes for cheese

containing, or processed from, blue-mold cheese (Note

17)..................................................... 176,667

Chile................................................ 26,667

Czech Republic....................................... 50,000

EC................................................... 100,000

Cheddar cheese, and cheese and substitutes for cheese

containing, or processed from, Cheddar cheese (Note 18). 2,673,333

Australia............................................ 416,667

EC................................................... 333,333

Chile................................................ 73,333

Czech Republic....................................... 50,000

New Zealand.......................................... 1,700,000

Any Country.......................................... 100,000

American-type cheese, including Colby, washed curd, and

granular cheese (but not including cheddar) and cheese

and substitutes for cheese containing or processed from

such American-type cheese (Note 19)..................... 33,333

EC................................................... 33,333

Edam and Gouda cheese, and cheese and substitutes for

cheese containing, or processed from, Edam and Gouda

Cheese (Note 20)........................................ 543,333

Argentina............................................ 110,000

Austria.............................................. 133,333

EC................................................... 200,000

Czech Republic....................................... 100,000

Italian-Type cheeses, made from cow's milk (Romano made

from cow's milk, Reggiano, Parmesan, Provolone,

Provoletti, Sbrinz, and Goya not in original loaves) and

cheese and substitutes for cheese containing, or

processed from, such Italian-Type cheeses, whether or

not in original loaves (Note 21)........................ 4,540,000

Argentina............................................ 1,890,000

EC................................................... 233,333

Uruguay.............................................. 750,000

Hungary.............................................. 400,000

Poland .............................................. 1,100,000

Romania.............................................. 166,667

Swiss and Emmenthaler cheese other than with eye

formation Gruyere-process, and cheese and substitutes

for cheese containing, or processed from such cheese

(Note 22)............................................... 126,667

Austria.............................................. 26,667

EC................................................... 100,000

Swiss and Emmenthaler cheese with eye formation (Note 25) 1,473,333

Austria.............................................. 73,333

EC................................................... 233,333

Sweden............................................... 300,000

Switzerland.......................................... 66,667

Czech Republic....................................... 400,000

Signed at Washington, D.C. on September 7, 1995.

Dan Glickman,

Secretary of Agriculture.

[FR Doc. 95-22817 Filed 9-11-95; 12:03 pm]

BILLING CODE 3410-01-P