Export Certificates for Lamb Meat Subject to Tariff-Rate Quota

AGENCY:

Customs Service, Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

This document adopts as a final rule, without change, the interim rule amending the Customs Regulations that was published in the Federal Register on December 2, 1999, as T.D. 99-87. The interim rule set forth the form and manner by which an importer establishes that a valid export certificate is in effect for certain fresh, chilled or frozen lamb meat that is the subject of a tariff-rate quota, and the product of a participating country, as defined in interim regulations of the United States Trade Representative (USTR). The export certificate enables the importer to claim the in-quota rate of duty on the lamb meat.

EFFECTIVE DATE:

December 13, 2000.

FOR FURTHER INFORMATION CONTACT:

Cynthia Porter, Office of Field Operations, (202-927-5399).

SUPPLEMENTARY INFORMATION:

Background

By Presidential Proclamation No. 7208 dated July 7, 1999, as modified by Presidential Proclamation No. 7214 of July 30, 1999, the President, acting under the authority of section 203 of the Trade Act of 1974 (19 U.S.C. 2253), established a tariff-rate quota with respect to certain fresh, chilled or frozen lamb meat exported to the United States on or after July 22, 1999.

Under a tariff-rate quota, the United States applies one tariff rate, known as the in-quota tariff rate, to imports of a product up to a particular amount, known as the in-quota quantity, and another, higher rate, known as the over-quota rate, to imports of a product in excess of the given amount. The preferential, in-quota tariff rate would be applicable only to the extent that the aggregate in-quota quantity of a product allocated to a country had not been exceeded.

It is noted that the tariff-rate quota on lamb meat was established in response to a determination by the U.S. International Trade Commission under section 202 of the Trade Act of 1974 (19 U.S.C. 2252) that lamb meat was being imported into the United States in such increased quantities as to substantially threaten serious injury to the domestic lamb meat industry. The tariff-rate quota is temporary in duration, being established for a period of three years and one day. It is intended to help facilitate efforts during this period by the domestic lamb meat industry to adjust to the increased import competition.

Specifically, the lamb meat covered by the tariff-rate quota consists of fresh, chilled or frozen lamb meat that is classified in subheading 0204.10.00, 0204.22.20, 0204.23.20, 0204.30.00, 0204.42.20, or 0204.43.20 of the Harmonized Tariff Schedule of the United States (HTSUS). In order to implement the tariff-rate quota for the described lamb meat, Presidential Proclamation No. 7208, as amended by Presidential Proclamation No. 7214, modified subchapter III of Chapter 99, HTSUS, so as to list the in-quota quantities of lamb meat allocated to those countries covered by the tariff-rate quota, together with the in-quota and over-quota rates of duty applicable to the lamb meat.

Under Presidential Proclamation No. 7214, the United States Trade Representative (USTR) was given authority to administer the tariff-rate quota on the imported lamb meat.

As part of the implementation of this tariff-rate quota, the USTR offered exporting countries that have an allocation of the in-quota quantity the opportunity to use export certificates for their lamb meat exports to the United States. While a country does not need to participate in the export-certificate program in order to receive the in-quota tariff rate for its share of the in-quota quantity, using export certificates assures an exporting country that only those exports that it intends for the United States market are counted against its in-quota allocation, and it helps ensure that such imports do not disrupt the orderly marketing of lamb meat in the United States.

The USTR issued an interim rule establishing regulations for this export-certificate program (15 CFR part 2014) (64 FR 56429; October 20, 1999). To this end, an exporting country wishing to participate in the export-certificate program must notify the USTR and provide the necessary supporting information. As defined in the USTR interim regulations (15 CFR 2014.2(c)), a participating country is a country that has received an allocation of the in-quota quantity of the tariff-rate quota, and that the USTR has determined, and has so informed Customs, is eligible to use export certificates for their lamb meat products exported to the United States. The USTR has stated that it intends to publish a notice in the Federal Register whenever a country becomes, or ceases to be, a participating country. In this connection, Australia and New Zealand have already requested, and have been approved by USTR, to use export certificates for their lamb meat that is exported to the United States, as noted in the USTR interim rule.

Accordingly, by a document published in the Federal Register (64 FR 67481) on December 2, 1999, as T.D. 99-87, Customs issued an interim rule setting forth a new § 132.16, Customs Regulations (19 CFR 132.16), in order to implement the USTR interim rule. Section 132.16 prescribes the form and manner by which an importer establishes that a valid export certificate exists, including a unique number for the certificate that must be referenced on the entry or withdrawal from warehouse for consumption. This was intended to ensure that no imports of the specified lamb meat products of a participating country would be counted against the country's in-quota allocation unless the products were covered by a proper export certificate. The export certificate enables the importer to claim the in-quota rate of duty on the lamb meat.

In addition, the interim rule revised the Interim (a)(1)(A) list of records required for the entry of merchandise, that is set forth in an Appendix to part 163, Customs Regulations (19 CFR part 163, Appendix). As amended, the list made reference to the requirement in § 132.15, Customs Regulations (19 CFR 132.15) and in new § 132.16, Customs Regulations (19 CFR 132.16), that an importer possess a valid export certificate, respectively, for beef or lamb meat subject to a tariff-rate quota that is the product of a participating country, in order that the importer may claim the applicable in-quota rate of duty. The interim rule also made a technical correction to § 132.15, Customs Regulations.

Discussion of Comments

Two comments were received in response to the interim rule. Both were submitted by or on behalf of trade associations. One commenter unconditionally supported the interim rule. The other commenter supported the establishment of an export-certificate program for lamb meat subject to the tariff-rate quota, but raised a question about how the applicable quota year under the export-certificate program was to be determined. The specific issue raised by this commenter, together with Customs response, is set forth below.

Comment

The commenter sought clarification as to whether the quota year under the export-certificate program was to be based on the date of entry or withdrawal for consumption, or on the date of exportation. The commenter asserted that the quota period for purposes of administering the tariff-rate quota for lamb meat should be based on the yearly period in which the lamb meat is entered or withdrawn for consumption, rather than on the yearly period in which the lamb meat is exported to the United States. The commenter requested that § 132.16 add a specific provision to this effect. The commenter believed that basing the quota period and the validity of the export certificate on the date of exportation, rather than on the date of entry or withdrawal for consumption, represented a departure from law as well as customary practice.

Customs Response

The administration of the tariff-rate quota for lamb meat was delegated to the USTR by Presidential Proclamation No. 7214 of July 30, 1999 (64 FR 42265; August 4, 1999). Thus, the determination of the quota year for purposes of the export-certificate program implementing this tariff-rate quota properly falls within the scope of USTR's authority. In adopting its interim rule as a final rule (65 FR 40049; June 29, 2000), the USTR has directly addressed the definition of the quota year in this matter.

Specifically, in accordance with 15 CFR 2014.2(g) of the USTR final rule, for purposes of applying the tariff-rate quota for lamb meat under the export-certificate program, the quota year is the yearly period in which the subject lamb meat is exported to the United States (from July 22, 1999 through July 21, 2000, inclusive; from July 22, 2000 through July 21, 2001, inclusive; and from July 22, 2001 through July 21, 2002, inclusive). This means that lamb meat covered by a valid export certificate would be entitled, upon entry or withdrawal for consumption, to the in-quota rate of duty that is in effect for the period within which the lamb meat is exported to the United States (15 CFR 2014.2(g), 2014.3(b)(2) and 2014.3(b)(4) of the USTR final rule).

For example, lamb meat subject to the export-certificate program that is exported on July 20, 2000, and entered for consumption on July 25, 2000, would be entitled to the in-quota rate of 9% ad valorem, if it is covered by a valid export certificate, because this is the in-quota rate in effect for the yearly (quota) period running from July 22, 1999, through July 21, 2000, inclusive, during which the product is exported to the United States.

It is noted that the USTR final rule in this case is governed by the Annex to Presidential Proclamation No. 7214 (64 FR 42265, at 42267) which plainly applies the tariff-rate quota for lamb meat based upon its date of exportation, as described above. To this effect, the Annex so modified subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS).

It is further noted that textile quotas, which are usually absolute in nature, are also similarly determined based upon the date of export, as opposed to the date of entry or withdrawal for consumption.

Conclusion

For these reasons, and after careful consideration of the comment and further review of the matter, Customs concludes that the amendments regarding parts 132 and 163, Customs Regulations (19 CFR parts 132 and 163) that appeared in the interim rule published in the Federal Register (64 FR 67481) on December 2, 1999, as T.D. 99-87, should be adopted as a final rule without change.

Inapplicability of Notice and Delayed Effective Date Requirements, the Regulatory Flexibility Act, and Executive Order 12866

Pursuant to the provisions of 5 U.S.C. 553(a), public notice is inapplicable to this final rule because it is within the foreign affairs function of the United States. Also, for the above reason, there is no need for a delayed effective date under 5 U.S.C. 553(d). Because this document is not subject to the requirements of 5 U.S.C. 553, as noted, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply; and because this document involves a foreign affairs function of the United States, it is not subject to the provisions of E.O. 12866.

Paperwork Reduction Act

The collections of information involved in this final rule have already been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) and assigned OMB Control Numbers 1515-0065 (Entry summary and continuation sheet) and 1515-0214 (General recordkeeping and record production requirements). This rule does not substantively change the existing approved information collections.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number assigned by OMB.

List of Subjects

19 CFR Part 132

• Agriculture and agricultural products
• Customs duties and inspection
• Quotas
• Reporting and recordkeeping requirements

19 CFR Part 163

• Administrative practice and procedure
• Customs duties and inspection
• Imports
• Reporting and recordkeeping requirements

Amendments to the Regulations

Accordingly, the amendments relating to parts 132 and 163 that appeared in the interim rule that was published at 64 FR 67481 on December 2, 1999, are adopted as a final rule without change.