FAS Amends Dairy Import TRQ Program Rules
The Foreign Agricultural Service issued a final rule on July 27 to amend its Dairy Tariff-Rate Import Quota Licensing Program, extending a safe harbor for under-utilized historic licenses and moving to an electronic submission and reporting process (here). The final rule would also change payment requirements and timelines for license applications. The new regulations take effect Sept. 1.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Dairy TRQ licenses are required to import certain dairy articles under the low in-quota rate. Licenses are issued for each calendar year, and each license authorizes the license holder to import a specified quantity and type of dairy article from a specified country of origin. There are currently three types of licenses: historical licenses that are automatically renewed as long as the license holder meets applicable requirements; non-historical “lottery” licenses that cannot be renewed, and the holder must reapply and go through a lottery process if it wants to continue to import at the in-quota rate; and designated licenses that are issued to importers who have been designated by an exporting country to receive a license.
Suspension of restrictions on historical licenses. A regulation has been in place since 1999 that lowers the license amount for historical licenses if the holder surrenders more than 50 percent of its license amount for a given item from a given country in three out of five years (surrender is required, because holders must import 85% of the license amount in order to be eligible for a license). The provision has been suspended three times since it was issued, most recently for five years in 2010. In order to avoid the regulation taking effect in 2015, FAS is again suspending application of the provision for another seven years, through the 2022 quota year.
Electronic communications. FAS is also providing for a move to exclusively electronic communications in the application, reporting and payment processes. Under the final rule, importers attempting to qualify with unlicensed entries will have to obtain an electronic copy of their CBP Form 7501, such as a digital scan, and email them to the Agriculture Department. FAS will no longer accept mail, faxes, or hard copies, it said. Licensed importers qualifying with licensed entries will continue to be assessed for eligibility based solely on CBP import records, as cross-checked through DAIRIES, said FAS.
Payment required at application. Finally, FAS is requiring payment of fees for all approved applications, regardless of whether the license holder still wants the license. Up until now, license applicants could apply but surrender their license once it is granted, avoiding payment of fees. FAS said it is making the change because the agency still incurs administrative expenses when a license is approved but then surrendered. FAS is also tightening the timeline for making payments to 10 days after a license is issued, rather than 30.
(Federal Register 07/27/15)