80_FR_44394 80 FR 44251 - Dairy Tariff-Rate Quota Import Licensing Program

80 FR 44251 - Dairy Tariff-Rate Quota Import Licensing Program

DEPARTMENT OF AGRICULTURE
Foreign Agricultural Service

Federal Register Volume 80, Issue 143 (July 27, 2015)

Page Range44251-44258
FR Document2015-18122

This final rule amends the regulation that provides for the issuance of licenses to import certain dairy articles under tariff-rate quotas (TRQs) as set forth in the Harmonized Tariff Schedule of the United States. The three most significant changes to the rule are to suspend for an additional seven years the historical license reduction provision which was set to expire with the beginning of quota year 2016; to modify procedures for collecting licensing fees in order to better align the fee collection to the costs of administering the program; and to exclusively use electronic communications in the application, reporting and payment processes. The expected outcome from these changes is to allow license holders to adjust to changing market conditions impacting the dairy sector; increase the Department's ability to more closely align cost recovery with the actual costs of administering the program; and allow the Department to reduce lag times, minimize paper files, and increase the efficiency of the program operations.

Federal Register, Volume 80 Issue 143 (Monday, July 27, 2015)
[Federal Register Volume 80, Number 143 (Monday, July 27, 2015)]
[Rules and Regulations]
[Pages 44251-44258]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-18122]



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Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules 
and Regulations

[[Page 44251]]



DEPARTMENT OF AGRICULTURE

Foreign Agricultural Service

7 CFR Part 6

RIN 0551-AA82


Dairy Tariff-Rate Quota Import Licensing Program

AGENCY: Foreign Agricultural Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule amends the regulation that provides for the 
issuance of licenses to import certain dairy articles under tariff-rate 
quotas (TRQs) as set forth in the Harmonized Tariff Schedule of the 
United States. The three most significant changes to the rule are to 
suspend for an additional seven years the historical license reduction 
provision which was set to expire with the beginning of quota year 
2016; to modify procedures for collecting licensing fees in order to 
better align the fee collection to the costs of administering the 
program; and to exclusively use electronic communications in the 
application, reporting and payment processes. The expected outcome from 
these changes is to allow license holders to adjust to changing market 
conditions impacting the dairy sector; increase the Department's 
ability to more closely align cost recovery with the actual costs of 
administering the program; and allow the Department to reduce lag 
times, minimize paper files, and increase the efficiency of the program 
operations.

DATES: Effective Date: September 1, 2015.

FOR FURTHER INFORMATION CONTACT: Sugar and Dairy Branch, Import 
Policies and Export Reporting Division, Office of Trade Programs, 
Foreign Agricultural Service, U.S. Department of Agriculture, (202) 
720-0638; fax (202) 720-0876; [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    The rule has been determined to be not significant under E.O. 12866 
and has been reviewed by the Office of Management and Budget.

Regulatory Flexibility Act

    The Regulatory Flexibility Act ensures that regulatory and 
information requirements are tailored to the size and nature of small 
businesses, small organizations, and small governmental jurisdictions. 
This rule will not have a significant economic impact on small 
businesses participating in the program.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988. The 
provisions of this rule would not have a preemptive effect with respect 
to any State or local laws, regulations, or policies which conflict 
with such provision or which otherwise impede their full 
implementation. This rule will not have a retroactive effect. Before 
any judicial action may be brought forward regarding this rule, all 
administrative remedies must be exhausted.

National Environmental Policy Act

    The Administrator has determined that this action will not have a 
significant effect on the quality of the human environment. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is necessary for this rule.

Unfunded Mandates Reform Act (Pub. L. 104-4)

    Public Law 104-4 requires consultation with state and local 
officials and Indian tribal governments. This rule does not impose an 
unfunded mandate or any other requirement on state, local, or tribal 
governments. Accordingly, these programs are not subject to the 
provisions of the Unfunded Mandates Reform Act.

Executive Order 12630

    This Executive Order requires careful evaluation of governmental 
actions that interfere with constitutionally protected property rights. 
This rule does not interfere with any property rights and, therefore, 
does not need to be evaluated on the basis of the criteria outlined in 
Executive Order 12630.

Government Paperwork Elimination Act

    The United States Department of Agriculture (USDA) is committed to 
compliance with the Government Paperwork Elimination Act, which 
requires Government agencies, in general, to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible.

Background

    The Foreign Agricultural Service (FAS), under a delegation of 
authority from the Secretary of Agriculture, administers the Dairy 
Tariff-Rate Quota Import Licensing regulation codified at 7 CFR 6.20 
through 6.37 that provides for the issuance of licenses to import 
certain dairy articles under tariff-rate quotas (TRQs) as set forth in 
certain notes in Chapter 4 of the Harmonized Tariff Schedule of the 
United States. These dairy articles may only be entered into the United 
States at the low-tier tariff by or for the account of a person, as 
defined in the regulation, to whom such licenses have been issued and 
only in accordance with the terms and conditions of the regulation. 
Licenses are issued on a calendar year basis, and each license 
authorizes the licensee to import a specified quantity and type of 
dairy article from a specified country of origin.
    Under TRQs, a low tariff rate, commonly referred to as the in-quota 
rate, applies to imports up to a specified quantity. A higher tariff 
rate, commonly referred to as the over-quota rate, applies to any 
imports in excess of that amount. No license is required to import 
products at the over-quota tariff rate.
    USDA issues three types of licenses: Historical, non-historical 
(lottery), and designated. For all three license types, the current 
regulation provides that persons must apply each year between September 
1 and October 15. Historical and designated licensees may apply for 
lottery licenses subject to certain conditions. Licensees may fail to 
qualify for a license for a specific item from a specific country in 
the following year, if they do not meet certain requirements. Licensees 
must (i) apply for the license each year, (ii) pay an annual fee, and 
(iii) have imported at least 85 percent of the final license amount 
from the

[[Page 44252]]

previous year. To avoid ineligibility due to the 85 percent rule, 
licensees may surrender up to 100 percent of the license, but must 
import 85 percent of any quantity not surrendered. Section 6.25(b) of 
this regulation provides that beginning with the 2023 quota year, any 
historical licensee who surrenders more than 50 percent of the license 
amount for the same item from the same country during at least three of 
the most recent five years will be issued a license thereafter in an 
amount equal to the average amount imported under that license for 
those five quota years.
    This rule provides historical license holders additional time to 
adjust to changing market conditions by suspending the Sec.  6.25(b) 
provision through the end of quota year 2022. Since this rule was 
adopted in order to implement U.S. obligations under the Uruguay Round 
Agreement on Agriculture, the Sec.  6.25(b) provision has previously 
been suspended on three different occasions: For five years, 2001-2005; 
for two years, 2009-10; and for five years, 2011-15. The rule also now 
provides that reporting, payment, and application for licenses be made 
only by electronic submission in order to reduce the use of paper and 
streamline operations. Additionally, the rule modifies procedures for 
collecting licensing fees in order to better align the fee collection 
with the costs of administering the program. The previous regulation 
allowed applicants to apply for a license, generating administrative 
costs for the USDA, and then choose not to pay for the license, thus 
resulting in unrecovered administrative expenses. This rule imposes 
financial consequences for such non-payment, which will increase USDA's 
ability to recover program expenses.
    This rule does not make any modifications to the appendices to this 
subpart.

Discussion of Comments

    On February 6, 2013, USDA published in the Federal Register (78 FR 
8434) an advanced notice of proposed rulemaking (ANPR) soliciting 
comment on all aspects of the previous dairy import licensing rule. 
USDA received comments from 46 interested parties and a summary of the 
comments was provided in the background to the Proposed Rule published 
December 23, 2014 (79 FR 76919).
    The comment period on the Proposed Rule ended February 23, 2015, 
and a total of 23 comments were received. Twenty-two of the comments 
received were similar in nature, provided support for the proposed 
rule, and are summarized as follows.

Historical License Reduction Provision

    Respondents generally support the additional seven year suspension 
of the historical license reduction provision (Sec.  6.25(b)) from the 
rule, but would prefer its complete elimination. They were concerned 
that market factors outside of importers' control will in the future 
lead to low fill-rates and possible loss of licenses. One respondent 
did not oppose the additional seven year suspension, but suggested it 
be enforced only to the same extent as the relative fill rates for non-
historical licenses. In such a system, a historical license holder 
would not be in jeopardy unless its fill rate fell below the fill-rate 
of non-historical licenses for the same article.
    Response: USDA chose the seven year suspension over complete 
elimination because the provision is generally in the public interest. 
As market conditions change, it may be important in the future to 
maintain the existence of the Sec.  6.25(b) provision in order to have 
a mechanism that stimulates the transfer of under-utilized historical 
licenses to the lottery category. USDA will not adopt a new system, 
such as the proposal to link Sec.  6.25(b) provisions for retaining 
licenses with fill rates in the lottery category, because of the 
complexity of administering such a system and the lack of support from 
other respondents.

Timing of Implementation of Historical License Reduction Provision

    They oppose implementing the historical license reduction provision 
beginning in 2023, and propose instead that 2023 would be the first of 
a new five-year base period lasting until 2027. Under this scheme, the 
first reductions could not occur until 2028.
    Response: USDA chose to follow the same process used for the three 
previous suspensions. The seven year suspension should allow historical 
licenses holders sufficient time to adjust to changing market 
conditions and take necessary actions to comply with the provision.

Administering the License Fee

    They generally support the proposed changes to tightening the 
timeline for making payments to 10 days from the date of issuance, and 
support requiring that an applicant who applies for and is issued a 
license pay for all licenses issued. One respondent preferred to 
maintain the payment deadline at 30 days and opposed revoking an entire 
licensee's portfolio for failure to pay the fee for a single license 
within ten days of receipt of a warning letter.
    Response: USDA will implement the proposed changes to the license 
fee payment timeline and loss of all licenses for failure to pay for 
all licenses. The proposed changes have the support of the large 
majority of respondents, will expedite the processing of licenses and 
will allow USDA to better align the fee collection to the costs of 
administering the program.

Level of the License Fee

    Twenty of the 23 respondents expressed concerns with the rising 
costs of license fees. These 20 respondents did not express concerns 
with the current fee but noted that fees have increased by more than 66 
percent in recent years and expressed an opinion that future increases 
be avoided.
    Response: USDA sets the license fee at the total estimated cost of 
administering the licensing program, divided by the number of licenses 
issued and accepted. The proposed changes will more closely align the 
fees to the cost of administering the program.

Electronic Communication

    Twenty-two respondents commented that they appreciated the desire 
to move toward exclusive use of electronic communications, but are 
concerned about the ability of USDA's computer system to automatically 
access entry data from the CBP system. If eligibility requirements 
cannot be verified through entries on the CBP system, USDA currently 
requests CBP Form 7501 in order to conduct a manual evaluation. 
Unlicensed importers and licensed importers attempting to qualify with 
unlicensed entries occasionally submit the forms to USDA via U.S. Mail 
to verify entries and eligibility.
    Response: USDA recognizes the need for manual verification of the 
CBP Form 7501 for un-licensed importers and licensed importers 
attempting to qualify with unlicensed entries. USDA has amended this 
final rule to explicitly recognize emails and attached electronic files 
(e.g. PDFs, Word Documents, and Excel Spreadsheets) as electronic 
communications. Licensed and un-licensed importers attempting to 
qualify using unlicensed entries must obtain an electronic copy, such 
as a digital scan of the CBP-7501 forms, and email them to USDA. USDA 
will no longer accept U.S. Mail, faxes, or hard copies. Licensed 
importers qualifying with licensed entries will continue to be assessed 
for eligibility based solely on CBP import records as cross-checked 
through DAIRIES. No additional verification is required for licensed 
refiners qualifying with licensed entries.

[[Page 44253]]

    One respondent recommended the replacement of the current lottery 
system for non-historical and surrendered licenses with a first-come-
first-served (FCFS) system. The respondent stated that a FCFS system 
would provide simplicity, lower transaction costs, eliminate licensing 
fees, allow greater flexibility for adapting to new market conditions 
and allow for continuing business relationships.
    Response: USDA will not replace the current licensing system with a 
FCFS system. Although USDA recognizes some advantages to a FCFS system, 
the current system generally permits adequate flexibility to administer 
the dairy import licensing requirements.

Summary of Changes to Final Rule

    The following is a summary of the substantive changes to the final 
regulation:
    The name of the program has been changed throughout the document to 
read ``Dairy Tariff-Rate Quota Import Licensing.''
    References to the process used for the initial allocation of 
licenses, which took place based on the 1997 quota year, have been 
removed throughout this rule due to the fact that current allocations 
are now based on the preceding quota year. References to the 1997 quota 
year allocations were removed from the following sections: Sec. Sec.  
6.20(b), 6.23(b)(2), 6.23(b)(3), 6.23(b)(4), 6.23(b)(5), 6.25(a)(1), 
6.25(a)(2), 6.25(a)(3), and 6.26(f).
    Section 6.21 Definitions has been updated to include several 
modifications. The definition of ``Article other than cheese or cheese 
products'' now specifies that the article is a dairy product. The 
definition of ``EC'' no longer lists the current members, because new 
members may be added at any time. Therefore, the definition of ``EC'' 
is defined to be those countries listed in Additional U.S. Note 2 to 
Chapter 4 of the Harmonized Tariff Schedule, because this is published 
annually and maintained current. ``Customs'' has been replaced 
throughout the rule with ``CBP'' which stands for U.S. Customs and 
Border Protection. The definition of ``Licensing Authority'' removes 
reference to a specific USDA division. The definition of ``Other 
Countries'' deletes the reference to the Harmonized Tariff Schedule. 
The definition of ``Postmark'' is deleted from this section, given that 
physical mail will no longer be accepted. This rule requires that all 
communications, applications, reporting and payment be made 
electronically as designated by the Licensing Authority. Therefore, 
references to physical mail, postmarks, mailing addresses, or physical 
locations have been deleted throughout the rule. The references to 
physical mail delivery that have been deleted are found in the 
following sections: Sec. Sec.  6.24(a), 6.24(b)(1), 6.24(c), 
6.25(d)(1), 6.26(a), 6.26(c), 6.28(b), 6.33(b), 6.33(c), 6.35(b), and 
6.36(b). Additionally, a valid email address is now required for 
eligibility. The requirement for an email address has been added to 
Sec.  6.23(a)(3).
    Section 6.22(b) was deleted from the rule because these references 
to General Note 15 provisions of the HTS are not covered, nor in any 
way affected, by the dairy import licensing program.
    Section 6.24(b)(1) requires for licensed qualifying entries, 
verification will be only processed through DAIRIES and cross checked 
with entries in the CBP system. For unlicensed qualifying entries, the 
applicant will submit an electronic copy (e.g. scanned PDF) of CBP Form 
7501 to the Licensing Authority.
    Section 6.24(c) was deleted because it primarily applied to mailed 
hardcopy applications. The information submitted through the current 
electronic application system obviates the need for submitting this 
additional information.
    Section 6.25(a)(1) through (3) was deleted because the historic 
allocation process is no longer relevant. New quota year allocations 
are made based on the preceding year's allocations and usage.
    Section 6.25(b) extends the date of the suspension of the 
historical licenses reduction provision for an additional seven years, 
expiring with the beginning of quota year 2023.
    Section 6.25(d)(1)(ii) requires, for Appendix 3 allocations, that 
countries designate the allocations of specific articles to importers 
in kilograms. This requirement will reduce any disputes arising from 
converting percentages into weights.
    Section 6.26(c) was rewritten to clarify the surrender and 
allocation process for persons who were issued an import license for a 
cheese or cheese product article versus a person who was issued an 
import license for an article other than cheese or cheese products.
    Section 6.28(b) requires that all license holders who intend to 
convey their business and are requesting USDA to transfer a license, 
submit the required documentation by email. The option to send 
documents via physical mail or courier is no longer available.
    Section 6.33(b) tightens the timeline for making payments and 
requires payment in full within 10 days from the date of the issuance 
of the license, rather than the current 30 day period. This change 
would allow USDA to accelerate some of its administrative functions of 
operating the licensing program because the use of electronic payment 
does not require the longer lag time necessary for processing paper 
checks.
    Section 6.33(c) requires that an applicant who applies for and is 
issued a license pay for all licenses issued, or a hold will be placed 
on all licenses of such applicant. If after receiving a warning letter 
via email from the Licensing Authority, the applicant does not pay in 
full within 10 days for all licenses issued, then all licenses issued 
to the licensee, paid or unpaid, will be revoked.
    Section 6.33(d) is deleted pursuant to the previous clause (Sec.  
6.33(c)) and no longer permits licensees not to accept or pay for 
certain licenses issued to them. The cost of administering the 
licensing program is incurred by USDA during the application and 
allocation process; therefore, applicants will be required to pay for 
licenses issued in accordance with Sec.  6.33(c) or have all licenses 
revoked.
    Section 6.37 is removed. This administrative change is an 
improvement in the method of publishing the annual adjustment of the 
appendixes to reflect changes in the quantities of historical (Appendix 
1) and lottery (appendix 2) license amounts (section 6.37). Previously, 
the final rule required an amendment each year. Instead, the Department 
of Agriculture will now annually publish the adjustments to the 
appendixes by Notice in the Federal Register.

List of Subjects in 7 CFR Part 6

    Agricultural commodities, Dairy, Cheese, Imports, Procedural rules, 
Application requirements, Tariff-rate quota, Reporting and 
recordkeeping requirements.

    Accordingly, for these reasons, 7 CFR part 6 is amended as follows:

PART 6--IMPORT QUOTAS AND FEES

Subpart--Dairy Tariff-Rate Quota Import Licensing

0
1. The authority citation for Subpart--Dairy Tariff-Rate Quota Import 
Licensing continues 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 (19 U.S.C. 3513 and 3601).


[[Page 44254]]



0
2. The heading for ``Subpart--Dairy Tariff-Rate Import Quota 
Licensing'' is revised to read as set forth above.

0
3. Sections 6.20 through 6.36 are revised to read as follows:

6.20 Introduction.
6.21 Definitions.
6.22 Requirement for a license.
6.23 Eligibility to apply for a license.
6.24 Application for a license.
6.25 Allocation of licenses.
6.26 Surrender and reallocation.
6.27 Limitations on use of license
6.28 Transfer of license.
6.29 Use of licenses.
6.30 Record maintenance and inspection.
6.31 Debarment and suspension.
6.32 Globalization of licenses.
6.33 License fee.
6.34 Adjustment of appendices.
6.35 Correction of errors.
6.36 Miscellaneous.
* * * * *


Sec.  6.20  Introduction.

    (a) Presidential Proclamation 6763 of December 23, 1994, modified 
the Harmonized Tariff Schedule of the United States affecting the 
import regime for certain articles of dairy products. The Proclamation 
terminated quantitative restrictions that had been imposed pursuant to 
section 22 of the Agricultural Adjustment Act of 1933, as amended (7 
U.S.C. 624); proclaimed tariff-rate quotas for such articles pursuant 
to Public Law 103-465; and specified which of such articles may be 
entered only by or for the account of a person to whom a license has 
been issued by the Secretary of Agriculture.
    (b) Effective January 1, 1995, the prior regime of absolute quotas 
for certain dairy products was replaced by a system of tariff-rate 
quotas. The articles subject to licensing under the tariff-rate quotas 
are listed in Appendices 1, 2, and 3 to be published annually in a 
notice in the Federal Register. Licenses permit the holder to import 
specified quantities of the subject articles into the United States at 
the applicable in-quota rate of duty. If an importer has no license for 
an article subject to licensing, such importer will, with certain 
exceptions, be required to pay the applicable over-quota rate of duty.
    (c) The Secretary of Agriculture has determined that this subpart 
will, to the fullest extent practicable, result in fair and equitable 
allocation of the right to import articles subject to such tariff-rate 
quotas. The subpart will also maximize utilization of the tariff-rate 
quotas for such articles, taking due account of any special factors 
which may have affected or may be affecting the trade in the articles 
concerned.


Sec.  6.21  Definitions.

    As used in this subpart and the appendices thereto, the following 
terms are defined as follows:
    Article. One of the products listed in Appendices 1, 2, or 3, which 
are the same as those described in Additional U.S. Notes 6, 7, 8, 12, 
14, 16-23 and 25 to Chapter 4 of the Harmonized Tariff Schedule.
    Article other than cheese or cheese products. Any article that is a 
dairy product, but not a cheese or cheese product.
    CBP. United States Customs and Border Protection, U.S. Department 
of Homeland Security.
    Cheese or cheese products. Articles in headings 0406, 1901.90.34, 
and 1901.90.36 of the Harmonized Tariff Schedule.
    Commercial entry. Any entry except those made by or for the account 
of the United States Government or for a foreign government, for the 
personal use of the importer or for sampling, taking orders, research, 
or the testing of equipment.
    Country. Country of origin as determined in accordance with CBP 
rules and regulations, except that ``EC'', and ``Other countries'' 
shall each be treated as a country.
    DAIRIES. The ``Dairy Accelerated Importer Retrieval and Information 
Exchange System''. The web-based user interface system which persons 
must utilize to apply for and manage licenses, and through which the 
Licensing Authority will communicate all program notices.
    Dairy products. Articles in headings 0401 through 0406, margarine 
cheese listed under headings 1901.90.34 and 1901.90.36, ice cream 
listed under heading 2105, and casein listed under heading 3501 of the 
Harmonized Tariff Schedule.
    Department. The United States Department of Agriculture.
    EC. Those countries listed in Additional U.S. Note 2 to Chapter 4 
of the Harmonized Tariff Schedule.
    Enter or Entry. To make or making entry for consumption, or 
withdrawal from warehouse for consumption in accordance with CBP 
regulations and procedures.
    Harmonized Tariff Schedule or HTS. The Harmonized Tariff Schedule 
of the United States.
    Licensee. A person to whom a license has been issued under this 
subpart.
    Licensing Authority. Any officer or employee of the U.S. Department 
of Agriculture designated to act in this position by the Director of 
the Division charged with managing the Dairy Tariff-Rate Quota Import 
Licensing System.
    Other countries. Countries not listed by name as having separate 
tariff-rate quota allocations for an article.
    Person. An individual, firm, corporation, partnership, association, 
trust, estate or other legal entity.
    Process or processing. Any additional preparation of a dairy 
product, such as melting, grating, shredding, cutting and wrapping, or 
blending with any additional ingredient.
    Quota year. The 12-month period beginning on January 1 of a given 
year.
    Tariff-rate quota amount or TRQ amount. The amount of an article 
subject to the applicable in-quota rate of duty established under a 
tariff-rate quota.
    United States. The customs territory of the United States, which is 
limited to the 50 states, the District of Columbia, and Puerto Rico.


Sec.  6.22  Requirement for a license.

    A person who seeks to enter, or cause to be entered an article as a 
commercial entry, shall obtain a license, in accordance with this 
subpart.


Sec.  6.23  Eligibility to apply for a license.

    (a) In general. To apply for any license, a person shall have:
    (1) A business office, and be doing business, in the United States, 
and
    (2) An agent in the United States for service of process, and
    (3) An email address to be used for correspondence regarding 
licensing activities and reports.
    The licensee is responsible to continuously maintain a valid email 
address in DAIRIES for use in communicating with the Licensing 
Authority.
    (b) Eligibility for 2016 and subsequent quota years. (1) Historical 
licenses (Appendix 1). A person issued a historical license for an 
article for the current quota year may apply for a historical license 
(Appendix 1) for the next quota year for the same article from the same 
country, if such person was, during the 12-month period ending August 
31 prior to the quota year, either:
    (i) Where the article is cheese or cheese product,
    (A) The owner of and importer of record for at least three separate 
commercial entries of cheese or cheese products totaling not less than 
57,000 kilograms net weight, each of the three entries not less than 
2,000 kilograms net weight;
    (B) The owner of and importer of record for at least eight separate 
commercial entries of cheese or cheese products, from at least eight 
separate shipments, totaling not less than 19,000 kilograms net weight, 
each of the eight

[[Page 44255]]

entries not less than 450 kilograms net weight, with a minimum of two 
entries in each of at least three quarters during that period; or
    (C) The owner or operator of a plant listed in Section II or listed 
in Section I as a processor of cheese of the most current issue of 
``Dairy Plants Surveyed and Approved for USDA Grading Service'' and had 
processed or packaged at least 450,000 kilograms of cheese or cheese 
products in its own plant in the United States; or
    (ii) Where the article is not cheese or cheese product,
    (A) The owner of and importer of record for at least three separate 
commercial entries of dairy products totaling not less than 57,000 
kilograms net weight, each of the three entries not less than 2,000 
kilograms net weight;
    (B) The owner of and importer of record for at least eight separate 
commercial entries of dairy products, from at least eight separate 
shipments, totaling not less than 19,000 kilograms net weight, each of 
the eight entries not less than 450 kilograms net weight, with a 
minimum of two entries in each of at least three quarters during that 
period;
    (C) The owner or operator of a plant listed in the most current 
issue of ``Dairy Plants Surveyed and Approved for USDA Grading 
Service'' and had manufactured, processed or packaged at least 450,000 
kilograms of dairy products in its own plant in the United States; or
    (D) The exporter of dairy products in the quantities and number of 
shipments required under (A) or (B) above.
    (2) Nonhistorical licenses for cheese or cheese products (Appendix 
2). A person may annually apply for a nonhistorical license for cheese 
or cheese products (Appendix 2) if such person meets the requirements 
of paragraph (b)(1)(i) of this section.
    (3) Nonhistorical licenses for articles other than cheese or cheese 
products (Appendix 2). A person may annually apply for a nonhistorical 
license for articles other than cheese or cheese products (Appendix 2) 
if such person meets the requirements of paragraph (b)(1)(ii) of this 
section.
    (4) Designated license (Appendix 3). A designated license may be 
issued to a person who has applied for a license, has met the 
requirements of paragraph (b)(1)(i) of this section, and is designated 
by the government of a country for such license according to Sec.  
6.25(d).
    (c) Exceptions. (1) A licensee that fails in a quota year to enter 
at least 85 percent of the amount of an article permitted under a 
license shall not be eligible to receive a license for the same article 
from the same country for the next quota year. For the purpose of this 
paragraph, the amount of an article permitted under the license will 
exclude any amounts surrendered pursuant to Sec.  6.26(a), but will 
include any additional allocations received pursuant to Sec.  6.26(b).
    (2) Paragraph (c)(1) of this section will not apply where the 
licensee demonstrates to the satisfaction of the Licensing Authority 
that the failure resulted from breach by a carrier of its contract of 
carriage, breach by a supplier of its contract to supply the article, 
act of God or force majeure.
    (3) Paragraph (c)(1) of this section may not apply in the case of 
historical or nonhistorical licenses, where the licensee demonstrates 
to the satisfaction of the Licensing Authority that the country 
specified on the license maintains or permits an export monopoly to 
control the dairy articles concerned and the licensee petitions the 
Licensing Authority to waive this requirement. The licensee shall 
submit evidence that the country maintains an export monopoly as 
defined in this paragraph. For the purposes of this paragraph ``export 
monopoly'' means a privilege vested in one or more persons consisting 
of the exclusive right to carry on the exportation of any article of 
dairy products from a country to the United States.
    (4) The Licensing Authority will not issue a nonhistorical license 
(Appendix 2) for an article from a country during a quota year to an 
applicant who is affiliated with another applicant to whom the 
Licensing Authority is issuing a non-historical license for the same 
article from the same country for that quota year. Further, the 
Licensing Authority will not issue a nonhistorical license for butter 
to an applicant who is affiliated with another applicant to whom the 
Licensing Authority is issuing a historical butter license of 57,000 
kilograms or greater. For the purpose of this paragraph, an applicant 
will be deemed affiliated with another applicant if:
    (i) The applicant is the spouse, brother, sister, parent, child or 
grandchild of such other applicant;
    (ii) The applicant is the spouse, brother, sister, parent, child or 
grandchild of an individual who owns or controls such other applicant;
    (iii) The applicant is owned or controlled by the spouse, brother, 
sister, parent, child or grandchild of an individual who owns or 
controls such other applicant.
    (iv) Both applicants are 5 percent or more owned or directly or 
indirectly controlled, by the same person;
    (v) The applicant, or a person who owns or controls the applicant, 
benefits from a trust that controls such other applicant.
    (5) The Licensing Authority will not issue a nonhistorical license 
(Appendix 2) for an article from a country during a quota year to an 
applicant who is associated with another applicant to whom the 
Licensing Authority is issuing a nonhistorical license for the same 
article from the same country for that quota year. Further, the 
Licensing Authority will not issue a nonhistorical license for butter 
to an applicant who is associated with another applicant to whom the 
Licensing Authority is issuing a historical butter license for 57,000 
kilograms or greater. For the purpose of this paragraph, an applicant 
will be deemed associated with another applicant if:
    (i) The applicant is an employee of, or is controlled by an 
employee of, such other applicant;
    (ii) The applicant manages or is managed by such other applicant, 
or economically benefits, directly or indirectly, from the use of the 
license issued to such other applicant.
    (6) The Licensing Authority will not issue a nonhistorical license 
for an article from a country during a quota year, for which the 
applicant receives a designated license.


Sec.  6.24  Application for a license.

    (a) Application for license shall be made on electronic forms 
designated for the purpose by the Licensing Authority. All parts of the 
application shall be completed. The application shall be transmitted no 
earlier than September 1 and no later than midnight October 15 of the 
year preceding that for which license application is made. The 
Licensing Authority will not accept incomplete applications.
    (b)(1) Where the applicant seeks to establish eligibility on the 
basis of imports, applications shall include identification of entries 
sufficient to establish the applicant as the importer of record of 
entries required under Sec.  6.23, during the 12-month period ending 
August 31 prior to the quota year for which license is being sought. 
For qualifying licensed entries, verification will be only processed 
through DAIRIES and cross checked with entries in the CBP system. For 
qualifying unlicensed entries, the applicant will submit an electronic 
copy (e.g. scanned PDF) of CBP Form 7501 to the Licensing Authority.
    (2) Where the applicant seeks to establish eligibility on the basis 
of exports, applications shall include:

[[Page 44256]]

    (i) Census Form 7525 or a copy of the electronic submission of such 
form, and
    (ii) The commercial invoice or bill of sale for the quantities and 
number of export shipments required under Sec.  6.23, during the 12-
month period ending August 31 prior to the quota year for which license 
is being sought.
    (c) An applicant requesting more than one nonhistorical license 
must rank order these requests by the applicable Additional U.S. Note 
number. Cheese and cheese products must be ranked separately from dairy 
articles other than cheese or cheese products.


Sec.  6.25  Allocation of licenses.

    (a) Licensing Authority. The Licensing Authority will issue 
historical, nonhistorical and designated licenses.
    (b) Historical licenses for the 2016 and subsequent quota years 
(Appendix 1). A person issued a historical license for the current 
quota year will be issued a historical license in the same amount for 
the same article from the same country for the next quota year except 
that beginning with the 2023 quota year, a person who has surrendered 
more than 50 percent of such historical license in at least three of 
the prior 5 quota years will thereafter be issued a license in an 
amount equal to the average annual quantity entered during those 5 
quota years.
    (c) Nonhistorical licenses (Appendix 2). The Licensing Authority 
will allocate nonhistorical licenses on the basis of a rank-order 
lottery system, which will operate as follows:
    (1) The minimum license size shall be:
    (i) Where the article is cheese or cheese product:
    (A) The total amount available for nonhistorical license where such 
amount is less than 9,500 kilograms;
    (B) 9,500 kilograms where the total amount available for 
nonhistorical license is between 9,500 kilograms and 500,000 kilograms, 
inclusive;
    (C) 19,000 kilograms where the total amount available for 
nonhistorical license is between 500,001 kilograms and 1,000,000 
kilograms, inclusive;
    (D) 38,000 kilograms where the total amount available for 
nonhistorical license is greater than 1,000,000 kilograms; or
    (E) An amount less than the minimum license size established in 
paragraphs (c)(1)(i) (A) through (D) of this section, if requested by 
the licensee;
    (ii) Where the article is not cheese or cheese product:
    (A) The total amount available for nonhistorical license where such 
amount is less than 19,000 kilograms;
    (B) 19,000 kilograms where the total amount available for 
nonhistorical license is between 19,000 kilograms and 550,000 
kilograms, inclusive;
    (C) 38,000 kilograms where the total amount available for 
nonhistorical license is between 550,001 kilograms and 1,000,000 
kilograms, inclusive; and
    (D) 57,000 kilograms where the total amount available for 
nonhistorical license is greater than 1,000,000 kilograms;
    (E) An amount less than the minimum license sizes established in 
paragraphs (c)(1)(i)(A) through (D) of this section, if requested by 
the licensee.
    (2) Taking into account the order of preference expressed by each 
applicant, as required by Sec.  6.24(c), the Licensing Authority will 
allocate licenses for an article from a country by a series of random 
draws. A license of minimum size will be issued to each applicant in 
the order established by such draws until the total amount of such 
article in Appendix 2 has been allocated. An applicant that receives a 
license for an article will be removed from the pool for subsequent 
draws until every applicant has been allocated at least one license, 
provided that the licenses for which they applied are not already fully 
allocated. Any amount remaining after the random draws which is less 
than the applicable minimum license size may, at the discretion of the 
licensing Authority, be prorated equally among the licenses awarded for 
that article.
    (d) Designated licenses (Appendix 3). (1) With respect to an 
article listed in Appendix 3, the government of the applicable country 
may, not later than October 31 prior to the beginning of a quota year, 
submit directly by email to the Licensing Authority:
    (i) The names, addresses and emails of the importers that it is 
designating to receive licenses; and
    (ii) The amount, in kilograms, of such article for which each such 
importer is being designated. Where quantities for designation result 
from both Tokyo Round concessions and Uruguay Round concessions, the 
designations should be made in terms of each.
    (2) To the extent practicable, the Licensing Authority will issue 
designated licenses to those importers, and in those amounts, indicated 
by the government of the applicable country, provided that the importer 
designated meets the eligibility requirements set forth in Sec.  6.23. 
Consistent with the international obligations of the United States, the 
Licensing Authority may disregard a designation if the Licensing 
Authority determines that the person designated is not eligible for any 
of the reasons set forth in Sec.  6.23(c)(1) or (2).
    (3) If a government of a country which negotiated in the Uruguay 
Round for the right to designate importers has not done so, but 
determines to designate importers for the next quota year, it shall 
indicate its intention to do so directly and in writing to the 
Licensing Authority not later than July 1 prior to the beginning of 
such next quota year. Furthermore, if a government that has designated 
importers for a quota year determines that it will not continue to 
designate importers for the next quota year, it shall so indicate 
directly and in writing to the Licensing Authority, not later than July 
1 prior to such next quota year.


Sec.  6.26  Surrender and reallocation.

    (a) If a licensee determines that it will not enter the entire 
amount of an article permitted under its license, such licensee shall 
surrender its license right to enter the amount that it does not intend 
to enter. Surrender shall be made to the Licensing Authority no later 
than October 1. Any surrender shall be final and shall be only for that 
quota year, except as provided in Sec.  6.25(b). The amount of the 
license not surrendered shall be subject to the license use 
requirements of Sec.  6.23(c)(1).
    (b) For each quota year, the Licensing Authority will, to the 
extent practicable, reallocate any amounts surrendered.
    (c) Any person who qualified for or was issued a cheese or cheese 
product license for a quota year may apply to receive additional 
license, or addition to an existing license for a portion of the amount 
being reallocated. A person who did not qualify for a cheese or cheese 
product license for a quota year, but qualified only for a license for 
articles other than cheese or cheese products, may only apply to 
receive an additional license for articles other than cheese or cheese 
products, or addition to an existing license for articles other than 
cheese or cheese products for a portion of the amount being 
reallocated. The application shall be submitted to the Licensing 
Authority no earlier than September 1 and not later than September 15, 
and shall specify:
    (1) The name and control number of the applicant;
    (2) The article and country being requested, the applicable HTS 
Additional U.S. Note number and, if more than one article is requested, 
a rank-order by Additional U.S. Note number; and
    (3) If applicable, the number of the license issued to the 
applicant for that quota year permitting entry of the same article from 
the same country.
    (d) The Licensing Authority will reallocate surrendered amounts 
among applicants as follows:

[[Page 44257]]

    (1) The minimum license size, or addition to an existing license, 
will be the total amount of the article from a country surrendered, or 
10,000 kilograms, whichever is less;
    (2) Minimum size licenses, or additions to an existing license, 
will be allocated among applicants requesting articles on the basis of 
the rank-order lottery system described in Sec.  6.25(c);
    (3) If there is any amount of an article from a country left after 
minimum size licenses have been issued, the Licensing Authority may 
allocate the remainder in any manner it determines equitable among 
applicants who have requested that article; and
    (4) No amount will be reallocated to a licensee who has surrendered 
a portion of its license for the same article from the same country 
during that quota year unless all other licensees applying for a 
reallocated quantity have been allocated a license;
    (e) However, if the government of an exporting country chooses to 
designate eligible importers for surrendered amounts under Appendix 3, 
the Licensing Authority shall issue the licenses in accordance with 
Sec.  6.25(d)(2), provided that the government of the exporting country 
notifies the Licensing Authority of its designations no later than 
September 1. Such notification shall contain the names, addresses, and 
emails addresses of the importers that it is designating and the amount 
in kilograms of such article for which each importer is being 
designated. In such case the requirements of paragraph (c) of this 
section shall not apply.


Sec.  6.27  Limitations on use of license.

    (a) A licensee shall not obtain or use a license for speculation, 
brokering, or offering for sale, or permit any other person to use the 
license for profit.
    (b) A licensee who is eligible as a manufacturer or processor, 
pursuant to Sec.  6.23, shall process at least 75 percent of its 
licensed imports in such person's own facilities and maintain the 
records necessary to so substantiate.


Sec.  6.28  Transfer of license.

    (a) If a licensee sells or conveys its business involving articles 
covered by this subpart to another person, including the complete 
transfer of the attendant assets, the Licensing Authority will transfer 
to such other person the historical, nonhistorical or designated 
license issued for that quota year. Such sale or conveyance must be 
unconditional, except that it may be in escrow with the sole condition 
for return of escrow being that the Licensing Authority determines that 
such sale does not meet the requirements of this paragraph.
    (b) The parties seeking transfer of license shall give written 
notice to the Licensing Authority of the intended sale or conveyance 
described in paragraph (a) of this section by email. The notice must be 
received by the Licensing Authority at least 20 working days prior to 
the intended consummation of the sale or conveyance. Such notice shall 
include electronic copies of the documents of sale or conveyance. The 
Licensing Authority will review the documents for compliance with the 
requirements of paragraph (a) of this section and advise the parties in 
writing of its findings by the end of the 20-day period. The parties 
shall have the burden of demonstrating to the satisfaction of the 
Licensing Authority that the contemplated sale or conveyance complies 
with the requirements of paragraph (a) of this section. Within 15 days 
of the consummation of the sale or conveyance, the parties shall email 
the final documents to the Licensing Authority. The Licensing Authority 
will not transfer the licenses unless the documents are submitted in 
accordance with this paragraph.
    (c) The eligibility for a license of a person to whom a business is 
sold or conveyed will be determined for the next quota year in 
accordance with Sec.  6.23. For the purposes of Sec.  6.23(b)(1) the 
person to whom a business is sold or conveyed shall be deemed to be the 
person to whom the historical licenses were issued during the quota 
year in which the sale or conveyance occurred. Further, for the 
purposes of Sec.  6.23(b) and (c), the entries made under such licenses 
by the original licensee during the year in which the sale of 
conveyance is made, shall be considered as having been made by the 
person to whom the business was sold or conveyed.


Sec.  6.29  Use of licenses.

    (a) An article entered under a license shall be an article produced 
in the country specified on the license.
    (b) An article entered or withdrawn from warehouse for consumption 
under a license must be entered in the name of the licensee as the 
importer of record by the licensee or its agent, and must be owned by 
the licensee at the time of such entry.
    (c) If the article entered or withdrawn from warehouse for 
consumption was purchased by the licensee through a direct sale from a 
foreign supplier, the licensee shall present, at the time of entry:
    (1) A true and correct copy of a through bill of lading from the 
country; and
    (2) A commercial invoice or bill of sale from the seller, showing 
the quantity and value of the product, the date of purchase and the 
country; or
    (3) Where the article was entered into warehouse by the foreign 
supplier, CBP Form 7501 endorsed by the foreign supplier, and the 
commercial invoice.
    (d) If the article entered was purchased by the licensee via sale-
in-transit, the licensee shall present, at the time of entry:
    (1) A true and correct copy of a through bill of lading endorsed by 
the original consignee of the goods;
    (2) A certified copy of the commercial invoice or bill of sale from 
the foreign supplier to the original consignee of the goods; and
    (3) A commercial invoice or bill of sale from the original 
consignee to the licensee.
    (e) If the article entered was purchased by the licensee in 
warehouse, the licensee shall present, at the time of entry:
    (1) CBP Form 7501 endorsed by the original consignee of the goods;
    (2) A certified copy of the commercial invoice or bill of sale from 
the foreign supplier to the original consignee of the goods; and
    (3) A commercial invoice or bill of sale from the original 
consignee to the licensee.
    (f) The Licensing Authority may waive the requirements of 
paragraphs (c), (d) or (e), if it determines that because of strikes, 
lockouts or other unusual circumstances, compliance with those 
requirements would unduly interfere with the entry of such articles.
    (g) Nothing in this subpart shall prevent the use of immediate 
delivery in accordance with the provisions of CBP regulations relating 
to tariff-rate quotas.


Sec.  6.30  Record maintenance and inspection.

    A licensee shall retain all records relating to its purchases, 
sales and transactions governed by this subpart, including all records 
necessary to establish the licensee's eligibility, for five years 
subsequent to the end of the quota year in which such purchases, sales 
or transactions occurred. During that period, the licensee shall, upon 
reasonable notice and during ordinary hours of business, grant 
officials of the U.S. Department of Agriculture full and complete 
access to the licensee's premises to inspect, audit or copy such 
records.

[[Page 44258]]

Sec.  6.31  Debarment and suspension.

    The provisions in 7 CFR part 3017-- Government-wide Debarment and 
Suspension (Nonprocurement) and Government Requirements for Drug-Free 
Workplace (Grants), subparts A through E, apply to this subpart.


Sec.  6.32  Globalization of licenses.

    If the Licensing Authority determines that entries of an article 
from a country are likely to fall short of that country's allocated 
amount as indicated in Appendices 1, 2, and 3, the Licensing Authority 
may permit, with the approval of the Office of the United States Trade 
Representative, the applicable licensees to enter the remaining balance 
or a portion thereof from any country during that quota year. Requests 
for consideration of such adjustments must be submitted to the 
Licensing Authority no later than September 1. The Licensing Authority 
will obtain prior consent for such an adjustment of licenses from the 
government of the exporting country for quantities in accordance with 
the Uruguay Round commitment of the United States. No globalization 
requests will be considered prior to April 1 of each year.


Sec.  6.33  License fee.

    (a) A fee will be assessed each quota year for each license to 
defray the Department's costs of administering the licensing system. To 
the extent practicable, the fee will be announced by the Licensing 
Authority in a notice published in the Federal Register no later than 
August 31 of the year preceding the quota year for which the fee is 
assessed.
    (b) The license fee for each license issued is due and payable in 
full no later than March 15 of the year for which the license is 
issued. The fee for any license issued after March 15 of any quota year 
is due and payable in full no later than 10 days from the date of 
issuance of the license. Fee payments are payable to the Treasurer of 
the United States and shall be made solely utilizing the electronic 
software designated for the purpose by the Licensing Authority as 
provided in Sec.  6.36(b).
    (c) If the license fees for all licenses issued to a licensee are 
not paid by the final payment date, a hold will be placed on the use of 
all licenses issued to the licensee and no articles will be permitted 
entry under those licenses. The Licensing Authority shall send a 
warning by email advising the licensee that if payment is not made in 
accordance with Sec.  6.36(b) and received within 10 calendar days from 
the date of the email, all licenses issued to that licensee will be 
revoked. Where the license at issue is a historical license, this will 
result, pursuant to Sec.  6.23(b), in the person's loss of historical 
eligibility for such license.


Sec.  6.34  Adjustment of appendices.

    (a) Whenever a historical license (Appendix 1) is not issued to an 
applicant pursuant to the provisions of Sec.  6.23, is permanently 
surrendered or is revoked by the Licensing Authority, the amount of 
such license will be transferred to Appendix 2.
    (b) The cumulative annual transfers to Appendix 2 made in 
accordance with paragraph (a) of this section will be published by 
Notice in the Federal Register each year. If a transfer results in the 
addition of a new article, or an article from a country not previously 
listed in Appendix 2, the Licensing Authority shall afford all eligible 
applicants for that quota year the opportunity to apply for a license 
for such article.


Sec.  6.35  Correction of errors.

    (a) If a person demonstrates, to the satisfaction of the Licensing 
Authority, that errors were made by officers or employees of the United 
States Government, the Licensing Authority will review and rectify the 
errors to the extent permitted under this subpart.
    (b) To be considered, a person must provide sufficient 
documentation regarding the error to the Licensing Authority by email, 
not later than August 31 of the calendar year following the calendar 
year in which the error was alleged to have been committed.
    (c) If the error resulted in the loss of a historical license by a 
license holder, the Licensing Authority will transfer the amount of 
such license from Appendix 2 to Appendix 1 in order to provide for the 
issuance of such license in the calendar year following the calendar 
year for which the license was revoked. The cumulative annual transfers 
to Appendix 1 in accordance with this paragraph will be published in 
the Federal Register.


Sec.  6.36  Miscellaneous.

    (a) If any deadline date in this subpart falls on a Saturday, 
Sunday, or a Federal holiday, then the deadline shall be the next 
business day.
    (b) All applications and fee payments required under this subpart 
shall be made utilizing the electronic software designated for this 
purpose by the Licensing Authority, and official correspondence with 
the Licensing Authority, except as provided under Sec.  6.28(b), shall 
be by email. Digital scanned versions (e.g. PDF, JPEG, TIF, etc.) of 
hardcopy documents submitted by email are acceptable electronic 
communications.


Sec.  6.37  [Removed]

0
4. Section 6.37 is removed.

Appendixes 1-3 to Subpart--Dairy Tariff-Rate Import Quota Licensing 
[Removed]

0
5. Appendixes 1-3 to Subpart--Dairy Tariff-Rate Import Quota Licensing 
are removed.

    Dated: June 23, 2015.
Philip C. Karsting,
Administrator, Foreign Agricultural Service.
[FR Doc. 2015-18122 Filed 7-24-15; 8:45 am]
 BILLING CODE 3410-10-P



                                                                                                                                                                                              44251

                                            Rules and Regulations                                                                                          Federal Register
                                                                                                                                                           Vol. 80, No. 143

                                                                                                                                                           Monday, July 27, 2015



                                            This section of the FEDERAL REGISTER                     (202) 720–0638; fax (202) 720–0876;                   on the basis of the criteria outlined in
                                            contains regulatory documents having general             dairy-ils@fas.usda.gov.                               Executive Order 12630.
                                            applicability and legal effect, most of which
                                                                                                     SUPPLEMENTARY INFORMATION:                            Government Paperwork Elimination
                                            are keyed to and codified in the Code of
                                            Federal Regulations, which is published under            Executive Order 12866                                 Act
                                            50 titles pursuant to 44 U.S.C. 1510.                                                                            The United States Department of
                                                                                                       The rule has been determined to be
                                                                                                                                                           Agriculture (USDA) is committed to
                                            The Code of Federal Regulations is sold by               not significant under E.O. 12866 and
                                            the Superintendent of Documents. Prices of                                                                     compliance with the Government
                                                                                                     has been reviewed by the Office of
                                            new books are listed in the first FEDERAL                                                                      Paperwork Elimination Act, which
                                                                                                     Management and Budget.
                                            REGISTER issue of each week.                                                                                   requires Government agencies, in
                                                                                                     Regulatory Flexibility Act                            general, to provide the public the option
                                                                                                                                                           of submitting information or transacting
                                                                                                       The Regulatory Flexibility Act
                                            DEPARTMENT OF AGRICULTURE                                                                                      business electronically to the maximum
                                                                                                     ensures that regulatory and information
                                                                                                                                                           extent possible.
                                            Foreign Agricultural Service                             requirements are tailored to the size and
                                                                                                     nature of small businesses, small                     Background
                                            7 CFR Part 6                                             organizations, and small governmental                    The Foreign Agricultural Service
                                                                                                     jurisdictions. This rule will not have a              (FAS), under a delegation of authority
                                                                                                     significant economic impact on small                  from the Secretary of Agriculture,
                                            RIN 0551–AA82                                            businesses participating in the program.              administers the Dairy Tariff-Rate Quota
                                            Dairy Tariff-Rate Quota Import                           Executive Order 12988                                 Import Licensing regulation codified at
                                            Licensing Program                                                                                              7 CFR 6.20 through 6.37 that provides
                                                                                                       This rule has been reviewed under                   for the issuance of licenses to import
                                            AGENCY:    Foreign Agricultural Service,                 Executive Order 12988. The provisions                 certain dairy articles under tariff-rate
                                            USDA.                                                    of this rule would not have a                         quotas (TRQs) as set forth in certain
                                            ACTION:   Final rule.                                    preemptive effect with respect to any                 notes in Chapter 4 of the Harmonized
                                                                                                     State or local laws, regulations, or                  Tariff Schedule of the United States.
                                            SUMMARY:    This final rule amends the                   policies which conflict with such                     These dairy articles may only be entered
                                            regulation that provides for the issuance                provision or which otherwise impede                   into the United States at the low-tier
                                            of licenses to import certain dairy                      their full implementation. This rule will             tariff by or for the account of a person,
                                            articles under tariff-rate quotas (TRQs)                 not have a retroactive effect. Before any             as defined in the regulation, to whom
                                            as set forth in the Harmonized Tariff                    judicial action may be brought forward                such licenses have been issued and only
                                            Schedule of the United States. The three                 regarding this rule, all administrative               in accordance with the terms and
                                            most significant changes to the rule are                 remedies must be exhausted.                           conditions of the regulation. Licenses
                                            to suspend for an additional seven years                 National Environmental Policy Act                     are issued on a calendar year basis, and
                                            the historical license reduction                                                                               each license authorizes the licensee to
                                            provision which was set to expire with                     The Administrator has determined                    import a specified quantity and type of
                                            the beginning of quota year 2016; to                     that this action will not have a                      dairy article from a specified country of
                                            modify procedures for collecting                         significant effect on the quality of the              origin.
                                            licensing fees in order to better align the              human environment. Therefore, neither                    Under TRQs, a low tariff rate,
                                            fee collection to the costs of                           an Environmental Assessment nor an                    commonly referred to as the in-quota
                                            administering the program; and to                        Environmental Impact Statement is                     rate, applies to imports up to a specified
                                            exclusively use electronic                               necessary for this rule.                              quantity. A higher tariff rate, commonly
                                            communications in the application,                       Unfunded Mandates Reform Act (Pub.                    referred to as the over-quota rate,
                                            reporting and payment processes. The                                                                           applies to any imports in excess of that
                                                                                                     L. 104–4)
                                            expected outcome from these changes is                                                                         amount. No license is required to import
                                            to allow license holders to adjust to                      Public Law 104–4 requires                           products at the over-quota tariff rate.
                                            changing market conditions impacting                     consultation with state and local                        USDA issues three types of licenses:
                                            the dairy sector; increase the                           officials and Indian tribal governments.              Historical, non-historical (lottery), and
                                            Department’s ability to more closely                     This rule does not impose an unfunded                 designated. For all three license types,
                                            align cost recovery with the actual costs                mandate or any other requirement on                   the current regulation provides that
                                            of administering the program; and allow                  state, local, or tribal governments.                  persons must apply each year between
                                            the Department to reduce lag times,                      Accordingly, these programs are not                   September 1 and October 15. Historical
                                            minimize paper files, and increase the                   subject to the provisions of the                      and designated licensees may apply for
                                            efficiency of the program operations.                    Unfunded Mandates Reform Act.                         lottery licenses subject to certain
                                                                                                                                                           conditions. Licensees may fail to qualify
                                            DATES: Effective Date: September 1,                      Executive Order 12630                                 for a license for a specific item from a
tkelley on DSK3SPTVN1PROD with RULES




                                            2015.                                                      This Executive Order requires careful               specific country in the following year, if
                                            FOR FURTHER INFORMATION CONTACT:                         evaluation of governmental actions that               they do not meet certain requirements.
                                            Sugar and Dairy Branch, Import Policies                  interfere with constitutionally protected             Licensees must (i) apply for the license
                                            and Export Reporting Division, Office of                 property rights. This rule does not                   each year, (ii) pay an annual fee, and
                                            Trade Programs, Foreign Agricultural                     interfere with any property rights and,               (iii) have imported at least 85 percent of
                                            Service, U.S. Department of Agriculture,                 therefore, does not need to be evaluated              the final license amount from the


                                       VerDate Sep<11>2014   16:00 Jul 24, 2015   Jkt 235001   PO 00000   Frm 00001   Fmt 4700   Sfmt 4700   E:\FR\FM\27JYR1.SGM   27JYR1


                                            44252               Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations

                                            previous year. To avoid ineligibility due                support for the proposed rule, and are                   Response: USDA will implement the
                                            to the 85 percent rule, licensees may                    summarized as follows.                                proposed changes to the license fee
                                            surrender up to 100 percent of the                                                                             payment timeline and loss of all
                                                                                                     Historical License Reduction Provision
                                            license, but must import 85 percent of                                                                         licenses for failure to pay for all
                                            any quantity not surrendered. Section                       Respondents generally support the                  licenses. The proposed changes have the
                                            6.25(b) of this regulation provides that                 additional seven year suspension of the               support of the large majority of
                                            beginning with the 2023 quota year, any                  historical license reduction provision                respondents, will expedite the
                                            historical licensee who surrenders more                  (§ 6.25(b)) from the rule, but would                  processing of licenses and will allow
                                            than 50 percent of the license amount                    prefer its complete elimination. They                 USDA to better align the fee collection
                                            for the same item from the same country                  were concerned that market factors                    to the costs of administering the
                                            during at least three of the most recent                 outside of importers’ control will in the             program.
                                            five years will be issued a license                      future lead to low fill-rates and possible
                                                                                                     loss of licenses. One respondent did not              Level of the License Fee
                                            thereafter in an amount equal to the
                                            average amount imported under that                       oppose the additional seven year                         Twenty of the 23 respondents
                                            license for those five quota years.                      suspension, but suggested it be enforced              expressed concerns with the rising costs
                                               This rule provides historical license                 only to the same extent as the relative               of license fees. These 20 respondents
                                            holders additional time to adjust to                     fill rates for non-historical licenses. In            did not express concerns with the
                                            changing market conditions by                            such a system, a historical license                   current fee but noted that fees have
                                            suspending the § 6.25(b) provision                       holder would not be in jeopardy unless                increased by more than 66 percent in
                                                                                                     its fill rate fell below the fill-rate of non-        recent years and expressed an opinion
                                            through the end of quota year 2022.
                                                                                                     historical licenses for the same article.             that future increases be avoided.
                                            Since this rule was adopted in order to
                                                                                                        Response: USDA chose the seven year                   Response: USDA sets the license fee
                                            implement U.S. obligations under the                                                                           at the total estimated cost of
                                            Uruguay Round Agreement on                               suspension over complete elimination
                                                                                                     because the provision is generally in the             administering the licensing program,
                                            Agriculture, the § 6.25(b) provision has                                                                       divided by the number of licenses
                                            previously been suspended on three                       public interest. As market conditions
                                                                                                     change, it may be important in the                    issued and accepted. The proposed
                                            different occasions: For five years,                                                                           changes will more closely align the fees
                                            2001–2005; for two years, 2009–10; and                   future to maintain the existence of the
                                                                                                     § 6.25(b) provision in order to have a                to the cost of administering the program.
                                            for five years, 2011–15. The rule also
                                            now provides that reporting, payment,                    mechanism that stimulates the transfer                Electronic Communication
                                            and application for licenses be made                     of under-utilized historical licenses to
                                                                                                     the lottery category. USDA will not                      Twenty-two respondents commented
                                            only by electronic submission in order                                                                         that they appreciated the desire to move
                                            to reduce the use of paper and                           adopt a new system, such as the
                                                                                                     proposal to link § 6.25(b) provisions for             toward exclusive use of electronic
                                            streamline operations. Additionally, the                                                                       communications, but are concerned
                                            rule modifies procedures for collecting                  retaining licenses with fill rates in the
                                                                                                     lottery category, because of the                      about the ability of USDA’s computer
                                            licensing fees in order to better align the                                                                    system to automatically access entry
                                            fee collection with the costs of                         complexity of administering such a
                                                                                                     system and the lack of support from                   data from the CBP system. If eligibility
                                            administering the program. The                                                                                 requirements cannot be verified through
                                            previous regulation allowed applicants                   other respondents.
                                                                                                                                                           entries on the CBP system, USDA
                                            to apply for a license, generating                       Timing of Implementation of Historical                currently requests CBP Form 7501 in
                                            administrative costs for the USDA, and                   License Reduction Provision                           order to conduct a manual evaluation.
                                            then choose not to pay for the license,                     They oppose implementing the                       Unlicensed importers and licensed
                                            thus resulting in unrecovered                            historical license reduction provision                importers attempting to qualify with
                                            administrative expenses. This rule                       beginning in 2023, and propose instead                unlicensed entries occasionally submit
                                            imposes financial consequences for                       that 2023 would be the first of a new                 the forms to USDA via U.S. Mail to
                                            such non-payment, which will increase                    five-year base period lasting until 2027.             verify entries and eligibility.
                                            USDA’s ability to recover program                        Under this scheme, the first reductions                  Response: USDA recognizes the need
                                            expenses.                                                could not occur until 2028.                           for manual verification of the CBP Form
                                               This rule does not make any                              Response: USDA chose to follow the                 7501 for un-licensed importers and
                                            modifications to the appendices to this                  same process used for the three previous              licensed importers attempting to qualify
                                            subpart.                                                 suspensions. The seven year suspension                with unlicensed entries. USDA has
                                                                                                     should allow historical licenses holders              amended this final rule to explicitly
                                            Discussion of Comments
                                                                                                     sufficient time to adjust to changing                 recognize emails and attached electronic
                                              On February 6, 2013, USDA                              market conditions and take necessary                  files (e.g. PDFs, Word Documents, and
                                            published in the Federal Register (78                    actions to comply with the provision.                 Excel Spreadsheets) as electronic
                                            FR 8434) an advanced notice of                                                                                 communications. Licensed and un-
                                            proposed rulemaking (ANPR) soliciting                    Administering the License Fee                         licensed importers attempting to qualify
                                            comment on all aspects of the previous                      They generally support the proposed                using unlicensed entries must obtain an
                                            dairy import licensing rule. USDA                        changes to tightening the timeline for                electronic copy, such as a digital scan of
                                            received comments from 46 interested                     making payments to 10 days from the                   the CBP–7501 forms, and email them to
                                            parties and a summary of the comments                    date of issuance, and support requiring               USDA. USDA will no longer accept U.S.
                                            was provided in the background to the                    that an applicant who applies for and is              Mail, faxes, or hard copies. Licensed
                                            Proposed Rule published December 23,                     issued a license pay for all licenses                 importers qualifying with licensed
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                                            2014 (79 FR 76919).                                      issued. One respondent preferred to                   entries will continue to be assessed for
                                              The comment period on the Proposed                     maintain the payment deadline at 30                   eligibility based solely on CBP import
                                            Rule ended February 23, 2015, and a                      days and opposed revoking an entire                   records as cross-checked through
                                            total of 23 comments were received.                      licensee’s portfolio for failure to pay the           DAIRIES. No additional verification is
                                            Twenty-two of the comments received                      fee for a single license within ten days              required for licensed refiners qualifying
                                            were similar in nature, provided                         of receipt of a warning letter.                       with licensed entries.


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                                                                Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations                                           44253

                                               One respondent recommended the                        Therefore, references to physical mail,               This change would allow USDA to
                                            replacement of the current lottery                       postmarks, mailing addresses, or                      accelerate some of its administrative
                                            system for non-historical and                            physical locations have been deleted                  functions of operating the licensing
                                            surrendered licenses with a first-come-                  throughout the rule. The references to                program because the use of electronic
                                            first-served (FCFS) system. The                          physical mail delivery that have been                 payment does not require the longer lag
                                            respondent stated that a FCFS system                     deleted are found in the following                    time necessary for processing paper
                                            would provide simplicity, lower                          sections: §§ 6.24(a), 6.24(b)(1), 6.24(c),            checks.
                                            transaction costs, eliminate licensing                   6.25(d)(1), 6.26(a), 6.26(c), 6.28(b),                   Section 6.33(c) requires that an
                                            fees, allow greater flexibility for                      6.33(b), 6.33(c), 6.35(b), and 6.36(b).               applicant who applies for and is issued
                                            adapting to new market conditions and                    Additionally, a valid email address is                a license pay for all licenses issued, or
                                            allow for continuing business                            now required for eligibility. The                     a hold will be placed on all licenses of
                                            relationships.                                           requirement for an email address has                  such applicant. If after receiving a
                                               Response: USDA will not replace the                   been added to § 6.23(a)(3).                           warning letter via email from the
                                            current licensing system with a FCFS                        Section 6.22(b) was deleted from the               Licensing Authority, the applicant does
                                            system. Although USDA recognizes                         rule because these references to General              not pay in full within 10 days for all
                                            some advantages to a FCFS system, the                    Note 15 provisions of the HTS are not                 licenses issued, then all licenses issued
                                            current system generally permits                         covered, nor in any way affected, by the              to the licensee, paid or unpaid, will be
                                            adequate flexibility to administer the                   dairy import licensing program.                       revoked.
                                            dairy import licensing requirements.                        Section 6.24(b)(1) requires for
                                                                                                     licensed qualifying entries, verification                Section 6.33(d) is deleted pursuant to
                                            Summary of Changes to Final Rule                                                                               the previous clause (§ 6.33(c)) and no
                                                                                                     will be only processed through DAIRIES
                                               The following is a summary of the                     and cross checked with entries in the                 longer permits licensees not to accept or
                                            substantive changes to the final                         CBP system. For unlicensed qualifying                 pay for certain licenses issued to them.
                                            regulation:                                              entries, the applicant will submit an                 The cost of administering the licensing
                                               The name of the program has been                      electronic copy (e.g. scanned PDF) of                 program is incurred by USDA during
                                            changed throughout the document to                       CBP Form 7501 to the Licensing                        the application and allocation process;
                                            read ‘‘Dairy Tariff-Rate Quota Import                    Authority.                                            therefore, applicants will be required to
                                            Licensing.’’                                                Section 6.24(c) was deleted because it             pay for licenses issued in accordance
                                               References to the process used for the                primarily applied to mailed hardcopy                  with § 6.33(c) or have all licenses
                                            initial allocation of licenses, which took               applications. The information submitted               revoked.
                                            place based on the 1997 quota year,                      through the current electronic                           Section 6.37 is removed. This
                                            have been removed throughout this rule                   application system obviates the need for              administrative change is an
                                            due to the fact that current allocations                 submitting this additional information.               improvement in the method of
                                            are now based on the preceding quota                        Section 6.25(a)(1) through (3) was                 publishing the annual adjustment of the
                                            year. References to the 1997 quota year                  deleted because the historic allocation               appendixes to reflect changes in the
                                            allocations were removed from the                        process is no longer relevant. New quota              quantities of historical (Appendix 1)
                                            following sections: §§ 6.20(b), 6.23(b)(2),              year allocations are made based on the                and lottery (appendix 2) license
                                            6.23(b)(3), 6.23(b)(4), 6.23(b)(5),                      preceding year’s allocations and usage.               amounts (section 6.37). Previously, the
                                            6.25(a)(1), 6.25(a)(2), 6.25(a)(3), and                     Section 6.25(b) extends the date of the            final rule required an amendment each
                                            6.26(f).                                                 suspension of the historical licenses                 year. Instead, the Department of
                                               Section 6.21 Definitions has been                     reduction provision for an additional                 Agriculture will now annually publish
                                            updated to include several                               seven years, expiring with the beginning              the adjustments to the appendixes by
                                            modifications. The definition of ‘‘Article               of quota year 2023.                                   Notice in the Federal Register.
                                            other than cheese or cheese products’’                      Section 6.25(d)(1)(ii) requires, for
                                            now specifies that the article is a dairy                Appendix 3 allocations, that countries                List of Subjects in 7 CFR Part 6
                                            product. The definition of ‘‘EC’’ no                     designate the allocations of specific                   Agricultural commodities, Dairy,
                                            longer lists the current members,                        articles to importers in kilograms. This              Cheese, Imports, Procedural rules,
                                            because new members may be added at                      requirement will reduce any disputes                  Application requirements, Tariff-rate
                                            any time. Therefore, the definition of                   arising from converting percentages into              quota, Reporting and recordkeeping
                                            ‘‘EC’’ is defined to be those countries                  weights.                                              requirements.
                                            listed in Additional U.S. Note 2 to                         Section 6.26(c) was rewritten to
                                            Chapter 4 of the Harmonized Tariff                       clarify the surrender and allocation                    Accordingly, for these reasons, 7 CFR
                                            Schedule, because this is published                      process for persons who were issued an                part 6 is amended as follows:
                                            annually and maintained current.                         import license for a cheese or cheese
                                            ‘‘Customs’’ has been replaced                                                                                  PART 6—IMPORT QUOTAS AND FEES
                                                                                                     product article versus a person who was
                                            throughout the rule with ‘‘CBP’’ which                   issued an import license for an article               Subpart—Dairy Tariff-Rate Quota
                                            stands for U.S. Customs and Border                       other than cheese or cheese products.                 Import Licensing
                                            Protection. The definition of ‘‘Licensing                   Section 6.28(b) requires that all
                                            Authority’’ removes reference to a                       license holders who intend to convey                  ■ 1. The authority citation for Subpart—
                                            specific USDA division. The definition                   their business and are requesting USDA                Dairy Tariff-Rate Quota Import
                                            of ‘‘Other Countries’’ deletes the                       to transfer a license, submit the required            Licensing continues to read as follows:
                                            reference to the Harmonized Tariff                       documentation by email. The option to
                                            Schedule. The definition of ‘‘Postmark’’                 send documents via physical mail or                     Authority: Additional U.S. Notes 6, 7, 8,
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                                            is deleted from this section, given that                                                                       12, 14, 16–23 and 25 to Chapter 4 and
                                                                                                     courier is no longer available.                       General Note 15 of the Harmonized Tariff
                                            physical mail will no longer be                             Section 6.33(b) tightens the timeline              Schedule of the United States (19 U.S.C.
                                            accepted. This rule requires that all                    for making payments and requires                      1202), Pub. L. 97–258, 96 Stat. 1051, as
                                            communications, applications, reporting                  payment in full within 10 days from the               amended (31 U.S.C. 9701), and secs. 103 and
                                            and payment be made electronically as                    date of the issuance of the license,                  404, Pub. L. 103–465, 108 Stat. 4819 (19
                                            designated by the Licensing Authority.                   rather than the current 30 day period.                U.S.C. 3513 and 3601).



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                                            44254                   Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations

                                            ■ 2. The heading for ‘‘Subpart—Dairy                         § 6.21   Definitions.                                   Other countries. Countries not listed
                                            Tariff-Rate Import Quota Licensing’’ is                         As used in this subpart and the                    by name as having separate tariff-rate
                                            revised to read as set forth above.                          appendices thereto, the following terms               quota allocations for an article.
                                                                                                         are defined as follows:                                 Person. An individual, firm,
                                            ■ 3. Sections 6.20 through 6.36 are                                                                                corporation, partnership, association,
                                                                                                            Article. One of the products listed in
                                            revised to read as follows:                                                                                        trust, estate or other legal entity.
                                                                                                         Appendices 1, 2, or 3, which are the
                                            6.20     Introduction.                                       same as those described in Additional                   Process or processing. Any additional
                                            6.21     Definitions.                                        U.S. Notes 6, 7, 8, 12, 14, 16–23 and 25              preparation of a dairy product, such as
                                            6.22     Requirement for a license.                          to Chapter 4 of the Harmonized Tariff                 melting, grating, shredding, cutting and
                                            6.23     Eligibility to apply for a license.                                                                       wrapping, or blending with any
                                                                                                         Schedule.
                                            6.24     Application for a license.
                                            6.25     Allocation of licenses.
                                                                                                            Article other than cheese or cheese                additional ingredient.
                                            6.26     Surrender and reallocation.                         products. Any article that is a dairy                   Quota year. The 12-month period
                                            6.27     Limitations on use of license                       product, but not a cheese or cheese                   beginning on January 1 of a given year.
                                            6.28     Transfer of license.                                product.                                                Tariff-rate quota amount or TRQ
                                            6.29     Use of licenses.                                       CBP. United States Customs and                     amount. The amount of an article
                                            6.30     Record maintenance and inspection.                  Border Protection, U.S. Department of                 subject to the applicable in-quota rate of
                                            6.31     Debarment and suspension.                           Homeland Security.                                    duty established under a tariff-rate
                                            6.32     Globalization of licenses.                             Cheese or cheese products. Articles in             quota.
                                            6.33     License fee.                                        headings 0406, 1901.90.34, and                          United States. The customs territory
                                            6.34     Adjustment of appendices.                           1901.90.36 of the Harmonized Tariff                   of the United States, which is limited to
                                            6.35     Correction of errors.
                                            6.36     Miscellaneous.
                                                                                                         Schedule.                                             the 50 states, the District of Columbia,
                                                                                                            Commercial entry. Any entry except                 and Puerto Rico.
                                            *        *       *       *       *                           those made by or for the account of the
                                                                                                         United States Government or for a                     § 6.22    Requirement for a license.
                                            § 6.20       Introduction.
                                                                                                         foreign government, for the personal use                A person who seeks to enter, or cause
                                               (a) Presidential Proclamation 6763 of                     of the importer or for sampling, taking               to be entered an article as a commercial
                                            December 23, 1994, modified the                              orders, research, or the testing of                   entry, shall obtain a license, in
                                            Harmonized Tariff Schedule of the                            equipment.                                            accordance with this subpart.
                                            United States affecting the import                              Country. Country of origin as
                                            regime for certain articles of dairy                                                                               § 6.23    Eligibility to apply for a license.
                                                                                                         determined in accordance with CBP
                                            products. The Proclamation terminated                        rules and regulations, except that ‘‘EC’’,               (a) In general. To apply for any
                                            quantitative restrictions that had been                      and ‘‘Other countries’’ shall each be                 license, a person shall have:
                                            imposed pursuant to section 22 of the                        treated as a country.                                    (1) A business office, and be doing
                                            Agricultural Adjustment Act of 1933, as                         DAIRIES. The ‘‘Dairy Accelerated                   business, in the United States, and
                                            amended (7 U.S.C. 624); proclaimed                           Importer Retrieval and Information                       (2) An agent in the United States for
                                            tariff-rate quotas for such articles                         Exchange System’’. The web-based user                 service of process, and
                                            pursuant to Public Law 103–465; and                          interface system which persons must                      (3) An email address to be used for
                                            specified which of such articles may be                      utilize to apply for and manage licenses,             correspondence regarding licensing
                                            entered only by or for the account of a                      and through which the Licensing                       activities and reports.
                                            person to whom a license has been                            Authority will communicate all program                   The licensee is responsible to
                                            issued by the Secretary of Agriculture.                      notices.                                              continuously maintain a valid email
                                                                                                            Dairy products. Articles in headings               address in DAIRIES for use in
                                               (b) Effective January 1, 1995, the prior                                                                        communicating with the Licensing
                                            regime of absolute quotas for certain                        0401 through 0406, margarine cheese
                                                                                                         listed under headings 1901.90.34 and                  Authority.
                                            dairy products was replaced by a system                                                                               (b) Eligibility for 2016 and subsequent
                                            of tariff-rate quotas. The articles subject                  1901.90.36, ice cream listed under
                                                                                                         heading 2105, and casein listed under                 quota years. (1) Historical licenses
                                            to licensing under the tariff-rate quotas                                                                          (Appendix 1). A person issued a
                                            are listed in Appendices 1, 2, and 3 to                      heading 3501 of the Harmonized Tariff
                                                                                                         Schedule.                                             historical license for an article for the
                                            be published annually in a notice in the                                                                           current quota year may apply for a
                                            Federal Register. Licenses permit the                           Department. The United States
                                                                                                         Department of Agriculture.                            historical license (Appendix 1) for the
                                            holder to import specified quantities of                                                                           next quota year for the same article from
                                            the subject articles into the United                            EC. Those countries listed in
                                                                                                         Additional U.S. Note 2 to Chapter 4 of                the same country, if such person was,
                                            States at the applicable in-quota rate of                                                                          during the 12-month period ending
                                            duty. If an importer has no license for                      the Harmonized Tariff Schedule.
                                                                                                            Enter or Entry. To make or making                  August 31 prior to the quota year, either:
                                            an article subject to licensing, such                                                                                 (i) Where the article is cheese or
                                                                                                         entry for consumption, or withdrawal
                                            importer will, with certain exceptions,                                                                            cheese product,
                                                                                                         from warehouse for consumption in
                                            be required to pay the applicable over-                                                                               (A) The owner of and importer of
                                                                                                         accordance with CBP regulations and
                                            quota rate of duty.                                                                                                record for at least three separate
                                                                                                         procedures.
                                               (c) The Secretary of Agriculture has                         Harmonized Tariff Schedule or HTS.                 commercial entries of cheese or cheese
                                            determined that this subpart will, to the                    The Harmonized Tariff Schedule of the                 products totaling not less than 57,000
                                            fullest extent practicable, result in fair                   United States.                                        kilograms net weight, each of the three
                                            and equitable allocation of the right to                        Licensee. A person to whom a license               entries not less than 2,000 kilograms net
                                            import articles subject to such tariff-rate                  has been issued under this subpart.                   weight;
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                                            quotas. The subpart will also maximize                          Licensing Authority. Any officer or                   (B) The owner of and importer of
                                            utilization of the tariff-rate quotas for                    employee of the U.S. Department of                    record for at least eight separate
                                            such articles, taking due account of any                     Agriculture designated to act in this                 commercial entries of cheese or cheese
                                            special factors which may have affected                      position by the Director of the Division              products, from at least eight separate
                                            or may be affecting the trade in the                         charged with managing the Dairy Tariff-               shipments, totaling not less than 19,000
                                            articles concerned.                                          Rate Quota Import Licensing System.                   kilograms net weight, each of the eight


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                                                                Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations                                               44255

                                            entries not less than 450 kilograms net                  article from the same country for the                    (v) The applicant, or a person who
                                            weight, with a minimum of two entries                    next quota year. For the purpose of this              owns or controls the applicant, benefits
                                            in each of at least three quarters during                paragraph, the amount of an article                   from a trust that controls such other
                                            that period; or                                          permitted under the license will                      applicant.
                                               (C) The owner or operator of a plant                  exclude any amounts surrendered                          (5) The Licensing Authority will not
                                            listed in Section II or listed in Section                pursuant to § 6.26(a), but will include               issue a nonhistorical license (Appendix
                                            I as a processor of cheese of the most                   any additional allocations received                   2) for an article from a country during
                                            current issue of ‘‘Dairy Plants Surveyed                 pursuant to § 6.26(b).                                a quota year to an applicant who is
                                            and Approved for USDA Grading                               (2) Paragraph (c)(1) of this section will          associated with another applicant to
                                            Service’’ and had processed or packaged                  not apply where the licensee                          whom the Licensing Authority is
                                            at least 450,000 kilograms of cheese or                  demonstrates to the satisfaction of the               issuing a nonhistorical license for the
                                            cheese products in its own plant in the                  Licensing Authority that the failure                  same article from the same country for
                                            United States; or                                        resulted from breach by a carrier of its              that quota year. Further, the Licensing
                                               (ii) Where the article is not cheese or               contract of carriage, breach by a supplier            Authority will not issue a nonhistorical
                                            cheese product,                                          of its contract to supply the article, act            license for butter to an applicant who is
                                               (A) The owner of and importer of                      of God or force majeure.                              associated with another applicant to
                                            record for at least three separate                          (3) Paragraph (c)(1) of this section               whom the Licensing Authority is
                                            commercial entries of dairy products                     may not apply in the case of historical               issuing a historical butter license for
                                            totaling not less than 57,000 kilograms                  or nonhistorical licenses, where the                  57,000 kilograms or greater. For the
                                            net weight, each of the three entries not                licensee demonstrates to the satisfaction             purpose of this paragraph, an applicant
                                            less than 2,000 kilograms net weight;                    of the Licensing Authority that the                   will be deemed associated with another
                                               (B) The owner of and importer of                      country specified on the license                      applicant if:
                                            record for at least eight separate                       maintains or permits an export
                                                                                                                                                              (i) The applicant is an employee of, or
                                            commercial entries of dairy products,                    monopoly to control the dairy articles
                                                                                                                                                           is controlled by an employee of, such
                                            from at least eight separate shipments,                  concerned and the licensee petitions the
                                                                                                                                                           other applicant;
                                            totaling not less than 19,000 kilograms                  Licensing Authority to waive this
                                                                                                     requirement. The licensee shall submit                   (ii) The applicant manages or is
                                            net weight, each of the eight entries not
                                                                                                     evidence that the country maintains an                managed by such other applicant, or
                                            less than 450 kilograms net weight, with
                                                                                                     export monopoly as defined in this                    economically benefits, directly or
                                            a minimum of two entries in each of at
                                                                                                     paragraph. For the purposes of this                   indirectly, from the use of the license
                                            least three quarters during that period;
                                               (C) The owner or operator of a plant                  paragraph ‘‘export monopoly’’ means a                 issued to such other applicant.
                                            listed in the most current issue of                      privilege vested in one or more persons                  (6) The Licensing Authority will not
                                            ‘‘Dairy Plants Surveyed and Approved                     consisting of the exclusive right to carry            issue a nonhistorical license for an
                                            for USDA Grading Service’’ and had                       on the exportation of any article of dairy            article from a country during a quota
                                            manufactured, processed or packaged at                   products from a country to the United                 year, for which the applicant receives a
                                            least 450,000 kilograms of dairy                         States.                                               designated license.
                                            products in its own plant in the United                     (4) The Licensing Authority will not               § 6.24    Application for a license.
                                            States; or                                               issue a nonhistorical license (Appendix
                                               (D) The exporter of dairy products in                 2) for an article from a country during                  (a) Application for license shall be
                                            the quantities and number of shipments                   a quota year to an applicant who is                   made on electronic forms designated for
                                            required under (A) or (B) above.                         affiliated with another applicant to                  the purpose by the Licensing Authority.
                                               (2) Nonhistorical licenses for cheese                 whom the Licensing Authority is                       All parts of the application shall be
                                            or cheese products (Appendix 2). A                       issuing a non-historical license for the              completed. The application shall be
                                            person may annually apply for a                          same article from the same country for                transmitted no earlier than September 1
                                            nonhistorical license for cheese or                      that quota year. Further, the Licensing               and no later than midnight October 15
                                            cheese products (Appendix 2) if such                     Authority will not issue a nonhistorical              of the year preceding that for which
                                            person meets the requirements of                         license for butter to an applicant who is             license application is made. The
                                            paragraph (b)(1)(i) of this section.                     affiliated with another applicant to                  Licensing Authority will not accept
                                               (3) Nonhistorical licenses for articles               whom the Licensing Authority is                       incomplete applications.
                                            other than cheese or cheese products                     issuing a historical butter license of                   (b)(1) Where the applicant seeks to
                                            (Appendix 2). A person may annually                      57,000 kilograms or greater. For the                  establish eligibility on the basis of
                                            apply for a nonhistorical license for                    purpose of this paragraph, an applicant               imports, applications shall include
                                            articles other than cheese or cheese                     will be deemed affiliated with another                identification of entries sufficient to
                                            products (Appendix 2) if such person                     applicant if:                                         establish the applicant as the importer
                                            meets the requirements of paragraph                         (i) The applicant is the spouse,                   of record of entries required under
                                            (b)(1)(ii) of this section.                              brother, sister, parent, child or                     § 6.23, during the 12-month period
                                               (4) Designated license (Appendix 3).                  grandchild of such other applicant;                   ending August 31 prior to the quota year
                                            A designated license may be issued to                       (ii) The applicant is the spouse,                  for which license is being sought. For
                                            a person who has applied for a license,                  brother, sister, parent, child or                     qualifying licensed entries, verification
                                            has met the requirements of paragraph                    grandchild of an individual who owns                  will be only processed through DAIRIES
                                            (b)(1)(i) of this section, and is                        or controls such other applicant;                     and cross checked with entries in the
                                            designated by the government of a                           (iii) The applicant is owned or                    CBP system. For qualifying unlicensed
                                            country for such license according to                    controlled by the spouse, brother, sister,            entries, the applicant will submit an
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                                            § 6.25(d).                                               parent, child or grandchild of an                     electronic copy (e.g. scanned PDF) of
                                               (c) Exceptions. (1) A licensee that fails             individual who owns or controls such                  CBP Form 7501 to the Licensing
                                            in a quota year to enter at least 85                     other applicant.                                      Authority.
                                            percent of the amount of an article                         (iv) Both applicants are 5 percent or                 (2) Where the applicant seeks to
                                            permitted under a license shall not be                   more owned or directly or indirectly                  establish eligibility on the basis of
                                            eligible to receive a license for the same               controlled, by the same person;                       exports, applications shall include:


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                                            44256               Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations

                                              (i) Census Form 7525 or a copy of the                  license is between 19,000 kilograms and               right to designate importers has not
                                            electronic submission of such form, and                  550,000 kilograms, inclusive;                         done so, but determines to designate
                                              (ii) The commercial invoice or bill of                    (C) 38,000 kilograms where the total               importers for the next quota year, it
                                            sale for the quantities and number of                    amount available for nonhistorical                    shall indicate its intention to do so
                                            export shipments required under § 6.23,                  license is between 550,001 kilograms                  directly and in writing to the Licensing
                                            during the 12-month period ending                        and 1,000,000 kilograms, inclusive; and               Authority not later than July 1 prior to
                                            August 31 prior to the quota year for                       (D) 57,000 kilograms where the total               the beginning of such next quota year.
                                            which license is being sought.                           amount available for nonhistorical                    Furthermore, if a government that has
                                              (c) An applicant requesting more than                  license is greater than 1,000,000                     designated importers for a quota year
                                            one nonhistorical license must rank                      kilograms;                                            determines that it will not continue to
                                            order these requests by the applicable                      (E) An amount less than the minimum                designate importers for the next quota
                                            Additional U.S. Note number. Cheese                      license sizes established in paragraphs               year, it shall so indicate directly and in
                                            and cheese products must be ranked                       (c)(1)(i)(A) through (D) of this section, if          writing to the Licensing Authority, not
                                            separately from dairy articles other than                requested by the licensee.                            later than July 1 prior to such next quota
                                            cheese or cheese products.                                  (2) Taking into account the order of               year.
                                                                                                     preference expressed by each applicant,
                                            § 6.25   Allocation of licenses.                         as required by § 6.24(c), the Licensing               § 6.26    Surrender and reallocation.
                                               (a) Licensing Authority. The Licensing                Authority will allocate licenses for an                  (a) If a licensee determines that it will
                                            Authority will issue historical,                         article from a country by a series of                 not enter the entire amount of an article
                                            nonhistorical and designated licenses.                   random draws. A license of minimum                    permitted under its license, such
                                               (b) Historical licenses for the 2016                  size will be issued to each applicant in              licensee shall surrender its license right
                                            and subsequent quota years (Appendix                     the order established by such draws
                                            1). A person issued a historical license                                                                       to enter the amount that it does not
                                                                                                     until the total amount of such article in             intend to enter. Surrender shall be made
                                            for the current quota year will be issued                Appendix 2 has been allocated. An
                                            a historical license in the same amount                                                                        to the Licensing Authority no later than
                                                                                                     applicant that receives a license for an              October 1. Any surrender shall be final
                                            for the same article from the same                       article will be removed from the pool for
                                            country for the next quota year except                                                                         and shall be only for that quota year,
                                                                                                     subsequent draws until every applicant                except as provided in § 6.25(b). The
                                            that beginning with the 2023 quota year,                 has been allocated at least one license,
                                            a person who has surrendered more                                                                              amount of the license not surrendered
                                                                                                     provided that the licenses for which                  shall be subject to the license use
                                            than 50 percent of such historical                       they applied are not already fully
                                            license in at least three of the prior 5                                                                       requirements of § 6.23(c)(1).
                                                                                                     allocated. Any amount remaining after                    (b) For each quota year, the Licensing
                                            quota years will thereafter be issued a                  the random draws which is less than the
                                            license in an amount equal to the                                                                              Authority will, to the extent practicable,
                                                                                                     applicable minimum license size may,                  reallocate any amounts surrendered.
                                            average annual quantity entered during                   at the discretion of the licensing
                                            those 5 quota years.                                                                                              (c) Any person who qualified for or
                                                                                                     Authority, be prorated equally among                  was issued a cheese or cheese product
                                               (c) Nonhistorical licenses (Appendix
                                                                                                     the licenses awarded for that article.                license for a quota year may apply to
                                            2). The Licensing Authority will allocate                   (d) Designated licenses (Appendix 3).
                                            nonhistorical licenses on the basis of a                                                                       receive additional license, or addition to
                                                                                                     (1) With respect to an article listed in
                                            rank-order lottery system, which will                                                                          an existing license for a portion of the
                                                                                                     Appendix 3, the government of the
                                            operate as follows:                                                                                            amount being reallocated. A person who
                                                                                                     applicable country may, not later than
                                               (1) The minimum license size shall                                                                          did not qualify for a cheese or cheese
                                                                                                     October 31 prior to the beginning of a
                                            be:                                                                                                            product license for a quota year, but
                                               (i) Where the article is cheese or                    quota year, submit directly by email to
                                                                                                                                                           qualified only for a license for articles
                                            cheese product:                                          the Licensing Authority:
                                                                                                                                                           other than cheese or cheese products,
                                               (A) The total amount available for                       (i) The names, addresses and emails
                                                                                                                                                           may only apply to receive an additional
                                            nonhistorical license where such                         of the importers that it is designating to
                                                                                                                                                           license for articles other than cheese or
                                            amount is less than 9,500 kilograms;                     receive licenses; and
                                                                                                        (ii) The amount, in kilograms, of such             cheese products, or addition to an
                                               (B) 9,500 kilograms where the total                                                                         existing license for articles other than
                                            amount available for nonhistorical                       article for which each such importer is
                                                                                                     being designated. Where quantities for                cheese or cheese products for a portion
                                            license is between 9,500 kilograms and                                                                         of the amount being reallocated. The
                                            500,000 kilograms, inclusive;                            designation result from both Tokyo
                                                                                                     Round concessions and Uruguay Round                   application shall be submitted to the
                                               (C) 19,000 kilograms where the total                                                                        Licensing Authority no earlier than
                                            amount available for nonhistorical                       concessions, the designations should be
                                                                                                     made in terms of each.                                September 1 and not later than
                                            license is between 500,001 kilograms                                                                           September 15, and shall specify:
                                            and 1,000,000 kilograms, inclusive;                         (2) To the extent practicable, the
                                                                                                     Licensing Authority will issue                           (1) The name and control number of
                                               (D) 38,000 kilograms where the total
                                                                                                     designated licenses to those importers,               the applicant;
                                            amount available for nonhistorical
                                            license is greater than 1,000,000                        and in those amounts, indicated by the                   (2) The article and country being
                                            kilograms; or                                            government of the applicable country,                 requested, the applicable HTS
                                               (E) An amount less than the minimum                   provided that the importer designated                 Additional U.S. Note number and, if
                                            license size established in paragraphs                   meets the eligibility requirements set                more than one article is requested, a
                                            (c)(1)(i) (A) through (D) of this section,               forth in § 6.23. Consistent with the                  rank-order by Additional U.S. Note
                                            if requested by the licensee;                            international obligations of the United               number; and
                                               (ii) Where the article is not cheese or               States, the Licensing Authority may                      (3) If applicable, the number of the
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                                            cheese product:                                          disregard a designation if the Licensing              license issued to the applicant for that
                                               (A) The total amount available for                    Authority determines that the person                  quota year permitting entry of the same
                                            nonhistorical license where such                         designated is not eligible for any of the             article from the same country.
                                            amount is less than 19,000 kilograms;                    reasons set forth in § 6.23(c)(1) or (2).                (d) The Licensing Authority will
                                               (B) 19,000 kilograms where the total                     (3) If a government of a country which             reallocate surrendered amounts among
                                            amount available for nonhistorical                       negotiated in the Uruguay Round for the               applicants as follows:


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                                                                Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations                                           44257

                                               (1) The minimum license size, or                      such sale does not meet the                              (1) A true and correct copy of a
                                            addition to an existing license, will be                 requirements of this paragraph.                       through bill of lading from the country;
                                            the total amount of the article from a                      (b) The parties seeking transfer of                and
                                            country surrendered, or 10,000                           license shall give written notice to the                 (2) A commercial invoice or bill of
                                            kilograms, whichever is less;                            Licensing Authority of the intended sale              sale from the seller, showing the
                                               (2) Minimum size licenses, or                         or conveyance described in paragraph                  quantity and value of the product, the
                                            additions to an existing license, will be                (a) of this section by email. The notice              date of purchase and the country; or
                                            allocated among applicants requesting                    must be received by the Licensing                        (3) Where the article was entered into
                                            articles on the basis of the rank-order                  Authority at least 20 working days prior              warehouse by the foreign supplier, CBP
                                            lottery system described in § 6.25(c);                   to the intended consummation of the                   Form 7501 endorsed by the foreign
                                               (3) If there is any amount of an article              sale or conveyance. Such notice shall                 supplier, and the commercial invoice.
                                            from a country left after minimum size                   include electronic copies of the                         (d) If the article entered was
                                            licenses have been issued, the Licensing                 documents of sale or conveyance. The                  purchased by the licensee via sale-in-
                                            Authority may allocate the remainder in                  Licensing Authority will review the                   transit, the licensee shall present, at the
                                            any manner it determines equitable                       documents for compliance with the                     time of entry:
                                            among applicants who have requested                      requirements of paragraph (a) of this                    (1) A true and correct copy of a
                                            that article; and                                        section and advise the parties in writing             through bill of lading endorsed by the
                                               (4) No amount will be reallocated to                  of its findings by the end of the 20-day              original consignee of the goods;
                                            a licensee who has surrendered a                         period. The parties shall have the                       (2) A certified copy of the commercial
                                            portion of its license for the same article              burden of demonstrating to the                        invoice or bill of sale from the foreign
                                            from the same country during that quota                  satisfaction of the Licensing Authority               supplier to the original consignee of the
                                            year unless all other licensees applying                 that the contemplated sale or                         goods; and
                                            for a reallocated quantity have been                     conveyance complies with the                             (3) A commercial invoice or bill of
                                            allocated a license;                                     requirements of paragraph (a) of this                 sale from the original consignee to the
                                               (e) However, if the government of an                  section. Within 15 days of the                        licensee.
                                            exporting country chooses to designate                   consummation of the sale or
                                                                                                     conveyance, the parties shall email the                  (e) If the article entered was
                                            eligible importers for surrendered
                                                                                                     final documents to the Licensing                      purchased by the licensee in warehouse,
                                            amounts under Appendix 3, the
                                                                                                     Authority. The Licensing Authority will               the licensee shall present, at the time of
                                            Licensing Authority shall issue the
                                                                                                     not transfer the licenses unless the                  entry:
                                            licenses in accordance with § 6.25(d)(2),
                                            provided that the government of the                      documents are submitted in accordance                    (1) CBP Form 7501 endorsed by the
                                            exporting country notifies the Licensing                 with this paragraph.                                  original consignee of the goods;
                                            Authority of its designations no later                                                                            (2) A certified copy of the commercial
                                                                                                        (c) The eligibility for a license of a
                                            than September 1. Such notification                                                                            invoice or bill of sale from the foreign
                                                                                                     person to whom a business is sold or
                                            shall contain the names, addresses, and                                                                        supplier to the original consignee of the
                                                                                                     conveyed will be determined for the
                                            emails addresses of the importers that it                                                                      goods; and
                                                                                                     next quota year in accordance with
                                            is designating and the amount in                         § 6.23. For the purposes of § 6.23(b)(1)                 (3) A commercial invoice or bill of
                                            kilograms of such article for which each                 the person to whom a business is sold                 sale from the original consignee to the
                                            importer is being designated. In such                    or conveyed shall be deemed to be the                 licensee.
                                            case the requirements of paragraph (c) of                person to whom the historical licenses                   (f) The Licensing Authority may
                                            this section shall not apply.                            were issued during the quota year in                  waive the requirements of paragraphs
                                                                                                     which the sale or conveyance occurred.                (c), (d) or (e), if it determines that
                                            § 6.27   Limitations on use of license.                                                                        because of strikes, lockouts or other
                                                                                                     Further, for the purposes of § 6.23(b)
                                               (a) A licensee shall not obtain or use                and (c), the entries made under such                  unusual circumstances, compliance
                                            a license for speculation, brokering, or                 licenses by the original licensee during              with those requirements would unduly
                                            offering for sale, or permit any other                   the year in which the sale of conveyance              interfere with the entry of such articles.
                                            person to use the license for profit.                    is made, shall be considered as having                   (g) Nothing in this subpart shall
                                               (b) A licensee who is eligible as a                   been made by the person to whom the                   prevent the use of immediate delivery in
                                            manufacturer or processor, pursuant to                   business was sold or conveyed.                        accordance with the provisions of CBP
                                            § 6.23, shall process at least 75 percent                                                                      regulations relating to tariff-rate quotas.
                                            of its licensed imports in such person’s                 § 6.29   Use of licenses.
                                            own facilities and maintain the records                                                                        § 6.30 Record maintenance and
                                                                                                        (a) An article entered under a license             inspection.
                                            necessary to so substantiate.                            shall be an article produced in the
                                                                                                     country specified on the license.                        A licensee shall retain all records
                                            § 6.28   Transfer of license.                                                                                  relating to its purchases, sales and
                                               (a) If a licensee sells or conveys its                   (b) An article entered or withdrawn                transactions governed by this subpart,
                                            business involving articles covered by                   from warehouse for consumption under                  including all records necessary to
                                            this subpart to another person,                          a license must be entered in the name                 establish the licensee’s eligibility, for
                                            including the complete transfer of the                   of the licensee as the importer of record             five years subsequent to the end of the
                                            attendant assets, the Licensing                          by the licensee or its agent, and must be             quota year in which such purchases,
                                            Authority will transfer to such other                    owned by the licensee at the time of                  sales or transactions occurred. During
                                            person the historical, nonhistorical or                  such entry.                                           that period, the licensee shall, upon
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                                            designated license issued for that quota                    (c) If the article entered or withdrawn            reasonable notice and during ordinary
                                            year. Such sale or conveyance must be                    from warehouse for consumption was                    hours of business, grant officials of the
                                            unconditional, except that it may be in                  purchased by the licensee through a                   U.S. Department of Agriculture full and
                                            escrow with the sole condition for                       direct sale from a foreign supplier, the              complete access to the licensee’s
                                            return of escrow being that the                          licensee shall present, at the time of                premises to inspect, audit or copy such
                                            Licensing Authority determines that                      entry:                                                records.


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                                            44258               Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Rules and Regulations

                                            § 6.31   Debarment and suspension.                       of the email, all licenses issued to that             scanned versions (e.g. PDF, JPEG, TIF,
                                              The provisions in 7 CFR part 3017—                     licensee will be revoked. Where the                   etc.) of hardcopy documents submitted
                                            Government-wide Debarment and                            license at issue is a historical license,             by email are acceptable electronic
                                            Suspension (Nonprocurement) and                          this will result, pursuant to § 6.23(b), in           communications.
                                            Government Requirements for Drug-Free                    the person’s loss of historical eligibility
                                            Workplace (Grants), subparts A through                   for such license.                                     § 6.37    [Removed]
                                            E, apply to this subpart.                                                                                      ■   4. Section 6.37 is removed.
                                                                                                     § 6.34   Adjustment of appendices.
                                            § 6.32   Globalization of licenses.                         (a) Whenever a historical license                  Appendixes 1–3 to Subpart—Dairy
                                               If the Licensing Authority determines                 (Appendix 1) is not issued to an                      Tariff-Rate Import Quota Licensing
                                            that entries of an article from a country                applicant pursuant to the provisions of               [Removed]
                                            are likely to fall short of that country’s               § 6.23, is permanently surrendered or is              ■ 5. Appendixes 1–3 to Subpart—Dairy
                                            allocated amount as indicated in                         revoked by the Licensing Authority, the               Tariff-Rate Import Quota Licensing are
                                            Appendices 1, 2, and 3, the Licensing                    amount of such license will be                        removed.
                                            Authority may permit, with the                           transferred to Appendix 2.
                                            approval of the Office of the United                        (b) The cumulative annual transfers to               Dated: June 23, 2015.
                                            States Trade Representative, the                         Appendix 2 made in accordance with                    Philip C. Karsting,
                                            applicable licensees to enter the                        paragraph (a) of this section will be                 Administrator, Foreign Agricultural Service.
                                            remaining balance or a portion thereof                   published by Notice in the Federal                    [FR Doc. 2015–18122 Filed 7–24–15; 8:45 am]
                                            from any country during that quota year.                 Register each year. If a transfer results             BILLING CODE 3410–10–P
                                            Requests for consideration of such                       in the addition of a new article, or an
                                            adjustments must be submitted to the                     article from a country not previously
                                            Licensing Authority no later than                        listed in Appendix 2, the Licensing                   FARM CREDIT ADMINISTRATION
                                            September 1. The Licensing Authority                     Authority shall afford all eligible
                                            will obtain prior consent for such an                    applicants for that quota year the                    12 CFR Part 611
                                            adjustment of licenses from the                          opportunity to apply for a license for
                                            government of the exporting country for                                                                        RIN 3052–AC85
                                                                                                     such article.
                                            quantities in accordance with the                                                                              Organization; Institution Stockholder
                                            Uruguay Round commitment of the                          § 6.35   Correction of errors.
                                                                                                        (a) If a person demonstrates, to the               Voting Procedures
                                            United States. No globalization requests
                                            will be considered prior to April 1 of                   satisfaction of the Licensing Authority,              AGENCY:    Farm Credit Administration.
                                            each year.                                               that errors were made by officers or                  ACTION:    Notice of effective date.
                                                                                                     employees of the United States
                                            § 6.33   License fee.                                    Government, the Licensing Authority                   SUMMARY:   The Farm Credit
                                               (a) A fee will be assessed each quota                 will review and rectify the errors to the             Administration (FCA, we, Agency or
                                            year for each license to defray the                      extent permitted under this subpart.                  our) amended our regulations to clarify
                                            Department’s costs of administering the                     (b) To be considered, a person must                and enhance Farm Credit System (Farm
                                            licensing system. To the extent                          provide sufficient documentation                      Credit or System) bank and association
                                            practicable, the fee will be announced                   regarding the error to the Licensing                  stockholder voting procedures for
                                            by the Licensing Authority in a notice                   Authority by email, not later than                    tabulating votes, the use of tellers
                                            published in the Federal Register no                     August 31 of the calendar year following              committees, and other items as
                                            later than August 31 of the year                         the calendar year in which the error was              identified. In accordance with the law,
                                            preceding the quota year for which the                   alleged to have been committed.                       the effective date of the rule is no earlier
                                            fee is assessed.                                            (c) If the error resulted in the loss of           than 30 days from the date of
                                               (b) The license fee for each license                  a historical license by a license holder,             publication in the Federal Register
                                            issued is due and payable in full no                     the Licensing Authority will transfer the             during which either or both Houses of
                                            later than March 15 of the year for                      amount of such license from Appendix                  Congress are in session.
                                            which the license is issued. The fee for                 2 to Appendix 1 in order to provide for               DATES: Effective Date:
                                            any license issued after March 15 of any                 the issuance of such license in the                     Under the authority of 12 U.S.C. 2252,
                                            quota year is due and payable in full no                 calendar year following the calendar                  the regulation amending 12 CFR part
                                            later than 10 days from the date of                      year for which the license was revoked.               611 published on May 28, 2015 (80 FR
                                            issuance of the license. Fee payments                    The cumulative annual transfers to                    30333) is effective July 27, 2015.
                                            are payable to the Treasurer of the                      Appendix 1 in accordance with this                      Compliance Date: All provisions of
                                            United States and shall be made solely                   paragraph will be published in the                    this regulation require compliance on or
                                            utilizing the electronic software                        Federal Register.                                     before January 1, 2016.
                                            designated for the purpose by the
                                            Licensing Authority as provided in                       § 6.36   Miscellaneous.                               FOR FURTHER INFORMATION CONTACT:
                                            § 6.36(b).                                                  (a) If any deadline date in this subpart           Thomas R. Risdal, Senior Policy
                                               (c) If the license fees for all licenses              falls on a Saturday, Sunday, or a Federal             Analyst, Office of Regulatory Policy,
                                            issued to a licensee are not paid by the                 holiday, then the deadline shall be the               Farm Credit Administration, McLean,
                                            final payment date, a hold will be                       next business day.                                    VA 22102–5090, (703) 883–4257, TTY
                                            placed on the use of all licenses issued                    (b) All applications and fee payments              (703) 883–4056, or Nancy Tunis, Senior
                                            to the licensee and no articles will be                  required under this subpart shall be                  Counsel, Office of General Counsel,
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                                            permitted entry under those licenses.                    made utilizing the electronic software                Farm Credit Administration, McLean,
                                            The Licensing Authority shall send a                     designated for this purpose by the                    VA 22102–5090, (703) 883–4061, TTY
                                            warning by email advising the licensee                   Licensing Authority, and official                     (703) 883–4056.
                                            that if payment is not made in                           correspondence with the Licensing                     SUPPLEMENTARY INFORMATION: The Farm
                                            accordance with § 6.36(b) and received                   Authority, except as provided under                   Credit Administration amended our
                                            within 10 calendar days from the date                    § 6.28(b), shall be by email. Digital                 regulations to clarify and enhance


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Document Created: 2018-02-23 09:26:47
Document Modified: 2018-02-23 09:26:47
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective Date: September 1, 2015.
ContactSugar and Dairy Branch, Import Policies and Export Reporting Division, Office of Trade Programs, Foreign Agricultural Service, U.S. Department of Agriculture, (202) 720-0638; fax (202) 720-0876; [email protected]
FR Citation80 FR 44251 
RIN Number0551-AA82
CFR AssociatedAgricultural Commodities; Dairy; Cheese; Imports; Procedural Rules; Application Requirements; Tariff-Rate Quota and Reporting and Recordkeeping Requirements

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