U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

i

66–010 CC

" ! COMMITTEE PRINT 106TH CONGRESS

2d Session

WMCP:

2000

106–13

SUBCOMMITTEE ON TRADE

OF THE

COMMITTEE ON WAYS AND MEANS

U.S. HOUSE OF REPRESENTATIVES

WRITTEN COMMENTS

ON

TECHNICAL CORRECTIONS TO U.S.

TRADE LAWS AND MISCELLANEOUS DUTY SUSPENSION BILLS

APRIL 20, 2000

Printed for the use of the Committee on Ways and Means by its staff

ii

COMMITTEE ON WAYS AND MEANS

BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

NANCY L. JOHNSON, Connecticut

AMO HOUGHTON, New York

WALLY HERGER, California

JIM MCCRERY, Louisiana

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JIM NUSSLE, Iowa

SAM JOHNSON, Texas

JENNIFER DUNN, Washington

MAC COLLINS, Georgia

ROB PORTMAN, Ohio

PHILIP S. ENGLISH, Pennsylvania

WES WATKINS, Oklahoma

J.D. HAYWORTH, Arizona

JERRY WELLER, Illinois

KENNY HULSHOF, Missouri

SCOTT MCINNIS, Colorado

RON LEWIS, Kentucky

MARK FOLEY, Florida

CHARLES B. RANGEL, New York

FORTNEY PETE STARK, California

ROBERT T. MATSUI, California

WILLIAM J. COYNE, Pennsylvania

SANDER M. LEVIN, Michigan

BENJAMIN L. CARDIN, Maryland

JIM MCDERMOTT, Washington

GERALD D. KLECZKA, Wisconsin

JOHN LEWIS, Georgia

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

JOHN S. TANNER, Tennessee

XAVIER BECERRA, California

KAREN L. THURMAN, Florida

LLOYD DOGGETT, Texas

A.L. SINGLETON, Chief of Staff

JANICE MAYS, Minority Chief Counsel

SUBCOMMITTEE ON TRADE

PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

AMO HOUGHTON, New York

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JENNIFER DUNN, Washington

WALLY HERGER, California

JIM NUSSLE, Iowa

SANDER M. LEVIN, Michigan

CHARLES B. RANGEL, New York

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

XAVIER BECERRA, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records

of the Committee on Ways and Means are also published in electronic form. The printed

record of written comments remains the official version. Because electronic submissions

are used to prepare both printed and electronic versions of the hearing/written comments

record, the process of converting between various electronic formats may introduce unintentional

errors or omissions. Such occurrences are inherent in the current publication process and

should diminish as the process is further refined.

iii

C O N T E N T S

Page

Advisory of April 20, 2000, announcing request for written comments on

Technical Corrections to U.S. Trade Laws and Miscellaneous Duty Suspension bills. ............................................................................................................... 2

H.R. 1622:

Fur Commission USA, Corando, CA, statement and attachment ................ 14

International Mass Retail Association, Arlington, VA, statement ............... 18

H.R. 2881: No comments submitted.

H.R. 3276: No comments submitted.

H.R. 3366: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 21

H.R. 3367: No comments submitted.

H.R. 3368: No comments submitted.

H.R. 3369: No comments submitted.

H.R. 3370: No comments submitted.

H.R. 3371: No comments submitted.

H.R. 3474: No comments submitted.

H.R. 3475: No comments submitted.

H.R. 3476: No comments submitted.

H.R. 3604: No comments submitted.

H.R. 3684:

California Association of Winegrape Growers, Sacramento, CA, Karen

Ross, letter ..................................................................................................... 23

Giumarra Vineyards, Bakersfield, CA, John Giumarra, letter ..................... 27

National Grape Cooperative Inc., Westfield, NY, Richard A. Boushey,

Welch Foods, Inc., Concord, MA .................................................................. 28

Fredrick P. Kilian, joint letter ....................................................................... 28

Vivian Tseng, joint letter ............................................................................... 29

National Juice Products Association, Tampa, FL, statement and attachment ............................................................................................................... 30

Thomas, Hon. William M., a Representative in Congress from the State

of California, statement ................................................................................ 33

H.R. 3704:

American Apparel Manufacturers Association, Arlington, VA, Stephen

Lamar, letter ................................................................................................. 34

American Textile Manufacturers Institute, Carlos Moore, letter ................. 35

International Mass Retail Association, Arlington, VA, statement ............... 18

Mattel, Inc., El Segundo, CA, statement ........................................................ 36

Rubie’s Costume Co. Inc., Richmond Hill, NY, Marc Beige, letter ............... 37

Toy Association of Southern California, Los Angeles, CA, Leeton Lee,

letter ............................................................................................................... 38

H.R. 3714: Bayer Corporation, U.S.A., Pittsburgh, PA, Stephen R. Johnsen,

letter ...................................................................................................................... 39

H.R. 3715: No comments submitted.

H.R. 3716: Honeywell International Inc., statement ............................................ 40

H.R. 3717: No comments submitted.

H.R. 3718: No comments submitted.

H.R. 3719: No comments submitted.

H.R. 3720: No comments submitted.

H.R. 3721: No comments submitted.

H.R. 3722: No comments submitted.

H.R. 3723: No comments submitted.

H.R. 3724: No comments submitted.

H.R. 3725: No comments submitted.

H.R. 3726: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 42

Page

iv

H.R. 3727: No comments submitted.

H.R. 3728: No comments submitted.

H.R. 3729: No comments submitted.

H.R. 3730: No comments submitted.

H.R. 3731: No comments submitted.

H.R. 3733: No comments submitted.

H.R. 3734: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 44

H.R. 3735: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 44

H.R. 3736: No comments submitted.

H.R. 3737: No comments submitted.

H.R. 3738: No comments submitted.

H.R. 3739: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3740: No comments submitted.

H.R. 3741: No comments submitted.

H.R. 3742: No comments submitted.

H.R. 3743: No comments submitted.

H.R. 3746: Honeywell International Inc., statement ............................................ 46

H.R. 3747: Honeywell International Inc., statement ............................................ 47

H.R. 3748: Honeywell International Inc., statement ............................................ 48

H.R. 3751:

Micron Technology, Inc., Boise, ID, and Hale and Dorr LLP, Bonnie

B. Byers, letter .............................................................................................. 50

Semiconductor Industry Association, San Jose, CA, Daryl G. Hatano,

letter ............................................................................................................... 51

H.R. 3752: No comments submitted. ......................................................................

H.R. 3753: Copper & Bass Fabricators Council, Inc., Joseph L. Mayer, letter

and attachment .................................................................................................... 52

H.R. 3754: Calgon Carbon Corporation, Pittsburgh, PA, Karl D. Krause, letter .......................................................................................................................... 54

H.R. 3755: No comments submitted.

H.R. 3757: No comments submitted.

H.R. 3758: No comments submitted.

H.R. 3759: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3760: No comments submitted.

H.R. 3762: Elf Atochem North America, Inc., Arlington, VA, Charles A.

Kitchen, letter and attachment ......................................................................... 56

H.R. 3763: Elf Atochem North America, Inc., Arlington, VA, Charles A.

Kitchen, letter and attachment ......................................................................... 57

H.R. 3764: Elf Atochem North America, Inc., Arlington, VA, Charles A.

Kitchen, letter and attachment ......................................................................... 58

H.R. 3772: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3773: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3774: No comments submitted.

H.R. 3775: No comments submitted.

H.R. 3776: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3777: SunChemical Corporation, Cincinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3778:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3779:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

Page

v

H.R. 3779—Continued

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3780:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3781:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3782:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3783:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3784:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Page

vi

H.R. 3784—Continued

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3785:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3786:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3787:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3788:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3789:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Page

vii

H.R. 3789—Continued

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3790:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3791:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3792:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3793:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3794:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Page

viii

H.R. 3794—Continued

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3795:

Digital Matrix Corporation, Hempstead, NY, Alex Greenspan, statement

and attachment ............................................................................................. 60

International Electronics Manufacturers and Consumers of America,

Keith Smith, letter and attachments .......................................................... 62

Kuykendall, Hon. Steven T., a Representative in Congress from the State

of California, letter ....................................................................................... 63

Optical Disc Corporation, Santa Fe Springs, CA, Richard L. Wilkinson,

statement and attachments ......................................................................... 64

Panasonic Disc Services Corporation, Torrance, CA, Robert B. Pfannkuch,

letter ............................................................................................................... 66

Sony Electronics Inc., Woodcliff Lake, NJ, Jim Palumbo, letter .................. 68

Toolex USA, Irvine, CA, Arnold S. Block, letter ............................................ 69

H.R. 3796:

Danner, Hon. Pat, a Representative in Congress from the State of Missouri, letter .................................................................................................... 76

Nufarm Limited, and Nufarm America’s, Inc., St. Joseph, MO, Roger

Unruh, joint letter ......................................................................................... 77

United Agri Products, Greeley, CO, James Sell, letter ................................. 78

H.R. 3797:

Danner, Hon. Pat, a Representative in Congress from the State of Missouri, letter .................................................................................................... 78

Dow AgroSciences LLC, Indianapolis, IN, Gregory E. McDaniel, letter ...... 79

Nufarm Limited, and Nufarm America’s, Inc., St. Joseph, MO, Roger

Unruh, joint letter ......................................................................................... 81

United Agri Products, Greeley, CO, James Sell, letter ................................. 83

H.R. 3801: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 84

H.R. 3802: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 85

H.R. 3803: No comments submitted.

H.R. 3804: No comments submitted.

H.R. 3805: No comments submitted.

H.R. 3808: No comments submitted.

H.R. 3813: No comments submitted.

H.R. 3818:

Haarmann & Reimer, Teterboro, NJ, William J. Ludlum, letter ................. 86

Hoffmann-La Roche, Inc., Nutley, NJ, and Barnes, Richardson &

Colburn, Matthew T. McGrath, letter ......................................................... 87

H.R. 3820:

Ney, Hon. Robert W., a Representative in Congress from the State of

Ohio, letter .................................................................................................... 88

Shieldalloy Metallurgical Corporation, Newfield, NJ, Eric E. Jackson,

letter ............................................................................................................... 89

Strategic Minerals Corporation, Danbury, CT, Nicholas A. Pyle, letter ...... 90

H.R. 3821: US JVC Corp., Wayne, NJ, statement ................................................ 91

H.R. 3828: No comments submitted.

H.R. 3837: No comments submitted.

H.R. 3838: Elf Atochem North America, Inc., Arlington, VA, Charles A. Kitchen, letter and attachment .................................................................................... 93

H.R. 3853: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 95

H.R. 3854: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 96

H.R. 3855: Bayer Corporation, U.S.A., Pittsburgh, PA, Stephen R. Johnsen,

letter ...................................................................................................................... 97

H.R. 3856: Bayer Corporation, U.S.A., Pittsburgh, PA, Stephen R. Johnsen,

letter ...................................................................................................................... 98

H.R. 3858: Tata Tea, Incorporated, Plant City, FL, V. Venkiteswaran, statement ...................................................................................................................... 98

H.R. 3868: No comments submitted.

H.R. 3869:

Hyde, Hon. Henry J., a Representative in Congress from the State of

Illinois, letter ................................................................................................. 100

Page

ix

H.R. 3869—Continued

Outokumpu Cooper, Inc., Bloomingdale, IL, Martin A. Kroll, and Ulf

Anvin, letter and attachments ..................................................................... 101

Weller, Hon. Jerry, a Representative in Congress from the State of Illinois, letter ...................................................................................................... 106

H.R. 3875:

McDermott International Incorporated, Arlington, VA, Bruce N. Hatton,

letter and attachments ................................................................................. 107

PricewaterhouseCoopers LLP, Nuclear Energy Institute, Alliant Energy

Corporation, Madison, WI, Northern States Power Company, Minneapolis, MN, Pinnacle West Energy Corporation, Phoenix, AZ, Southern Companies, Atlanta, GA, Westinghouse Electric Company, Pittsburgh, PA, and WPS Resources Corporation, Green Bay, WI, Kirt C.

Johnson, and Patrick H. Raffaniello, joint letter and attachments .......... 112

H.R. 3876: Bayer Corporation, U.S.A., Pittsburgh, PA, Stephen R. Johnsen,

letter ...................................................................................................................... 132

H.R. 3877: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. Niedermeyer,

letter ...................................................................................................................... 133

H.R. 3930: No comments submitted.

H.R. 3931: No comments submitted.

H.R. 3932: No comments submitted.

H.R. 3933: No comments submitted.

H.R. 3934: No comments submitted.

H.R. 3935: No comments submitted.

H.R. 3936: No comments submitted.

H.R. 3937: SunChemical Corporation, Cinncinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3938: No comments submitted.

H.R. 3939: SunChemical Corporation, Cinncinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3940: No comments submitted.

H.R. 3941: No comments submitted.

H.R. 3942: No comments submitted.

H.R. 3943: No comments submitted.

H.R. 3944: SunChemical Corporation, Cinncinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3945: No comments submitted.

H.R. 3946: No comments submitted.

H.R. 3947: ColorChem International Corp., Atlanta, GA, and Hogan &

Hartson, T. Clark Weymouth, and Daniel J. Cannistra, letter ........................ 136

H.R. 3948: No comments submitted.

H.R. 3949: No comments submitted.

H.R. 3950: No comments submitted.

H.R. 3951: SunChemical Corporation, Cinncinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

H.R. 3952: No comments submitted.

H.R. 3953: No comments submitted.

H.R. 3954: No comments submitted.

H.R. 3955: No comments submitted.

H.R. 3956: No comments submitted.

H.R. 3957: No comments submitted.

H.R. 3958: SunChemical Corporation, Cinncinnati, OH, Stephen J. Schmidt,

letter and attachment .......................................................................................... 45

Page

x

H.R. 3959: No comments submitted.

H.R. 3960: No comments submitted.

H.R. 3961: No comments submitted.

H.R. 3962: No comments submitted.

H.R. 3963: No comments submitted.

H.R. 3964: No comments submitted.

H.R. 3965: No comments submitted.

H.R. 3966: No comments submitted.

H.R. 3967: No comments submitted.

H.R. 3968: No comments submitted.

H.R. 3969: No comments submitted.

H.R. 3970: No comments submitted.

H.R. 3971: No comments submitted.

H.R. 3972: No comments submitted.

H.R. 3973: No comments submitted.

H.R. 3974: No comments submitted.

H.R. 3975: No comments submitted.

H.R. 3976: No comments submitted.

H.R. 3977: No comments submitted.

H.R. 3978: No comments submitted.

H.R. 3979: No comments submitted.

H.R. 3988: No comments submitted.

H.R. 3989: No comments submitted.

H.R. 3990: No comments submitted.

H.R. 3991: No comments submitted.

H.R. 3992: No comments submitted.

H.R. 4026: International Dairy Foods Association, Janet A. Nuzum, letter ...... 143

H.R. 4223: No comments submitted.

H.R. 4229: American Apparel Manufacturers Association, Arlington, VA, Stephen Lamar, letter ............................................................................................... 34

H.R. 4337:

Alliance of Automobile Manufacturers, Josephine S. Cooper, letter ............ 145

American Apparel Manufacturers Association, Arlington, VA, Stephen

Lamar, Letter ................................................................................................ 34

American Association of Exporters and Importers, New York, NY, statement ............................................................................................................... 146

American Electronics Association, AnnMarie McIntyre, letter and attachments ............................................................................................................. 147

Armstrong, Bob, Canadian Importers Association Inc., Toronto, Ontario,

Canada, letter ................................................................................................ 150

Association of International Automobile Manufacturers, Arlington, VA,

Timothy C. MacCarthy, letter ...................................................................... 148

Baglien, Brent A., ConAgra, Inc., letter ......................................................... 151

Bunden, Kenichi, Floral Trade Council, Haslett, MI, letter ......................... 156

Caine, Wesley K., Torrington Company, Torrington, CT, and Stewart

and Stewart, letter ........................................................................................ 167

Canadian Importers Association Inc., Toronto, Ontario, Canada, Bob

Armstrong, letter .......................................................................................... 150

Caterpillar Inc., Peoria, IL, Eric F. Hinton, letter ......................................... 150

ConAgra, Inc., Brent A. Balien, letter ............................................................ 151

Cooper, Josephine S., Alliance of Automobile Manufacturers, letter ........... 145

DaimlerChrysler Corporation, Auburn Hills, MI, Janet Y. Sangster, letter ................................................................................................................... 152

De Prest, Geert, Torrington Company, Torrington, CT, and Stewart and

Stewart, letter ............................................................................................... 167

Federal-Mogul Corporation, Southfield, MI, and Hughes Hubbard & Reed

LLP, Janet A. Forest, letter ......................................................................... 153

Fennell, William A., Timken Company, Canton, OH, and Stewart and

Stewart, letter ............................................................................................... 166

Finnegan, James P., U.S. Business Alliance for Customs Modernization,

letter and attachments ................................................................................. 170

Floral Trade Council, Haslett, MI, Kenichi Bunden, letter .......................... 156

Forest, Janet A.:

Federal-Mogul Corporation, Southfield, MI, and Hughes Hubbard &

Reed LLP, letter ..................................................................................... 153

Lands’ End, Inc., Dogeville, WI, and Hughes Hubbard & Reed LLP,

letter ....................................................................................................... 160

Hinton, Eric F., Caterpillar Inc., Peoria, IL, Letter ...................................... 150

Page

xi

H.R. 4337—Continued

JCPenney Purchasing Corporation, Dallas, TX, Peter McGrath, letter ...... 158

Johanson, David S.:

Timken Company, Canton, OH, and Stewart and Stewart, letter ........ 166

Torrington Company, Torrington, CT, and Stewart and Stewart,

letter ..................................................................................................... 167

Joint Industry Group, Ron Schoof, letter ....................................................... 158

Land’s End Inc., Dodgeville, WI, and Hughes Hubbard and Reed LLP,

Janet A. Forest, letter .................................................................................. 160

Lesher, Frank M., Sony Electronics Inc., Park Ridge, NJ, letter ................. 165

Levy, M. Barry, Toy Manufacturers of America, Inc., New York, NY

and Sharretts, Paley, Carter & Blauvelt, P.C., letter ................................ 169

MacCarthy, Timothy C., Association of International Automobile Manufacturers, Arlington, VA, letter .................................................................... 148

Mattel, Inc., El Segundo, CA, statement ........................................................ 162

McGrath, Peter, JCPenney Purchasing Corporation, Dallas, TX, letter ..... 158

McIntyre, AnnMarie, American Electronics Association, letter and attachments ............................................................................................................. 147

National Association of Manfacturers, Frank Vargo, letter .......................... 163

National Customs Brokers & Forwarders Association of America, Peter

H. Powell, Sr., letter ..................................................................................... 163

Sangster, Janet Y., DaimlerChrysler Corporation, Auburn Hills, MI, letter ................................................................................................................... 152

Schoof, Ron, Joint Industry Group, letter ...................................................... 158

Sony Electronics Inc., Park Ridge, NJ, Frank M. Lesher, letter .................. 165

Stewart, Terence P.:

Timken Company, Canton, OH, and Stewart and Stewart, letter ........ 166

Torrington Company, Torrington, CT, and Stewart and Stewart,

letter ..................................................................................................... 167

Timken Company, Canton, OH, and Stewart and Stewart, Terrence P.

Stewart, William A. Fennell, and David S. Johanson, letter .................... 166

Torrington Company, Torrington, CT, and Stewart and Stewart, Terence

P. Stewart, Wesley K. Caine, Geert De Prest, David S. Johanson,

letter ............................................................................................................... 167

Toy Manufactures of America, Inc., New York, NY, Sharretts, Paley,

Carter & Blauvelt, P.C., M. Barry Levy, letter .......................................... 169

U.S. Business Alliance for Customs Modernization, James P. Finnegan,

letter and attachments ................................................................................. 170

Vargo, Frank, National Association of Manufacturers, letter ...................... 163

(1)

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON TRADE

FOR IMMEDIATE RELEASE CONTACT: (202) 225–6649

April 20, 2000

No. TR–20

Crane Announces Request for

Written Comments on Technical Corrections

to U.S. Trade Laws and Miscellaneous

Duty Suspension Bills

Congressman Philip M. Crane (R–IL), Chairman, Subcommittee on Trade of the

Committee on Ways and Means, today announced that the Subcommittee is requesting written comments for the record from all parties interested in technical corrections to U.S. trade laws and miscellaneous duty suspension proposals.

BACKGROUND:

In the first session of the 106th Congress, as part of the ongoing process of identifying technical changes to improve the trade laws, a number of proposals were submitted to the Subcommittee by the Administration, the business community, and

the public for possible consideration for future legislation. Members also introduced

legislation to provide temporary suspension of duty or duty-free treatment for certain specific products and to change other miscellaneous provisions. On August 12,

1999, Chairman Crane requested written public comments on a list of such bills

that had been introduced by June 11, 1999, and requested the Administration’s position on those bills, a report from the International Trade Commission (ITC), and

budget scoring estimates from Congressional Budget Office (CBO) (See TR–15).

Those comments are printed in WMCP: 106–8.

On January 11, 2000, Chairman Crane requested that all Members who planned

to introduce similar legislation do so by March 1, 2000. Chairman Crane is now requesting public comment on those bills listed below and is requesting the Administration’s position, an ITC report, and budget scoring estimates from CBO. After the

comment period, the Subcommittee will review all comments to determine which

bills should be included, together with bills from the list published last August, in

a miscellaneous trade package. The Committee will consider the extent to which the

bills create a revenue loss, operate retroactively, attract significant controversy, or

are not administrable.

Congress passed the Miscellaneous Trade and Technical Corrections Act of 1999

(P.L. 106–36) in the first session of the 106th Congress, and the legislation was

signed into law by the President on June 25, 1999.

2

SUMMARY OF BILLS:

H.R. 1622—The Dog and Cat Protection Act of 1999, to prohibit the importation

of products made with dog or cat fur; to prohibit the sale, manufacture, offer for

sale, transportation, and distribution of products made with dog or cat fur in the

United States; and to impose civil and criminal penalties for violation of the Act.

H.R. 2881—Amends section 13031(b)(1)(A)(iii) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(1)(A)(iii)) to allow for the collection

of fees for Customs’ services for the arrival of certain ferries.

H.R. 3276—Amends subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) by inserting in numerical sequence the new heading 9902.28.01, Thionyl chloride (CAS No. 007719–09–7) (provided for in subheading

2812.10.50), as temporarily duty-free.

H.R. 3366—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.29.27, Phenylmethyl

hydrazinecarboxylate (CAS No. 5331–43–1) (provided for in subheading 2928.00.25),

as temporarily duty-free.

H.R. 3367—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.29.34, 2–1[ethoxyimino propyl]–3-hydroxy–5(2,4,6-trimethylphenyl)2-cyclohexen–1-one (Achieve) (CAS No. 87820–88–0)

(provided for in subheading 2934.90.15), as temporarily duty-free.

H.R. 3368—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.29.33, 1-piperidinecarboxylic acid, 2-

[(2,4—dichloro–5-hydroxyphenyl)hydrazono]-, methyl ester (KNOO2) (CAS No.

159393–46–1) (provided for in subheading 2933.39.61), as temporarily duty-free.

H.R. 3369—Amends subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States by inserting in the numerical sequence the new heading

9902.29.30, 2-imino–1-methoxycarbonyl-piperidine hydrochloride (KL08 4) (CAS No.

159393–48–3) (provided for in subheading 2933.39.61), with temporary duty reduction to 6.8 percent ad valorem for calender year 2000 and to 6.1 percent for calendar

year 2001.

H.R. 3370—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.29.35, 2-(Methoxycarbonyl)

Benzylsulfonamide (IN–N5297) (CAS No. 59777–72–9) (provided for in subheading

2935.00.75), as temporarily duty-free.

H.R. 3371—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.38.01, Methyl(E)–2(2-[6-(2-

cyanophonoxy)pyrimidin–4-yloxy]pkhenyl)–3-methoxyacrylate (azoxystrobin formulated ‘‘Heritage,’’ ‘‘Abound,’’ and ‘‘Quadris’’) (CAS No. 13860–33–8) (provided for in

subheading 3808.20.15), with a temporary duty reduction to 5.7 percent ad valorem.

H.R. 3474—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.08, Fungaflor 500 EC, in preparation

form, as a fungicide for citrus fruit (provided for in subheading 3808.20.15), as temporarily duty-free.

H.R. 3475—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.20, NORBLOC 7966, in bulk active

form as a benzotriazole stabilizer (CAS No. 96478–09–0) (provided for in subheading

2933.90.79), as temporarily duty-free.

H.R. 3476—Amendssubchapter II of chapter 99 of the HTSUS by inserting in numerical sequence the new heading 9902.29.10, Imazalil, as the active ingredient in

fungicides for citrus fruit (CAS No. 73790–28–0) (provided for in subheading

2933.29.35), as temporarily duty-free.

H.R. 3604—Provides for the liquidation or reliquidation of certain identified entries in accordance with a final decision of the U.S. Department of Commerce under

the Tariff Act of 1930.

H.R. 3684—Amends section 313 of the Tariff Act of 1930 to allow duty drawback

for grape juice concentrates made from Concord or Niagara grapes.

H.R. 3704—Amends chapter 95 of the HTSUS by striking subheading 9503.70.00

and inserting new subheadings and superior text, to reclassify certain toys in

9503.70.10 (dress-up sets and outfits, marketed year-round for role-play activity,

whether or not of textile materials, and parts and accessories thereof); and in

9503.70.20 (other toys put up in sets or outfits, and parts and accessories thereof).

The bill also amends the headnotes to chapter 95 and applies retroactively.

3

H.R. 3714—Amends heading 9902.32.12 of subchapter II of chapter 99 of the

HTSUS to extend the temporary duty suspension on DEMT.

H.R. 3715—Amends chapter 70 of the HTSUS to revise the article description for

monochrome glass envelopes to be eligible for duty-free treatment.

H.R. 3716—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.17, 9-Anthracene-carboxylic acid,

(triethoxysilyl) methyl ester (a certain ultraviolet dye) (provided for in subheading

2918.90.90), as temporarily duty-free.

H.R. 3717—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.38.20, 3-(3,5-dichlorophenyl)–5-ethenyl–5-methyl–2,4-oxazolidinedione (Vinclozolin) (CAS No. 50471–44–8) (provided

for in subheading 3808.20.15), as temporarily duty-free.

H.R. 3718—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.64, (E)–2-[1-[[(3-chloro–2-propenyl)

oxy] imino] propyl] ¥3-hydroxy–5 (tetrahydro–2H-pyran–4-yl)–2-cyclohexen–1 -one

(Tepraloxydim) CAS No. 149979–41–9) (provided for in subheading 3808.30.50), as

temporarily duty-free.

H.R. 3719—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.38.30, 2-tert-butyl–5-(4-tert-butylbenzylthio)–4-chloro-pyridazin–3(2H)-one (Pyridaben) (CAS No. 96489–71–3) (provided for in subheading 3808.30.15), as temporarily duty-free.

H.R. 3720—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new subheading 9902.29.39, 2-Acetylnicotinic acid (CAS No. 89942–59–6) (provided

for in subheading 2933.39.61), as temporarily duty-free.

H.R. 3721—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.21.06, S-adenosylmethionine 1.4

butanedisulfonate (SAMe) (CAS No. 557–04–0) (provided for in subheading

2106.90.99), as temporarily duty-free.

H.R. 3722—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.32.04, 1,5-Naphthalenedisulfonic acid,

2-((8-((4-chloro–6-((3-(((4-choloro–6-((7-((1,5-disulfo–2-naphthalenyl)azo)–8-hydroxy–

3,6-disulfo–1-naphthlenyl)amino)–1,3,5-triazin–2-yl)amino)methyl) phenyl)amino)–

1,3,5-triazin–2-yl)amino)–1-hydroxy–3,6-disulfo–2-naphthalenyl)azo)-, octa-(Procion

Crimson H-EXL) (CAS No. 186554–26–7) (provided for in subheading 3204.16.30),

as temporarily duty-free.

H.R. 3723—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading for Dispersol Crimson SF Grains

9902.32.05, a mixture of Benzo (1,2-b:4,5-b)difuran–2,6-dione,3-phenyl–7-(4-

propoxyphenyl)-, (CAS No. 79694–17–0); acetic acid (4–2,6-dihydro–2,6-dioxo–7-

phenylbenzo(1,2-b:4,5-b)difuran–3-yl)-phenoxy)–2-ethoxyethyl) ester (CAS No.

126877–05–2); and acetic acid (4-(2,6-dihydro–2,6-dioxo–7-(4-

propoxphenyl)benzo(1,2-b:4,5-b)difuran–3-yl)phenoxy)-phenoxy)-, 2-ethoxyethyl ester

(CAS No. 126877–06–3) (provided for in subheading 3204.11.35), as temporarily

duty-free.

H.R. 3724—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading for Procion Navy H-EXL 9902.32.09, a mixture of 2,7-Naphthalenedisulfonic acid, 4-amino–3,6-bis[[5-[[4-chloro–6-[(2-methyl–4-

sulfophenyl) amino]–1,3,5-triazin–2-yl]amino]–2-sulfophenyl]azo]–5-hydroxy-,

hexasodium salt (CAS No. 186554–27–8); and 1,5-Naphthalenedisulfonic acid, 2-((8-

((4-chloro–6-((3-(((4-chloro–6-((7-((1,5-disulfo–2-naphthalenyl)azo)–8-hydroxy–3,6-

disulfo–1-naphthlenyl)amino)–1,3,5-triazin–2-yl)amino) methyl)phenyl)amino)–1,3,5-

triazin–2-yl)amino)–1-hydroxy–3,6-disulfo–2-naphthalenyl)azo)-, octa-(CAS No.

186554–26–7) (provided for in subheading 3204.16.30),as temporarily duty-free.

H.R. 3725—Amends subchapter II of chapter 99 of the HTSUS by striking heading 9902.32.43 and inserting the new subheading for Procion Yellow H–EXL

9902.32.43, a mixture of 1,5-Naphthalenedisulfonic acid, 3,3-((3-methyl (CAS No.

72906–24–2) and the 4-methyl compound ¥1,2-phyenylene)bis(imino(6-chloro–1,3,5-

triazine–4,2-diyl)imino(2-(acetylamino)–5-methoxy–4,1-phenylene)azo))bis-,

tetrasodium salt (CAS No. 72906–25–3) (provided for in subheading 3204.16.30),as

temporarily duty-free.

H.R. 3726—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, O-phenyl phenol (ortho-phenyl

4

phenol (‘‘;OPP’’)) (CAS No. 90–43–7) (provided for in subheading 2907.19.80), as

temporarily duty-free.

H.R. 3727—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.29.16, 2-Methoxy–1-Propene (2-

Methoxypropene) (CAS No. 116–11–0) (provided for in subheading 2909.19.18), as

temporarily duty-free.

H.R. 3728—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.29.55, 3,5-Difluroaniline (CAS No.

372–39–4) (provided for in subheading 2921.42.65), with a temporary duty reduction

to 6.3 percent ad valorem.

H.R. 3729—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.29.46, 3,7-dichloro–8-quinoline carboxylic acid (Quinclorac) (CAS No. 84087–01–4) (provided for in subheading

2933.40.30), with a temporary duty reduction to 5.0 percent ad valorem.

H.R. 3730—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new subheading for Dispersol Black XF Grains 9902.32.44, a mixture of

Napthalenesulfonic acid, polymer with formaldehyde, sodium salt (CAS No. 36290–

04–7); .beta.-Alanine, N-(4-((2-bromo–6-choloro–4-nitrophenyl)azo)phenyl)-N-(3-

methoxy–3-oxoproply)-, methyl ester (CAS No. 59709–38–5); Ethanol, 2,2-((4-((3,5-

dinitro–2-thienyl)azo)phenyl) imino)bis-, diacetate (ester) (CAS No. 42783–06–2);

and .beta.-Alanine, N-(3-(acetylamino)–4-((2,4-dinitrophenly)azo)phenyl)-N-(3-

methoxy–3-oxoproply)-, methyl ester (CAS No. 42783–06–2); and (CAS No. 70729–

65–6) (the foregoing provided for in subheading 3204.11.35), as temporarily dutyfree

H.R. 3731—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, Fluroxypyr 1-methylheptyl ester

(1-methylheptyl 4 aminooo–3,5-dichloro–6-fluoro–2-pyridyloxyacetate (fluroxypyr 1-

methylheptyl ester (FME)) (CAS No. 81406–37–3) (provided for in subheading

2933.39.25), as temporarily duty-free.

H.R. 3733—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.39.01, Ethylene/tetra-fluoroethylene copolymer (ETFE) (provided for in subheading 3904.69.50), with a temporary duty reduction to 3.0 percent ad valorem.

H.R. 3734—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.04, Copper, [29H,31Hphthalocyaninate(2-)-N29,N30,N31,N32]-, brominated chlorinated (monolite green

860) (CAS No. 68512–13–0) (provided for in subheading 3204.17.90), as temporarily

duty-free.

H.R. 3735—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.02, Copper, [29H,31Hphthalocyaninato(2-)-N29,N30,N31,N32]-, brominated chlorinated (monolite green

952) (CAS No. 68512–13–0) (provided for in subheading 3204.17.60), as temporarily

duty-free.

H.R. 3736—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.01, Octadecanoic acid, 12-hydroxy-,

homopolymer, reaction products with N,N-dimethyl–1,3-propanediamine di-Me sulfate-quaternized (solsperse 17260) (CAS No. 70879–66–2) (provided for in subheading 3824.90.28), as temporarily duty-free.

H.R. 3737—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.02, Octadecanoic acid, 12-hydroxy-,

homopolymer, reaction products with N,N-dimethyl–1,3-propanediamine,di-Me sulfate-quaternized (solsperse 17000) (CAS No. 70879–66–2) (provided for in subheading 3824.90.40), as temporarily duty-free.

H.R. 3738—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.03, 1-Octadecanaminium, N,N-dimethyl-N-octadecyl-, (SP–4–2)-[29H,31H-phthalocyanine–2-sulfonate (3-).kappa.N29,

.kappa.N30,.kappa.N31, .kappa.N32]cuprate(1-) (solsperse 5000) (CAS No. 70750–

63–9) (provided for in subheading 3824.90.28), as temporarily duty-free.

H.R. 3739—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.03, 5,9,14,18-Anthrazinetetrone,6,15-

dihydro-(monolite blue 3R) (CAS No. 81–77–6) (provided for in subheading

3204.17.9085), as temporarily duty-free.

5

H.R. 3740—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, Tetraacetylethylenediamine (certain TAED chemicals) (CAS Nos. 10543–57–4, 61791–28–4, 9004–32–4, 1328–53–6,

147–14–8, 1302–78–9, and 14808–60–7) (provided for in subheading 2924.10.10), as

temporarily duty-free.

H.R. 3741—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.39.07 to extend the temporary suspension of duty on a certain polymer to December 31, 2003.

H.R. 3742—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, Isobornyl acetate (CAS No. 125–

12–2) (provided for in subheading 2915.39.45), as temporarily duty-free.

H.R. 3743—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.34.01, Sodium petroleum sulfonate (CAS

No. 68608–26–4) (provided for in subheading 3402.11.50), as temporarily duty-free.

H.R. 3746—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.29.07 to extend the temporary suspension of duty on 4-hexylresorcinol to December 31, 2003.

H.R. 3747—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.29.37 to extend the temporary suspension of duty on certain sensitizing dyes

to December 31, 2003.

H.R. 3748—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.32.07 to extend the temporary suspension of duty on certain organic pigments

and dyes to December 31, 2003.

H.R. 3751—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.71.08 to extend the temporary suspension of duty on certain semi-manufactured forms of gold to December 31, 2003.

H.R. 3752—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, 4-Nitro-o-xylene (CAS No. 99–51–

4) (provided for in subheading 2904.20.15), as temporarily duty-free.

H.R. 3753—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.74.10, certain copper foils (provided

for in subheading 7410.11.00), as temporarily duty-free.

H.R. 3754—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.38.02, certain activated carbon (provided for in subheading 3802.10.00), as temporarily duty-free.

H.R. 3755—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.84.60, certain buff brushes (provided

for in subheading 8466.93.95), as temporarily duty-free.

H.R. 3757—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.73, Solvent Blue 124 (CAS No. 29243–

26–3) (provided for in subheading 3204.19.20), as temporarily duty-free.

H.R. 3758—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.72, Solvent Blue 104 (CAS No. 116–

75–6) (provided for in subheading 3204.19.20), as temporarily duty-free.

H.R. 3759—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.74, Pigment Red 176 (CAS No. 12225–

06–8) (provided for in subheading 3204.14.04), as temporarily duty-free.

H.R. 3760—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.96, Benzensulfonamide,4-amino–2,5-

dimethyoxy-N-phenyl (CAS No. 52298–44–9) (provided for in subheading

2935.00.10), as temporarily duty-free.

H.R. 3762—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, 10-Undecylenic acid (CAS No.

112–38–9) (provided for in subheading 2916.19.30), as temporarily duty-free.

H.R. 3763—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.02, n-Heptaldehyde (CAS No. 111–71–

7) (provided for in subheading 2912.19.50), as temporarily duty-free.

H.R. 3764—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.03, n-Heptanoic acid (CAS No. 111–

14–8) (provided for in subheading 2915.90.18), as temporarily duty-free.

6

H.R. 3772—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.04, Pigment Yellow 199 (CAS No.

136897–58–0) (provided for in subheading 3204.17.60), as temporarily duty-free.

H.R. 3773—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.10, Pigment Blue 60 (CAS No. 81–77–

6) (provided for in subheading 3204.17.90), as temporarily duty-free.

H.R. 3774—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.09, Solvent Violet 13 (CAS No. 81–48–

1) (provided for in subheading 3204.19.20), as temporarily duty-free.

H.R. 3775—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.05, Solvent Blue 67 (CAS No. 81457–

65–0) (provided for in subheading 3204.19.11), as temporarily duty-free.

H.R. 3776—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.17, Pigment Yellow 147 (CAS No.

4118–16–5) (provided for in subheading 3204.17.60), as temporarily duty-free.

H.R. 3777—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.20, Pigment Yellow 191.1 (CAS No.

154946–66–4) (provided for in subheading 3204.17.60), as temporarily duty-free.

H.R. 3778—Amends subheadings 8477.10.40 and 8479.89.85 of the HTSUS to

provide duty-free treatment for, and clarify the classification of, machines and components used in the manufacture of digital versatile discs (DVDs).

H.R. 3779—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.01, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

the manufacture of DVDs (provided for in subheading 8456.99.90), as temporarily

duty-free.

H.R. 3780—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.06, In-Line System Machines, whether

imported as an entirety, or in components, or parts thereof, for use in the manufacture of DVDs (provided for in subheading 8479.89.97), as temporarily duty-free.

H.R. 3781—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.02, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

the manufacture of DVDs (provided for in subheading 8460.40.40), as temporarily

duty-free.

H.R. 3782—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.07, Laser Encoder Machines, whether

imported as an entirety, or in components, or parts thereof, for use in the manufacture of DVDs (provided for in subheading 8479.89.97), as temporarily duty-free.

H.R. 3783—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.03, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

the manufacture of DVDs (provided for in subheading 8462.41.00), as temporarily

duty-free.

H.R. 3784—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.08, electrical machines and apparatus,

whether imported separately or as an entirety, and parts thereof, for use in the

manufacture of DVDs (provided for in subheading 8543.30.00), as temporarily dutyfree.

H.R. 3785—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.04, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

the manufacture of DVDs (provided for in subheading 8464.20.50), as temporarily

duty-free.

H.R. 3786—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.09, electrical machines and apparatus,

whether imported separately or as an entirety, and parts thereof, for use in the

manufacture of DVDs (provided for in subheading 8543.89.96), as temporarily dutyfree.

H.R. 3787—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.05, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

7

the manufacture of DVDs (provided for in subheading 8464.90.90), as temporarily

duty-free.

H.R. 3788—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.15, Coater machines, whether imported as an entirety, or in components, or parts thereof, for use in the manufacture

of DVDs (provided for in subheading 8479.89.97), as temporarily duty-free.

H.R. 3789—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.13, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

the manufacture of DVDs (provided for in subheading 8477.10.90), as temporarily

duty-free.

H.R. 3790—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the f new heading 9902.84.16, Bonding machines, whether imported as an entirety, or in components, or parts thereof, for use in the manufacture

of DVDs (provided for in subheading 8479.89.97), as temporarily duty-free.

H.R. 3791—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.14, Stacker machines, whether imported as an entirety, or in components, or parts thereof, for use in the manufacture

of DVDs (provided for in subheading 8479.89.97), as temporarily duty-free.

H.R. 3792—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.17, Gold sputter machines, whether

imported as an entirety, or in components, or parts thereof, for use in the manufacture of DVDs (provided for in subheading 8479.89.97), as temporarily duty-free.

H.R. 3793—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.18, Aluminum sputter machines,

whether imported as an entirety, or in components, or parts thereof, for use in the

manufacture of DVDs (provided for in subheading 8479.89.97), as temporarily dutyfree.

H.R. 3794—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.19, machines or mechanical appliances, whether imported separately or as an entirety, and parts thereof, for use in

the manufacture of DVDs (provided for in subheading 8480.79.90), as temporarily

duty-free.

H.R. 3795—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.84.21, measuring or checking instruments, appliances, or machines, whether imported separately or as an entirety, and

parts thereof, for use in the manufacture of DVDs (provided for in subheading

9031.49.90), as temporarily duty-free.

H.R. 3796—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, 2-Methyl–4-chlorophenoxyacetic

acid (CAS No. 9021–09–6) (provided for in subheading 2918.90.20), as temporarily

duty-free.

H.R. 3797—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.02, 2,4-Dichlorophenoxyacetic acid, its

salts and esters (CAS No. 29091–09–6) (provided for in subheading 2918.90.20), as

temporarily duty-free.

H.R. 3801—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.01, Iminodisuccinate (CAS No.

144538–83–0) (provided for in subheading 3824.90.90), as temporarily duty-free.

H.R. 3802—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.02, Iminodisuccinate salts and aqueous solutions (provided for in subheading 3824.90.90), as temporarily duty-free.

H.R. 3803—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.85.04, (120/60Hz electrical transformers

(provided for in subheading 8504.31.40), with dimensions not exceeding 78mm by

64.5mm by 88.7mm and containing stacked EI laminations with an integral bobbin,

imported for use as components in radiobroadcast receivers with digital clock or

clock-timer, valued over $40 each) (provided for in subheading 8527.32.50), the foregoing which include a resonant system tuned to at least five audible , as temporarily

duty-free.

H.R. 3804—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.85.05, 120/60Hz electrical transformers

(provided for in subheading 8504.31.40), with dimensions not exceeding 51.7mm by

8

78mm by 91mm and each containing a layered and uncut round core with two balanced bobbins, imported for use as components in radio recorder combinations, incorporating optical disc (including compact disc) players or recorders (provided for

in subheading 8527.31.60), the foregoing which include a resonant system tuned to

at least five audible frequencies, as temporarily duty-free.

H.R. 3805—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.39.01, Polyvinylchloride (PVC) self-adhesive sheets of a type used to make bandages (provided for in subheading

3919.19.50), as temporarily duty-free.

H.R. 3808—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, BEPD 2-Butyl–2-ethylpropanediol

(CAS No. 115–84–4) (provided for in subheading 2905.39.90), as temporarily dutyfree.

H.R. 3813—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, Cyclohexadee–8-en–1-one (CHD)

(CAS No. 3100–36–5) (provided for in subheading 2914.29.50), as temporarily dutyfree.

H.R. 3818—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.17, 2-ethylbexyl 3-(4-methoxyphenyl)–

2-propenoate (octylmethoxycinnamate) (CAS No. 5466–77–3) (provided for in subheading 2918.90.30), as temporarily duty-free.

H.R. 3820—To provide for the liquidation or reliquidation of certain identified entries of carbides.

H.R. 3821—To provide for the liquidation or reliquidation of certain identified

color television receiver entries.

H.R. 3828—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.33, N-Cyclopropyl-N-(1,1-dimethylethy)–6-(methylthio)–1,3,5-

triazine–2,4-diamine (a paint additive chemical) (certain polyamides) (CAS No.

28159–98–0) (provided for in subheading 2933.69.60), as temporarily duty-free.

H.R. 3837—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, Ortho-cumyl-octylphenol (OCOP)

(CAS No. 73936–80–8) (provided for in subheading 2907.19.80), as temporarily dutyfree.

H.R. 3838—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.39.08, Micro-porous ultra fine spherical

forms of polyamides 6, 12, and 6/12 powder (provided for in subheading 3908.10.00),

as temporarily duty-free.

H.R. 3853—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.38.14, a certain Alkylsulfonie Acid

Ester of Phenol (Mesamoll) (CAS No. 70775–94–9)(provided for in subheading

3812.20.10), as temporarily duty-free.

H.R. 3854—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.38.30, a mixture of N-Phenyl-N-

((trichloromethyl)thio)-Benzenesulfonamide; calcium carbonate; and mineral oil

(Vulkalent E/C) (provided for in subheading 3824.90.28), as temporarily duty-free.

H.R. 3855—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.29.34, a certain 3,4-

ethylenedioxythiophene (Baytron M) (CAS No. 126213–50–1) (provided for in subheading 2934.90.90), as temporarily duty-free.

H.R. 3856—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.38.15, a certain catalytic preparation

based on Iron (III) toluenesulfonate (Baytron C-R) (CAS No. 77214–82–5) (provided

for in subheading 3815.90.50), as temporarily duty-free.

H.R. 3858—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.21.01, Preparations with a basis of extracts, essences, or concentrates of tea or mate, or with a basis of tea or mate, described in additional U.S. note 8 to chapter 7 and entered pursuant to its provisions

(provided for in subheading 2101.20.54), as temporarily duty-free.

H.R. 3868—To provide for the reliquidation of certain identified entries of vacuum cleaners as duty-free.

H.R. 3869—To provide for the liquidation or reliquidation of certain identified entries of copper and brass sheet and strip.

9

H.R. 3875—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new subheading 9902.84.02, Watertube boilers with a steam

production exceeding 45 t per hour, for use in nuclear facilities (provided for in subheading 8402.11.00), as temporarily duty-free.

H.R. 3876—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.39.01, a certain mixture of water and

poly(3,4-ethylene-dioxythiophene)-poly (styrenesulfonate) (cationic) (Baytron P) (CAS

No. 155090–83–8) (provided for in subheading 3911.90.25), as temporarily duty-free.

H.R. 3877—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, Dimethyl dicarbonate (CAS No.

4525–33–1) (provided for in subheading 2920.90.50), as temporarily duty-free.

H.R. 3930—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.01, 2,4-dichloro–5-hydroxyhydrazine

hydrochloride (KN001 (a hydrochloride)) (CAS No. 189573–21–5) (provided for in

subheading 2928.00.25), as temporarily duty-free.

H.R. 3931—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.02, Methyl thioglycolate (CAS No.

2365–48–2) (provided for in subheading 2930.90.90), as temporarily duty -free.

H.R. 3932—Amends subchapter II of chapter 99 of the HTSUS is amended by inserting in numerical sequence the new heading 9902.29.03, Methyl–4-

trifluoromethoxyphenyl-N-(chlorocarbonyl) carbamate (KL540) (CAS No. 173903–

15–6) (provided for in subheading 2924.29.70), as temporarily duty-free.

H.R. 3933—Amends subchapter II of chapter 99 of the HTSUS is amended by inserting in numerical sequence the new heading 9902.29.04, (S)–6-chloro–3,4-

dihydro–4-E-cyclopropylethenyl–4-trifluoromethyl–2(1H)-quinozolinone (DPC 083)

(CAS No. 214287–99–7) (provided for in subheading 2933.90.46), as temporarily

duty-free.

H.R. 3934—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.20.05, (S)–6-chloro–3,4-dihydro–4-

cyclopropylethynyl–4-trifluoromethyl–2(1H)-quinozolinone (DPC 961) (CAS No.

214287–88–4) (provided for in subheading 2933.90.46), as temporarily duty-free.

H.R. 3935—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902—-—,5-[4-(4,5-dimethyl–2-sulfophenylamino)–6-hydroxy-[1,3,5-] triazin–2-yl amino]–4-hydroxy–3-(1-sulfonaphthalen–2-ylazo)-naphthalene–2,7-disulphonic acid, sodium/ammonium salt (ProJet Magenta 364 Stage) (provided for in subheading 3204.14.3000), as temporarily

duty-free.

H.R. 3936—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902-—-—,5-[4-(7-amino–1-hydroxy–3-sulfonaphthalen–2-ylazo)–2,5-bis-(2-hydroxy-ethoxy)-phenylazo]-isophthalic acid, lithium

salt (Pro-Jet Black 263 Stage) (provided for in subheading 3204.14.3000), as temporarily duty-free.

H.R. 3937—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.48, Pigment Yellow 184 (provided for

in subheading 3206.49.5000), as temporarily duty-free.

H.R. 3938—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.02, 1,5-Naphthalenedisulfonic acid,

3,3-[[6-[(2-hydroxyethyl)amino]–1,3,5-triazine–2,4-diyl]bis[imino (2-methyl–4, 1-

phenylene)azo]]bis-, tetrasodium salt (Pro-Jet Yellow 1 Stage) (CAS No. 50925–42–

3), as temporarily duty-free.

H.R. 3939—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.25, Pigment Orange 73 (CAS No.

84632–59–7) (provided for in subheading 3204.17.6085), as temporarily duty-free.

H.R. 3940—Amends subchapter II of chapter 99 of the HTSUS is amended by inserting in numerical sequence the new heading 9902.32.03, 2,7-

Naphthalenedisulfonic acid, 4-amino–3,6-bis [[4-[(2,4-diaminophenyl)

azo]phenyl]azo]–5-hydroxy-(Direct Black 19 Press Paste) (CAS No. 7518–68–5) (provided for in subheading 3204.14.5000), as temporarily duty-free.

H.R. 3941—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.04, Trisodium 4-amino–3-[[4-[[4-[(2-

amino–4-hydroxyphenyl) azo] phenyl] amino]–3-sulphonatophenyl] azo]–5-hydroxy–

6-(phenylazo) naphtalene–2,7-disulphonate (Pro-Jet Black HSAQ Stage) (CAS No.

85631–88–5) (provided for in subheading 3204.14.3000), as temporarily duty-free.

10

H.R. 3942—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.09, 1,3-Benzenedicarboxylic acid, 5-[[4-

[(7-amino–1-hydroxy–3-sulfo–2-naphthalenyl)azo]–6-sulfo–1-naphthalenyl]azo]-, sodium salt (Pro-Jet Fast Black 286 Paste) (CAS No. 201932–24–3) (provided for in

subheading 3204.14.3000), as temporarily duty-free.

H.R. 3943—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.21, Benzenesulfonic acid, 3,3-[carbonyl

bis[imino (3-methoxy–4,1-phenylene)azo]] bis-disodium salt (Pro-Jet Yellow 1G

Stage) (CAS No. 10114–86–0) (provided for in subheading 3204.14.5000), as temporarily duty-free.

H.R. 3944—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.28, Pigment Red 255 (CAS No. 54660–

00–3) (provided for in subheading 3204.17.6085), as temporarily duty-free.

H.R. 3945—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.20, Copper, [29H,31Hphthalocyaninato(2-) -N29,N30, N31,N32]-, aminosulfonyl sulfo derivs. (Pro-Jet

Cyan 1 Press Paste) (CAS No. 80146–12–9) (provided for in subheading 3204.14.50),

as temporarily duty-free.

H.R. 3946—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.05, a 2:1 mixture of; a) tris(3,5,5-

trimethylhexylammonium) 4-amino–3-{4-[4-(4-amino–2-hydroxyphenylazo)anilino]–3-

sulphonatophenylazo}–5,6-dihydro–5-oxo–6-phenylhydrazonaphthalene–2,7-

disulphonateb) tris(3,5,5-trimethylhexylammonium) 4-amino–3-{4-[4-(2-amino–2-

hydroxyphenylazo)anilino]–3-sulphonatophenylazo}–5,6-dihydro–5-oxo–6-

phenylhydrazonaphthalene–2,7-disulphonate (Pro-Jet Black Alc Powder) (provided

for in subheading 3204.14.3000), as temporarily duty-free.

H.R. 3947—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.32, Solvent Yellow 163 (CAS No.

13676–91–0) (provided for in subheading 3204.19.2090), as temporarily duty-free.

H.R. 3948—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.10, 1,3-Benzenedicarboxylic acid, 5,5-

[[6-(4-morpholinyl)–1,3,5-triazine–2,4-diyl]bis(imino–4,1-phenyleneazo)]bis-, ammonium/sodium/hydrogen salt (Pro-Jet Fast Yellow 2 RO Feed) (provided for in subheading 3204.14.3000), as temporarily duty-free.

H.R. 3949—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.46, Solvent Yellow 145 (CAS No.

27425–55–4) (provided for in subheading 3204.19.2595), as temporarily duty-free.

H.R. 3950—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.15, 1,3-Benzenedicarboxylic acid, 5,5-

[(2,5-dimethyl–1,4-piperazinediyl)bis[(1,6-dihydro–6-oxo–1,3,5-triazine–4,2-

diyl)imino(8-hydroxy–3,6-disulfo–1,7-naphthalenediyl)azo]]bis-, ammonium/sodium/

hydrogen salt (Pro-Jet Fast Magenta 2 RO Feed) (provided for in subheading

3204.14.3000), as temporarily duty free.

H.R. 3951—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.47, Pigment Red 264 (CAS No. 88949–

33–1) (provided for in subheading 3204.17.6085), as temporarily duty-free.

H.R. 3952—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.17, Copper, [29H,31Hphthalocyaninato(2-)-N29,N30, N31,N32]-, [(3-carboxyphenyl)amino]sulfonyl sulfo

derivs., ammonium sodium hydrogen salts (Pro-Jet Fast Cyan 2 Stage) (provided for

in subheading 3204.14.3000), as temporarily duty-free.

H.R. 3953—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.23, [(2-hydro-xyethylsul-famoyl)sulfophthalo-cyaninato] copper (II), mixed isomers (Pro-Jet Cyan 485 Stage) (provided for

in subheading 3204.14.3000), as temporarily duty-fee.

H.R. 3954—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.01, Methyl 2-[[[[[–4(dimethylamino)

¥6-(2,2,2-trifluoroethoxy) ¥1,3,5-triazin–2-yl] -amino]carbonyl] amino]sulfonyl]–3-

methylbenzoate (a triflusulfuron methyl formulated product) (CAS No. 126535–15–

7) (provided for in subheading 3808.10.15), as temporarily duty-free.

H.R. 3955—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.24, Copper, [29H, 31Hphthalocyaninato (2-)-xN29, xN30, xN31, xN32]-, [[2-[4-(2-amino-ethyl)–1-piperVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
11

azinyl]ethyl]-amino]sulfonyl aminosulfonyl [(2-hydroxy-ethyl)amino]-sulfonyl [[2-[[2-

(1-piperazinyl)-ethyl]amino)-ethyl]amino]-sulfonyl sulfo derivs., sodium salts (Pro-Jet

Fast Cyan 3 Stage) (provided for in subheading 3204.14.3000), as temporarily dutyfree.

H.R. 3956—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.32.02, Copper, [29H, 31Hphthalocyaninato(2-)-N29, N30, N31, N32]-, aminosulfonyl sulfo derivs., sodium

salts (Pro-Jet Cyan 1 RO Feed) (CAS No. 80146–12–9) (provided for in subheading

3204.14.50), with a temporary duty reduction to 9.5 percent ad valorem.

H.R. 3957—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.32.03, 1,3-benzenedicarboxylic acid,

5-[[4-[(7-amino–1-hydroxy–3-sulfo–2-naphthalenyl) azo]–1-naphthalenyl] azo]-, trisodium salt (Pro-Jet Fast Black 287 NA Paste/Liquid Feed) (CAS No. 160512–93–

6) (provided for in subheading 3204.14.30), with a temporary duty reduction to 7.8

percent ad valorem.

H.R. 3958—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.49, Pigment Yellow 168 (CAS No.

71832–85–4) (provided for in subheading 3204.17.6085), as temporarily duty-free.

H.R. 3959—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.22, 4-(Cyclopropyl-a-hydroxy-methylene)–3,5-dioxocyclohexanecarboxylic acid ethyl ester (CAS No. 95266–40–3) (provided for in subheading 2916.20.50), as temporarily duty-free.

H.R. 3960—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.38, 8-a-oxo-emamectin benzoate desmethylemamectin benzoate

emamectin benzoate methanol adduct 2-epl-emamectin benzoate emamectin benzoate isomer, 4-epl-D–2,3-emamectin benzoate dihydroemamectin benzoate (CAS No.

137512–74–4) (provided for in subheading 2938.90.00), as temporarily duty-free.

H.R. 3961—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.10, Propanoic acid, 2-[4-[(5-chloro–3-

fluoro–2-pyridinyl)oxy]-phenoxy]–2-propynyl ester (CAS No.105512–06–9) (provided

for in subheading 3808.30.15), as temporarily duty-free.

H.R. 3962—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.21, Certain end-use products containing benzenesulfonamide, 2-(2-chloroethoxy)N-[[4methoxy–6-methyl–1,3,5-

triazin–2-yl)amino] carbonyl]-(CAS No. 82097–50–5) and 3,6-dichloro–2-

methoxybenzoic acid (CAS No. 1918–00–9) (provided for in subheading 3809.30.15),

as temporarily duty-free.

H.R. 3963—Amends subchapter II of chapter 99 of the HTSUS by striking heading 9902.29.41 and inserting the new heading 9902.29.41, Benzeneacetic acid, (E,E)-

a-(-(methoxyimino) ¥2[[[[1-[3-trifluoromethyl) phenyl] ethylidene] amino]oxy] methyl]-, methyl ester (CAS No. 141517–21–7) (provided for in subheading 2930.90.10),

as temporarily duty-free.

H.R. 3964—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.39, 3-[4,6-Bis (difluoromethoxy)-pyrimidin–2-yl]–1-(2-methoxycarbonyl-phenylsulfonyl) urea (CAS No. 86209–51–05) (provided for in subheading

2935.00.75), as temporarily duty-free.

H.R. 3965—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.25, 5-Dipropylamino-a,a,a-trifluoro–

4,6-dinitro-o-toluidine (CAS No. 29091–21–2) (provided for in subheading

2921.43.80), as temporarily duty-free.

H.R. 3966—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.13, Sulfur (CAS No. 7704–34–9) (provided for in subheading 3808.20.50), as temporarily duty-free.

H.R. 3967—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the f new heading 9902.38.09, 3-(6-methoxy–4-methyl–1,3,5-

triazin–2-yl)–1-[2-(2-chloro-ethoxy)-phenylsulfonyl]-urea (CAS No. 82097–50–5) (provided for in subheading 3808.30.15), as temporarily duty-free.

H.R. 3968—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.14, 4-Cyclopropyl–6-methyl-N-phenyl–

2-pyrimidinamine–4-(2,2-difluoro–1,3-benzodioxol–4-yl)–1H-pyrrole–3-carbonitrile

(CAS No. 131341–86–1) (provided for in subheading 3808.20.15), as temporarily

duty-free.

12

H.R. 3969—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.32.10, Pigment Blue 60 (CAS No. 81–77–

6) (provided for in subheading 3204.17.90), as temporarily duty-free.

H.R. 3970—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.27, (R)–2-[2,6-dimethylphenyl)-methoxyacetyl-amino]-propionic

acid methyl ester (CAS Nos. 7–830–17–7 and 69516–34–3) (provided for in subheading 2924.29.47), as temporarily duty-fee.

H.R. 3971—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.22, Benzothialdiazole–7-carbothioic

acid S-methyl ester (CAS No. 135158–54–2) (provided for in subheading 3803.20.15),

as temporarily duty-free.

H.R. 3972—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.33, Benzothialdiazole–7-carbothioic

acid S-methyl ester (CAS No. 135158–54–2) (provided for in subheading 2933.69.60),

as temporarily duty -fee.

H.R. 3973—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.30, O-(4-Bromo–2-chlorophenyl)-O-ethyl-S-propyl

phosphorothioate (CAS No. 41198–08–7) (provided for in subheading 2930.90.10), as

temporarily duty-free.

H.R. 3974—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.35, 1-[[2-(2,4-dichlorophenyl)–4-propyl–1,3-dioxolan–2-yl]

methyl]–1H–1,2,4-triazole (CAS No. 60207–90–1) (provided for in subheading

2934.90.12), as temporarily duty-free.

H.R. 3975—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.34, tetrahydro–3-methyl-N-nitro–5[[2-

phenylthio)–5-thiazolyl]–4-H–1,3,5-oxadiazin–4-imine (CAS No. 192439–46–6) (provided for in subheading 2934.90.16), as temporarily duty-free.

H.R. 3976—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.40, 1-(4-methoxy–6-methyl-triazin–2-yl)–3-[2-(3,3,3-

trifluoropropyl)-phenylsulfonyl]-urea (CAS No. 94125–34–5) (provided for in subheading 2935.00.75), as temporarily duty-free.

H.R. 3977—Amends subchapter II of chapter 99 of the HTSUS by inserting the

new heading 9902.29.33 1,2,4-Triazin–3(2H)one, 4,5-dihydro–6-meth-yl–4-[(3-

pyridinylmeth-ylene)amino](CAS No.23312–89–0) (provided for in

subheading2933.69.60), as temporarily duty-free.

H.R. 3978—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.29.34, 4-(2,2-difluoro–1,3-benzodioxol–4-

yl)–1H-pyrrole–3-carbonitrile (CAS No. 131341–86–1) (provided for in subheading

2934.90.12), as temporarily duty-free.

H.R. 3979—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.22, 3-(6-methoxy–4-methyl–1,3,5-

triazin–2-yl)–1-[2-(2-chloro-ethoxy)-phenylsulfonyl]-urea–3,6-dichloro–2-

methoxybenzoic acid (CAS No. 1982–69–0) (provided for in subheading 3808.30.15),

as temporarily duty-free.

H.R. 3988—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.33.61, to extend the temporary suspension of duty on Carbamic Acid (V–9069)

to December 31, 2003.

H.R. 3989—Amends subchapter II of chapter 99 of the HTSUS by inserting in

numerical sequence the new heading 9902.38.01, 2-(((((4,6-Di-methoxypyrimi-din–2-

yl) aminocarbonyl))-N,N-dimethyl–3-pyridinecarboxamide (Accent) (CAS No.

122931–48–0) (provided for in subheading 3808.10.15), as temporarily duty-free.

H.R. 3990—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.33.60, to extend the temporary suspension of duty on Rimsulfuron to December

31, 2003.

H.R. 3991—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.33.63, to extend the temporary suspension of duty on DPX-E9260 to December

31, 2003.

H.R. 3992—Amends subchapter II of chapter 99 of the HTSUS in heading

9902.33.63, to extend the temporary suspension of duty on DPXE 6578 to December

31, 2003.

H.R. 4026—Amends subchapter II of chapter 98 of the HTSUS (HTSUS) to insert

a new subheading: 9802.00.95, under which certain food stuffs originating in

13

NAFTA countries would receive duty-free treatment upon meeting certain conditions: (1) satisfy the rules of origin under NAFTA as set forth in General Note 12

of the HTSUS—such food stuffs must be processed in Canada or Mexico using a material exported from the United States, (2) any dairy ingredient used in the processing of the good in Canada or Mexico must be of U.S. origin and consistent with

the current tariff-rate quota provisions on sugar-containing products, (3) the goods

as imported into the United Stated may not contain foreign-origin cane or beet

sugar in excess of 10 percent by dry weight, (4) an additional limitation excludes

from the scope of the provision dairy products such as cheeses manufactured in Canada or Mexico, even if all milk or cream used in such manufacturing were of U.S.

origin. The bill also would add a new U.S. note 7 to subchapter II of chapter 98,

to provide (in subparagraph 7(a)) that products entered under subheading

9802.00.95 would not be subject to safeguard duties and would not be counted

against the in-quota quantities for otherwise-applicable tariff-rate quota provisions.

H.R. 4223—Amends subchapter II of chapter 99 of the HTSUS by inserting in

the numerical sequence the new heading 9902.29.47, 5-Amino–1(2,6,-dichloro–4-

trifluromethy–1)phynyl)–4-((1,r,s,)-trifluromethy–1)sulfinyl)–1-h-pyrazole–3-

carbonitrile: fipronil 90mp(Fipronil Technical) (CAS No. 120068–37–3) (provided for

in subheading 2933.19.23), with a temporary duty reduction to 5 percent ad valorem.

H.R. 4229—Amends chapter 51 of the HTSUS by striking subheading 5111.11.70,

and inserting two new subheadings, 5111.65.65 and 5111.11.75, to expand the scope

of the existing subheading 5111.11.70 to include imported hand-loomed fabric in a

wider width.

H.R. 4337—Amends the following sections of the Tariff Act of 1930 with respect

to entry revision procedures: (1) (a) section 484 (19 U.S.C. § 1484)—to require minimum data (description of the merchandise, classification, country of origin, and admissibility documentation) at the time of entry for release of imported merchandise

from Customs’ custody; (b) section 499 (19 U.S.C. § 1499)—toamend the current conditions for release of imported merchandise from Customs’ custody; and (c) section

401 (19 U.S.C. § 1401)—to conform remote filing to include the electronic entry of

the import activity summary statement (IASS),(2) section 414 (19 U.S.C § 1414)—

to allow importers the option of filing one IASS per month in lieu of entry summaries for each individual transaction as currently required by the Customs Service,

and to amend the Mod Act ‘‘remote location filing’’ section to conform with this option, (3) section 484 (19 U.S.C § 1484)—to allow an importer to declare its information using either the current individual entry summary system or by filing a monthly IASS which will resemble an individual entry summary, except that it will contain aggregate information for the entire month. In addition, absent fraud, variances

in the information provided would be considered clerical errors. This amendment

would (a) permit the importer to segregate and total the information by tariff number, country of origin, and special program indicator (e.g., GSP), as currently permitted for entry summaries, (b) not require information relating to specific entries

or shipments, i.e., importers would not have to list the activity for each and every

entry during the month, and (c) treat the IASS just as any other entry summary

for purposes of administration of the customs laws, (4) section 505(c) of the Tariff

Act of 1930 (19 U.S.C. § 1505(c)) -to re-authorize mid-point interest, first established

as part of P.L. 106–36, which allows the collection of interest on duty underpayments without an entry-by-entry calculation, (5) section 484 (19 U.S.C. § 1484) -to

eliminate the requirement that each entry be flagged for reconciliation, and to allow

importers to reconcile any element of an entry, (6) section 592 of the Tariff Act of

1930 (19 U.S.C. § 1592) -(a) absent fraud, to allow importers to correct import information in an entry summary, IASS and/or reconciliation, and variances in the shipment information as clerical errors; (b) to provide that, in cases of errors in an

entry, entry summary, IASS, or reconciliation information that cancel out each

other, the violation would be only material to the extent of the net error or omission,

and (c) to allow importers to offset duty overpayments against underpayments for

a relevant period for Customs enforcement actions and prior disclosures, (7) section

401a of the Tariff Act of 1930 (19 U.S.C. § 1401a)—to requirethe Customs Service

to ensure that the circumstances of sale are examined for a representative period

to determine whether transaction value can be used, (8) section 313 (19 U.S.C.

§ 1313)—to allow drawback where there is valuable waste, and for the available

drawback to be reduced by taking into account the residual commercial value of the

product, (9) section 322 (19 U.S.C. § 1322)—to allow containers and shipping devices

that are not imported into the United States as articles of commerce to be subject

to the exclusions contained in the HTSUS as ‘‘Instruments of International Traffic’’

(IIT’s); and, (10) the Harmonized Tariff Schedule (19 U.S.C. § 1202)—to renumber

14

General Notes 15–21 and add a new General Note to allow an importer the option

of classifying discrete pieces of machinery (certain dies, machinery tools and equipment) under the tariff provision for the complete, finished good provided that the

importer meets certain entry conditions and proof thresholds.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Any person or organization wishing to submit a written statement for the printed

record should submit six (6) single-spaced copies of their statement, along with an

IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, with their

name, address, and comments date noted on label, by the close of business, Friday,

May 19, 2000, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S.

House of Representatives, 1102 Longworth House Office Building, Washington, D.C.

20515.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement

or exhibit submitted for the printed record or any written comments in response to a request

for written comments must conform to the guidelines listed below. Any statement or exhibit not

in compliance with these guidelines will not be printed, but will be maintained in the Committee

files for review and use by the Committee.

1. All statements and any accompanying exhibits for printing must be submitted on an IBM

compatible 3.5-inch diskette in WordPerfect or MS Word format, typed in single space and may

not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee

will rely on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing.

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material

not meeting these specifications will be maintained in the Committee files for review and use

by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments

by the Committee, must include on his statement or submission a list of all clients, persons,

or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, company, address,

telephone and fax numbers where the witness or the designated representative may be reached.

This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing.

Statements and exhibits or supplementary material submitted solely for distribution to the

Members, the press, and the public during the course of a public hearing may be submitted in

other forms.

Note: All Committee advisories and news releases are available on the World

Wide Web at ‘‘http://waysandmeans.house.gov’’.

f

H.R. 1622

To prohibit the importation of products made with dog or cat fur, to prohibit the

sale, manufacture, offer for sale, transportation, and distribution of products made

with dog or cat fur in the United States, and for other purposes.

400 farms in 31 states. We seek to educate the public about responsible fur farming,

Fur Commission USA represents over 600 mink and fox farming families on over

Statement of Fur Commission USA, Corando, California

f

ensure the best care for our animals, and to celebrate and secure fur-farming families.

Fur bearing animals have been raised on farms in North America since shortly

after the Civil War. Today’s farm-raised fur bearers are among the world’s best

cared-for livestock. Good nutrition, comfortable housing and prompt veterinary care

15

have resulted in domestic animals very well suited to the farm environment. Precise

attention to animal care has enabled North American farmers to produce the finest

quality fur in the world.

At the outset, it should be noted that the intent of H.R. 1622 could be achieved

by simply establishing an importation prohibition, which could then be integrated

within existing Customs enforcement schemes. Many such import prohibitions exist

in law and are enforceable by Customs. Indeed, Customs already has authority to

assess penalties, seize merchandise and subject such merchandise to forfeiture, subject to normal due process protections. Moreover, sales of fur products are subject

to a labeling scheme administered by the Federal Trade Commission. Mislabeling

of the products can result in the imposition of significant penalties.

Given the current authority possessed by U.S. Customs to enforce an import ban

and the FTC labeling requirements, the administrative and judicial enforcement

scheme contained in H.R. 1622 is not only excessive, but is also overly broad, vague

and confusing for the following reasons:

1. The legislation establishes a cause of action wherein any individual could

bring a citizen’s suit to compel the Secretary of Treasury to enforce the Act

or to enjoin an individual from taking any action deemed to be in violation

of the Act. Establishing such a broad basis for legal standing could result

in numerous law suits brought by anti-fur activists, regardless of whether

the private citizen bringing the suit has knowledge that the activity in

question is in violation of the prohibitions contained in this legislation.

2. The legislation establishes broad seizure and arrest authority based on

a ‘‘duly-authorized officer’s’’ reasonable belief that a violation has occurred.

A law designed to be administered by the U.S. Customs Service cannot permit private citizens, particularly individuals who have a broader agenda

with respect to fur, to be involved in any aspect of the enforcement scheme.

Unfortunately, the current language of the bill leaves open the possibility

that a ‘‘duly-authorized officer’’ could in fact be a private citizen.

3. The legislation suggests that the Department of Justice (through the U.S.

Attorney structure) will be involved in the enforcement of this legislation,

regardless of whether a violation is criminal or civil.

4. The legislation, to the extent it prohibits certain manufacturing and sales

activities, preempts the regulation of activities that normally fall under the

jurisdiction of the states.

5. The legislation’s mandate that a person who violates any provision of the

Act can be enjoined from further sales of any fur product is excessive and

probably would not withstand judicial scrutiny. Such a sanction, if it is to

be included, must be limited to those individuals who have criminally (with

knowledge and intent) violated the prohibition. Even in these instances,

however, it is doubtful that a court would issue an injunction denying an

individual his livelihood based on a violation of this statute.

If the intent of the bill’s sponsors is to create a unique and complex criminal and

civil statutory enforcement scheme, which includes private citizen suits, the bill

must be referred to the House and Senate Judiciary Committees to ensure that the

bill does not become a vehicle for harassing legitimate fur industry interests or depriving individuals in the fur trade of their rights. More generally, referral is critical

given that the legislation would affect the U.S. criminal code and create new causes

of action that will be justiciable under the federal court system.

On the other hand, if Customs is to be the principal implementing agency for this

legislation, then the bill can be modified to ensure consistency with existing Customs administrative enforcement schemes, particularly with respect to burden of

proof, forfeiture, and search and seizure authority. The inconsistencies between the

legislation’s enforcement scheme and Customs’ are likely to create serious administrative burdens for the Customs Service. These inconsistencies could be addressed

by integrating any importation ban into the Customs Service’s general enforcement

scheme.

Finally, the definitions of dog and cat fur (Canis familiaris and Felis catus or

Felis domesticus) contained in the legislation correctly limit the scope of the bill to

animals generally recognized as household pets. Distinguishing these species from

others, however, is often difficult for those outside the industry, particularly for

those who would rely on DNA evidence to make these distinctions. Indeed, experts

in the field have claimed that even DNA evidence is not adequate to identify and

distinguish fur of the Canis familiaris species and the Felis catus species. See ‘‘Dogs,

Cats and DNA,’’ attached hereto. At a minimum, to ensure that the implementation

of any import prohibition does not inadvertently impede the legitimate fur trade, the

legislative history should reaffirm that the bill is not intended to affect trade in

16

other wild or commercially raised canine or feline species, the fur or hair of which

is generally-recognized for use in clothing and outer wear.

* * * * *

The U.S. fur farming industry believes that products derived from domesticated

dogs and cats, if properly labeled as required by law, are unacceptable to the U.S.

public and would not find a market within our borders. At the same time, the industry is deeply concerned that H.R. 1622, with its unprecedented enforcement scheme

could impede the legitimate trade in fur products, and is likely to create more problems for the U.S. government and the courts than is necessary, given the scope of

the problem, and the availability of alternative and more direct approaches for addressing the issue. The Committee must address these concerns before allowing this

legislation to move forward.

Attachment

TERESA PLATT

Executive Director

Coronado, CA 92118–2698

FCUSA COMMENTARY

DOGS, CATS AND DNA

BY TERESA PLATT, EXECUTIVE DIRECTOR, FCUSA

AMERICANS ARE NOTED FOR THEIR LOVE of domesticated cats and dogs,

our cherished pets. We have selectively bred a wide range of animals that are clean,

loyal and rewarding companions. There truly is a pet for everyone, no matter what

the lifestyle or need.

In 1998 and 1999, the Humane Society of the United States (HSUS) claimed that

by using DNA testing, it found the fur of domesticated dog and cat mislabeled and

used as trim in garments and figurines sold in the US. Obviously, most Americans

would find such a trade unacceptable and reject the products immediately if they

were correctly labeled.

Mislabeling any product, no matter how inexpensive, is consumer fraud, and

comes under the jurisdiction of the Federal Trade Commission (FTC). Fines and

penalties can be severe.

TRADE IN ANIMAL PRODUCTS

Canines and felines, as with many other species, occur both in the wild and in

domesticated settings, plus there are feral populations of domesticated animals now

living wild. The meat and fur of wild canines and felines, such as raccoon dog, coyote, fox, wolf, bobcat and lynx, are utilized in most societies and traded widely.

International trade in any wild species at risk is, of course, tightly controlled by the

Convention on International Trade in Endangered Species (CITES).

Farmed production complements the wild harvest—an important tool in wildlife

management—by stabilizing prices during times of high demand and ensuring wildlife caretakers respond to the needs of biologists, not the market. Although we have

a thriving global market for mink and fox pelts, farmed production ensures their

wild cousins are never depleted.

Cultural taboos exist in the US and elsewhere against using products from domesticated dogs and cats, even from controlled feral populations, and so the remains

of these millions of animals are discarded. In parts of Asia, however, domesticated

dog and cat remains are fully utilized and even sold.

According to Rick Swain of HSUS, China is ‘‘killing hundreds of thousands of cats,

and about 20 percent of the figurines sold in the United States are made with real

cat hides,’’(1) with the balance coming from rabbit skins and synthetic materials.

The key questions: are illegally mislabeled products entering the US? Can DNA

testing help in this area? And what is a discerning consumer to do?

Labeling Controls and Consumer Fraud

International brokers, of course, know their goods and, when trading across cultural lines, take care to purchase products acceptable to consumers while meeting

the labeling laws of importing countries. No one, for example, would attempt to develop a business selling beef to India.

In the US, the FTC is charged with ensuring all products are labeled correctly

so consumers can buy or reject them for any reason. It is consumer fraud and illegal

to mislabel a product, no matter how inexpensive. Additionally, the Fur Products

17

Labeling Act, also administered by the FTC, has specific controls for the labeling

of fur products costing over $150.

QUESTIONS, QUESTIONS ON DNA TESTING

The coats that HSUS questioned in 1998 were labeled ‘‘Mongolian dog,’’ a wild

species native to Mongolia where it is hunted to protect humans and livestock.

HSUS claimed, however, that DNA testing proved the pelts came from domesticated

dogs. In 1999, it claimed to have found figurines labeled rabbit but made with ‘‘real

cat hair.’’

FCUSA asked HSUS to share its raw data and DNA test results. When it refused,

we became curious and began questioning genetic experts. What we learned was fascinating.

From watching the O.J. Simpson trial, every American knows that a clean sample

is vital for DNA testing. So, Question No. 1 was: Can finished, tanned or ‘‘dressed’’

garments, even dyed fur, provide ‘‘clean’’ samples? Can they give accurate readings?

A specialist in canine DNA testing replied:

‘‘The main problem with using fur as a source of DNA is that the chemicals used

to preserve the hide have two deleterious effects–1) they probably degrade most if

not all of the DNA in a piece of hide and 2) the chemicals themselves are toxic to

the enzymatic reaction used in the testing. . . .

‘‘It is often challenging . . . to extract DNA from tanned leather or fur but it can

be done, though it may not be successful with every sample. In order to provide this

service to the industry, it would be necessary to refine the DNA extraction method

and to build a referral data base of information on all species used for fur.’’

Hmm. We were told that HSUS took samples from dressed furs so we wonder how

‘‘clean’’ the samples were and if the DNA readings were accurate. But HSUS won’t

share the data or the results. Odd.

Question No. 2: Is there a good library of DNA in existence now?

Our expert replied:

‘‘I do not know if any other laboratory has put together a DNA data base with

the purpose of distinguishing fur-bearing animals. To do so—it would require time

and money—I would say about 6 months and approximately $250,000. It would also

require samples of animals other than fur (ideally blood samples) that you would

be absolutely confident of the species.’’

Hmm. Does HSUS maintain a DNA library? Strange it makes no mention of this

breakthrough.

Question No. 3: If a clean sample could be provided, can DNA testing distinguish

‘‘domesticated’’ cats and dogs from wild or farm-raised species? Simply put, is a wolf

is a fox is a poodle? And is a calico is a mountain lion is a bobcat, or what?

Again we went to the experts:

‘‘There is a type of DNA test that can distinguish species of animals. It is done

by amplifying the cytochrome B gene and doing one of several forms of sequence

analysis. . . . It is my belief that the fur of wild cats such as tigers, lions, lynx,

etc. could be distinguished from domestic cats. There would obviously be a problem

with cats derived from hybrids such as ’pixiebobs’ (a cross between domestic cats

and bobcats).

‘‘In the case of distinguishing wolf from dog, unfortunately dogs have descended

from wolves too recently such that they are essentially still the same species and

can not be distinguished by this method. However, dogs/wolves can be distinguished

from fox, raccoon, and other canid-type species used for fur.’’

Thus, goods labeled as ‘‘rabbit’’ but made from the fur of other species would easily be exposed by DNA testing. But the lack of differentiation between sub-species

of canines and some felines takes us back in time. Man’s ancestors branched off

from other primates 4–5 million years ago, with Homo sapiens appearing 100,000

years ago. Domestication of animals by humans, 10,000 years ago, is a relatively

recent experiment.

In the Kingdom of Animalia is the Class Mammalia, where resides the Order of

Carnivora, which includes the Family Canidae, canines, a species we call ‘‘dog.’’

Coyotes, wolves, foxes, jackals, bush dog, dingo, dhole and more, canines include a

vast array of animals. With about 21 distinct species, foxes, of the genus vulpes,

comprise the largest canine group. Which one of these is ‘‘dog’’?

The Family Felidae, felines, include domestic cats and at least 34 other species.

Lion, tiger, jaguar, jaguarundi, spotted cat, lynx, bobcat, ocelot, pampas cat, puma.

Which one of these is ‘‘cat’’?

So, according to the experts, the Asian wild and Russian farm-raised raccoon dog,

Nyctereutes procyonoides, and wild and farmed fox, vulpes, which branched off early

in the canine family tree, could be distinguished from domesticated dogs by DNA

18

testing. Wolf, coyote and Mongolian dog, however, could not be distinguished from

domesticated dogs.

But HSUS says it has a DNA test that tells the difference, in direct contradiction

to the experts.

CROSSING THE LINE

Late in 1999, HSUS announced it had found figures made of cat fur illegally labeled ‘‘rabbit.’’ Provided a clean sample can be obtained, DNA testing can distinguish cat fur from rabbit fur. However, if the clean sample shows ‘‘feline,’’ it may

be difficult to tell the sub-species involved. And absolutely no test will tell us whether a product was made from a cherished household ‘‘pet’’ or the result of measures

to control feral domesticated cats.

Consumers have the right to know exactly what they are purchasing, and to expect that purveyors of mislabeled products will be punished.

But it is also important for consumers to understand that different cultures value

animals in different ways, and incorporate animal products into their markets and

selected animals into their homes as pets, just as Americans do.

When crossing cultural lines and borders with trade, we must respect the world’s

diversity of opinion and carefully think out solutions to real issues. Otherwise, we

will all end up in one big dog and cat fight.

NOTES:

(1) Orlando Sentinel, Dec. 31, 1999, ‘‘China Kills Cats, Uses Fur on Figures.’’ For

comparison purposes, each year in the US (population: 250 million), shelters

euthanize and discard the remains of millions of domestic and feral dogs and cats.

China has 2.5 billion people, ten times as many as the US.

See also, ‘‘What’s in a name? Or, the wolf among us’’ by I. Lehr Brishin, PhD,

at www.naiaonline.org/name.htm, which discusses the changes in the Mammal Species of the World: A Taxonomic and Geographic Reference. ‘‘In this volume, it was

agreed that our domestic dog should be designated Canis Lupus instead of the more

customary Canis familiaries, thereby confirming concsensus of the scientific community that the dog is indeed exactly the same species as the wolf, the species from

with it is generally assumed to have been derived through the process of domestication.’’

tion (IMRA) which is an alliance of retailers and their product and service suppliers

Statement of the International Mass Retail Association, Arlington, Virginia

This statement is submitted on behalf of the International Mass Retail Associaf

committed to bringing price-competitive value to the world’s consumers. IMRA improves its members’ businesses by providing industry research and education, government advocacy, and a unique forum for its members to establish relationships,

solve problems, and work together for the benefit of the consumer and the mass retail industry. IMRA represents over 200 retail companies, which operate more than

133,000 stores worldwide and have sales of over $450 billion annually. IMRA represents over 600 supplier companies with sales totaling over $600 billion per year.

Together, IMRA’s membership represents over $1 trillion in sales and employs millions of workers.

While many of the bills listed on the April 20th advisory do not affect IMRA members, there are three in particular that IMRA would like to comment on. The first

two bills (H.R. 3704 and H.R. 4337) IMRA strongly supports. The third bill, H.R.

1622, IMRA opposes.

H.R. 3704—AMENDING CHAPTER 95 OF THE HTSUS TO INCLUDE DRESS-UP SETS

Flimsy costumes, used in ‘‘dress-up’’ play sets are viewed and used as toys by children. IMRA believes that Customs has been correct in its longstanding view that

these products are not complex or permanent wearing apparel, and should be classified in Chapter 95 of the HTSUS. Creating a new subcategory in Chapter 95 will

reinforce what Customs has already been doing.

The textile items included in play sets are not designed or manufactured for multiple wearings. This is why they need to be included in the new subcategory in

Chapter 95. In addition, these items are not sold in the same channels of distribution as wearing apparel. Instead, toy stores, drug stores and variety stores carry

these items in large numbers, and general merchandise retailers do not sell these

19

items in the apparel departments of their stores, but, rather, in their toy departments.

The dress-up items in play sets are extremely lightweight and inexpensive. These

costume elements are intended for play, not as wearing apparel. In addition,

playsets also frequently include other non-textile items, including play jewelry,

magic wands, doctor and nurse toys, and other accessories that are clearly toys, not

wearing apparel.

There was an attempt during the 105th Congress to shift these play items into

Chapters 61 and 62 which would have subjected them to import quotas and visas—

an action that could have resulted in their elimination from the marketplace. Existing bilateral textile and apparel agreements are based on the assumption that these

products are not wearing apparel. Shifting them into wearing apparel headings,

without adjusting negotiated bilateral quota agreements will put significant pressure on existing import quotas. Since these products are extremely low-cost, it is

logical to assume that foreign producers will have difficulty in obtaining quota for

these items, making it impossible (or extremely uneconomical) to import these

items. This is why these items need to be classified in Chapter 95.

In addition, shifting flimsy textile components of ‘‘dress up’’ play sets would subject these toys to significant duties. In combination with quota charges, this action

would significantly drive up the cost of these currently low-cost toys.

H.R. 4337—AMENDING CUSTOMS LAWS WITH RESPECT TO IMPORTATION OF

MERCHANDISE

The trade community has never fully realized the automation benefits of the Customs Modernization Act, passed by congress in 1993. That seminal piece of legislation cleared the way for a new way of handling transactions that would include periodic payment of duties, remote filing and expedited release of merchandise. The

Customs Modernization Act also imposed new obligations on importers, as part of

a ‘‘package deal’’ that would require importers to take more ‘‘reasonable care,’’ keep

extended records, and take responsibility for classifying merchandise all in return

for expedited service and periodic filing and payment.

Today, seven years after the enactment of the Customs Modernization Act, many

in the trade community, including virtually all of IMRA’s members have made significant new investments in Customs compliance to meet the new obligations of the

Modernization Act. However, Customs has yet to provide for periodic duty payment,

remote filing or expedited service.

IMRA well recognizes that one of the main reasons Customs has been unable to

deliver the benefits of the Modernization Act is because Congress has yet to fully

fund a new computer system known as the Automated Commercial Environment

(ACE).

IMRA is confident that funding for the new computer system will be appropriated

in Fiscal Year 2001. Consequently, we strongly believe that Congress should reiterate to the Customs Service its belief that progress must be made on the promises

of the Customs Modernization Act.

Chief among these promises is the requirement that the Customs Service move

from an entry-by-entry basis to an account based system. Such a system would

allow importers to submit entries and pay duties on a periodic basis rather than

on an entry-by-entry basis, much as the Internal Revenue Service treats individual

taxpayers. In such a system, Customs would rely on post-entry audits and compliance assessments to enforce the nation’s trade laws, thereby making it much easier

and faster for the Customs Service to identify those importers who are either small

and inexperienced and therefore more likely to make entry mistakes, and those companies who are simply bad actors.

IMRA therefore supports the intent of H.R. 4337, which is to remind the Customs

Service that Congress intended to create a system of national accounts as part of

the 1993 Modernization Act. IMRA recognizes, however that the full benefits of automation cannot be achieved without funding for the Automated Commercial Environment.

H.R. 1622—THE DOG AND CAT PROTECTION ACT OF 1999

IMRA does not condone the importation of products made with dog or cat fur.

However, we believe that HR 1622, as written has many shortcomings. Most notably, the bill would impose harsh civil and criminal penalties on American retailers

who unwittingly purchased products that contain disguised cat or dog fur, which appears to IMRA to be contrary to the basic hierarchy of Customs penalties set forth

in Section 1592.

20

HR 1622 places all of the burden of proof upon the owner of the merchandise to

prove that the merchandise does not contain dog or cat fur (Sec. 6 (d)). This is contrary to current evidentiary standards. The burden should be placed upon the complaining party, especially with the difficulty in identifying dog or cat fur once it has

been dyed.

The bill also allows for an individual to be arrested because of ‘‘reasonable cause.’’

This is a very subjective term. Reasonable cause not only needs to be defined, but

must be as objective as possible. It also allows for warrantless searches without

probable cause. This is clearly a violation of the constitution.

Section 6 (f) allows for a private right of action where private citizens can commence an injunction proceeding if they believe that an entity is in violation of the

bill. Congress has consistently opposed this kind of private right of action in customs cases because it creates severe market disruption. In this particular case, this

provision invites anti-fur activists to file nuisance suits against legitimate retailers.

The civil penalty section of the bill is very troubling. It allows for a $25,000 civil

penalty for each violation. What happens when a legitimate retailer places an order

for ten thousand gloves lined with rabbit fur, but unwittingly receives gloves with

cat fur lining? According to the bill, the retailer would be subject to $250,000,000

in fines because of the overseas manufacturer’s deception. A penalty such as this

could bankrupt a legitimate retailer.

One of the most troubling sections of the bill is Section 7 (d). This section allows

for a court to permanently enjoin a business from selling any fur products, even if

the party is an unintentional violator.

The bill, as it is currently written, does not take into account the fact that the

U.S. retailer may be a victim of deception by an overseas manufacturer. Retailers

are not in the business of providing fur products made from dog or cat fur and do

not intentionally source from manufacturers who do. As the bill itself states, it is

very difficult to distinguish dog and cat fur from other types of fur once it has been

dyed. Retailers should be given the benefit of the doubt if they are found to have

imported such products unwittingly. At best a hierarchy of penalties, such as currently exist for customs violations, should be applied in such cases.

f

H.R. 2881

To allow the collection of fees for the provision of customs services for the arrival

of certain ferries.

NO COMMENTS SUBMITTED

f.

H.R. 3276

To suspend temporarily the duty on thionyl chloride.

NO COMMENTS SUBMITTED

f.

H.R. 3366

To suspend temporarily the duty on benzyl carbazate (DT–291).

f

21

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA

May 16, 2000

A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R.3366 Benzylcarbazate

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bill number H.R. 3366 has been introduced by DuPont for duty suspension on

Benzylcarbazate for insecticide applications.

Bayer Corporation is a regular importer of Benzylcarbazate. Bayer’s Logistics Division, with major import operations at Pittsburgh, Pennsylvania and Bayer customer Alabama would benefit from tariff suspension on Benzylcarbazate.

Benzylcarbazate is not manufactured in the United States but is an important ingredient in many U.S. and international products. Benzylcarbazate is used in the

production of insecticides for use on cotton vegetables and fruit, to protect U.S. crops

and as a result, the business of U.S. farmers. The products are also used to manufacture a new family of insect control components with very favorable environmental

profiles

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the proposed tariff suspension for

Iminodisuccinate bill number H.R. 3801. Please do not hesitate to contact me at Tel:

412–777–2058 with any questions. In the event that I am unavailable, Julie Van

Egmond in our Washington office (Tel.: 202–756–3773) or Stephen Johnsen at our

Pittsburgh location (Tel: 412–777–5616) could be of assistance.

Very sincerely,

f

Karen L. Niedermeyer

H.R. 3367

To suspend temporarily the duty on tralkoxydim formulated (‘‘Achieve’’).

NO COMMENTS SUBMITTED

f.

H.R. 3368

To suspend temporarily the duty on the chemical KN002.

NO COMMENTS SUBMITTED

f.

22

H.R. 3369

To reduce temporarily the duty on the chemical KL084.

NO COMMENTS SUBMITTED

f.

H.R. 3370

To suspend temporarily the duty on the chemical IN-N5297.

NO COMMENTS SUBMITTED

f.

H.R. 3371

To reduce temporarily the duty on azoxystrobin formulated (‘‘Heritage’’, ‘‘Abound’’,

and ‘‘Quadris’’).

NO COMMENTS SUBMITTED

f .

H.R. 3474

To suspend temporarily the duty on Fungaflor 500 EC.

NO COMMENTS SUBMITTED

f.

H.R. 3475

To suspend temporarily the duty on NORBLOC 7966.

NO COMMENTS SUBMITTED

f.

H.R. 3476

To suspend temporarily the duty on Imazalil.

NO COMMENTS SUBMITTED

f.

H.R. 3604

To provide for the liquidation or reliquidation of certain entries in accordance with

a final decision of the Department of Commerce under the Tariff Act of 1930.

NO COMMENTS SUBMITTED

f.

H.R. 3684

To amend section 313 of the Tariff Act of 1930 to allow duty drawback for grape

juice concentrates made from Concord or Niagara grapes.

f

23

CALIFORNIA ASSOCIATION OF

WINEGRAPE GROWERS

SACRAMENTO, CA

May 12, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Singleton:

These comments are submitted in response to the notice issued on April 20 by

the House Committee on Ways and Means, Subcommittee on Trade, announcing a

request for written comments on miscellaneous corrections to trade legislation and

miscellaneous duty suspension bills.

These comments are on behalf of the members of the California Association of

Winegrape Growers (CAWG), who grow more than 60% of the tonnage of grapes

crushed for wine and concentrate in California. Grapes crushed for concentrate represent an increasingly important market for Central Valley grape growers. According to the 1999 Annual Grape Crush Report, the volume of grapes crushed to be

marketed as concentrate was 762,171 tons, nearly one-quarter of the total 1999

crush.

The following comments are directed to one bill on the April 20, 2000 list—specifically, H.R. 3684, to amend section 313 of the Tariff Act of 1930 (19 U.S.C. 1313)

to allow duty drawback for grape juice concentrates made from Concord or Niagara

grapes.

DISCUSSION

CAWG is opposed to H.R. 3684 which is similar to H.R> 194. This opposition

is based on the following points, all of which are detailed below. Enactment of H.R.

3684 would: (1) be an assault on the integrity of the duty drawback program; (2)

establish a problematic precedent of alteration of the program; (3) lead to disruption

in the U.S. grape juice concentrate market; (4) provide a unilateral trade benefit to

a number of U.S. trading partners, without obtaining a reciprocal trade benefit for

the U.S. winegrape industry; (5) provide a financial benefit to industries in other

countries already receiving subsidies from their own countries; (6) provide a de facto

subsidy to certain exporters; and (7) lead to losses for the U.S. Treasury.

1. H.R. 3684 WOULD ALTER PURPOSE OF DRAWBACK PROGRAM

First, it is a misnomer to label H.R. 3684 as a ‘‘miscellaneous correction to trade

legislation.’’ The provisions of H.R. 3684 would not ‘‘correct’’ any mistake now set

forth in U.S. trade law. In contrast, H.R. 3684 would undermine and distort the purposes of the duty drawback program administered by the U.S. Customs Service.

The drawback program has been a part of U.S. law since 1789 and has evolved

over the years. While the intent of the program can be stated rather simply, administration of the program is complex. The program has been administered strictly and

with extreme care by the U.S. Customs Service, due to the potential for abuse and

erosion of U.S. treasury revenues.

The U.S. Customs website provides the following description of the drawback program:

The rationale of drawback has always been to encourage American commerce or manufacturing, or both. It permits the American manufacturer to

compete in foreign markets without the handicap of including in his costs,

and consequently in his sales price, the duty paid on imported merchandise.

Several types of drawback are authorized by U.S. law, but H.R. 3684 would

amend only one type. H.R. 3684 references the ‘‘manufacturing substitution’’ drawback program. This program addresses the situation where a manufacturer brings

in one product to make another product, and the manufactured product is then exported. The theory is that the manufacturer should not have to bear the cost of the

duty on the imported material that forms a necessary component of the manufactured article. Manufacturing substitution drawback is available whether the imported material, or a domestic material of the ‘‘same kind and quality,’’ are utilized

24

1Labrusca grape species are grown in cold climate areas that are subject to heavy frost, including the Northeast, Northwest and North central regions of the U.S. Grapes from this species

are used primarily for the production of grape juice and grape juice concentrate. All of the

grapes produced in California are of the vinifera species, which are used primarily for the production of wine, although certain vinifera varieties are also used in the production of grape

juice, grape concentrate, table grapes and raisins. 2 International Light Metals v. U.S., 24 F. Supp.2d 281 (CIT 1998). (This decision has been

appealed by the plaintiff.)

in the exported product. This version of drawback eliminates the need for a manufacturer to maintain separate inventories for imported and domestic merchandise.

A. Customs Regulations

Customs strictly interprets and enforces the drawback program through its regulations at 19 CFR 191.0 et seq. These regulations contain extensive provisions which

set forth the agency’s procedures in administering the program. The regulations provide that to qualify as material of the ‘‘same kind and quality,’’ Customs will look

to a number of standards, such as USDA grade standards, FDA standards of identity, and industry standards. In the case of grape juice concentrate, criteria of the

first two types do not exist; we are not aware of any USDA grade standard nor any

FDA standard of identity applicable to grape juice concentrate.

However, as to the third test, industry standards, there are commonly followed

practices. Two grape species represent more than 99% of grape production in the

world and in the U.S. These two species are vinifera and labrusca.1 The two species

are completely different in heritage, taste, yields and end uses. If buyers are desirous of labrusca concentrate, buyers will purchase only labrusca concentrate. In the

industry, labrusca concentrate is not interchangeable with vinifera concentrate.

With respect to H.R.3684, we understand that a certain agricultural co-op,

Welch’s, wants to import vinifera (white and red) concentrate to make various products. However, it wishes to export only concentrate that is primarily from the Concord or Niagara varieties—both of which are of the labrusca species. These two

grape varieties are grown primarily in the U.S. The exporter in this case wishes to

receive duty drawback on its exports of labrusca concentrate, for the duties paid on

the imported vinifera concentrate. As stated above, the two species are totally different.

B. Judicial Interpretation

In addition to the provisions set forth in Customs regulations, the Court of International Trade has recently reviewed the ‘‘same kind and quality’’ test. The Court’s

decision contains this useful discussion:

While the statute and regulations provide little, if any, guidance as to the

meaning of the statutory term ‘‘same kind and quality’’ Customs has addressed materials it will consider to satisfy the statutory requirement of

‘‘same kind and quality’’ in a published ruling.See T.B. 82–36, 16 Cust. B.

& Dec. 97 (1982).

The introductory sentence of T.D. 82–36 states, ‘‘[u]nder the drawback law

(19 U.S.C. 1313(b)) drawback contracts have been approved since 1958, permitting the substitution of one domestic compound for a different imported

compound when an identical element is sought for use in manufacturing an

exported article.’’ 2

Thus, according to the Court of International Trade, in order to qualify under the

manufacturing substitution program for a drawback, the substituted component

must be ‘‘identical to the imported product. The Court found that this version of

drawback is meant to address processes where the component in question (in this

case, a metal) is interchangeable with the imported component.

We understand that proponents of H.R. 3684 admit that grape juice concentrate

of a different color or quality (from the imported concentrate) would not qualify for

drawback under the historical administration of the program. Color is, by comparison, an almost insignificant factor in relation to the fact that vinifera and labrusca

grapes are derived from totally different species which are distinct in all respects.

The proponents are asking Congress to change the fundamental nature of the program to allow drawback for types of exported concentrate that are not interchangeable with the imported product.

2. H.R. 3684 WOULD CREATE A PROBLEMATIC PRECEDENT

Congress should not take the step represented by H.R. 3684, as it would create

a troubling precedent. If this legislation were accepted, it would be entirely approVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
25

priate for exporters of, for example, U.S.-grown lemon juice concentrate to ask Congress to provide a duty drawback on their imports of orange juice concentrate on

the basis that both products are citrus juice concentrate. Numerous other examples

could be cited, where producers of distinct products would argue that the products

should be deemed of the same kind and quality for purposes of the drawback program. For instance, the argument could be made that two different types of vegetables, such as broccoli and asparagus, should be considered to be for purposes of the

drawback program. Adoption of H.R. 3684 would create unending requests for similar action.

Different species of grapes are as distinct as different types of citrus. Further,

there is a distinct market demand for the different species. The proponents of H.R.

3684 would likely admit that concentrate from labrusca grapes commands a premium price. At the current time, this price in the world market is more than double

the value of concentrate produced from vinifera grapes.

Simply stated, eligibility for duty drawback is a privilege that is earned through

meeting the Congressional intent in creating the program, as well as Customs requirements that govern the program. Each drawback that is granted by Customs

is a privilege because it results in a loss to the U.S. Treasury—a loss of the duties

paid on the imported product.

If adopted, H.R. 3684 would amend the drawback program—so that the program

would provide a benefit that would be a significant departure from historical practice under the program.

3. DISRUPTION OF THE DOMESTIC INDUSTRY

In large measure, CAWG is opposed to H.R. 3684 because of the disruption it

could cause in the U.S. grape juice concentrate market. Grape juice concentrate has

become a significant industry in the U.S., and promises to continue to grow in the

coming years. Grape juice concentrate is especially popular in the health food sector,

which is a rapidly growing segment of the food industry. Grape juice concentrate

is used in drinks, frozen juice, canned juice, fruit drinks and preserves. It is also

used as a sweetener in canned fruit, yogurt, cookies, cereals, candies and baby foods.

The market in California’s San Joaquin Valley for grape juice concentrate for food

manufacturing is approximately $150 million per year.

American growers have to attempt to compete with the sometimes tremendous

subsidies provided by the European Union (and we believe by Argentina) to their

grape growers. The Uruguay Round did not eliminate these subsidies; in fact, some

of the subsidy programs in other countries have actually been increased since the

Uruguay Round.

If adopted, H.R. 3684, by allowing a refund of the duties paid on imported concentrate, would allow those volumes to enter the U.S. at a lower landed cost to the

importer than would otherwise be the case. Although only the amount of imported

concentrate matching the volumes of exported concentrate would be eligible for the

drawback refund, this lower-cost, imported concentrate could and would either displace U.S.-produced concentrate of a higher price, or put downward price pressure

on the U.S.-produced product. It would also send a false signal to the market and

could cause additional grape juice concentrate to be imported.

CAWG’s members currently produce more than one-half of the grapes which now

are used for grape juice concentrate. For this reason, CAWG is extremely concerned

about any additional product which might either displace or put downward price

pressure on U.S.-grown grapes.

Congress has deemed that imported grape juice concentrate should be subject to

a set level of duty, and CAWG believes that this level should continue to be operative, except in those limited cases where the importer qualifies for duty drawback

in the sense in which the program has been administered for years—i.e., where the

exported product is of the same kind and quality and is interchangeable with the

imported product.

4. UNILATERAL TRADE BENEFIT TO FOREIGN GRAPE JUICE CONCENTRATE PRODUCERS

Enactment of H.R. 3684 would also serve to provide a unilateral, and

unreciprocated, trade benefit—indeed, a de facto tariff reduction—to all countries

that produce grape juice concentrate and would like to export to the U.S. market

(to the extent the grape juice concentrate is imported and later matched with exported volumes of grape juice concentrate, not of the same kind and quality). We

believe the bill would provide an incentive for increased purchases from countries

now subject to a tariff and reduce demand for U.S.-produced concentrate, particularly the type of concentrate produced in California.

26

3Twenty-Seventh Financial Report of the Commission of the European Communities Concerning the European Agricultural Guidance and Guarantee Fund 4 Based on 1999 Grape Juice Concentrate Import/Export Report by IV International.

Of great concern is the fact that the elimination of a pre-existing tariff is something that is normally only provided in the course of trade negotiations. Such action

is handled in trade negotiations for very good reason—so that U.S. producers and

industries will obtain a reciprocal trade benefit of some type.

The U.S. should not be providing beneficial duty treatment to potential competitors to the U.S. winegrape growing industry, without those countries requesting

that treatment and without the U.S. obtaining some type of benefit in return.

Further, when trade concessions are under consideration in the course of trade

negotiations, very careful analysis is normally carried out on the impact that a possible concession would have on the U.S. industry in question. However, because H.R.

3684 is not framed as a trade concession—although the result would be the same—

it appears that no such consideration has taken place. The Committee is obligated

to consider this impact. This impact is addressed above in the section entitled ‘‘Disruption of the Domestic Industry.’’

5. GRAPE INDUSTRIES IN CERTAIN OTHER COUNTRIES ALREADY RECEIVE SUBSIDIES

Some of the main exporters to the U.S. at the present time are: Argentina, Spain

and Italy. These three countries comprise approximately seventy percent of the U.S.

imports of grape juice concentrate.

The grape industries in Spain and Italy enjoy considerable subsidies already (in excess of $750 million in 1997) 3, which provide them assistance to compete in global

markets. There is no policy justification to increase the amount of effective subsidy

available to these foreign competitors.

Further, the U.S. has entered into negotiations for a Free Trade Area of the

Americas and is preparing for the next round of World Trade Organization (WTO)

negotiations. In the WTO Round, the U.S. is committed to reducing all agricultural

subsidies. It would be wholly inconsistent to, on the one hand, reward behavior that

the U.S. has announced, on the other hand, it is committed to reducing or eliminating.

6. A DE FACTO SUBSIDY

Although the goal of the proponent of H.R. 3684—to increase its exports of concentrate from U.S. grapes—is indeed laudable, it is trying to obtain Congressional

concurrence to accomplish its goal through an alteration, or special exemption, to

a program for which it does not otherwise qualify.

If Congress were to grant this exemption by deeming the exports of concentrate

as eligible for duty drawback, the importer/exporter would obtain a de facto subsidy

on its export. This subsidy would be created because the importer/exporter could use

the refunded duties to reduce the price of the exported product, in essence subsidizing

the price of the exported product.

The importer/exporter would achieve its goal with the assistance of all U.S. taxpayers—since the U.S. treasury is the source of drawback revenues. Further, if Congress were to adopt H.R. 3684, a benefit would be provided to one group of grape

growers which growers of other agricultural products do not have.

Other Programs

Given its goal, there are other programs in existence for which the proponent of

the legislation should be applying. For instance, the Market Assistance Program

(MAP) is administered by the U.S. Department of Agriculture. For that program,

Congress makes a decision on an annual basis (through the annual appropriations

process) as to the level of U.S. tax dollars that shall be available to assist U.S. agricultural producers to attain new (or increase existing) export markets. If Congress

were to enact H.R. 3684, those entities which would benefit from the legislation

would in essence be circumventing the requirements, process, and budget limitations, of the MAP program.

7. POTENTIAL LOSS TO U.S. TREASURY

The volume of grape juice concentrate imported into the U.S. has increased substantially in recent years—from 90,736,000 liters in 1995 (equivalent of 129,622

tons of grapes) to 180,517,000 liters in 1999 (equivalent of 257,881 tons of grapes).4

In 1999, $7,943,000 in duties were paid on imported grape juice concentrate. Theoretically, ninety-nine percent (99%) of this amount could ultimately be subject to

27

5 Based on 1999 Grape Juice Concentrate Import/Export Report by IV International.

drawback claims (99% is the level of refund available when an export qualifies for

manufacturing drawback). It is certainly possible that companies would devise ways

to take advantage of the new financial benefit, were it to become available.

If in 1999 all of the 87 million liters of U.S.-produced concentrate that were exported 5 were deemed eligible for duty drawback, the loss of revenue to the U.S.

treasury would have been $3.8 million (based on current rate of $.044 per liter).

CONCLUSION

For all of the above reasons, the Subcommittee on Trade of the House Committee

on Ways and Means should not approve H.R. 3684. We appreciate the Committee’s

consideration of these comments, and we would be pleased to provide any additional

information the Committee would find helpful.

Sincerely,

f

KAREN ROSS

GIUMARRA VINEYARDS

BAKERSFIELD, CA

May 19, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U. S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Singleton:

Giumarra Vineyards is a family owned farming company located in the southern

San Joaquin Valley of California, near Bakersfield. We are one of California’s largest producers of grape concentrate as well as being a wine producer, table grape

grower and producer of other agricultural crops. We are the largest employer in

Kern County, California, with over 4000 employees -many of whom depend on our

grape concentrate business for their employment.

As a company whose economic success depends in large part on this grape concentrate business, we strongly oppose HR 3684 which allows for duty drawback for

grape juice concentrates made from Concord or Niagara grapes. HR 3684 would

cause an increase in the importation of foreign concentrate -an increase that would

be artificially motivated by the duty drawback rather than by normal economic considerations. This increase will result in a decrease in the value and use of U.S.

grown grapes to the great economic disadvantage of U.S. growers and U.S. workers.

For this reason, then, as well as the reasons set forth in the May 12, 2000, letter

from the California Association of Winegrape Growers (CAWG) to the committee on

Ways and Means, Giumarra Vineyards strongly opposes H.R. 3684 and respectfully

requests that the Committee not approve H.R. 3684.

Sincerely yours,

JOHN GIUMARRA,

f

Vice President

28

NATIONAL GRAPE CORPERATIVE INC.

WESTFIELD, NY

May 18, 2000

Mr. A. L. Singleton, Chief of Staff

Committee on Ways and Means

U. S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Singleton:

I am writing to support H. R. 3684, a bill which will amend the customs duty

drawback law and which will assist exports of products made with American Concord and Niagara grapes.

I am a farmer in Washington where I have grown Concord and Niagara grapes

for over 17 years. I am also a member of the board of directors of National Grape

Cooperative Association, Inc. In addition to the juice grapes, I also grow wine grapes

and I am a board member of the Washington State Wine Commission as well as

a past president of the Washington Association of Wine Grape Growers.

This bill will help growers of Concord and Niagara grapes by allowing customs

duty drawback on exports of products containing juice concentrate made from our

grapes. This bill is important to growers in Washington where most of these products are manufactured and exported from the Port of Seattle to Japan and other

Pacific Rim countries.

H.R. 3684 will have no effect on the domestic market for grape juice concentrate.

This amendment, however, will help to increase export by allowing duty drawback

on exported grape juice products grown and manufactured in the United States. Increased exports of U.S. Concord and Niagara grape concentrate will increase over- all demand for all domestic grape juice products. Thank you for allowing me to comment on this bill. Please approve H. R. 3684

as part of the next miscellaneous trade bill.

Sincerely,

f

RICHARD A. BOUSHEY

NATIONAL GRAPE COOPERATIVE INC.

CONCORD, MA

May 18, 2000

Mr. A. L. Singleton, Chief of Staff

Committee on Ways and Means

U. S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Singleton:

I am writing to support H. R. 3684, a bill which will amend the customs duty

drawback law and which will assist exports of products made with American Concord and Niagara grapes.

I am a farmer in Washington where I have grown Concord and Niagara grapes

for over 30 years. I am also president of the National Grape Cooperative Association, Inc. and the chairman of the board of directors of Welch Foods, Inc., A Cooperative.

Welch’s serves its owner-growers by providing a predictable, growing market for

their Concord and Niagara grapes. Welch’s has been recognized as one of the most

successful agricultural cooperatives in the country. That success is based on growing

the domestic and international markets for our grapes.

This bill will help growers of Concord and Niagara grapes by allowing customs

duty drawback on exports of products containing juice concentrate made from our

grapes. This bill is important to growers in Washington where most of these products are manufactured and exported from the Port of Seattle to Japan and other

Pacific Rim countries.

H.R. 3684 will have no effect on the domestic market for grape juice concentrate.

This amendment, however, will help to increase exports by allowing duty drawback on exported grape juice products grown and manufactured in the United

29

States. Increased exports of U.S. Concord and Niagara grape concentrate will increase overall demand for grape juice products.

Thank you for allowing me to comment on this bill. Please approve H. R. 3684

as part of the next miscellaneous trade bill.

Sincerely,

FREDRICK P. KILIAN

President

Chairman of the Board

f

Welch Foods Inc., A Cooperative

NATIONAL GRAPE COOPERATIVE INC.

CONCORD, MA

May 15, 2000

Mr. A. L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Singleton:

Welch Foods Inc., A Cooperative (Welch’s) and the National Grape Cooperative

Association, Inc. are pleased to support H. R. 3684 as part of the next miscellaneous

tariff and trade bill. This technical amendment of the duty drawback law is specifically intended to benefit exports of products manufactured in the United States with

the American Concord and Niagara varieties of grapes.

The effect of this amendment will be to increase exports of products made from

Concord and Niagara grapes grown in Washington, New York, Pennsylvania, Michigan and Ohio, and to give them equal treatment under the drawback law to exported products made from vinifera grapes typically grown in California.

Welch’s does not believe that this bill will injure any U. S. grape growers and that

the bill will assist exports.

BACKGROUND:

Welch’s is the processing and marketing affiliated cooperative of the National

Grape Cooperative Association, Inc., whose owner-growers supply Welch’s with its

principal raw products, Concord and Niagara Grapes. The Cooperative is made up

of 1,497 growers who cultivate over 44,000 acres of vineyards in Michigan, New

York, Ontario-Canada, Ohio, Pennsylvania, and Washington. Welch’s manufacturing

plants are located in Lawton, Michigan; North East, Pennsylvania; Westfield, New

York; and Grandview and Kennewick Washington.

Welch’s had its beginnings in 1869 when Dr. Thomas Bramwell Welch successfully processed an unfermented Concord grape wine that could be used in his

church’s communion service. Headquartered in Concord, Massachusetts, Welch’s is

the worlds leading marketer of Concord and Niagara grape-based products, including grape juice and jelly.

These products are sold by the food store, special markets, food service, industrial

and military, licensing and international divisions throughout the United States and

in more than 30 countries around the world. In its most recently completed fiscal

year, Welch’s sales totaled over $600 million.

Welch’s is largely responsible for developing the retail market for grape juice

products in the United States. All American grape growers and grape juice producers have benefited from this market development by Welch’s, including growers

and producers of vinifera grape juice concentrates in California and other states.

The mission of the Company as a cooperative is to maximize the long-term value

of its growers and to provide a reliable market for their grapes through excellence

in product quality, customer service, market growth and customer satisfaction. To

this end, Welch’s has been working with local distributors and manufacturers in

Japan and other Pacific Rim countries since the 1970’s. This effort has resulted in

a substantial market for our exports of grape juice concentrate and other products

manufactured in the United States using American Concord and Niagara grapes.

Welch’s has also dramatically expanded its product line and distribution methods

to insure its long term growth and demand for products made from the grapes

30

grown by its cooperative members. This growth, together with year to year crop

variations, requires the Company to purchase large quantities of grape juice concentrates from producers in California. Some concentrate is also purchased from foreign suppliers.

Under the Customs Duty Drawback law [Section 313 of the Tariff Act of 1930,

19 U.S.C. 1313(b)] products manufactured in the United States and then exported

are eligible for a refund of customs duties (duty drawback) if they contain imported

ingredients, or domestic ingredients of the ‘‘same kind.’’ The U.S. Customs Service

has advised Welch’s that duty paid on imported concentrates, which are mostly

white in color, cannot be claimed against the Company’s exported products, which

are mostly purple in color. This technical determination denies Welch’s a significant

export incentive and benefit.

Exports of grape juice concentrates produced from the vinifera grapes typically

grown in California are already considered by Customs to be of the ‘‘same kind’’ as

foreign concentrates. Duty drawback is allowed on exports of such concentrates.

INTENT OF PROPOSED AMENDMENT:

The proposed amendment is intended to replace Customs’ restrictive interpretation by allowing duty drawback on grape juice concentrates made from Concord or

Niagara grapes. This amendment and the underlying section of the law (19 U.S.C.

1313(b)) apply only to exported grape juice-based products that are manufactured

in the United States. As such, the proposed amendment is designed to bring U.S.

Customs treatment of Concord and Niagara grape juice concentrates into conformance with the underlying goals of duty drawback: i.e., to promote U.S. manufacturing and export sales.

CONCERNS OF CALIFORNIA GROWERS:

Some grape growers in California have expressed concern that this amendment

to the drawback law will disrupt the U. S. grape juice concentrate market. The

amendment will have no effect on the domestic market for grape juice concentrate

except to the extent that it increases exports and thereby increases overall demand

for grape juice products.

Our principal business objective is to provide a predictable, growing market for

our products. Welch’s is, after all, an agricultural cooperative owned by grape farmers. We have been recognized as one of the most successful agricultural cooperatives

in the country. Our success is based on growing our markets in the United States

and abroad.

Welch’s has funded most of the national and international advertisement for

grape juice products since as early as the early 1900’s. All growers and producers

of grape juice products in the United States have benefited from our market development. California growers and concentrate producers have seen substantial, direct

benefits as Welch’s purchases large quantities of concentrate from them.

No foreign producer will receive any direct benefit on any product that it sells into

the U. S. market. The duty drawback law allows refunds of duties when products

are exported. The amendment will benefit U. S. manufacturers of products using

Concord and Niagara grapes that are exported. It will make those exported products more competitive in foreign, not U. S., markets.

CONCLUSION:

For the above reasons, we ask the Subcommittee on Trade to approve H. R. 3684.

Thank you very much for the opportunity to comment on this bill.

Sincerely,

VIVIAN TSENG

Vice President, General Counsel and Secretary

f

Welch Foods Inc., A Cooperative

Statement of the National Juice Products Association

Pursuant to the April 20, 2000 advisory by the Subcommittee on Trade of the

Committee on Ways and Means, the National Juice Products Association (‘‘NJPA’’)

submits the following statement for consideration by the Committee and for inclusion in the printed record. The statement briefly comments on H.R. 3684, a bill to

amend section 313 of the Tariff Act of 1930 to allow duty drawback for grape juice

31

concentrates made from Concord or Niagara grapes. The statement also addresses

the more fundamental issue of how Customs is administering the drawback program

to the detriment of the U.S. juice producing industry.

NJPA is a national trade association comprised of over 70 juice growers and processors located throughout the United States. See membership list at Attachment 1.

A number of NJPA members import concentrated juice products for manufacturing

and these members are heavily reliant on the drawback program to maintain the

competitiveness of their domestic processing operations, particularly in foreign markets.

NJPA believes that H.R. 3684 is symptomatic of a fundamental problem in the

implementation of the drawback statute by the U.S. Customs Service, including the

most recent amendments to that statute. Through these comments, NJPA hopes to

direct the attention of the Committee to the need to address this issue or risk jeopardizing the continued ability of U.S. juice processors to compete in overseas markets.

1. SUMMARY OF H.R. 3684

H.R. 3684 would amend the Tariff Act of 1930 to authorize the substitution of certain grape juice concentrate regardless of color, variety, or any other characteristic

for purposes of the drawback of import duties on such products. The legislation is

rooted in Customs’ narrow construction of the substitution provisions of the manufacturing drawback statute (19 U.S.C. § 1313(b)).

NJPA does not oppose this legislation. NJPA believes, however, that the Committee needs to consider the more fundamental issue of how Customs is implementing the drawback statute, to the extent the law permits the substitution of imported and domestic merchandise. This issue arises, in particular, in connection

with the filing of unused merchandise substitution drawback claims, which is discussed next.

2. SUBSTITUTION OF JUICE CONCENTRATES IN THE FILING OF UNUSED MERCHANDISE

SUBSTITUTION DRAWBACK CLAIMS

The Customs Modernization and Informed Compliance Act (Mod Act) established

a new and more liberal standard of substitution for purposes of claiming drawback

under the unused merchandise substitution drawback provision set forth in section

313(j)(2) of the Tariff Act of 1930, 19 U.S.C. § 1313(j)(2). The new standard, commercial interchangeability, replaced the narrow standard of fungibility, which severely

limited the use of unused merchandise substitution drawback (previously substitution same condition drawback) under the pre-Mod Act drawback regime.

In determining whether two articles are commercially interchangeable for drawback purposes, Congress set forth in the legislative history to the Mod Act certain

criteria to be considered including, but not limited to, governmental and industry

standards, part numbers, tariff classification and relative values. The standard of

commercial interchangeability was intended by Congress to more closely align the

administration of the drawback law with commercial realities. Unfortunately, Customs’ application of the new standard to the juice producing industry has been

fraught with problems. The problem arises because, for a number of juice products,

there exist no governmental and industry standards that would facilitate a commercial interchangeability analysis. Similarly, the relative values that are reflective of

market pricing in the juice producing industry can vary for a number of reasons

that have little or nothing to do with the quality or commercial substitutability of

the product. The reasons might include fluctuations in supply, weather conditions,

or the seasonality of various types of fruits. The absence of governmental standards

and the problems inherent in a relative value analysis have, therefore, virtually

eliminated the availability of unused merchandise substitution drawback to the

juice producing industry, notwithstanding the intent of Congress to increase its

availability and enhance U.S. producers’ ability to export their products.

NJPA, therefore, urges Congress to amend the drawback statute to accomplish

the goals of the Mod Act. NJPA does not seek a change in the standard of commercial interchangeability but, rather, a change in the statute to recognize that specific

concentrated juice products for manufacturing, whether they are produced domestically or overseas, are bulk commodities that are commercially interchangeable. With

respect to concentrated orange juice for manufacturing, the one juice product for

which a recognized governmental standard does exist, the USDA grading system is

the single most important factor upon which COJM is traded. An amendment that

therefore defines commercial interchangeability for purposes of COJM on the basis

of the standards of identity that comprise the USDA grading system would be of

great benefit. Thus, for example, imported COJM that is rated Grade A under the

32

USDA grading system would be deemed commercially interchangeable with domestic, duty-paid or duty free merchandise that is rated Grade A, provided that the

products also fall within the range of 93–96 for total USDA scores (based on color,

defects and flavor). Drawback could be claimed on the exportation of domestic, dutypaid or duty free Grade A COJM (with USDA scores in the range of 93–96), provided that the other requirements of the drawback law are met.

With respect to other juice products, unused merchandise substitution drawback

should be permitted based on the existence of the identical 8-digit Harmonized Tariff Schedule Numbers that define them.

3. CONCLUSION

The concerns reflected in H.R. 3684 are merely symptomatic of a more fundamental problem with the administration of the drawback program by U.S. Customs

with respect to the entire U.S. juice producing industry. The problem is caused by

Customs’ narrow application of the legal standard for substitution, both with respect

to manufacturing and unused merchandise drawback. The situation is particularly

troublesome with respect to unused merchandise drawback, where Congress has recently established a new and more liberal standard, which Customs has refused to

properly implement. Even the courts have recently rejected Customs’ narrow application of the standard. SeeTexport Oil Company v. United States, Slip. Op. 98–

1352,–1353, ¥1373 (Fed. Cir. 1999).

We respectfully ask that Congress and this Committee revisit these issues, or the

competitiveness of the U.S. juice producing industry in world markets will be severely undermined.

Atttachment 1

National Juice Products Association

REGULAR MEMBERS

Agrigold Juice Products

A. Lassonde, Inc.

American Fruit Processors

Americana Juice Products

Bascitrus Agro Industria

Camerican, A Con-Agra Co.

Canadaigua Concentrates

Cargill Citro-America

Caulkins Indiantown Cit.

CCPA/Valley Foods

Chiquita Brands, Int’l

Citrofrut, S.A.

Citrosol, S.A. De C.V.

Citrosuco North America

Citrosuco Paulista, S.A.

Citrus Belle, Div. A. Duda

Citrus Products, Inc.

Citrus World, Inc.

Clement Pappas & Co., Inc.

Cliffstar Corporation

Coca-Cola Foods

Confrutta, S.A.

Country Pure Foods

Cutrale Citrus Juices USA

Del Monte Foods

Del Oro, S.A.

Delano Growers Grape

Dinter GMBH

Dole Packaged Foods

Farmland Dairies, Inc.

Florida Flavors, Inc.

Flavors From Florida

Florida Global Citrus Ltd.

Golden Gem Growers, Inc.

Givadaun Roure

Gregory Packaging Int’l

H.J. Heinz Company

Holly Hill Fruit Products

Home Juice Company

Johanna Farms, Inc.

Jugos Concentrados, S.A.

Jugos Del Sur, S.A.

Juguera Veracruzana, S.A.

The Kroger Co.

Le Vignoble, S.A.

Lykes Pasco, Inc.

McCain Citrus, Inc.

Nestle

Northland Cranberries, Inc.

Ocean Spray Cranberries

Old Orchard Brands

Olympic Foods, Inc.

Orange-Co., Inc.

Orfiva, S.A.

Peace River Citrus Prod.

Pepsico, Inc.

Sabroso Company

San Joaquin Valley

Silver Springs Citrus Coop.

Sociedad Cooperativa

Sunbase U.S.A., Inc.

Sundor Brands, Inc.

Sunkist Growers, Inc.

Sun Pac Foods, Inc.

Sunpure

Tecnovin Do Brasil Icie, Ltda

Texas Citrus Exchange

Ticofrut, S.A.

Tree Top, Inc.

Tropicana Products, Inc.

United States Sugar Corp.

Ventura Coastal Corp.

Very Fine Products, Inc.

Vicente Trapani, S.A.

33

Vie Del Company

Vita-Pakt Citrus Prod. Co.

Welch’s

Winter Garden Citrus

National Juice Products Association

ASSOCIATE MEMBERS

A.G. Edwards & Sons

A.M. Beebe Company

American National Can

Automatic Machinery

B.A. Carlson of Fla.

Bowen Juices Int’l

Bradford Company

Brown International

Cargill Investor Services

Cerestar

Champion International

Citrico, Inc.

Citrus Assoc. N.Y. Cotton

Combibloc

Continental Plastic

Daystar Robinson Int’l

Directus International

Ecolab-Food and Bev. Div.

Eni Laboratories

Enerfab

Elopak, Inc.

Export Packers Co. Ltd.

Fabri-Kal Corp.

Ferreiro and Company

Fimat Futures USA, Inc.

Fleming Packaging

Florida Bulk Sales

Florida Worldwide Cit.

FMC Corporation

FMC do Brasil

G.B. International, Inc.

Graham Packaging Company

Harris Hollow Froz. Fruit

Hartog Foods Int’l

International Paper

Jefferson Smurfit Corp.

Johnson Controls, Inc.

Kendall Frozen Fruits

Leeward Resources

Koch Membrane

Merrill, Lynch, etc.

Miller & Smith Foods

Oakley Groves, Inc.

Paine Webber

Pittra Incorporated

Potomac Foods of VA

Premier Juices, Inc.

Purcell & Assoc.

Purkel Products, Inc.

Ryan Trading Corp.

Scholle Corp.

Sethness-Greenleaf

Silgan Containers

Smith Barney Shearson

Sonoco Products Co.

Tetra-Pak, Inc.

Vincent Corporation

f

White Cap, Inc.

Statement of Hon. Bill Thomas, a Representative in Congress from the

State of California

IN OPPOSITION TO H. R. 3684

I cannot support H. R. 3684 because it undermines the rules for duty drawback

and fundamentally changes the nature of the program into a new agricultural export subsidy. For all practical purposes, it would have the same effect as H.R. 194,

a drawback proposal which I continue to oppose.

The drawback rules are intended to promote U.S. trade. Drawback prevents duties on inputs used to create U.S. export goods from becoming a drag on those goods’

international sales. By providing drawback, current law recognizes that the imports

or an equivalent amount of U.S. product will be returned to international commerce.

H. R. 3684 and H.R. 194 would allow exporters of American grape juice concentrate to obtain refunds of duties paid on imported concentrate even though the

concentrates exported and imported are not the same product. The bill would permit

an exporter of grape juice concentrate to obtain duty refunds in cases where American Concord or Niagara grape juice concentrate had been exported and other grape

juice concentrate imported.

What H. R. 3684 creates is a new form of export subsidy. The trade does not consider the Concord or Niagara grape concentrates to be the commercial equivalent

of other red or white grape concentrates. Concord and Niagara juices have a unique

taste. In fact, well over 90% of the world’s production of both Concord and Niagara

grapes occurs in the United States. As a result, enactment of H.R. 3684 would create an incentive to export American Concord and Niagara grape juice concentrates

by transferring duties on imported grape concentrates to the exporter. Like H. R.

194, H.R. 3684 would thus allow U.S. concentrate exporters the unique benefit of

being rewarded by the U.S. Treasury for having exported a product that is not the

34

commercial equivalent of the product being imported. American industries exporting

other products are certain to seek similar treatment.

Export subsidies seriously distort international trade. At a time when the United

States is seeking to improve the World Trade Organization trade regimes, it would

not be wise to adopt a new means of subsidizing some farm exports. As a result,

I must oppose H. R. 3684.

f

H.R. 3704

To amend the Harmonized Tariff Schedule of the United States with respect to certain toys.

see International Mass Retail Association, under H.R. 1622

AMERICAN

f

APPAREL MANUFACTURERS ASSOCIATION

ARLINGTON, VA

May 17, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

REF: NO. TR–20

Dear Mr. Singleton:

On behalf of the American Apparel Manufacturers Association, the national trade

association of the apparel industry, I am writing to express our industry’s perspectives on several pieces of legislation currently pending before the Ways and Means

Trade Subcommittee for possible consideration in an upcoming miscellaneous duty

bill.

1. HR 3704/S 2128

AAMA Position: Opposed.

The legislation seeks to reclassify certain costumes or dress-up outfits as toys,

even when they are made of textile materials, simply by packaging them with toys

and other accessories. When classified as toys, such apparel would then enter the

United States duty and quota free. AAMA is concerned that this change would create an unintentional ‘‘back door’’ through which many kinds of garments could enter

duty and quota free, merely by being packaged with toys and marketed as ‘‘dress

up sets.’’ If Congress intends to create duty and quota free trade in apparel, it

should do so as the result of a determined public policy and not as the accidental

consequence of a marketing tool.

In addition, the proposal effectively drops the duty on certain kinds of finished

garments, while leaving intact the duty on the component textile parts. Such a

change constitutes a tariff inversion that effectively subsidizes foreign production at

the expense of domestic manufacturers. We find no compelling reason to create such

a tariff inversion with these products in this manner.

Finally, at least one AAMA member who makes costumes in the United States

has expressed explicit opposition to this legislation, stating its enactment and the

competitive disadvantage to which it will subject them will cause irreparable harm.

2. HR 4229/S. 2245

AAMA Position: Supports

This legislation corrects and updates a definition for Harris Tweed wool. This

change is technical in nature, but is necessary so as to avoid inadvertent discrimination against the import of the affected HTS lines

35

3. HR 4337

AAMA Position: Supports

This legislation makes changes necessary to implement the Entry Revision Project

(ERP) proposal, promulgated by the U.S. Customs Service. ERP is intended to

streamline and simplify the entry process, and to bring customs processes in line

with modern business practices. AAMA strongly supports efforts to simplify customs

processes, especially in the area of textiles and apparel where documentation requirements are unusually burdensome. Customs has signaled that, for the purposes

of the new authority, treatment of textile and apparel imports will be based on the

same criteria as other sectors, subject to other statutory requirements. On the basis

of that understanding, AAMA endorses HR 4337.

Thank you. Please contact me on 703–524–1864 if you have any further questions.

Sincerely,

STEPHEN LAMAR

f

Director, Government Relations

AMERICAN TEXTILE MANUFACTURERS INSTITUTE

WASHINGTON, DC

May 16, 2000

Mr. A.L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

The American Textile Manufactures Institute (ATMI), the national association of

the domestic textile mill products industry, offers the following comments regarding

H.R. 3704, a bill to amend the Harmonized Tariff Schedule of the United States

with respect to certain toys.

The effect of this bill would be to have costumes made of fabric—a textile material—treated as ‘‘other toys’’ and not subject to import duty or the quantitative restraints governing imports of textile and apparel products until January 1, 2005.

ATMI is strongly opposed to this proposed legislation on the grounds that it flies

in the face of past Congressional intent and would convey substantial benefits—unilaterally—to an undeserving trading partner.

Costumes, whether they be for Halloween, parties, children’s play or any other activity, are not ‘‘other toys.’’ They are made of fabric and worn on the body. Thus,

they are wearing apparel, pure and simple. Imported wearing apparel is subject to

duty and, where appreciable, quantitative restraint -quotas. Through eight rounds

of multilateral trade negotiations convened under the (former) General Agreement

on Tariffs and Trade (GATT), Congress had the opportunity to eliminate duty on

wearing apparel and declined, with good reason, to do so. Now it is confronted with

a bill which asks Congress to overturn its policy of fifty years’ standing.

Imports of wearing apparel are also subject to various restraints maintained

under the World Trade Organization Agreement on Textiles and Clothing until

2005. Congress ought not to, with respect to the apparel items in question, invalidate a multilateral agreement painstakingly negotiated by the United States and

nearly one hundred other countries.

Perhaps the most unsettling aspect of H.R. 3704, however, is the primary beneficiary. The great majority of costumes imported into the United States are made

in China. China has done nothing to warrant the United States’ providing it with

benefits worth tens of millions of dollars.

In fact, China’s actions with respect to trade in textiles and apparel warrant the

most severe opprobrium, not a generous reward. China has and continues to transship billions of dollars’ worth of textiles and apparel to the U.S. in order to avoid

its mutually agreed quotas. Chinese exporters (most often the Government of

China), in collaboration with dishonest American importers, have committed every

other kind of Customs fraud there is. China subsidizes and dumps textiles in the

United States. China has stolen American textile designs and patterns. One is hard

pressed to find an offense China has not committed.

Domestic producers of cloth costumes operate in the United States despite China’s

past efforts to drive them all out of business. ATMI members supply fabric to these

domestic costume manufacturers.

36

If H.R. 3704 becomes law, these remaining manufacturers will be driven out of

business, many jobs lost and the domestic textile industry will lose a valued customer. Congress should not allow this to happen.

Sincerely,

CARLOS MOORE,

f

Executive Vice President

Statement of Mattel, Inc., El Segundo, California

This statement is submitted on behalf of Mattel, Inc. in connection with the April

20 request for public comment by the House Committee on Ways and Means regarding the package of miscellaneous trade bills being prepared by the committee.

Mattel strongly supports the inclusion in this package of legislation which would require the U.S. Customs Service to classify all ‘‘dress-up sets and outfits, marketed

year-round for the amusement of children in role-play activity, whether or not of

textile materials and parts and accessories thereof,’’ as toys in subheading

9503.70.10 of the Harmonized Tariff Schedule of the United States (HTSUS). This

legislation was introduced by Rep. Xavier Becerra as H.R. 3704 on February 29,

2000.

Headquartered in El Segundo, California, Mattel is the world’s largest toy company, with 1999 sales of $5.5 billion in over 150 countries. The company has manufacturing, distribution and sales operations in the United States and 35 other countries, with over 7,700 U.S. employees and a global workforce of 31,000.

Mattel, like many other U.S. toy companies, imports and markets dress-up sets

as part of its broader line of toy products. There is no known production of dressup sets in the United States.

The dress-up sets addressed by H.R. 3704 are designed, marketed and sold year

round for the amusement of children in role-playing activities. They are imported

by toy companies and others, and are marketed principally through toy stores and

toy departments of retail stores.

The products to which H.R. 3704 relates consist of various assortments of articles

packaged together for retail sale, to permit a child to play doctor, nurse, grown-up

lady, ballerina, mermaid, actress, model, bride, princess, cheerleader, or any other

activity or role which children enjoy emulating in role-playing activities.

The composition of these sets varies widely, and includes an assortment of articles

to permit a child to play the role selected. These sets usually include any of a variety of accessories, as appropriate to the intended use, such as ballerina slippers, tiaras, apparel, gloves, collars, books, doctor and nurse bags and instruments, and

cosmetic kits for model.

Dress-up sets differ materially from Halloween costumes and costumes for other

festive occasions which are sold seasonally, prior to various holidays such as Halloween, Christmas, Easter, and other special occasions, and which are sold primarily

without accompanying accessories, other than possibly masks, for use solely on the

particular festive occasion.

Various importations of dress-up sets have been classified by the U.S. Customs

Service under the duty-free provision for ‘‘toys put up in sets or outfits,’’ as provided

for under HTS 9503.70, or under the duty-free provision for ‘‘festive, carnival or

other entertainment articles,’’ as provided for under HTS 9505. H.R. 3704 would

clarify and confirm the correctness of the classification of dress-up sets composed

of various articles put up in sets or outfits for retail sale for the use and amusement

of children in role playing, under the provision for ‘‘toys put up in sets or outfits’’

(HTS 9503.70).

Enactment of H.R. 3704 would assist Customs officers in distinguishing dress-up

sets from costumes, which usually consist of more elaborate complete articles of

wearing apparel without accessories, other than possibly masks. It would also confirm that dress-up sets represent a separate class of products recognized in the

trade and commerce of the United States, which are distinguishable from the products which are the subject of certain litigation pending before the U.S. Court of

International Trade involving whether ‘‘costumes’’ are classifiable as festive, carnival or other entertainment articles, or as articles of wearing apparel.

Please feel free to contact us should the Committee have any questions regarding

this matter.

f

37

RUBIE’S COSTUME COMPANY

RICHMOND HILL, NY

May 16, 2000

The Honorable Philip M. Crane

Chairman of the

Subcommittee on Trade

Committee on Ways & Means

233 Cannon House Ofc. Bldg.

Washington, D.C. 20515–1308

RE: TECHNICAL CORRECTIONS TO THE U.S. TRADE LAWS AND MISCELLANEOUS DUTY

SUSPENSION BILLS

Dear Mr. Chairman:

This responds to your request for comments regarding the Technical Corrections

to U.S. Trade Laws and Miscellaneous Duty Suspension bills now before the Committee. Specifically, as President of Rubie’s Costume Co., the largest manufacturer

of costumes in the United States, I write in opposition to H.R. 3704. Ostensibly limited only to so-called ‘‘dress-up sets,’’ this bill would allow a much wider range of

foreign-made textile garments to enter into the United States, duty-free and not

subject to quota. This would occur because as drafted, importers could use the proposed new classification to enter textile items, including costumes, as ‘‘dress-up

sets.’’

Currently, the U.S. Customs Service treats dress-up sets as consisting of ‘‘a combination of articles, most of which are toys . . . . Thus, a police dress-up set would

consist of a badge, toy gun, and toy handcuffs.’’ To be classified as a dress-up set,

a retail item must not include ‘‘wearing apparel-type items’’ made of textiles. See

Customs Ruling NYB88764. For example, Customs has stated that ‘‘a ballerina

dress-up set would be limited to her shoes and head piece. The presence of her tutu

makes the retail package a costume.’’ In short, dress-up sets are currently limited

to products which are not considered to be costumes, or other items of apparel.

However, by the terms of H.R. 3704, dress-up sets could be construed to include

a wide range of textile products, including costumes. The bill specifically defines

dress-up sets as including items ‘‘whether or not of textile material.’’ As such, costumes made of textile material, which are currently subject to duty and quota requirements, could be entered duty free as a dress-up set. This represents a radical,

and I believe, unintended, departure from the ways such products are currently

classified.

Passage of this bill would damage not only domestic costume manufacturers, but

producers of other textile products as well. For instance, a child’s theme pajamas,

like a cowboy, could become a dress-up set by packaging the pajamas with a few

accessories. The same result would obtain with respect to T-shirts and a variety of

other textile garments.

What is proposed in H.R. 3704 could hardly be characterized as a ‘‘technical correction.’’ On the contrary, it represents a fundamental change in the way garments

made of textiles are classified for tariff purposes. It would result in serious economic

injury to the domestic costume industry and to the thousands of workers it employs

in the United States. I urge you to eliminate this provision from the Miscellaneous

Tariff bill.

Very truly yours,

MARC BEIGE, PRESIDENT

Rubie’s Costume Co. Inc.

f

38

TOY ASSOCIATION OF

SOUTHERN CALIFORNIA

LOS ANGELES, CA

May 17, 2000

A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

RE: COMMENTS IN SUPPORT OF H.R. 3704

Dear Mr. Singleton:

In response to the Committee’s Release No. TR–20 of April 20, 2000, The Toy Association of Southern California is pleased to submit its comments in support of

H.R. 3704, an act to insure that toys known in the toy industry as ‘‘dress-up sets,’’

offered at retail year-round for amusement of children in role-playing, will be classified for tariff purposes in Chapter 95, Harmonized Tariff Schedules of the United

States [HTSUS].

Southern California is home to over 500 toy companies. The Toy Association of

Southern California is the largest trade group in California representing the toy industry, and its members include manufacturers, importers, and distributors of toys

in the greater Los Angeles area.

H.R. 3704 would safeguard the interests of these and other toy companies located

throughout the United States. The bill would codify the Customs Service’s existing

practice of classifying children’s dress-up sets in Chapter 95 of the Harmonized Tariff Schedules of the United States (HTSUS), thereby ensuring that imports of these

articles continue to receive the duty-free and quota-free treatment they currently

enjoy. For over 50 years, the toy industry has manufactured and marketed dressup sets or outfits consisting of numerous articles (including textile and apparel articles) used for amusement by children in role-playing.

During the last several years, one company which manufactures and imports costumes and not dress-up sets has attempted to insure that all costumes and dressup sets containing any textile components are classified for tariff purposes as textiles and apparel in Chapters 61 and 62, HTSUS, which cover wearing apparel. This

would subject dress-up sets, which are generally recognized as not being normal articles of wearing apparel, to high duties and tight quotas, requiring costly textile

visas. This would price these articles out of the market, above prices consumers are

willing to pay for play articles. H.R. 3704 would guard against that result, thereby

protecting the interests of U.S. toy companies and consumers.

Inasmuch as the toy industry regards dress-up sets or outfits marketed year

round for amusement of children in role-playing, as toys, our Association fully supports H.R. 3704, and asks that it be included in any miscellaneous trade bill prepared by the Committee for consideration by Congress during its present session.

Very truly yours,

LEETON LEE,

f

President

39

H.R. 3714

To extend the temporary suspension of duty on DEMT.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 16, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means May 16, 2000

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

SUBJECT: H.R. 3714—A BILL TO EXTEND THE DUTY SUSPENSION ON DEMT

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of DEMT. Bayer’s Industrial Chemicals

Division, headquartered, and with major import operations in Pittsburgh, Pennsylvania would benefit from the extension of the tariff suspension on DEMT.

Bayer AG in Uerdingen, Germany produces DEMT, which is imported by Bayer

Corporation. Bayer Corporation sells the imported DEMT to Eastman Chemical in

Kingsport, TN. Eastman Chemical, in turn, uses DEMT to make color developers

for photographic film. Color developers applied to film, precipitate film development.

According to Eastman, approximately 100 jobs are devoted to color developers,

which could be adversely impacted if the DEMT tariff suspension is not renewed.

There are no domestic suppliers of DEMT. DEMT is also competitively produced in

India. Finished color developers are currently being imported from China. Extending the DEMT tariff suspension would promote the domestic production of color developers. The DEMT tariff suspension would also assist domestic color developer

producers in being competitive with color developer manufacturers in China.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding extending the tariff suspension for DEMT, proposed in H.R. 3714. Please do not hesitate to contact me at Tel: 412–777–5616 with

any questions. In the event that I am unavailable, Julie Van Egmond in our Washington office (Tel.: 202–756–3773) or Karen Niedermeyer at our Pittsburgh location

(Tel: 412–777–2058) could be of assistance.

Sincerely,

f

STEPHEN R. JOHNSEN

H.R. 3715

To revise the article description for monochrome glass envelopes under the Harmonized Tariff Schedule of the United States.

NO COMMENTS SUBMITTED

f.

40

H.R. 3716

To suspend temporarily the duty on a certain ultraviolet dye.

Statement of Honeywell International Inc.

f

H.R. 3716

Honeywell International Inc. (Honeywell) appreciates the opportunity to comment

on H.R. 3716, introduced by Representative Robert Matsui of California. This measure provides for temporary suspension of the U.S. import duty on a certain ultraviolet dye, classified under 2931.00.30 of the Harmonized Tariff Schedule of the

United States (HTSUS).

Granting a suspension of the duty on the product subject to this legislation is justified and appropriate. To our knowledge there is no U.S. commercial production of

the exact product in question. For this reason passage of H.R. 3716, while having

a positive impact on the competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry.

DESCRIPTION OF HONEYWELL

Honeywell is a US$25-billion diversified technology and manufacturing leader,

serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation

systems; specialty chemicals; fibers; plastics; and electronic and advanced materials.

Honeywell was formed by the December 1999 merger of AlliedSignal Inc. and Honeywell Inc.

The company is a leading developer of software, solutions, and Internet e-hubs,

including MyAircraft.com and MyPlant.com. Honeywell employs approximately

120,000 people in 95 countries and is traded on the New York Stock Exchange

under the symbol HON, as well as on the London, Chicago and Pacific stock exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average

and is also a component of the Standard & Poor’s 500 Index.

DESCRIPTION OF THE PRODUCT AND ITS USES

This compound can be added to certain formulations to perform as an ultraviolet

light absorbing dye. The compound has been custom designed by Honeywell for use

in proprietary Honeywell formulations.

GRANTING SUSPENSION OF DUTY ON THIS ULTRAVIOLET DYE IS WARRANTED

There is no U.S. commercial production of the product subject to this legislation.

Because of the product’s strictly proprietary nature, we are certain Honeywell is the

only worldwide producer and importer of this dye. Further, based on import projections for this product for the period covered by H.R. 3716, this legislation also complies with the Committee’s ‘‘no-cost’’ requirement.

SUMMARY

There is no U.S. commercial production of the compound on which suspension of

duty is being sought. This legislation also meets the Committee’s ‘‘no cost’’ criterion.

For these reasons passage of H.R. 3716, while having a positive impact on the

competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry. Granting temporary suspension of the duty on

the product subject to this legislation is justified and appropriate.

Honeywell thanks the Committee for its careful consideration of our testimony.

f

41

H.R. 3717

To suspend temporarily the duty on Vinclozolin.

NO COMMENTS SUBMITTED

f.

H.R. 3718

To suspend temporarily the duty on Tepraloxydim.

NO COMMENTS SUBMITTED

f.

H.R. 3719

To suspend temporarily the duty on Pyridaben.

NO COMMENTS SUBMITTED

f.

H.R. 3720

To suspend temporarily the duty on 2-Acetylnicotinic acid.

NO COMMENTS SUBMITTED

f.

H.R. 3721

To suspend temporarily the duty on SAMe.

NO COMMENTS SUBMITTED

f.

H.R. 3722

To suspend temporarily the duty on Procion Crimson H–EXL.

NO COMMENTS SUBMITTED

f.

H.R. 3723

To suspend temporarily the duty on Dispersol Crimson SF Grains.

NO COMMENTS SUBMITTED

f.

H.R. 3724

To suspend temporarily the duty on Procion Navy H–EXL.

NO COMMENTS SUBMITTED.

f

42

H.R. 3725

NO COMMENTS SUBMITTED.

To suspend temporarily the duty on Procion Yellow H–EXL.

f

H.R. 3726

To suspend temporarily the duty on ortho-phenyl phenol (‘‘OPP’’).

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 11, 2000

A. L. Singleton

Chief of Staff

House Committee on Ways and Means May 11, 2000

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

SUBJECT: H.R.3726 ORTHO-PHENYLPHENOL (‘‘OPP’’)

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of ortho-Phenylphenol (‘‘OPP’’). Bayer’s

Logistics Division, with major import operations at Pittsburgh, Pennsylvania and

Bayer warehouses in Pennsylvania, Chicago, South Carolina, Texas and California

as well as Bayer’s customers in Michigan, Georgia, Florida, Massachusetts, Kansas,

Illinois, Pennsylvania, Ohio, Missouri and New Jersey would benefit from tariff suspension on this product. Ortho-Phenylphenol is effective for U.S. customers against

a wide variety of mold fungi and bacteria for the preservation of glues and adhesives. It is also used in U.S. industry in preservation applications for polymer emulsions (coatings, PVA systems and rubber), thickeners, paper, textiles, dyes, metalworking fluids, air filter oils, printing inks and polishes and waxes. Orthophenylphenol also benefits the U.S. lumber industry as a temporary sapstain control

of fresh cut lumber and the building industry as a preservative for concrete additives and masonry. Bayer is the sole producer of ortho-Phenylphenol, which is not

produced in the United States. There is a foreign producer of other phenolic biocides

in the United Kingdom by the name of Nipa.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the proposed tariff suspension for orthoPhenylphenol bill number H.R. 3726. Please do not hesitate to contact me at Tel:

412–777–2058 with any questions. In the event that I am unavailable, Julie Van

Egmond in our Washington office (Tel.: 202–756–3773) or Stephen Johnsen at our

Pittsburgh location (Tel: 412–777–5616) could be of assistance.

Sincerely,

f

KAREN L. NIEDERMEYER

43

H.R. 3727

To suspend temporarily the duty on 2-Methoxypropene.

NO COMMENTS SUBMITTED

f.

H.R. 3728

To reduce temporarily the duty on 3,5-Difluroaniline.

NO COMMENTS SUBMITTED

f.

H.R. 3729

To reduce temporarily the duty on Quinclorac.

NO COMMENTS SUBMITTED

f.

H.R. 3730

To suspend temporarily the duty on Dispersol Black XF Grains.

NO COMMENTS SUBMITTED

f.

H.R. 3731

To suspend temporarily the duty on fluroxypyr 1-methylheptyl ester (FME).

NO COMMENTS SUBMITTED

f.

H.R. 3733

To reduce temporarily the duty on ethylene/tetrafluoroethylene copolymer (ETFE).

NO COMMENTS SUBMITTED

f.

H.R. 3734

To suspend temporarily the duty on monolite green 860.

f

44

SUN CHEMICAL CORPORATION

CINCINNATI, OH

May 18, 2000

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

SunChemical Corporation Colors Group requests that these following entries be

removed from the Temporary Duty Suspension List; Dyes & Pigments:

HR3734, Monolite Green 952, Pigment Green 7 (PG7)

HR3735, Monolite Green 860, Pigment Green 36 (PG36)

These organic green pigments are produced by Colors Group, SunChemical Corporation, for the printing ink, coatings and plastics by our manufacturing plants located in Staten Island, NY; and, in Cincinnati, Ohio. With SunChemical Colors

Group pigment and colorant annual sales near $300 million, these organic

phthalocyanine pigment greens, PG7 and PG36, comprise a significant portion of the

total organic pigments that SunChemical Colors Group produce specifically for the

printing ink and automotive coatings markets.

Pigment imports over these past 7 years have significantly eroded our sales and

margin volumes.Consequently, any lower duties on these pigment green items would

seriously impact our ability to manufacture and compete in this printing ink marketplace.

Based in Cincinnati, OH, with over 700 employees, SunChemical Colors Group

have become one of the top three world recognised producers of synthetic organic

pigments.Our Research and Development Group have applied considerable effort on

innovative and technical development of our high quality Sunfast Green PG7 and

PG36 pigments.

I would appreciate your consideration on these important issues.

Sincerely,

STEPHEN J. SCHMIDT,

Vice President of Purchasing

[An attachment is being retained in the Committee files.]

f

H.R. 3735

To suspend temporarily the duty on monolite green 952.

see SunChemical Corporation, under H.R. 3734

f

H.R. 3736

To suspend temporarily the duty on solsperse 17260.

NO COMMENTS SUBMITTED

f.

H.R. 3737

To suspend temporarily the duty on solsperse 17000.

NO COMMENTS SUBMITTED.

f

45

H.R. 3738

To suspend temporarily the duty on solsperse 5000.

NO COMMENTS SUBMITTED

f.

H.R. 3739

To suspend temporarily the duty on monolite blue 3R.

f

SUN CHEMICAL CORPORATION

CINCINNATI, OH

May 18, 2000

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

SunChemical Corporation Colors Group requests that these following entries be

removed from the Temporary Duty Suspension List; Dyes & Pigments:

HR3739, Monolite Blue 3R, Pigment Blue 60 (PB60)

HR3759, Pigment Red 176, (PR176)

HR3772, Pigment Yellow 199, (PY199)

HR3773, Pigment Blue 60, (PB60)

Note: same as HR3739. Monolite Blue 3R is a Zeneca trade name for its

PB60.

HR3776, Pigment Yellow 147, (PY147)

HR3777, Pigment Yellow 191.1, (PY191)

HR3937, Pigment Yellow 184,(PY184)

HR3939, Pigment Orange 73, (PO73)

HR3944, Pigment Red 255, (PR255)

HR3951, Pigment Red 264, (PR264)

HR3958, Pigment Yellow 168, (PY168)

SunChemical Corporation, Colors Group, currently produces a wide product range

of similar high molecular weight, temperature resistant, specialised synthetic pigments for the paint, coatings and plastics markets. I have attached our pigment

catalogues which list SunChemical Colors Group pigments specifically designed for

these coatings and plastics markets.

SunChemical requests that duties not be reduced on these similar pigments listed

above. From its pigment manufacturing plants located in Staten Island, NY; Newark and Brunswick, NJ; Cincinnati and Amelia, OH; and Chicago, IL; Colors Group

are fully capable of providing these type pigments to our color-consuming customers.

I would appreciate your attention to these matters.

Sincerely,

STEPHEN J. SCHMIDT

Vice President of Purchasing

Colors Group

Cc: fax: Stephen Wanser, USITC 202–205–2150

f

H.R. 3740

To suspend temporarily the duty on certain TAED chemicals.

NO COMMENTS SUBMITTED.

f

46

H.R. 3741

To extend the temporary suspension of duty on a certain polymer.

NO COMMENTS SUBMITTED

f.

H.R. 3742

NO COMMENTS SUBMITTED.

To suspend temporarily the duty on isobornyl acetate.

f

H.R. 3743

To suspend temporarily the duty on sodium petroleum sulfonate.

NO COMMENTS SUBMITTED

f.

H.R. 3746

To extend the temporary suspension of duty on 4-hexylresorcinol.

Honeywell International Inc. (Honeywell) appreciates the opportunity to comment

Statement of Honeywell International Inc.

f

on H.R. 3746, introduced by Representative Jim Ramstad of Minnesota. This measure provides for extension of the temporary suspension of the U.S. import duty on

the chemical 4-Hexylresorcinol, normally classified under 2907.29.90, and temporarily classified under 9902.29.07, of the Harmonized Tariff Schedule of the United

States (HTSUS).

Granting a suspension of the duty on the product subject to this legislation is justified and appropriate. To our knowledge there is no U.S. commercial production of

the exact product in question. For this reason passage of H.R. 3746, while having

a positive impact on the competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on a U.S. industry.

DESCRIPTION OF HONEYWELL

Honeywell is a US$25-billion diversified technology and manufacturing leader,

serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation

systems; specialty chemicals; fibers; plastics; and electronic and advanced materials.

Honeywell was formed by the December 1999 merger of AlliedSignal Inc. and Honeywell Inc.

The company is a leading developer of software, solutions, and Internet e-hubs,

including MyAircraft.com and MyPlant.com. Honeywell employs approximately

120,000 people in 95 countries and is traded on the New York Stock Exchange

under the symbol HON, as well as on the London, Chicago and Pacific stock exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average

and is also a component of the Standard & Poor’s 500 Index.

DESCRIPTION OF THE PRODUCT AND ITS USES

4-Hexylresorcinol is used by Honeywell customers for a variety of applications, including in throat lozenges, to reduce spoilage in shrimp, in topical antiseptics, and

47

in other pharmaceutical and cosmetic applications (some of which are still in the

research and development stage).

EXTENDING THE EXISTING SUSPENSION OF DUTY ON 4-HEXYLRESORCINOL IS

WARRANTED

There is no U.S. commercial production of the product subject to this legislation.

This product was originally proposed for duty suspension in 1998. A thorough review by the U.S. International Trade Commission, U.S. Department of Commerce,

and U.S. Customs Service determined the proposal to be noncontroversial and compliant with the revenue impact criterion established by the Committee on Ways and

Means and the Committee on Finance. This proposal became law as part of the Miscellaneous Trade and Technical Corrections Act of 1999 (P.L. 106–36), which was

signed by the President on June 25, 1999.

Earlier, in 1997 the Office of the U.S. Trade Representative compiled a list (socalled ‘‘zero list’’) of chemical products whose U.S. tariffs it tried unsuccessfully to

use the November 1997 APEC Ministerial meeting to eliminate. We submitted the

product subject to this bill for inclusion on that list. In a chemical industry-wide

formal review of the proposed list, undertaken at the behest of the U.S. government,

no one objected to this product’s presence on the list, i.e., had no objections to its

duty being eliminated.

SUMMARY

To Honeywell’s knowledge there is no U.S. commercial production of the exact

product in question. Further, when scrutinized thoroughly in the past as a product

proposed to receive preferential tariff treatment, such related proposals were

deemed noncontroversial. Regrettably, notwithstanding the good intentions and tireless efforts of U.S. trade negotiators to achieve tariff elimination/reductions in various fora, it is uncertain if and when the APEC, or for that matter the WTO, process

will yield the desired tariff cuts provided for in H.R. 3746.

For these reasons passage of H.R. 3746, while having a positive impact on the

competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry. Extending the temporary suspension of the duty

on the product subject to this legislation is justified and appropriate.

Honeywell thanks the Committee for its careful consideration of our testimony.

f

H.R. 3747

To extend the temporary suspension of duty on certain sensitizing dyes.

Honeywell International Inc. (Honeywell) appreciates the opportunity to comment

Statement of Honeywell International Inc.

f

on H.R. 3747, introduced by Representative Jim Ramstad of Minnesota. This measure provides for extension of the temporary suspension of the U.S. import duty on

certain sensitizing dyes for photo/imaging applications, normally classified under

2933.19.30, 2933.19.90, 2933.90.24, 2934.10.90, 2934.20.40, 2934.90.20, and

2934.90.90, and temporarily classified under 9902.29.37, of the Harmonized Tariff

Schedule of the United States (HTSUS).

Granting a suspension of the duty on the products subject to this legislation is

justified and appropriate. To our knowledge there is no U.S. commercial production

of the exact products in question. For this reason passage of H.R. 3747, while having a positive impact on the competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry.

DESCRIPTION OF HONEYWELL

Honeywell is a US$25-billion diversified technology and manufacturing leader,

serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation

systems; specialty chemicals; fibers; plastics; and electronic and advanced materials.

Honeywell was formed by the December 1999 merger of AlliedSignal Inc. and Honeywell Inc.

48

The company is a leading developer of software, solutions, and Internet e-hubs,

including MyAircraft.com and MyPlant.com. Honeywell employs approximately

120,000 people in 95 countries and is traded on the New York Stock Exchange

under the symbol HON, as well as on the London, Chicago and Pacific stock exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average

and is also a component of the Standard & Poor’s 500 Index.

DESCRIPTION OF THE PRODUCTS AND THEIR USES

Polymethine sensitizing dyes are used by Honeywell customers to improve the

spectral response of photosensitive emulsions used on films, including photographic

films of all types, medical imaging films, and graphic arts films. These dyes are

complex organic molecules, and each one is typically designed on a proprietary basis

for a specific film emulsion. Once a customer has decided upon a particular molecular structure and specifications for the material (e.g., metals content, crystal size,

etc.), the product becomes truly unique to that particular customer, to the supplier

and to the application. These dyes are generally added in tiny amounts to film

emulsions to adjust the photon sensitivity of the film.

EXTENDING THE EXISTING SUSPENSION OF DUTY ON CERTAIN SENSITIZING DYES FOR

PHOTO/IMAGING APPLICATIONS IS WARRANTED

There is no U.S. commercial production of the products subject to this legislation.

These products were originally proposed for duty suspension in 1998. A thorough

review by the U.S. International Trade Commission, U.S. Department of Commerce,

and U.S. Customs Service determined the proposal to be noncontroversial and compliant with the revenue impact criterion established by the Committee on Ways and

Means and the Committee on Finance. This proposal became law as part of the Miscellaneous Trade and Technical Corrections Act of 1999 (P.L. 106–36), which was

signed by the President on June 25, 1999.

Earlier, in 1997 the Office of the U.S. Trade Representative compiled a list (socalled ‘‘zero list’’) of chemical products whose U.S. tariffs it tried unsuccessfully to

use the November 1997 APEC Ministerial meeting to eliminate. We submitted the

products subject to this bill for inclusion on that list. In a chemical industry-wide

formal review of the proposed list, undertaken at the behest of the U.S. government,

no one objected to these products presence on the list, i.e., had no objections to their

duties being eliminated.

SUMMARY

To Honeywell’s knowledge there is no U.S. commercial production of the exact

products in question. Further, when scrutinized thoroughly in the past as products

proposed to receive preferential tariff treatment, such related proposals were

deemed noncontroversial. Regrettably, notwithstanding the good intentions and tireless efforts of U.S. trade negotiators to achieve tariff elimination/reductions in various fora, it is uncertain if and when the APEC, or for that matter the WTO, process

will yield the desired tariff cuts provided for in H.R. 3747.

For these reasons passage of H.R. 3747, while having a positive impact on the

competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry. Extending the temporary suspension of the duty

on the products subject to this legislation is justified and appropriate.

Honeywell thanks the Committee for its careful consideration of our testimony.

f

H.R. 3748

on H.R. 3748, introduced by Representative Jim Ramstad of Minnesota. This measTo extend the temporary suspension of duty on certain organic pigments and dyes

Honeywell International Inc. (Honeywell) appreciates the opportunity to comment

Statement of Honeywell International Inc.

f

ure provides for extension of the temporary suspension of the U.S. import duty on

certain organic pigments and dyes for security applications, normally classified

under 3204.90.00, and temporarily classified under 9902.32.07, of the Harmonized

Tariff Schedule of the United States (HTSUS).

49

Granting a suspension of the duty on the products subject to this legislation is

justified and appropriate. To our knowledge there is no U.S. commercial production

of the exact products in question. For this reason passage of H.R. 3748, while having a positive impact on the competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry.

DESCRIPTION OF HONEYWELL

Honeywell is a US$25-billion diversified technology and manufacturing leader,

serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation

systems; specialty chemicals; fibers; plastics; and electronic and advanced materials.

Honeywell was formed by the December 1999 merger of AlliedSignal Inc. and Honeywell Inc.

The company is a leading developer of software, solutions, and Internet e-hubs,

including MyAircraft.com and MyPlant.com. Honeywell employs approximately

120,000 people in 95 countries and is traded on the New York Stock Exchange

under the symbol HON, as well as on the London, Chicago and Pacific stock exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average

and is also a component of the Standard & Poor’s 500 Index.

DESCRIPTION OF THE PRODUCTS AND THEIR USES

Organic luminescent pigments and dyes are used by Honeywell customers in various products that require security and anti-counterfeiting technology. Examples of

end uses in which trace amounts of highly specialized luminescent pigments, dyes

and fibers may be used are: Currency, stock certificates, credit cards, postal stamps,

labels for packages, software certificates of authenticity, drivers licenses, etc. These

luminescent compounds are complex organic molecules, and each one is typically designed on a proprietary basis for a specific anti-counterfeiting application. Once a

customer has decided upon a particular molecular structure, and specifications for

the material, the product becomes truly unique to that particular customer, to the

supplier and to the application.

EXTENDING THE EXISTING SUSPENSION OF DUTY ON CERTAIN ORGANIC PIGMENTS

AND DYES FOR SECURITY APPLICATIONS IS WARRANTED

There is no U.S. commercial production of the products subject to this legislation.

These products were originally proposed for duty suspension in 1998. A thorough

review by the U.S. International Trade Commission, U.S. Department of Commerce,

and U.S. Customs Service determined the proposal to be noncontroversial and compliant with the revenue impact criterion established by the Committee on Ways and

Means and the Committee on Finance. This proposal became law as part of the Miscellaneous Trade and Technical Corrections Act of 1999 (P.L. 106–36), which was

signed by the President on June 25, 1999.

Earlier, in 1997 the Office of the U.S. Trade Representative compiled a list (socalled ‘‘zero list’’) of chemical products whose U.S. tariffs it tried unsuccessfully to

use the November 1997 APEC Ministerial meeting to eliminate. We submitted the

products subject to this bill for inclusion on that list. In a chemical industry-wide

formal review of the proposed list, undertaken at the behest of the U.S. government,

no one objected to these products presence on the list, i.e., had no objections to their

duties being eliminated.

SUMMARY

To Honeywell’s knowledge there is no U.S. commercial production of the exact

products in question. Further, when scrutinized thoroughly in the past as products

proposed to receive preferential tariff treatment, such related proposals were

deemed noncontroversial. Regrettably, notwithstanding the good intentions and tireless efforts of U.S. trade negotiators to achieve tariff elimination/reductions in various fora, it is uncertain if and when the APEC, or for that matter the WTO, process

will yield the desired tariff cuts provided for in H.R. 3748.

For these reasons passage of H.R. 3748, while having a positive impact on the

competitiveness of Honeywell and many of its U.S. customers, would not have a detrimental effect on an U.S. industry. Extending the temporary suspension of the duty

on the products subject to this legislation is justified and appropriate.

Honeywell thanks the Committee for its careful consideration of our testimony.

f

50

H.R. 3751

To extend the temporary suspension of duty on certain semi-manufactured forms

of gold.

f

HALE AND DORR LLP

WASHINGTON, DC 20004

May 19, 2000

A.L Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Re: Request for Comments on Miscellaneous Tariff Provision, H.R. 3751

Dear Mr. Singleton:

This letter is filed on behalf of Micron Technology, Inc., in strong support of H.R.

3751, a miscellaneous tariff bill that would continue the temporary duty suspension

for gold bonding wire used in the semiconductor assembly process. Micron does believe, however, that duty free treatment should be extended to 2005, rather than

2003, as in the current draft of this legislation. A companion Senate bill would extend duty free treatment through 2005.

Gold bonding wire is an indispensable material used in assembling semiconductors and integrated circuits. In the semiconductor assembly process, very fine gold

wire is used to connect the pads on the semiconductor die to the leads on the

leadframe of the semiconductor package.

Semiconductor-grade gold wire is unlike gold wire used for any other application.

First, it is very fine, with a diameter of 0.06 millimeters or less. It is also very pure,

usually having a purity of 99.99 percent or greater. Semiconductor gold bonding

wire also contains very specific dopants, which are added to control wirebonding

characteristics. This type of gold wire is used only for semiconductors and integrated

circuits and cannot be used for any other purpose.

Semiconductor gold bonding wire is classified under Harmonized Tariff Number

7108.13.7000, and carries a duty rate of 5.1 percent. The duty on this product is

currently suspended, however, due to legislation passed in October 1996. The current temporary tariff classification for this product is 9902.71.08.

Gold bonding wire should be duty free an a permanent basis. The ‘‘zero-for-zero’’

round of duty elimination negotiations that took place during the Uruguay Round

and the Information Technology Agreement eliminated most of the duties on semiconductor manufacturing equipment and materials. Gold bonding wire was overlooked during these negotiations. United States duties were eliminated on the end

product, semiconductors, in the 1980’s.

There is clear historical industry consensus regarding duty suspension for gold

bonding wire. It would benefit all U.S. companies assembling semiconductors in the

United States. As noted above, gold bonding wire for semiconductors was included

in a temporary duty suspension bill passed in October 1996. (It is for this reason

that gold bonding wire currently has a zero duty rate.) In conjunction with that bill,

the Senate requested public comment. No adverse comments were received. In fact,

Victoria Hadfield, filing comments on behalf of Semiconductor and Equipment Manufacturers International (‘‘SEMI’’), stated that for gold bonding wire ‘‘I can identify

no domestic opposition to these proposed tariff reductions and would support (its)

passage.’’ SEMI’s support is important because this trade organization represents

the U.S. producers of materials used in the semiconductor manufacturing process.

The Semiconductor Industry Association, the trade association representing U.S.

semiconductor manufacturers, also supports this legislation.

Duty free treatment for gold bonding wire would make U.S. semiconductor manufacturers more competitive and would reinforce and encourage greater assembly of

semiconductors in the United States, rather than abroad where many assemblers

already enjoy duty free treatment of material inputs and equipment.

51

Finally, Micron believes that this legislation is non-controversial because, to Micron’s knowledge, there are no companies that make semiconductor gold bonding

wire in the United States. Micron also believes that the revenue impact of this legislation would be de minimis.

If you have any questions regarding these comments, please do not hesitate to

contact me at (202) 942–8371. Thank you for your help on this important legislation.

Sincerely,

f

BONNIE B. BYERS

SEMICONDUCTOR INDUSTRY ASSOCIATION

May 19, 2000

A.L Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Re: Request for Comments on Miscellaneous Tariff Provision, H.R. 3751

Dear Mr. Singleton:

The Semiconductor Industry Association (‘‘SIA’’) urges passage of H.R. 3751 introduced by Congressman Simpson. Specifically, the bill would continue the suspension

of the 6.6 percent duty for gold bonding wire used in the semiconductor manufacturing process.

SIA has long supported the elimination of tariffs on semiconductors, semiconductor manufacturing equipment and materials, and information technology products. The US eliminated semiconductor duties in 1985, and during the Uruguay

Round and the Information Technology Agreement, eliminated duties on many types

of equipment and materials related to the semiconductor fabrication process. Many

duties remain, however, on equipment and materials that relate to the assembly

stage of the semiconductor manufacturing process. During this step, individual silicon chips are placed in packages. This is done by attaching the chips to lead frames

with very fine gold wire and then literally molding a plastic package around the

chip and the lead frame. The gold wire used to attach the die to the lead frame is

of a certain grade, purity and chemical composition suitable for use only in the

semiconductor manufacturing process.

The US semiconductor industry is a major contributor to the US economy providing 284,000 US jobs. In 1999 worldwide sales of semiconductors reached $174 billion. The world market is expected to grow to $234 billion by the year 2002. Duty

free treatment for items used in the semiconductor assembly process would improve

the competitiveness of the US semiconductor industry, particularly those companies

who locate assembly operations in the US. Moreover, to SIA’s knowledge, this tariff

suspension bill is not controversial, since there is no bonding wire industry in the

United States.

SIA appreciates the opportunity to comment on the above-mentioned tariff suspension provision, and urges you to include it in any miscellaneous tariff bill reported out of the Ways and Means Committee.

Sincerely,

DARYL G. HATANO

f

Vice President Public Policy

H.R. 3752

To suspend temporarily the duty on 4-Nitro-o-xylene.

NO COMMENTS SUBMITTED.

f

52

H.R. 3753

To suspend temporarily the duty on certain copper foils.

f

COPPER & BRASS FABRICATORS

COUNCIL, INC.

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Singleton:

RE: REQUEST FOR WRITTEN COMMENTS ON TECHNICAL CORRECTIONS TO U.S. TRADE

LAWS AND MISCELLANEOUS DUTY SUSPENSION BILLS

In response to your notice of April 20, 2000, subject as above, this statement is

submitted on behalf of the Copper and Brass Fabricators Council, Inc., (‘‘Council’’)

and its 22 member companies (see attached list of Council member companies). The

Council is a trade association which represents the principal copper and brass mills

in the United States. These mills together account for the fabrication of more than

80 percent of all copper and brass mill products produced in the United States, including sheet, strip, plate, foil, bar, rod and both plumbing and commercial tube.

These products are used in a wide variety of applications, chiefly in the automotive,

construction, and electrical/electronic industries.

The Council’s comments are limited to H.R.3753 and H.R.3869 which are listed

as components of the Technical Corrections to U.S. Trade Laws and Miscellaneous

Duty Suspension legislation compiled in the Committee’s notice of April 20.

As background, it should be noted that since early 1985, the Council and its member companies have brought a series of antidumping and countervailing duty cases

before the Department of Commerce and International Trade Commission to counter

large increases of imports of brass mill products. These proceedings have led to determinations that respondent countries were guilty of unfair pricing and resulted in

the issuance of eleven antidumping duty orders and three countervailing duty orders against imports of brass sheet and strip and of low-fuming brazing rod from

a total of eleven countries.

In taking these measures, the Council was reacting to a steady increase in the

share of imports that were dumped and subsidized beginning in the late 1970’s and

continuing to the present.

Correspondingly, with respect to regular U.S. import tariffs, in the series of multilateral trade negotiations following the GATT agreement of 1948, the U.S. Government has consistently stated that the world trading system should be free and nondiscriminatory and that U.S. commerce should have competitive opportunities substantially equivalent to those of its trading partners within that system.

Unfortunately, none of the multilateral trade negotiations, including the Uruguay

Round, has secured those goals for the U.S. brass mill industry. Excessive and unmatched reductions in U.S. brass mill product tariffs have resulted in a persistent

and substantial unfavorable trade balance in brass mill products. For copper foil the

product covered by H.R.3753 (HTS No. 7410.11.00) U.S. imports from all countries

in 1999 totaled 55,468,020 pounds while U.S. exports were 23,428,815 pounds.

Brass mill product markets are marked by intense price competition and sales are

won or lost on differences as small as a penny per pound. Consequently, temporary

suspension of normal tariffs on copper foil as proposed in H.R.3753 would certainly

lead to even larger trade deficits in the product.

Because of this likely adverse impact on the U.S. market for copper foil, the Council objects to the enactment of H.R.3753 as part of the Technical Corrections to U.S.

Trade Laws and Miscellaneous Duty Suspension legislation.

The Council’s reliance upon the United States’ unfair trade laws is of vital importance to this industry, and the continuance of the antidumping and countervailing

53

duty orders won by the Council has been a matter to which the United States copper and brass mills assign a top priority. This industry is similar to other United

States domestic industries that have successfully prosecuted antidumping and countervailing duty proceedings. The cost of these cases is high, and petitioners understandably expect that the unfair trade remedies which they have fought so hard to

obtain will remain viable.

The Council has discovered in its cases that enforcement of unfair trade orders

must be pursued vigorously by the domestic industry in several major respects. Of

pertinence to this matter, the Council has found that there is no effective mechanism in place by which the Customs Service and Department of Commerce can accurately record what antidumping and countervailing duties have been assessed and

collected on legally entered imports in a particular proceeding or over-all. Over the

past several years, the Council has asked for documented and detailed accountings

of the aggregated duties brought in under its orders. These efforts have produced

limited and often inconsistent data and only after considerable checking and special

compilation by the agencies.

In the Council’s antidumping and countervailing duty cases it has become evident

that the Customs Service and Department of Commerce do not know what antidumping and countervailing duties are being paid. These data are simply not being

maintained on a regular basis in a manner that enables the agencies to say with

any assurance that particular unfair trade orders are being enforced. It is assumed

that the duties are being collected, but there is no trustworthy evidence to substantiate this claim or to ascertain the amounts of the duties.

The Council has been advised that the situation sought to be remedied by

H.R.3869 may represent an example of the Customs Service failing to accurately collect antidumping duties on brass sheet and strip. Since becoming aware of

H.R.3869, the Council has attempted to obtain verification of the claim that the bill

would simply correct errors on the part of the Customs Service. Those attempts

have not resulted in the receipt of any documentation of the alleged Customs Service errors.

H.R.3869 would mandate the liquidation or reliquidation of approximately 235 entries of brass sheet and strip subject to an antidumping duty order and ranging in

time from 1987, which was the first full year of the order’s existence, to as recently

as 1996.

While the Council would not contest the possibility that the Customs Service may

have erroneously administered collection of antidumping duties on brass sheet and

strip, the large number of entries and extended period of time covered by H.R.3869

compel the Council to object to its inclusion in the Technical Corrections to U.S.

Trade Laws and Miscellaneous Duty Suspension legislation currently under consideration.

The Council would welcome, and cooperate in, an effort to ascertain the accuracy

of the entries listed in H.R.3869 but until that determination is made in an open

process the Council does not believe that Congressionally mandated liquidation or

reliquidation of the subject entries is justified.

In closing, it should be noted that Outokumpu American Brass, a Council member

company, does not support that portion of this submission which relates to

H.R.3869.

Respectfully submitted,

JOSEPH L. MAYER

President & General Counsel

Copper and Brass Fabricators Council, Inc.

Attachment

Copper and Brass Fabricators Council, Inc.

MEMBERSHIP LIST

THE AMPCO GROUP

P.O. Box 2004

Milwaukee, WI 53201

(414) 645–3750x358

ANSONIA COPPER & BRASS, INC.

P.O. Box 109

Ansonia, CT 06401

(203) 732–6606x606

BRUSH WELLMAN, INC.

17876 St. Clair Avenue

Cleveland, OH 44110

(216) 486–4048

CAMBRIDGE-LEE INDUSTRIES,

INC.

(Reading Tube Division)

P.O. Box 14026

Reading, PA 19612–4026

(610) 926–7366

CERRO COPPER PRODUCTS CO.

(A member of The Marmon

54

Group of companies)

P.O. Box 66800

St. Louis, MO 63166–6800

(618) 874–8670

CERRO METAL PRODUCTS CO.

(A member of The Marmon

Group of companies)

P.O. Box 388

Bellefonte, PA 16823

(814) 355–6200

CHASE BRASS & COPPER CO., INC.

P.O. Box 152

Montpelier, OH 43543

(419) 485–3193

CHICAGO EXTRUDED METALS CO.

401 N. Michigan Avenue, #700

Chicago, IL 60611

(312) 670–1515

EXTRUDED METALS

302 Ashfield Street

Belding, MI 48809

(616) 794–4842

HEYCO METALS, INC.

1069 Stinson Drive

Reading, PA 19605

(610) 926–4131

HUSSEY COPPER LTD.

Washington Street

Leetsdale, PA 15056–1099

(724) 251–4238

KOBE COPPER PRODUCTS, INC.

P.O. Box 160

Pine Hall, NC 27042

(336) 427–6611

METALS AMERICA

135 Old Boiling Springs Road

Shelby, NC 28150

(215) 517–6000X125

THE MILLER COMPANY

290 Pratt Street

Meriden, CT 06450–1010

(203) 639–5234

MUELLER INDUSTRIES, INC.

8285 Tournament Drive, #150

Memphis, TN 38125

(901) 753–3201

OLIN CORPORATION-BRASS

GROUP

427 N. Shamrock Street

East Alton, IL 62024–1174

(618) 258–3775

OUTOKUMPU AMERICAN BRASS

P.O. Box 981

Buffalo, NY 14240–0981

(716) 879–6979

OUTOKUMPU COPPER FRANKLIN,

INC.

P.O. Box 539

Franklin, KY 42135–0539

(270) 586–8201x155

PMX INDUSTRIES, INC.

5300 Willow Creek Drive, SW

Cedar Rapids, IA 52404–4303

(319) 368–7700x1155

REVERE COPPER PRODUCTS, INC.

One Revere Park

Rome, NY 13440–5561

(315) 338–2332

WATERBURY ROLLING MILLS,

INC.

P.O. Box 550

Waterbury, CT 06720

(203) 754–0151x246

WIELAND METALS, INC.

567 Northgate Parkway

Wheeling, IL 60090

f

(847) 537–3990

H.R. 3754

To suspend temporarily the duty on certain activated carbon.

f

CALGON CARBON CORPORATION

PITTSBURGH, PA

April 25, 2000

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Re: H.R. 3754

Calgon Carbon Corporation (CCC), as the largest manufacturer of activated carbon in the United States and representing the best interests of our industry, strongly opposes H.R. 3754. The main reasons for our opposition to H.R. 3754 are as follows:

• The current import duty is not restrictive to the import of activated carbon.

This is evident particularly by the dramatic increase in Chinese activated carbon

imports from 5 million pounds in 1991 to 32 million pounds in 1998. In other words,

the rate of activated carbon imports from China has grown at an average rate of

55

30% per year since 1991. This is an unprecedented growth rate in a market that

has only grown at an average of 3% to 5% per year since 1991.

• The US trade deficit has climbed to astronomic proportions fueled in large part

due to our soaring trade deficit with China. Suspending the duty will only serve to

accelerate the rate of growth of our trade deficit.

• US based activated carbon manufacturers serving the municipal water and

wastewater treatment markets have idled and reduced capacity. These actions have

eliminated US industrial workers of their livelihood and have taken place largely

due to the sharp decrease in pricing due to inexpensive imported activated carbons

mainly from China. Specifically, CCC has been forced to make several major production capacity decisions. In response to artificially low priced activated carbon produced in China flooding markets in Japan, US, and Europe, In November 1991 CCC

permanently shutdown an activated carbon production line at our Kentucky plant

eliminating 18 million pounds of capacity. In November 1999 we permanently shutdown another activated carbon production line at our Kentucky plant and an activated carbon pellet production line at our Pennsylvania plant eliminating an additional 25 million pounds of capacity. In May 2000 we will have completed our shutdown an activated carbon production line in Belgium eliminating 25 million pounds

of capacity. The total job loss due to the elimination of our production capacity is

approximately 220 employees in the US and 100 employees in Belgium.

• US based activated carbon manufacturers are held to stringent environmental

standards which is commendable considering activated carbon is one of the major

solutions to air and water pollution. Yet, it is ironic that countries exporting activated carbon do not hold their manufacturers to the same environmental standards.

This is especially true in China where no air pollution abatement equipment is utilized in their production of activated carbon from high ash coals. The air pollution

they create at their plants knows no boundaries. It travels across the Pacific Ocean

and ends up in US water supplies where activated carbon is required to make the

water drinkable.

In conclusion, CCC and other US activated carbon manufacturers are quite similar to many large and more publicized US industries such as steel manufacturers

who are also facing challenges from inexpensive imports. Their arguments against

foreign manufactures are similar to ours along with the specific reasons noted

above. At this time we see no logical reason why suspending the 4.8% duty is prudent. Rather, we recommend increasing the duty to 10–15%.

We appreciate the opportunity to express of our position. If you have any questions, please feel free to contact me at (412) 787–6762.

Sincerely,

KARL D. KRAUSE

f

Marketing Manager Carbon Platform

H.R. 3755

To suspend temporarily the duty on certain buff brushes.

NO COMMENTS SUBMITTED

f.

H.R. 3757

To temporarily suspend the duty on Solvent Blue 124.

NO COMMENTS SUBMITTED

f.

56

H.R. 3758

To temporarily suspend the duty on Solvent Blue 104.

NO COMMENTS SUBMITTED

f.

H.R. 3759

To temporarily suspend the duty on Pigment Red 176.

see SunChemical Corporation under H.R. 3739.

f

H.R. 3760

To temporarily suspend the duty on benzenesulfonamide, 4-amino-2, 5-dimethyoxyN-phenyl

NO COMMENTS SUBMITTED

f.

H.R. 3762

To suspend temporarily the duty on undecylenic acid.

f

ELF ATOCHEM NORTH AMERICA, INC

ARLINGTON, VA 22209

May 10, 2000

The Hon. A. L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

RE: Copy of Statement of Purpose Submitted Upon Request to the U.S. International Trade Commission and to U.S. Department of Commerce Covering Duty

Suspension for Undecylenic Acid (HR 3762).

Dear Mr. Singleton,

In response to inquiries made by both the U.S. International Trade Commission

and the U.S. Department of Commerce, the enclosed document was prepared in support of passage of the measure. On behalf of Elf Atochem NA, importer of the products designated, I am submitting these copies to the Committee for the record.

Thank you for your attention. Please advise should your office have additional

questions.

Regards,

CHARLES A. KITCHEN

Director—Government Relations

ELF ATOCHEM/ATO—PRODUCT/MARKET INFORMATION

Note: This information is provided in response to U.S. International Trade Commission inquiry.

PRODUCT INFORMATION AND PROJECT IMPORT VOLUME DATA FOR UNDECYLENIC ACID

(H.R. 3762 & S. 2427)

57

CAS Reference Number

Undecylenic Acid -CAS #112–38–9

Background

Undecylenic acid is a carboxylic acid derived from natural castor oil. It is used

in the manufacture of pharmaceuticals, cosmetics and perfumery including anti-dandruff shampoos, anti-microbial powders and as a musk in perfumes and aromas. Undecylenic acid is not produced in the U.S. It must be imported. Imported undecylenic

acid is subject to a 6.1% duty under HTS 2916.19.30.

Undecylenic Acid should be re-classified as duty free

• No Domestic production. There are no U.S. producers of undecylenic acid

that would be affected by re-classifying undecylenic acid as duty free.

• Derived from a renewable resource. Undecylenic acid is derived from castor

oil and is of very high purity (98%), which is not typical of carboxylic acids of this

type.

PRODUCTION / IMPORTATION

Importer: Elf Atochem North America, Inc., Corporate Headquarters, 2000

Market Street, Philadelphia, PA 19103, Tel: 215/419–7000

Undecylenic acid is produced at Elf Atochem SA’s production facility in Marseilles,

France. Material is imported by Elf Atochem N.A. for direct sale to end-user market

customers. No subsequent production processing is required. Imported material is

warehoused in the following location prior to shipment to end-use customers:

Stored at Edison, NJ (Linden Distribution). Imported through New York. No additional processing at any Elf Atochem facilities.

f

H.R. 3763

To suspend temporarily the duty on n-Heptaldehyde.

f

ELF ATOCHEM NORTH AMERICA, INC.

ARLINGTON, VA 22209

May 10, 2000

The Hon. A. L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

RE: Copy of Statement of Purpose Submitted Upon Request to the U.S. International Trade Commission and to U.S. Department of Commerce Covering Duty

Suspension for n-Heptaldehyde (HR 3763).

Dear Mr. Singleton,

In response to inquiries made by both the U.S. International Trade Commission

and the U.S. Department of Commerce, the enclosed document was prepared in support of passage of the measure. On behalf of Elf Atochem NA, importer of the products designated, I am submitting these copies to the Committee for the record.

Thank you for your attention. Please advise should your office have additional

questions.

Regards,

CHARLES A. KITCHEN

Director—Government Relations

ELF ATOCHEM/ATO—PRODUCT/MARKET INFORMATION

Note: This information is provided in response to U.S. International Trade Commission inquiry.

58

PRODUCT INFORMATION AND PROJECT IMPORT VOLUME DATA FOR N-HEPTALDEHYDE

(H.R. 3763 & S. 2428)

CAS Reference Number

n-Heptaldehyde -CAS # 111–71–7

Background

N-heptaldehyde is an aldehyde that is derived from natural castor oil. It is used

primarily in the manufacture of alpha amyl cinnamic aldehyde (ACA), a key ingredient in fragrances and perfumes as well as for certain industrial uses, including

tire manufacture. N-heptaldehyde is not produced in the U.S. It must be imported.

Imported n-heptaldehyde is subject to a 5.5% duty under HTS 2912.50.50.

n-Heptaldehyde should be re-classified as duty free.

¢ No Domestic production. There are no U.S. producers of n-heptaldehyde that

would be affected by re-classifying n-heptaldehyde as duty free.

PRODUCTION / IMPORTATION

Importer: Elf Atochem North America, Inc., Corporate Headquarters, 2000

Market Street, Philadelphia, PA 19103, Tel: 215/419–7000

The material, n-Heptaldehyde, is produced at Elf Atochem SA’s production facility

in Marseilles, France. Material is imported by Elf Atochem N.A. for direct sale to

end-user market customers. No subsequent production processing is required. Imported material is warehoused in the following location prior to shipment to enduse customers:

Stored at Edison, NJ (Linden Distribution). Imported through New York. No additional processing at any ATO site.

Please Note: In response to your earlier inquiry, Firmenich and Penta Manufacturing are Elf Atochem’s customers for n-heptaldehyde. Aldrich has not bought from

us in the recent past, but they are a supplier of laboratory quantities (milliliters

to liters). They have over 30,000 items in their catalog. They do not produce nheptaldehyde in any commercial quantity.

f

H.R. 3764

To suspend temporarily the duty on n-Heptanoic acid.

f

ELF ATOCHEM NORTH AMERICA, INC.

ARLINGTON, VA 22209

May 10, 2000

The Hon. A. L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

RE: Copy of Statement of Purpose Submitted Upon Request to the U.S.

InternationalTrade Commission and to U.S. Department of Commerce Covering

Duty Suspension for n-Heptanoic Acid (HR 3764).

Dear Mr. Singleton,

In response to inquiries made by both the U.S. International Trade Commission

and the U.S. Department of Commerce, the enclosed document was prepared in support of passage of the measure. On behalf of Elf Atochem NA, importer of the products designated, I am submitting these copies to the Committee for the record.

Thank you for your attention. Please advise should your office have additional

questions.

Regards,

CHARLES A. KITCHEN

Director, Government Relations

59

ELF ATOCHEM/ATO—PRODUCT/MARKET INFORMATION

Note: This information is provided in response to U.S. International Trade Commission inquiry.

PRODUCT INFORMATION AND PROJECT IMPORT VOLUME DATA FOR N-HEPTANOIC ACID

(H.R. 3764 & S. 2426)

CAS Reference Number

n-Heptanoic Acid -CAS # 114–14–8

Background

Imported n-heptanoic acid is a carboxylic acid that is derived from natural castor

oil. It is used to make lubricants (including those for jet engines), paint additives

and in manufacturing a plastisizer for PVB (polyvinyl butyral), an interlayer in laminated safety glass for auto and architectural applications.

Domestically produced n-heptanoic acid is a synthetic product. It is used for similar applications, but is derived from hexene, a petrochemical. The supply of domestically produced n-heptanoic acid is not sufficient to meet the domestic demand. Even

with imports, the domestic demand for n-heptanoic acid exceeds the available supply

Imported n-heptanoic acid is subject to a 4.2% duty under HTS 2915.90.18.

n-Heptanoic Acid should be re-classified as duty free.

1. Environmentally advantageous to use imported n-heptanoic Acid. The

environmental advantage of using imported n-heptanoic acid is that it is based on

a renewable resource, Castor oil, which is a vegetable oil. The imported product is

also very pure. The domestic product is synthetic. It is manufactured by reacting

hexene, a flammable liquid petrochemical, with carbon monoxide (a toxic gas) and

hydrogen gas (explosive). Since imported n-heptanoic acid is derived from a natural

and renewable resource, hazardous chemical precursors are not utilized in the production process.

• Domestic production is not sufficient to satisfy domestic demand. Projected Y2000 domestic demand for n-heptanoic acid is estimated at 48 million lbs.

In 1999, U.S. sales of imported n-heptanoic acid were approximately 15 million lbs.

and U.S. sales of domestically produced n-heptanoic acid were approximately 31 million lbs. No U.S. producer or any other potential new producers have indicated an

intent to increase or start-up production of n-heptanoic acid in the U.S.

PRODUCTION / IMPORTATION

Importer: Elf Atochem North America, Inc., Corporate Headquarters, 2000

Market Street, Philadelphia, PA 19103, Tel: 215/419–7000

The material, n-heptanoic acid is produced at Elf Atochem SA’s production facility

in Marseilles, France. Material is imported by Elf Atochem N.A. for direct sale to

end-user market customers. No subsequent production processing is required. Imported material is warehoused in the following location prior to shipment to enduse customers:

No additional processing occurs at any Elf Atochem site. Imported product is

stored at Elizabeth, NJ (Croda Storage). Imported through New York City.

f

H.R. 3772

To suspend temporarily the duty on pigment yellow 199.

see SunChemical Corporation under H.R. 3739.

f

H.R. 3773

To suspend temporarily the duty on pigment blue 60.

see SunChemical Corporation under H.R. 3739.

f

60

H.R. 3774

To suspend temporarily the duty on solvent violet 13.

NO COMMENTS SUBMITTED

f.

H.R. 3775

To suspend temporarily the duty on solvent blue 67.

NO COMMENTS SUBMITTED

f.

H.R. 3776

To suspend temporarily the duty on pigment yellow 147.

see SunChemical Corporation under H.R. 3739.

f

H.R. 3777

To suspend temporarily the duty on pigment yellow 191.1.

see SunChemical Corporation under H.R. 3739.

f

H.R. 3778

To amend the Harmonized Tariff Schedule of the United States to provide dutyfree treatment for, and clarify the classification of, machines and components used

in the manufacture of digital versatile discs (DVDs).

I am Alex Greenspan, president of Digital Matrix Corporation, a New York-based

Statement of Alex Greenspan on Behalf of Digital Matrix Corporation,

Hempstead, New York

f

company that manufactures and integrates equipment used for the production of optical disc media, including compact discs (CDs) and digital versatile discs (DVDs).

Of the three major components of the DVD production process (mastering,

electroforming, and replication), Digital Matrix specializes in electroforming. Specifically, Digital Matrix manufactures electroforming equipment used to produce, by an

electolytic plating process, CD/DVD stampers from CD/DVD masters, which are

then used to produce CDs and DVDs.

Digital Matrix’s comments concern those duty suspension bills, H.R. 3778 through

H.R. 3795, currently before the Subcommittee that relate to the optical disc industry, and specifically to the importation of equipment used to manufacture DVD

media. These bills would eliminate the tariff on the importation of such equipment,

in a misguided and unnecessary attempt to stimulate growth of the DVD format.

Digital Matrix vigorously opposes these bills. The impact would be to increase the

market advantage and profits of the foreign manufacturers at the expense of U.S.

companies. Further, it is patently unfair to suspend tariffs for foreign companies

when no such tariff relief is available for the same U.S. made products sold in European and Asian markets. Furthermore, these bills would inflict special harm on domestic companies as the same tariff-free equipment used for DVD production can

61

and will be used to produce a wide range of optical media including CD-ROMs and

audio CDs.

The introduction of these bills is predicated on the representations of foreign companies, specifically Japan’s Panasonic and the Dutch Toolex/ODME, that there are

no US companies involved in the manufacturing of optical disc media producing

equipment. This is quite simply not so, as these companies well know. In fact, there

are numerous U.S. companies competing in this arena, including ourselves, Optical

Digital Corporation, and Record Products of America. The only difference is that

most of the US equipment manufacturers adopt to a modular design, while most foreign makers tend to produce all-in-one in-line equipment. Despite Toolex’s assertions that the development and production of optical storage media started in Europe, much of the development, testing, and production of these new formats has

been performed in the United States. While both Toolex and Panasonic claim that

all or nearly all equipment used by domestic DVD manufacturers is of foreign origin, again this is simply false. In fact the majority of electroforming equipment

alone (Digital Matrix’s sole line of business) used in the United States is of domestic

origin.

As a U.S. company, Digital Matrix constantly struggles in foreign markets. This

difficult task is complicated by several factors. First, the strength of the U.S. Dollar

increases the price of our equipment abroad. Second Digital Matrix must overcome

the distinct ‘‘anti-American’’ sentiment pervasive in European, and to some extent

Asian, markets. Only with our top-quality equipment backed up by the best support

in the industry are we able to overcome this bias. The tariffs on American products

only exacerbate the situation.

Our competitors have clearly embarked on an aggressive campaign to increase

their already substantial market share of the US Market. For example, Toolex has

acquired many of its competitors, including one US company. By using such anticompetitive practices as ‘‘dumping,’’ ‘‘bundling,’’ and ‘‘tie-in sales,’’ we believe that

Toolex has crossed the line into attempting to dominate the market. In many cases,

Toolex will only sell mastering equipment to a customer who buys electroforming

equipment with it.

Toolex and Panasonic allege relieving them of the required tariff on the machinery they export to the US will make US DVD manufacturers more competitive. Realistically though, the cost of machinery used to produce DVD’s is only a fraction

of the cost of each DVD, and the three percent tariff Toolex pays would not likely

find its way to lower priced DVDs. The three percent is enough, however, to encourage the use of domestic equipment.

While the foreign corporations recommending this favorable treatment for themselves attempt to draw a parallel to the 1994 tariff relief for foreign producers of

video laser disks (VLDs), this is a poor analogy. DVDs are much more than the next

incarnation of VLDs. Equipment used in the production of VLDs served to produce

only VLD discs used for home movie viewing. DVD equipment, on the other hand,

has a substantially broader range of uses. Also, while there were no major domestic

manufactureres of VLD machinery in 1994 thus necessitating imported equipment,

there are a number of DVD equipment manufacturers, as previously stated. Additionally, the 1994 tariff relief effectively eviscerated the market for US made VLD

manufacturing machinery, and eventually served to move the production of VLDs

themselves offshore. The same will happen to the DVD, audio CD, and CD-ROM

production if these bills are passed.

Additionally, it is important to understand that DVD manufacturing is essentially

the same as CD manufacturing. There is almost no difference between the way a

CD stamper is made and the way a DVD stamper is made. The only major difference is that the specifications and tolerances are more rigorous for DVD stampers

than for CD stampers. The basic process, however, is the same. As a result, equipment imported tariff-free as DVD producing equipment will also be used to produce

audio CDs, video game discs, computer CD-ROMs, and other formats with little or

no modification. Thus, a lifting of tariffs on DVD-related equipment is effectively a

lifting of tariffs relevant to such other media as well.

In addition to the damage to the businesses that produce DVD and CD manufacturing equipment, the upstream effects could be significant as well. Digital Matrix

contracts millions of dollars worth of business from dozens of vendors that produce

and supply parts, components, design work, assemblies, and services necessary to

produce such a technology intensive product. A sample partial list Digital Matrix’s

suppliers is attached as Exhibit A. Other domestic manufacturers have similar support networks. The loss of business to Digital Matrix and the other domestic optical

disc companies affected would affect potentially hundreds of companies, and thousands of American employees. While Toolex believes their theoretical increase in doVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00073 Fmt 6633 Sfmt 6602 K:\CPRINT\66010 WAYS1 PsN: WAYS1
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mestic DVD production will mean more jobs, this will surely be more than offset

by the offshore production of these machines and their components.

Finally, Toolex has stated that there will be no loss of tariff revenue. Their tortured logic states that ‘‘any loss of revenue . . . would be set off against the duties

gained through Customs’ reclassification of DVD machines. It is simply inconceivable that by importing these machines duty-free, Customs will collect more tariff

revenue.

In conclusion, in addition to the loss to the U.S. of millions in tariff revenue, the

net effect of this legislation would be great harm to American businesses, the loss

of American jobs, and the tariff-free importation of many types of optical disc equipment, all to serve the interests of foreign corporations and further tilt the playing

field in their favor. We therefore urge the subcommittee to reject these bills, and

any future similar bills.

[An attachment is being retained in Committee files.]

I

f

NTERNATIONAL ELECTRONICS MANUFACTURERS

AND CONSUMERS OF AMERICA

WASHINGTON, DC

May 19, 2000

The Honorable Bill Archer

Chairman

Committee on Ways and Means

United States House of Representatives

Washington, D.C. 20515

Re: H.R. 3778 through H.R. 3795—Committee Request for Comments on Miscellaneous Tariff and Technical Measures

Dear Mr. Chairman:

I am writing on behalf of the International Electronics Manufacturers and Consumers of America (‘‘IEMCA’’), to endorse legislation to provide tariff relief for machinery and components used to make digital versatile discs (DVDs).

IEMCA is a trade association founded in 1987 and located in Washington, D.C.

IEMCA’s principal members are major manufacturers of consumer electronics; optical, telecommunications, and computer products; DVDs and DVD machinery.

IEMCA’s associate members are leading electronics retailers. The U.S. investment

of IEMCA’s members and their direct suppliers exceeds $75 billion, their annual

U.S. sales exceed $100 billion, and they employ over 300,000 American workers.

IEMCA advocates enactment of legislation, H.R. 3778 through H.R. 3795, introduced by Congressman Collins (R., Georgia), with Congressmen Boehner (R., Ohio),

Kuykendall (R., California), and Matsui (D., California). This legislation will increase U.S. employment, reduce U.S. production costs, enable domestic producers to

be more competitive in this important sector of the electronics industry, and, we believe, harm no domestic producers. It will also help to deter widespread piracy of

software and entertainment media around the world by encouraging DVD production in the U.S., where anti-piracy laws are strongest.

DVD Technology.

DVDs, using cutting-edge optical disc technology, provide consumers the highest

quality audio and video reproduction. Used in DVD players, as part of home theater

systems, and in DVD-ROM-equipped computers, these discs have grown enormously

in popularity since their introduction in 1997. In three years, sales of DVDs have

grown from 8 million units annually to a projected 586 million units in 2000. In fact,

it is expected that DVD technology will replace both videocassette tapes and video

laser discs as the preferred medium for presentation of movies in the home.

There are at least 17 domestic producers of DVDs, including Hitachi, JVC,

Panasonic, Sanyo, Sony, and Time Warner.

DVDs are the ‘‘next generation’’ recorded video media in the marketplace, succeeding video laser discs (VLDs) that were produced in the early 1990s. Recent advancements in technology enable DVDs to hold more recordings on smaller discs

than VLDs. The machines that make DVDs consist of several components (including

a master recording system, a replicating system, and such individual machines as

a laser encoder and an injection mold machine) that function together to produce

DVDs.

63

In 1994, Congress passed new, duty-free tariff legislation for VLD manufacturing

machines. It helped companies like Time Warner (WEA Manufacturing) create and

save jobs in the U.S. that were threatened as a result of foreign production of CDs

and VLDs. Importantly, the 1994 legislation did not adversely affect any U.S. company because the industry-standard optical disc technology, such as that used in

VLDs and DVDs, was first developed overseas.

Shortly after enactment of the legislation allowing duty-free import of machines

that make VLDs, home video entertainment shifted to DVDs. Production was shifted from VLDs to DVDs using substantially the same systems, and companies like

Panasonic began manufacturing DVDs in the U.S. Accordingly, a proper interpretation of existing law would accord DVD manufacturing machines the same duty-free

treatment as VLD manufacturing machines. The Customs Service, however, has

ruled that DVD manufacturing machines are not explicitly named in current law,

and that the components of DVD manufacturing machines should be classified

under several separate tariff headings, bearing an average duty of 3 percent. This

ruling has had the effect of negating the benefits that Congress intended when it

passed legislation in 1994.

Benefits.

The proposed legislation would help make domestic DVD manufacturers more

competitive with foreign DVD manufacturers. Competition from Taiwan, Japan, and

the European Union in particular is very strong. A recent study indicated that some

overseas competitors are trying to sell their DVD discs in the U.S. at a price as low

as 75 cents each, compared to a cost of $1.61 for domestic production.

There is also a major anomaly in DVD manufacture and import: Duties on imported DVDs (up to 2.7 percent) are lower than duties on DVD manufacturing machines themselves (up to 4.4 percent), a fact which encourages foreign production

at the expense of domestic production. The proposed legislation would remove this

anomaly, thereby stimulating U.S. jobs in DVD manufacturing in the U.S.

According to industry analysts, demand for DVDs is expected to rise from 586 million units in 2000 to 2.3 billion units in 2003. Demand for DVDs is expected to increase further as recordable DVDs come on line in 2001. This market development

will be enhanced by the legislation advocated by IEMCA.

The proposed legislation also will protect U.S. intellectual property rights. Movie

studios have invested heavily in the protection of movie content for DVDs. Keeping

production of DVDs in the U.S., rather than in countries that have weaker intellectual property laws and enforcement, will help prevent the mass piracy of software

that occurs overseas.

IEMCA believes that the enactment of the legislation providing duty-free entry of

DVD machinery and components will not injure any domestic producer.

Accordingly, for the foregoing reasons, IEMCA strongly supports prompt enactment of H.R. 3778 through H.R. 3795.

Respectfully submitted,

KEITH SMITH

Executive Director

[Attachments are being retained in the Committee files.]

f

May 18, 2000

The Honorable Bill Archer

House Ways and Means Committee

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Dear Chairman Archer:

Recently, I joined my colleagues, Representatives Mac Collins, John Boehner, and

Bob Matsui, to introduce legislation suspending the duties on the machinery and

components necessary for the manufacture of digital versatile discs (DVDs). I urge

that these bills be included in the Committee’s miscellaneous tariff package that it

will consider shortly.

Our legislation, represented by House Resolutions 3778–3795, is intended to help

domestic DVD manufacturers compete against companies who make DVDs in Hong

Kong and Taiwan at half the cost. One of the reasons for this lower cost is that

64

these countries do not face the prospect of paying duties on the manufacturing

equipment.

I am particularly supportive of this legislation because one of the major domestic

manufacturing companies, Panasonic Disc Services, is located in my district. Although a major player in the domestic disc market, Panasonic is just one of 17 domestic companies manufacturing 16.6 million discs annually, to serve entertainment

industry companies such as Universal, Paramount, and Disney. None of the equipment necessary to manufacture DVDs is made in the United States. It must all be

imported. Although DVDs are arguably the next generation of video laser disc technology that receives tariff-free treatment, the Customs Service ruled that DVD manufacturing equipment should not be classified under these provisions. Instead, Customs indicated that the 17 different components of DVD manufacturing machines

should be classified under 11 separate tariff headings, with an average duty of three

percent.

The purpose of our legislation is to make clear that the 17 different components

should, like the earlier generation technology, receive duty-free treatment. In turn,

this will reduce per unit production costs for DVDs, helping domestic manufacturers

remain competitive while ensuring good paying, high-tech jobs for Torrance, California, Pickneyville, Illinois and other sites around the country.

Demand for DVDs worldwide is expected to reach 394 million units this year, with

much of the production likely to occur in the United States. For US companies to

remain viable in this exploding marketplace, it must receive tariff relief on the production equipment. For this reason, I urge the inclusion of these bills within the

Committee’s miscellaneous tariff relief package that it is now considering.

Thank you for considering this request. I am happy to discuss this with you in

greater detail.

Sincerely,

STEVEN T. KUYKENDALL

f

Member of Congress

Statement of Richard L. Wilkinson, President and Chief Executive Officer,

Optical Disc Corporation, Santa Fe Springs, California

My name is Richard L. Wilkinson, and I am President and CEO of Optical Disc

Corporation (ODC). ODC is a U.S. manufacturer of optical disc mastering system

machinery and components. ODC holds 12 U.S. patents in optical disc technology,

and its staff was part of the U.S. team that developed the world’s first optical disc

masters, video laser discs (VLDs) and recordable laser videodiscs (RLVs). We are

deeply concerned about bills H.R. 3778 through H.R. 3795 which would suspend import tariffs on foreign machinery and components used to manufacture digital

versatile discs (DVDs) as well as amend all HTS production classification codes to

include equipment used to manufacture DVDs. The legislation would be detrimental

to the U.S. government, domestic equipment manufacturers, suppliers, and, ultimately, U.S. consumers.

Suspending import tariffs on the equipment our foreign competitors provide to the

U.S. customer base would provide them with an unfair trade advantage over domestic competition. During our 17 years in business, we have seen large direct foreign

competitors, including Toolex International/ODME, Sony and Panasonic, Nimbus,

and others enter the market with their own government-backed programs for financing, reducing prices, and driving down our pricing structures and profits. We

estimate that the current foreign trade advantages have directly resulted in a 75

percent loss in U.S. market share for ODC.

Contrary to statements made by proponents of this legislation, the U.S. has at

least three major suppliers of optical disc manufacturing equipment. These suppliers serve both domestic and international customers and are supported by thousands of U.S.-based sub-suppliers. There are also well over 300 optical disc manufacturers and VHS duplication houses in the U.S. that have the potential to evolve

into DVD producers.

This legislation would impact a greater marketplace and involve much greater

loses in tariff revenue for the U.S., potentially in the multiple millions of dollars,

than what has been conveyed by the bills’ proponents. The bills would not only impact suppliers of optical disc manufacturing equipment, but would also have significant impacts on the companies that supply optical disc manufacturers. Suspending

these import tariffs would have a significant ripple effect that would negatively imVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00076 Fmt 6633 Sfmt 6602 K:\CPRINT\66010 WAYS1 PsN: WAYS1
65

pact many hundreds of U.S. companies and thousands of domestic jobs. We strongly

oppose these bills.

If any of these bills became law, they would effectively eliminate tariff duties on

all optical disc manufacturing equipment, not just DVDs. Foreign suppliers would

easily be able to claim their compact disc (CD) and multi-format production equipment as ‘‘DVD equipment’’ in order to evade customs tariffs. In most cases, the

equipment used to produce DVDs is actually multi-format equipment that can

produce other formats as well, including: • CD-ROM (retail computer software), • CD-Audio (music CDs), • Discs for game consoles, • CD-R, and • Various types of hybrid discs.

In addition, DVD equipment that is not multi-format is designed to be easily

reconfigured for CD production.

The representations of the bills’ proponents not withstanding, DVD is not simply

a replacement of the video laser disc (VLD). DVD, unlike the VLD, was originally

designed to be a generic digital data carrier, not just a movie medium. Uses for

DVD include movie distribution, video console games, video presentations and advertising, computer software, audio, and others. Therefore it is important to recognize that, unlike VLD tariff legislation passed in 1994, the customs tariff exemptions embodied in these bills would be applied to equipment that serves a much

larger marketplace.

The VLD experience, however, does offer a glimpse of what the impact of these

bills would be. After the 1994 legislation that suspended tariffs on VLD equipment,

U.S. manufacturers of high quality VLD equipment could no longer compete in the

domestic marketplace. After 1994, all new VLD mastering equipment started coming from Japan and was installed in U.S. plants owned by Japanese equipment

manufacturers. Eventually, foreign manufacturers moved all of their VLD production from the U.S., back to their own countries.

Contrary to statements made by the proponents of these bills, it is not true that

jobs are being lost to foreign entities because of the current import tariffs. By continuing to allow U.S. equipment companies to have a domestic trade advantage, CD/

DVD manufacturing equipment jobs in the U.S. will remain steady or grow. The

proposed bills will only benefit foreign competitors and stimulate the economies of

foreign governments.

Further, jobs that might be created by expanded DVD production can only mean

the net loss of jobs in the VHS tape duplication industry. The majority of DVD production in the U.S. is used for the release of movies, which is in direct competition

with the current U.S. VHS tape duplication industry. The domestic VHS tape duplication industry has almost no competition from anywhere else in the world. Ultimately, most industry experts agree that the VHS duplication industry will be replaced by the DVD replication industry. Thus any of the supposed benefits to domestic DVD production will be at the expense of the domestic VHS industry.

We would like to clarify that, in spite of suggestions by our foreign competitors

to the contrary, in-line mastering systems compete directly with modular/batch mastering systems in the same market. To clarify, in-line systems are those that complete all of the components of the process sequentially as to each DVD master. Modular/batch systems complete work on each component as to a group of masters before proceeding to the next component. H.R. 3780 defines DVD mastering machinery

as an ‘‘in-line system machine,’’ which is how some foreign competitors define their

mastering equipment. We believe that this ‘‘in-line system machine’’ definition may

be an attempt to confuse the issue and to make it appear that this type of equipment is not currently manufactured in the U.S. The machinery should be referred

to as ‘‘mastering equipment’’ or ‘‘mastering systems,’’ which can be designed either

as an in-line style or modular/batch style system. Both are automated mastering

systems. Both provide the same function and product—CD and DVD master discs.

Optical Disc Corporation’s mastering systems have a modular/batch design, and

incorporate the complete set of components necessary to produce master discs (see

The ODC Mastering System—Introduction). ODC is also currently developing an inline system, which is being planned for release in late 2000.

Panasonic Disc Services Corporation (PDSC), a vocal proponent of these bills, has

argued that ‘‘Optical Disc Corporation (U.S. Company) makes the laser encoder, a

major component of the mastering system, but their machines use technology that

is incompatible with PDSC technology.’’ (see May 2, 2000 letter to Hon. Lynn Bragg

from Robert B. Pfannkuch, page 2) Essentially PDSC is supporting this legislation

as necessary because they claim there is no domestically-made equipment available

that is compatible with their systems. However, on July 23, 1998, Mitchell Brown,

66

General Manager, Manufacturing and Process Engineering at PDSC sent an e-mail

to staff at ODC confirming the compatibility of ODC’s mastering technology with

their own (see July 23, 1998 e-mail—Replication Tests using Optical Disc Corporation Stampers). We believe these sorts misrepresentations should pose serious concerns regarding the credibility and motives of PDSC as a proponent of this legislation.

We do not think it is appropriate to enact legislation that is detrimental to the

success of U.S. manufacturers nationwide. We do not believe Congress should consider providing foreign companies, which already dominate the U.S. marketplace,

with such a strong competitive advantage when U.S. companies, such as ODC, remain levied with tariffs whenever we sell the same type of equipment into their

countries. Eliminating import tariffs for foreign entities without the elimination of

tariffs on U.S. goods imported overseas would ultimately place U.S. firms at an even

greater trade disadvantage and burden the U.S. government with an even wider

trade imbalance.

We urge you to consider the potentially significant adverse implications of enacting legislation such as this, and we hope that you will ultimately oppose these bills,

or others like them in the future.

[Attachments are being retained in the Committee files.]

f

PANASONIC

TORRANCE, CA

May 19, 2000

The Honorable Bill Archer

Chairman

Committee on Ways and Means

United States House of Representatives

Washington, DC 20515

Re: H.R. 3778–3795—Committee Request for Comments on Miscellaneous Tariff and

Technical Measures

Dear Mr. Chairman:

As President of Panasonic Disc Services Corporation (PDSC) in Torrance, California, I wish to express my strong support for H.R. 3778–3795, duty-suspension

legislation for machinery used to manufacture digital versatile discs (DVDs), introduced by Congressman Mac Collins, and co-sponsored, by Congressman Steve

Kuykendall, representing our factory; Congressman Bob Matsui, representing JVC,

another DVD manufacturer; and Congressman John Boehner, representing other

Panasonic facilities. PDSC was established in 1996 and is the world’s first DVD-only

replication facility. It is a subsidiary of Matsushita Electric Industrial Co. Ltd., one

of the leading developers and producers of digital electronic products for the home

and office.

Consumers use DVDs both in DVD players as part of a home theatre system and

in DVD-ROM equipped computers. Based on the growing demand for DVD, the industry expects, ultimately, that DVDs will replace both videocassette tapes and

video laser discs for home viewing. The leading DVD producers, such as Panasonic,

Sony, Warner, Nimbus/Technicolor, Deluxe Digital (formerly Pioneer), JVC, and

Sonopress, make discs for such movie studios as Universal, Paramount, Columbia

TriStar, and MGM. All use predominantly imported DVD machinery. Like most of

our competitors, PDSC uses an integrated line of machines to make DVDs, sourced

to our specifications from a number of overseas companies, including Panasonic.

DVDs are the ‘‘next generation’’ video media for the marketplace, succeeding video

laser discs (VLDs) that were produced from the early 1970s through the 1990s. Both

VLD and DVD manufacturing machines create a master, using a laser encoder to

create pits on optical recording media, and then the information on the master is

replicated. Although VLD manufacturing machines enter the United States under

one duty-free tariff provision, the Customs Service ruled that DVD manufacturing

machines must enter the United States under eleven separate tariff headings, with

an average tariff of 3 percent. The total duties on an average line, therefore, are

approximately $75,000.

There are only a limited number of DVD disc manufacturers in the United States.

This group is small because the technology is still new, the initial investment cost

in establishing a production line is high, and every manufacturer must have a guarVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00078 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
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anteed source of content for the discs, which currently is predominantly from the

movie studios. For instance, PDSC makes discs for Universal, Fox, and Paramount;

and Warner makes discs for Warner, New Line, MGM and Artisan.

There are two major operations in making DVDs—mastering and replication. The

mastering system used by PDSC consists of a series of steps to make the ‘‘master’’

copy and uses the industry standard photoresist technology. The first step is the

preparation of a glass substrate by chemically cleaning and polishing the glass.

Next, the glass substrate is loaded into the in-line mastering machine for a mechanical cleaning and a photoresist coating. The newly created glass master is then

transferred automatically to the laser beam recorder. The recording machine modulates the laser to record information onto the surface of the photoresist, creating a

layer of digitally recorded information. After rinsing the glass master with a developing solution, the result is a series of digitally encoded pits in the surface of the

photoresist. A sputtering machine then deposits a thin film of nickel onto the surface of the master, and the master then is cycled through an electrolytic plating

bath. The electrolytic nickel layer of bumps, carefully removed from the master disc,

is called a ‘‘stamper.’’ An ashing machine cleans the stamper’s surface, a lapping

machine polishes the back of the stamper; and a center hole is punched in the

stamper to complete the mastering process.

The replication process (making copies from the ‘‘stamper’’) consists of three major

and separate manufacturing operations. First, during the molding process, the

stampers are installed in custom DVD molds and, using injection molding machines,

the mold cavities are filled with a polycarbonate molding resin. As this molding

resin cools in the mold cavity, it replicates the layer of bumps on the stamper as

pits in the plastic substrates. The molded substrate is now an exact copy of the

original master. Second, during the metalizing process, the encoded substrates are

coated with a reflective metal layer. The encoded side of the single-sided replica is

sputtered with a reflective layer of aluminum. The top-side layer of a dual layer disc

(layer 1) is sputtered with aluminum. The bottom layer of the dual layer disc (layer

0) is sputtered with gold. The aluminum-coated substrates and the gold-coated substrates are then stacked on separate spindles before the final bonding process. During the bonding process, an adhesive is dispensed between the two substrate layers.

A DVD–5 has one encoded aluminum substrate and one clear ‘‘dummy’’ substrate.

A DVD–9, dual layer disc, has one encoded aluminum substrate and one encoded

gold substrate. The UV bonding resin is cured using UV light to create a permanent

bond between the substrates. An optical inspection machine or laser scanner checks

each disc for defects. Finally, label art is printed on the backside using an offset

or silk-screen printing method, and the finished DVDs are then packaged and

wrapped.

Although there are a number of manufacturers of CD equipment (a similar technology), only a limited number of companies, called integrators (e.g., Panasonic,

Sony, and Toolex), provide a full DVD production system, sourcing from a number

of companies, predominantly located overseas. A DVD mastering system, consisting

of eight separate machines designed to work together, uses very advanced technology, and consequently has only a few manufacturers. Examples of integrators

that provide mastering system equipment, are Panasonic, Sony, Toolex, Nimbus,

and Optical Disc Corporation. Examples of integrators that provide replication system equipment are Panasonic, Singulus, Marubeni, and FirstLight. Other companies produce the individual machines or ‘‘batch’’ systems for either the mastering

or replication process, but do not produce the entire DVD production system.

Between our facility in Torrance, California and a joint venture with Universal

Music in Pinckneyville, Illinois, we employ over 1000 employees, and we anticipate

PDSC employment to be 1,500 by 2003. By July 2000, the two plants will be producing 5.2 million DVD discs per month on 22 lines; and by 2001, we plan to be

producing 10 million DVD discs per month. To meet these projected numbers and

an increasing consumer demand, we anticipate the need for additional lines and

plan to have 66 lines running by 2004. In fact, the DVD machinery industry estimates that within three years there will be a demand for 92 new mastering systems

and 275 new replicating systems valued at $600 million. However, that investment

is small compared to the value of the discs they will produce. By 2003, the industry

expects to be making 227 billion DVD discs per year, at a retail value of $136 billion.

Currently the U.S. industry faces competition from overseas makers of DVD discs

who are trying to sell their discs at one-half the cost of production in the United

States. In addition, the average 3 percent U.S. tariff on machines to make DVDs

is higher than the EU tariff of 1.7 percent and the 0 percent tariff in Japan, and

the 2.7 percent tariff on the imported DVD discs themselves is lower than the average 3 percent duty on the imported machinery. Reduced production costs for PDSC

68

and other DVD disc manufacturers in the United States would help the DVD industry be more competitive and ensure the growth of employment in the United States

as the demand for DVDs grows dramatically. This legislation would alleviate that

unfairness.

In addition, the proposed legislation will protect U.S. intellectual property rights.

Because of strong IP laws in the United States, domestic production of DVDs would

reduce the threat of international digital piracy of software by encouraging more

production in the United States, rather than in Taiwan and other Asian countries.

Movie studios have invested heavily in the protection of movie content for DVDs and

fear an increased threat of piracy with the shift to the DVD format. Keeping production in the United States, rather than in countries that can produce DVD discs

cheaper but have weaker intellectual property laws and enforcement, will help prevent the mass piracy of software overseas.

Therefore, we believe duty-suspension legislation for DVD machinery would be

beneficial to the United States and the growing domestic DVD industry, and should

be supported by the U.S. Congress.

Sincerely,

ROBERT B. PFANNKUCH

f

President

SONY ELECTRONICS INC.

WOODCLIFF LAKE, NJ

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

1102 Longworth House Office Building

Washington, D.C. 20515

Dear Chairman Archer:

On behalf of Sony Electronics, I wish to express our strong support for H.R. 3778-

H.R. 3795, duty suspension legislation for machinery used in the manufacture of

digital versatile discs (DVDs). Our facility in Terre Haute, Indiana, which opened

in 1983 as the first compact disc production facility in the United States, will soon

employ over 1,100 employees. Sony is adding 25 new DVD production lines, quintupling our current output from 2 million discs per month to 10 million.

Currently, the U.S. Customs Service classifies the machinery used to master and

replicate DVD discs in a number of separate tariff heading with average duties of

three percent. Consequently, over several years, Sony has paid substantial duties

on this machinery, and we anticipate continued sizeable duties in the future. Because of 1994 tariff reduction legislation, machinery for manufacturing ‘‘previous

generation’’ laser video discs (the precursor to current technology) enters the United

States duty-free.

As you may know, consumer demand for this popular new digital technology is

growing rapidly. Consumers are buying both DVD players as part of a home theater

or mobile entertainment system and DVD-ROM equipped computers. In fact, in

three years, U.S. companies have sold 5.4 million DVD players and analysts predict

the sale of an additional 10 million units by the end of the year. Our industry is

struggling to keep up with the incredible demand for discs to play on these machines. In fact, in the same three years, consumer demand for DVD discs has grown

from eight million to 394 million discs, as analysts expect. By the year 2003, demand is expected to be 2.27 billion at an estimated ex factory value of $6.8 billion.

However, the DVD disc industry faces competition from overseas manufacturers

that are trying to sell their discs in the United States at half U.S. production costs.

Elimination of tariffs on the imported machinery used to manufacture DVD discs

would reduce U.S. production costs and would enable the U.S. producers of DVDs

to maintain our competitiveness in this important area of growth for the electronics

industry.

In addition, because of strong intellectual property laws in the United States, domestic production of DVDs reduces the risk of international digital piracy. Movie

studios, such as Sony Pictures, have invested heavily in the protection of movie content for DVDs, but see an increased threat of piracy with the shift to DVD technology. The United States can prevent the mass overseas piracy by keeping the proVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00080 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
69

duction of DVDs in the United States, rather than allowing overseas production in

countries that have weaker intellectual property laws and enforcement.

Sony Electronics believes this legislation is good for U.S. high-technology employment, will reduce U.S. production costs, and will enable U.S. companies to compete

favorably in the world. Therefore, we urge the Ways and Means Committee to give

the legislation favorable consideration.

Sincerely,

JIM PALUMBO

Senior Vice President

f

External Affairs

TOOLEX USA

IRVINE, CA

May 19, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1100 Longworth House Office Building

Washington, D.C. 20515

Re: H.R. 3778–H.R. 3795—Committee Press Release TR–20, Request for Comments

on Miscellaneous Tariff and Technical Measures

Dear Mr. Singleton:

On behalf of Toolex USA, Inc. headquartered in Irvine, California, I am writing

to express my strong support for H.R. 3778 -H.R. 3795, legislation providing tariff

relief for machinery used in the manufacture of digital versatile discs (‘‘DVDs’’). Our

parent company, Toolex International is one of the world’s largest producers of machines used for the manufacture of optical discs such as video laser discs (‘‘VLDs’’)

and digital versatile discs (‘‘DVDs’’). Headquartered in the Netherlands, Toolex has

operations in the United States and throughout the world. Toolex designs, engineers, manufactures, sells, services and assembles a complete line of optical discs

manufacturing equipment, including equipment specifically used for the manufacture of DVDs.

The worldwide market for optical disc media is growing exponentially and the demand for machines that produce this media is dramatically increasing as well. From

8 million DVD discs sold in 1997, industry analysts anticipate year 2000 sales to

exceed 580 million, with over 2.3 billion discs expected to be purchased by 2003.

U.S. sales of DVD players are expected to reach 10 million units by the end of this

year. It is expected that DVDs will replace both VLDs and videocassette tapes as

the preferred medium for the presentation of movies in the home.

In March 2000, Toolex USA, Inc. made a multi-million dollar investment in relocating its headquarters and manufacturing operations to an expanded state-of-theart facility in Irvine, CA. There, Toolex USA produces complete mastering machines

for compact discs (‘‘CDs’’), which complement our complete lines of optical disc manufacturing equipment currently produced in Europe. In the next several months,

Toolex USA will also be producing substrates for use with both CD and DVD mastering machines. Additionally, given the extraordinary demand for DVDs, Toolex

USA expects to begin producing mastering and replication systems for the DVD

manufacturing industry later this year. As a domestic manufacturer, Toolex USA

strongly supports this legislation because it will increase the size of the U.S. DVD

market, benefiting U.S. equipment producers because there will be more sales of

both mastering and replication systems. U.S. consumers will also benefit from lower

cost DVDs.

As a result of a U.S. Customs Service ruling last year, equipment used to master

and replicate DVDs is classified under a variety of tariff headings with an average

duty rate of three percent. However, machinery for manufacturing earlier generation video laser discs (‘‘VLDs’’) which is very similar to the equipment used for DVD

production today—enters duty-free, due to tariff reduction legislation enacted by

Congress in 1994. Consequently, our U.S. customers—the domestic DVD manufacturers—are paying duties amounting to millions of dollars annually, which places

70

them in a less competitive position vis-a-vis DVD manufacturers in Japan, Taiwan,

China and the European Union.

In addition, due to an anomaly in the U.S. tariff schedules, imports of finished

DVDs enter the United States at a lower duty rate than imports of machinery used

to manufacture the discs, thus placing U.S. DVD manufacturers at a further disadvantage with their foreign competitors. As DVD manufacturing is a fairly low

profit-margin business, the relatively small decrease in the U.S. duty rates for machinery will translate into a significant advantage for American DVD producers. To

further illustrate the worldwide competitive environment, a recent industry study

indicates that some foreign DVD manufacturers are attempting sell finished discs

in the United States at prices as low as 75 cents each, compared to a U.S. production cost of $1.61. Clearly, reduced production costs will help American DVD manufacturers be more competitive and will ensure the continued and growing employment of American workers in these companies.

The temporary duty suspension legislation will also help U.S. DVD manufacturers

remain competitive in the export market. Currently, DVD mastering systems may

be imported into Japan duty-free. The European Union charges an essentially nuisance tariff of 1.7 percent—approximately one-half the rate imposed by the United

States. As the development and refinement of optical disc technology that is now

the industry standard was pioneered in Europe and Japan in the 1980’s, production

of DVD manufacturing equipment has been predominantly foreign. Imports of this

machinery currently account for virtually all of the market in the United States.

Finally, industry surveys indicate that there are no anticipated imports of VLD

manufacturing machines. As DVD is simply the next generation of VLD, and importantly, there is no production of VLD machinery, any loss of revenue associated with

this legislation should be offset against the duties gained through Customs’ reclassification of DVD machines. The proposed legislation does not result in any loss of

revenue, but merely clarifies existing legislation and international commitments to

provide duty free treatment to optical disc manufacturing equipment used to

produce home videos. Toolex USA would like to emphasize that to the extent there

is any revenue loss created by the proposed legislation, this possible loss would be

more than offset by the revenue generated by the creation of DVD manufacturing

jobs in the United States.

In summary, Toolex USA believes that this legislation, which is good for U.S.

high-tech employment, clearly will reduce U.S. DVD manufacturing costs and will

enable U.S. companies to compete favorably in the world. We urge the Congress to

approve H.R. 3778–H.R. 3795 as soon as possible.

Sincerely,

ARNOLD S. BLOCK

Executive Vice President

ASB/ck

f

H.R. 3779

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

71

H.R. 3780

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3781

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3782

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

72

H.R. 3783

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3784

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3785

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

73

H.R. 3786

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3787

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3788

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

74

H.R. 3789

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3790

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3791

To suspend temporarily the duty on machines, and their parts, for use in the

maunfacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

75

H.R. 3792

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3793

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3794

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

76

H.R. 3795

To suspend temporarily the duty on machines, and their parts, for use in the manufacture of digital versatile discs (DVDs).

see Digital Matrix Corporation under H.R. 3778

see International Electronics Manufacturers under H.R. 3778

see Hon. Steven T. Kuykendall under H.R. 3778

see Optical Disc Corporation under H.R. 3778

see Panasonic Disc Service under H.R. 3778

see Sony Electronics Inc., under H.R. 3778

see Toolex USA under H.R. 3778

f

H.R. 3796

To suspend temporarily the duty on 2-Methyl-4-chlorophenoxyacetic acid.

f

May 18, 2000

A. L. Singleton

Chief of Staff, Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Dear Mr. Singleton:

I am writing to offer my comments in support of H.R. 3796, which would suspend

duties on 4-Chloro–2-methylphenoxyacetic acid (‘‘MCPA’’).

As an effective herbicide used to control a variety of broadleaved weeds in a large

number of agricultural crops, there would be an important cost savings from the

suspension of the relatively high 9.3% duty on this important agricultural input. In

these times of low commodity prices, the ability of agricultural producers to continue

reducing their costs of production, it is critical to any possibility of profitability for

our farmers.

These savings also find their way to US consumers that ultimately are benefited

by lower costs of agricultural production.

These cost savings to US growers and consumers are achieved without any effect

on US manufacturers. There are no domestic producers of MCPA in the United

States. Thus no domestic industry is threatened by the suspension of duties under

H.R. 3796.

In addition, the suspension of duties and lowering of costs on imported MCPA will

allow for expansion of employment in my district and other sites in the United

States. Moreover, the duty free importation of MCPA should increase export opportunities throughout NAFTA and other export markets, which will result in added

manufacturing, distribution and related administrative employment positions.

Because of the critical cost savings to agriculture, and the opportunity to generate

new jobs from duty free imports of MCPA, I submit that it will ultimately benefit

the economy of the United States to forego the duty revenue on this imported product in lieu of commensurate advantages to the US economy from duty suspension.

Sincerely,

PAT DANNER

Member of Congress

f

77

NUFARM

ST. JOSEPH, MO 64506

May 18, 2000

A. L. Singleton

Chief of Staff, Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C.

RE: Written Comments Supporting Duty Suspension Bill H.R. 3796 (4-Chloro–2-

methylphenoxyacetic acid (MCPA))

Dear Mr. Singleton:

Pursuant to Advisory TR–20 dated April 20, 2000, we respectfully submit these

supportive comments on behalf of Nufarm Limited and Nufarm America’s, Inc. with

respect to H.R. 3796 which concerns the suspension of duty on 4-Chloro–2-

methylphenoxyacetic acid (MCPA).

MCPA is a plant growth regulator-type herbicide used to effectively control a wide

variety of broadleaved weeds in cereals, grasses, orchards, grapes, flax, sugarcane,

pulses, and non-crop areas. MCPA is currently classified under HTSUS No.

2918.90.2015 with a duty rate of 9.3%. However, imports are duty free under the

Generalized System of Preferences with the exception of India, the Caribbean Basin

Economic Recovery Act, the Andean Trade Preference Act, the United States-Israel

Free Trade Area, and the North American Free Trade Agreement (Canada and Mexico).

There are no manufacturers of MCPA in the United States. Because MCPA is not

domestically produced and is used in crop protection for numerous agricultural crops

grown in the United States, the market demand will continue to be met by imports.

Furthermore, the suspension of duties is not expected to result in a price changes

that will substantially change market demand. Thus, there are no grounds on which

to anticipate significant changes in import levels resulting from duty suspension.

MCPA has a substantial end use as an input for agricultural application and production. Thus the cost savings from duty will be strategically important agricultural

commodity growers who are presently experiencing significant price and cost pressures. These duty savings in part will ultimate benefit the end consumer.

The imported MCPA affected by HR 3796 is involved in significant downstream

production activity. Imported acid product is further processed into amines and

esters, or blended into branded product and other active ingredients, or formulated

into lesser concentrates of amines and esters at numerous general formulators

throughout the United States. Approximately ten formulators in the United States

with over 20 operation sites, in addition to approximately 2–3 local smaller or family owned blenders per state throughout the United States will benefit from lower

cost and possibly expanded use of duty free product..

The suspension of duty on MCPA will also create significant export activity for

US producers and formulators. As you are aware, the North American agricultural

commodity market is a major market for agricultural inputs, including crop protection materials. US producers and formulators of MCPA based products would have

more competitive access to the significant Canadian and Mexican markets were

duty to be suspended.

Presently under NAFTA requirements, when imported product enters the United

States duty free under bond for formulating or further processing (i.e, a TIB under

HTS 9813.00.05), any subsequent export to a NAFTA country triggers payment of

US duty on the base material entered under bond as if it were entered for consumption in the United States. (19 CFR 181.53(A)(2)(i)). That relatively high 9.3% duty

must be born in any cost structure of exports to Canada or Mexico, and therefore

makes US produced product less price competitive. If US duty were suspended on

imported MCPA, US producers and formulators could export more competitively a

wide variety of blended and formulated products in North America without this cost

burden

Because the current tariff rate is staged and is reduced annually, any loss of revenue will be decreased in the coming years. In addition, this product is an agricultural input designated for possible multilateral duty elimination in the ‘‘Zero for

Zero’’ initiative supported by the United States. Thus, revenues from duties on this

78

product may be eliminated through this avenue in the future even if duty were not

suspended under this bill.

For the above stated reasons, we strongly support the suspension of duty on

MCPA in H.R. 3796.

Sincerely yours,

f

UNITED AGRI PRODUCTS

GREELEY, CO

May 18,2000

A.L. Singleton

Chief of Staff, Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

RE: Written comments supporting suspension bill H.R. 3796 (4-chloro-Zmethylacetic acid, its salts and esters (‘‘MCPA’’)).

Dear Mr. Singleton,

I wish to express my support in suspension of duties on (4-chloro-Z-methylacetic

acid, it’s salts and esters (‘‘MCPA’’)) in conjunction with HR 3796.

MCPA is an important agronomic tool in controlling a variety of broadleaf weeds

in a vast number of small grain and feed crops in the U.S.

As we are all aware, today’s agriculture economy demands the most effective, low

cost on ag inputs in crop production. MCPA with it’s 9.3% duty is one of these inputs.

There are no U.S. manufacturers of MCPA . Therefore, it is of no economic disadvantage to the U.S. industry. I submit that suspension of duty would effectively

enhance the American farmers’ profitability. It would also enable my company to

fully utilize U.S. owned assets to participate in NAFTA nation export without the

9.3% penalty , which now exists.

Very Truly Yours,

JAMES SELL

Vice President, Distribution

f

United Agri Products

H.R. 3797

To suspend temporarily the duty on 2,4-Dichlorophenoxyacetic acid, its salts and

esters.

f

May 18, 2000

A. L. Singleton

Chief of Staff, Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Dear Mr. Singleton:

I am writing to offer my comments in support of H.R. 3797 which would suspend

duties on (2,4-Dichlorophenoxyacetic Acid, Its Salts and Esters (‘‘2,4-D’’)).

One of the first herbicides to be registered in the United States, 2,4-D is extensively used in agriculture because of its efficacy, low toxicity, and cost-effectiveness.

It thus is a necessary product for the American farmer in today’s climate of low

commodity prices.

Consequently, the suspension of the relatively high duty rate of 9.3% on this imported product represents a substantial savings on this important agricultural

79

input. Such a savings not only helps American growers to compete more profitably

in current depressed markets, but consumers also benefit from the reduction in

costs represented by the duty suspension.

The suspension of duty on 2,4-D will also enhance the U.S. economy through creation of jobs in my district as well as other cities in the United States, and through

additional added export opportunities under NAFTA. With additional supplies of

duty free 2,4-D acid, herbicide product formulators will be able to access the important Canadian and Mexican markets without having to absorb the competitive disadvantage of the 9.3% duty cost.

These savings and opportunities for the US economy are achieved without apparent harm to any US industry. The single US producer of 2,4-D holds a dominant

market share that has not been effected detrimentally by the majority of imports

of 2,4-D that already are low-priced and duty free under the Generalized System

of Preferences. Consequently, the suspension of duty on the one company which

pays duties on the imported product would not appear to have any detrimental effect on US production that heretofore has not been affected by the larger volumes

of lower-priced, duty-free imports.

With critical cost savings to agricultural growers and US consumers, with new

employment and export opportunities, and with no apparent detrimental effect on

the US industry, the suspension of duties on 2,4-D will be a worthwhile action by

Congress. I therefore support the suspension of duty under H.R. 3797.

Thank you for your consideration.

Sincerely,

PAT DANNER

f

Member of Congress

DOW AGRO SCIENCES

INDIANAPOLIS, IN 46268–1054

April 4, 2000

Mr. A. L. Singleton, Chief of Staff

Committee on Way and Means

U. S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: H. R. 3797—Temporary Suspension of Duty

Dear Mr. Singleton:

We are writing to register our strong objection to H. R. 3797. A bill introduced

by Representative Danner from the 6th District of Missouri at the request of an

Australian competitor of Dow AgroSciences LLC. This bill, if enacted, would temporarily suspend the U. S. duty rate for three years on at least three related chemicals

(identified below) that are produced solely by Dow AgroSciences (DAS) in the United

States. We are asking that the Ways and Means Committee support our strong objection by seeking the withdrawal or defeat of H. R. 3797. We recognize that the

committee has not yet called for public comments on this or other recently introduced temporary duty suspension bills, but we wanted to make our views known

early on H. R. 3797 as it is extremely important to DAS.

We will also be writing similar letters to the U. S. International Trade Commission, the Department of Commerce and the U. S. Trade Representative in registering our objection to H. R. 3797 for the reasons outlined in this letter.

DAS is the only U. S. producer of 2,4-dichclorophenoxyacetic acid (2,4-D), (CAS

number 94–75–7), and its salts and esters (different CAS numbers) at a plant located in Midland, Michigan. This product, its production and the U. S. market for

2,4-D is very important to the company. The plant producing 2,4-D employs over

150 people and our investment in this plant exceeds $60 million. 2,4-D is one of the

most widely used herbicides in the U. S. broadleaf market. It is used to treat more

than 80 million acres each year. The U. S. market for 2,4-D is the largest in the

world, so it is the only significant target for foreign competitors.

On a more technical point regarding the chemicals named in H. R. 3797, please

note in the text of H. R. 3797 that the CAS number indicated (29091–09–6) for 2,4-

D is not correct. As noted above, the correct CAS number for 2,4-D is 94–75–7. Furthermore, the salts and esters of 2,4-D have different CAS numbers, but none are

80

29091–09–6. This CAS number is for 2,4-Dichloro–3,5-dinitrobenzotrifluoride. Nevertheless, we believe the intent of H. R. 3797 is to cover 2,4-D, and its salts and

esters, chemicals DAS produce in Midland, Michigan.

In recent years, imports of 2,4-D from GSP eligible countries have already taken

a substantial share of the U. S. market because of the duty-free benefit under the

GSP program. H. R. 3797 would allow more duty-free imports from Australia, the

EU, and potentially from other countries where 2,4-D is produced. We do not think

that a foreign manufacturers in a developed country like Australia should be given

even a temporary suspension of the U. S. duty on their imports of 2,4-D. If they

were to receive such a suspension, it would enable the foreign manufacturers to sell

their product at a reduced price from what it is now, and displace some of the U.

S. market share that DAS currently has in the domestic market for 2,4-D. Beyond

opening the U. S. market to three years of no duty on imports from Australia, H.

R. 3797 would also open the U.S. market to imports from European manufactures.

Currently, they are not competing in the U. S. market today because of the applicable U. S. duty that would be assessed to their imports. It is also noteworthy that

the European Union has a duty rate of 6.5% on 2,4-D, and that imports from DAS

would to be assessed this duty while the U. S. duty would be suspended if H. R.

3797 were enacted.

Another factor that should be considered carefully is the amount of revenue from

collection of duties that would be lost for the proposed three-year period. Based on

1999 U. S. import data, the customs value of imports of 2,4-D from Australia were

$9,961,495. At the 1999 duty rate of 10%, duties collected should have been nearly

$1,000,000. As you know, suspension of the duty at this level would significantly

exceed the annual ‘‘PAYGO’’ limitations, yet another reason for the bill to be withdrawn or defeated.

DAS has ample production capacity current utilization rates at Dow’s plant in

Midland, Michigan to supply all the domestic demand for 2,4-D. Imports are not

needed to fill this demand, and should certainly not be enabled by a temporary suspension of the applicable U. S. duties. We would hope, that as the sole U. S. producer of 2,4-D, we would have more than adequate justification for our objection to

H. R. 3797. Furthermore, that it would override any request from a foreign interest

in a developed country to temporarily suspend the U. S. duty on imports of 2,4-D,

and its salts and esters.

Clearly, the maintenance of the U. S. duty rate on 2,4-D is an important factor

for DAS in keeping its 2,4-D plant, production, employees and domestic market at

operating levels economically viable to justify the investments we have made in

Michigan and at many other U. S. locations where products are formulated from

2,4-D and sold into the domestic market. Any future expansion, product development and related investment in this important product line are dependent upon

maintaining the domestic market share we have. Decreases or suspensions of U. S.

duty will allow more imports to displace market share, thereby clearly affecting any

realization of new investments in our 2,4-D plant, and the related positive economic

effects to the U. S. economy and agriculture community.

As the only U. S. producer of 2,4-D, we believe there should be no reason for favorable consideration of H. R. 3797. Clearly it is controversial at this early stage

after its introduction, and should be withdrawn. We urge your support of our objection and will appreciate the committee’s help with the defeat of H. R. 3797 if Representative Danner does not withdraw it.

Please do not hesitate to contact Tom Campbell of Dow AgroSciences in our Washington, D. C. office at (202) 429–3438 if you have any questions. We would be

pleased to meet with you or the appropriate committee staff about this matter if

you would like to discuss this matter directly. Please let us know an appropriate

time if you would to meet with DAS representatives.

Sincerely,

GREGORY E. MCDANIEL

Global Business Leader

Copy: Representative Pat Danner, Trade Subcommittee

f

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NUFARM

ST. JOSEPH, MO 64506

May 18, 2000

A. L. Singleton

Chief of Staff, Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C.

RE: Written Comments Supporting Duty Suspension Bill H.R. 3797 (2,4-

Dichlorophenoxyacetic Acid, Its Salts and Esters (2,4-D))

Dear Mr. Singleton:

Pursuant to Advisory TR–20 dated April 20, 2000, we respectfully submit these

supportive comments on behalf of Nufarm Limited and Nufarm America’s, Inc. with

respect to H.R. 3797 which concerns the suspension of duty on 2,4-

Dichlorophenoxyacetic Acid, Its Salts and Esters (2,4-D).

As some of the first herbicides to be registered in the United States, 2,4-D acid,

its salts and esters have been widely used in the control of broadleaf and woody

plants on rangelands, lawns, golf courses, forests, roadways, parks, and agricultural

land, as well as in aquatic environments for the control of nuisance aquatic weeds.

Currently, 2,4-D is classified under HTSUS No. 2918.90.2010 with a duty rate of

9.3%. Imports of 2,4-D are duty free under the Generalized System of Preferences

with the exception of India, the Caribbean Basin Economic Recovery Act, the Andean Trade Preference Act, the United States-Israel Free Trade Area, and the North

American Free Trade Agreement (Canada and Mexico).

Although there are substitutable products, none of them are more cost effective,

and in some cases are more toxic to the environment, than 2,4-D. Additionally, 2,4-

D is extensively used because of its efficacy, low toxicity, and cost-effectiveness, thus

making it a necessary product for the American farmer in today’s climate of low

commodity prices.

There is a significant barrier to entry for any imports, in that manufacturers of

2,4-D that are able to access the US market include only the members of a 2,4-D

industry Task Force that have product quality similar to the TF II material. The

2,4-D Task Force was formed under an exemption from the antitrust laws of the

U.S. to allow companies requiring the generation of EPA mandated data to collaborate on the generation of that data. (The Memorandum of Understanding which created the Task Force is attached as Attachment A hereto.) The Task Force has gone

through a vast amount of change since its inception of 2,4-D Industry Task Force

I to its present form as Industry Task Force II. The original Task Force began with

thirteen members equally sharing the cost of generating data. As TF I came to conclusion it was obvious that TF II would see fewer participants with larger expenditures. The present total expenditure has eclipsed $30 million and the present number of seats has shrunk to four seats representing three full memberships and two

affiliate memberships.

Full memberships include: Nufarm Ltd., Dow AgroSciences Agro., BASF, and

AgroGore; made up of two affiliate members, PBI Gordon and Atanor, which is

owned 52% by Albaugh.

The present Task Force is about to complete the battery of data generation put

out by the EPA and is expecting the EPA to issue the RED for 2,4-D sometime next

year. The only companies that can utilize the data generated in support of their registration are those included as full members or affiliated members listed above.

These members can use the information as outlined in the MOU to support their

labels outside of the United States. No member or affiliate can extend this information outside the control of the TF II

At the present time the only potential importers of product would include Dow

AgroSciences (Midland Michigan), Dow AgroSciences, SanaChem (South Africa),

Nufarm Ltd. (Mebourne Australia), Nufarm (Linz Austria), and Atanor (Argentina).

The U.S. market Share of these companies is as follows:

Dow AgroSciences Michigan 33.0 Million Lb. 66%

Atanor Argentina 10.0 Million Lb. 20%

Nufarm Ltd. Australia 7.0 Million Lb. 14%

There are nine countries which export 2,4-D to the US. Under the Task Force

membership as presently constituted, there is only one company eligible to import

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that currently pays duty on imported product, i.e. Nufarm. All other imports are

duty free under GSP.

Exports from Argentina and Brazil are GSP duty free and constitute 63% of US

imports. However, with the exception of isolated shipments from the UK, France,

and Germany, a majority of the duty paid imports is from Nufarm Limited facilities

in Australia and Austria. As a result of this high percentage of GSP shipments, the

weighted average value of GSP shipments in 1999 was $1.28 per pound, whereas

the weighted average value of Nufarm Limited shipments in 1999 was 19% higher

at $1.52 per pound. The difference in the low value of GSP imports and the 19%

higher value of Nufarm imports suggests that suspension of the 9.3% duty will

merely cause values of the 37% of imports that were duty paid to trend towards

a value closer to but still above duty free imports. Thus, suspension of duties on

2,4-D will result in savings to US growers and ultimately consumers.

Economic Effects

The following conclusions can be reached from the U.S. Census Bureau import

data for 2,4-D:

1. Sixty-three per cent (63%) of all imports are GSP duty free, principally from

Argentina and Brazil.

2. With the exception of isolated shipments from the UK, France, and Germany,

the duty paid imports were from Nufarm facilities in Australia and Austria. 3. The weighted average value of GSP shipments in 1999 was $1.28 per lb. whereas the weighted average value of Nufarm shipments in 1999 was 19% higher at

$1.52 per lb.

No deleterious effects on the U.S. economy or industry are anticipated from the

suspension of duty on 2,4-D.

The suspension of duties on this crop protection material will result in savings

to U.S. growers and ultimately consumers. According to a report from the National

Agricultural Pesticide Impact Assessment Program, ‘‘Throughout the past five decades, weed management provided by 2,4-D has contributed to the production of billions of tons of crops throughout the world, which otherwise would not have been

available for human consumptiona??2. The herbicide 2,4-D is registered (tolerances

have been established) for use on over 65 crops in the United States, and other

phenoxy herbicides are registered on over 25 crops. Also, the phenoxy herbicides are

registered for numerous noncropland uses.’’ The report notes that elimination of 2,4-

D from the U.S. would result in a loss of $2.559 Billion annually, from increased

weed management cost, decreased crop yields, and ‘‘a net societal loss for consumers

because of higher retail commodity prices.’’ (The report can be found at Error!

Bookmark not defined..) Thus, the costs of 2,4-D have a direct impact on growers

and consumers that will be reduced with the suspension of duty.

The domestic industry should not be impacted by suspension of duties. Firstly, no

significant change in import sourcing will occur because of the unavoidable barrier

to entry represented by the Task Force membership requirements. Furthermore,

Nufarm is informed and believes that imports from Brazil will be all but eliminated

because of ‘‘trade out’’ agreements between its competitors that will divert Brazilian

production to non-U.S. markets.

Secondly, if there were any threat to the domestic industry from duty free imports, the effects would be evident already from the majority of lower priced imports

from GSP eligible countries.

Yet, the only U.S. producer of 2,4-D acid, Dow Agro Services (‘‘DAS’’), has a well

established dominant market share of approximately 66%. This dominant market

share, moreover, will not be reduced any time soon because of the current ‘‘Dow Premier Program.’’ Under this multi-year program, DAS’s current customers are locked

into significant product discounts for purchase of DAS 2,4-D product at levels that

maintain or increase its market share; the majority of the discount payout occurs

only after three years of purchases, and large penalties are incurred for leaving the

program.

Moreover, the suspension of duty is consistent with DAS’s leadership position of

strongly supporting worldwide elimination of duty on crop protection materials, including 2,4-D. DAS has been an influential participant in the Crop Protection

Chemicals Coalition, a world body comprised of related national associations, e.g.

ACPA, Avcare, etc. Its ‘‘Zero For Zero’’ Initiative for the multilateral elimination of

duty on crop protection materials has achieved the agreement of countries comprising over 85% of world trade. In the United States, the USTR has been presented

with the proposal, which has been through the ISAC and approved.

Finally, the difference in the low value of GSP imports and the 19% higher value

of Nufarm imports suggests that suspension of the 9.3% duty will merely cause values of the 37% of imports that were duty paid to trend towards a value closer to

83

but still above duty free imports. Thus, there is no indication of downward pricing

pressure on prices received by the domestic industry to the extent they are set by

low value GSP imports.

The imported 2,4-D affected by HR 3797 is involved in significant downstream

production activity. Imported acid product is further processed into amines and

esters, or blended into branded product and other active ingredients, or formulated

into lesser concentrates of amines and esters at numerous general formulators

throughout the United States. Approximately ten formulators in the United States

with over 20 operation sites, in addition to approximately 2–3 local smaller or family owned blenders per state throughout the United States will benefit from lower

cost and possibly expanded use of duty free product.

The suspension of duty on 2,4-D will also create significant export activity for US

producers and formulators. As you are aware, the North American agricultural commodity market is a major market for agricultural inputs, including crop protection

materials. US producers and formulators of 2,4-D based products would have more

competitive access to the significant Canadian and Mexican markets were duty to

be suspended.

Presently under NAFTA requirements, when imported product enters the United

States duty free under bond for formulating or further processing (i.e, a TIB under

HTS 9813.00.05), any subsequent export to a NAFTA country triggers payment of

US duty on the base material entered under bond as if it were entered for consumption in the United States. (19 CFR 181.53(A)(2)(i)). That relatively high 9.3% duty

must be born in any cost structure of exports to Canada or Mexico, and therefore

makes US produced product less price competitive. If US duty were suspended on

imported 2,4-D, US producers and formulators could export more competitively a

wide variety of blended and formulated products in North America without this cost

burden

Revenue Loss

According to Census Bureau Data, duty paid in 1998 totaled $688,601 and in 1999

totaled $810,531. The increase in 1999 appears to be the result of an increase in

value (36%) rather than an increase in quantity (14%) of dutiable imports.

Because the current tariff rate is staged and is reduced annually, any loss of revenue will be decreased in the coming years. In addition, this product is an agricultural input designated for possible multilateral duty elimination in the ‘‘Zero for

Zero’’ initiative supported by the United States. Thus, revenues from duties on this

product may be eliminated through this avenue in the future even if duty were not

suspended under this bill.

For the above stated reasons, we strongly support the suspension of duty on 2,4-

D in H.R. 3797.

Respectfully submitted,

ROGER UNRUH,

f

Vice President

UNITED AGRI PRODUCTS

GREELEY, CO 80632–1286

May 18, 2000

A.L. Singleton

Chief of Staff, Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

RE: Written comments supporting duty suspension bill H.R. 3797 (2,4-

Dichlorophenoxyacetic Acid, it’s salts and esters (*2,4-D*)

Dear Mr. Singleton,

I am writing in support of H.R. 3797 that will relinquish duties on (2,4-

Dichlorophenoxyacetic Acid, it’s salts and esters (‘‘2,4-D’’)).

In today’s agricultural economy it is mandatory on the producer to minimize all

input costs. The suspension of duties on 2,4-D will enhance not only the producers

cost, but will enable our company’s ability to further utilize our U.S assets through

additional exports into NAFTA nations (Canada and Mexico).

84

The only U.S producer of 2,4-D holds a dominant position in the U.S. market and

all other producers that import into the U.S enjoy duty free status under Generalized System of Preferences.

We, therefore, desire to express our support in suspension of all duties in reference to 2,4-D as a cost savings to the American producer.

Very Truly Yours

JAMES SELL

f

Vice President, Distribution

H.R. 3801

To suspend temporarily the duty on Iminodisuccinate.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R.3801

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Iminodisuccinate. Bayer’s Logistics Division, with major import operations at Pittsburgh, Pennsylvania and Bayer warehouses in Morrisville, PA, Los Angeles, CA, Chicago, IL and Houston, TX as well

as Bayer’s customers in Burlington, NC, Hazlet, NJ, San Diego, CA and Logansport,

IN would benefit from tariff suspension on Iminodisuccinate via cost reductions for

waste water treatment and formulations for the textile, agricultural, cleaner and detergent industries. Bayer is the sole producer of Iminodisuccinate, which is not produced in the United States. Although BASF, DOW and Monsanto manufacture products with similar applications, Iminodisuccinate is unique in the fact that it is biodegradable and therefore an environmentally friendly complexing agent used in

laundry detergents, dishwashing detergents, industrial and institutional cleaners,

and chelated micronutrients thus benefiting American industry and the environment.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the proposed tariff suspension for

Iminodisuccinate bill number H.R. 3801. Please do not hesitate to contact me at Tel:

412–777–2058 with any questions. In the event that I am unavailable, Julie Van

Egmond in our Washington office (Tel.: 202–756–3773) or Stephen Johnsen at our

Pittsburgh location (Tel: 412–777–5616) could be of assistance.

Sincerely,

f

KAREN L. NIEDERMEYER

85

H.R. 3802

To suspend temporarily the duty on Iminodisuccinate salts and aqueous solutions.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R.3802

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Iminodisuccinate salts and aqueous solutions. Bayer’s Logistics Division, with major import operations at Pittsburgh,

Pennsylvania and Bayer warehouses in Morrisville, PA, Los Angeles, CA, Chicago,

IL and Houston, TX as well as Bayer’s customers in Burlington, NC, Hazlet, NJ,

San Diego, CA and Logansport, IN would benefit from tariff suspension on

Iminodisuccinate salts and aqueous solutions via cost reductions for waste water

treatment and formulations for the textile, agricultural, cleaner and detergent industries. Bayer is the sole producer of Iminodisuccinate salts and aqueous solutions,

which are not produced in the United States. Although BASF, DOW and Monsanto

manufacture products with similar applications, Iminodisuccinate salts and aqueous

solutions are unique in the fact that they are biodegradable and therefore environmentally friendly complexing agents used in laundry detergents, dishwashing detergents, industrial and institutional cleaners, and chelated micronutrients thus benefiting American industry and the environment.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the proposed tariff suspension for

Iminodisuccinate salts and aqueous solutions bill number H.R. 3802. Please do not

hesitate to contact me at Tel: 412–777–2058 with any questions. In the event that

I am unavailable, Julie Van Egmond in our Washington office (Tel.: 202–756–3773)

or Stephen Johnsen at our Pittsburgh location (Tel: 412–777–5616) could be of assistance.

Sincerely,

f

KAREN L. NIEDERMEYER

H.R. 3803

To suspend until June 30, 2003, the duty on transformers for use in certain

radiobroadcast receivers capable of receiving signals on AM and FM frequencies.

NO COMMENTS SUBMITTED

f.

86

H.R. 3804

To suspend until June 3, 2003, the duty on transformers for use in certain

radiobroadcast receivers with compact disc players and capable of receiving signals

on AM and FM frequencies.

NO COMMENTS SUBMITTED

f.

H.R. 3805

To suspend temporarily the duty on polyvinylchloride (PVC) self-adhesive sheets.

NO COMMENTS SUBMITTED

f.

H.R. 3808

To suspend temporarily the duty on BEPD 2-Butyl-2-ethylpropanediol.

NO COMMENTS SUBMITTED

f.

H.R. 3813

To suspend temporarily the duty on cyclohexadee-8-en-1-one (CHD).

NO COMMENTS SUBMITTED

f.

H.R. 3818

To suspend temporarily the duty on octylmethoxycinnamate.

f

HAARMANN & REIMER

TETERBORO, NJ 07608

May 11, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Re: H.R. 3818

Dear Mr. Singleton:

This note is being sent to offer comments to the aforementioned Bill, which looks

to suspend duty on Octyl Methoxy Cinnamate, HTS 2918.90.30.

As the U.S. manufacturer, Haarmann & Reimer objects to this legislation as it

would give an unfair advantage to the importers and have the tendency over time

to negatively affect our manufacturing facility in Goose Creek, South Carolina.

We respectfully request that this Bill be withdrawn from the 2000 Trade Tariff

Bill.

87

We thank you for your attention to this detail.

Sincerely,

WILLIAM J. LUDLUM

President

WJL:ra

cc:

Eric Land—U.S. International Trade Commission

Mike Kelly—U.S. Department of Commerce

Jim Smith—Smith, Dawson & Andrews

f

BARNES, RICHARDSON & COLBURN

WASHINGTON, DC 20005

May 19, 2000

A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515.

Re: Comments on Miscellaneous Duty Suspension Proposals; In Support of H.R.

3818

Dear Mr. Singleton:

These comments are submitted on behalf of Hoffmann-La Roche, Inc. in response

to the notice issued April 20, 2000 by the House Committee on Ways and Means,

Subcommittee on Trade, announcing a request for written comments on miscellaneous corrections to trade legislation and miscellaneous duty suspension bills. Hoffman-LaRoche strongly supports H.R. 3818, a bill to suspend temporarily the duty

on octylmethoxycinnamate.

Hoffman-LaRoche is a manufacturer and marketer of a variety of pharmaceutical

and health products, including vitamins, pharmaceuticals, and cancer-prevention

products. Hoffman-LaRoche employs approximately 7000 people at its vitamin and

pharmaceutical sites throughout the United States. Included in the Roche line are

ultraviolet sun ray filters and dermal protection products, designed to help prevent

melanomas and ameliorate the skin-damaging effects of ultraviolet B (UVB), medium wave-length radiation. One such product is sold in the United States as

ParsolMCX, a specially formulated, patented UVB broad spectrum skin protectant.

UVB is the most active ultraviolet radiation for producing erythema, and it significantly decreases enzymic and non-enzymic antioxidants in the skin, thus impairing its ability to protect itself against the free radicals generated by exposure to

sunlight. UVB is responsible for producing skin cancer due to DNA damage, and is

suspected of affecting the immune system by depleting the Langerhans cells in the

epidermis, which play an important role in the immunologic defense of the skin.

Hoffman-LaRoche’s Parsol, recently developed and approved by FDA, and imported

for use in skin care applications, is especially effective in preventing infiltration of

UVB radiation and decreasing the epidermal exposure to medium-length ultraviolet

radiation. The active ingredient, octyl methoxycinnamate (also known as ethylhexyl

p-Methoxycinnamate) is imported by Hoffman-LaRoche only from its affiliates in

Europe, where the only facilities used to synthesize the active ingredient are located.

Octyl methoxycinnamate is imported under Item 2918.90.30 of the Harmonized

Tariff Schedules of the United States, dutiable at a rate of 6.5% ad valorem. UV

radiation protection chemicals in the same family of pharmaceutical products, such

as avobenzone (which provides broad-spectrum protection against UVA and UVB radiation), are currently eligible for duty-free treatment upon importation pursuant to

the multilateral pharmaceutical tariff elimination agreement under the auspices of

the World Trade Organization. However, due to the relatively recent development

and approval of this product—ParsolMCX—the precise active ingredient has not

yet been added to the duty-elimination list, since it has not yet been assigned an

International Non-proprietary Name (INN) by the World Health Organization.

When an INN is assigned, octyl methoxycinnamte will presumably be accorded like

duty-free treatment under the international agreement. In the meantime, the curVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00099 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
88

rent 6.5% tariff is a deterrent to the free movement of this unique cancer-fighting

chemical, which is cannot be made in the United States. Thus, there is no tradeprotective reason for the tariff, and its only effect is to restrict access to consumers.

Hoffman-LaRoche supports a temporary suspension of the tariff on this chemical,

pending its inclusion in the zero-for-zero tariff agreement on a multilateral and permanent basis. A suspension is appropriate in light of the absence of available domestic supply, and importance of ParsolMCX in helping to prevent cancers of the

skin and other illnesses caused by immunological impairment due to UVB exposure.

Hoffman-LaRoche is aware of no competitive reason to maintain the duty, especially

since the product will soon become eligible for duty free treatment under the WTO

arrangement. Suspension of the tariff will facilitate trade in this beneficial new

product and help control costs to U.S. companies and consumers. Furthermore, the

company estimates that the total tariff revenue effect of this proposed duty suspension will be less than $500,000 per year.

We appreciate the Committee’s consideration of these comments, and we would

be pleased to provide any additional information the Committee would find helpful.

Sincerely

MATTHEW T. MCGRATH

f

Counsel to: Hoffmann-La Roche, Inc.

H.R. 3820

To provide for the liquidation or reliquidation of certain entries of carbides.

f

May 15, 2000

The Honorable Philip M. Crane

Chairman, Subcommittee on Trade

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Dear Chairman Crane:

According to Advisory No. TR–20, which was posted on the web site of the Committee on Ways and Means on April 20, 2000, the Subcommittee on Trade has solicited comments on a number of bills, including H.R. 3820, which have been offered

for inclusion in a miscellaneous trade package. I oppose H.R. 3820, and urge that

it not be included in any miscellaneous trade bill that the Committee may favorably

report out.

The merchandise that is the subject of this legislation, described in H.R. 3820 as

‘‘carbides’’ classified under subheading 2849.90.50 of the Harmonized Tariff Schedule of the United States, is otherwise known as vanadium carbides, vanadium

carbonitrides, and/or nitrided vanadium. These products are chiefly used as additives in the manufacture of steel. They are interchangeable and compete head-tohead for sales with ferrovanadium manufactured by the two remaining U.S. producers of that product.

H.R. 3820 would require the U.S. Customs Service to retroactively refund Customs duties that were paid for merchandise that entered the United States during

a seven month period from July 1998 to January 1999. The retroactive refunds required by H.R. 3820 would be significant, since the ‘‘general’’ rate of duty that

should have been paid for these goods is 3.7 percent of their value. In fact, the legislation would create a windfall for a single importing company, to the detriment of

competing U.S. producers of ferrovanadium. This would be unfair and inappropriate.

Obviously, this bill is not revenue neutral. It would require the Treasury to issue

substantial refunds to the importer. Consequently, it would result in a budget loss

that would require an equivalent offset.

In addition, H.R. 3820 would undermine our country’s negotiating stance and establish bad precedent. I understand that the importer that would benefit from this

bill successfully petitioned for a waiver of the Generalized System of Preferences

(GSP) ‘‘competitive need limit,’’ so that it could import unlimited quantities of this

89

merchandise from South Africa free of duty. Presidential Proclamation 7107 of June

30, 1998 (63 Fed. Reg. 36531 (July 6, 1998)). However, the effective date of the provisions granting benefits to carbides and certain other products of South Africa was

intentionally left to the discretion of the U.S. Trade Representative, based on concerns regarding South Africa’s Medicines Act and its protection of patent rights for

pharmaceuticals. The law requires that the President consider the GSP’s eligibility

requirements, including a country’s protection of intellectual property rights, before

granting waivers or extending other benefits under the program. Once the U.S.

Trade Representative received adequate assurances as to South Africa’s commitment to protecting intellectual property rights, these provisions were implemented.

64 Fed. Reg. 72138 (December 23, 1999). Hence, the delay in implementing preferential tariff treatment for carbides and other products from South Africa served

a legitimate negotiating purpose. If our trading partners and companies that are affected by a trade dispute expect that those companies will ultimately be reimbursed

retroactively for duties or other costs incurred during the negotiation, they will have

no incentive to seek a speedy resolution.

Moreover, if Congress authorizes retroactive duty refunds to compensate for a legitimate delay in unilaterally implementing a preferential tariff rate, then we must

anticipate that similarly-situated importers of other products will step forward to

seek retroactive refunds, as well.

For these reasons, I urge that H.R. 3820 be excluded from any miscellaneous

trade bill that the Committee may favorably report out. Thank your for your consideration, and please do not hesitate to call me if you have any questions.

Sincerely,

ROBERT W. NEY

Member of Congress

cc: A.L. Singleton,

Chief of Staff Committee on Ways and Means

f

SHIELDALLOY METALLURGICAL CORPORATION

NEWFIELD, NJ 08344–0768

May 18, 2000

A.L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: Request for Comments on Technical Corrections to U.S. Trade Laws and Miscellaneous Duty Suspension Bills: Opposition to H.R. 3820

Dear Mr. Singleton:

As President of Shieldalloy Metallurgical Corporation, one of two remaining U.S.

producers of ferrovanadium, I am writing to advise the Subcommittee on Trade of

Shieldalloy’s strong opposition to H.R. 3820, a bill offered for inclusion in a miscellaneous trade package. On behalf of Shieldalloy and the more than 250 individuals

that the company employs at its manufacturing facilities in Cambridge, Ohio and

Newfield, New Jersey, I urge that H.R. 3820 not be included in any miscellaneous

trade bill that the Committee may favorably report out.

The merchandise that is the subject of H.R. 3820, described in the legislation as

‘‘carbides’’ classified under subheading 2849.90.50 of the Harmonized Tariff Schedule of the United States, is otherwise known as vanadium carbides, vanadium

carbonitrides, and/or nitrided vanadium. These products are chiefly used as additives in the manufacture of steel. They are interchangeable and compete head-tohead for sales with ferrovanadium manufactured in the United States by

Shieldalloy.

H.R. 3820 would require the U.S. Customs Service to retroactively refund Customs duties that our competitor paid for merchandise that it imported during a

seven-month period from July 1998 to January 1999. These retroactive refunds

would be a significant windfall for our competitor, since the ‘‘general’’ rate of duty

that would have been paid for these goods is 3.7 percent of their value. In short,

the legislation would reward our competitor for importing product, and unfairly penalize Shieldalloy for producing ferrovanadium in the United States.

90

Obviously, H.R. 3820 is not revenue neutral. It would require the Treasury to

issue substantial refunds to the importer. Consequently, it would result in a budget

loss that would require an equivalent offset.

In addition, H.R. 3820 would undermine our country’s negotiating stance and establish bad precedent. The importer that would benefit from this bill successfully

petitioned for a waiver of the Generalized System of Preferences (GSP) ‘‘competitive

need limit,’’ so that it could import unlimited quantities of this merchandise from

South Africa free of duty. Presidential Proclamation 7107 of June 30, 1998 (63 Fed.

Reg. 36531 (July 6, 1998)). However, the effective date of the provisions granting

benefits to carbides and certain other products of South Africa was intentionally left

to the discretion of the U.S. Trade Representative, based on concerns regarding

South Africa’s Medicines Act and its protection of patent rights for pharmaceuticals.

The law requires that the President consider the GSP’s eligibility requirements, including a country’s protection of intellectual property rights, before granting waivers

or extending other benefits under the program. Once the U.S. Trade Representative

received adequate assurances as to South Africa’s commitment to protecting intellectual property rights, these provisions were implemented. 64 Fed. Reg. 72138 (December 23, 1999). In other words, the delay in implementing preferential tariff

treatment for products from South Africa served a legitimate negotiating purpose.

If our trading partners and companies that are affected by a trade dispute expect

that those companies will ultimately be reimbursed retroactively for duties or other

costs incurred during the negotiations, they will have no incentive to seek a speedy

resolution.

Moreover, if Congress authorizes retroactive duty refunds to compensate for this

legitimate delay in unilaterally implementing a preferential tariff rate, then it must

anticipate that similarly situated importers of other products will step forward to

seek retroactive refunds, as well.

On behalf of Shieldalloy and its employees, I urge the Subcommittee to exclude

H.R. 3820 from any miscellaneous trade bill that it may favorably report out. Thank

you for your consideration. If you have any questions, please do not hesitate to call

me.

Sincerely,

ERIC E. JACKSON

President

cc: The Honorable Bob Ney

The Honorable Frank A. LoBiondo

f

STRATCOR

DANBURG, CT

May 19, 2000

Hon. Phil Crane

United States House of Representatives

Ways and Means Committee

Subcommittee on Trade

1102 Longworth House Office Building

Washington, DC 20515

Dear Mr. Chairman:

In February, representatives of Strategic Minerals Corporation (‘‘STRATCOR’’)

met with Savatri Singh of your staff regarding how we as a U.S. Company found

itself in the middle of trade fight between the United States Trade Representative

and the Republic of South Africa. Our letter today is to advise you that Representative Jay Dickey (R–AR) introduced a Miscellaneous Trade and Tariff Bill, HR 3820,

which is presently before your committee, and which will correct the financial impact of the international dispute. These comments support this measure to remedy

an unprecedented action against an innocent U.S. company, a bystander to an unrelated dispute. On behalf of Strategic Minerals Corporation and its subsidiaries, this

letter requests you to include HR 3820 into the omnibus trade bill.

Background:

On July 1, 1998 the United States Trade Representative (USTR) granted U.S. Vanadium Corporation (USV), a Competitive Need Limit (CNL) waiver for vanadium

91

carbides produced by Vametco Minerals Corporation, a Delaware corporation with

manufacturing operations in the Republic of South Africa. This waiver was requested by USV in 1997 to allow duty-free treatment of such imports to continue

under the Generalized System of Preferences (GSP) program. Without precedent,

the USTR’s office then suspended the effective date of this waiver pending resolution of an unrelated dispute regarding pharmaceutical patents. That dispute was

settled in September 1999.

U.S. Vanadium and Vametco Minerals are both wholly-owned subsidiaries of Strategic Minerals Corporation, a Connecticut corporation with vanadium operations in

Arkansas, New York, and South Africa, plus a new facility being constructed in Louisiana. The company also has tungsten interests in California.

When USTR restored GSP treatment to a number of South African products, it

did not do so retroactively for the USV’s vanadium CNL. One of the GSP ‘‘hostages’’

to the pharmaceutical debate was the effective date for implementing this CNL

waiver. The implementation delay cost U.S. Vanadium, an innocent company, approximately a million dollars to date, and has figured prominently in Strategic Minerals’ 1999 annual loss. Compared to the pharmaceutical industry, Strategic Minerals is a tiny company, with fewer than 160 employees in all its U.S. operations

combined.

These developments were particularly egregious because the sole producer and

the sole U.S. importer of these vanadium carbides are both wholly-owned subsidiaries of an American company. Neither Vametco Minerals, nor U.S. Vanadium, nor

any of the products they make or import were the subject of the dispute. Clearly,

it was inappropriate for USTR to use one trade tool (GSP) to achieve another trade

objective (resolution of the intellectual property dispute) in a manner that only

hurts an innocent American company. USTR should have made the effective date

for the CNL waiver for Vanadium Carbides from South Africa the date it was originally granted, i.e. July 1, 1998.

Strategic Minerals unsuccessfully lobbied key USTR officials until December 1999

to remedy the situation. However, conversations with USTR staff and an understanding of trade law leads us to request your support for the private relief bill (HR

3820) to recover approximately half the duties paid during the ‘‘implementation

delay’’ imposed by USTR for over two years. We ask that you include this measure

with the House Ways and Means Committee Omnibus Trade Bill mark-up.

Thank you in advance for your consideration of this request.

Sincerely,

NICHOLAS A. PYLE

f

Washington Representative

H.R. 3821

To provide for the liquidation or reliquidation of certain color television receiver

entries to correct an error that was made in connection with the original liquidation.

This statement is submitted on behalf of US JVC Corp. (JVC) in connection with

Statement of US JVC Corp., Wayne, New Jersey

f

the April 20 request for public comment by the House Committee on Ways and

Means regarding the package of miscellaneous trade bills being prepared by the

committee. JVC strongly supports the inclusion in this package of legislation which

would require the U.S. Customs Service to refund the antidumping duties it improperly collected on certain JVC entries of color television sets in 1989 and 1990. This

legislation, introduced by Rep. William Pascrell as H.R. 3821 on March 31, 2000,

parallels other bills included in previous miscellaneous trade packages to resolve

similar disputes in recent years, and it should be completely noncontroversial.

US JVC Corp. is a subsidiary of JVC Americas Corp. Headquartered in Wayne,

NJ, JVC Americas Corp. has 1,830 U.S. employees. In addition to its New Jersey

headquarters, the company has U.S. manufacturing operations in Tuscaloosa, Alabama and Sacramento, California. JVC also has sales, service, research and development, and entertainment software facilities in California, Illinois, Georgia and Hawaii.

92

As noted above, H.R. 3821 would require Customs to refund the antidumping duties the agency collected in 1989 and 1990 on certain JVC entries subject to Commerce Department antidumping reviews, despite instructions from Commerce not to

liquidate the entries until the reviews were complete. These reviews eventually

found that no antidumping duties were due on JVC’s entries, but Customs refused

to refund the duties because the deadline for filing protests had passed.

JVC imported 19 entries of color television receivers from Taiwan between June

1989 and November 1990. These TV receivers were the subject of an antidumping

duty order at the time, and thus JVC deposited approximately $130,000 in estimated antidumping duties with the U.S. Customs Service when the TV receivers entered the United States. After JVC deposited these estimated duties, the Commerce

Department instructed Customs to suspend liquidation of these entries until Commerce published the results of its final determination in the administrative reviews

of color TV receivers from Taiwan during the periods from April 1989 through

March 1990 and April 1990 through March 1991. Customs specifically notified JVC

of this suspension of liquidation for these entries.

On January 9, 1992, Commerce directed Customs to continue to suspend final assessment of duties on the TV receivers until specifically instructed otherwise. However, on February 28, 1992, Customs proceeded to assess JVC’s entries at the duty

rate deposited by JVC, and published bulletin notices of the final assessments. Customs officials have acknowledged that this liquidation was in error, and that it occurred as a result of a misreading by a Customs official of the Commerce instructions to continue the suspension of liquidation for JVC’s entries.

On May 12, 1992, Commerce released the final results of its administrative review

of TV receivers from Taiwan. As part of this announcement, Commerce determined

that no antidumping duties should be assessed on the type of receivers imported by

JVC during the review period. However, several participants in the review challenged the results of this review and, because of the ensuing delay, Commerce did

not instruct Customs to assess JVC’s TV receivers with a dumping margin of zero

until September 27, 1995.

Following Commerce’s final action, JVC requested a refund of the antidumping

duty deposits it had paid on the receivers. However, Customs denied this request

and also a subsequent JVC protest of Customs’ 1992 decision to assess the antidumping duties on the television receivers, arguing that the 90-day limit for filing

such protests had expired. Subsequent court cases brought by JVC challenging this

Customs decision in the Court of International Trade and the U.S. Court of Appeals

for the Federal Circuit have been rejected, primarily due to precedents established

in a similar case involving improperly collected duties on concentrated orange juice

imported by Juice Farms, Inc.

During the course of this appeal process, these courts suggested that JVC should

seek a legislative remedy through congressional legislation, noting that Juice Farms

had succeeded in receiving duty refunds through such legislation in 1996. In fact,

Juice Farms was one of several companies which succeeded in obtaining refunds of

duties improperly collected by Customs as part of the package of miscellaneous

trade bills approved by the 104th Congress in 1996 (Public Law 104–295). Similar

duty refund legislation was also passed as part of the Miscellaneous Trade and

Technical Corrections Act of 1999 (Public Law 106–36). Given these precedents,

Rep. Pascrell introduced H.R. 3821 on behalf of JVC on March 1, 2000.

In conclusion, JVC strongly supports the inclusion of H.R. 3821 in the miscellaneous trade package being prepared by the Committee on Ways & Means. The enactment of this legislation as part of the miscellaneous trade package would allow

JVC to finally receive refunds of the duties improperly collected by Customs ten

years ago. Furthermore, the measure is noncontroversial, as evidenced by the inclusion of virtually identical provisions to resolve similar situations in previous miscellaneous trade packages enacted by Congress.

Please feel free to contact us should the Committee have any questions regarding

this matter.

Respectfully submitted,

THOMAS F. ST. MAXENS

f

St. Maxens & Company

93

H.R. 3828

To suspend until January 1, 2003, the duty on a paint additive chemical.

NO COMMENTS SUBMITTED

f.

H.R. 3837

To suspend temporarily the duty on ortho-cumyl-octylphenol (OCOP).

NO COMMENTS SUBMITTED

f.

H.R. 3838

To suspend temporarily the duty on certain polyamides.

f

ELF ATOCHEM NORTH AMERICA, INC.

ARLINGTON, VA 22209

May 10, 2000

The Honorable A. L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

RE: Copy of Statement of Purpose Submitted Upon Request to the U.S. International Trade Commission and to U.S. Department of Commerce Covering Duty

Suspension for Micro-Porous, Ultra-Fine, Spherical Forms of Polyamides 6, 12, and

6/12 (HR 3838).

Dear Mr. Singleton,

In response to inquiries made by both the U.S. International Trade Commission

and the U.S. Department of Commerce, the enclosed document was prepared in support of passage of the measure. On behalf of Elf Atochem NA, importer of the products designated, I am submitting these copies to the Committee for the record.

Thank you for your attention. Please advise should your office have additional

questions.

Regards,

CHARLES A. KITCHEN

Director—Government Releations

PRODUCT & MARKET INFORMATION

Note: This information is provided in response to U.S. International Trade Commission inquiry.

MICRO-POROUS, ULTRA FINE, SPHERICAL FORMS OF POLYAMIDES 6, 12 AND 6/12

SHOULD BE DUTY FREE IMPORTS (HR 3838 & S. 2240)

CAS Reference Numbers

Polyamide 6 -CAS # 25038–54–4

Polyamide 12 -CAS # 25038–74–8

Polyamide 6/12 -CAS # 25191–04–2

94

Product Line / Trademark

The Micro-Porous, Ultra Fine, Spherical Forms of Polyamide 6, 12, and 6/12 copolymer are sold under Elf Atochem’s Registered Trademark ORGASOL.

No Domestic Competition

While there are domestic producers of the ubiquitous pelletized or granular form

of polyamides 6 and 12 that finds application in a long list of high-volume plastic

molded or extruded products, there are no domestic producers of the micro-porous,

ultra fine, spherical forms of polyamide 6, 12, and 6/12 copolymer material. In fact,

Elf Atochem is the only global producer the this specialized polyamide line.

The term polyamide as used in HTS 3908.10. is the chemical designation for

‘‘nylon’’—the original brand name coined by DuPont decades ago. Polyamides 6, 12

and the 6/12 copolymer, classified under HTS 3908.10, are subject to a 6.3% duty.

There are process variations in how polyamides are polymerized that produce

Polyamides 6, 12 and a 6/12 copolymer that, while chemically the same, have distinctly different structural characteristics that provide unique features and benefits

in certain ‘‘niche’’ product applications.

Most polyamides are polymerized by standard methods resulting in Polyamides 6,

12 and 6/12 products that are pelletized—i.e., granular in structure. However

Polyamides 6, 12 and a 6/12 are polymerized by the solution method (see attached

‘‘Fact Sheet’’) of production yielding polymer material that is a micro-porous, ultra

fine, spherical polymerized powder that has special and exclusive niches in the industrial coatings and cosmetics markets.

PRODUCTION / IMPORTATION

Importer: Elf Atochem North America, Inc., Corporate Headquarters, 2000

Market Street, Philadelphia, PA 19103, Tel: 215/419–7000

ORGASOL micro-porous, ultra fine, spherical form polyamide 6, 12, 6/12 powder

resins are produced at Elf Atochem SA’s production facility in Mont, France. Material is imported by Elf Atochem N.A. for direct sale to end-user market customers.

No subsequent production processing is required. Imported material is warehoused

in the following location prior to shipment to end-use customers:

Linden Warehouse Company, Linden NJ (Port of Newark)

ORGASOL SPECIALIZED POLYMERS MEET PERFORMANCE REQUIREMENTS OF THE

COSMETICS INDUSTRY AND OF THE HIGH-END INDUSTRIAL COATINGS MARKET

Cosmetics Market

Micro-porous, ultra fine, spherical polyamides 6, 12, and 6/12 copolymer powder

forms are used as carriers of pigments and to absorb oils in the skin. Personal care/

cosmetics marketers use our ORGASOL micro-porous powder resins to give products

such as pressed powder, superior texture and a pleasant or soft-to-the-touch feel.

There are no domestic producers of these unique form of polyamides 6. 12 and 6/

12 copolymer.

High-End Industrial Coatings

ORGASOL micro-porous, ultra fine, spherical form powder resins also are used by

manufacturers of industrial coatings, paints and varnishes to increase abrasion resistance, texturing and gloss control in UV cured coatings -without significantly increasing viscosity. There are no domestic producers of these micro-porous, ultra fine

polyamides that meet the unique product features is high-end ‘‘niche’’ coatings applications that can only be realized with ORGASOL powder resins.

f

95

H.R. 3853

To reduce temporarily the duty on Mesamoll.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 5, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R. 3853 A bill to suspend temporarily the duty on Mesamoll

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Mesamoll. Bayer’s Logistics Division,

with major import operations at Pittsburgh, Pennsylvania and Bayer warehousing

in Morrisville, PA and Greenville, SC as well as Bayer’s customers would benefit

from tariff suspension on Mesamoll. Mesamoll is very specialized material occupying

less than 1% of the 1 billion plus pound plasticizer market and is a non-phthalate

plasticizer for flexible PVC and other polymers.

Over 400 U.S. customers are served by use of these products as a replacement

for phthalates in a wide variety of end use applications. This product has also proven to be a safe alternative to chlorinated solvents such as methylene chloride in the

cleaning of polyurethane processing equipment. Mesamoll is not produced in the

United States and is extremely helpful to the automotive industry to assist with

high performance applications in competing with imported goods. Mesamoll has humanitarian applications raging from the manufacture of tents and shelters based on

PVC coated fabric to medical apparatus. United States compounders seeking to

reach new performance levels economically will reap economic benefits from duty reduction of this product. Bayer AG is the only producer of this type of Alkyl Acid

Ester of Phenol (Mesamoll) with its unique balance of properties and high performance characteristics.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the tariff suspension for Mesamoll, proposed in

H.R. 3853. Please do not hesitate to contact me at Tel: 412–777–2058 with any

questions. In the event that I am unavailable, Julie Van Egmond in our Washington

office (Tel.: 202–756–3773) or Stephen Johnsen at our Pittsburgh location (Tel: 412–

777–5616) could be of assistance.

Sincerely,

f

KAREN L. NIEDERMEYER

96

H.R. 3854

To reduce temporarily the duty on Vulkalent E/C.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R. 3854 A bill to suspend temporarily the duty on Vulkalent E/C

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Vulkalent E/C. Bayer’s Rubber Division, with operations in Akron, OH, import operations in Pittsburgh, PA, Bayer

warehouses in Greenville, SC and Bayer customers in the states of Ohio, California,

North Carolina, Texas, Illinois, Tennessee, Virginia, New Jersey and Rhode Island

would benefit from tariff suspension on Vulkalent E/C. Vulkalent E/C is a very

uniquely balanced retardant for rubber products with high performance applications, occupying less than 1% of the $1 billion + rubber market.

United States compounders seeking to reach new performance levels will reap

technical benefits from duty reduction of this product. Vulkalent E/C has an advantage for the U.S. industry because of its unique balance of properties and high performance applications. U.S. customers are served by use of this product as part of

base rubber compound recipes in the production of rubber goods, such as automotive

hoses and shoes, where it is used as a vulkanization retarder. This product is not

produced in the United States and is extremely technically effective and thereby

helpful to U.S. industry in competing with other imported rubber products in a wide

variety of uses.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the tariff suspension for Vulkalent E/C, proposed

in H.R. 3854. Please do not hesitate to contact me at Tel: 412–777–2058 with any

questions. In the event that I am unavailable, Julie Van Egmond in our Washington

office (Tel.: 202–756–3773) or Stephen Johnsen at our Pittsburgh location (Tel: 412–

777–5616) could be of assistance.

Sincerely,

f

KAREN L. NIEDERMEYER

97

H.R. 3855

To reduce temporarily the duty on Baytron M.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R. 3855 A bill to suspend temporarily the duty on Baytron M

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Baytron M. Bayer’s Logistics Division,

with major import operations at Pittsburgh, Pennsylvania and Bayer warehousing

in Simpsonville and Rock Hill, SC as well as Bayer’s customers in Simpsonville, SC

and Bridgeville, IL would benefit from tariff suspension on Baytron M. Baytron M

is a patent-protected, very specialized monomer used for the production of electrostatic and antistatic coating of films. The product is an environmentally friendly,

cost-effective material occupying less than 1% of the electronics industry.

United States compounders seeking to reach new performance levels economically

will reap economic benefits from duty reduction of this product. Baytron M has an

advantage for the U.S. industry because of its unique electrostatic and anti-static

properties. This product is not produced in the United States, and is extremely helpful to the U.S. industry in competing with imported goods from the Asian market.

There are a wide variety of applications of Baytron M from electronics, glass and

circuit boards to organic light emitting diodes.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the tariff suspension for Baytron M, proposed in

H.R. 3855. Please do not hesitate to contact me at Tel: 412–777–5616 with any

questions. In the event that I am unavailable, Julie Van Egmond in our Washington

office (Tel.: 202–756–3773) or Karen Niedermeyer at our Pittsburgh location (Tel:

412–777–2058) could be of assistance.

Sincerely,

f

STEPHEN R. JOHNSEN

98

H.R. 3856

To reduce temporarily the duty on Baytron C–R.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R. 3856 A bill to suspend temporarily the duty on Baytron C-R

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Baytron C-R. Bayer’s Logistics Division, with major import operations at Pittsburgh, Pennsylvania and a Bayer warehouse and Bayer customers in Simpsonville, SC would benefit from tariff suspension

on Baytron C-R. Baytron C-R is a very specialized aqueous catalytic dispersion material with high performance, and environmentally friendly characteristics occupying

less than 1% of the electronics industry.

United States compounders seeking to reach new performance levels economically

will reap economic benefits from duty reduction of this product. Baytron C-R has

an advantage for the U.S. industry because of its unique electrostatic and anti-static

properties and ability to be used even in the fine pores of circuit boards. This product is not produced in the United States, and is extremely cost-effective and thereby

helpful to U.S. industry in competing with imported goods from the Asian market.

There are a wide variety of applications of Baytron C-R from the production of capacitors to printed circuit boards.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the tariff suspension for Baytron C-R, proposed

in H.R. 3856. Please do not hesitate to contact me at Tel: 412–777–5616 with any

questions. In the event that I am unavailable, Julie Van Egmond in our Washington

office (Tel.: 202–756–3773) or Karen Niedermeyer at our Pittsburgh location (Tel:

412–777–2058) could be of assistance.

Sincerely,

f

STEPHEN R. JOHNSEN

H.R. 3858

Statement of V. Venkiteswaran, President, Tata Tea, Incorporated, Plant

To suspend temporarily the duty on iced teas.

f

City, Florida

Tata Tea, Incorporated, based in Plant City Florida, produces and markets instant tea powders. We have been in business for more than 20 years and annual

sales amount to approximately $16 million.

Bill Summary

H.R. 3858 is a bill that would eliminate a 10% tariff on iced tea drink mixes containing sugar that are imported into the United States.

99

Description of Manufacturing Process

Instant iced tea drink mixes are composed of sugar, powdered tea, flavors and

coloring.

Tata Tea imports powdered tea extracted from tea leaf. The tea powder is extracted in India by our parent company. In Plant City, Florida, the powdered tea

is dissolved in water, mixed with caramel color, spray dried and milled to a fine

powder.

Our customers are private label companies and some of them purchase tea powder

as a pre-mix to manufacture instant iced tea drink mixes. They export the tea powder to Canada in order to add sugar and other ingredients. The finished product

is then packaged for retail sale and imported into the United States.

Tariff Treatment

Tea leaves and tea powders are generally imported into the United States duty

free.

In contrast, iced tea drink mixes containing sugar are dutiable and may be subject

to tariff rate quotas that exist under the U.S. sugar program. The sugar quotas are

administered by imposing high tariffs on over quota merchandise. Drink mixes imported within the quota are dutiable at the lower rate of 10 percent ad valorem.

The tariff that applies to in quota drink mixes is unrelated to the sugar quota program. Drink mixes imported within the quota may also be imported into the United

States duty free if they qualify for preferential duty treatment under the North

American Free Trade Agreement (NAFTA).

Although our tea powder is further processed in the United States, it does not

qualify for preferential treatment under the NAFTA rules of origin. In order to qualify for NAFTA, the tea powder must be extracted in North America.

At present, Tata Tea imports tea powder into the United States duty free. However, our customers would have to pay a 10% tariff if they import the drink mix

into the United States.

Effect on the Market

The existing tariff structure places Tata Tea at a competitive disadvantage with

producers that extract tea powder in the United States. Our customers must pay

duties on drink mixes that are imported into the United States from Canada. However, they pay no duties if the tea powder is purchased from a supplier that extracts

powder in the United States. This occurs despite the fact that all of the major producers extract tea powder from foreign tea leaf.

The situation described above is distorting the market for instant tea drink mixes.

Producers that rely on tea powder extracted abroad have difficulty competing with

manufacturers that extract tea powder in the United States. This results in less

competition and fewer choices for the consumer.

Tata Tea has explored the possibility of establishing an extraction facility in the

United States in order to qualify for NAFTA. This is not feasible primarily due to

environmental concerns. For the same reason, most of our competitors have moved

their extraction facilities offshore. In the long-term, it may not be viable for any

manufacturer to extract tea powder in the United States.

Proposed Duty Suspension

Congress did not intend to shield domestic producers of tea powder from foreign

competition. This is evident because there is no tariff on tea powder imported into

the United States. Nevertheless, due to the tax on finished iced tea mixes, suppliers

that extract tea overseas are placed at a competitive disadvantage. If enacted, H.R.

3858 would eliminate this disparity in tariff treatment by suspending the tariff on

instant iced tea drink mixes. As a consequence, all producers of tea powder will be

placed on an equal footing.

The proposal to suspend duties will have no effect on the United States sugar program because it applies only to instant iced tea drink mixes that are entered within

the sugar quota. That is, the rates used to administer the tariff rate quotas on sugar

will remain unchanged and will apply to all over quota merchandise. Consequently,

we do not believe that the cane and beet sugar industry will lodge an objection to

this bill.

Conclusion

For the foregoing reasons, we urge the Subcommittee on Trade to include H.R.

3858 in the next miscellaneous trade package.

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H.R. 3868

To provide for the reliquidation of certain entries of vacuum cleaners.

NO COMMENTS SUBMITTED

f.

H.R. 3869

To provide for the liquidation or reliquidation of certain entries of copper and

brass sheet and strip.

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May 17, 2000

Honorable Philip M. Crane

Chairman

Ways and Means Subcommittee on Trade

U.S. House of Representatives

Washington, D.C. 20515

Dear Phil:

I am responding to your April 20th press advisory in which you request written

comments regarding a list of trade proposals you are considering for inclusion into

a Miscellaneous Tariff and Duty Suspension package.

Specifically, I am writing to urge you to incorporate legislation I have introduced,

H.R. 3869, into the proposal you are crafting. I introduced H.R. 3869 on behalf of

a company headquartered in my district, Outokumpu Copper, Inc. (Outokumpu). Indeed, Outokumpu is located just down the road from your district in Bloomingdale,

Illinois. Technically, the bill would ‘‘provide for the liquidation or reliquidation of

certain identified entries of copper and brass sheet and strip.’’ In layman’s terms,

my bill would refund to Outokumpu monies owed to it by the federal government

as a result of duty payments Outokumpu made that were in excess of the final duty

it was determined to owe. The excess payments come to slightly over $1 million in

principal and interest.

Outokumpu imports brass sheet and strip from the Netherlands and Sweden.

These imports have been subject to antidumping orders since the late 1980s. Under

Customs procedure, Outokumpu pays (‘‘deposits’’) the estimated antidumping duties

at the time its imports enter the United States. A final assessment (‘‘liquidation’’)

of the actual duty amount that should be paid is not made until the Import Administration of the Department of Commerce Service completes a review. During the

period in which deposits are made on the imports, and prior to review, the Customs

Service is supposed to suspend the liquidation of the entries. Notwithstanding the

suspension requirement, the Customs Service inadvertently liquidated many of

Outokumpu’s entries at the original deposit amount even though many were in excess of the final assessed duty. The company should have been refunded the amount

of its overpayments, which date back to a period of time covering 1988–1992. Unfortunately, it was not, a fact which Outokumpu only recently discovered. Outokumpu’s

only recourse to recover the money owed to them by the federal government is

through enactment of legislation.

It is my understanding that in the past your Committee has granted similar requests with respect to liquidated duties, and I respectfully urge you to include H.R.

3869 in your legislative trade package. The federal government owes Outokumpu

money—money that Outokumpu deposited with the federal government in good

faith. This money belongs to the taxpayer and ought to be returned to the taxpayer

with appropriate interest.

Needless to say, I would be happy to provide you with any additional information

you may require. Thank you for your consideration of my request.

Very truly yours,

HENRY HYDE

HJH:ns

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OUTOKUMPU COPPER

BLOOMINGDALE, IL 60108

May 16, 2000

The Honorable Phil Crane

Chairman

Ways and Means

Subcommittee on Trade

1104 Longworth HOB

Washington, D.C. 20515

Dear Mr. Chairman:

We are writing in response to your April 20th Advisory requesting written comments for the record with regard to a list of trade proposals you are considering for

inclusion into a Miscellaneous Tariff and Duty Suspension package.

Specifically, as company officers for Outokumpu Copper, Inc. and Outokumpu

Copper (USA), Inc. (‘‘Outokumpu’’), we are writing in strong support of H.R. 3869,

legislation to ‘‘provide for the liquidation or reliquidation of certain identified entries

of copper and brass sheet and strip.’’ H.R. 3869, introduced by your Illinois colleague, Representative Henry Hyde, will refund to Outokumpu monies owed to it

by the federal government as a result of the inadvertent liquidation of duties by the

U.S. Customs Service. The remainder of this letter will explain in detail the circumstances surrounding this case and the necessity for enactment of H.R. 3869. For

your information, Senator Dick Durbin has introduced similar legislation, S. 2295,

in the Senate.

Outokumpu is a U.S. importer of brass sheet and strip from the Netherlands and

Sweden. Headquartered in Bloomingdale, Illinois, our company imports these products from Outokumpu Copper Strip BV (Netherlands) and Outokumpu Rolled Products AB (Sweden). Imports of Outokumpu brass have been subject to antidumping

orders since 1987 (Sweden) and 1988 (Netherlands). Under Customs procedure,

Outokumpu pays (‘‘deposits’’) the estimated antidumpting duties at the time its imports enter the United States. A final assessment (‘‘liquidation’’) of the actual duty

amount that should be paid is not made until the Import Administration of The Department of Commerce completes a review for the applicable 12-month period covering the imports. During the period in which deposits are made on the imports,

and prior to the Import Administration’s review, the Customs Service is supposed

to suspend the liquidation of entries subject to antidumping orders.

Notwithstanding the suspension order, the Customs Service inadvertently liquidated many of Outokumpu’s entries at their original deposit amount even though

many were in excess of the final assessed duty. The company should have been refunded the amount of its overpayments, which date back to a period of time covering

1988–1992. Unfortunately, it was not. Until very recently, the company believed

that these entries were still unliquidated. Consequently, Outokumpu’s only recourse

to recover these entries, amounting to slightly over $1 million (in excess duty deposits and interest cost), is through federal legislation—namely H.R. 3869.

We would note that the $1 million figure is a ‘‘net’’ figure. The net figure is referenced because not only have we provided Customs with a list of those liquidated

entries where Outokumpu overpaid, but we have also provided Customs with a list

of liquidated entries where Outokumpu actually owes additional duty. In short, we

want to set the entire record straight. We believe that the Customs evaluation of

the entry list we have provided will unequivocally support our claim. For your information and for the record, in this transmittal we have provided you with the same

detailed list of entries that we have provided to Customs. Finally we would note for

the record that, to date, Customs has been very cooperative in working with us to

evaluate the entries in question.

We stand prepared to provide you and your Subcommittee with any additional information you may require to evaluate the merits of this legislation. As a matter

of principle and as a matter of equity and fairness, we strongly believe Outokumpu

should be refunded the amount of duty it has overpaid along with appropriate interest. It is our understanding that in the past your Subcommittee has granted similar

requests with respect to liquidated duties, and we urge you to include H.R. 3869

in your legislative trade package.

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Thank you for your time and for your consideration of our request.

Sincerely,

Martin A. Kroll Ulf Anvin

President President

Enclosure

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May 16, 2000

The Honorable Phil Crane

Chairman

Ways and Means Subcommittee on Trade

1104 Longworth House Office Building

Washington, D.C. 20515

Dear Phil:

It is my understanding that you have asked for public comment on a list of trade

proposals you recently listed in a press advisory dated April 20th. I am writing to

express my support for a proposal contained on that list, H.R. 3869, legislation introduced by our colleague, Henry Hyde.

Specifically, I am writing to urge you to incorporate H.R. 3869 into the Miscellaneous Tariff and Duty Suspension bill you are currently crafting. Representative

Hyde introduced H.R. 3869 on behalf of an Illinois company, Outokumpu Copper,

Inc. (Outokumpu), headquartered in Bloomingdale, Illinois. Essentially, the bill

would refund monies owed to Outokumpu by the federal government resulting from

duty payments Outokumpu made that were in excess of the final duty it was determined to owe. The excess payments come to slightly over $1 million in principal and

interest. The only way Outokumpu can recoup its money is through federal legislation.

Outokumpu imports brass sheet and strip, imports that have been subject to antidumping orders since the late 1980s. Under Customs procedure, Outokumpu pays

(‘‘deposits’’) the estimated antidumping duties at the time its imports enter the

United States. A final assessment (‘‘liquidation’’) of the actual duty amount that

should be paid is not made until the Import Administration of the Department of

Commerce Service completes a review. During the period in which deposits are

made on the imports, and prior to review, the Customs Service is supposed to suspend the liquidation of the entries. Notwithstanding the suspension order, the Customs Service inadvertently liquidated many of Outokumpu’s entries at the original

deposit amount even though many were in excess of the final assessed duty. The

company should have been refunded the amount of its overpayments, which date

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back to a period of time covering 1988–1992. Unfortunately, it was not, a fact that

Outokumpu only recently discovered.

I know your Subcommittee has addressed similar requests in the past, and on behalf of the Illinois company in question, I urge you to include Chairman Hyde’s bill

into your Duty Suspension package.

Thank you for your consideration of my request. Please feel free to contact Jeanette Forcash of my staff at (5–3635) with any questions.

Sincerely,

f

JERRY WELLER

H.R. 3875

To suspend temporarily the duty on certain steam or other vapor generating boilers

used in nuclear facilities

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MCDERMOTT INTERNATIONAL, INC.

ARLINGTON, VA

May 19, 2000

A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Re: HR 3875

Dear Mr. Singleton:

McDermott International is strongly opposed to the adoption of HR 3875 which

proposes to eliminate tariffs on certain steam or other vapor generating boilers used

in nuclear facilities and classified under the Harmonized Tariff Schedule of the

United States (HTSUS) Subheading 8402.11.

McDermott is a leading energy services and manufacturing company, providing

engineering, procurement, manufacturing of equipment and project management for

customers involved in the production of energy and in other industries. Babcock &

Wilcox is a subsidiary of McDermott that manufactures power generation systems,

including steam or other vapor generating boilers used in nuclear facilities. Babcock

& Wilcox’s North American facilities are located in Barberton, Ohio; Cambridge, Ontario, Canada; Ebensburg, Pennsylvania; Lancaster, Ohio; Alliance, Ohio; Melville,

Saskatchewan, Canada; Mount Vernon, Indiana; St Petersburg, Florida; West Palm

Beach, Florida; and West Point, Mississippi.

Suspension of the 5.2 percent duties as expressed in HR 3875, or permanent

elimination of the duties as expressed in’S 2158, on certain steam or other vapor

generating boilers that are used in nuclear facilities, would result in substantial loss

of revenue to the U.S. Treasury. In the month of February 2000, imports classified

under HTSUS Subheading 8402.11 were valued at the amount of $31,058,850.

Based on information available to the company, we are confident that this value reflects the importation from Spain of boilers to be used in a nuclear facility. The calculated duty for the month of February, based on the current 5.2 percent rate, is

$1,615,060. Based on additional information received from sources in the trade, we

believe that imports of boilers for use in nuclear facilities under HTSUS Subheading

8402.11 for calendar year 2000 will be in the range of $150,000,000, thus resulting

in potential revenue to the U.S. Treasury of about $7,800,000. In addition, we are

aware of numerous U.S. orders to foreign suppliers for delivery in 2001, 2002 and

2003. Please see Enclosure 1 for a listing of these orders. We have also included

a list of nuclear plants expected to replace their boilers during the 2006–2010 timeframe (see Enclosure 2). To further document the value of these orders, enclosures

3 and 4 are trade press announcements of significant orders to Korea’s Hanjung for

2 nuclear boilers ($50 million) and one to Ansaldo of Italy for L 100 billion for 2

nuclear boilers (roughly $57 million in 1998). Steam generators are the industry

term for nuclear boilers.

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Nuclear boiler contracts are often awarded on a supply, remove and install basis.

The company awards the overall contract and then contracts with a nuclear boiler

manufacturer for the supply of the equipment. The contract price for the overall contract, including removal and installation, is often public knowledge. However, the

price just for the equipment is often not made public. But, there are only a few

major models of nuclear boilers in the U.S. and by knowing the pricing of nuclear

boilers at another plant with the same basic model of boilers, one can closely approximate the pricing of nuclear boilers at a plant where the pricing of the boilers

is not publicly known. We have used our extensive knowledge of nuclear boiler models at specific plants to complete the pricing shown in enclosures 1 and 2.

Nuclear boilers are critical pieces of equipment in nuclear power plants and are

designed and manufactured to exacting standards. Facilities that manufacture nuclear boilers are required to possess an N-stamp qualification. N-stamps are issued

by the American Society of Mechanical Engineers and conform to Nuclear Regulatory Commission (NRC) criteria. Qualification for an N-stamp includes a rigorous

quality assurance program and a very high level of expertise and quality.

Nuclear boilers are very large pieces of highly engineered equipment (a single

boiler can weigh up to 500 tons, approach 70 feet in length and exceed 20 feet in

diameter) that are designed and manufactured to extremely tight tolerances (measured in thousandths of an inch).

Babcock & Wilcox maintains the capability to manufacture steam or other vapor

generating boilers for use in nuclear facilities at our plants in Cambridge, Ontario,

Canada, Mount Vernon, Indiana and Barberton, Ohio. We have performed significant nuclear boiler manufacturing work in our U.S. facilities (component fabrication,

component installation, heavy assembly, final inspection and testing). There are a

number of nuclear plants requiring replacement boilers, which will necessitate manufacturing in our U.S. facilities. We conduct virtually all of our research and development in the United States. Our North American manufacturing requires significant procurement of U.S. sourced materials and engineering equipment. We also undertake extensive manufacturing of boilers for non-nuclear use in the United States.

Our ability to manufacture boilers for nuclear use in the United States will depend

on how future orders develop and the duty of HTSUS Subheading 8402.11 remaining at 5.2 %.

Temporary or permanent duty suspension would have an adverse economic impact

on US suppliers to Babcock & Wilcox. In 1998, Babcock & Wilcox operations in

Cambridge, Ontario issued a minimum of US$3.49 million in purchase orders to US

suppliers or their Canadian distributors (US$194,000). These purchase orders were

issued strictly against Babcock & Wilcox’s nuclear boiler contracts. The corresponding amounts in 1999 were US$ 4.62 million with $1.25 million of this to Canadian distributors. The principal suppliers are located in California, Connecticut,

Maine, Nevada, North Carolina, Ohio, Pennsylvania, Texas, Virginia and West Virginia. To the best of our knowledge, these US suppliers only supply to Babcock &

Wilcox in respect of our nuclear boiler products. As the duty suspension contemplated in HR 3875 would make Babcock & Wilcox’s nuclear boilers less competitive, then this could have a direct adverse impact on our US suppliers.

While HR 3875 and’S 2158 propose to eliminate the U.S. duty on certain products

classified under HTSUS Subheading 8402.11, U.S. competitors such as the European Union and Korea (a significant supplier) both maintain duties on this product—2.7 percent and 8.0 percent, respectively. The continued existence of duties in

the EU and Korea coupled with the concomitant elimination of duties on U.S. imports would undermine the intent of NAFTA and encourage the migration of production from North America to countries outside the region.

In conclusion, the elimination of the 5.2 percent duty on certain boilers classified

under HTSUS Subheading 8402.11 would adversely affect McDermott International

and its subsidiary Babcock & Wilcox and preclude it from producing such boilers

in the United States. For the reasons stated above, McDermott International and

Babcock & Wilcox oppose HR 3875 (and’S 2158) and request that these comments

be given formal consideration.

Sincerely,

BRUCE N. HATTON

Enclosures

cc: Mr. Grant Aldonas, Chief International Trade Counsel, Senate Finance Committee

Mr. Dennis Fravel, U.S. International Trade Commission

Ms. Jan Summers, U.S. International Trade Commission

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f

PRICEWATERHOUSECOOPERS

WASHINGTON, DC 20005–3333

May 19, 2000

The Honorable Phil Crane

Chairman

Ways and Means Subcommittee on Trade

1104 Longworth HOB

Washington, DC 20515

Re: H.R. 3875—Legislation to temporarily suspend the duty on steam generators

imported for use in nuclear power facilities.

Dear Mr. Chairman:

We are writing in response to your April 20th press advisory in which you request

written comments for the record on technical corrections to U.S. trade law and miscellaneous duty suspension proposals. The comments contained in this letter are

submitted on behalf of the following parties and are in lieu of individual comments

from each of these organizations.

Nuclear Energy Institute

Alliant Energy Corporation

Northern States Power Company

Pinnacle West Energy Corporation

The Southern Companies

Westinghouse Electric Company

WPS Resources Corporation

In addition, the seven above-named entities filed the attached comments urging

repeal of the tariff on steam generators used in nuclear power facilities with the

International Trade Commission.

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Each of the aforementioned parties strongly support H.R. 3875 and urges the

House of Representatives to repeal or suspend the tariff on steam generators imported for use in nuclear power plants.

As proponents of H.R. 3875, our comments will highlight the following facts.

(1) No public policy is served by the imposition of the duty on nuclear steam generators and there is no apparent public benefit from the tariff.

(2) There is no current domestic production of these specialized steam generators

and it is highly unlikely that domestic production capability will be developed in the

foreseeable future.

(3) The 5.2% duty imposed on these specialized steam generators is an unnecessary burden on domestic residential, industrial, and commercial users of electricity.

(4) Repeal or suspension of the duty will have an insignificant effect on the federal

government’s receipts.

(5) H.R. 3875 has strong bipartisan and bicameral congressional support.

No Public Policy Goals are Furthered by the Tariff

There is no apparent public benefit for the imposition and collection of a duty on

steam generators imported for use in nuclear facilities. Because there is currently

no domestic production and there is no likelihood of future domestic production of

nuclear steam generators, there is no policy rationale justifying the continued imposition of this duty.

In fact, the tariff on nuclear steam generators is an inefficient tax on domestic

electricity consumers. The tariff is a hidden ‘‘BTU tax’’ on residential, commercial,

and industrial users of electricity. Because this hidden BTU tax is collected as a tariff and passed on to consumers through ratemaking proceedings, the tax is masked

to the end-users.

Further, this hidden BTU tax is imposed only on nuclear power generation at a

time when over 26 States, including Illinois, have deregulated the electric industry.

The tariff imposes a competitive disadvantage on nuclear power. The tariff penalizes

nuclear power generation, which is the only large-scale power generation source

that produces no smokestack emissions.

As the federal and state governments work to bring competition to the electric

utility industry and reduce greenhouse gases, it is time to remove the tariff on

steam generators imported for use in nuclear power facilities.

No Current U.S. Production

Nuclear steam generators are no longer manufactured in the United States. When

nuclear power plants were being constructed in the United States, the reactor suppliers manufactured the original steam generators. Combustion Engineering manufactured generators in Chattanooga, Tennessee; Babcock & Wilcox in Barberton,

Ohio; and Westinghouse, in Pensacola, Florida. Combustion Engineering no longer

uses its Chattanooga facility for that purpose and has disposed of the manufacturing

equipment. Babcock & Wilcox, owned by McDermott International, moved its manufacturing operation to Canada.

Westinghouse was the last company to manufacture this product in the United

States. Its plant in Pensacola, Florida was closed after shipping its last order in November 1999. Westinghouse found the nuclear steam generator business insufficient

to sustain the plant and transferred its production overseas. The plant equipment

has already been sold and the plant structure is for sale and will be converted to

another use.

Today, only six companies produce nuclear steam generators in the world, and all

of them are outside the United States: Ensa (Spain), Ansaldo (Italy), Babcock &

Wilcox (Canada), Framatome (France), HANJUNG (Korea) and Mitsubishi (Japan).

Future U.S. Production Unlikely

The prospect of a nuclear steam generator production facility being located in the

United States is extremely remote. We cannot stress this point strongly enough. Indeed, several significant factors suggest that it is highly unlikely that such a production capability will be created in the next five years or for the foreseeable future:

• The market for nuclear steam generators—The universe of nuclear power plants

in the United States is limited and is not expected to grow. Indeed, the last time

a nuclear power facility was ordered in the United States was in January 1978.

• The expense and time required to select, design, and construct a manufacturing

facility—The estimated cost of a new manufacturing facility is $60 million to $80

million. Preferred sites are large (a facility of about 200,000 square feet is needed

to house production and output prior to shipping) and close to water (steam generators, at 500 to 900 tons, are too large to transport by rail and are transported by

water).

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• The time required for regulatory authorizations—For example, the Nuclear Regulatory Commission requires manufacturers of nuclear power plant components to

be certified (the N-Certificate of Authorization) by the American Society of Mechanical Engineers before a plant may operate in the United States. To acquire a new

certification takes about one year. • The time required to produce a nuclear steam generator—Even after a manufacturing facility is ready to produce, the construction of all component subassemblies and final fabrication takes 32 to 48 months in the typical case. • U.S. competitiveness—By their actions, it is clear that the assessment of former

U.S. suppliers is that production of nuclear steam generators in the United States

is not competitive with foreign production.

In addition to these factors, recent decisions by U.S. manufacturers provide compelling evidence that there will be no future U.S. production of nuclear steam generators. If the nuclear steam generator market were viable, an interested party

could have purchased a licensed, operating facility at the time the Westinghouse

plant closed. No buyers expressed any interest in purchasing the Westinghouse facility for its nuclear steam generator production capacity. Westinghouse has dismantled the facility and is offering to sell the property for other industrial uses.

The Tariff is an Unnecessary Burden on the Consumer

U.S. production capability has evaporated despite the imposition of the duty. The

cost of the duty incurred by the utility owning a nuclear power facility is simply

passed directly on to the ratepayer. The ratepayer derives no benefit through the

payment of this duty. Simply put, the 5.2% duty imposed on these steam generators

is an unnecessary burden on domestic residential, industrial, and commercial users.

H.R. 3875 has Strong Congressional Support

Representative Mac Collins (GA) introduced H.R. 3875 in the House of Representatives to suspend for five years the tariff imposed by Section 8402.11 of the 2000

U.S. Harmonized Tariff Schedule (USHTS) on the importation of steam generators

used in nuclear power facilities. The legislation was introduced with five original cosponsors: Representatives Tanner (TN), J.D. Hayworth (AZ), J. Lewis (GA), N. Johnson (CT), and Thurman (FL). Following introduction of the legislation, Representatives Matsui (CA), Watkins (OK) and Barr (GA) cosponsored the bill.

In the Senate, Senator Frank Murkowski (AK) introduced S. 2158 to eliminate the

duty on the importation of steam generators for use in nuclear power facilities. Senator Murkowski introduced his legislation with two original cosponsors, Senators

Grams (MN) and Thompson (TN). Senators Coverdell (GA), Kyl (AZ), Mack (FL) and

Nickles (OK) have also cosponsored the bill.

The proponents support both H.R. 3875 and S. 2158. While the proponents prefer

outright repeal of the duty, they will support a five-year suspension effective January 1, 2000. A lengthy suspension is in order considering how unlikely it is that U.S.

production might spring up for all the reasons stated.

In short, legislation to suspend or eliminate the duty on nuclear steam generators

has strong bipartisan and bicameral support, particularly from key members of the

House Ways and Means Committee and Senate Finance Committee.

Revenue Effect

We estimate that the revenue loss to the federal Treasury will be less than $9

million over five years. We arrive at this figure by applying the tariff rate of 5.2%

to the average price of a nuclear steam generator ($12.6 million) and multiplying

the result by the number of nuclear steam generators (18) ordered and expected to

be imported between 2000 and 2005.

Duties paid by U.S. taxpayers are deductible expenses for purposes of computing

income tax liability. Therefore, increased federal revenue derived from duties paid

by U.S. taxpayers is partially offset by lower income tax payments to the federal

government. It is our understanding the Congressional Budget Office’s scoring conventions assume that the income tax offset lowers the revenue loss of a duty suspension or repeal by 25%. The enclosed letter to ITC explains in further detail how we

arrived at our revenue estimate and includes discussion of the difference between

replacement cost versus dutiable cost.

While the $9,000,000.00 ($9 million) revenue loss may be more than the revenue

loss of the typical duty suspension measure your Subcommittee considers, it is insignificant in an annual federal budget of $1,800,000,000,000.00 ($1.8 trillion).

Conclusion

Because there are no domestic manufacturing facilities, the tariff neither protects

a domestic industry nor promotes the development of new domestic capacity. Indeed,

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despite the artificial competitive advantage of the tariff, the last two remaining domestic manufacturers abandoned the market. McDermott International moved its

Babcock & Wilcox steam generator production facility to a foreign country. Westinghouse, unable to find a purchaser for it steam generator production facility, simply

surrendered its ASME certification required by the U.S. Nuclear Regulatory Commission, shut down its plant, and is converting the facilities to other uses.

Other than an insignificant amount of revenue derived from this hidden tax, the

tariff on nuclear steam generators provides no apparent public benefit. Because of

the limited market for these specialized generators and the many difficult barriers

to entry into production, it is highly unlikely that there will be any domestic production capability in the future.

H.R. 3875 represents sound trade policy. On behalf of the organizations for which

we are writing, we strongly urge you to include this proposal in the duty suspension

legislation that the Committee will consider this year.

If we can provide any additional information, please do not hesitate to call us at

202.414.1533.

Sincerely,

KIRT C. JOHNSON, AND

Patrick J. Raffaniello

Attachment 1—Proponents

The Nuclear Energy Institute is a trade association organized to shape public policy in a manner

that ensures the beneficial use of nuclear energy and related technologies in the United States and

around the world. Formed in 1953, the Institute today has nearly 300 members engaged in the peaceful use of nuclear technologies.

Alliant Energy is a major energy-services corporation headquartered in Madison, Wisconsin. It is a

utility holding company employing more than 6000 employees, providing electric, natural gas, water

and steam energy to more than 1.3 million customers in service territories in Iowa, Wisconsin, Illinois

and Minnesota. Alliant Energy is putting its energy services expertise to use in developing markets

internationally. Roughly 12% of the energy is generates as a utility comes from nuclear sources, and

it purchases additional nuclear-generated electricity for its customers on the wholesale market.

Northern States Power Company is an investor-owned utility serving the Upper Mid-West.

Headquartered in Minneapolis, Minnesota, NSP serves electricity consumers in Minnesota, Michigan,

North Dakota, South Dakota, and Wisconsin.

Pinnacle West Energy Corporation (PWEC) is an affiliate of Arizona Public Service Company (APS)

which is an investor-owned utility serving the Southwest. Headquartered in Phoenix, Arizona, APS

is the majority owner and operator of the Palo Verde Nuclear Generating Station that provides electricity to consumers in Arizona, California, Nevada, New Mexico, and Texas. As a result of deregulation in the State of Arizona, APS’ ownership interest and operating authority for Palo Verde will be

transferred to PWEC.

The Southern Companies is an investor-owned utility serving the Southeast. Headquartered in Atlanta, Georgia, The Southern Companies serves electricity consumers in Alabama, Florida, Georgia,

and Mississippi.

Westinghouse Electric Company is engineering and technology company headquartered in Pittsburgh, Pennsylvania.

WPS Resources Corporation is a holding company headquartered in Green Bay, Wisconsin providing

products and services in both regulated and non-regulated energy markets. Through its subsidiaries,

Wisconsin Public Service Corporation and Upper Peninsula Power Company, WPS serves electric

Mr. Dennis Fravel

International Trade Analyst

U.S. International Trade Commission

consumers in Michigan and Wisconsin.

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500 E Street, SW

Washington, DC 20002

Re: H.R. 3875: Legislation to suspend temporarily the duty on certain steam and

other vapor-generating boiler used in nuclear facilities.

S. 2158: Legislation to amend the Harmonized Tariff Schedule of the United

States to eliminate the duty on certain steam or other vapor-generating boilers used

in nuclear facilities.

Dear Mr. Fravel:

Please accept these comments in support of H.R. 3875 and S. 2158. These comments and the enclosed report on the U.S. Market for Nuclear Steam Generators are

submitted on behalf of several domestic proponents of H.R. 3875 and S. 2158. These

comments are filed on behalf the following organizations and are in lieu of individual comments from each organization.

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Nuclear Energy Institute

Alliant Energy Corporation

Northern States Power Company

Pinnacle West Energy Corporation

The Southern Companies

Westinghouse Electric Company

WPS Resources Corporation

A description of each organization is provided as Attachment 1 to this letter.

The proponents strongly urge the Administration to work with Congress to repeal

the tariff on steam generators imported for use in nuclear power facilities. The 5.2%

duty imposed by 8402.11 of the 2000 U.S. Harmonized Tariff Schedule (USHTS) is

a burden on domestic residential, industrial, and commercial users of electricity.

There is no current domestic production of these specialized steam generators. Further, there is no domestic capability to initiate production of nuclear steam generators and no feasible likelihood that domestic production capability will be developed.

H.R. 3875

Representative Collins (GA) introduced H.R. 3875 in the House of Representatives

to suspend for five years the tariff imposed by 2000 USHTS 8402.11 on the importation of steam generators for use in nuclear power facilities.

The legislation was introduced with five original cosponsors: Representatives Tanner (TN), J.D. Hayworth (AZ), J. Lewis (GA), N. Johnson (CT), and Thurman (FL).

Following introduction of the bill, Representatives Matsui (CA) and Barr (GA) cosponsored the bill.

S. 2158

Senator Murkowski (AK) introduced S. 2158 to eliminate the duty on the importation steam generators for use in nuclear power facilities. Senator Murkowski introduced his legislation with two original cosponsors, Senators Grams (MN) and

Thompson (TN). Senators Coverdell (GA), Kyl (AZ), Mack (FL) and Nickles (OK)

have also cosponsored the bill.

Proponents Prefer Repeal (S. 2158)

The proponents support both S. 2168 and H.R. 3875. We urge Congress and the

Administration to repeal the duty. Other than a limited amount of revenue derived

from this hidden tax, the tariff on nuclear steam generators provides no apparent

public benefit. Because of the limited market for these specialized generators and

the many difficult barriers to entry into production, it is highly unlikely that there

will be any domestic production capability in the future.

Locations Where Proponents Will Use the Product

Of the 104 operational nuclear power plants in the United States in 1998, 70 have

pressurized water reactors. These plants are owned by 34 different utilities and are

located in 27 different States. There are committed orders for 30 nuclear steam generators. The following table identifies the country of origin, estimated year of delivery, and power plant where these steam generators will be installed.

COMMITTED ORDERS FOR STEAM GENERATORS BY U.S. POWER PLANTS

Power Plant Name Country of Manufacture Year of Delivery Power Plant State Number of Units

Purchased

Ano 2 .......................................................................... Spain 2000 Arkansas 2

Farley 1 ...................................................................... Spain 2000 Alabama 3

Kewaunee ................................................................... Italy 2000 Wisconsin 2

Shearon Harris ........................................................... 2000 North Carolina 2

South Texas Project 1 ................................................ USA 2000 Texas 4

Cook 1 ........................................................................ Canada 2001 Michigan 4

Farley 2 ...................................................................... Spain 2001 Alabama 3

Calvert Cliffs 1 .......................................................... Canada 2002 Maryland 2

Calvert Cliffs 2 .......................................................... Canada 2003 Maryland 2

Palo Verde 2 ............................................................... Italy 2002 Arizona 2

Attachment 2 lists the U.S. plants with pressurized water reactors in 1998 and

their owners. Attachment 3 depicts their locations.

Description of the Product and Its Uses

Nuclear steam generators are essential components in the process of turning nuclear energy into electricity in a pressurized water reactor. Water is pumped

through the reactor’s core and is heated by the fission process. This water is maintained under pressure to prevent it from boiling and turning into steam. The pressurized water is passed through the tubing within the nuclear steam generator, a

117

large heat exchanger that transfers heat from a primary coolant system (tube side)

to a secondary coolant system (shell side). The primary coolant system contains

pressurized water; the secondary coolant system contains water that is turned into

steam by the heat exchanged. The steam drives the power plant turbines, creating

electricity.

Attachment 4 shows how nuclear steam generators fit into the generation of electricity. Attachment 5 diagrams the reactor coolant system arrangement.

Specialized use: Nuclear steam generators are specialized pieces of equipment

that weigh 500 to 900 tons each. They are used only in pressurized water reactors.

They are not used in boiling water reactors, non-nuclear power plants, or other industrial facilities.

The design of a nuclear steam generator is unlike the design of a fossil fuel steam

generator. The equipment required to operate the two types of generators is different. The material for the tubing in the nuclear steam generator is different from

the tubing material in a non-nuclear plant. The nuclear steam generator tubing

must be compatible with the unique primary and secondary side water chemistry

conditions to minimize corrosion degradation. Historically the transfer tubes in nuclear steam generators used in the United States were made of alloy 600, a nickel/

chrome/iron alloy. Newer steam generators primarily use alloy 690, which is more

resistant to corrosion.

Countries of Origin of the Product

Only six companies produce nuclear steam generators. All of them are outside the

United States. The companies are listed below. • Ensa (Spain) • Ansaldo (Italy) • Babcock & Wilcox (Canada) • Framatome (France) • HANJUNG (Korea) • Mitsubishi (Japan).

Revenue Effect

We estimate the revenue loss to federal Treasury will be less than $9 million over

five years. We arrive at this figure by applying the tariff rate of 5.2% to the average

price of a nuclear steam generator ($12.6 million) and multiplying the result by the

number of committed nuclear steam generators (18) ordered and expected to be imported between 2000 and 2005.

Duties paid by U.S. taxpayers are deductible expenses for purposes of computing

income tax liability. Therefore, increased federal revenue derived from duties paid

by U.S. taxpayers is partially offset by lower income tax payments to the federal

government. It is our understanding the Congressional Budget Office’s scoring conventions assume that the income tax offset lowers the revenue loss of a duty suspension or repeal by 25%.

Replacement cost and price: The average replacement cost of a nuclear steam

generator during 1994–1997 (the latest available year of full price data) was $38.4

million. Replacement cost includes many costs in addition to the price or fabrication

cost of the steam generator itself. Replacement cost may include licensing, engineering, installation, storage, and transport, as well as the price of the steam generator.

Recently, the price of a nuclear steam generator has been approximately 33% of

total replacement cost, with some variation.

Tariff to the United States: A buyer may be required to pay an import duty

to the United States on nuclear steam generators that are manufactured abroad. In

general, the tariff rate for 2000 is 5.2%, although imports from certain countries are

exempt by treaties (including Canada, by virtue of the North American Free Trade

Agreement).

Duty is computed by reference to the price of the steam generator and not to the

replacement cost discussed above (which includes substantial, domestically incurred

costs such as transportation, installation, and engineering). A 5.2% duty on the

price or fabrication cost of a nuclear steam generator ($12.67 million, or 33% of average total replacement cost) is about $660,000. Of the 30 steam generators under

committed orders and listed in Attachment 6, all will be imported and, excepting

eight Canadian-made steam generators, 18 apparently will be subject to the 5.2%

duty.

No Current U.S. Production of the Product

Nuclear steam generators are no longer manufactured in the United States. When

nuclear plants were being constructed in the United States, the original steam generators were being manufactured by the reactor suppliers. Combustion Engineering

118

manufactured in Chattanooga, Tennessee; Westinghouse, in Pensacola, Florida; and

Babcock & Wilcox in Barberton, Ohio. Combustion Engineering no longer uses its

Chattanooga facility for that purpose and has disposed of the manufacturing equipment. Babcock & Wilcox moved its manufacturing operation to Canada.

Westinghouse was the last company to manufacture this product in the United

States. Its plant in Pensacola, Florida was closed after shipping its last order in November 1999 to the South Texas Project. The plant equipment has already been sold

and moved, including highly specialized equipment purchased by competitors. The

plant structure is for sale and could be converted to many uses other than its former

use.

The Pensacola plant had been used to make power generation and electric generation systems in addition to nuclear steam generators. Westinghouse had planned to

close the plant when it sold its power generation division to Siemens AG and its

nuclear division to BNFL LTD. Siemens transferred activities relating to power generation out of the plant. Westinghouse/BNFL found the nuclear steam generator

business insufficient to sustain the plant and transferred its production overseas to

Ensa.

Future U.S. Production is Unlikely

U.S. market entry—the delivery of a new nuclear steam generator that has been

produced in the United States—seems highly unlikely during the next five years.

There are several factors:

• The time required to select, design, and construct a manufacturing facility. Preferred sites are large (a facility of about 200,000 square feet is needed to house production and output prior to shipping) and close to water (steam generators, at 500

to 900 tons, are too large to transport by rail and are transported by water). The

estimated cost of a new manufacturing facility is $60 million to $80 million.

• The time required for regulatory authorizations. For example, the Nuclear Regulatory Commission requires manufacturers of nuclear power plant components to

be certified (the N-Certificate of Authorization) by the American Society of Mechanical Engineers before a plant may operate in the United States. To acquire a new

certification takes about one year.

• The time required to produce a nuclear steam generator. Even after a manufacturing facility is ready to produce, the construction of all component subassemblies

and final fabrication would take 32 to 48 months in the typical case.

• The evident assessment of former U.S. suppliers that production of nuclear

steam generators in the United States is not competitive with production elsewhere.

Attachment 6 illustrates the timetable for the 6-year nuclear steam generator replacement project at Unit 2 of the Palo Verde Nuclear Generating Station located

60 miles west of Phoenix, Arizona.

Conclusion

The proponents conclude by again urging the Administration to recommend that

Congress repeal the tariff on nuclear steam generators. If we can provide any additional information, please do not hesitate to call us.

Sincerely,

PATRICK J. RAFFANIELLO AND

Kirt C. Johnson

Attachment 1—Proponents

Alliant Energy is a major energy-services corporation headquartered in Madison,

Wisconsin. It is a utility holding company employing more than 6000 employees,

providing electric, natural gas, water and steam energy to more than 1.3 million

customers in service territories in Iowa, Wisconsin, Illinois and Minnesota. Alliant

Energy is putting its energy services expertise to use in developing markets internationally. Roughly 12% of the energy is generates as a utility comes from nuclear

sources, and it purchases additional nuclear-generated electricity for its customers

on the wholesale market.

Northern States Power Company is an investor-owned utility serving the

Upper Mid-West. Headquartered in Minneapolis, Minnesota, NSP serves electricity

consumers in Minnesota, Michigan, North Dakota, South Dakota, and Wisconsin.

Pinnacle West Energy Corporation (PWEC) is an affiliate of Arizona Public

Service Company (APS) which is an investor-owned utility serving the Southwest.

Headquartered in Phoenix, Arizona, APS is the majority owner and operator of the

Palo Verde Nuclear Generating Station that provides electricity to consumers in Arizona, California, Nevada, New Mexico, and Texas. As a result of deregulation in the

119

State of Arizona, APS’ ownership interest and operating authority for Palo Verde

will be transferred to PWEC.

The Southern Companies is an investor-owned utility serving the Southeast.

Headquartered in Atlanta, Georgia, The Southern Companies serve electricity consumers in Alabama, Florida, Georgia, and Mississippi.

Westinghouse Electric Company is engineering and technology company

headquartered in Pittsburgh, Pennsylvania.

WPS Resources Corporation is a holding company headquartered in Green

Bay, Wisconsin providing products and services in both regulated and non-regulated

energy markets. Through its subsidiaries, Wisconsin Public Service Corporation and Upper Peninsula Power Company, WPS serves electric consumers in

Michigan and Wisconsin.

Attachment 2—U.S. Pressurized Water Reactor Power Plants

In 1998

Utility Owner Power Plant Location

Alabama Power .................................................. Farley 1

Farley 2

Alabama

Alabama

Arizona PSC ....................................................... Palo Verde 1

Palo Verde 2

Palo Verde 3

Arizona

Arizona

Arizona

Baltimore G&E .................................................. Calvert Cliffs 1

Calvert Cliffs 2

Maryland

Maryland

Carolina Power .................................................. Robinson

Shearon Harris

S. Carolina

N. Carolina

Commonwealth Edison ..................................... Braidwood 1

Braidwood 2

Byron 1

Byron 2

Illinois

Illinois

Illinois

Illinois

Consolidated Edison .......................................... Indian Point 2 New York

Consumers Energy ............................................ Palisades Michigan

Duke Power ........................................................ Catawba 1

Catawba 2

McGuire 1

McGuire 2

Oconee 1

Oconee 2

Oconee 3

Piedmont Carolinas

Piedmont Carolinas

Piedmont Carolinas

Piedmont Carolinas

S. Carolina

S. Carolina

S. Carolina

Duquense ........................................................... Beaver Valley 1

Beaver Valley 2

Pennsylvania

Pennsylvania

Entergy ............................................................... Ano 2

Ano 1

Waterford 3

Arkansas

Arkansas

Louisiana

Florida P&L ....................................................... St Lucie 1

St Lucie 2

Turkey Point 3

Turkey Point 4

Florida

Florida

Florida

Florida

Florida Power Corp ........................................... Crystal River 3 Florida

General Public Utilities .................................... TMI 1 Pennsylvania

Georgia Power Co. ............................................. Vogtle 1

Vogtle 2

Georgia

Georgia

Houston Light and Power ................................. South Texas Proj 1

South Texas Proj 2

Texas

Texas

Indiana Michigan Power Company .................. Cook 1

Cook 2

Michigan

Michigan

Maine Yankee AP .............................................. Maine Yankee Maine

New York Power Authority .............................. Indian Point 3 New York

Northeast Utilities ............................................ Millstone 2

Millstone 3

Connecticut

Connecticut

Northern States ................................................. Prairie Island 1

Prairie Island 2

Minnesota

Minnesota

Omaha PPD ....................................................... Fort Calhoun Nebraska

PG&E ................................................................. Diablo Canyon 1

Diablo Canyon 2

California

California

Public Service Electric ...................................... Salem 1

Salem 2

New Jersey

New Jersey

120

Attachment 2—U.S. Pressurized Water Reactor Power Plants—Continued

In 1998

Utility Owner Power Plant Location

Public Service of New Hampshire .................... Seabrook New Hampshire

Rochester G&E .................................................. Ginna New York

South Carolina E&G ......................................... Summer S. Carolina

Southern California Edison .............................. San Onofre 2

San Onofre 3

California

California

Texas Utilities Electric ..................................... Comanche Peak 1

Comanche Peak 2

Texas

Texas

Toledo Edison ..................................................... Davis Besse Ohio

Tennessee Valley Authority .............................. Sequoyah 1

Sequoyah 2

Watts Bar 1

Tennessee

Tennessee

Tennessee

Union Electric .................................................... Callaway Missouri

Virginia Power ................................................... North Anna 1

North Anna 2

Surry 1

Surry 2

Virginia

Virginia

Virginia

Virginia

Wisconsin Electric Power .................................. Point Beach 1

Point Beach 2

Wisconsin

Wisconsin

Wisconsin Public Service .................................. Kewaunee Wisconsin

Wolf Creek NOC ................................................ Wolf Creek Kansas

121

1 EPRI Steam Generator Reference Book, pages 2.2–2.3

2 EPRI Steam Generator Reference Book, Appendix B—Plant Design Characteristics

3 EPRI Steam Generator Progress Report, Revision 14, Table 2–1; PwC calculations

4 EPRI Steam Generator Progress Report, Revision 14, Table 9–1

5 EPRI Steam Generator Progress Report, Revision 14, Table 9–2, and supplemental information6 In conversations with industry experts

7 EPRI Steam Generator Progress Report, Revision 14, Table 9–1

8 U.S. Harmonized Tariff Code Schedule, Chapter 84, Year 2000 revision

9 EPRI Steam Generator Progress Report, Revision 14, Table 9–2; In conversation with industry experts

The U.S. Market for Nuclear Steam Generators:

f

SUMMARY

Product

Nuclear steam generators are essential components in the process of turning nuclear energy into electricity in a pressurized water reactor. They enable the transfer

of heat from pressurized water that has been in the nuclear core to water that has

not, thus isolating the steam supply to the power plant turbines from radioactivity.1

The generators are used only in pressurized water reactors. They are not used in

boiling water reactors or non-nuclear power plants because those other types of

plants require steam generators that differ in design and materials. Of the 104 operational nuclear power plants in the United States in 1998, 70 are pressurized water

reactors. These plants are located in 27 different States.2

Market Demand

Replacement demand.—The market for new nuclear steam generators in the

United States is circumscribed and static. There have been no new orders for nuclear power plants in the United States since the late 1970s, and no additions are

expected in the foreseable future. Therefore, the demand for nuclear steam generators is, and will be, confined to replacing degraded nuclear steam generators at existing plants. The average age of a nuclear steam generator in the United States

at the time of replacement has been about 15 years.3

Of the 70 U.S. nuclear facilities with pressurized water reactors in 1998, 48 facilities (69 percent) still operate with their original steam generators and 22 facilities

(31 percent) have already replaced the generators.4 However, 11 of the plants that

use original nuclear steam generators have scheduled replacement of 30 generators

during 2000–2003 (each plant uses two to four steam generators). These plants are

located in Alabama, Arizona, Arkansas, Maryland, Michigan, North Carolina, Tennessee, Texas, and Wisconsin.5

Replacement cost and price.—The average replacement cost of a nuclear steam

generator from 1994 through 1997 was $38.4 million. Replacement cost includes

many costs in addition to the price (fabrication cost) of the steam generator itself.

As reported to EPRI, replacement cost may include licensing, engineering, installation, storage, and transport. Recently, the price of the steam generator has been approximately 33 percent of total replacement cost, with some variation above and

below.6

When nuclear steam generators are replaced at a plant, the utility usually purchases between two and four steam generators, one for each steam generation loop.

Thus, the total cost of replacing nuclear steam generators averaged between $76

million and $152 million per plant during 1994–97.7 Replacement cost has increased

very little in nominal dollars through the years, with some ups and downs in between.

The buyer may be required to pay an import duty to the United States on generators that are manufactured abroad. The applicable year 2000 Harmonized Tariff Organization schedule subheading for nuclear replacement steam generators is

8402.11.00, with an associated duty rate of 5.2 percent. Imports from Canada are

exempt from this tariff under the North American Free Trade Agreement.8 It appears that 18 of the 30 nuclear steam generators that are scheduled for replacement

during 2000–2003 will be dutiable and that the other eight will come from Canada.9

Duty is computed by reference to the price of the steam generator and not to the

replacement cost discussed above (which includes substantial, domestically incurred

costs such as installation and engineering). A 5.2-percent duty on the price of a nuVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00133 Fmt 6633 Sfmt 6602 K:\CPRINT\66010 WAYS1 PsN: WAYS1
122

10 In conversation with industry experts 11 In conversation with industry experts 12 In conversation with industry experts 13 In conversation with government experts 14 In conversation with industry experts 15 EPRI Steam Generator Reference Book, pages 2.1–2.4 16 In conversation with industry experts 17 In conversation with industry experts

clear steam generator ($12.67 million, or 33 percent of average total replacement

cost) is about $660,000.

Market Supply

No current U.S. production—Six companies are currently producing nuclear steam

generators outside the United States. They are Ensa (Spain), Ansaldo (Italy), Babcock and Wilcox (Canada), Framatome (France), Korea Heavy Industries & Construction Company (HANJUNG) (Korea), and Mitsubishi (Japan).10

Nuclear steam generators are no longer manufactured in the United States. Westinghouse was the last company to manufacture this product in the United States.

Upon closing its plant in Pensacola, Florida after shipping its last order in November 1999, Westinghouse surrendered its American Society of Mechanical Engineers

certification which the Nuclear Regulatory Commission requires of manufacturers of

nuclear steam generators. The plant equipment has already been sold and the plant

structure is for sale.11

U.S. market entry highly unlikely in next five years—Production and delivery of

nuclear steam generators made in the United States is highly unlikely for at least

the next five years.12 In addition to the evident conclusion of former U.S. suppliers

that production overseas is more competitive and the limited economic incentives for

expanding production in a country where domestic demand is confined to replacing

the existing stock of generators, there are time factors to consider as well. They include time to— • Select, design, and construct a manufacturing facility. Preferred sites are large, close to water, and cost between $60 million and $80 million to construct.13

• Obtain necessary authorizations. For example, the Nuclear Regulatory Commission requires manufacturers of nuclear power plant components to be certified by

the American Society of Mechanical Engineers.14

• Produce a generator. If a new nuclear steam generator were ordered today, it

would take, in the typical case, about 32 to 48 months to complete.15

About This Report

This report was prepared by the National Economic Consulting group of

PricewaterhouseCoopers. Information for the report was obtained from publications

of the Electric Power Research Institute (EPRI), discussions with government and

industry experts, and other sources, as recorded in footnotes. Exhibits that elaborate

or depict certain points made in the report are collected at the back, beginning at

page 12.

The U.S. Market for Nuclear Steam Generators:

PRODUCT

Function

Nuclear steam generators are essential components in the process of turning nuclear energy into electricity in a pressurized water reactor. Water is pumped

through the reactor’s core and is heated by the fission process. This water is maintained under pressure to prevent it from boiling and turning into steam. The pressurized water is passed through the tubing within the nuclear steam generator, a

large heat exchanger that transfers heat from a primary coolant system (tube side)

to a secondary coolant system (shell side). The primary coolant system contains

pressurized water; the secondary coolant system contains water that is turned into

steam by the heat exchanged. The steam powers the power plant turbines, creating

electricity.16

Exhibit 1 shows how nuclear steam generators fit into the generation of electricity.

Exhibit 2 diagrams the reactor coolant system arrangement.

Used Only in Pressurized Water Reactors

Specialized use.—Nuclear steam generators are specialized pieces of equipment

that weigh 500 to 900 tons each.17 They are used only in pressurized water reactors.

123

18 In conversation with industry experts; EPRI Steam Generator Reference Book, pages 2.3–

2.419 EPRI Steam Generator Reference Book, pages 2.4–2.5 20 EPRI Steam Generator Reference Book, Appendix B—Plant Design Characteristics 21 EIA, 1996 Nuclear Capacity Status and Projections, DOE Document 22 EPRI Steam Generator Reference Book, pages 1.6–1.7 23 In conversation with industry experts 24Lockyer Elizabeth M., ‘‘Laser Welding Technology to Put Kewaunee River Plant Back on

Line,’’ Technology News, December 1996. 25 NEI, Long Term Nuclear Power Maintenance, September 1999 Revision 26 EPRI Steam Generator Progress Report, Revision 14, Table 2–1, PwC 27 EPRI Steam Generator Progress Report, Revision 14, Table 9–1 28 EPRI Steam Generator Progress Report, Revision 14, Table 9–1 29 EPRI Steam Generator Progress Report, Revision 14, Table 9–2, and conversations with industry experts

They are not used in boiling water reactors, non-nuclear power plants, or other industrial facilities.18

The design of a nuclear steam generator is unlike the design of a fossil fuel steam

generator. The equipment required to operate the two types of generators is different. The material for the tubing in the nuclear steam generator is different from

the tubing material in a non-nuclear plant. The nuclear steam generator tubing

must be compatible with the unique primary and secondary side water chemistry

conditions to minimize corrosion degradation. Historically the transfer tubes in nuclear steam generators used in the United States were made of alloy 600, a nickel/

chrome/iron alloy. Newer steam generators primarily use alloy 690, which is more

resistant to corrosion.19

Number in use—Of the 104 operational nuclear power plants in the United States

in 1998, 70 have pressurized water reactors. These plants are owned by 34 different

utilities and are located in 27 different States.20

Exhibit 3 lists the U.S. plants with pressurized water reactors in 1998 and their owners. Exhibit 4 depicts their locations.

The U.S. Market for Nuclear Steam Generators:

MARKET DEMAND

Replacement Demand

No demand from new power plant construction—No new nuclear power plants are

currently planned for construction in the United States.21 However, existing plants

will eventually replace their deteriorating nuclear steam generators.22 Thus, the

market for nuclear steam generators in the United States is limited to replacements

at existing plants.

Repairs—The tubes in a nuclear steam generator (approximately 4,000 to 12,000,

depending on size 23) are susceptible to denting, fatigue, wall thinning, corrosion,

and other degradation mechanisms requiring repair. A sleeve can be inserted into

the tube and welded to bridge the problem area, allowing continued use of the

tube.24 Alternatively, the tube can be plugged with a corrosion resistant alloy, effectively removing it from service.25

Replacement—As more tubes are plugged or sleeved performance is diminished

and it may become necessary to replace the steam generator with a new, more corrosion resistant one. The average age of a nuclear steam generator in the United

States at the time of replacement has been 14.6 years.26

Of the 70 operational nuclear facilities in the United States in 1998 with pressurized water reactors, 22 (or 31 percent) have replaced their original generators. The

replacements are concentrated in the older plants. Nearly half of the plants that are

now 21 years or older have replaced their nuclear steam generators, while none that

are now 10 years or younger have replaced them.27

The majority of pressurized water reactors (69 percent) still operate with their

original nuclear steam generators.28 However, 11 of that group have scheduled replacement of 30 generators during 2000–2003.29 Each plant uses two to four steam

generators.

Exhibit 5 gives a frequency distribution of replacements of nuclear steam generators, keyed to the age of the nuclear facility.

Exhibit 6 lists the committed orders for steam generators by U.S. power plants

and includes the country of manufacture, year of delivery, power plant site, and

number of steam generators.

Price

124

30 In conversation with industry experts 31 EPRI Steam Generator Progress Report, Revision 14, Table 9–1 32 U.S. Harmonized Tariff Code Schedule, Chapter 84, Year 2000 revision 33 In conversation with industry experts; EPRI Steam Generator Progress Report, Revision 14

Table 9–2; U.S. Harmonized Tariff Code Schedule, Chapter 84, Year 2000 revision 34 In conversation with industry experts 35 EPRI Steam Generator Progress Report, Revision 14, Table 2–1 36 In conversation with industry experts 37 In conversation with industry experts

Replacement cost and price.—The average replacement cost of a nuclear steam

generator during 1994–1997 (the latest year of full price data, as collected by Electric Power Research Institute) was $38.4 million. Replacement cost includes many

costs in addition to the price or fabrication cost of the steam generator itself. As reported to EPRI, replacement cost may include licensing, engineering, installation,

storage, and transport, as well as the price of the steam generator. Recently, the

price of a nuclear steam generator has been approximately 33 percent of total replacement cost, with some variation.30

The average replacement cost of a nuclear steam generator has increased only slightly in nominal value between 1980 ($31.3 million) and 1997 ($35.5 million),

with some larger ups and downs in between. Data for part of 1998 suggest that the

1998 average nominal replacement cost might be above the trend line.31 As prices

for capital equipment have generally increased by more than 60 percent since 1980,

the replacement cost of nuclear steam generators in 1980 dollars has declined greatly.

Exhibit 7 charts average replacement cost of one nuclear steam generator, in current dollars, from 1980 through 1997.

Tariff to United States—A buyer may be required to pay an import duty to the

United States on nuclear steam generators that are manufactured abroad. In general, the tariff rate for 2000 is 5.2 percent, although imports from certain countries

are exempt by treaties (including Canada, by virtue of the North American Free

Trade Agreement).32

Duty is computed by reference to the price of the steam generator and not to the

replacement cost discussed above (which includes substantial, domestically incurred

costs such as installation and engineering). A 5.2-percent duty on the price or fabrication cost of a nuclear steam generator ($12.67 million, or 33 percent of average

total replacement cost) is about $660,000. Of the 30 steam generators under committed orders and listed in Exhibit 6, all but 4 will be imported and, excepting

eight Canadian-made steam generators, 18 apparently will be subject to the 5.2-percent duty.33

Fee to designer—Each pressurized water reactor power plant has steam generators that were designed specifically for it. When a utility decides to replace the nuclear steam generators, the replacements must match the original design specifications.34

The designs used at the 70 pressurized water reactor power plants in the United

States belong to three companies: Westinghouse, ABB Combustion Engineering, and

Babcock & Wilcox.35

Because a manufacturer has licenses only for certain designs, a customer may

have to pay a design royalty fee. For example, the Ansaldo plant in Italy is licensed

to build ABB CE System 80 model steam generators but not Babcock & Wilcox models.36 A utility buying a Babcock & Wilcox model may have to pay a design royalty

to Babcock & Wilcox for construction to occur at Ansaldo.

The U.S. Market for Nuclear Steam Generators:

MARKET SUPPLY

Overview of Production

A nuclear steam generator has over 18 subassemblies that need to be planned,

specified, and built according to certification standards of the American Society of

Mechanical Engineers (ASME). Paperwork documenting that the material usage, design plans, and construction facilities meet AMSE certification must be filed before

construction begins.37 The Nuclear Regulatory Commission also requires specific

quality assurance standards that are unique to the nuclear industry.

Assembly at a nuclear steam generator production plant can occur at the rate of

four to six items per year. However, the actual rate of output can be as low as two

items per year due to backlogs in acquiring components. For example, alloy 690 tubing, a key component in a nuclear steam generator, is produced in only three locations worldwide—Sumitomo (Japan), Valinox (France), and Sandvik (Sweden)—and

125

38 In conversation with industry experts 39 In conversation with industry experts 40 In conversation with industry experts 41Westinghouse Electric Company, ‘‘Steam Generators Shipped to Quinshan II Nuclear Station,’’ Press Release of 3/24/99 42 In conversation with industry experts 43 In conversation with industry experts 44 In conversation with industry experts 45 In conversation with industry experts 46 In conversation with industry experts 47 In conversation with government experts 48 In conversation with industry experts

lead times may be as much as eighteen months. Or again, integrally forged primary

channel head lead times may be in excess of 12 months.38

Accounting for all factors, the typical turnaround time from ordering a nuclear

steam generator to delivering it is about 32 to 48 months.39

Foreign Suppliers

Six companies produce nuclear steam generators outside the United States. They

are 40—

• Ensa (Spain)

• Ansaldo (Italy)

• Babcock & Wilcox (Canada)

• Framatome (France)

• HANJUNG (Korea)

• Mitsubishi (Japan).

In some cases, international consortia own these companies. For example, Ensa

is jointly owned by Westinghouse/BNFL and Equipe Nucleares S.A.41

No Current U.S. Production

Nuclear steam generators are no longer manufactured in the United States.42

When nuclear plants were being constructed in the United States, the original

steam generators were being manufactured by the reactor suppliers. Combustion

Engineering manufactured in Chattanooga, Tennessee; Westinghouse, in Pensacola,

Florida; and Babcock & Wilcox in Barberton, Ohio. Combustion Engineering no

longer uses its Chattanooga facility for that purpose and has disposed of the manufacturing equipment. Babcock & Wilcox moved its manufacturing operation to Canada.

Westinghouse was the last company to manufacture this product in the United

States.43 Its plant in Pensacola, Florida was closed after shipping its last order in

November 1999 to the South Texas Project. The plant equipment has already been

sold and moved, including highly specialized equipment purchased by competitors.

The plant structure is for sale and could be converted to many uses other than its

former use.44

The Pensacola plant had been used to make power generation and electric generation systems in addition to nuclear steam generators. Westinghouse had planned to

close the plant when it sold its power generation division to Siemens AG and its

nuclear division to BNFL LTD. Siemens transferred activities relating to power generation out of the plant. Westinghouse/BNFL found the nuclear steam generator

business insufficient to sustain the plant and transferred its production overseas to

Ensa.45

U.S. Market Entry Highly Unlikely

U.S. market entry—the delivery of a new nuclear steam generator that has been

produced in the United States—seems highly unlikely during the next five years.

There are several factors:

• The time required to select, design, and construct a manufacturing facility. Preferred sites are large (a facility of about 200,000 square feet is needed to house production and output prior to shipping) and close to water (steam generators, at 500

to 900 tons, are too large to transport by rail and are transported by water). The

estimated cost of a new manufacturing facility is $60 million to $80 million.46

• The time required for regulatory authorizations. For example, the Nuclear Regulatory Commission requires manufacturers of nuclear power plant components to

be certified (the N-Certificate of Authorization) by the American Society of Mechanical Engineers before a plant may operate in the United States.47 To acquire a new

certification takes about one year.48

126

49 In conversation with industry experts 50 In conversation with industry experts

• The time required to produce a nuclear steam generator. Even after a manufacturing facility is ready to produce, the construction of all component subassemblies

and final fabrication would take 32 to 48 months in the typical case.49

• The evident assessment of former U.S. suppliers that production of nuclear

steam generators in the United States is not competitive with production elsewhere.50

Exhibit 8 illustrates the timetable for the 6-year nuclear steam generator replacement project at Unit 2 of the Palo Verde Nuclear Generating Station located

60 miles west of Phoenix, Arizona.

127

Exhibit 3—U.S. Pressurized Water Reactor Power Plants

In 1998

Utility Owner Power Plant Location

Alabama Power .................................................. Farley 1

Farley 2

Alabama

Alabama

Arizona PSC ....................................................... Palo Verde 1

Palo Verde 2

Palo Verde 3

Arizona

Arizona

Arizona

Baltimore G&E .................................................. Calvert Cliffs 1

Calvert Cliffs 2

Maryland

Maryland

Carolina Power .................................................. Robinson

Shearon Harris

S. Carolina

N. Carolina

128

Exhibit 3—U.S. Pressurized Water Reactor Power Plants—Continued

In 1998

Utility Owner Power Plant Location

Commonwealth Edison ..................................... Braidwood 1

Braidwood 2

Byron 1

Byron 2

Illinois

Illinois

Illinois

Illinois

Consolidated Edison .......................................... Indian Point 2 New York

Consumers Energy ............................................ Palisades Michigan

Duke Power ........................................................ Catawba 1

Catawba 2

McGuire 1

McGuire 2

Pconee 1

Oconee 2

Oconee 3

Piedmont Carolinas

Piedmont Carolinas

Piedmont Carolinas

Piedmont Carolinas

S. Carolina

S. Carolina

S. Carolina

Duquense ........................................................... Beaver Valley 1

Beaver Valley 2

Pennsylvania

Pennsylvania

Entergy ............................................................... Ano 2

Ano 1

Waterford 3

Arkansas

Arkansas

Louisiana

Florida P&L ....................................................... St Lucie 1

St Lucie 2

Turkey Point 3

Turkey Point 4

Florida

Florida

Florida

Florida

Florida Power Corp Crystal River 3 Florida

General Public Utilities .................................... TMI 1 Pennsylvania

Georgia Power Co. ............................................. Vogtle 1

Vogtle 2

Georgia

Georgia

Houston Light and Power ................................. South Texas Proj 1

South Texas Proj 2

Texas

Texas

Indiana Michigan Power Company .................. Cook 1

Cook 2

Michigan

Michigan

Maine Yankee AP .............................................. Maine Yankee Maine

New York Power Authority .............................. Indian Point 3 New York

Northeast Utilities ............................................ Millstone 2

Millstone 3

Connecticut

Connecticut

Northern States ................................................. Prairie Island 1

Prairie Island 2

Minnesota

Minnesota

Omaha PPD ....................................................... Fort Calhoun Nebraska

PG&E ................................................................. Diablo Canyon 1

Diablo Canyon 2

California

California

Public Service Electric ...................................... Salem 1

Salem 2

New Jersey

New Jersey

Public Service of New Hampshire .................... Seabrook New Hampshire

Rochester G&E .................................................. Ginna New York

South Carolina E&G ......................................... Summer S. Carolina

Southern California Edison .............................. San Onofre 2

San Onofre 3

California

California

Texas Utilities Electric ..................................... Comanche Peak 1

Comanche Peak 2

Texas

Texas

Toledo Edison ..................................................... Davis Besse Ohio

Tennessee Valley Authority .............................. Sequoyah 1

Sequoyah 2

Watts Bar 1

Tennessee

Tennessee

Tennessee

Union Electric .................................................... Callaway Missouri

Virginia Power ................................................... North Anna 1

North Anna 2

Surry 1

Surry 2

Virginia

Virginia

Virginia

Virginia

Wisconsin Electric Power .................................. Point Beach 1

Point Beach 2

Wisconsin

Wisconsin

Wisconsin Public Service .................................. Kewaunee Wisconsin

129

Exhibit 3—U.S. Pressurized Water Reactor Power Plants—Continued

In 1998

Utility Owner Power Plant Location

Wolf Creek NOC ................................................ Wolf Creek Kansas

AAAAAAAAAASource: EPRI Steam Generator Progress Report Table 2–1; EPRI Steam Generator Reference

Book, Appendix B—Plant Design Characteristics

Note: Maine Yankee has since shut down.

Exhibit 5—Replacement of Nuclear Steam Generators

Age Category Number of Power Plants Number of Plants with Replaced

Steam Generators

Percentage with Replacements

5¥ 1 0 0.0

6 to 10 3 0 0.0

11 to 15 21 3 14.3

16–20 12 4 33.3

21–25 13 6 46.2

26∂ 20 9 45.0

Total 70 22 31.4

AAAASource: EPRI Steam Generator Progress Report, Tables 2–1 and 9–1

130

Exhibit 6—Committed Orders For Steam Generators by U.S. Power Plants

Power Plant Name Country of Manufacture

Year of Delivery Power Plant State

Number of

Generators

Purchased

Ano 2 Spain .................... 2000 Arkansas .............. 2

Farley 1 Spain .................... 2000 Alabama ............... 3

Kewaunee Italy ...................... 2000 Wisconsin.

Shearon Harris .......................... 2000 North Carolina .... 2

South Texas Project USA ...................... 2000 Texas .................... 4

Cook 1 Canada ................. 2001 Michigan .............. 4

Farley 2 Spain .................... 2001 Alabama ............... 3

Sequoyah 1 South Korea ......... 2002 Tennessee ............. 4

Palo Verde 2 Italy ...................... 2002 Arizona ................. 2

Calvert Cliffs 1 Canada ................. 2002 Maryland .............. 2

Calvert Cliffs 2 Canada ................. 2002 Maryland .............. 2

AAAASource: EPRI, Steam Generator Progress Report, Revision 14, and conversations with industry experts

Exhibit 7—Average Replacement Cost of a Nuclear Steam Generator

Note: Replacement cost includes the price of a steam generator (about 33 percent

of replacement cost) plus installation costs, engineering, licensing, and other costs

related to replacement.

Source: EPRI Steam Generator Progress Report, Table 9–1.

131

f

132

H.R. 3876

To suspend temporarily the duty on Baytron P.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R. 3876 A bill to suspend temporarily the duty on Baytron P

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in health

care and life sciences and chemicals. The company had 1999 sales of $8.9 billion and

employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Baytron P. Bayer’s Logistics Division,

with major import operations at Pittsburgh, Pennsylvania and Bayer warehousing

in Calumet City, IL as well as Bayer’s customers in Janesville, WI, Corpus Christi,

TX, Chicago, IL, and Tampa, FL would benefit from tariff suspension on Baytron

P. Baytron P is a very specialized aqueous dispersion of an environmentally friendly, conductive polymeric material occupying less than 1% of the electronics industry.

United States compounders seeking to reach new performance levels economically

will reap economic benefits from duty reduction of this product. Baytron P has an

advantage for the U.S. industry because of its unique electrostatic and anti-static

properties. This product is not produced in the United States, and is extremely helpful to the U.S. industry in competing with imported goods from the Asian market.

There are a wide variety of applications of Baytron P from coating glass to organic

light emitting diodes.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the tariff suspension for Baytron P, proposed in

H.R. 3876. Please do not hesitate to contact me at Tel: 412–777–5616 with any

questions. In the event that I am unavailable, Julie Van Egmond in our Washington

office (Tel.: 202–756–3773) or Karen L. Niedermeyer at our Pittsburgh location (Tel:

412–777–2058) could be of assistance.

Sincerely,

f

STEPHEN R. JOHNSEN

133

H.R. 3877

To suspend temporarily the duty on dimethyl dicarbonate.

f

BAYER CORPORATION, U.S.A.

PITTSBURGH, PA 15205–9741

May 1, 2000

Mr. A. L. Singleton

Chief of Staff

House Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Subject: H.R. 3877 A bill to suspend temporarily the duty on Dimethyl Dicarbonate

(DMDC)

Dear Mr. Singleton:

Bayer Corporation is a research-based company with major businesses in

healthcare, life sciences and chemicals. The company had 1999 sales of $8.9 billion

and employs more than 22,200 people throughout the United States and is

headquartered in Pittsburgh, Pennsylvania. Bayer Corporation is a member of the

worldwide Bayer Group, a $29 billion international life sciences, polymers and specialty chemicals group based in Leverkusen with 120,400 employees worldwide.

Bayer Corporation is a regular importer of Dimethyl Dicarbonate (DMDC). Bayer’s Industrial Chemicals Division, with major import operations in Pittsburgh,

Pennsylvania and Bayer customers in Petaluma, California would benefit from tariff

suspension on DMDC. After sufficient market growth, construction of a manufacturing unit in the United States is anticipated and depends on sufficient U.S. market growth. Duty reduction in the U.S. will also greatly assist U.S. manufacturers

in becoming more innovative and more competitive in certain parts of the beverage

industry.

Dimethyl Dicarbonate (DMDC) is an FDA regulated secondary food additive used

as a cold beverage sterilant highly effective in low dosages against a variety of

yeast, some mold fungi and bacteria in alcoholic wine, low alcohol and dealcoholized

wines, ready-to-drink tea, sport drinks and juice sparklers. A food additive petition

is underway with the FDA for registration of non-carbonated juice beverages containing up to and including 100% juice. This will enable the industry to address

spoilage of juices due to yeast contamination and is also effective against E. coli that

has had known occurrences within the market segment. This product is not produced in the United States, and is extremely helpful to the beverage industry because it is non-persistent. It does not affect the taste, bouquet or color of the beverage. DMDC even provides the user with the option to reduce or in some cases,

even eliminate the need for chemical preservatives. It has been shown to control

human pathogens like E.coli H0157, a common food spoiling bacteria. Bayer AG is

the only producer of this type of DMDC (Velcorin) with this unique balance of properties. It is highly desirable in the U.S. to avoid excessive filtration in the manufacturing process that negatively impacts the taste of wine. The fact that DMDC even

provides the user with the option to reduce or in some cases, even eliminate the

need for chemical preservatives and also eliminate important human pathogens will,

in the future, allow for use in other beverages like fruit juices and soft drinks to

prevent spoilage.

We hope this supplemental information is useful in the House Ways and Means

Committee deliberations regarding the tariff suspension for Dimethyl Dicarbonate,

proposed in H.R. 3877. Please do not hesitate to contact me at 412/777–2058 with

any questions. In the event that I am unavailable, Julie Van Egmond in our Washington office (Ph. 202–756–3773) or Stephen Johnsen at our Pittsburgh location (Ph.

412/777–5616) could be of assistance.

Sincerely,

f

KAREN L. NIEDERMEYER

134

H.R. 3930

To suspend temporarily the duty on KN001 (a hydrochloride).

NO COMMENTS SUBMITTED

f.

H.R. 3931

To suspend temporarily the duty on Methyl thioglycolate.

NO COMMENTS SUBMITTED

f.

H.R. 3932

To suspend temporarily the duty on KL540.

NO COMMENTS SUBMITTED

f.

H.R. 3933

To suspend temporarily the duty on DPC 083.

NO COMMENTS SUBMITTED

f.

H.R. 3934

To suspend temporarily the duty on DPC 961.

NO COMMENTS SUBMITTED

f.

H.R. 3935

To suspend temporarily the duty on Pro-Jet Magenta 364 Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3936

To suspend temporarily the duty on Pro-Jet Black 263 Stage.

NO COMMENTS SUBMITTED

f.

135

H.R. 3937

To supend temporarily the duty on Pigment Yellow 184.

see SunChemical Corporation under H.R. 3739

f

H.R. 3938

To suspend temporarily the duty on Pro-Jet Yellow 1 Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3939

To suspend temporarily the duty on Pigment Orange 73.

see SunChemical Corporation under H.R. 3739

f

H.R. 3940

To suspend temporarily the duty on Direct Black 19 Press Paste.

NO COMMENTS SUBMITTED

f.

H.R. 3941

To suspend temporarily the duty on Pro-Jet Black HSAQ Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3942

To suspend temporarily the duty on Pro-Jet Fast Black 286 Paste.

NO COMMENTS SUBMITTED

f.

H.R. 3943

To suspend temporarily the duty on Pro-Jet Yellow 1G Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3944

To suspend temporarily the duty on Pigment Red 255.

see SunChemical Corporation under H.R. 3739

136

1See also the Modern Plastics Encyclopedia, published by McGraw Hill as a supplement to

Modern Plastics.

f

H.R. 3945

To suspend temporarily the duty on Pro-Jet Cyan 1 Press Paste.

NO COMMENTS SUBMITTED

f.

H.R. 3946

To suspend temporarily the duty on Pro-Jet Black Alc Powder.

NO COMMENTS SUBMITTED

f.

H.R. 3947

To suspend temporarily the duty on Solvent Yellow 163.

f

HOGAN & HARTSON

WASHINGTON, DC 200004–1109

May 22, 2000

A.L. Singleton

Chief of Staff

House Ways and Means Committee

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 205155–6354

Re: Technical Corrections to U.S. Trade Laws and Miscellaneous Duty Suspension

Bill -Opposition to the Adoption of H.R. 3947

Dear Mr. Singleton:

On behalf of ColorChem International Corp. (‘‘ColorChem’’), we hereby request

that the Committee decline to adopt H.R. 3947. For the reasons articulated below,

adopting H.R. 3947 would severely and adversely impact ColorChem, the only remaining U.S. producer of Solvent Yellow 163.

As illustrated in the Colour Index International, a listing of chemical producers

published by the Society of Dyers and Colourists in conjunction with the American

Association of Textile Chemists and Colorists (‘‘AATCC’’), ColorChem is the sole remaining U.S. producer of Solvent Yellow 163.1 Solvent yellow 163 is a dyestuff that

is used to color engineering plastics, such as ABS, polycarbonate and acrylic.

Since 1997 ColorChem has become increasingly concerned that import surges soon

would overwhelm one of the few remaining U.S. producers of chemical dyes. In each

of the past three years, the U.S. market price for Solvent Yellow 163 has declined

by ten percent. This severe price deflation threatens ColorChem’s workforce, comprised primarily of highly trained U.S. chemical engineers/ technicians/ operators.

The immediate tariff elimination proposed in H.R. 3947 necessarily would lead to

further—perhaps devastating—price declines. This, in turn, would undoubtedly lead

to the loss of U.S. value-added jobs and have a detrimental impact on one of the

few remaining U.S. producers of solvent dyes.

A key factor that makes ColorChem—which represents the entirety of the U.S.

domestic Solvent Yellow 163 industry—so vulnerable to import surges and price declines is ColorChem’s cost of complying with U.S. environmental regulation, including the increased costs associated with the Clean Water Act. Without the current

duties on Solvent Yellow 163, ColorChem could not profitably produce and sell this

137

product at the resulting market price. Thus, if H.R. 3947 were adopted and the duties on Solvent Yellow 163 were eliminated, ColorChem would have to consider discontinuing production of this product. Because Solvent Yellow 163 is one of

ColorChem’s most important products, the elimination of tariffs on this product

would have severe consequences on the company as a whole.

Significantly, the primary beneficiaries of the proposed tariff reduction would be

solvent dyes producers in India and the People’s Republic of China (the ‘‘PRC’’). In

both countries, production of solvent dyes, including Solvent Yellow 163, requires

compliance with only minimal worker safety and environmental standards. Moreover, the PRC subsidizes the production of solvent dyes through export credits. The

current tariffs on Solvent Yellow 163 mitigate these unfair trade advantages and

allow ColorChem to compete on a level playing field. Without these tariffs,

ColorChem would be forced to try to compete in an unfair trade environment.

The loss of Solvent Yellow 163 production in the U.S. would also have a detrimental impact of U.S. exports. Currently, ColorChem is exporting Solvent Yellow

163 to the EC. This business has grown significantly within the last twelve months

due to Color Chem’s superior product and supply. ColorChem expects this export

market to grow in the EC and even in the Far East However, the economics of dye

production are such that the price per unit declines with larger volumes. Should

Color Chem lose a significant portion of its domestic business because the duty was

suspended, the cost per unit would increase, making Color Chem uncompetitive in

foreign markets.

In light of the foregoing, ColorChem respectfully requests that the Committee decline to adopt H.R. 3947. Please contact the undersigned if there are questions regarding this matter.

Respectfully submitted,

T. CLARK WEYMOUTH

1Daniel J. Cannistra

Counsel for ColorChem International Corp.

ccs: The Honorable Philip M. Crane (U.S. House of Representatives)

The Honorable Johnny Isakson (U.S. House of Representatives)

Vincent Kamenicky (U.S. Department of Commerce)

John Gersick (U.S. International trade Commission)

Steven Printz (ColorChem International Corp.)

f

H.R. 3948

To suspend temporarily the duty on Pro-Jet Fast Yellow 2 RO Feed.

NO COMMENTS SUBMITTED

f.

H.R. 3949

To suspend temporarily the duty on Solvent Yellow 145.

NO COMMENTS SUBMITTED

f.

H.R. 3950

To suspend temporarily the duty on Pro-Jet Fast Magenta 2 RO Feed.

NO COMMENTS SUBMITTED.

f

138

H.R. 3951

To suspend temporarily the duty on Pigment Red 264.

see SunChemical Corporation under H.R. 3739

f

H.R. 3952

To suspend temporarily the duty on Pro-Jet Fast Cyan 2 Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3953

To suspend temporarily the duty on Pro-Jet Cyan 485 Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3954

To suspend temporarily the duty on triflusulfuron methyl formulated product.

NO COMMENTS SUBMITTED

f.

H.R. 3955

To suspend temporarily the duty on Pro-Jet Fast Cyan 3 Stage.

NO COMMENTS SUBMITTED

f.

H.R. 3956

To reduce temporarily the duty on Pro-Jet Cyan 1 RO Feed.

NO COMMENTS SUBMITTED

f.

H.R. 3957

To reduce temporarily the duty on Pro-Jet Fast Black 287 NA Paste/Liquid Feed.

NO COMMENTS SUBMITTED

f.

139

H.R. 3958

To suspend temporarily the duty on Pigment Yellow 168.

see SunChemical Corporation under H.R. 3739

f

H.R. 3959

To suspend temporarily the duty on 4-(Cyclopropyl- - hy-droxy-methylene)-3,5-

dioxo-cyclohexanecarboxylic acid ethyl ester.

NO COMMENTS SUBMITTED

f.

H.R. 3960

To suspend temporarily the duty on 8- -oxo-emamectin benzoate

desmethylemamectin benzoate emamectin benzoate methanol adduct 2-epl-emamectin

benzoate emamectin benzoate isomer, 4-epl- -2,3-emamectin benzoate

dihydroemamectin benzoate.

NO COMMENTS SUBMITTED

f.

H.R. 3961

To suspend temporarily the duty on propanoic acid, 2-[4-[(5-chloro-3-fluoro-2-

pyridinyl)oxy]-phenoxy]-2- propynyl ester.

NO COMMENTS SUBMITTED

f.

H.R. 3962

To suspend temporarily the duty on certain end-use products containing

benzenesulfonamide, 2-(2-chloroethoxy)N-[[4methoxy-6methyl-1,3,5-triazin-2-yl)

amino]carbonyl]-and 3,6-dichloro-2-methoxybenzoic acid.

NO COMMENTS SUBMITTED

f.

H.R. 3963

To suspend temporarily the duty on benzeneacetic acid, (E,E)- -(-(methoxyimino)-

2[[[[1-[3-trifluoromethyl) phenyl] ethylidene]amino]oxy]methyl]-, methyl ester.

NO COMMENTS SUBMITTED

f.

140

H.R. 3964

To suspend temporarily the duty on 3-[4,6-Bis(difluoromethoxy)-pyrimidin-2-yl]-1-

(2- methoxycar-bonyl-phenylsulfonyl) urea.

NO COMMENTS SUBMITTED

f.

H.R. 3965

To suspend temporarily the duty on 5-dipropylamino-,, -trifluoro-4,6-dinitro-o-toluidine.

NO COMMENTS SUBMITTED

f.

H.R. 3966

To suspend temporarily the duty on sulfur.

NO COMMENTS SUBMITTED

f.

H.R. 3967

To suspend temporarily the duty on end use products containing 3-(6-methoxy-4-

methyl-1,3,5-triazin-2-yl)-1-[2-(2- chloro-ethoxy)-phenylsulfonyl]-urea.

NO COMMENTS SUBMITTED

f.

H.R. 3968

To suspend temporarily the duty on 4-cyclopropyl-6-methyl-N-phenyl-2-

pyrimidinamine-4-(2,2- difluoro-1,3-benzodioxol-4-yl)-1H-pyrrole-3-carbonitrile.

NO COMMENTS SUBMITTED

f.

H.R. 3969

To suspend temporarily the duty on pigment blue 60.

NO COMMENTS SUBMITTED

f.

H.R. 3970

To suspend temporarily the duty on (R)-2-[2,6-dimethylphenyl)-methoxyacetylamino]-propionic acid methyl ester propanoic acid, 2-[4-[(5-chloro-3-fluoro-2-

pyridinyl)oxy]-phenoxy]-2-propynl ester.

NO COMMENTS SUBMITTED.

f

141

H.R. 3971

To suspend temporarily the duty on certain end-use products containing

benzothialdiazole-7-carbothioic acid S-methyl ester.

NO COMMENTS SUBMITTED

f.

H.R. 3972

To suspend temporarily the duty on benzothialdiazole-7-carbothioic acid S-methyl

ester.

NO COMMENTS SUBMITTED

f.

H.R. 3973

To suspend temporarily the duty on O-(4-Bromo-2-chlorophenyl)-O-ethyl-S-propyl

phosphorothioate.

NO COMMENTS SUBMITTED

f.

H.R. 3974

To suspend temporarily the duty on 1-[[2-(2,4-dichlorophenyl)-4-propyl-1,3-

dioxolan-2-yl] methyl]-1H-1,2,4-triazole.

NO COMMENTS SUBMITTED

f.

H.R. 3975

To suspend temporarily the duty on tetrahydro-3-methyl-N-nitro-5[[2-phenylthio)-5-

thiazolyl]-4 -H-1,3,5-oxadiazin-4-imine.

NO COMMENTS SUBMITTED

f.

H.R. 3976

To suspend temporarily the duty on 1-(4-methoxy-6-methyl-triazin-2-yl)-3-[2-(3,3,3-

trifluoropropyl)-phenylsulfonyl]-urea.

NO COMMENTS SUBMITTED

f.

142

H.R. 3977

To suspend temporarily the duty on 1,2,4-Triazin-3(2H)one,4,5-dihydro-6-methyl-4-

[(3-pyridinyl methylene)amino].

NO COMMENTS SUBMITTED

f.

H.R. 3978

To suspend temporarily the duty on 4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1Hpyrrole-3- carbonitrile

NO COMMENTS SUBMITTED

f.

H.R. 3979

To suspend temporarily the duty on 3-(6-methoxy-4-methyl-1,3,5-triazin-2-yl)-1-[2-

(2- chloro-ethoxy)- phenylsulfonyl]-urea-3,6-dichloro-2-methoxybenzoic acid.

NO COMMENTS SUBMITTED

f.

H.R. 3988

To extend the temporary suspension of duty on Carbamic Acid (V-9069).

NO COMMENTS SUBMITTED

f.

H.R. 3989

To suspend temporarily the duty on nicosulfuron formulated product (‘‘Accent’’).

NO COMMENTS SUBMITTED

f.

H.R. 3990

To extend the temporary suspension of duty on Rimsulfuron.

NO COMMENTS SUBMITTED

f.

H.R. 3991

To extend the temporary suspension of duty on DPX–E9260.

NO COMMENTS SUBMITTED

f.

143

H.R. 3992

To extend the temporary suspension of duty on DPX–E6758.

NO COMMENTS SUBMITTED

f.

H.R. 4026

To amend the Harmonized Tariff Schedule of the United States to provide dutyfree treatment for certain foodstuffs originating in NAFTA countries.

f

INTERNATIONAL DAIRY FOODS ASSOCIATION

WASHINGTON, DC 20005

May 19, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Subject: Miscellaneous tariff bill H.R. 4026

Dear Mr. Singleton:

These comments are filed on behalf of the International Dairy Foods Association

(IDFA), and its constituent organizations, the Milk Industry Foundation, National

Cheese Institute, and International Ice Cream Association. Together these organizations represent dairy processors, manufacturers, marketers and distributors of dairy

foods and their suppliers. Our members’ products account for 85% of the milk, yogurt, cheese, ice cream, and other dairy products sold in the United States and Canada, and are also exported to a wide range of foreign markets.

We wish to comment on H.R. 4026, a tariff elimination bill introduced by Representative Shaw, that would provide duty-free treatment for certain foodstuffs originating in NAFTA countries. The bill, as we understand it, would provide for dutyfree and quota-free treatment of certain foodstuffs originating in NAFTA countries,

provided they are consistent with four specific conditions set forth in the bill. Two

of these four conditions relate to tariff schedule provisions on dairy products.

We support the general concept of the bill, however we believe it is too narrow

in scope. We urge the Subcommittee to broaden the scope of the bill to allow for

duty-free and quota-free entry of a broader range of dairy-containing food products

within NAFTA.

Recent changes in the structure of the food industry have resulted in more crossborder business relationships. Companies, including dairy foods companies, increasingly have plants and investments in more than one country, especially within

North America. Allowing duty-free and quota-free trade in dairy ingredients and

dairy products across the borders of the United States, Canada, and Mexico will enable our dairy processors and manufacturers to rationalize their product lines and

business operations in a more cost-efficient and consumer-oriented manner.

IDFA supports a broader program that would promote more efficient use of dairy

ingredients within the NAFTA region, by allowing for two-way duty-free, quota-free

trade across the border IDFA Comments on H.R. 4026 for dairy ingredients and

dairy products re-exported within the NAFTA market. This would include providing

duty-free, quota-free treatment to any milk or dairy ingredient (the component) that

is exported from one NAFTA country to another NAFTA country for further processing or use in manufacture, and also duty-free, quota-free treatment for the dairycontaining processed or manufactured product that is re-exported back to the country of origin of the milk or dairy ingredient. As currently drafted, H.R. 4026 only

affects the tariff and tariff-rate quota treatment of the processed food as it is returned to the United States.

We would like to see implementation of consistent rules among the NAFTA countries (including Canada and Mexico) that provide for duty-free and quota-free treatment of both the dairy ingredients imported by processors and manufacturers, as

144

well as duty-free and quota-free treatment of the processed or manufactured product

that contains dairy and is re-exported to another NAFTA country. We would be willing to work with the Subcommittee and the Administration as well as our industry

counterparts in Canada and Mexico to take any steps necessary to achieve such a

NAFTA-wide regime.

With respect to the particular approach of H.R. 4026, we question the need for

the third pre-condition for duty-free treatment set forth in the bill, that excludes

processing or manufacturing operations that change the tariff classification of the

good to be returned to the United States. This condition will limit the opportunities

for U.S. suppliers of milk and dairy ingredients to ship to dairy processors and manufacturers in Canada and Mexico, and have the processed product return to the U.S.

market duty-free. As currently drafted, H.R. 4026 would only allow duty-free treatment to be extended to dairy products that receive minimal processing or valueadded steps. Fluid milk must be returned as fluid milk; milk powder must be returned as milk powder; cheese must be returned as cheese. The bill would not apply,

for example, to U.S. milk powder exported for processing into cheese or yogurt, or

for U.S. anhydrous milk fat exported for use in processed cheese. We believe the

heading restrictions contained in the bill’s third condition are unduly restrictive,

and urge that they be dropped. As long as the dairy ingredient is of U.S. origin,

there should be duty-free and quota-free eligibility of the food product returned to

the United States. Such an approach would encourage greater use of U.S.-origin

dairy ingredients and greater efficiency gains for value-added processing operations

within the NAFTA region.

This tariff bill is a step in the right direction, but only a limited step. We are anxious to work with the Subcommittee to build on the elements of this bill to produce

a more effective mechanism for dairy processors and manufacturers to increase efficiency, sales and jobs. Thank you for the opportunity to comment.

Respectfully submitted,

JANET A. NUZUM

f

Vice President and General Counsel

H.R. 4223

To reduce temporarily the duty on Fipronil Technical.

NO COMMENTS SUBMITTED

f.

H.R. 4229

To amend the Harmonized Tariff Schedule of the United States to correct the definition of certain hand-woven wool fabrics.

see American Apparel Manufacturers under H.R. 3704

f

H.R. 4337

To amend the customs laws of the United States relating to procedures with respect

to the importation of merchandise.

see American Apparel Manufacturers under H.R. 3704

f

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ALLIANCE OF AUTOMOBILE MANUFACTURERS

WASHINGTON, DC 20005

May 17, 2000

The Honorable Philip M. Crane

Chairman, Subcommittee on Trade

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, D.C. 20515

Re: H.R. 4337

Dear Mr. Chairman:

The Alliance of Automobile Manufacturers—BMW, DaimlerChrysler, Fiat, Ford

Motor Company, General Motors, Isuzu, Mazda, Mitsubishi Motors, Nissan,

Porsche, Toyota, Volkswagen, and Volvo—supports the enactment of H.R. 4337, a

bill ‘‘To amend the customs laws of the United States relating to procedures with

respect to the importation of merchandise.’’ In our view, the bill contains non-controversial technical amendments to the customs laws.

The enactment of H.R. 4337 would further the 1993 Congressional mandate to the

United States Customs Service contained in Title VI—Customs Modernization—of

the North American Free Trade Agreement, Public Law 103–182 (‘‘the Mod Act’’),

to streamline and automate its commercial operations. Subtitle B of that Title, ‘‘National Customs Automation Programs’’ (‘‘NCAP’’), contained far-reaching provisions

authorizing Customs to implement periodic reporting of importations, periodic payment of duties, fees and taxes, remote entry filing, and reconciliation of import data.

Each of these new procedures was designed to supplant the entry-by-entry approach

to import reporting and duty collection with a more business-like, account-based approach.

It has been seven years since the Mod Act became law and still these programs

have yet to be implemented fully. While limited tests of two of the concepts, reconciliation and remote entry filing, have been conducted, minimal effort has been

devoted to developing and testing the concepts of periodic reporting of import data

or periodic payment of duties, fees and taxes. Implementation of these programs has

been retarded, in part, by Customs’ lack of funds to replace its antiquated processes

and systems, and in part by its interpretation of the law. In the few instances where

Customs has created prototypes, they are so narrow in scope that any information

gathered from them will have limited utility. Thus, the promises to the importing

community of automated, account-based processing, contained in the Mod Act, simply have not been fulfilled.

H.R. 4337 does not make major, substantive changes to the customs law. It would,

however, if enacted, eliminate doubt about what the Congress intended when it authorized NCAP in 1993.

• It would make clear that minimal information is required when goods enter the

country, yet sufficient to permit Customs to decide whether the goods are admissible

into the country. However, it would not allow Customs to misuse its control over

goods entering the country as a tool to enforce laws and regulations unrelated to

the admissibility of the goods, and thereby delay delivery of shipments.

• It would specify the data elements to be reported monthly in the Import Activity Summary Statement, eliminating any question about the type and breadth of the

information to be submitted to Customs periodically, and would permit the Import

Activity Summary Statement to be transmitted from remote locations.

• It would reauthorize the mid-point interest method for use with a reconciliation

entry. Use of this method for calculating interest on underpayments is essential to

the reconciliation program.

• It would eliminate the ‘‘flagging’’ of individual entries in order to correct information through a reconciliation entry. When the Import Activity Summary Statement is implemented there should be no need to identify or ‘‘flag’’ individual entries.

• It would authorize netting and offsetting of underpayments and overpayments.

In conducting compliance audits of importers, Customs has taken the position that

if an entry has been liquidated and the liquidation is final, it lacks authority to refund overpayments or offset overpayments against underpayments, but it asserts

the authority of 19 U.S.C. § 1592(d) to collect underpayments. This one-sided approach is fundamentally unfair, and would be remedied by this provision.

146

Enactment of these and the other provisions of H.R. 4337 would expedite the

shift, commenced by the Congress in 1993, to modern account-based import processing and would clarify many of the concepts introduced in the Mod Act. At that

time, Alliance members were at the forefront of companies that developed these concepts and worked with Customs and the Congress to refine them and have them

incorporated into the law. The changes in Customs policy and procedures that have

occurred since then, particularly Customs growing reliance on post-importation compliance assessments, require implementation of full, account-based procedures.

We respectfully request that you schedule a hearing on this bill as soon as it is

feasible and report it favorably to the full Committee and then to the House of Representatives. When the Trade Subcommittee holds hearings on the bill, the Alliance

would be pleased to have the opportunity to testify in support of its enactment.

Sincerely,

JOSEPHINE S. COOPER

f

President and Chief Executive Officer

Statement of the American Association of Exporters and Importers (AAEI),

New York, New York

COMMENTS ON TECHNICAL CORRECTIONS TO U.S. TRADE LAWS AND MISCELLANEOUS

DUTY SUSPENSION BILLS

The American Association of Exporters and Importers (AAEI) is a national organization of over 1000 members who export, import, distribute and manufacture a complete spectrum of products, including chemicals, electronics, machinery, footwear,

autos/parts, food, household consumer goods, toys, specialty items, textiles and apparel. The AAEI membership also comprises firms that serve the international trade

community, including customs brokers, freight forwarders, banks, attorneys, insurance firms and carriers. AAEI members conduct operations in all fifty states, employing millions of U.S. workers. Together, AAEI companies account for a large majority of non-military, commercial U.S. trade.

AAEI is pleased to respond to Chairman Crane’s April 20, 2000, Advisory, requesting comments on Technical Corrections to U.S. Trade Laws and Miscellaneous

Duty Suspension Bills.

As the largest association concentrating on policies and practices of the U.S. Customs Service, AAEI urges this Committee to include H.R. 4337 in its miscellaneous

trade bill. H.R. 4337 proposes to amend the customs laws of the United States with

respect to the entry process for imported merchandise. H.R. 4337 is intended to give

Customs the statutory authorization to make minor, but important, practical improvements to its entry process while Customs and the trade community await development of Customs’ long-overdue, new computer system and to fulfill more of the

promise of the 1994 Mod Act. AAEI has testified before the Trade Subcommittee on

numerous occasions as to the looming national crisis surrounding the delay in getting this system up and running. In the meantime, H.R. 4337 seeks to apply some

of the safeguards and benefits of a modern system to Customs’ current antiquated

system while respecting the statutory mandate of both Customs and the Census Bureau.

The Customs Modernization Act of 1994 was expected to initiate a new era in

international trade by enabling Customs to create efficient automated processes that

would interface almost seamlessly with the private sector’s newly re-engineered integrated information management systems. No longer would commerce be restrained by entry and duty assessment procedures developed when information

could be moved from place to place only by hand and cargo moved slowly in relatively small batches.

Unfortunately, the promise of the Mod Act has not been realized. The effectiveness of the Mod Act was premised on the early development and installation of a

modern computer system at Customs. That system has never come into being. At

best, it will not exist for years to come. Customs has implemented only parts of the

Mod Act, and to a point, we can understand its reluctance to write regulations for

computer-dependent programs when it is not clear what kind of system, if any, will

be available.

As the private sector has gained increasingly advanced business software and

hardware systems, we have learned, with Customs, how much further we could

automate Customs’ processes than was assumed when the Mod Act was written alVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00158 Fmt 6633 Sfmt 6602 K:\CPRINT\66010 WAYS1 PsN: WAYS1
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most ten years ago. When we can know with some assurance that Customs will be

getting a modern computer system, when it will be available, and what its capabilities will be, we will be able to work with Customs to design even better approaches

to entry processing and duty assessment.

As you can understand, we are most anxious to help develop those procedures.

In contrast with the major efficiencies and data capabilities achieved by the private

sector in the 1990’s, Customs’ antiquated methods are painfully visible. We know

how more efficiently Customs could be operating. We know how much less cost we

would incur if Customs were operating at this level of efficiency. And we are fearful

of the inevitable day when Customs’ data systems no longer operate at all.

AAEI believes that the funding of a modern computer hardware and software system for Customs is one of the best investments the federal government can make

today. The private sector has made enormous investments in such systems and the

benefits are clear. Customs would be reaping those same benefits if those systems

were available to it. The benefits would not be solely to importers but to the economy and to all taxpayers. At the same time we believe that the continued delay in

obtaining a new system is one of the most dangerous acts the federal government

could take because even a weeklong outage of the current Customs system would

have negative impacts throughout the U.S. economy, up and down the supply chains

of the automobile, food, chemical, pharmaceutical, apparel, and retail industries. If

these industries cannot obtain needed imported components and are forced to reduce

operations, domestic suppliers, employees, grocers, and the mom and pop stores of

Main Street will be hurt just surely as if there were a nationwide strike.

Rather than waiting for a new system before proposing any of the useful updates

to the Customs laws, the private sector has proposed the reforms in H.R. 4337, necessary updating of the Customs laws that are not dependent on a new computer system. Together with Customs we believe that these statutory changes will enable

Customs to achieve benefits with its current computer system. These improvements

do require minimal statutory change, however. The incremental changes this year,

in combination with regulatory changes at Customs, will provide important benefits

to U.S. business, consumers and the economy. They will greatly help the private sector cope with the lack of modern computer systems at Customs.

In drafting the provisions of H.R. 4337, industry has been mindful of the important mandate of both Customs and the Census Bureau. We believe that these provisions do not compromise either agency’s ability to meet its statutory duties.

For these reasons, AAEI urges this Committee to pass H.R. 4337, alone or as part

of a miscellaneous trade bill.

We would be pleased to provide further information and to discuss with you the

implications of this bill or its individual provisions.

f

AMERICAN ELECTRONICS ASSOCIATION

SANTA CLARA, CA 95056–0990

May 17, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

RE: Request for Written Comments on Technical Corrections to U.S. Trade Laws

and Miscellaneous Duty Suspension Bills

Dear Mr. Singleton:

The American Electronics Association (AEA), a 3,000-member organization representing the U.S. electronics, software and information technologies industries, respectfully submits the following input with the focus on modernizing the entry process, and Congress’ part in financially supporting this role.

H.R. 4337

AEA supports H.R. 4337 for its modernizing affect on the U.S. Customs entry

processes. However, AEA requests that Congress set up oversight of these measures

in order to insure that the implementing regulations are promulgated; unlike similar authority granted under PL 95–410, 1978 (sec 103) and PL 103–182, 1993 (sec

637). Attachments A and B are from Senate Reports 95–778, and 103–189 for the

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relevant sections requiring regulations promulgating importer activity summary

statements (IASS).

Linkage to Modernization

Although there is existing authority and growing urgency to implement these

legal procedural improvements, in order to preserve the expansion of the U.S. (and

world) economy, in AEA’s opinion the benefits of these H.R. 4337 legal procedural

improvements will be frustrated unless Customs is granted the funds for a modernized commercial computer system which can implement the (existing) legal authority. A recent survey of AEA members’ customs compliance costs to existing U.S.

Customs legal procedures shows a nullifying 3–6% overhead expense on our predominantly duty free importations.

We believe the stewardship obligations on Congress extend to this area and that

they require Congress to appropriate the necessary computer systems funding to

support this overdue procedural reform of the Customs entry process. Further, we

believe these obligations are embodied in H.R. 4337.

Drawback

In promulgating new regulations to implement Mod-Act (1993) changes to drawback, Customs inserted an new procedural requirement for ‘‘determination of commercial interchangeability’’ on Substitution Unused (Same Condition) Merchandise

drawback [19 USC 1313 (j) (2), 19 CFR 191.32(c)] which we believe is being interpreted as a new mandatory requirement for filing, paying or liquidating claims

under 19 USC 1313(j)(2).

Previously, exporters in compliance with the law designated merchandise that

was substituted and drawback eligible (usually by part number), Customs paid the

claim, and then Regulatory Audit subsequently audited the drawback records for

compliance.

We are concerned that this new pre-determination imposes a curious non-public

governmental standard of commercial interchangeability which is inconsistent with

other equivalent Substitution Unused merchandise regulations under Manufacturing Drawback.

AEA asks for no statute change as we think none is warranted. Nonetheless, AEA

does ask for House Report directive language indicating that in order to facilitate

Unused Substitution Merchandise drawback (19 USC 1313 (j)(2)) consistent with the

liberalizing change from ‘‘fungible merchandise’’ that there be no requirement for a

claimant to seek a Customs ‘‘determination of commercial interchangeability’’ prior

to receiving approval for waiver of prior notice to export, filing, paying or liquidating

the claim under existing law. This insures that the Customs regulations and their

interpretive procedures are no more procedurally burdensome than previously required for substantially the same drawback claims and where no limiting language

was introduced in the Mod-Act.

Thank you for your time and consideration of our views.

Sincerely,

ANNMARIE MCINTYRE

Director, Trade Regulation

[Attachments are being retained in the Committee files.]

ASSOCIATION OF INTERNATIONAL

f

AUTOMOBILE MANUFACTURERS, INC.

ARLINGTON, VA 22209

May 19, 2000

The Honorable Philip Crane

U.S. House of Representatives

Washington, D.C. 20515

Re: Comments in Support of H.R. 4337

Dear Mr. Chairman:

On behalf of the Association of International Automobile Manufacturers (AIAM),

I am writing to express our strong support for H.R. 4337. AIAM believes the amendments contained in this legislation are largely technical in nature and should not

be controversial. They offer much-needed clarification and guidance on a number of

149

1 AIAM members include American Honda Motor Co., American Suzuki Motor Corp., Daewoo

Motor America, Hyundai Motor America, Isuzu America, Kia Motors America, Mitsubishi Motor

Sales of America, Nissan North America, Saab Cars USA, Subaru of America, and Toyota Motor

Sales, U.S.A. The Association also represents original equipment suppliers, other automotiverelated trade associations, and motor vehicle manufacturers not currently engaged in the sale

of motor vehicles in the United States. During the past 20 years, AIAM members have invested

billions of dollars in new production and distribution capacity, creating tens of thousands of

high-skill, high-wage jobs across the country in manufacturing, supplier industries, ports, distribution centers, headquarters, R&D centers and automobile dealerships.

important reforms contemplated in the 1993 Customs Modernization and Informed

Compliance Act (‘‘Mod Act’’), but which are still awaiting full implementation.

AIAM is a trade association representing the interests of United States subsidiaries of international automotive companies, including many of the largest companies in America.1 Collectively, our companies are responsible for billions of dollars

annually in cross-border trade, involving all aspects of manufacturing and distribution of passenger cars, light trucks and multipurpose vehicles.

AIAM and its member companies were early and active supporters of the Mod

Act. With the Customs Service, we have long seen this legislation as an essential

building block for helping move the U.S. customs administration process into the

twenty-first century. Much progress has already been made, with attendant benefits

both for the Customs Service and business community. In a number of areas, however, important Mod Act reforms remain to be fully implemented.

As was well understood at the time, the Mod Act was a complex, carefully-balanced compromise built on commitments and reasonable concessions from all sides.

AIAM member companies, along with others in the business community, have expended substantial resources to satisfy industry commitments to improve compliance with the trade laws through automation and cost-effective, modern business

practices. But we have not reaped the full benefits of these investments because key

Mod Act reforms like periodic data reporting in aggregate form and periodic payment of duties, taxes and fees have still not been initiated, more than six years after

passage of the Mod Act. The Mod Act envisioned a change in the way the Customs

Service and trade community conduct business, from a transaction-based system to

an account-based one. The failure to implement these key Mod Act reforms has prevented us from making this transition, leaving AIAM companies mired in the outdated, inefficient transaction-based model the Mod Act was expressly designed to

eliminate.

AIAM believes that H.R. 4337 would not make any major substantive change to

U.S. customs law. Rather, the bill’s core provisions would reaffirm and facilitate the

implementation of express or implied commitments in the Mod Act to:

• Minimize data requirements for cargo release;

The Mod Act promised to eliminate unnecessary data requirements for cargo release ‘‘in return for’’ an importer commitment to ‘‘maintain and produce information

after the fact.’’ This would be accomplished by limiting requirements to information

actually needed to make admissibility and release decisions.

• Permit periodic filing of aggregate import information;

H.R. 4337 would reaffirm Congress’ intent in the Mod Act to provide importers

the option of filing an ‘‘import activity summary statement’’ (IASS) each month in

lieu of entry summaries for individual transactions, and provide needed clarification

on the categories of data required for duty, tax and other administrative purposes.

• Renew Customs Service authority to make ‘‘mid-point’’ calculations for interest

on underpayments; and

H.R. 4337 would reaffirm the Customs Service’s authority to use the mid-point

method for interest calculations, without which the reconciliation program would be

unworkable.

• Provide for netting and offsetting of under-and over-declarations.

H.R. 4337 would allow importers the option of using an account-based approach

in which importers would receive credit for overvalued-declarations that could be

used to net out or off-set undervalued-declarations during the same import period.

AIAM believes it is time to move forward on these measures, and H.R. 4337 provides a clear mandate to the U.S. Customs Service to do so. Timely implementation

of the provisions of H.R. 4337 would significantly reduce entry processing costs, according to one estimate, by as much as 30 percent. AIAM believes that this would

be accomplished with no diminution in the ability of Customs to fulfill its duty to

the public to enforce the trade laws at the border. Furthermore, we believe that revising import procedures to reflect the realities of automation and other modern-day

150

business practices would make data collection more accurate and improve overall

compliance with the trade laws.

AIAM appreciates the opportunity to comment on this important issue, and respectfully urges the Trade Subcommittee and the Ways and Means Committee to

favorably report H.R. 4337 at the soonest possible opportunity.

Sincerely,

TIMOTHY C. MACCARTHY

f

President & CEO

CANADIAN IMPORTERS ASSOCIATION INC.

TORONTO, ONTARIO M5G 2K8

May 19, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: Comments on H.R. 4337

Dear Mr. Singleton:

On behalf of the Canadian Importers Association, I am grateful for the opportunity to submit comments concerning HR4337.

Canadian importers welcome the initiative to amend U. S. Customs Law

(HR4337). They assert that the initiative will ultimately modernize and simplify the

importation procedures, which will benefit both Canada and the United States.

We wish to clarify comments from the U.S. Bureau of Census concerning Canadian importers’ preference for filing non-aggregate data. Canadian importers prefer

periodic, aggregate filing of import information rather than discreet filing of transactions. The Association supports the implementation of modernized and efficient

custom procedures, such as Custom Self Assessment. The Canada Customs and Revenue Agency is working with Canada’s international trade community on ‘‘Custom

Self Assessment,’’ which aims to simplify cross-border procedures.

Thank you.

Sincerely

BOB ARMSTRONG

f

President

CATERPILLAR INC.

PEORIA, ILLINOIS 61629–7310

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

1102 Longworth House Office Building

Washington, D.C. 20515

Re: Request for Comments on H.R. 4337

Dear Mr. Singleton:

In response to the Subcommittee on Trade’s notice of April 20, 2000, Caterpillar

Inc. submits the following comments in support of H.R. 4337. As you may be aware,

Caterpillar is one of the largest companies in the world and is the global leader in

the manufacture of construction, mining, and agricultural equipment. Caterpillar

has a presence in most of the 50 states and employs nearly 70,000 persons worldwide.

As with most multinational companies, Caterpillar imports a number of items to

assist in the production of Caterpillar products. In 1999, Caterpillar was one of the

top thirty importers of goods into the United States. To support its import operVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00162 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
151

ations, Caterpillar has invested significant resources in order to comply with United

States trade regulations, including Customs Service rules.

Given its large volume of imports into the United States, Caterpillar pays millions

of dollars annually to process entries. Much of this expense comes as a result of the

transaction-based process currently utilized by the Customs Service. If the provisions embodied in H.R. 4337 were to be implemented, Caterpillar would see a reduction of at least 30 percent in entry processing transaction costs. Improvements such

as periodic filing of entry data in aggregate form, periodic payment of duties, taxes,

and fees, and the filing of essential data for cargo release would contribute to Caterpillar’s world-wide competitiveness by reducing Caterpillar’s import-related costs

by millions of dollars.

Caterpillar believes that the improvements contained in H.R. 4337 are largely

technical in nature and represent a realization of the Customs Modernization and

Informed Compliance Act (‘‘Mod Act’’). It is time that import mechanisms reflected

the realities of modern business as mandated by the Mod Act. Otherwise, American

business has lost the benefit of the bargain negotiated with the passage of the Mod

Act. Caterpillar believes that adoption of H.R. 4337 will not undermine the government’s ability to perform its responsibilities, including the examination and inspection of goods and the collection of trade statistics. Rather, H.R. 4337 will greatly

enhance the customs process and will allow for better data collection and increased

compliance by importers.

For the reasons listed above, Caterpillar encourages favorable treatment of H.R.

4337.

Sincerely yours,

ERIC F. HINTON

f

Legal Services Division

CONAGRA, INC.

WASHINGTON, DC 20006

May 18, 2000

Hon. Philip M. Crane

Chairman, Trade Subcommittee

Committee on Ways and Means

1104 Longworth House Office Building

Washington, D.C. 20515–6354

Re: H.R. 4337

Dear Chairman Crane:

ConAgra, Inc., a diversified international food company with headquarters in

Omaha, Nebraska, supports H.R. 4337 and urges its prompt enactment.

Through a network of operating companies working interdependently throughout

the United States and thirty three other countries, ConAgra is dedicated to satisfying the world’s appetite for safe, delicious, convenient and affordable food.

ConAgra’s products cover the entire food chain from crop inputs such as fertilizer

to convenient, table ready prepared foods. Some of our leading brands include

Healthy Choice, Butterball, Parkay, Peter Pan, Hunt’s and Swift Premium.

In conducting its global business operations ConAgra imports millions of dollars

worth of raw materials and ingredients annually. For this reason, ConAgra has a

significant interest in legislation that affects procedures for importation of merchandise into the United States.

ConAgra strongly believes that Customs procedures should be designed to provide

accurate and timely information to Customs with regard to the classification and

valuation of merchandise so that duties can be assessed fairly and accurately. At

the same time, it is critically important that Customs procedures be designed so as

to minimize burdens on importers in order that they can compete effectively in providing affordable products to American consumers. ConAgra believes that enactment

of H.R. 4337 will further these objectives by facilitating accurate reporting of classification and valuation information in a manner which does not subject importers to

unwarranted penalties.

The beneficial impact of H.R. 4337 can be illustrated by a real world example.

ConAgra imports grain from Canada which is used to produce flour for a variety

of baked goods, pasta products, and livestock feed ingredients. The quantity and

quality of grain actually delivered to ConAgra will sometimes vary from the purVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00163 Fmt 6633 Sfmt 6621 K:\CPRINT\66010 WAYS1 PsN: WAYS1
152

chase specifications. This occurs because the purchase specifications are targets

which cannot always be matched precisely. Entry documents are prepared on the

basis of information provided by the supplier. However, when the grain arrives it

is weighed and tested. Such weighing and testing can reveal variations in quantity,

protein and moisture content or other characteristics which effect value, that are

sufficient to require that corrected entry information be provided to Customs. For

example, the Canadian supplier may deliver grain with a protein content that is

close to, but not precisely, what was specified by ConAgra. Similarly, because of the

method of loading the rail cars in which the grain is delivered may contain somewhat more or less grain than was invoiced. At the present time such unintentional

discrepancies must either be flagged upon entry and reconciled within 15 months,

or by admitting to an error in a Supplemental Information Letter or a Prior Disclosure. Customs views admission in a Supplemental Information Letter or a Prior Disclosure as acknowledgments of error subject to penalties.

Under the provisions of H.R. 4337, ConAgra would have one month to ascertain

the actual quantity and quality of the grain actually received. Any discrepancy between what was described on the supplier’s invoice and what was actually received

could then be reported on a monthly Import Activity Summary Statement (‘‘IASS’’)

which covers all entries during the preceding month. This new procedure will allow

ConAgra to assure the timely submission of accurate entry data without fear of

being penalized for its efforts.

Similarly, H.R. 4337 eliminates the need to flag entries for reconciliation. Currently, if any information provided upon entry of the merchandise is incorrect or incomplete, the entire entry must be flagged before a reconciliation may be filed at

the end of the year. For example, if an importer does not know the exact amount

of prepaid freight charges included in the price of the merchandise it must flag the

entry for later reconciliation when it is able to obtain that information. A reconciliation must be filed at the end of the year. This process is not only burdensome on

the importer but it suggests to Customs that the information contained in the

flagged entry may be incorrect for any number of reasons. H.R. 4337 eliminates this

problem by allowing importers to file reconciliations at the end of the year without

flagging individual entries.

These and other provisions of H.R. 4337 recognize the realities of the ever increasing pace of global commerce. They enable importers to provide accurate and timely

entry data based on the merchandise as actually received. Indeed, they encourage

accurate reporting by eliminating the spectre of penalties in response to good faith

disclosure of inadvertent, and in some cases, inevitable discrepancies between information provided by the supplier and the actual quantity and condition of the merchandise as received by the importer. From the standpoint of Customs compliance

this will have the further advantage of eliminating excuses for inaccuracies by making it easier to submit accurate entry data. If an importer chooses not to avail itself

of that opportunity, it has no excuse for inaccurate reporting.

For the foregoing reasons ConAgra urges prompt enactment of H.R. 4337. If we

can provide any further information that might be helpful to the Subcommittee in

its consideration of H.R. 4337, we will be happy to do so on request.

Very truly yours,

f

BRENT A. BAGLIEN

DAIMLERCHRYSLER

AUBURN HILLS, MI

May 12, 2000

The Honorable Bill Archer

Committee on Ways and Means

U.S. House of Representatives

Washington, DC 20515

Re: H.R. 4337

Dear Representative Archer:

DaimlerChrysler supports the enactment of H.R. 4337, a bill ‘‘To amend the customs laws of the United States relating to procedures with respect to the importation of merchandise.’’ H.R. 4337 will assist in fulfilling the 1993 Customs Modernization Act mandate that Customs commercial operations be both modernized

and simplified. It is our opinion that this bill contains non-controversial technical

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amendments to the customs laws, which will result in consistent, practical and simplified customs procedures.

As a major importer with over 500,000 auto part entries per year valued at approximately $3 billion, we believe that the account-based approach addressed by

this legislation will assist both the Trade and the U.S. Customs Service. Trade benefits include streamlined customs reporting and payment procedures combined with

increased compliance rates. These benefits will ensure that our Just-In-Time inventory program is not jeopardized by border crossing delays. The major benefit we see

for the U.S. Customs Service is the ability to redirect valuable resources away from

transaction-based manual intensive clerical activities to the protection of the United

States borders.

DaimlerChrysler respectfully requests that you schedule a hearing on this bill and

present it in a positive manner to the full Committee and then the House of Representatives.

Sincerely,

JANET Y. SANGSTER

DaimlerChrysler

f

Director, International Supply & Customs

HUGHES HUBBARD & REED LLP

WASHINGTON, DC 20006–2401

May 19, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Bldg.

Washington, D.C. 20515

Re: Comments on H.R. 4337

Dear Mr. Singleton:

We are writing on behalf of our client, Federal-Mogul Corporation, to comment

in support of H.R. 4337, which would amend the customs laws relating to importation procedures, as well as making changes with respect to valuation, drawback, instruments of international traffic and entireties. Federal-Mogul Corporation,

headquartered in Southfield, Michigan, is a global manufacturer and distributor of

automotive, heavy duty and industrial parts to original equipment manufacturers

and aftermarket customers.

Federal-Mogul Corporation is generally in favor of the proposed changes and commends Representative Thomas for his sponsorship of this legislation. H.R. 4337

would make certain changes that are needed to complete the implementation of the

1993 Customs Modernization Act (‘‘Mod Act’’). While the Mod Act was intended to

provide for a shift from entry-by-entry processing to periodic entry and reconciliation, or an account-based approach, this objective cannot be successfully achieved

without the additional amendments provided in H.R. 4337.

Although we agree with most of the changes proposed in H.R. 4337, we do have

specific comments with respect to certain sections of the proposed bill. Our specific

comments are set forth below.

Section 1—

Section 1(a) of the bill proposes to amend the statute to require the submission

of minimal documentation to obtain the release of merchandise. While we agree

with the intent of section 1(a), the proposed legislation is ambiguous in describing

the relevant requirements. The legislation proposes amending 19 U.S.C. § 1484 to

provide that, at the time of entry, the importer need only file such documentation

as is necessary to enable the Customs Service to determine whether the merchandise can be released. It does not specify what documentation is required at that

point. While it is true that the proposed legislation does contain language specifying

what documentation must be submitted at some point in the entry process (either

before release or in the entry summary or Importer Activity Summary Statement

(‘‘IASS’’)), it is not clear which portion of the documentation is required for release

and which is required later when the entry summary or IASS is filed. It is also unVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00165 Fmt 6633 Sfmt 6602 K:\CPRINT\66010 WAYS1 PsN: WAYS1
154

clear what is meant by ‘‘unless the Customs Service has granted the importer an

alternative means to obtain release.’’

As set forth in the bill, the list of documentation required to be submitted at some

point in the entry process would be as follows:

1. a description of the merchandise;

2. the classification number for the merchandise (to the sixth digit);

3. the country of origin; and

4. other documents required to determine admissibility.

The requirement that the tariff number be stated to the sixth digit before release

may not go far enough. Many admissibility decisions require classification to the

eighth, or even the tenth, digit. Also, the list does not include documents necessary

to establish a value for the merchandise. While we agree that the value of merchandise does not generally affect admissibility, in certain situations, where classification depends on the unit value of the goods, the absence of value information could

make it impossible to classify the merchandise.

The amendments proposed in section 1(b) of the legislation would reduce the examination requirements that must be satisfied for release of the merchandise. This

language does not appear to be completely consistent with the language of section

1(a) in that it addresses only considerations of health, safety and welfare and the

correctness of the description and country of origin. The requirement in section 1(a)

that all information needed to determine admissibility be submitted before the merchandise can be released goes further. Admissibility decisions can require more than

a correct description of the merchandise, a correct statement of the country of origin, and evidence that there is no threat to health, safety and welfare. For example,

admissibility may hinge on whether a proper visa has been obtained for quota merchandise.

Section 2—

We agree with the proposal in section 2 of the bill to provide for remote filing of

the IASS.

Section 3—

Section 3 proposes to allow the filing of monthly import activity in the form of

an IASS containing information totaled by tariff number, country of origin and any

relevant special duty indicators. Any discrepancies between the entry and the entry

summary or IASS would be treated as clerical errors (in the absence of fraud).

We certainly agree that discrepancies addressed at the time of the filing of the

entry summary or IASS should be treated as clerical errors. However, while we also

believe that the monthly aggregate statement filing proposed by the bill is a step

in the right direction, we believe it does not go far enough. In effect, the IASS will

still be treated like an entry. It may still be necessary, at least in some situations,

to go back to a particular entry or shipment if changes are required. For example,

an importer may import a single product from a single country but from multiple

vendors. If a value adjustment is needed with respect to only one of the vendors

and the aggregate reporting method has been used, it may be difficult to make the

required adjustment.

Section 4—

We have no objections to or comments on section 4, which would require the Customs Service to prescribe an alternative mid-point interest methodology in calculating interest due on underpayments of duties.

Section 5—

Section 5 proposes to eliminate the requirement to flag entries for reconciliation

and provides for reconciliation of any information required by subsection (a)(1)(B)

of 19 U.S.C. § 1484. We are in favor of this proposal. Under an account-based approach, it should not be necessary to flag issues at the time of entry because corrections are not made on an entry-by-entry basis. Elimination of the requirement to

flag entries will allow importers to correct errors, such as quantity discrepancies,

in situations in which it is not known at the time of entry that there may be a problem.

We are concerned, however, that, based on the language used in the proposed legislation, reconciliation may not cover classification and country of origin, as these

are not specifically covered in subsection (a)(1)(B) of 19 U.S.C. § 1484. This confusion

arises because, as discussed in our comments to section 1 of the bill, it is not clear

what documents are meant to be covered by proposed subsection (a)(1)(A) and which

are covered by subsection (a)(1)(B).

155

Section 6—

We wholeheartedly agree with the proposal to net and offset overpayments and

underpayments of duties. The practice now in effect is manifestly unfair to importers in that it requires the payment to the Customs Service of any additional duties

due, even after liquidation, but does not allow for the refund of overpayments

(where liquidation has become final) or the netting of overpayments against underpayments. Many clerical errors are made by the shipper and cannot be controlled

by the importer. This proposal would allow the importer to correct mistakes without

faulting the importer for mistakes it can not control.

We do have some questions with respect to this section of the bill, however. The

bill does not define ‘‘relevant period.’’ Also, although we believe the intention is to

allow importers to net over-and underpayments with respect to all products imported during the period, without regard to tariff categories or any other criteria,

this is not completely clear.

Finally, because the proposed legislation does not appear to provide for refunds

from the Customs Service in those situations in which the net amount is an overpayment to the Customs Service, we do not believe the legislation goes far enough.

The Customs Service should also be required to pay back any excess amounts collected from the importer.

Section 7—

Section 7 of the bill would impose a requirement on the Customs Service that it

look at a representative number of transactions in determining whether a related

party price is influenced by a relationship between the buyer and the seller, and

not just at one or two transactions. First, we note that there appears to be a typographical error in the legislation. We believe the reference should be to section

1401a(b)(2) rather than 1401(b)(2).

We agree with the intention of this section of the bill. However, we do have some

problems with the proposal. The bill does not state what the ‘‘representative time

frame’’ will be and what will be considered ‘‘in the normal course of trade’’ in merchandise of the ‘‘same class or kind.’’ Also, it is unclear what would happen if an

importer has some ‘‘good’’ (i.e., not influenced by the relationship) and some ‘‘bad’’

(i.e., influenced) transactions. How will the Customs Service determine whether,

overall, the price used for the imported merchandise is a legitimate price for customs valuation purposes?

Section 8—

Section 8 would amend the statute to provide drawback for merchandise destroyed within 5 years as well as merchandise exported within 5 years, define destruction for these purposes, and provide for drawback even when valuable waste

or scrap results from the manufacturing process. We are in favor of this section of

the bill, particularly the part addressing waste and scrap, because we believe it is

good policy to encourage recycling in the drawback arena.

Section 9—

We are in favor of the proposal to simplify the procedures with respect to instruments of international traffic (‘‘IITs’’). This proposal provides that certain containers

are not goods subject to the tariff schedule. However, it does not require that they

be used in international traffic. We are concerned that this leaves open the possibility that containers being imported for sale in the United States would enter U.S.

commerce both without being subject to the tariff schedule and without being subject to other laws intended to protect the public from unsafe articles.

Section 10—

Section 10 proposes to treat certain machinery and equipment imported in more

than one shipment as a single machine if the importer files an election and demonstrates to the satisfaction of the Customs Service that there is a preexisting

agreement to purchase the complete article. Under current law, parts of a machine

cannot be classified as the complete article if they are not imported in one shipment

or in shipments entered on the same day.

We are in favor of this proposal, which addresses the problem of classification of

machines too large to be imported in one shipment. However, we are concerned

about whether the addition of another general note defining entireties will be sufficient to achieve the intended result. General Rule of Interpretation 2(a), which will

remain unchanged by this legislation, has been interpreted to require that in order

to be classified as the complete article, parts must be imported in a single shipment

(or on a single day) and must have the essential character of the complete article.

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1See Advisory from the Committee on Ways and Means, Subcommittee on Trade, No. TR–

20, April 20, 2000. 2See 19 U.S.C. § § 1671e(a)(3) and 1673e(a)(3).

This appears to be inconsistent with the intended goal of section 10 of the legislation. Also, there is a need to define terms, such as ‘‘machinery tools’’ and ‘‘equipment,’’ and it is not clear how the Customs Service will be able to determine whether there is a binding agreement to purchase a complete machine and how long a

time period should be allowed for all of the parts of the machine to be imported.

In sum, on behalf of our client, Federal-Mogul Corporation, we support H.R. 4337.

We believe the legislation would be improved if the changes and clarifications described in our specific comments were incorporated into the bill. In particular, we

believe there is a need for clarification of a number of terms used in the legislation.

Respectfully submitted,

f

JANET A. FOREST

FLORAL TRADE COUNCIL

HASLETT, MI 48840

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth Building

Washington, D.C. 20515

Re: H.R. 4337—Comments of the Floral Trade Council

Dear Mr. Singleton:

The Floral Trade Council (FTC) appreciates the opportunity to submit comments

to the Committee on Ways and Means of the House of Representatives regarding

H.R. 4337, which would amend U.S. customs laws relating to import procedures.1

The FTC is a U.S. trade association composed of growers and/or wholesalers of fresh

cut flowers. The FTC is based in Haslett, Michigan, and its members are located

throughout the United States. The President of the FTC resides in Salinas, California. The FTC is committed both to finding markets abroad for U.S. fresh cut flowers and to working to see that U.S. laws provide adequate relief for domestic industries harmed by unfair trade practices.

As a domestic industry that has used the unfair trade laws in the past, the FTC

is concerned that changes proposed to customs laws in H.R. 4337 not undermine the

effectiveness of antidumping and countervailing duty laws and other import relief

laws.

As noted below, the FTC would like to see H.R. 4337 amended (1) to provide for

the notation of antidumping or countervailing duty orders or any other trade law

relief measures at time of entry and in import activity summary statements and (2)

to bring the language of H.R. 4337 regarding transaction values of imported merchandise more closely in line with current law.

I. Notation of Antidumping or Countervailing Duty Orders at Time of Entry and in

Import Activity Summary Statements

The FTC understands that the purpose of H.R. 4337 is to streamline and simplify

filing procedures for importers. Accordingly, the bill calls for the filing of minimal

information by importers at the time of entry. H.R. 4337 at Section 1(a)(2)(C) would

require that importers provide the Customs Service upon entry a description of the

merchandise, the merchandise’s tariff classification, its country of origin, and admissibility documentation.

H.R. 4337 also provides for minimal reporting of information in import activity

summary statements. Under Sections 3(a)(2) and (c) of the bill, importers would report tariff numbers, countries of origin, and special program indicators, e.g., GSP,

on these statements.

Under existing law, importers of merchandise subject to antidumping and countervailing duty orders are required to make deposits of estimated special duties

upon entry.2 As this requirement will continue under H.R. 4337, the Customs Service should ensure that any new forms or streamlined procedures maintain the

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3Please note that H.R. 4337 refers to ‘‘19 U.S.C. 1401(b)(2).’’ The FTC believes that the bill

was intended to read ‘‘19 U.S.C. 1401a(b)(2).’’

present system for ensuring compliance with the requirements: importers have to

indicate on their entry forms that their merchandise is subject to an order and make

special duty deposits at the time of entry.

The FTC respectfully requests that H.R. 4337 be amended to require that importers note at time of entry and in importer activity summary statements whether the

reported merchandise is subject to an antidumping or countervailing duty order or

any other trade law relief measures. The FTC is concerned that, through the

streamlined process proposed in H.R. 4337, the Customs Service may in some cases

be unaware as to whether imported products are subject to antidumping and countervailing duty orders or other trade law relief measures. This circumstance could

result in the Customs Service inadvertently failing to suspend liquidation on some

entries. Such a situation could be obviated, however, if Customs were put on notice

at time of entry or through importer activity summary statements whether imported

merchandise is subject to antidumping and countervailing duty orders or other trade

law relief measures.

II. Transaction Values of Imported Merchandise

The FTC is concerned about variances of language in H.R. 4337 with current law

pertaining to circumstances of sale that may be considered in determining whether

‘‘transaction values’’ may be used in related party import transactions.3 Section 7

of H.R. 4337 states

In determining whether the circumstances of the sale of the imported merchandise indicate that the relationship between the buyer and seller did not

influence the price actually paid or payable, there shall be taken into account other sales during a representative timeframe in the normal course

of trade in merchandise of the same class or kind.

The FTC has two specific concerns regarding this language. First, the language

‘‘merchandise of the same class or kind’’ in Section 7 is significantly broader than

current law regarding transaction values between related buyers and sellers. Current law, 19 U.S.C. § 1401a(b)(2)(B)(i), compares the transaction value of imported

merchandise and the transaction value of ‘‘identical merchandise, or of similar merchandise.’’ The more specific language of the current law provides for closer comparisons between merchandise and is thus viewed by the FTC as preferable.

Second, Section 7 of H.R. 4337 does not require that sales be ‘‘to unrelated buyers

in the United States’’ as does 19 U.S.C. § language in H.R. 4337 could lower the

standard for determining the acceptability of ‘‘transaction values’’ in related party

transactions.

Accordingly, the FTC respectfully requests that Section 7 of H.R. 4337 be amended, first, to replace ‘‘merchandise of the same class or kind’’ with ‘‘identical merchandise, or of similar merchandise,’’ and second, to add ‘‘to unrelated buyers in the

United States’’ at the end of Section 7.

III. Conclusion

The FTC would be pleased to participate further in the development of H.R. 4337.

If you have any questions regarding the FTC’s position on this legislation, I may

be reached at (831) 442–2508.

Sincerely,

KENICHI BUNDEN

f

President of the Floral Trade Council

158

JCPENNEY COMPANY, INC.

PLANO, TX 75024–3698

May 16, 2000

The Honorable Bill Archer

Chairman, House Ways & Means Committee

United States House of Representatives

1102 Longworth

Washington, D.C. 20515

Re: H.R. 4337—To Effect Full Implementation of the 1993 Customs Mod Act

Dear Chairman Archer,

On behalf of JCPenney Purchasing Corporation, I am writing to express support

for H.R. 4337. This legislation will effect full implementation of the 1993 Customs

Modernization and Informed Compliance Act (‘‘the Mod Act’’). Since enactment into

law on December 8, 1993, implementation by US Customs has been slow and often

selective. As a result, the burden for compliance has been shifted to the importing

company from Customs without delivery of the promised administrative efficiencies

to reduce both public and private sector costs.

As US duty rates decline, US companies are spending a disproportionate amount

to build systems and implement procedures to manage import compliance. The enactment of H.R. 4337 would remedy the unbalanced implementation of the Mod Act,

reduce the drain on Customs resources and facilitate importer compliance by promoting modern cost-effective compliance import laws. The bill is revenue neutral

and will meet or exceed Bureau of Statistics reporting requirements, while providing

more accurate trade data in pre-consolidated manner. In addition, H.R. 4337 would

accomplish the following objectives:

• Clarify language in the original 1993 Mod Act and as such, is a non-controversial technical corrections bill.

• Eliminate barriers to fully implement the Mod Act of 1993, per congressional

intent.

• Provide a simplified, optional method for aggregate reporting of import data to

streamline the business process for both importers and the U.S. Government.

• Implement true Customs’ ‘‘account management’’ and improve Customs controls

on revenue collection by importer.

• Facilitate modernization under Customs current ACS environment and possibly

reduce the costs of ACE.

• Create no impediment to Customs’ ability to inspect cargo or determine admissibility of goods at time of import, prior to release into US commerce.

JCPenney Purchasing Corporation urges Congress to pass this legislation so that

the Mod Act of 1993 can be fully implemented as anticipated to strengthen our economy by providing increased efficiencies for Customs and allow importers to comply

with US law.

Sincerely,

PETER MCGRATH

f

President

JOINT INDUSTRY GROUP

WASHINGTON, DC 20006

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: Request for Written Comments on H.R. 4337

Dear Mr. Singleton:

The Joint Industry Group (JIG) appreciates the opportunity to comment on this

bill to amend the customs laws of the United States relating to certain importation

procedures. The JIG supports H.R. 4337, which will promote full implementation of

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the Customs Modernization and Informed Compliance Act (the ‘‘Mod Act’’) and will

make other technical and conforming amendments to U.S. customs laws.

JIG is a coalition of more than one hundred and sixty members representing Fortune 500 companies, brokers, importers, exporters, trade associations, and law firms

actively involved in international trade. JIG membership represents over $350 billion in annual trade.

From 1989 to 1993, the JIG led the business community’s effort to modernize the

customs entry process, which culminated in the Mod Act in 1993. During those four

years, the importing community had extensive negotiations with Congress and all

concerned Executive Branch agencies, including the Customs Service and Census

Bureau, to insure that the legislation reflected a carefully balanced compromise,

under which all sides would realize some of the improvements for which they had

bargained.

In major part, the compromise which was ultimately accepted required the trade

community to be responsible for the classification and valuation of imported merchandise and the exercise of ‘‘reasonable care’’ in the import process, in exchange

for the Government streamlining and fully automating the commercial operations

of the U.S. Customs Service and fully implementing a system of ‘‘informed compliance’’ to insure that importers are aware of the Customs Service’s requirements.

More than six years later, many of the improvements which the trade community

bargained for, particularly those relating to electronic data transmission and periodic reporting, have not been implemented at all, or only partially implemented.

Sections 1 through 5 of H.R. 4337 are designed to provide a clear mandate to the

Customs Service to follow through on these long-delayed promises and commitments

contained in the Mod Act. The remaining sections of the bill are technical and conforming amendments that address problems that have surfaced during Mod Act implementation.

H.R. 4337 will promote full implementation of the following modern, cost-effective

and business-like concepts contained in the Mod Act:

• Filing of essential data for cargo release

The bill clarifies that upon arrival of goods, only such information as is necessary

to enable the Customs Service to determine whether the goods may be admitted

should be required. All other information necessary to fix duties, etc., would be provided later after release of the goods. The Customs Service enforces myriad laws on

behalf of other federal agencies regarding the admissibility of goods, and the bill

does not change existing procedures in that regard, and does not restrict Customs’

authority to examine goods presented for entry into the United States.

• Periodic filing of entry data in aggregate form

The Mod Act first introduced the concepts of Importer Activity Summary Statement (IASS) and Reconciliation. As indicated in the House Report on that legislation, Congress clearly contemplated that these concepts would permit aggregate,

periodic entry data reporting:

The introduction into the law of two new provisions, the import activity

summary statement and the reconciliation, will permit importers and customs brokers which are capable of interacting with Customs in an electronic

mode to handle Customs transactions in a more business-like way, reducing

paperwork and many of the administrative costs. The import activity summary statement is the electronic transmission, periodically, of the information now contained in individual entry summarieT1. Major U.S. companies

will increase their competitiveness through cost reduction by being able to

submit information in batch form. House Report 103–361(I)(emphasis

added).

Despite this clear mandate, Customs has never implemented IASS. While the

agency has implemented Reconciliation, it is currently only in prototype form and

has proven to be so cumbersome and limited as designed by Customs that there is

a disincentive for importers to use it. H.R. 4337 is intended to require Customs to

implement the business-like aggregated data reporting that Congress and the business community expected via the Mod Act.

• Periodic payment of duties, taxes, and fees

The bill clarifies that, along with aggregate data reporting, importers may elect

to make payments of duties, taxes, and fees on a periodic, aggregate basis. This simply delivers on another aspect of IASS that has not been implemented at all.

Taken together, the provisions summarized above would further the Mod Act goal

of transitioning away from the outmoded transaction-based model of customs commercial operations to an account-based system. Importantly, H.R. 4337 would not

impede the government’s authority and responsibility in examination and inspection

160

of goods, and the collection of revenue and trade statistics. Other provisions of the

bill contain technical amendments that we believe are non-controversial. For these

reasons, the JIG supports enactment of this proposed legislation.

Sincerely,

RON SCHOOF

f

Chairman, Joint Industry Group

HUGHES HUBBARD & REED LLP

Washington, DC 20006–2401

May 19, 2000

Mr. A. L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Bldg.

Washington, D.C. 20515

Re: Comments on H.R. 4337

Dear Mr. Singleton:

We are writing on behalf of our client, Lands’ End, Inc., to comment in support

of H.R. 4337, which would amend the customs laws relating to importation procedures. Lands’ End is an importer of textiles, apparel and other articles for catalog

sales. Lands’ End is generally in favor of the proposed changes and commends Representative Thomas for his sponsorship of this legislation.

H.R. 4337 would make certain changes that are needed to complete the implementation of the 1993 Customs Modernization Act (‘‘Mod Act’’). While the Mod Act was

intended to provide for a shift from entry-by-entry processing to periodic entry and

reconciliation, or an account-based approach, this objective cannot be successfully

achieved without the additional amendments provided in H.R. 4337.

Although we agree with most of the changes proposed in H.R. 4337, we do have

specific comments with respect to certain sections of the proposed bill. Our specific

comments are set forth below.

Section 1—

Section 1(a) of the bill proposes to amend the statute to require the submission

of minimal documentation to obtain the release of merchandise. While we agree

with the intent of section 1(a), the proposed legislation is ambiguous in describing

the relevant requirements. The legislation proposes amending 19 U.S.C. § 1484 to

provide that, at the time of entry, the importer need only file such documentation

as is necessary to enable the Customs Service to determine whether the merchandise may be released. It does not specify what documentation is required at that

point. While it is true that the proposed legislation does contain language specifying

what documentation must be submitted at some point in the entry process (either

before release or in the entry summary or Importer Activity Summary Statement

(‘‘IASS’’)), it is not clear which portion of the documentation is required for release

and which is required later when the entry summary or IASS is filed. It is also unclear what is meant by ‘‘unless the Customs Service has granted the importer an

alternative means to obtain release.’’

As set forth in the bill, the list of documentation required to be submitted at some

point in the entry process would be as follows:

1. a description of the merchandise;

2. the classification number for the merchandise (to the sixth digit);

3. the country of origin; and

4. other documents required to determine admissibility.

The requirement that the tariff number be stated to the sixth digit before release

may not go far enough. Many admissibility decisions require classification to the

eighth, or even the tenth, digit. Also, the list does not include documents necessary

to establish a value for the merchandise. While we agree that the value of merchandise does not generally affect admissibility, in certain situations, where classification depends on the unit value of the goods, the absence of value information could

make it impossible to classify the merchandise.

161

The amendments proposed in section 1(b) of the legislation would reduce the examination requirements that must be satisfied for release of the merchandise. This

language does not appear to be completely consistent with the language of section

1(a) in that it addresses only considerations of health, safety and welfare and the

correctness of the description and country of origin. The requirement in section 1(a)

that all information needed to determine admissibility be submitted before the merchandise can be released goes further. Admissibility decisions can require more than

a correct description of the merchandise, a correct statement of the country of origin, and evidence that there is no threat to health, safety and welfare. For example,

admissibility may hinge on whether a proper visa has been obtained for quota merchandise.

Section 2—

We agree with the proposal in section 2 of the bill to provide for remote filing of

the IASS.

Section 3—

Section 3 proposes to allow the filing of monthly import activity in the form of

an IASS containing information totaled by tariff number, country of origin and any

relevant special duty indicators. Any discrepancies between the entry and the entry

summary or IASS would be treated as clerical errors (in the absence of fraud).

We certainly agree that discrepancies addressed at the time of the filing of the

entry summary or IASS should be treated as clerical errors. However, while we also

believe that the monthly aggregate statement filing proposed by the bill is a step

in the right direction, we believe it does not go far enough. In effect, the IASS will

still be treated like an entry. It may still be necessary, at least in some situations,

to go back to a particular entry or shipment if changes are required. For example,

an importer may import a single product from a single country but from multiple

vendors. If a value adjustment is needed with respect to only one of the vendors

and the aggregate reporting method has been used, it may be difficult to make the

required adjustment.

Section 4—

We have no objections to or comments on section 4, which would require the Customs Service to prescribe an alternative mid-point interest methodology in calculating interest due on underpayments of duties.

Section 5—

Section 5 proposes to eliminate the requirement to flag entries for reconciliation

and provides for reconciliation of any information required by subsection (a)(1)(B)

of 19 U.S.C. § 1484. We are in favor of this proposal. Under an account-based approach, it should not be necessary to flag issues at the time of entry because corrections are not made on an entry-by-entry basis. Elimination of the requirement to

flag entries will allow importers to correct errors, such as quantity discrepancies,

in situations in which it is not known at the time of entry that there may be a problem.

We are concerned, however, that, based on the language used in the proposed legislation, reconciliation may not cover classification and country of origin, as these

are not specifically covered in subsection (a)(1)(B) of 19 U.S.C. § 1484. This confusion

arises because, as discussed in our comments to section 1 of the bill, it is not clear

what documents are meant to be covered by proposed subsection (a)(1)(A) and which

are covered by subsection (a)(1)(B).

Section 6—

We wholeheartedly agree with the proposal to net and offset overpayments and

underpayments of duties. The practice now in effect is manifestly unfair to importers in that it requires the payment to the Customs Service of any additional duties

due, even after liquidation, but does not allow for the refund of overpayments

(where liquidation has become final) or the netting of overpayments against underpayments. Many clerical errors are made by the shipper and cannot be controlled

by the importer. This proposal would allow the importer to correct mistakes without

faulting the importer for mistakes it can not control.

We do have some questions with respect to this section of the bill, however. The

bill does not define ‘‘relevant period.’’ Also, although we believe the intention is to

allow importers to net over-and underpayments with respect to all products imported during the period, without regard to tariff categories or any other criteria,

this is not completely clear.

162

Finally, because the proposed legislation does not appear to provide for refunds

from the Customs Service in those situations in which the net amount is an overpayment to the Customs Service, we do not believe the legislation goes far enough.

The Customs Service should also be required to pay back any excess amounts collected from the importer.

Sections 7—

We have no comments on sections 7 through 10 of the bill, which address related

party sales, drawback, instruments of international traffic and entireties.

In sum, on behalf of our client, Lands’ End, we support H.R. 4337. We believe

the legislation would be improved if the changes and clarifications described in our

specific comments were incorporated into the bill. In particular, we believe there is

a need for clarification with respect to a number of the terms used in the legislation.

Respectfully submitted,

f

JANET A. FOREST

Statement by Mattel, Inc., El Segundo, California

This statement is submitted on behalf of Mattel, Inc. in connection with the April

20 request for public comment by the House Committee on Ways and Means regarding the package of miscellaneous trade bills being prepared by the committee.

Mattel strongly supports the inclusion in this package of legislation which would

make several technical changes to U.S. Customs laws. This legislation was introduced by Rep. William Thomas as H.R. 4337 on April 13, 2000.

Headquartered in El Segundo, California, Mattel is the world’s largest toy company, with 1999 sales of $5.5 billion in over 150 countries. The company has manufacturing, distribution and sales operations in the United States and 35 other countries, with over 7,700 U.S. employees and a global workforce of 31,000.

Mattel, together with other members of the U.S. Business Alliance for Customs

Modernization (BACM), strongly supports H.R. 4337 in order to effect full implementation of the 1993 Customs Modernization and Informed Compliance Act (‘‘the

Mod Act’’). Despite enactment of the Mod Act in December 1993, implementation of

the law by Customs has been slow and often selective. Of particular concern, the

burden for compliance has been shifted from Customs to the importing community

without delivery of the promised administrative efficiencies to reduce both public

and private sector costs.

The purpose of H.R. 4337 is to promote modern, cost-effective compliance with import laws. As U.S. duty rates decline, U.S. companies are being forced to commit

large resources to build systems and implement procedures to manage import compliance. Having delivered on this responsibility required under the Mod Act, the

trade community asks Congress to deliver on its promise to replace the transactionby-transaction entry process established in 1789 with an account-based option for

periodic aggregate filing of import data and payment of duties and fees.

The enactment of H.R. 4337 would remedy the unbalanced implementation of the

Mod Act, reduce the drain on Customs resources and facilitate importer compliance.

The bill is revenue neutral and will meet or exceed Bureau of Statistics reporting

requirements, while providing more accurate trade data in a pre-consolidated manner.

For the foregoing reasons, Mattel strongly supports the Customs entry changes

proposed in H.R. 4337 and urges that this legislation be included in the miscellaneous trade package being prepared by the Committee on Ways & Means. Please

feel free to contact us should the Committee have any questions regarding this matter.

Respectfully submitted,

THOMAS F. ST. MAXENS

f

163

NATIONAL ASSOCIATION OF MANUFACTURERS

WASHINGTON, DC 20004–1790

May 19, 2000

A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: Request for Written Comments on H.R. 4337

The National Association of Manufacturers (NAM) appreciates the opportunity to

comment on proposed technical corrections to U.S. trade laws and miscellaneous

duty suspensions. On behalf of NAM, I am writing to express support for H.R. 4337,

which will ensure full implementation of the 1993 Customs Modernization and Informed Compliance Act (the ‘‘ModAct’’).

As a result of the legislation, the following procedures will be made available that

will both modernize the import process and ensure cost-effective compliance with

import laws:

• Filing of essential data for cargo release.

Only such information as is necessary to enable the Customs Service to make admissibility and release decisions should be required. H.R. 4337 delineates the types

of information that ordinarily would be required at the time of entry. The Customs

Service retains the right to seek additional information insofar as the additional information relates to whether the goods may be refused entry into the U.S.

• Periodic filing of aggregate import data.

The law will provide an optional periodic method for aggregate reporting of import

data, which should result in a streamlined process for both importers and the U.S.

government. By moving from a transaction-based to an account-based system, the

Customs Service will be able to free additional resources directed to the protection

of U.S. borders.

• Periodic payment of duties, taxes and fees.

This provision simply delivers on the ‘‘ModAct’’ promise of a modern, accountbased system that augments current import requirements.

These are just some of the improvements and clarifications introduced by H.R.

4337. We are confident that they will result in a more modern, efficient customs

process, improved trade data and enhanced compliance—goals which we share with

the U.S. government.

Sincerely,

FRANK VARGO

f

Vice President

NATIONAL CUSTOMS BROKERS &

FORWARDERS ASSOCIATION OF AMERICA

WASHINGTON, DC 20036

May 17, 2000

The Honorable Philip Crane

Chairman, Subcommittee on Trade

Committee on Ways and Means

U.S. House of Representatives

1104 Longworth House Office Building

Washington, DC 20515

Dear Congressman Crane:

The National Customs Brokers and Forwarders Association of America (NCBFAA)

appreciates the opportunity to provide our views on miscellaneous tariff proposals

now open to public comment. We are particularly interested in H.R. 4337, sponsored

164

by Mr. Thomas and supported by the Business Alliance for Customs Modernization

(BACM).

NCBFAA is on record as supporting the general direction of this legislation. We

believe that fundamental changes can indeed be made to the customs entry process

and we have supported BACM’s initiatives in this regard. It is important to understand that theirs are the interests of the twenty largest, most reputable importers/

exporters in the United States. They have large numbers of transactions, shipping

large volumes of merchandise throughout the world and, in many instances, deal

extensively with related parties. Global commerce demands that Customs operations

become transparent and do not constitute further hurdles to a company’s logistics

flow. Thus, there is, in H.R. 4337, a statutory recognition of a ‘‘Track IV’’ concept

that would permit Customs to design processes tailored to the unique circumstance

of these largest importers/exporters.

Simultaneously though, it is also incumbent on the Congress to look for ways to

streamline the entry process for the remaining 80% of the entries and 98+% of importers. Small and medium-sized companies are the engine of international commerce and arguably are in even more need of avoiding the delays and expense consequent to traditional Customs processes. Thus, in addition to changes accommodating the largest importers, we offer the following concepts that should be included

in any discussion of reforming Customs procedures.

1. A new money management system for Tracks I, II & III. In our meetings, Customs has correctly pointed out that payment of duties and other collections on a

transaction-by-transaction basis is inefficient from both Customs’ and the importer’s

perspective. They create analogies to the income tax payment system and the commercial credit card system whereby payment is handled separate from the transaction and accumulated in some fashion that permits periodic payment without loss

of revenue to the government.

In reviewing Customs’ proposal, NCBFAA favors a business account statement approach presently used by most businesses for acquisitions of both hard goods and

services. Such an approach would permit the importer and/or his broker to manage

the statement—both its credits and debits—using the importer IRS number as the

identifier. Payment or refunds would be made at any juncture, based on the importer’s business practices and the establishment of a reasonable time for a lump sum

payment of duties.

In advancing the concept of a money management system, the government clearly

recognizes the savings that an accumulated transaction approach can offer. The

challenge ahead will be to establish revenue neutrality and promote cash flow without imposing interest for accounts paid within a reasonable period. Interest is not

levied today on routine transactions and would not be supportable for a new money

management system. NCBFAA therefore proposes the model now employed by the

government in collecting IRS taxes on distilled spirits, beer and wine. Here, entries

released in a given month are due and payable by the 15th of the following month.

We believe that separating data from revenue has many compelling advantages.

It is important that any approach be simple and easy to administer. We know that

the existing system of convoluted interest calculations is unpopular and counterproductive. NCBFAA is willing to work with the Congress, and, in turn, the Customs Service to develop a practical alternative

2. Establish a ‘‘corrective period’’ and eliminate ‘‘reconciliation’’ for the vast majority of filers for other than Track IV filers.

Implicit in the reconciliation process, now existing at Customs, is the recognition

that errors occur and their correction should be encouraged. Reconciliation was a

step in that direction, but it has become unworkable for the importing public and

for Customs. A primary source of its fallibility is the requirement that importers,

contemporaneous to filing the entry, ‘‘flag’’ that entry for possible subsequent revision. This simply does not work. A better approach, we think, is to extend the statutory liquidation period to 18 months after entry. During that period, an importer

may electronically correct the entry summary and apply any duties, fees, interest

or refunds to his statement. Everyone benefits when good faith errors are corrected

and adjustments are made voluntarily. It would also dramatically reduce personnel

demands on Customs.

NCBFAA welcomes the idea of an electronic entry correction period, reasonably

for the 18 month period after the entry summary is filed. During this timeframe,

an importer or his broker can revise the record relating to a particular entry and

make the necessary adjustments required by Customs. This would dramatically reduce personnel demands on Customs over the existing reconciliation system (e.g.

eliminating SILs and the consequent Customs input of entry corrections). Finally,

165

we believe strongly that, in the context of these reforms, the concept of liquidation,

and the finality it achieves, must be retained.

****

NCBFAA makes these comments in anticipation of a formal review by the Committee as it proceeds with this legislation. We look forward to further presenting

our views.

Sincerely,

Peter H. Powell, Sr.

President

cc: The Honorable Bill Thomas

f

SONY ELECTRONICS INCORPORATION

PARK RIDGE, NEW JERSEY 07656–8003

May 16, 2000

A.L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: HR 4337—To Amend The Customs Laws

Dear Chairman Archer:

Sony Electronics Inc. is writing to request your full support for HR 4337, a bill

to modernize and simplify customs processes, as intended by the 1993 Customs Mod

Act. Current customs processes are mired in arcane and antiquated procedures. In

many ways, we are operating as if we were still in the 19th century. Even as duty

rates decline, our company is expending ever-increasing amounts on inefficient

transaction-by-transaction customs administration. It is a drag on business and creates unnecessary costs for purchasers and consumers.

HR 4337 will create an unambiguous mandate for efficient account-based processing options. While leaving the right of the Customs Service to inspect inbound

cargo untouched, it will allow certain information to be compiled and submitted on

a periodic, consolidated basis, the same way that businesses operate.

Supporters of HR 4337 have made an utterly stunning and incisive observation.

Current customs regulations are the equivalent of requiring a retail merchant to report sales tax transactions for each sale instead of on an aggregate basis. Further,

that merchant would have to accurately report quantities and values before ever

having the opportunity to take count.

With the passage of HR 4337, we can rectify the situation described above. Importers have already taken on new and additional responsibilities, some formerly

the exclusive province of Customs. For example, under the Mod Act, we became responsible for using reasonable care to appraise and classify merchandise. We also

became subject to significant new penalties for violations. Yet, we have not obtained

the quid-pro-quo for the numerous burdens undertaken.

HR 4337 is the mechanism to fulfill the promise of the Mod Act. We ask you to

support it as a means to fair and modernized customs processes.

Sincerely,

FRANK M. LESHER

166

1See Advisory from the Committee on Ways and Means, Subcommittee on Trade, No. TR–

20, April 20, 2000. 2See 19 U.S.C. § § 1671e(a)(3) and 1673e(a)(3).

f

STEWART AND STEWART LAW OFFICE

WASHINGTON, DC 20037

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth Building

Washington, D.C. 20515

Re: H.R. 4337—Comments of The Timken Company

Dear Mr. Singleton:

The Timken Company appreciates the opportunity to submit comments to the

Committee on Ways and Means of the House of Representatives regarding H.R.

4337, which would amend U.S. customs laws relating to import procedures.1 As a

domestic industry that has used the unfair trade laws, The Timken Company is concerned that changes proposed to customs laws in H.R. 4337 not undermine the effectiveness of antidumping and countervailing duty laws and other import relief laws.

As noted below, The Timken Company would like to see H.R. 4337 amended (1)

to provide for the notation of antidumping or countervailing duty orders or any

other trade law relief measures at time of entry and in import activity summary

statements and (2) to bring the language of H.R. 4337 regarding transaction values

of imported merchandise more closely in line with current law.

I. Notation of Antidumping or Countervailing Duty Orders at Time of Entry and in

Import Activity Summary Statements

The Timken Company understands that the purpose of H.R. 4337 is to streamline

and simplify filing procedures for importers. Accordingly, the bill calls for the filing

of minimal information by importers at the time of entry. H.R. 4337 at Section

1(a)(2)(C) would require that importers provide the Customs Service upon entry a

description of the merchandise, the merchandise’s tariff classification, its country of

origin, and admissibility documentation.

H.R. 4337 also provides for minimal reporting of information in import activity

summary statements. Under Sections 3(a)(2) and (c) of the bill, importers would report tariff numbers, countries of origin, and special program indicators, e.g., GSP,

on these statements.

Under existing law, importers of merchandise subject to antidumping and countervailing duty orders are required to make deposits of estimated special duties

upon entry.2 As this requirement will continue under H.R. 4337, the Customs Service should ensure that any new forms or streamlined procedures maintain the

present system for ensuring compliance with the requirements: importers have to

indicate on their entry forms that their merchandise is subject to an order and make

special duty deposits at the time of entry.

The Timken Company respectfully requests that H.R. 4337 be amended to require

that importers note at time of entry and in importer activity summary statements

whether the reported merchandise is subject to an antidumping or countervailing

duty order or any other trade law relief measures. The Timken Company is concerned that, through the streamlined process proposed in H.R. 4337, the Customs

Service may in some cases be unaware as to whether imported products are subject

to antidumping and countervailing duty orders or other trade law relief measures.

This circumstance could result in the Customs Service inadvertently failing to suspend liquidation on some entries. Such a situation could be obviated, however, if

Customs were put on notice at time of entry or through importer activity summary

statements whether imported merchandise is subject to antidumping and countervailing duty orders or other trade law relief measures.

II. Transaction Values of Imported Merchandise

The Timken Company is concerned about variances of language in H.R. 4337 with

current law pertaining to circumstances of sale that may be considered in deterVerDate 20-JUL-2000 07:26 Sep 05, 2000 Jkt 060010 PO 00000 Frm 00178 Fmt 6633 Sfmt 6602 K:\CPRINT\66010 WAYS1 PsN: WAYS1
167

3Please note that H.R. 4337 refers to ‘‘19 U.S.C. 1401(b)(2).’’ The Timken Company believes

that the bill was intended to read ‘‘19 U.S.C. 1401a(b)(2).’’ 1See Advisory from the Committee on Ways and Means, Subcommittee on Trade, No. TR–

20, April 20, 2000.

mining whether ‘‘transaction values’’ may be used in related party import transactions.3 Section 7 of H.R. 4337 states

In determining whether the circumstances of the sale of the imported merchandise indicate that the relationship between the buyer and seller did not

influence the price actually paid or payable, there shall be taken into account other sales during a representative timeframe in the normal course

of trade in merchandise of the same class or kind.

The Timken Company has two specific concerns regarding this language. First,

the language ‘‘merchandise of the same class or kind’’ in Section 7 is significantly

broader than current law regarding transaction values between related buyers and

sellers. Current law, 19 U.S.C. § 1401a(b)(2)(B)(i), compares the transaction value of

imported merchandise and the transaction value of ‘‘identical merchandise, or of

similar merchandise.’’ The more specific language of the current law provides for

closer comparisons between merchandise and is thus viewed by The Timken Company as preferable.

Second, Section 7 of H.R. 4337 does not require that sales be ‘‘to unrelated buyers

in the United States’’ as does 19 U.S.C. § 1401a(b)(2)(B)(i). The Timken Company

is concerned that the absence of this language in H.R. 4337 could lower the standard for determining the acceptability of ‘‘transaction values’’ in related party transactions.

Accordingly, The Timken Company respectfully requests that Section 7 of H.R.

4337 be amended, first, to replace ‘‘merchandise of the same class or kind’’ with

‘‘identical merchandise, or of similar merchandise,’’ and second, to add ‘‘to unrelated

buyers in the United States’’ at the end of Section 7.

III. Conclusion

The Timken Company would be pleased to participate further in the development

of H.R. 4337. If you have any questions regarding The Timken Company’s position

on this legislation, we may be reached at (202) 785–4185.

Sincerely,

TERENCE P. STEWART

WILLIAM A. FENNELL

DAVID S. JOHANSON

Special Counsel to

f

The Timken Company

STEWART AND STEWART LAW OFFICE

WASHINGTON, DC 20037

May 19, 2000

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth Building

Washington, D.C. 20515

Re: H.R. 4337—Comments of the Torrington Company

Dear Mr. Singleton:

The Torrington Company appreciates the opportunity to submit comments to the

Committee on Ways and Means of the House of Representatives regarding H.R.

4337, which would amend U.S. customs laws relating to import procedures.1 As a

domestic industry that has used to the unfair trade laws, the Torrington Company

is concerned that changes proposed to customs laws in H.R. 4337 not undermine the

effectiveness of antidumping and countervailing duty laws and other import relief

laws.

As noted below, the Torrington Company would like to see H.R. 4337 amended

(1) to provide for the notation of antidumping or countervailing duty orders or any

168

2See 19 U.S.C. § § 1671e(a)(3) and 1673e(a)(3).

3Please note that H.R. 4337 refers to ‘‘19 U.S.C. 1401(b)(2).’’ The Torrington Company believes that the bill was intended to read ‘‘19 U.S.C. 1401a(b)(2).’’

other trade law relief measures at time of entry and in import activity summary

statements and (2) to bring the language of H.R. 4337 regarding transaction values

of imported merchandise more closely in line with current law.

I. Notation of Antidumping or Countervailing Duty Orders at Time of Entry and in

Import Activity Summary Statements

The Torrington Company understands that the purpose of H.R. 4337 is to streamline and simplify filing procedures for importers. Accordingly, the bill calls for the

filing of minimal information by importers at the time of entry. H.R. 4337 at Section

1(a)(2)(C) would require that importers provide the Customs Service upon entry a

description of the merchandise, the merchandise’s tariff classification, its country of

origin, and admissibility documentation.

H.R. 4337 also provides for minimal reporting of information in import activity

summary statements. Under Sections 3(a)(2) and (c) of the bill, importers would report tariff numbers, countries of origin, and special program indicators, e.g., GSP,

on these statements.

Under existing law, importers of merchandise subject to antidumping and countervailing duty orders are required to make deposits of estimated special duties

upon entry.2 As this requirement will continue under H.R. 4337, the Customs Service should ensure that any new forms or streamlined procedures maintain the

present system for ensuring compliance with the requirements: importers have to

indicate on their entry forms that their merchandise is subject to an order and make

special duty deposits at the time of entry.

The Torrington Company respectfully requests that H.R. 4337 be amended to require that importers note at time of entry and in importer activity summary statements whether the reported merchandise is subject to an antidumping or countervailing duty order or any other trade law relief measures. The Torrington Company

is concerned that, through the streamlined process proposed in H.R. 4337, the Customs Service may in some cases be unaware as to whether imported products are

subject to antidumping and countervailing duty orders or other trade law relief

measures. This circumstance could result in the Customs Service inadvertently failing to suspend liquidation on some entries. Such a situation could be obviated, however, if Customs were put on notice at time of entry or through importer activity

summary statements whether imported merchandise is subject to antidumping and

countervailing duty orders or other trade law relief measures.

II. Transaction Values of Imported Merchandise

The Torrington Company is concerned about variances of language in H.R. 4337

with current law pertaining to circumstances of sale that may be considered in determining whether ‘‘transaction values’’ may be used in related party import transactions.3 Section 7 of H.R. 4337 states

In determining whether the circumstances of the sale of the imported merchandise indicate that the relationship between the buyer and seller did not

influence the price actually paid or payable, there shall be taken into account other sales during a representative timeframe in the normal course

of trade in merchandise of the same class or kind.

The Torrington Company has two specific concerns regarding this language. First,

the language ‘‘merchandise of the same class or kind’’ in Section 7 is significantly

broader than current law regarding transaction values between related buyers and

sellers. Current law, 19 U.S.C. § 1401a(b)(2)(B)(i), compares the transaction value of

imported merchandise and the transaction value of ‘‘identical merchandise, or of

similar merchandise.’’ The more specific language of the current law provides for

closer comparisons between merchandise and is thus viewed by the Torrington Company as preferable.

Second, Section 7 of H.R. 4337 does not require that sales be ‘‘to unrelated buyers

in the United States’’ as does 19 U.S.C. § 1401a(b)(2)(B)(i). The Torrington Company

is concerned that the absence of this language in H.R. 4337 could lower the standard for determining the acceptability of ‘‘transaction values’’ in related party transactions.

Accordingly, the Torrington Company respectfully requests that Section 7 of H.R.

4337 be amended, first, to replace ‘‘merchandise of the same class or kind’’ with

‘‘identical merchandise, or of similar merchandise,’’ and second, to add ‘‘to unrelated

buyers in the United States’’ at the end of Section 7.

169

III. Conclusion

The Torrington Company would be pleased to participate further in the development of H.R. 4337. If you have any questions regarding the Torrington Company’s

position on this legislation, we may be reached at (202) 785–4185.

Sincerely,

TERENCE P. STEWART

Wesley K. Caine

Geert De Prest

David S. Johanson

Special Counsel to

f

The Torrington Company

SHARRETTS, PALEY, CARTER &

BLAUVELT, P.C.

WASHINGTON, DC 20036

May 19, 2000

Mr. A. L. Singleton

Chief of Staff, Committee on Ways and Means

U. S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: Request for Written Comments on Technical Corrections to U.S. Trade Laws

and Miscellaneous Duty Suspension Bills

Dear Mr. Singleton:

The Toy Manufacturers of America, Inc. (TMA) wishes to express its support for

passage of H.R. 4337 as a crucial part of this year’s technical corrections and miscellaneous duty suspension legislation. TMA, founded in 1916, is a New York based

non-profit trade organization of 290 member companies involved in toys, dolls,

games, holiday decorations and related products. TMA member companies account

for approximately 85% of the $20 billion of toys sold in the United States annually.

TMA member companies include multi-national corporations, small family owned

businesses, manufacturers, design firms, professional inventors and toy testing companies.

TMA supports H.R. 4337 because it will promote up-to-date and cost effective

compliance with US import laws. The Customs Mod Act, which was passed in 1993,

was toted as legislation, which would deliver significant administrative benefits to

the importing community. It has not lived up to its advance billing. Although duties

have been eliminated for most products imported by TMA member companies, many

toy industry participants find that they are still spending disproportionate resources

on Customs compliance. Enactment of H.R. 4337 will allow for a fuller implementation of the Mod Act, as originally intended by Congress. It will allow for simplified

aggregate reporting of import data. It will allow Customs to implement a true ‘‘Account Management System.’’ It will facilitate modernization under the ACS environment, and probably reduce the cost of implementing ACE. It will accomplish these

goals without impeding the ability of Customs to inspect incoming cargo and determine its admissibility. Finally, H.R. 4337 is revenue neutral.

In light of the above, TMA urges that Congress enact H.R. 4337 as part of this

year’s technical corrections and miscellaneous duty suspensions legislation. If you

have any questions regarding this submission, please do not hesitate to contact the

undersigned.

Very truly yours.

M. BARRY LEVY,

Trade Counsel for

Toy Manufacturers of America, Inc.

cc: David A. Miller, President, TMA

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170

U.S. BUSINESS ALLIANCE FOR

CUSTOMS MODERNIZATION

May 19, 2000

The Honorable Bill Archer Chairman,

House Ways and Means Committee

1236 Longworth House Office Building

Washington, D.C. 20515–4307

The Honorable Philip M. Crane Chairman,

House Ways and Means Trade Subcommittee

233 Cannon House Office Building

Washington, D.C. 20515–1308

Re: H.R. 4337

Dear Chairman Archer and Chairman Crane:

This letter is submitted in strong support of H.R. 4337 by the U.S. Business Alliance for Customs Modernization (‘‘BACM’’). BACM includes companies that span

the major industrial sectors. For example, in the automotive sector, BACM includes

General Motors, Ford, DaimlerChrysler, American Honda, Toyota, and Nissan. In

the computer, electronics and telecommunications sector, BACM includes Hewlett

Packard, Compaq, Sony Electronics, General Electric and Nortel Networks. In the

retail sector, BACM includes Sears, J.C. Penney Co., Mattel, Target Corporation,

and Wal-Mart. In agribusiness, BACM includes Sara Lee and Pillsbury. In petroleum and chemicals, BACM includes BP-Amoco and DuPont.

Each of our member companies depends upon the smooth and efficient administration of the customs laws and regulations in order to run its business. Each of

our member companies has extensive experience in dealing with the import process

and interfacing with the United States Customs Service. Therefore, BACM and its

member companies are uniquely well-qualified to comment upon H.R. 4337, which

proposes changes to the customs entry process.

BACM fully supports the provisions in H.R. 4337 that seek to complete implementation of the unfulfilled promises of the 1993 Customs Mod Act. For convenience,

we attach a ‘‘Statement of Purpose’’ that explains each section of the bill in detail.

H.R. 4337 would allow for true account-based processing and customs administration that is consistent, reasonable and efficient. It would make customs transactions

more businesslike, thus reducing unnecessary work and administrative costs.

Most important, H.R. 4337 would ensure that the Customs Service implement the

mandate in the Mod Act to allow for ‘‘account-based’’ processing, including the importer activity summary statement or IASS. Although the Congress intended that

importers be given the option to report import information to the Customs Service

in an aggregate and periodic form using the IASS procedures, the Customs Service

has utterly failed to implement this mandate. The provisions in H.R. 4337 would

make it clear to the Customs Service that it cannot continue to disregard and ignore

the intent of Congress, and that it must implement all provisions of the Customs

Mod Act.

In addition, H.R. 4337 would make clear that at the time of import, an importer

should be required to report only that information necessary to confirm that the

goods may properly enter the U.S. commerce. This requirement would in no way decrease or otherwise limit the responsibility and authority of the Customs Service to

inspect merchandise that arrives at our nation’s borders. However, it would allow

the Customs Service to focus its resources more effectively on identifying those shipments of merchandise that should be denied entry into the United States. At this

point in the entry process, issues that do not affect admissibility (such as value) can

be deferred without risking the revenue, security or national interests of the United

States.

The member companies of BACM strongly support H.R. 4337, and we greatly appreciate your active support and co-sponsorship of this important legislation. Please

call me at 858–942–2441 if you have any questions or need additional information.

Sincerely,

JAMES P. FINNEGAN

Chairperson

171

Year 2000 Customs Trade Legislation

STATEMENT OF PURPOSE

The purpose of the Year 2000 Customs Trade Legislation is to help fulfill the 1993

Customs Mod Act mandate that customs commercial operations be modernized and

simplified.

From its very earliest days, the Customs Service’s commercial operations process

has been transaction-based. This means that all of the information necessary to appraise and classify imported goods has been collected on an entry-by-entry (shipment-by-shipment) basis. For the companies that conduct the majority of trade into

the U.S., tens of thousands of entry summaries must be filed yearly covering each

discrete import shipment.

The Customs Service’s treatment of these individual declarations does not take

into full consideration the totality or context of the importer’s business. Moreover,

under this antiquated system, importers are required to file data before they have

had any reasonable opportunity to confirm and reconcile the required information.

In many ways, it is the equivalent of requiring a retail merchant to report sales

taxes for each sale instead of on a periodic consolidated basis. The net result is that

despite declining duty rates, businesses are spending ever-increasing amounts, and

devoting more and more corporate resources, on customs compliance and administration.

The Mod Act was intended to remedy the entry-by-entry operations problem by

providing importers with access to account-based processing. In exchange for agreeing to new civil penalties and accepting responsibility for the classification and appraisement of imported merchandise (which was formerly the exclusive responsibility of the Customs Service), the trade community was to gain periodic entry (in

the form of an ‘‘import activity summary statement’’), the ability to ‘‘reconcile’’ (or

adjust) import information, faster release, remote filing and other programs. Notwithstanding the expressed intent of the Congress in the Mod Act, the Customs

Service’s commercial operations remain transaction-based. Some Mod Act programs

have never been implemented. Others have been subject to only limited, prototype

implementation.

Although Mod Act implementation has been hampered by obstacles associated

with the Customs Service’s antiquated computer system, a new system alone will

not address industry’s concerns about the stalled modernization effort. The Customs

Service’s public notices and pronouncements about future plans (e.g., Entry Revision

Project (‘‘ERP’’)) continue to limit the benefits of the Mod Act bargain. The present

legislation is intended to dispel any lingering ambiguity about what the Mod Act

provided. It will supply the Customs Service with a clear mandate to implement efficient account-based processing options.

As a benefit, this legislation will free the Customs Service and the trade community from cumbersome and inefficient procedures. It will enable Customs to redirect

more effort to the protection of the country’s borders. As an additional benefit, the

collection of trade statistics will be enhanced because importers will be able to file

monthly-consolidated information maintained in the ordinary course of business,

which will insure the greatest possible statistical accuracy.

The provisions of this legislation are intended to clarify the additional importer

options for commercial operations processing intended by the Congress in the Mod

Act. However, this legislation does not alter or restrict the availability of current

‘‘entry/entry summary’’ procedures.

A summary of each provision of the bill is attached hereto.

SECTION 1. MINIMAL DATA REQUIRED TO RELEASE IMPORTED MERCHANDISE FROM

CUSTOMS CUSTODY

The trade community fully acknowledges and supports the mission of the Customs

Service to prevent the introduction into U.S. commerce of dangerous and harmful

goods. However, this mission is separate from and should not be confused with the

collection of revenue and the administration of the customs laws in general. The

government should not require commercial importers to present more information

at the time of importation than is necessary to determine whether merchandise

should be released from Customs’ custody. All other information can be presented

at a later time. Section 1(a) of the bill delineates the types of information that would

ordinarily be required at the time of entry. At the same time, it preserves the Customs Service’s right to seek additional information about any particular shipment,

but only insofar as the additional information relates to whether the goods may be

refused entry into the U.S.

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Section 1(b) also amends the law to delineate the proper subjects of import examinations. Inspections of merchandise should not be used as a punitive enforcement

measure. For example, a Customs Service determination that an importer has failed

to correctly report dutiable value should not result in increased examinations, because inspections of merchandise are not able to yield information about whether

the importer has paid the agreed upon price. On the other hand, the bill envisions

that the Customs Service will continue unimpeded in its right to examine imports

to determine admissibility and to enforce all laws for which the physical inspection

of the merchandise is relevant and material. For example, it may properly inspect

the merchandise to determine whether it is properly marked, subject to antidumping, visa or other requirements. Section 1(c) conforms the definition of ‘‘electronic entry’’ to the information necessary to determine whether an examination

must be conducted by Customs.

SECTION 2. REMOTE FILING

The following section of this bill, Section 3, clarifies that importers will have an

option to file one import activity summary statement (‘‘IASS’’) per month in lieu of

entry summaries for each individual transaction, as currently required by the Customs Service. Section 2 amends the Mod Act ‘‘remote location filing’’ section to conform with this option. Remote filing currently contemplates the filing of an electronic entry summary, but not the filing of an IASS. Section 2 remedies this by establishing that remote filing depends upon the capability to file either the entry

summary or the IASS electronically.

SECTION 3. IMPORTER ACTIVITY SUMMARY STATEMENT CLARIFICATION

The Mod Act defined the ‘‘import activity summary statement’’ (‘‘IASS’’) as the

periodic transmission of data or information which enables Customs to assess duties, taxes and fees on merchandise imported during that period, collect accurate

trade statistics and determine whether other applicable legal requirements are met.

See 19 U.S.C. § 1401(r). The Act further provided in amended § 1484(a)(2)(A) that

the IASS would cover entries made during the calendar month and would be filed

no later than the 20th day of the following month. The purpose was to permit importers ‘‘to handle Customs transactions in a more business-like way, reducing paperwork and many of the administrative costs. The import activity summary statement is the electronic transmission, periodically, of the information now contained

in individual entry summaries. Major U.S. companies will increase their competitiveness through cost reduction by being able to submit information in batch form.’’

H.R. Rep. No. 103–361 (1993).

Despite this clear mandate, importers have never seen the IASS implemented and

must continue to file all import information on an individual entry basis. Further,

because importers are unable to compile, verify and batch their import information,

each discrete transaction must be reported with 100% accuracy within ten business

days of entry. Failure to do so can result in penalties and/or adverse audit findings

upon later discovery of variances. This process is directly contrary to business accounting processes, whereby data is subject to validation, a monthly accounting

close process and reporting. In business, individual variances are often offset and

records will reflect the 100% accurate net activity for the period.

The Customs Service’s current transaction-based approach skews results. For example, from time-to-time all commercial invoices for imports are subject to manual

keying errors. On one shipment during the month certain data may be over reported, in another shipment of the merchandise it may be underreported. The two

transactions may cancel each other out entirely, and the net result will be correctly

reflected in the records. For the Customs Service’s purposes, however, each transaction is errant, no matter the end result. This is completely antithetical to an account-based approach.

The proposed legislation will clarify that an importer has the right to declare its

information either using the current individual entry summary system or by filing

a monthly IASS. As a practical matter, the IASS will resemble an individual entry

summary, except that it will contain aggregate information for the entire month.

Thus, for example, suppose an importer now files 30 entry summaries per month,

each one for imports of Products A, B and C. The IASS will also entail three line

items, but with totals for A, B and C for the entire month.

The proposed Section 3, will, in main part, permit the importer to segregate and

total the information by tariff number, country of origin and special program indicator (e.g., GSP), the same way now permitted for entry summaries. See Subsection

(a)(2). Thus, the importer will be responsible for using reasonable care to present

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regarded. Pursuant to subsection (c), importers would not have to list the activity

for each and every entry during the month, which could overload the Customs Service system with an excessively large number of data lines, all at once. Finally, the

IASS would be treated just like any other entry summary for purposes of administration of the customs laws, including the payment of duties, taxes, fees and drawback.

The Customs Service has refused to implement the IASS, instead opting merely

for periodic payment proposals and most recently, periodic entry follow-up with full

detailed entry-by-entry data. Any proposal that stops short of the business-like ability to consolidate and report data periodically fails to truly modernize customs practices in the manner intended by Congress.

SECTION 4. MID-POINT INTEREST

This section re-authorizes mid-point interest, first established as part of Pub. L.

106–36. The purpose is to authorize a means of collecting interest on duty underpayments without having to resort to entry-by-entry calculation, consistent with the

overall goals of this bill.

SECTION 5. RECONCILIATION CHANGES/CLARIFICATION

Reconciliation is the means to later report information relating to imports that is

undetermined at the time the entry summary or IASS is filed. The problem for importers and the Customs Service is that Customs requires the reconciliation to be

connected to individual entries by means of a ‘‘flag’’ in Customs’ automated system.

This is the same transaction-based approach that has created huge burdens for Customs and the trade community. In keeping with the spirit of the Mod Act, Section

5(1) of the bill would eliminate the requirement that each entry be flagged for reconciliation. The underlying premise is that import information is presumptively correctable via a reconciliation. For example, the actual quantity of goods imported is

never known for sure until the merchandise is physically received and counted. This

may occur long after entry. Subsection (2) would allow elements such as quantity

to be reconciled.

SECTION 6. NETTING AND OFFSETTING

Section 6(1) of the bill reaffirms that importers should be encouraged to file the

best, most accurate information with Customs, even if the foreign shipper makes

clerical errors in the preparation of the shipping information. As previously stated

with respect to the IASS and reconciliation, in general, periodic summary statements and adjustments filed via reconciliation are geared to allowing the importer

to rely on its own business accounting records, verified and recorded pursuant to

Generally Accepted Accounting Principles. This contrasts with current Customs requirements, which force importers to rely upon the shipper’s untested information

(e.g., commercial invoice information), which accompanies shipments for export to

the U.S.

The idea that importers be able to use their own accounting information is consistent with the Mod Act, which placed responsibility on importers to use reasonable

care. Reasonable care requires diligence with respect to information and records

under the importer’s control. On the other hand, the importer cannot control whether clerical errors are made with respect to information prepared by the foreign shipper.

For example, following importation the importer will gather within its accounting

system the total quantity imported and the amount paid to the foreign seller. Permitted time to compile this information, the importer will report it to Customs, in

reliance on its own records, instead of using a best estimate based on information

contained in unverified commercial shipping documents prepared by the shipper. If

the importer correctly reports quantities and values in its entry summary, IASS

and/or reconciliation, the importer should not be faulted for clerical errors made by

the shipper in preparing the shipping information, as the latter was not under the

importer’s control. Therefore, variances in the shipping information from the correct

information presented by the importer to Customs should be considered clerical errors, absent intent to misuse or misrepresent the shipping information in a fraudulent manner. Section 6(1) of the bill accomplishes this purpose.

Section 6(2) recognizes that within an account-based approach, individual transactions that cancel each other out should not be recognized for Customs’ enforcement. Rather, only the net variances (e.g., the net amount of unreported value)

should count against the importer. Finally, Section 6(3) allows importers to offset

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tions and prior disclosures. It is fundamentally unfair for duty collection to be exclusively one-sided in favor of the Customs Service.

SECTION 7. CIRCUMSTANCES OF SALE

In transactions between related parties, the price will not be used if it is determined, by an examination of the circumstances surrounding the sale, that the relationship of the parties affects the price. In making this determination, the Customs

Service now views individual U.S. import prices in isolation. A finding that one or

two transactions are affected in this manner can result in a prohibition against the

importer using Transaction Value (price paid or payable) for all of its imports. In

keeping with the account-based approach of this bill, the Customs Service would be

required to make sure that the circumstances of sale are examined for a representative period. Section 7 would prevent aberrations from being used to disqualify pricebased Transaction Value.

SECTION 8. DESTRUCTION DRAWBACK

The first provision conforms the statute to the current Customs regulations and

practice by allowing destruction within the same timeframe as exportation. The second provision is dedicated exclusively to promoting environmentally sound disposition of duty drawback eligible product. At present, drawback is allowed on products

that are exported or destroyed, provided that the destruction does not result in residual commercial value. Recycling and other ecologically sound processes usually

yield some valuable waste, resulting in drawback forfeiture. Rather than lose drawback, many claimants export the products overseas where there may not be environmentally sensitive disposal procedures. This provision would eliminate the recycling

disincentive by allowing drawback where there is valuable waste. However, the

drawback available to the claimant would be reduced to account for the residual

commercial value. This would align the claim process with the current practice for

valuable waste in manufacturing drawback claims.

SECTION 9. INSTRUMENTS OF INTERNATIONAL TRAFFIC

Instruments of International Traffic (‘‘IIT’s’’) are containers and shipping devices

that are not imported into the U.S. as articles of commerce. Rather, they are intended to continue in use in international traffic. The problem is that these items,

which include racks and boxes, are widely dispersed and nearly impossible to track

in order to prove that they have not been removed from international traffic. This

section is intended to remedy the tracking problem by subjecting them to the exclusions contained in the Harmonized Tariff Schedules of the United States.

SECTION 10. ENTIRETIES

Importers of factory lines and other production equipment are faced with a very

unique problem. In many instances the machinery is simply too large to be placed

in one shipment. In such cases, the shippers have to break down the equipment into

manageable sections or parts. When imported separately into the U.S., the Customs

Service treats the equipment as discrete goods instead of as one entirety. Thus, instead of one classification under one entry summary line item, hundreds of classifications and line items in multiple entries may have to be used. Further aggravating the situation is that any post-importation adjustments to dutiable value of

the machinery have to be allocated proportionately to the individual entry summary

lines. Under Section 10, the importer would have the option of classifying these

types of imports under the tariff provision for the complete, finished good, provided

certain proof thresholds are met, including an agreement for the purchase of the

complete machinery. This tariff treatment is currently allowed by some of the trading partners of the U.S.

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