This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

28831

Vol. 66, No. 102

Friday, May 25, 2001

DEPARTMENT OF COMMERCE

International Trade Administration

DEPARTMENT OF THE TREASURY

Customs Service

15 CFR Part 301

[Docket No. 000331091–0177–02]

RIN 0625–AA47

Changes in Procedures for Florence

Agreement Program

AGENCIES: Import Administration,

International Trade Administration,

Department of Commerce; U.S. Customs

Service, Department of the Treasury.

ACTION: Final rule.

SUMMARY: The International Trade

Administration and U.S. Court of Law

amended the regulations which govern

duty-free entry of scientific instruments

and apparatus, by educational and

nonprofit institutions, into the United

States. The amendments make the

technical changes required by the

Omnibus Trade and Competitiveness

Act of 1988 and by the Miscellaneous

Trade and Technical Corrections Act of

1999. In addition this rule revises the

regulations to specify the correct court

of review, to use terminology consistent

with accepted metric units, to extend

the waiver for repair components to

maintenance tools as well, to simplify

and clarify the regulations for applicants

by clarifying the commercial use

provisions and by removing redundant

requirements, to add information about

procedures for obtaining duty refunds,

to reduce the number of copies required

for resubmitted applications and to

permit performance data obtained in

tests or trials as evidence of guaranteed

specifications.

EFFECTIVE DATE: June 25, 2001.

ADDRESSES: Send comments regarding

the reporting burden estimate or any

other aspect of the collection-ofinformation requirements in this final

rule, including suggestions for reducing

the burden, to U.S. Department of

Commerce, ITA Information Officer,

Washington, DC 20230 and Office of

Information and Regulations Officer,

Office of Management and Budget,

Washington, DC 20503 (Attn: OMB Desk

Officer).

FOR FURTHER INFORMATION CONTACT:

Gerald Zerdy, (202) 482–1660.

SUPPLEMENTARY INFORMATION: The

International Trade Administration of

the Department of Commerce and the

U.S. Customs Service of the Department

of the Treasury: amend Part 301,

Chapter III, Subtitle B of Title 15 of the

Code of Federal Regulations relating to

their responsibilities under the

Educational, Scientific, and Cultural

Materials Importation Act of 1966 (the

‘‘Act’’; Pub. L. 89–651; 80 Stat. 897).

The rule makes the necessary

technical changes to reflect the

conversion from the Tariff Schedule of

the United States (TSUS) to the

Harmonized Tariff Schedule of the

United States (HTSUS); and the

modification made by Proclamation

5978 of May 12, 1989, which was issued

pursuant to sections 1121 and 1204 of

the Omnibus Trade and

Competitiveness Act of 1988 (Pub. L.

100–418) and section 604 of the Trade

Act of 1974 (Pub. L. 93–618), as

amended; and the statutory amendment

made by section 2402 of the

Miscellaneous Trade and Technical

Corrections Act of 1999 (Pub. L. 106–

36). The rule makes editorial and

administrative changes, including

updating terminology.

We have amended § 301.2(h) to

provide further information about the

entry of accessories for existing

instruments.

The rule amends paragraph (r) of

§ 301.2 to permit performance data

obtained from a trial or test run of an

instrument, under conditions specified

by the applicant, to be used as evidence

for a guaranteed specification since this

is sometimes stipulated as a condition

for purchase or provides the basis for

selecting one instrument over another.

The rule removes the language in

§ 301.4(a)(1) that refers to specific

documentation Customs may require to

establish the applicant’s nonprofit or tax

exempt status. The revision leaves the

method of this determination to the

discretion of Customs.

Section 301.4(a)(3) is amended to

further emphasize that an applicant may

not participate in the development and

evaluation of an instrument, beyond

routine acceptance testing and

calibration, if substantial benefits accrue

to the manufacturer as a result of such

participation for which the applicant

receives a valuable consideration. This

change clarifies the conditions of

compliance with the statutory

prohibition of commercial use within

five years of entry (see § 301.1(c)(1)).

The rule amends § 301.5(a)(1) by

making copies of applications available

for public inspection within five days of

receipt from Customs instead of the ten

days currently specified in the

regulations.

The rule eliminates § 301.5(a)(7),

relating to the routine sending of copies

of applications to interested domestic

manufacturers. Use of this service has

been extremely limited. We will

continue to provide copies on a case-bycase basis if requested.

Section 301.5(c)(3) is amended by

removing language requesting

consultants to provide advice within 30

days. Routine interagency procedures

do not require codification. ‘‘National

Bureau of Standards’’ is replaced by

‘‘National Institute of Standards and

Technology.’’

To simplify the application process

§ 301.5(e)(3) is amended to permit

resubmissions by facsimile, e-mail or

other electronic means in addition to

posted mail, and to permit

resubmissions with an original copy

only instead of in quadruplicate.

Section 301.5(e)(5) is amended to

conform with this change.

The rule eliminates § 301.5(e)(9),

which allows interested parties to

comment on resubmitted applications.

Interested parties are afforded ample

opportunity to comment on the original

applications. Also, applicants are not

permitted to introduce new purposes or

other material changes in a

resubmission.

Section 301.8(d) is amended to inform

the applicant that estimated duties

levied by U.S. Customs at the time of

entry may be refundable, and instruct

the applicant to contact Customs at the

port of entry for information and claims

status.

28832 Federal Register / Vol. 66, No. 102 / Friday, May 25, 2001 / Rules and Regulations

Presidential Proclamation 5978 of

May 12, 1989, issued pursuant to

sections 1121 and 1204 of the Omnibus

Trade and Competitiveness Act of 1988

and section 604 of the Trade Act of

1974, as amended, added maintenance

tools for scientific instruments to the list

of items eligible for duty-free import

under the Act. Accordingly, § 301.10 is

amended (a) to add maintenance tools to

the scope of the waiver already in place

for repair tools.

Classification

Comments on Proposed Rule

No comments were received in

response to the notice of proposed

rulemaking published for this rule on

May 12, 2000 (65 FR 30555). No

comments were received on that

certification and the basis for it was not

changed. Accordingly a Regulatory

Flexibility Analysis has not been

prepared. The Chief Counsel for

Regulation of the Department of

Commerce certified to the Chief Counsel

for Advocacy, Small Business

Administration, when this rule was

proposed, that it will not have a

significant economic impact on a

substantial number of small entities.

Paperwork Reduction Act

Notwithstanding any other provision

of law, no person is required to respond

to nor shall a person be subject to a

penalty for failure to comply with a

collection of information subject to the

requirements of the Paperwork

Reduction Act unless that collection of

information displays a currently valid

Office of Management and Budget

(OMB) control number. Public reporting

burden for this collection of information

is estimated to average 2 hours per

response. This rulemaking involves

information collection activities subject

to the Paperwork Reduction Act of 1980,

44 U.S.C. 3501 et seq., which are

currently approved by OMB under

control number 0625–0037. The

amendments will not increase the

information burden on the public. Send

comments on this burden estimate or

any other aspects of the collection of

information, including suggestions for

reducing the burden, to the U.S.

Department of Commerce and to OMB

(see ADDRESSES).

Plain English

The President has directed Federal

agencies to use plain language in their

communications with the public,

including regulations. To comply with

this directive, we seek public comment

on any ambiguity or unnecessary

complexity arising from the language

used in this rule (see ADDRESSES).

Executive Order 12866

This rulemaking has been determined

to be not significant for purposes of

Executive Order 12866.

List of Subjects in 15 CFR Part 301

Administrative practice and

procedure, Customs duties and

inspection, Educational facilities,

Imports, Nonprofit organizations,

Scientific equipment.

For the reasons set forth in the

preamble, 15 CFR part 301 is amended

as follows:

PART 301—[AMENDED]

1. The authority citation for part 301

is revised to read as follows:

Authority: Sec. 6(c), Pub. L. 89–651, 80

Stat. 897, 899; Sec. 2402, Pub. L. 106–36, 113

Stat. 127, 168.

2. Amend part 301 as follows:

a. Revise all references to ‘‘tariff item

851.60’’, ‘‘item 851.60’’, or ‘‘item 851.60,

TSUS’’ to read ‘‘subheading 9810.00.60,

HTSUS’’.

b. Revise all references to ‘‘item

851.65’’ or ‘‘tariff item 851.65’’ to read

‘‘subheading 9810.00.65, HTSUS’’.

3. Amend § 301.1 as follows:

a. Amend paragraph (b)(1) by

removing ’’, contracted to by

approximately 89 countries’’;

b. Revise paragraphs (b)(3), (c)(1) and

(c)(2); and

c. Add paragraph (c)(4).

d. Amend paragraph (d) by removing

‘‘Headnote 6, TSUS’’ from the first

sentence and adding ‘‘U.S. Note 6,

Subchapter X, Chapter 98, HTSUS’’ in

its place; by removing ‘‘and Operations’’

in the second sentence; and by

removing ‘‘Deputy’’ in the third

sentence;

§ 301.1 General provisions.

* * * * *

(b) * * *

(3) The Annex D provisions are

implemented for U.S. purposes in

Subchapter X, Chapter 98, Harmonized

Tariff Schedule of the United States

(HTSUS).

(c) Summary of statutory procedures

and requirements. (1) U.S. Note 1,

Subchapter X, Chapter 98, HTSUS,

provides, among other things, that

articles covered by subheadings

9810.00.60 (scientific instruments and

apparatus), 9810.00.65 (repair

components therefor) and 9810.00.67

(tools for maintaining and testing the

above), HTSUS, must be exclusively for

the use of the institutions involved and

not for distribution, sale, or other

commercial use within five years after

entry. These articles may be transferred

to another qualified nonprofit

institution, but any commercial use

within five years of entry shall result in

the assessment of applicable duties

pursuant to § 301.9(c).

(2) An institution wishing to enter an

instrument or apparatus under tariff

subheading 9810.00.60, HTSUS, must

file an application with the Secretary of

the Treasury (U.S. Customs Service) in

accordance with the regulations in this

section. If the application is made in

accordance with the regulations, notice

of the application is published in the

Federal Register to provide an

opportunity for interested persons and

government agencies to present views.

The application is reviewed by the

Secretary of Commerce (Director,

Statutory Import Programs Staff) , who

decides whether or not duty-free entry

may be accorded the instrument and

publishes the decision in the Federal

Register. An appeal of the final decision

may be filed with the U.S. Court of

Appeals for the Federal Circuit, on

questions of law only, within 20 days

after publication in the Federal

Register.

* * * * *

(4) Tools specifically designed to be

used for the maintenance, checking,

gauging or repair of instruments or

apparatus admitted under subheadings

9810.00.65 and 9810.00.67, HTSUS,

require no application and may be

entered duty-free in accordance with the

procedures prescribed in § 301.10.

* * * * *

§ 301.2 [Amended]

4. Amend § 301.2 as follows:

a. Amend paragraph (f) by removing

‘‘only’’ in the first sentence; by

removing ‘‘classifiable under the tariff

items specified in headnote 6(a) of part

4 of Schedule 8’’ and adding in its place

‘‘specified in U.S. Note 6(a), Subchapter

X, Chapter 98, HTSUS’’; and by adding

the following after the second sentence:

‘‘The term ‘instrument’ also covers

separable components of an instrument

that are imported for assembly in the

United States in such instrument where

that instrument, due to its size, cannot

feasibly be imported in its assembled

state. The components, as well as the

assembled instrument itself, must be

classifiable under the tariff provisions

listed in U.S. Note 6(a), Subchapter X,

Chapter 98, HTSUS. See paragraph (k)

of this section and § 301.3(f).’’;

b. Revise paragraph (f)(5);

c. Amend paragraph (h) by adding a

new sentence to the end of the

paragraph to read: ‘‘The existing

Federal Register / Vol. 66, No. 102 / Friday, May 25, 2001 / Rules and Regulations 28833

instrument, for which the accessory is

being purchased, may be domestic or, if

foreign, it need not have entered duty

free under subheading 9810.00.60,

HTSUS.’’;

d. Amend paragraph (k) by adding the

following at the end of the paragraph:

‘‘The above notwithstanding, separable

components of some instruments may

be eligible for duty-free treatment. See

paragraph (f) of this section.’’;

e. Amend paragraph (r) by removing

‘‘angstroms’’ in the second sentence and

adding ‘‘nanometers’’ in its place, and

by adding a sentence at the end of the

paragraph to read: ‘‘Performance results

on a test sample run at the applicant’s

request may be cited as evidence for or

against a guaranteed specification.’’; and

f. Amend paragraph(s) by removing

‘‘and/’’ from the first sentence, removing

the last sentence and adding in its place

the following: ‘‘Also, characteristics

such as size, weight, appearance,

durability, reliability, complexity (or

simplicity), ease of operation, ease of

maintenance, productivity, versatility,

‘‘state of the art’’ design, specific design

and compatibility with currently owned

or ordered equipment are not pertinent

unless the applicant demonstrates that

the characteristic is necessary for the

accomplishment of its scientific

purposes.’’

§ 301.2 Definitions

* * * * *

(f) * * *

(5) Instruments initially imported

solely for testing or review purposes

which were entered under bond under

subheading 9813.00.30, HTSUS, subject

to the provisions of U.S. Note 1(a),

Subchapter XIII, Chapter 98, HTSUS,

and must be exported or destroyed

within the time period specified in that

U.S. Note.

* * * * *

5. Amend § 301.3 as follows:

a. Amend paragraph (d) by removing

‘‘One copy of the form’’ from the second

sentence and adding in its place ‘‘One

of these copies’’

b. Redesignate paragraph (f) as

paragraph (g); and

c. Add a new paragraph (f).

§ 301.3 Application for duty-free entry of

scientific instruments.

* * * * *

(f) An application for components of

an instrument to be assembled in the

United States as described in § 301.2(f)

may be filed provided that all of the

components for the complete,

assembled instrument are covered by,

and fully described in, the application.

See also § 301.2(k).

* * * * *

6. In § 301.4, paragraphs (a)(1), (a)(2)

and the first two sentences of paragraph

(a)(3) are revised and a new third

sentence is added to read as follows:

§ 301.4 Processing of applications by the

Department of the Treasury (U.S. Customs

Service).

(a) * * *

(1) Whether the institution is a

nonprofit private or public institution

established for research and educational

purposes and therefore authorized to

import instruments into the U.S. under

subheading 9810.00.60, HTSUS. In

making this determination, the

Commissioner may require applicants to

document their eligibility under this

paragraph;

(2) Whether the instrument or

apparatus falls within the classes of

instruments eligible for duty-free entry

consideration under subheading

9810.00.60, HTSUS. For eligible classes,

see U.S. Note 6(a), Subchapter X,

Chapter 98, HTSUS; and

(3) Whether the instrument or

apparatus is for the exclusive use of the

applicant institution and is not intended

to be used for commercial purposes. For

the purposes of this section, commercial

uses would include, but not necessarily

be limited to: Distribution, lease or sale

of the instrument by the applicant

institution; any use by, or for the

primary benefit of, a commercial entity;

or use of the instrument for

demonstration purposes in return for a

fee, price discount or other valuable

consideration. Evaluation, modification

or testing of the foreign instrument,

beyond normal, routine acceptance

testing and calibration, to enhance or

expand its capabilities primarily to

benefit the manufacturer in return for a

discount or other valuable

consideration, may be considered a

commercial benefit. * * *

* * * * *

7. Amend § 301.5 as follows:

a. Amend paragraph (a)(1) by

removing ‘‘10’’ from the first sentence

and adding ‘‘5’’ in its place;

b. Amend paragraph (a)(2) by

removing ‘‘contained in Question 11 of

the form’’ in the second sentence and

adding ‘‘on the form’’ in its place, and

by adding ‘‘pursuant to paragraph (e) of

this section’’ at the end of the last

sentence;

c. Amend paragraph (a)(3) by

removing the last sentence;

d. Amend paragraph (a)(4)(v) by

removing ‘‘submitted a formal’’ and

adding ‘‘issued an’’ in its place;

e. Revise paragraph (a)(5);

f. Amend paragraph (a)(6) by

removing ‘‘apprise’’ from the first

sentence and adding ‘‘inform’’ in its

place, by removing ‘‘routinely’’ from the

second sentence, removing

‘‘commentor’s’’ from the last sentence

and adding ‘‘provider’s’’ in its place,

and by removing ‘‘on a particular

application’’ from the last sentence;

g. Remove paragraph (a)(7);

h. Revise paragraph (b);

i. Amend paragraph (c)(2), by

removing the word ‘‘the’’ between ‘‘to’’

and ‘‘appropriate’’ and by removing

‘‘written’’

j. Amend paragraph (c)(3) by

removing the first sentence, by

removing ‘‘may’’ from the second

sentence, and by removing ‘‘National

Bureau of Standards’’ and adding

‘‘National Institute of Standards and

Technology’’ in its place in the second

sentence;

k. Amend paragraph (d)(1)(i) by

removing ‘‘combines’’ from the fourth

sentence and adding ‘‘brings together’’

in its place, and by removing

‘‘instrument(s)’’ in the last sentence and

adding ‘‘instrument’’ in its place;

l. Amend Paragraph (d)(1)(ii) by

removing ‘‘conversion’’ from the last

sentence and adding ‘‘adaptation’’ in its

place, and by removing ‘‘for such

programs’’ from the last sentence;

m. Add a paragraph (d)(5); and

n. Revise paragraphs (e) introductory

text; (e)(2) and (e)(3); add two sentences

to the end of the paragraph (e)(5); and

remove paragraph (e)(9).

§ 301.5 Processing of applications by the

Department of Commerce.

(a) * * *

(5) Untimely comments. Comments

must be made on a timely basis to

ensure their consideration by the

Director and the technical consultants,

and to preserve the commenting

person’s right to appeal the Director’s

decision. The Director, at his discretion,

may take into account factual

information contained in untimely

comments.

* * * * *

(b) Additions to the record. The

Director may solicit from the applicant,

from foreign or domestic manufacturers,

their agents, or any other person or

Government agency considered by the

Director to have related competence,

any additional information the Director

considers necessary to make a decision.

The Director may attach conditions and

time limitations upon the provision of

such information and may draw

appropriate inferences from a person’s

failure to provide the requested

information.

* * * * *

(d) * * *

(5) Processing of applications for

components. (i) The Director may

28834 Federal Register / Vol. 66, No. 102 / Friday, May 25, 2001 / Rules and Regulations

process an application for components

which are to be assembled in the United

States into an instrument or apparatus

which, due to its size, cannot be

imported in its assembled state (see

§ 301.2(k)) as if it were an application

for the assembled instrument. A finding

by the Director that no equivalent

instrument is being manufactured in the

United States shall, subject to paragraph

(d)(5)(ii) of this section, qualify all the

associated components, provided they

are entered within the period

established by the Director, taking into

account both the scientific needs of the

importing institution and the potential

for development of related domestic

manufacturing capacity. (ii)

Notwithstanding a finding under

paragraph (d)(5)(i) of this section that no

equivalent instrument is being

manufactured in the United States, the

Director shall disqualify a particular

component for duty-free treatment if the

Director finds that the component is

being manufactured in the United

States.

(e) Denial without prejudice to

resubmission (DWOP). The Director

may, at any stage in the processing of an

application by the Department of

Commerce, DWOP an application if it

contains any deficiency which, in the

Director’s judgment, prevents a

determination on its merits. The

Director shall state the deficiencies of

the application in the DWOP letter to

the applicant.

* * * * *

(2) If granted, extensions of time will

generally be limited to 30 days.

(3) Resubmissions must reference the

application number of the earlier

submission. The resubmission may be

made by letter to the Director. The

record of a resubmitted application shall

include the original submission on file

with the Department. Any new material

or information contained in a

resubmission, which should address the

specific deficiencies cited in the DWOP

letter, should be clearly labeled and

referenced to the applicable question on

the application form. The resubmission

must be for the instrument covered by

the original application unless the

DWOP letter specifies to the contrary.

The resubmission shall be subject to the

certification made on the original

application.

* * * * *

(5) * * * Resubmission by fax, e-mail

or other electronic means is acceptable

provided an appropriate return number

or address is provided in the

transmittal. Resubmissions must clearly

indicate the date of transmittal to the

Director.

* * * * *

8. Amend § 301.6 by revising

paragraphs (a) and (c) to read as follows:

§ 301.6 Appeals.

(a) An appeal from a final decision

made by the Director under § 301.5(f)

may be taken in accordance with U.S.

Note 6(e), Subchapter X, Chapter 98,

HTSUS, only to the U.S. Court of

Appeals for the Federal Circuit and only

on questions of law, within 20 days after

publication of the decision in the

Federal Register. If at any time while its

application is under consideration by

the Court of Appeals on an appeal from

a finding by the Director an institution

cancels an order for the instrument to

which the application relates or ceases

to have a firm intention to order such

instrument, the institution shall

promptly notify the court.

* * * * *

(c) Questions regarding appeal

procedures should be addressed directly

to the U.S. Court of Appeals for the

Federal Circuit, Clerk’s Office,

Washington, DC 20439.

§ 301.7 [Amended]

9. Amend § 301.7 by removing ‘‘(see

§ 301.6(a))’’ from the first sentence of

paragraph (a).

10. Amend § 301.8 as follows:

a. Amend paragraph (a)(1) by adding

‘‘(as defined in 19 CFR 101.1)’’ after

‘‘Customs territory of the United

States’’;

b. Amend the second sentence of

paragraph (a)(5) by adding the words

‘‘either by delaying importation or by

placing the instrument in a bonded

warehouse or foreign trade zone,’’ after

the words ‘‘duty-free entry of the

instrument,’’;

c. Amend paragraph (b) by removing

‘‘above’’ and ‘‘mentioned’’ from the first

sentence;

d. Amend paragraph (c) by removing

‘‘of § 301.8’’ in the first sentence and

adding ‘‘of this section’’

e. Revise paragraph (d) to read as

follows:

§ 301.8 Instructions for entering

instruments through U.S. Customs under

subheading 9810.00.60, HTSUS.

* * * * *

(d) Payment of duties. The importer of

record will be billed for payment of

duties when Customs determines that

such payment is due. If a refund of a

deposit made pursuant to paragraph

(a)(4) of this section is due, the importer

should contact Customs officials at the

port of entry, not the Department of

Commerce.

§ 301.9 [Amended]

11. Amend § 301.9 by removing

‘‘latter’’ from the first sentence of the

introductory text of paragraph (a) and

adding ‘‘receiving’’ in its place.

12. § 301.10 is revised to read as

follows:

§ 301.10 Importation of repair components

and maintenance tools under HTSUS

subheadings 9810.00.65 and 9810.00.67 for

instruments previously the subject of an

entry liquidated under subheading

9810.00.60, HTSUS.

(a) An institution owning an

instrument that was the subject of an

entry liquidated duty-free under

subheading 9810.00.60, HTSUS, that

wishes to enter repair components or

maintenance tools for that instrument

may do so without regard to the

application procedures required for

entry under subheading 9810.00.60,

HTSUS. The institution must certify to

Customs officials at the port of entry

that such components are repair

components for that instrument under

subheading 9810.00.65, HTSUS, or that

the tools are maintenance tools

necessary for the repair, checking,

gauging or maintenance of that

instrument under subheading

9810.00.67, HTSUS.

(b) Instruments entered under

subheading 9810.00.60, HTSUS, and

subsequently returned to the foreign

manufacturer for repair, replacement or

modification are not covered by

subheading 9810.00.65 or 9810.00.67,

HTSUS, although they may, upon return

to the United States, be eligible for a

reduced duty payment under

subheading 9802.00.40 or 9802.00.50,

HTSUS (covering articles exported for

repairs or alterations) or may be made

the subject of a new application under

subheading 9810.00.60, HTSUS.

Troy H. Cribb,

Acting Assistant Secretary for Import

Administration.

Raymond W. Kelly,

Commissioner of Customs.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 01–13165 Filed 5–24–01; 8:45 am]

BILLING CODE 3510–DS–P; 4820–02–P