This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

76919 

Vol. 79, No. 246 

Tuesday, December 23, 2014 

DEPARTMENT OF AGRICULTURE 

Foreign Agricultural Service 

7 CFR Part 6 

RIN 0551–AA82 

Dairy Tariff-Rate Import Quota 

Licensing Program 

AGENCY: Foreign Agricultural Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend the regulation that provides for 

the issuance of licenses to import 

certain dairy articles under tariff-rate 

quotas (TRQs) as set forth in the 

Harmonized Tariff Schedule of the 

United States. The three most 

significant changes to the rule would be 

to suspend for an additional seven 

years, the historical license reduction 

provision, which currently expires with 

the beginning of quota year 2016; to 

modify procedures for collecting 

licensing fees in order to better align the 

fee collection to the costs of 

administering the program; and to 

exclusively use electronic 

communications in the application, 

reporting and payment processes. The 

expected outcome from the 

implementation of the proposed 

changes would be to allow license 

holders to adjust to changing market 

conditions impacting the dairy sector; 

increase the Department’s ability to 

more closely align cost recovery with 

the actual costs of administering the 

program; and allow the Department to 

reduce lag times, minimize paper files, 

and increase the efficiency of the 

program operations. 

DATES: Submit comments on this 

proposed rule on or before February 23, 

2015. 

ADDRESSES: Comments should include 

the Regulation Identifier Number (RIN) 

and volume, date, and page number of 

this issue of the Federal Register. You 

may submit comments by any of the 

following methods: 

Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

Mail, hand delivery, or courier: 

Abdelsalam El-Farra, Agricultural 

Marketing Specialist, Sugar and Dairy 

Branch, Import Programs and Export 

Reporting Division, Office of Trade 

Programs, Foreign Agricultural Service, 

U.S. Department of Agriculture, Room 

5526, 1400 Independence Avenue SW., 

Washington, DC 20250–1021, (202) 720– 

9439; fax (202) 720–0876; dairy_ils@

fas.usda.gov. 

Comments will be available for 

inspection online at 

www.regulations.gov and at the mail 

address listed above between 8 a.m. and 

4:30 p.m., Monday through Friday, 

except holidays. 

FOR FURTHER INFORMATION CONTACT: 

Abdelsalam El-Farra, Agricultural 

Marketing Specialist, Sugar and Dairy 

Branch, Import Programs and Export 

Reporting Division, Office of Trade 

Programs, Foreign Agricultural Service, 

U.S. Department of Agriculture, (202) 

720–9439; fax (202) 720–0876; dairy_

ils@fas.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

The proposed rule has been 

determined to be not significant under 

E.O. 12866 and has been reviewed by 

the Office of Management and Budget. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

ensures that regulatory and information 

requirements are tailored to the size and 

nature of small businesses, small 

organizations, and small governmental 

jurisdictions. This proposed rule will 

not have a significant economic impact 

on small businesses participating in the 

program. 

Executive Order 12988 

This proposed rule has been reviewed 

under Executive Order 12988. The 

provisions of this proposed rule would 

not have a preemptive effect with 

respect to any State or local laws, 

regulations, or policies which conflict 

with such provision or which otherwise 

impede their full implementation. The 

proposed rule would not have a 

retroactive effect. Before any judicial 

action may be brought forward 

regarding this proposed rule, all 

administrative remedies must be 

exhausted. 

National Environmental Policy Act 

The Administrator has determined 

that this action will not have a 

significant effect on the quality of the 

human environment. Therefore, neither 

an Environmental Assessment nor an 

Environmental Impact Statement is 

necessary for this rule. 

Unfunded Mandates Reform Act (Pub. 

L. 104–4) 

Public Law 104–4 requires 

consultation with state and local 

officials and Indian tribal governments. 

This proposed rule does not impose an 

unfunded mandate or any other 

requirement on state, local, or tribal 

governments. Accordingly, these 

programs are not subject to the 

provisions of the Unfunded Mandates 

Reform Act. 

Executive Order 12630 

This Executive Order requires careful 

evaluation of governmental actions that 

interfere with constitutionally protected 

property rights. This rule does not 

interfere with any property rights and, 

therefore, does not need to be evaluated 

on the basis of the criteria outlined in 

Executive Order 12630. 

Government Paperwork Elimination 

Act 

The United States Department of 

Agriculture (USDA) is committed to 

compliance with the Government 

Paperwork Elimination Act, which 

requires Government agencies, in 

general, to provide the public the option 

of submitting information or transacting 

business electronically to the maximum 

extent possible. 

Background 

The Foreign Agricultural Service 

(FAS), under a delegation of authority 

from the Secretary of Agriculture, 

administers the Dairy Tariff-Rate Import 

Quota Licensing regulation codified at 7 

CFR 6.20 through 6.37 that provides for 

the issuance of licenses to import 

certain dairy articles under tariff-rate 

quotas (TRQs) as set forth in certain 

notes in Chapter 4 of the Harmonized 

Tariff Schedule of the United States. 

These dairy articles may only be entered 

into the United States at the low-tier 

tariff by or for the account of a person, 

as defined in the regulation, to whom 


tkelley on DSK3SPTVN1PROD with PROPOSALS
76920 Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 

such licenses have been issued and only 

in accordance with the terms and 

conditions of the regulation. Licenses 

are issued on a calendar year basis, and 

each license authorizes the licensee to 

import a specified quantity and type of 

dairy article from a specified country of 

origin. 

Under TRQs, a low tariff rate, 

commonly referred to as the in-quota 

rate, applies to imports up to a specified 

quantity. A higher tariff rate, commonly 

referred to as the over-quota rate, 

applies to any imports in excess of that 

amount. No license is required to import 

products at the over-quota tariff rate. 

USDA issues three types of licenses: 

Historical, nonhistorical (lottery), and 

designated. For all three license types, 

the current regulation provides that 

persons must apply each year between 

September 1 and October 15. Historical 

and designated licensees may apply for 

lottery licenses, subject to certain 

limitations, if they are affiliated or 

associated with another company 

holding a license for that same item 

from the same country of origin. 

Licensees may fail to qualify for a 

license for a specific item from a 

specific country in the following year, if 

they do not meet certain requirements. 

Licensees must (i) apply for the license 

each year, (ii) pay an annual fee, and 

(iii) have imported at least 85 percent of 

the final license amount from the 

previous year. To avoid ineligibility due 

to the 85 percent rule, licensees may 

surrender up to 100 percent of the 

license, but must import 85 percent of 

any quantity not surrendered. Section 

6.25(b)(1)(i) of the regulation currently 

provides that beginning with the 2016 

quota year, any historical licensee who 

surrenders more than 50 percent of the 

license amount for the same item from 

the same country during at least three of 

the most recent five years will be issued 

a license thereafter in an amount equal 

to the average amount imported under 

that license for those five quota years. 

This proposed rule would provide 

historical license holders additional 

time to adjust to changing market 

conditions by suspending the § 

6.25(b)(1)(i) provision through the end 

of quota year 2022. The proposed rule 

would provide that reporting, payment, 

and application for licenses be made 

only by electronic submission in order 

to reduce the use of paper and 

streamline operations. Additionally, the 

rule proposes to modify procedures for 

collecting licensing fees in order to 

better align the fee collection with the 

costs of administering the program. 

The current regulations allow 

applicants to apply for a license, 

generating administrative costs for the 

USDA, and then choose not to pay for 

the license, thus resulting in nonrecovered administrative expenses. The 

proposed rule would impose financial 

consequences for such non-payment, 

which should increase USDA’s ability to 

recover program expenses. 

The proposed rule does not make any 

modifications to the appendices to this 

subpart. 

Discussion of Comments 

On February 6, 2013, USDA 

published in the Federal Register (78 

FR 8434) an advanced notice of 

proposed rulemaking (ANPR) soliciting 

comment on all aspects of the current 

dairy import licensing rule. Specifically, 

USDA invited comment on the 

following questions: (1) Does the 

historical and nonhistorical license 

system still serve a purpose? (2) Should 

any provisions of the current regulation 

be modified in light of significant 

advances in technology and 

telecommunications? (3) Should 

methods be developed for issuing 

licenses that would increase 

competition among importers? (4) 

Should licenses be auctioned or issued 

on another basis? (5) Should 

§ 6.25(b)(1)(i) regarding historical 

license reductions be eliminated, 

revised, or indefinitely suspended? (6) 

Should the basis upon which license 

fees are assessed be changed from the 

current flat-fee per license? (7) Should 

the deadlines for the surrender and 

reallocation of licenses in § 6.26 be 

changed to allow earlier reallocations? 

USDA received comments from 46 

respondents, all of whom hold licenses 

and receive an economic benefit from 

the program or represent license holders 

who benefit from the program. The 46 

respondents consisted of: 33 private 

importers; 7 associations; 3 foreign 

governments; and 3 other private 

concerns with vested interests in the 

outcome of the regulation review. 

Many of the comments were general 

in nature, focusing on the following 

three themes: Support for the current 

program, administrative management of 

the program, and the allocation of 

licenses. Below is a summary of their 

comments by respondents who 

addressed the seven specific questions 

posed in the ANPR including the 

relevant section number in the current 

rule where applicable. 

Does the historical and nonhistorical 

license system still serve a purpose? 

(§§ 6.20 through 6.23) 

Of the 39 respondents who 

commented on this issue, 32 supported 

continuation of a license system. 

Respondents claimed that the system 

supports the importer’s ability to 

develop distribution networks; ensures 

adequate food safety; allows the license 

holder to foster investment in 

distribution systems, brand identity and 

marketing; and supports consumer 

choice, competition and the 

development of domestic artisan 

products. Seven respondents 

commented that the system no longer 

served any purpose, stating that the 

system increases the difficulty of 

obtaining licenses by new entrants; 

supports a growing concentration of 

historical license in fewer hands; and 

adds additional costs and burdens; and 

acts as an impediment to free trade. One 

respondent proposed abolishing the 

license systems. A quota-holding foreign 

government proposed revisions such as: 

Combining all three licenses types; 

allowing the exporting nation to manage 

its quotas; implementing a first-comefirst-serve system for eligible importers; 

phasing out the category of 

nonhistorical licenses in favor of 

designated licenses; and combining 

historical and designated licenses into a 

single category. 

Upon consideration of all comments 

supporting and opposing the current 

licensing system, no changes to the 

fundamental structure of the licensing 

system are proposed at this time. 

Should any provisions of the current 

regulation be modified in light of 

significant advances in technology and 

telecommunications? (§§ 6.24 through 

6.26; §§ 6.32 through 6.34) 

Of the 21 respondents who 

commented on this issue, 16 favored 

technological improvements that would 

allow the streamlining of the 

application process and improved 

administrative processes that would 

allow an earlier reallocation. Five 

respondents opposed to modifying the 

current regulation cite the success of the 

current program as it is. 

The Department recognizes the desire 

for a more technologically advanced and 

streamlined reporting system for 

administering licenses, reallocations, 

surrenders, applications, reporting and 

payment of fees. The Department is 

currently working to implement the 

February 19, 2014 Executive Order— 

Streamlining the Export/Import Process 

for America’s Businesses—calling for 

the completion of the International 

Trade Data System (ITDS) by December 

2016. The USDA, Foreign Agricultural 

Service, is mandated to be a 

Participating Government Agency (PGA) 

of the Automated Commercial Exchange 

(ACE) project of the International Trade 

Data System. Over the next two years, 

the Department will be required to reVerDate Sep<11>2014 17:38 Dec 22, 2014 Jkt 235001 PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 E:\FR\FM\23DEP1.SGM 23DEP1

tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 76921 

program and update the dairy import 

licensing computer systems, in order to 

comply with the Federal Government’s 

Single Window Initiative for all trade 

agencies. The Department will be 

making fundamental changes to the 

computer systems, which will take 

several years to accomplish. Without 

these structural changes to the 

underlying computer systems, required 

as part of the ITDS project, USDA would 

not be able to implement most of the 

other changes proposed in the 

comments, such as changing the dates 

by which fees are due or by which 

reallocation of licenses may be issued. 

At an appropriate time and once the 

computer systems have been moved to 

the ACE platform, the Department will 

again request comments for additional 

improvements and changes to the 

program. 

The Department proposes moving to 

strictly electronic communications in 

the application, reporting and payment 

processes to streamline operations, 

reduce the need for paper and to 

increase the efficiency of the program. 

The proposed change toward greater 

electronic submissions in the 

application, allocation, reporting and 

payment process will allow USDA to 

reduce lag-times, minimize paper files, 

streamline operations and increase the 

efficiency of the program operations. 

Should methods be developed for 

issuing licenses that would increase 

competition among importers? (§ 6.25) 

Of the 21 respondents who 

commented on this issue, 15 opposed 

increasing competition among 

importers, citing that the most 

significant competition comes from 

other premium cheeses and that 

increasing competition among importers 

would weaken the system and reduce 

the incentive to invest in the necessary 

marketing, distribution network, and 

food safety. The six respondents 

favoring increased competition were 

divided in their approach. One 

proposed to eliminate the licensing 

system altogether; another proposed 

implementing a first-come-first-served 

system; and one proposed to combine 

categories, giving greater influence over 

the quotas to the foreign countries. 

At this time, the Department does not 

propose any changes that directly alter 

the level of competition among 

importers. 

Should licenses be auctioned or issued 

on another basis? (§ 6.25) 

Of the 33 respondents who 

commented on this issue, none 

supported auctioning licenses. The two 

associations and foreign government 

that responded to this question 

commented that auctioning licenses 

would lead to a decrease in the fill rates. 

The Department does not propose any 

change to the existing basis for issuing 

licenses. 

Should § 6.25(b)(1)(i), regarding the 

historical license reduction provision, 

be eliminated, revised, or indefinitely 

suspended? (§ 6.25) 

Of the 39 respondents who 

commented on this issue, 37 were 

licenses holders or associations who 

supported the elimination of 

§ 6.25(b)(1)(i). A common theme of these 

comments was that market forces 

outside their control have prevented 

them from importing the volumes 

required to prevent license reductions, 

and they believe they should not be 

penalized for market forces beyond their 

control. Thirty-three respondents stated 

that § 6.25(b)(1)(i) threatens their 

business of importing specialty cheeses. 

One respondent supported changing the 

basis for this provision to 50 percent of 

the overall TRQ fill rate; in other words, 

if a licensee’s fill rate was above the 

industry average fill rate, no license 

reduction would occur. 

The Department previously 

suspended § 6.25(b) three times: In 1999 

for five years, in 2008 for two years, and 

in 2010 for five more years. The 

association representing historical 

licensees argues that the use of the term 

‘‘suspend’’ is not appropriate. They 

argue that once the suspension period is 

over and the provision comes back into 

force, the previous five years are used as 

a basis for calculating historical license 

amounts, i.e., tracking is not suspended. 

Nonetheless the Department will 

continue to use the term ‘‘suspension,’’ 

because even though tracking occurs, 

the license reductions themselves are 

suspended. 

The two respondents commenting in 

favor of maintaining § 6.25(b)(1)(i) cite 

the benefits of moving TRQ amounts 

from the historical to the lottery 

category, where it is available to other 

applicants. They stated that historical 

licenses have become increasingly 

concentrated in fewer companies, and 

claim that it is increasingly difficult for 

new companies to enter the dairy 

importing business due to the difficulty 

of obtaining licenses. One respondent 

questioned why only certain importers 

should have access to historical licenses 

while others are effectively barred from 

holding such licenses, many of which 

were issued in the 1950s. 

Significant market changes have 

occurred in the U.S. and global dairy 

markets in the past five years. The 

United States has been transformed 

from being a net importer of dairy 

products to being a large net exporter. 

Many of the unfilled licenses are types 

of cheese for which demand has 

diminished or for which U.S. 

production has increased, leading to 

reduced import demand. There have 

been policy changes in major dairy 

exporting countries, in some cases 

reducing export supply. For the majority 

of dairy products subject to significant 

historical license reductions in recent 

years, if they had been in force, a 

transfer of the license from the historical 

to the lottery category would not have 

resulted in an increased TRQ fill rate. 

Nonetheless, the basic concept of the 

historical license reduction provision— 

that some mechanism be in place to 

provide for at least the potential 

movement of license from the historical 

to the lottery category—serves a public 

purpose. Therefore, the Department 

believes that this provision needs to be 

retained. However, to allow more time 

for adjustments to these new market 

conditions, the Department proposes 

suspending the § 6.25(b)(1)(i) provision 

for an additional seven years, through 

the 2022 quota year, and the provision 

would come back into effect for 2023. 

Should the basis upon which license 

fees are assessed be changed from the 

current flat-fee per license? 

Of the 15 respondents who 

commented on this issue, eight 

commented that the current flat fee 

system is adequate, simple, and 

straightforward, while seven 

respondents supported a change. Those 

supporting a change cited an issue of 

equity, preferring to charge a fee based 

on the size of the licenses. 

The basis for the fee is to recover the 

costs of administering the dairy 

licensing program. The cost of 

administering each license is the same, 

whether the license quantity is small or 

large. Therefore, the Department will 

retain keeping the same fee for each 

license. Under the current regulation, 

eligible parties can request and be 

awarded a license and then decide not 

to pay for it, thus forfeiting the license. 

The administrative costs are incurred 

during the application, eligibility 

determination, and allocation process, 

as well as in administering the license 

after it is issued. Therefore, the 

Department proposes to require 

payment of the fee for each license 

requested and awarded, instead of the 

current system where the fee can be 

avoided if the license is returned. To 

ensure compliance with this provision, 

an applicant who fails to pay all fees for 

all licenses requested and awarded will 

forfeit all licenses. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
76922 Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 

Should the deadlines for the surrender 

and reallocation of licenses in section 

6.26 be changed to allow earlier 

reallocations? 

Of the 21 respondents who 

commented on this issue, 19 supported 

an early as possible surrender and 

reallocation date, citing that more time 

is needed to make the commercial 

arrangements necessary to utilize the 

reallocated quantities. The other two 

respondents found the current timeline 

adequate. 

The Department seriously considered 

many options for changing the dates for 

surrender and reallocation, but given 

the interaction of the surrender and 

reallocation process with other 

timelines, such as for fee payments, it is 

not feasible to accommodate an earlier 

surrender and reallocation period 

within the current reporting system. The 

Department will make no modification 

to deadlines for the surrender and 

allocation process. 

Summary of Proposed Changes to Rule 

The following is a summary of the 

proposed substantive changes to the 

current regulation: 

The name of the program has been 

corrected throughout the document to 

read ‘‘Dairy Tariff-Rate Quota Import 

Licensing.’’ 

References to the process used for the 

initial allocation of licenses, which took 

place based on the 1997 quota year, 

have been removed throughout this 

proposed rule due to the fact that 

current allocations are now based on the 

preceding quota year. References to the 

1997 quota year allocations are removed 

from the following sections: §§ 6.20(b), 

6.23(b)(2), 6.23(b)(3), 6.23(b)(4), 

6.23(b)(5), 6.25(a)(1), 6.25(a)(2), 

6.25(a)(3), and 6.26(f). 

Section 6.21 Definitions has been 

updated to include several 

modifications. The definition of ‘‘Article 

other than cheese or cheese products’’ 

now specifies that the article is a dairy 

product. The definition of ‘‘EC’’ no 

longer lists the current members, 

because new members may be added at 

any time. Therefore, the definition of 

‘‘EC’’ is defined to be those countries 

listed in Additional U.S. Note 2 to 

Chapter 4 of the Harmonized Tariff 

Schedule, because this is published 

annually and maintained current. 

‘‘Customs’’ has been replaced 

throughout the proposed rule with 

‘‘CBP’’ which stands for Customs and 

Border Protection. The definition of 

‘‘Licensing Authority’’ removes 

reference to a specific USDA division. 

The definition of ‘‘Other Countries’’ 

deletes the reference to the Harmonized 

Tariff Schedule. The definition of 

‘‘Postmark’’ is deleted from this section, 

given that physical mail will no longer 

be accepted. This proposed rule would 

require that all communications, 

applications, reporting and payment 

will be made electronically as 

designated by the Licensing Authority. 

Therefore, references to physical mail, 

postmarks, mailing addresses, or 

physical locations have been deleted 

throughout the rule. The references to 

physical mail delivery that have been 

deleted are found in the following 

sections: §§ 6.24(a), 6.24(b)(1), 6.24(c), 

6.25(d)(1), 6.26(a), 6.26(c), 6.28(b), 

6.33(b), 6.33(c), 6.35(b), and 6.36(b). 

Additionally, a valid email address is 

now being required for eligibility. The 

requirement for an email address has 

been added to § 6.23(a)(3). 

Section 6.22(b) was deleted from the 

rule because these references to General 

Note 15 provisions of the HTS are not 

covered, nor in any way affected, by the 

dairy import licensing program. 

Section 6.24(c) was deleted because it 

primarily applied to mailed hardcopy 

applications. The information submitted 

through the current electronic 

application system obviates the need for 

submitting this additional information. 

Section 6.25(a)(1) through (3) was 

deleted because the historic allocation 

process is no longer relevant. New quota 

year allocations are made based on the 

preceding year’s allocations and usage. 

Section 6.25(b)(1)(i) extends the date 

of the suspension of the historical 

licenses reduction provision for an 

additional seven years, expiring with 

the beginning of quota year 2023. 

Section 6.25(d)(1)(ii) requires, for 

Appendix 3 allocations, that countries 

designate the allocations of specific 

articles to importers in kilograms. This 

requirement will reduce any disputes 

arising from converting percentages into 

weights. 

Section 6.26(c) was rewritten to 

clarify the surrender and allocation 

process for persons who were issued an 

import license for a cheese or cheese 

product article versus a person who was 

issued an import license for an article 

other than cheese or cheese products. 

Section 6.28(b) requires that all 

license holders who intend to convey 

their business and are requesting USDA 

to transfer a license, submit the required 

documentation by email. The option to 

send documents via physical mail or 

courier is no longer available. 

Section 6.33(b) tightens the timeline 

for making payments and requires 

payment in full within 10 days from the 

date of the issuance of the license, 

rather than the current 30 day period. 

This change would allow USDA to 

accelerate some of its administrative 

functions of operating the licensing 

program because the use of electronic 

payment does not require the longer lag 

time necessary for processing paper 

checks. 

Section 6.33(c) requires that an 

applicant who applies for and is issued 

a license pay for all licenses issued, or 

a hold will be placed on all licenses of 

such applicant. If after receiving a 

warning letter via email from the 

Licensing Authority, the applicant does 

not pay in full within 10 days for all 

licenses issued, then all licenses issued 

to the licensee, paid or unpaid, will be 

revoked. 

Section 6.33(d) is deleted pursuant to 

the previous clause (§ 6.33(c)) and no 

longer permits licensees not to accept or 

pay for certain licenses issued to them. 

The cost of administering the licensing 

program is incurred by USDA during 

the application and allocation process; 

therefore, applicants will be required to 

pay for licenses issued in accordance 

with § 6.33(c) or have all licenses 

revoked. 

List of Subjects in 7 CFR Part 6 

Agricultural commodities, Dairy, 

Cheese, Imports, Procedural rules, 

Application requirements, Tariff-rate 

Quota, Reporting and recordkeeping 

requirements. 

Accordingly, for reasons described in 

the preamble, 7 CFR part 6 is proposed 

to be amended as follows: 

PART 6—IMPORT QUOTAS AND FEES 

Subpart—Dairy Tariff-Rate Quota 

Import Licensing 

■ 1. The authority citation for Subpart— 

Dairy Tariff-Rate Quota Import 

Licensing continues to read as follows: 

Authority: Additional U.S. Notes 6, 7, 8, 

12, 14, 16–23 and 25 to Chapter 4 and 

General Note 15 of the Harmonized Tariff 

Schedule of the United States (19 U.S.C. 

1202), Pub. L. 97–258, 96 Stat. 1051, as 

amended (31 U.S.C. 9701), and secs. 103 and 

404, Pub. L. 103–465, 108 Stat. 4819 (19 

U.S.C. 3513 and 3601). 

■ 2. The heading for ‘‘Subpart—Dairy 

Tariff-Rate Import Quota Licensing’’ is 

revised to read as set forth above. 

■ 3. Sections 6.20 through 6.36 are 

revised to read as follows: 

* * * * * 

6.20 Introduction. 

6.21 Definitions. 

6.22 Requirement for a license. 

6.23 Eligibility to apply for a license. 

6.24 Application for a license. 

6.25 Allocation of licenses. 

6.26 Surrender and reallocation. 

6.27 Limitations on use of license. 

6.28 Transfer of license. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 76923 

6.29 Use of licenses. 

6.30 Record maintenance and inspection. 

6.31 Debarment and suspension. 

6.32 Globalization of licenses. 

6.33 License fee. 

6.34 Adjustment of appendices. 

6.35 Correction of errors. 

6.36 Miscellaneous. 

* * * * * 

§ 6.20 Introduction. 

(a) Presidential Proclamation 6763 of 

December 23, 1994, modified the 

Harmonized Tariff Schedule of the 

United States affecting the import 

regime for certain articles of dairy 

products. The Proclamation terminated 

quantitative restrictions that had been 

imposed pursuant to section 22 of the 

Agricultural Adjustment Act of 1933, as 

amended (7 U.S.C. 624); proclaimed 

tariff-rate quotas for such articles 

pursuant to Pub. L. 103–465; and 

specified which of such articles may be 

entered only by or for the account of a 

person to whom a license has been 

issued by the Secretary of Agriculture. 

(b) Effective January 1, 1995, the prior 

regime of absolute quotas for certain 

dairy products was replaced by a system 

of tariff-rate quotas. The articles subject 

to licensing under the tariff-rate quotas 

are listed in Appendices 1, 2, and 3 of 

this subpart. Licenses permit the holder 

to import specified quantities of the 

subject articles into the United States at 

the applicable in-quota rate of duty. If 

an importer has no license for an article 

subject to licensing, such importer will, 

with certain exceptions, be required to 

pay the applicable over-quota rate of 

duty. 

(c) The Secretary of Agriculture has 

determined that this subpart will, to the 

fullest extent practicable, result in fair 

and equitable allocation of the right to 

import articles subject to such tariff-rate 

quotas. The subpart will also maximize 

utilization of the tariff-rate quotas for 

such articles, taking due account of any 

special factors which may have affected 

or may be affecting the trade in the 

articles concerned. 

§ 6.21 Definitions. 

As used in this subpart and the 

appendices thereto, the following terms 

are defined as follows: 

Article. One of the products listed in 

Appendices 1, 2, or 3, which are the 

same as those described in Additional 

U.S. Notes 6, 7, 8, 12, 14, 16–23 and 25 

to Chapter 4 of the Harmonized Tariff 

Schedule. 

Article other than cheese or cheese 

products. Any article that is a dairy 

product, but not a cheese or cheese 

product. 

CBP. United States Customs and 

Border Protection, U.S. Department of 

Homeland Security. 

Cheese or cheese products. Articles in 

headings 0406, 1901.90.34, and 

1901.90.36 of the Harmonized Tariff 

Schedule. 

Commercial entry. Any entry except 

those made by or for the account of the 

United States Government or for a 

foreign government, for the personal use 

of the importer or for sampling, taking 

orders, research, or the testing of 

equipment. 

Country. Country of origin as 

determined in accordance with CBP 

rules and regulations, except that ‘‘EC’’, 

and ‘‘Other countries’’ shall each be 

treated as a country. 

Dairy products. Articles in headings 

0401 through 0406, margarine cheese 

listed under headings 1901.90.34 and 

1901.90.36, ice cream listed under 

heading 2105, and casein listed under 

heading 3501 of the Harmonized Tariff 

Schedule. 

Department. The United States 

Department of Agriculture. 

EC. Those countries listed in 

Additional U.S. Note 2 to Chapter 4 of 

the Harmonized Tariff Schedule. 

Enter or Entry. To make or making 

entry for consumption, or withdrawal 

from warehouse for consumption in 

accordance with CBP regulations and 

procedures. 

Harmonized Tariff Schedule or HTS. 

The Harmonized Tariff Schedule of the 

United States. 

Licensee. A person to whom a license 

has been issued under this subpart. 

Licensing Authority. Any officer or 

employee of the U.S. Department of 

Agriculture designated to act in this 

position by the Director of the Division 

charged with managing the Dairy TariffRate Quota Import Licensing System. 

Other countries. Countries not listed 

by name as having separate tariff-rate 

quota allocations for an article. 

Person. An individual, firm, 

corporation, partnership, association, 

trust, estate or other legal entity. 

Process or processing. Any additional 

preparation of a dairy product, such as 

melting, grating, shredding, cutting and 

wrapping, or blending with any 

additional ingredient. 

Quota year. The 12-month period 

beginning on January 1 of a given year. 

Tariff-rate quota amount or TRQ 

amount. The amount of an article 

subject to the applicable in-quota rate of 

duty established under a tariff-rate 

quota. 

United States. The customs territory 

of the United States, which is limited to 

the 50 states, the District of Columbia, 

and Puerto Rico. 

§ 6.22 Requirement for a license. 

A person who seeks to enter, or cause 

to be entered an article as a commercial 

entry, shall obtain a license, in 

accordance with this subpart. 

§ 6.23 Eligibility to apply for a license. 

(a) In general. To apply for any 

license, a person shall have: 

(1) A business office, and be doing 

business, in the United States, and 

(2) An agent in the United States for 

service of process, and 

(3) An email address to be used for 

correspondence regarding licensing 

activities and reports. 

The licensee shall at all times 

maintain a valid email address with the 

Licensing Authority. 

(b) Eligibility for 2014 and subsequent 

quota years. (1) Historical licenses 

(Appendix 1). A person issued a 

historical license for an article for the 

current quota year may apply for a 

historical license (Appendix 1) for the 

next quota year for the same article from 

the same country, if such person was, 

during the 12-month period ending 

August 31 prior to the quota year, either: 

(i) Where the article is cheese or 

cheese product, 

(A) The owner of and importer of 

record for at least three separate 

commercial entries of cheese or cheese 

products totaling not less than 57,000 

kilograms net weight, each of the three 

entries not less than 2,000 kilograms net 

weight; 

(B) The owner of and importer of 

record for at least eight separate 

commercial entries of cheese or cheese 

products, from at least eight separate 

shipments, totaling not less than 19,000 

kilograms net weight, each of the eight 

entries not less than 450 kilograms net 

weight, with a minimum of two entries 

in each of at least three quarters during 

that period; or 

(C) The owner or operator of a plant 

listed in Section II or listed in Section 

I as a processor of cheese of the most 

current issue of ‘‘Dairy Plants Surveyed 

and Approved for USDA Grading 

Service’’ and had processed or packaged 

at least 450,000 kilograms of cheese or 

cheese products in its own plant in the 

United States; or 

(ii) Where the article is not cheese or 

cheese product, 

(A) The owner of and importer of 

record for at least three separate 

commercial entries of dairy products 

totaling not less than 57,000 kilograms 

net weight, each of the three entries not 

less than 2,000 kilograms net weight; 

(B) The owner of and importer of 

record for at least eight separate 

commercial entries of dairy products, 

from at least eight separate shipments, 


tkelley on DSK3SPTVN1PROD with PROPOSALS
76924 Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 

totaling not less than 19,000 kilograms 

net weight, each of the eight entries not 

less than 450 kilograms net weight, with 

a minimum of two entries in each of at 

least three quarters during that period; 

(C) The owner or operator of a plant 

listed in the most current issue of 

‘‘Dairy Plants Surveyed and Approved 

for USDA Grading Service’’ and had 

manufactured, processed or packaged at 

least 450,000 kilograms of dairy 

products in its own plant in the United 

States; or 

(D) The exporter of dairy products in 

the quantities and number of shipments 

required under (A) or (B) above. 

(2) Nonhistorical licenses for cheese 

or cheese products (Appendix 2). A 

person may annually apply for a 

nonhistorical license for cheese or 

cheese products (Appendix 2) if such 

person meets the requirements of 

paragraph (b)(1)(i) of this section. 

(3) Nonhistorical licenses for articles 

other than cheese or cheese products 

(Appendix 2). A person may annually 

apply for a nonhistorical license for 

articles other than cheese or cheese 

products (Appendix 2) if such person 

meets the requirements of paragraph 

(b)(1)(ii) of this section. 

(4) Designated license (Appendix 3). 

A designated license may be issued to 

a person who has applied for a license, 

has met the requirements of paragraph 

(b)(1)(i) of this section, and is 

designated by the government of a 

country for such license according to 

§ 6.25(d). 

(c) Exceptions. (1) A licensee that fails 

in a quota year to enter at least 85 

percent of the amount of an article 

permitted under a license shall not be 

eligible to receive a license for the same 

article from the same country for the 

next quota year. For the purpose of this 

paragraph, the amount of an article 

permitted under the license will 

exclude any amounts surrendered 

pursuant to § 6.26(a), but will include 

any additional allocations received 

pursuant to § 6.26(b). 

(2) Paragraph (c)(1) of this section will 

not apply where the licensee 

demonstrates to the satisfaction of the 

Licensing Authority that the failure 

resulted from breach by a carrier of its 

contract of carriage, breach by a supplier 

of its contract to supply the article, act 

of God or force majeure. 

(3) Paragraph (c)(1) of this section 

may not apply in the case of historical 

or nonhistorical licenses, where the 

licensee demonstrates to the satisfaction 

of the Licensing Authority that the 

country specified on the license 

maintains or permits an export 

monopoly to control the dairy articles 

concerned and the licensee petitions the 

Licensing Authority to waive this 

requirement. The licensee shall submit 

evidence that the country maintains an 

export monopoly as defined in this 

paragraph. For the purposes of this 

paragraph ‘‘export monopoly’’ means a 

privilege vested in one or more persons 

consisting of the exclusive right to carry 

on the exportation of any article of dairy 

products from a country to the United 

States. 

(4) The Licensing Authority will not 

issue a nonhistorical license (Appendix 

2) for an article from a country during 

a quota year to an applicant who is 

affiliated with another applicant to 

whom the Licensing Authority is 

issuing a non-historical license for the 

same article from the same country for 

that quota year. Further, the Licensing 

Authority will not issue a nonhistorical 

license for butter to an applicant who is 

affiliated with another applicant to 

whom the Licensing Authority is 

issuing a historical butter license of 

57,000 kilograms or greater. For the 

purpose of this paragraph, an applicant 

will be deemed affiliated with another 

applicant if: 

(i) The applicant is the spouse, 

brother, sister, parent, child or 

grandchild of such other applicant; 

(ii) The applicant is the spouse, 

brother, sister, parent, child or 

grandchild of an individual who owns 

or controls such other applicant; 

(iii) The applicant is owned or 

controlled by the spouse, brother, sister, 

parent, child or grandchild of an 

individual who owns or controls such 

other applicant. 

(iv) Both applicants are 5 percent or 

more owned or directly or indirectly 

controlled, by the same person; 

(v) The applicant, or a person who 

owns or controls the applicant, benefits 

from a trust that controls such other 

applicant. 

(5) The Licensing Authority will not 

issue a nonhistorical license (Appendix 

2) for an article from a country during 

a quota year to an applicant who is 

associated with another applicant to 

whom the Licensing Authority is 

issuing a nonhistorical license for the 

same article from the same country for 

that quota year. Further, the Licensing 

Authority will not issue a nonhistorical 

license for butter to an applicant who is 

associated with another applicant to 

whom the Licensing Authority is 

issuing a historical butter license for 

57,000 kilograms or greater. For the 

purpose of this paragraph, an applicant 

will be deemed associated with another 

applicant if: 

(i) The applicant is an employee of, or 

is controlled by an employee of, such 

other applicant; 

(ii) The applicant manages or is 

managed by such other applicant, or 

economically benefits, directly or 

indirectly, from the use of the license 

issued to such other applicant. 

(6) The Licensing Authority will not 

issue a nonhistorical license for an 

article from a country during a quota 

year, for which the applicant receives a 

designated license. 

§ 6.24 Application for a license. 

(a) Application for license shall be 

made on electronic forms designated for 

the purpose by the Licensing Authority. 

All parts of the application shall be 

completed. The application shall be 

transmitted no earlier than September 1 

and no later than midnight October 15 

of the year preceding that for which 

license application is made. The 

Licensing Authority will not accept 

incomplete applications. 

(b)(1) Where the applicant seeks to 

establish eligibility on the basis of 

imports, applications shall include 

identification of entries sufficient to 

establish the applicant as the importer 

of record of entries required under 

§ 6.23, during the 12-month period 

ending August 31 prior to the quota year 

for which license is being sought. 

(2) Where the applicant seeks to 

establish eligibility on the basis of 

exports, applications shall include: 

(i) Census Form 7525 or a copy of the 

electronic submission of such form, and 

(ii) The commercial invoice or bill of 

sale for the quantities and number of 

export shipments required under § 6.23, 

during the 12-month period ending 

August 31 prior to the quota year for 

which license is being sought. 

(c) An applicant requesting more than 

one nonhistorical license must rank 

order these requests by the applicable 

Additional U.S. Note number. Cheese 

and cheese products must be ranked 

separately from dairy articles other than 

cheese or cheese products. 

§ 6.25 Allocation of licenses. 

(a) Licensing Authority. The Licensing 

Authority will issue historical, 

nonhistorical and designated licenses. 

(b) Historical licenses for the 2014 

and subsequent quota years (Appendix 

1). A person issued a historical license 

for the current quota year will be issued 

a historical license in the same amount 

for the same article from the same 

country for the next quota year except 

that beginning with the 2023 quota year, 

a person who has surrendered more 

than 50 percent of such historical 

license in at least three of the prior 5 

quota years will thereafter be issued a 

license in an amount equal to the 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 76925 

average annual quantity entered during 

those 5 quota years. 

(c) Nonhistorical licenses (Appendix 

2). The Licensing Authority will allocate 

nonhistorical licenses on the basis of a 

rank-order lottery system, which will 

operate as follows: 

(1) The minimum license size shall 

be: 

(i) Where the article is cheese or 

cheese product: 

(A) The total amount available for 

nonhistorical license where such 

amount is less than 9,500 kilograms; 

(B) 9,500 kilograms where the total 

amount available for nonhistorical 

license is between 9,500 kilograms and 

500,000 kilograms, inclusive; 

(C) 19,000 kilograms where the total 

amount available for nonhistorical 

license is between 500,001 kilograms 

and 1,000,000 kilograms, inclusive; 

(D) 38,000 kilograms where the total 

amount available for nonhistorical 

license is greater than 1,000,000 

kilograms; or 

(E) An amount less than the minimum 

license size established in paragraphs 

(c)(1)(i) (A) through (D) of this section, 

if requested by the licensee; 

(ii) Where the article is not cheese or 

cheese product: 

(A) The total amount available for 

nonhistorical license where such 

amount is less than 19,000 kilograms; 

(B) 19,000 kilograms where the total 

amount available for nonhistorical 

license is between 19,000 kilograms and 

550,000 kilograms, inclusive; 

(C) 38,000 kilograms where the total 

amount available for nonhistorical 

license is between 550,001 kilograms 

and 1,000,000 kilograms, inclusive; and 

(D) 57,000 kilograms where the total 

amount available for nonhistorical 

license is greater than 1,000,000 

kilograms; 

(E) An amount less than the minimum 

license sizes established in paragraphs 

(c)(1)(i) (A) through (D) of this section, 

if requested by the licensee. 

(2) Taking into account the order of 

preference expressed by each applicant, 

as required by § 6.24(c), the Licensing 

Authority will allocate licenses for an 

article from a country by a series of 

random draws. A license of minimum 

size will be issued to each applicant in 

the order established by such draws 

until the total amount of such article in 

Appendix 2 has been allocated. An 

applicant that receives a license for an 

article will be removed from the pool for 

subsequent draws until every applicant 

has been allocated at least one license, 

provided that the licenses for which 

they applied are not already fully 

allocated. Any amount remaining after 

the random draws which is less than the 

applicable minimum license size may, 

at the discretion of the Licensing 

Authority, be prorated equally among 

the licenses awarded for that article. 

(d) Designated licenses (Appendix 3). 

(1) With respect to an article listed in 

Appendix 3, the government of the 

applicable country may, not later than 

October 31 prior to the beginning of a 

quota year, submit directly by email to 

the Licensing Authority: 

(i) The names, addresses and emails 

of the importers that it is designating to 

receive licenses; and 

(ii) The amount, in kilograms, of such 

article for which each such importer is 

being designated. Where quantities for 

designation result from both Tokyo 

Round concessions and Uruguay Round 

concessions, the designations should be 

made in terms of each. 

(2) To the extent practicable, the 

Licensing Authority will issue 

designated licenses to those importers, 

and in those amounts, indicated by the 

government of the applicable country, 

provided that the importer designated 

meets the eligibility requirements set 

forth in § 6.23. Consistent with the 

international obligations of the United 

States, the Licensing Authority may 

disregard a designation if the Licensing 

Authority determines that the person 

designated is not eligible for any of the 

reasons set forth in § 6.23(c)(1) or (2). 

(3) If a government of a country which 

negotiated in the Uruguay Round for the 

right to designate importers has not 

done so, but determines to designate 

importers for the next quota year, it 

shall indicate its intention to do so 

directly and in writing to the Licensing 

Authority not later than July 1 prior to 

the beginning of such next quota year. 

Furthermore, if a government that has 

designated importers for a quota year 

determines that it will not continue to 

designate importers for the next quota 

year, it shall so indicate directly and in 

writing to the Licensing Authority, not 

later than July 1 prior to such next quota 

year. 

§ 6.26 Surrender and reallocation. 

(a) If a licensee determines that it will 

not enter the entire amount of an article 

permitted under its license, such 

licensee shall surrender its license right 

to enter the amount that it does not 

intend to enter. Surrender shall be made 

to the Licensing Authority no later than 

October 1. Any surrender shall be final 

and shall be only for that quota year, 

except as provided in § 6.25(b). The 

amount of the license not surrendered 

shall be subject to the license use 

requirements of § 6.23(c)(1). 

(b) For each quota year, the Licensing 

Authority will, to the extent practicable, 

reallocate any amounts surrendered. 

(c) Any person who qualified for or 

was issued a cheese or cheese product 

license for a quota year may apply to 

receive additional license, or addition to 

an existing license for a portion of the 

amount being reallocated. A person who 

did not qualify for a cheese or cheese 

product license for a quota year, but 

qualified only for a license for articles 

other than cheese or cheese products, 

may only apply to receive an additional 

license for articles other than cheese or 

cheese products, or addition to an 

existing license for articles other than 

cheese or cheese products for a portion 

of the amount being reallocated. The 

application shall be submitted to the 

Licensing Authority no earlier than 

September 1 and not later than 

September 15, and shall specify: 

(1) The name and control number of 

the applicant; 

(2) The article and country being 

requested, the applicable HTS 

Additional U.S. Note number and, if 

more than one article is requested, a 

rank-order by Additional U.S. Note 

number; and 

(3) If applicable, the number of the 

license issued to the applicant for that 

quota year permitting entry of the same 

article from the same country. 

(d) The Licensing Authority will 

reallocate surrendered amounts among 

applicants as follows: 

(1) The minimum license size, or 

addition to an existing license, will be 

the total amount of the article from a 

country surrendered, or 10,000 

kilograms, whichever is less; 

(2) Minimum size licenses, or 

additions to an existing license, will be 

allocated among applicants requesting 

articles on the basis of the rank-order 

lottery system described in § 6.25(c); 

(3) If there is any amount of an article 

from a country left after minimum size 

licenses have been issued, the Licensing 

Authority may allocate the remainder in 

any manner it determines equitable 

among applicants who have requested 

that article; and 

(4) No amount will be reallocated to 

a licensee who has surrendered a 

portion of its license for the same article 

from the same country during that quota 

year unless all other licensees applying 

for a reallocated quantity have been 

allocated a license; 

(e) However, if the government of an 

exporting country chooses to designate 

eligible importers for surrendered 

amounts under Appendix 3, the 

Licensing Authority shall issue the 

licenses in accordance with § 6.25(d)(2), 

provided that the government of the 


tkelley on DSK3SPTVN1PROD with PROPOSALS
76926 Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 

exporting country notifies the Licensing 

Authority of its designations no later 

than September 1. Such notification 

shall contain the names and addresses 

of the importers that it is designating 

and the amount in percentage terms of 

such article for which each importer is 

being designated. In such case the 

requirements of paragraph (c) of this 

section shall not apply. 

§ 6.27 Limitations on use of license. 

(a) A licensee shall not obtain or use 

a license for speculation, brokering, or 

offering for sale, or permit any other 

person to use the license for profit. 

(b) A licensee who is eligible as a 

manufacturer or processor, pursuant to 

§ 6.23, shall process at least 75 percent 

of its licensed imports in such person’s 

own facilities and maintain the records 

necessary to so substantiate. 

§ 6.28 Transfer of license. 

(a) If a licensee sells or conveys its 

business involving articles covered by 

this subpart to another person, 

including the complete transfer of the 

attendant assets, the Licensing 

Authority will transfer to such other 

person the historical, nonhistorical or 

designated license issued for that quota 

year. Such sale or conveyance must be 

unconditional, except that it may be in 

escrow with the sole condition for 

return of escrow being that the 

Licensing Authority determines that 

such sale does not meet the 

requirements of this paragraph. 

(b) The parties seeking transfer of 

license shall give written notice to the 

Licensing Authority of the intended sale 

or conveyance described in paragraph 

(a) of this section by email. The notice 

must be received by the Licensing 

Authority at least 20 working days prior 

to the intended consummation of the 

sale or conveyance. Such written notice 

shall include copies of the documents of 

sale or conveyance. The Licensing 

Authority will review the documents for 

compliance with the requirements of 

paragraph (a) of this section and advise 

the parties in writing of its findings by 

the end of the 20-day period. The 

parties shall have the burden of 

demonstrating to the satisfaction of the 

Licensing Authority that the 

contemplated sale or conveyance 

complies with the requirements of 

paragraph (a) of this section. Within 15 

days of the consummation of the sale or 

conveyance, the parties shall email the 

final documents to the Licensing 

Authority. The Licensing Authority will 

not transfer the licenses unless the 

documents are submitted in accordance 

with this paragraph. 

(c) The eligibility for a license of a 

person to whom a business is sold or 

conveyed will be determined for the 

next quota year in accordance with 

§ 6.23. For the purposes of § 6.23(b)(1) 

the person to whom a business is sold 

or conveyed shall be deemed to be the 

person to whom the historical licenses 

were issued during the quota year in 

which the sale or conveyance occurred. 

Further, for the purposes of § 6.23(b) 

and (c), the entries made under such 

licenses by the original licensee during 

the year in which the sale of conveyance 

is made, shall be considered as having 

been made by the person to whom the 

business was sold or conveyed. 

§ 6.29 Use of licenses. 

(a) An article entered under a license 

shall be an article produced in the 

country specified on the license. 

(b) An article entered or withdrawn 

from warehouse for consumption under 

a license must be entered in the name 

of the licensee as the importer of record 

by the licensee or its agent, and must be 

owned by the licensee at the time of 

such entry. 

(c) If the article entered or withdrawn 

from warehouse for consumption was 

purchased by the licensee through a 

direct sale from a foreign supplier, the 

licensee shall present, at the time of 

entry: 

(1) A true and correct copy of a 

through bill of lading from the country; 

and 

(2) A commercial invoice or bill of 

sale from the seller, showing the 

quantity and value of the product, the 

date of purchase and the country; or 

(3) Where the article was entered into 

warehouse by the foreign supplier, CBP 

Form 7501 endorsed by the foreign 

supplier, and the commercial invoice. 

(d) If the article entered was 

purchased by the licensee via sale-intransit, the licensee shall present, at the 

time of entry: 

(1) A true and correct copy of a 

through bill of lading endorsed by the 

original consignee of the goods; 

(2) A certified copy of the commercial 

invoice or bill of sale from the foreign 

supplier to the original consignee of the 

goods; and 

(3) A commercial invoice or bill of 

sale from the original consignee to the 

licensee. 

(e) If the article entered was 

purchased by the licensee in warehouse, 

the licensee shall present, at the time of 

entry: 

(1) CBP Form 7501 endorsed by the 

original consignee of the goods; 

(2) A certified copy of the commercial 

invoice or bill of sale from the foreign 

supplier to the original consignee of the 

goods; and 

(3) A commercial invoice or bill of 

sale from the original consignee to the 

licensee. 

(f) The Licensing Authority may 

waive the requirements of paragraphs 

(c), (d) or (e), if it determines that 

because of strikes, lockouts or other 

unusual circumstances, compliance 

with those requirements would unduly 

interfere with the entry of such articles. 

(g) Nothing in this subpart shall 

prevent the use of immediate delivery in 

accordance with the provisions of CBP 

regulations relating to tariff-rate quotas. 

§ 6.30 Record maintenance and 

inspection. 

A licensee shall retain all records 

relating to its purchases, sales and 

transactions governed by this subpart, 

including all records necessary to 

establish the licensee’s eligibility, for 

five years subsequent to the end of the 

quota year in which such purchases, 

sales or transactions occurred. During 

that period, the licensee shall, upon 

reasonable notice and during ordinary 

hours of business, grant officials of the 

U.S. Department of Agriculture full and 

complete access to the licensee’s 

premises to inspect, audit or copy such 

records. 

§ 6.31 Debarment and suspension. 

The provisions in 7 CFR part 3017— 

Governmentwide Debarment and 

Suspension (Nonprocurement) and 

Government Requirements for Drug-Free 

Workplace (Grants), subparts A through 

E, apply to this subpart. 

§ 6.32 Globalization of licenses. 

If the Licensing Authority determines 

that entries of an article from a country 

are likely to fall short of that country’s 

allocated amount as indicated in 

appendices 1, 2, and 3, the Licensing 

Authority may permit, with the 

approval of the Office of the United 

States Trade Representative, the 

applicable licensees to enter the 

remaining balance or a portion thereof 

from any country during that quota year. 

Requests for consideration of such 

adjustments must be submitted to the 

Licensing Authority no later than 

September 1. The Licensing Authority 

will obtain prior consent for such an 

adjustment of licenses from the 

government of the exporting country for 

quantities in accordance with the 

Uruguay Round commitment of the 

United States. No globalization requests 

will be considered prior to April 1 of 

each year. 

§ 6.33 License fee. 

(a) A fee will be assessed each quota 

year for each license to defray the 

Department’s costs of administering the 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 246 / Tuesday, December 23, 2014 / Proposed Rules 76927 

licensing system. To the extent 

practicable, the fee will be announced 

by the Licensing Authority in a notice 

published in the Federal Register no 

later than August 31 of the year 

preceding the quota year for which the 

fee is assessed. 

(b) The license fee for each license 

issued is due and payable in full no 

later than March 15 of the year for 

which the license is issued. The fee for 

any license issued after March 15 of any 

quota year is due and payable in full no 

later than 10 days from the date of 

issuance of the license. Fee payments 

are payable to the Treasurer of the 

United States and shall be made 

utilizing the electronic software 

designated for the purpose by the 

Licensing Authority as provided in 

§ 6.36(b). 

(c) If the license fees for all licenses 

issued to a licensee are not paid by the 

final payment date, a hold will be 

placed on the use of all licenses issued 

to the licensee and no articles will be 

permitted entry under those licenses. 

The Licensing Authority shall send a 

warning letter by email advising the 

licensee that if payment is not made in 

accordance with § 6.36(b) and received 

within 10 calendar days from the date 

of the email, all licenses issued to that 

licensee will be revoked. Where the 

license at issue is a historical license, 

this will result, pursuant to § 6.23(b), in 

the person’s loss of historical eligibility 

for such license. 

§ 6.34 Adjustment of appendices. 

(a) Whenever a historical license 

(Appendix 1) is not issued to an 

applicant pursuant to the provisions of 

§ 6.23, is permanently surrendered or is 

revoked by the Licensing Authority, the 

amount of such license will be 

transferred to Appendix 2. 

(b) The cumulative annual transfers to 

Appendix 2 made in accordance with 

paragraph (a) will be published in the 

Federal Register. If a transfer results in 

the addition of a new article, or an 

article from a country not previously 

listed in Appendix 2, the Licensing 

Authority shall afford all eligible 

applicants for that quota year the 

opportunity to apply for a license for 

such article. 

§ 6.35 Correction of errors. 

(a) If a person demonstrates, to the 

satisfaction of the Licensing Authority, 

that errors were made by officers or 

employees of the United States 

Government, the Licensing Authority 

will review and rectify the errors to the 

extent permitted under this subpart. 

(b) To be considered, a person must 

provide sufficient documentation 

regarding the error to the Licensing 

Authority by email, not later than 

August 31 of the calendar year following 

the calendar year in which the error was 

alleged to have been committed. 

(c) If the error resulted in the loss of 

a historical license by a license holder, 

the Licensing Authority will transfer the 

amount of such license from Appendix 

2 to Appendix 1 in order to provide for 

the issuance of such license in the 

calendar year following the calendar 

year for which the license was revoked. 

The cumulative annual transfers to 

Appendix 1 in accordance with this 

paragraph will be published in the 

Federal Register. 

§ 6.36 Miscellaneous. 

(a) If any deadline date in this subpart 

falls on a Saturday, Sunday, or a Federal 

holiday, then the deadline shall be the 

next business day. 

(b) All applications and fee payments 

required under this subpart shall be 

made utilizing the electronic software 

designated for this purpose by the 

Licensing Authority, and official 

correspondence with the Licensing 

Authority, except as provided under 

§ 6.28(b), shall be by email. 

§ 6.37 [Removed] 

■ 4. Section 6. 37 is removed. 

Dated: August 21, 2014. 

Philip C. Karsting, 

Administrator, Foreign Agricultural Service. 

[FR Doc. 2014–29807 Filed 12–22–14; 8:45 am] 

BILLING CODE 3410–10–P 

FARM CREDIT ADMINISTRATION 

12 CFR Parts 607, 614, 615, 620 and 

628 

RIN 3052–AC81 

Regulatory Capital Rules: Regulatory 

Capital, Implementation of Tier 1/Tier 2 

Framework 

AGENCY: Farm Credit Administration. 

ACTION: Proposed rule; extension of 

comment period. 

SUMMARY: The Farm Credit 

Administration (FCA or we) published a 

proposed rule that would revise our 

regulatory capital requirements for Farm 

Credit System (System) institutions to 

include tier 1 and tier 2 risk-based 

capital ratio requirements (replacing 

core surplus and total surplus 

requirements), a tier 1 leverage 

requirement (replacing a net collateral 

requirement for System banks), a capital 

conservation buffer, revised risk 

weightings, and additional public 

disclosure requirements. The revisions 

to the risk weightings would include 

alternatives to the use of credit ratings, 

as required by section 939A of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act. To allow 

interested parties additional time to 

submit comments, we are extending the 

comment period on the proposed rule 

from January 2, 2015 to February 16, 

2015. 

DATES: Comments on the proposed rule 

must be submitted on or before February 

16, 2015. 

ADDRESSES: For accuracy and efficiency 

reasons, commenters are encouraged to 

submit comments by email or through 

the FCA’s Web site. As facsimiles (fax) 

are difficult for us to process and 

achieve compliance with section 508 of 

the Rehabilitation Act, we no longer 

accept comments submitted by fax. 

Regardless of the method you use, 

please do not submit your comments 

multiple times via different methods. 

You may submit comments by any of 

the following methods: 

• Email: Send an email to reg-comm@

fca.gov. 

• FCA Web site: http://www.fca.gov. 

Select ‘‘Public Commenters,’’ then 

‘‘Public Comments,’’ and follow the 

directions for ‘‘Submitting a Comment.’’ 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Barry F. Mardock, Deputy 

Director, Office of Regulatory Policy, 

Farm Credit Administration, 1501 Farm 

Credit Drive, McLean, VA 22102–5090. 

You may review copies of all 

comments we receive at our office in 

McLean, Virginia or on our Web site at 

http://www.fca.gov. Once you are in the 

Web site, select ‘‘Public Commenters,’’ 

then ‘‘Public Comments,’’ and follow 

the directions for ‘‘Reading Submitted 

Public Comments.’’ We will show your 

comments as submitted, including any 

supporting data provided, but for 

technical reasons we may omit items 

such as logos and special characters. 

Identifying information that you 

provide, such as phone numbers and 

addresses, will be publicly available. 

However, we will attempt to remove 

email addresses to help reduce Internet 

spam. 

FOR FURTHER INFORMATION CONTACT: J. C. 

Floyd, Associate Director, Finance and 

Capital Markets Team, Office of 

Regulatory Policy, Farm Credit 

Administration, McLean, VA 22102– 

5090, (703) 883–4414, TTY (703) 883– 

4434, or Rebecca S. Orlich, Senior 

Counsel, or Jennifer A. Cohn, Senior 

Counsel, Office of General Counsel, 

Farm Credit Administration, McLean, 


tkelley on DSK3SPTVN1PROD with PROPOSALS