Federal Register / Vol. 66, No. 28 / Friday, February 9, 2001 / Rules and Regulations 9647

a percentage, that is attributable to the

qualifying rum.

(g) Importer system for review of

necessary recordkeeping. The importer

will establish and implement a system

of internal controls which demonstrate

that reasonable care was exercised in its

claim for duty-free treatment under the

CBI. These controls should include tests

to assure the accuracy and availability

of records that establish:

(1) The origin of the rum;

(2) The direct shipment of the rum

from a beneficiary country or from the

U.S. Virgin Islands to Canada;

(3) The alcohol content of the finished

liqueur/beverage imported from Canada;

and

(4) The direct shipment of the

finished liqueur/beverage from Canada

to the United States.

(h) Submission of documents to

Customs. The importer must be

prepared to submit directly to the port

director, if requested, those documents

and/or supporting records as described

in paragraphs (d), (e) and (f) of this

section, for a period of 5 years from the

date of entry of the related liqueurs and

spirituous beverages under section

213(a)(6) of the Caribbean Basin

Economic Recovery Act (19 U.S.C.

2703(a)(6)), as provided in § 163.4(a) of

this chapter. If requested, the importer

must submit such documents and/or

supporting records to the port director

within 60 calendar days of the date of

the request or such additional period as

the port director may allow for good

cause shown.

PART 163—RECORDKEEPING

1. The authority citation for part 163

continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66,

1484, 1508, 1509, 1510, 1624.

2. The Appendix to part 163 is

amended by adding the following new

listing under section IV in appropriate

numerical order to read as follows:

Appendix to Part 163—Interim (a)(1)(A)

List

* * * * *

IV. * * *

§ 10.199 Documents, etc. required for dutyfree entry of liqueurs and/or spirituous

beverages produced in Canada from CBI rum,

declaration of Canadian processor (plus

supporting information.

* * * * *

PART 178—APPROVAL OF

INFORMATION COLLECTION

REQUIREMENTS

1. The authority citation for part 178

continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44

U.S.C. 3501 et seq.

2. Section 178.2 is amended by

adding the following in appropriate

numerical sequence according to the

section number under the columns

indicated:

§ 178.2 Listing of OMB control numbers.

19 CFR Section Description OMB control

No.

*******

§ 10.199 ....................................................................................... Claim for duty-free entry of rum beverages from Canada

under the Caribbean Basin Initiative.

1515–0194

*******

Raymond W. Kelly,

Commissioner of Customs.

Approved: February 5, 2001.

Timothy E. Skud,

Acting Deputy Assistant Secretary of the

Treasury.

[FR Doc. 01–3360 Filed 2–8–01; 8:45 am]

BILLING CODE 4820–02–U

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 191

[T.D. 01–18]

RIN 1515–AC67

Merchandise Processing Fee Eligible

To Be Claimed as Unused Merchandise

Drawback

AGENCY: Customs Service, Department

of the Treasury.

ACTION: Interim rule; solicitation of

comments.

SUMMARY: This document amends the

Customs Regulations on an interim basis

to indicate that merchandise processing

fees are eligible to be claimed as unused

merchandise drawback. The change is

made to reflect a recent court decision

in which merchandise processing fees

were found to be assessed under Federal

law and imposed by reason of

importation and therefore eligible to be

claimed as unused merchandise

drawback pursuant to 19 U.S.C. 1313(j).

The amendment will require a drawback

claimant to apportion the merchandise

processing fee to that merchandise that

provides the basis for drawback.

DATES: This interim rule is effective

February 9, 2001. Comments must be

received on or before April 10, 2001.

ADDRESSES: Written comments

(preferably in triplicate) may be

submitted to and inspected at the

Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, 1300 Pennsylvania Avenue,

NW., 3rd Floor, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:

William G. Rosoff, Chief, Duty and

Refund Determinations Branch, Office

of Regulations and Rulings, U.S.

Customs Service, 1300 Pennsylvania

Avenue, NW., Washington, DC 20029,

Tel. (202) 927–2265.

SUPPLEMENTARY INFORMATION:

Background

Merchandise Processing Fees—19 U.S.C.

58c(a)(9)(A)

Merchandise processing fees are fees

the Secretary of the Treasury charges

and collects for the processing of

merchandise that is formally entered or

released into the United States. See 19

U.S.C. 58c(a)(9)(A). A merchandise

processing fee is assessed in an amount

equal to 0.21 percent of the value of the

imported merchandise, as determined

under 19 U.S.C. 1401a. Merchandise

processing fees are subject to two

monetary limits:

(1) A cap of $485 is imposed by 19

U.S.C. 58c(a)(9)(B)(i) for any release or

entry, including weekly Free Trade

Zone entries (see section 410 of the

Trade and Development Act of 2000,

Pub. L. 106–200, 114 Stat. 251, enacted

on May 18, 2000), for which the value

of merchandise subject to the fee

exceeds $230,952.38 ($485 ÷ .0021 =

$230,952.38); and

(2) For certain monthly entries, as

prescribed by Pub. L. 101–382, section

111(f), as amended, and implemented

9648 Federal Register / Vol. 66, No. 28 / Friday, February 9, 2001 / Rules and Regulations

by § 24.23(d) of the Customs Regulations

(19 CFR 24.23(d)), the merchandise

processing fee is limited to the lesser of

the following:

(i) A cap of $400 where the value of

the merchandise subject to the fee

exceeds $190,476.19 ($400 ÷ .0021 =

$190,476.19); or

(ii) The amount determined by

applying the ad valorem rate under

paragraph (b)(1)(i)(A) of § 24.23 to the

total value of such daily importations.

Drawback—19 U.S.C. 1313

Section 313 of the Tariff Act of 1930,

as amended (19 U.S.C. 1313), concerns

drawback and refunds. Drawback is a

refund of certain duties, taxes and fees

paid by the importer of record and

granted to a drawback claimant under

specific conditions. There are several

types of drawback. Section 1313(j)

concerns drawback for ‘‘unused

merchandise,’’ and provides, pursuant

to specific conditions set forth therein,

that a refund of 99 percent of each duty,

tax, or fee ‘‘imposed under Federal law

because of [an article’s] importation’’

will be refunded as drawback.

Merchandise Processing Fees Eligible To

Be Claimed as Unused Merchandise

Drawback

The issue of whether a merchandise

processing fee is ‘‘imposed under

Federal law because of [an article’s]

importation,’’ and therefore eligible to

be claimed as unused merchandise

drawback pursuant to the terms of

section 1313(j), was recently examined

by the Court of Appeals for the Federal

Circuit in Texport Oil v. United States,

185 Fd. 3d 1291 (Fed. Cir. 1999). In that

case, the court held that as merchandise

processing fees are ‘‘assessed under

Federal law’’ (pursuant to 19 U.S.C.

58c(a)(9)) and ‘‘explicitly linked to

import activities,’’ they are imposed by

reason of importation and therefore

subject to unused merchandise

drawback by application of the statute.

Amendment to the Customs Regulations

To implement the court’s

interpretation of 19 U.S.C. 1313(j), it is

necessary to amend the Customs

Regulations to provide that merchandise

processing fees are now subject to

unused merchandise drawback, and to

add apportionment language.

Apportionment language is necessary

because in order for a drawback

claimant to correctly calculate the

amount of drawback due, the claimant

must apportion the merchandise

processing fee to that merchandise that

provides the basis for unused

merchandise drawback.

In this document, Customs is

amending the regulations to reflect the

holding in Texport and to provide

examples of apportionment

calculations. Amendments are made to

§§ 191.2(u), 191.3, and 191.51 of the

Customs Regulations. Section 191.3 is

amended to reflect that a merchandise

processing fee is now subject to unused

merchandise drawback. Section 191.51

is amended to reflect how a claimant is

to calculate the portion of a

merchandise processing fee that is

eligible to be claimed as unused

merchandise drawback. A conforming

change is made to § 191.2(u). A more

detailed explanation of the amendments

is set forth below.

19 CFR 191.3

Section 191.3 of the Customs

Regulations (19 CFR 191.3) identifies

those duties and fees that are subject to,

or ineligible for, drawback. Paragraph

(a) of this section enumerates those

duties that are subject to drawback.

Paragraph (b) sets forth those duties and

fees that are deemed ineligible for

drawback. In paragraph (b)(2),

merchandise processing fees are

specifically identified as ineligible for

drawback.

In view of the recent judicial

interpretation of section 1313(j)(2) in

which merchandise processing fees

were deemed subject to unused

merchandise drawback, §§ 191.3(a) and

(b)(2) of the Customs Regulations are

amended to reflect that determination.

A new paragraph (a)(4) is added to

provide that merchandise processing

fees are eligible to be claimed as unused

merchandise drawback. Paragraph (b)(2)

is amended so as to provide that

merchandise processing fees are

ineligible for drawback except when

unused merchandise drawback is

claimed.

19 CFR 191.51

Section 191.51(b) of the Customs

Regulations requires a drawback

claimant to correctly calculate the

amount of drawback due when

completing a drawback entry.

As stated above, the court’s

interpretation of 19 U.S.C. 1313(j)

requires that a drawback claimant

apportion a merchandise processing fee

to that merchandise that provides the

basis for unused merchandise drawback

in order to correctly calculate the

amount of drawback due.

In order for a drawback claimant to be

able to ascertain what portion of a

merchandise processing fee is eligible to

be claimed as unused merchandise

drawback, a four-step apportionment

calculation is necessary. First, as with

any drawback claim where not all of the

merchandise in a particular entry

provides a basis for drawback, it is

necessary for a claimant to calculate the

value of each line item of entered

merchandise subject to the fee, relative

to the value of the entire entry subject

to the fee. The resulting figure

constitutes the ‘‘relative value ratio’’.

Second, the relative value ratio for each

line item is multiplied by the amount of

merchandise processing fee paid in

connection with the entry. The resulting

figures represent the amount of

merchandise processing fee attributable

to each line item. Third, the amount of

merchandise processing fee attributable

to each line item that provides the basis

for unused merchandise drawback is

multiplied by 99 percent. The resulting

figure represents that portion of the

merchandise processing fee attributable

to each line item that is eligible to be

claimed as unused merchandise

drawback, as per section 1313(j). Lastly,

in order to calculate the amount of

merchandise processing fee eligible for

drawback per unit of merchandise, the

amount of fee that is eligible to be

claimed as unused merchandise

drawback per line item is divided by the

number of units covered by that line

item.

As § 191.51(b) requires that a

drawback claimant correctly calculate

the amount of drawback due, and a

claim for unused merchandise drawback

for a merchandise processing fee will

necessarily involve an apportionment

calculation, this provision is amended

to reflect that fact and to provide

examples of the manner by which such

apportionment calculations are to be

made.

19 CFR 191.2(u)

Section 191.2(u) of the Customs

Regulations (19 CFR 191.2(u)) sets forth

the definition of the term ‘‘relative

value’’ for purposes of part 191.

A drawback claimant is required to

calculate the ‘‘relative value ratio’’ when

determining what portion of a

merchandise processing fee is eligible

for unused merchandise drawback. See

the amended text of § 191.51(b) of the

Customs Regulations (19 CFR

191.51(b)), discussed below. As the term

‘‘relative value ratio,’’ as used in

§ 191.51(b), as amended, does not share

the same meaning as the term ‘‘relative

value’’ as set forth in § 191.2(u), and the

two terms are similar enough to

potentially cause confusion, § 191.2(u)

is amended so as to exclude

applicability to § 191.51(b).

Federal Register / Vol. 66, No. 28 / Friday, February 9, 2001 / Rules and Regulations 9649

Comments

Before adopting this interim

regulation as a final rule, consideration

will be given to any written comments

timely submitted to Customs, including

comments on the clarity of this interim

rule and how it may be made easier to

understand. Comments submitted will

be available for public inspection in

accordance with the Freedom of

Information Act (5 U.S.C. 552), § 1.4 of

the Treasury Department Regulations

(31 CFR 1.4), and § 103.11(b) of the

Customs Regulations (19 CFR

103.11(b)), on regular business days

between the hours of 9 a.m. and 4:30

p.m. at the Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, 1300 Pennsylvania Avenue,

NW., 3rd Floor, Washington, DC.

Inapplicability of Prior Public Notice

and Comment Procedures

Pursuant to the provisions of 5 U.S.C.

553(b)(B), Customs has determined that

prior public notice and comment

procedures on this regulation are

unnecessary and contrary to public

interest. The regulatory changes

conform the Customs Regulations to

reflect a recent decision by the Court of

Appeals for the Federal Circuit. In

addition, the regulatory changes benefit

the public by allowing merchandise

processing fees to be claimed as unused

merchandise drawback, and by

providing specific information as to

how a drawback claimant is to correctly

calculate that portion of a merchandise

processing fee that is eligible to be

claimed as unused merchandise

drawback. For these reasons, pursuant

to the provisions of 5 U.S.C. 553(d)(1)

and (3), Customs finds that there is good

cause for dispensing with a delayed

effective date.

Executive Order 12866

This document does not meet the

criteria for a ‘‘significant regulatory

action’’ as specified in Executive Order

12866.

Regulatory Flexibility Act

Because no notice of proposed

rulemaking is required for this rule, the

provisions of the Regulatory Flexibility

Act (5 U.S.C. 601 et seq.) do not apply.

Drafting Information

The principal author of this document

was Suzanne Kingsbury, Regulations

Branch, Office of Regulations and

Rulings, U.S. Customs Service.

However, personnel from other offices

participated in its development.

List of Subjects

19 CFR Part 191

Claims, Commerce, Customs duties

and inspection, Drawback.

Amendment to the Regulations

For the reason stated above, part 191

of the Customs Regulations (19 CFR part

191), is amended as set forth below.

PART 191—DRAWBACK

1. The general authority citation for

part 191 continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202

(General Note 20, Harmonized Tariff

Schedule of the United States), 1313, 1624.

* * * * *

2. Section 191.2(u) is amended by

adding the words ‘‘, except for purposes

of § 191.51(b),’’ after the word ‘‘means’’

in the first sentence.

3. Section 191.3 is amended:

a. In paragraph (a), introductory text,

by adding the words ‘‘and fees’’ after the

word ‘‘Duties’’;

b. At the end of paragraph (a)(1)(ii), by

adding the word ‘‘and’’ after the semicolon;

c. At the end of paragraph (a)(2), by

removing the word ‘‘and,’’;

d. At the end of paragraph (a)(3), by

removing the period and adding in its

place ‘‘; and’’;

e. By adding a new paragraph (a)(4);

and

f. By revising paragraph (b)(2).

The addition and revision read as

follows:

§ 191.3 Duties and fees subject or not

subject to drawback.

(a) * * *

(4) Merchandise processing fees (see

§ 24.23 of this chapter) for unused

merchandise drawback pursuant to 19

U.S.C. 1313(j).

(b) * * *

(2) Merchandise processing fees (see

§ 24.23 of this chapter), except where

unused merchandise drawback is

claimed; and

* * * * *

4. Section 191.51(b) is amended by

redesignating the existing text as

paragraph (b)(1), adding a heading to

newly redesignated paragraph (b)(1),

and adding a new paragraph (b)(2) to

read as follows:

§ 191.51 Completion of drawback claims.

* * * * *

(b) Drawback due.—(1) Claimant

required to calculate drawback. ***

(2) Merchandise processing fee

apportionment calculation. Where a

drawback claimant seeks unused

merchandise drawback pursuant to 19

U.S.C. 1313(j) for a merchandise

processing fee paid pursuant to 19

U.S.C. 58c(a)(9)(A), the claimant is

required to correctly apportion the fee to

that merchandise that provides the basis

for drawback when calculating the

amount of drawback requested on the

drawback entry. This is determined as

follows:

(i) Relative value ratio for each line

item. The value of each line item of

entered merchandise subject to a

merchandise processing fee is

calculated (to four decimal places) by

dividing the value of the line item

subject to the fee by the total value of

entered merchandise subject to the fee.

The resulting value forms the relative

value ratio.

(ii) Merchandise processing fee

apportioned to each line item. To

apportion the merchandise processing

fee to each line item, the relative value

ratio for each line item is multiplied by

the merchandise processing fee paid.

(iii) Amount of merchandise

processing fee eligible for drawback per

line item. The amount of merchandise

processing fee apportioned to each line

item is multiplied by 99 percent to

calculate that portion of the fee

attributable to each line item that is

eligible for drawback.

(iv) Amount of merchandise

processing fee eligible for drawback per

unit of merchandise. To calculate the

amount of a merchandise processing fee

eligible for drawback per unit of

merchandise, the line item amount that

is eligible for drawback is divided by

the number of units covered by that line

item (to two decimal places).

Example 1

Line item 1—5,000 articles valued at

$10 each total $50,000

Line item 2—6,000 articles valued at

$15 each total $90,000

Line item 3—10,000 articles valued at

$20 each total $200,000

Total units = 21,000

Total value = $340,000

Merchandise processing fee = $485 (for

purposes of this example, the fee cap

of $485, as per 19 U.S.C.

58c(a)(9)(B)(i), is applicable)

Line item relative value ratios. The

relative value ratio for line item 1 is

calculated by dividing the value of that

line item by the total value ($50,000 ÷

340,000 = .1470). The relative value

ratio for line item 2 is .2647. The

relative value ratio for line item 3 is

.5882.

Merchandise processing fee

apportioned to each line item. The

amount of fee attributable to each line

item is calculated by multiplying $485

by the applicable relative value ratio.

9650 Federal Register / Vol. 66, No. 28 / Friday, February 9, 2001 / Rules and Regulations

The amount of the $485 fee attributable

to line item 1 is $71.295 (.1470 × $485

= $71.295). The amount of the fee

attributable to line item 2 is $128.3795

(.2647 × $485 = $128.3795). The amount

of the fee attributable to line item 3 is

$285.277 (.5882 × $485 = $285.277).

Amount of merchandise processing

fee eligible for drawback per line item.

The amount of merchandise processing

fee eligible for drawback for line item 1

is $70.5821 ÷ (.99 × $71.295). The

amount of fee eligible for drawback for

line item 2 is $127.0957 (.99 ×

$128.3795). The amount of fee eligible

for drawback for line item 3 is

$282.4242 (.99 × $285.277).

Amount of merchandise processing

fee eligible for drawback per unit of

merchandise. The amount of

merchandise processing fee eligible for

drawback per unit of merchandise is

calculated by dividing the amount of fee

eligible for drawback for the line item

by the number of units in the line item.

For line item 1, the amount of

merchandise processing fee eligible for

drawback per unit is $.0141 ($70.5821 ÷

5,000 = $.0141). If 1,000 widgets form

the basis of a claim for drawback under

19 U.S.C. 1313(j), the total amount of

drawback attributable to the

merchandise processing fee is $14.10

(1,000 × .0141 = $14.10). For line item

2, the amount of fee eligible for

drawback per unit is $.0212 ($127.0957

÷ 6,000 = $.0212). For line item 3, the

amount of fee eligible for drawback per

unit is $.0282 ($282.4242 ÷ 10,000 =

$.0282).

Example 2

This example illustrates the treatment

of dutiable merchandise that is exempt

from the merchandise processing fee

and duty-free merchandise that is

subject to the merchandise processing

fee.

Line item 1—700 meters of printed cloth

valued at $10 per meter (total value

$70,000) that is exempt from the

merchandise processing fee under 19

U.S.C. 58c(b)(8)(ii)(B)(iii)

Line item 2—15,000 articles valued at

$100 each (total value $1,500,000)

Line item 3—10,000 duty-free articles

valued at $50 each (total value

$500,000)

The relative value ratios are

calculated using line items 2 and 3 only,

as there is no merchandise processing

fee imposed by reason of importation on

line item 1.

Line item 2—1,500,000 ÷ 2,000,000 =

.75 (line items 2 and 3 form the total

value of the merchandise subject to

the merchandise processing fee).

Line item 3—500,000 ÷ 2,000,000 = .25

If the total merchandise processing fee

paid was $485, the amount of the fee

attributable to line item 2 is $363.75 (.75

× $485 = $363.75). The amount of the

fee attributable to line item 3 is $121.25

(.25 × $485 = $121.25).

The amount of drawback on the

merchandise processing fee attributable

to each unit of line item 2 is $.0243

($363.75 ÷ 15,000 = $.02430). The

amount of drawback on the

merchandise processing fee attributable

to each unit of line item 3 is $.0121

($121.25 ÷ 10,000 = $.0121).

If 1,000 units of line item 2 were

exported, the drawback attributable to

the merchandise processing fee is

$24.23 ($.02423 × 1,000 = $24.23).

* * * * *

Raymond W. Kelly,

Commissioner of Customs.

Approved: November 9, 2000.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 01–3358 Filed 2–8–01; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 520

Oral Dosage Form New Animal Drugs;

Pyrantel Pamoate Chewable Tablets

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is amending the

animal drug regulations to reflect

approval of an abbreviated new animal

drug application (ANADA) filed by Blue

Ridge Pharmaceuticals, Inc. The

ANADA provides for use of pyrantel

pamoate chewable tablets for the

removal of certain gastrointestinal

parasites and prevention of reinfection

in puppies and dogs.

DATES: This rule is effective February 9,

2001.

FOR FURTHER INFORMATION CONTACT:

Lonnie W. Luther, Center for Veterinary

Medicine (HFV–102), Food and Drug

Administration, 7500 Standish Pl.,

Rockville, MD 20855, 301–827–0209.

SUPPLEMENTARY INFORMATION: Blue

Ridge Pharmaceuticals, Inc., 4249–105

Piedmont Pkwy., Greensboro, NC 27410,

filed ANADA 200–281 that provides for

use of WORMEXX (pyrantel pamoate)

Chewable Tablets for the removal of

certain gastrointestinal parasites and

prevention of reinfection in puppies and

dogs. Blue Ridge’s WORMEXX

Chewable Tablets is approved as a

generic copy of Farnam Co.’s D–

WORM (pyrantel pamoate) Dog

Wormer Chewable Tablets, approved

under NADA 139–191. ANADA 200–

281 is approved as of January 3, 2001,

and 21 CFR 520.2041 is amended to

reflect the approval. The basis for

approval is discussed in the freedom of

information summary.

In accordance with the freedom of

information provisions of 21 CFR part

20 and 514.11(e)(2)(ii), a summary of

safety and effectiveness data and

information submitted to support

approval of this application may be seen

in the Dockets Management Branch

(HFA–305), Food and Drug

Administration, 5630 Fishers Lane, rm.

1061, Rockville, MD 20852, between 9

a.m. and 4 p.m., Monday through

Friday.

The agency has determined under 21

CFR 25.33(d)(1) that this action is of a

type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

This rule does not meet the definition

of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because

it is a rule of ‘‘particular applicability.’’

Therefore, it is not subject to the

congressional review requirements in 5

U.S.C. 801–808.

List of Subjects in 21 CFR Part 520

Animal drugs.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs and redelegated to

the Center for Veterinary Medicine, 21

CFR part 520 is amended as follows:

PART 520—ORAL DOSAGE FORM

NEW ANIMAL DRUGS

1. The authority citation for 21 CFR

part 520 continues to read as follows:

Authority: 21 U.S.C. 360b.

§ 520.2041 [Amended]

2. Section 520.2041 Pyrantel pamoate

chewable tablets is amended in

paragraph (b) by removing ‘‘No.

017135’’ and adding in its place ‘‘Nos.

017135 and 065274’’.

Dated: January 31, 2001.

Stephen F. Sundlof,

Director, Center for Veterinary Medicine.

[FR Doc. 01–3415 Filed 2–8–01; 8:45 am]

BILLING CODE 4160–01–F