FAS Proposes Changes to Dairy Import License Program
The Foreign Agricultural Service is proposing changes to its Dairy Tariff-Rate Import Quota Licensing Program, including a move to electronic submission and reporting process and an extension to a safe harbor for under-utilized historic licenses (here). The proposed rule would also change payment requirements and timelines for license applications. Comments on the proposed rule are due Feb. 23.
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Dairy TRQ licenses are required to import certain dairy articles under the low in-quota rate. Licenses are issued for each calendar year, and each license authorizes the license holder to import a specified quantity and type of dairy article from a specified country of origin. There are currently three types of licenses: historical licenses that are automatically renewed as long as the license holder meets applicable requirements; non-historical “lottery” licenses that cannot be renewed, and the holder must reapply and go through a lottery process if it wants to continue to import at the in-quota rate; and designated licenses that are issued to importers who have been designated by an exporting country to receive a license.
Suspension of restrictions on historical licenses. A regulation has been on the books since 1999 that lowers the license amount for historical licenses if the holder surrenders more than 50 percent of its license amount for a given item from a given country in three out of five years (surrender is required, because holders that don’t import 85% of the license amount in order to be eligible for a license). The provision has been suspended three times since it was issued, most recently for five years in 2010. In order to avoid the regulation taking effect in 2015, FAS is proposing to again suspend application of the provision for another seven years, through the 2022 quota year.
Electronic communications. FAS is also proposing to move to exclusively electronic communications in the application, reporting and payment processes. The agency said it intends to make further moves toward automation, including “fundamental changes to the computer systems” that will “take several years to accomplish,” in order to comply with the Obama administration’s single window directive. However, it needs to wait until its computer systems have been moved to the Automated Commercial Environment platform, and will again request comments for additional improvements and changes to the program once that has occurred.
Payment required at application. Finally, FAS is proposing to require payment of fees for all approved applications, regardless of whether the license holder still wants the license. License applicants can currently apply but surrender their license once it is granted, avoiding payment of fees. FAS said it is proposing the change because the agency still incurs administrative expenses when a license is approved but then surrendered. FAS is also proposing to tighten the timeline for making payments to 10 days after a license is issued, rather than 30.
(Federal Register 12/23/14)