Certain dairy products
- Document symbol
- G/LIC/N/3/USA/21
- Original language
- English
- Published on
- 16/10/2024
Outline of Systems
Q1. Give a brief description of each licensing system as a whole and, with respect to each, reply to the following questions as relevant, placing all of the material with respect to a given system in sequence together, and using cross references as appropriate when elements which have already been described are also present in another system.
Presidential Proclamation 6763 of 23 December 1994, modified the Harmonized Tariff Schedule of the United States (HTS) in various ways that affected the import system for certain 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 (TRQs) for such articles pursuant to P.L. 103-465 (the Uruguay Round Agreements Act); and specified which imports of dairy articles may require import licenses issued in accordance with the terms and conditions in regulations issued by the Secretary of Agriculture.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
The licensing system covers the following dairy commodities as defined in the Additional U.S. notes to Chapter 4 of the HTS: butter and fresh or sour cream containing over 45% by weight of butterfat (note 6); dried skim milk (note 7); dried whole milk (note 8); dried buttermilk and whey (note 12); butter substitutes (note 14); other cheese, NSPF (note 16); blue-mould cheese (note 17); Cheddar cheese (note 18); American cheese other than Cheddar (note 19); Edam and Gouda cheese (note 20); Italian-type cheese (note 21); Gruyere-process cheese (note 22); low-fat cheese (note 23); and Swiss/Emmenthaler cheese (note 25).
Q3. The system applies to goods originating in and coming from which countries?
The licensing system applies to dairy products coming from all supplying countries
Q4. Is the licensing intended to restrict the quantity or value of imports, and if not, what are its purposes? Have alternative methods of accomplishing the purposes been considered and if so which? Why have they not been adopted?
The licensing system was originally implemented as a requirement of Presidential Proclamation 3019 for the purpose of providing for an equitable distribution of trade in dairy products covered by Section 22 quotas among importers, users, and supplying countries. Under a TRQ system, licensing serves the same trade-stabilizing and equity purposes.
The licensing system is an administrative tool that governs the importation of certain dairy products subject to TRQs resulting from entry into force of the Uruguay Round Agreement. Under the TRQ system, the in-quota quantity of imports enters at the low-tier tariff rate, and the over-quota quantity enters at the high-tier tariff rate. Dairy articles subject to licensing cannot enter at the in-quota rate unless such imports are accompanied by a license. An article may be entered only in the name of the licensee, or the licensee's agent acting in the licensee's name under the power of attorney, and the quantity entered must be owned by the licensee on the date of entry, and must be charged against the license in effect. The licensing system was originally implemented as a requirement of Presidential Proclamation 3019 for the purpose of providing for an equitable distribution of trade in dairy products covered by Section 22 quotas among importers, users, and supplying countries. Under a TRQ system, licensing serves the same trade-stabilizing and equity purposes.
Q5. Cite the law, regulation and/or administrative order under which the licensing is maintained. Is the licensing statutorily required? Does the legislation leave designation of products to be subjected to licensing to administrative discretion? Is it possible for the government (or the executive branch) to abolish the system without legislative approval?
The licensing system is a statutory requirement. The authority to make such allocations was delegated to the Secretary of Agriculture by Presidential Proclamation 3019 of 8 June 1953.
Procedures
Q6. For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
Q6.I. Is information published, and where, concerning allocation of quotas and formalities of filing applications for licences? If not, how is it brought to the attention of possible importers? Of governments and export promotion bodies of exporting countries and their trade representatives? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
The procedures for submitting license applications, eligibility criteria, license use requirements and other provisions of the regulation are codified in 7 CFR 6.20-6.36. The electronic application forms designated by the Licensing Authority, which are readily available from the Department, provide complete information on the TRQs and allocations by supplying country. Limitations on the size of individual licenses are in the regulation. An Advanced Notice of Proposed Rule-making was published in the Federal Register on 2 June 1994, seeking comments on methods for allocating Uruguay Round TRQs through the year 2000, and comments on updating or improving the existing regulation. On 6 January 1995, and 2 May 1995, notices were published in the Federal Register amending the Import Regulation to implement those U.S. Uruguay Round commitments for 1995. The Department published the final rule on dairy tariff-rate quota licensing in the Federal Register on 9 October 1996. The regulation was modified on 6 October 2004, to accommodate electronic web-based application procedures. On 27 July 2015, a revision to the regulation was published in the Federal Register Vol. 80, No. 143, pages 44251-44258, published after extensive public comment. On 4 November 2020, the decision was announced in the Federal Register Vol. 85, No. 214, pages 70127-70128, to permit the UK authority to designate importers on behalf of UK exporters for trade transactions occurring after 31 December 2020.
Q6.II. How is the size of the quotas determined: on a yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for fresh licence on a six-monthly or quarterly basis?
License applications must be submitted annually during the application period specified in the Import Regulation, between September 1 and October 15 of the calendar year preceding importation. Licenses are generally issued during the last two weeks of December. Licenses are valid beginning in January 1 of each year and are valid for 12 months.
Q6.III. Are licences allotted for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are the names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate.)
Licenses are allocated to importers of dairy products regardless of whether they are producers of like products. Unused allocations may not be added to the allocation of the succeeding year. The Import Regulation requires that licensees must utilize 85% of the licenses issued and have the option to surrender voluntarily unused amounts, which are then reallocated, the same year, to other eligible licensees through an application process. A list of names of licensed importers is published on the FAS website each year. The list can be found on the internet at: http://www.fas.usda.gov/programs/dairy-import-licensing-program.
Q6.IV. From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
Applications are processed to determine if the eligibility criteria in the Import Regulations are met. In general, over 500 applications are reviewed, and the application process is completed within six weeks.
Q6.V. What are the minimum and maximum lengths of time for processing applications?
Licenses are issued for use beginning 1 January and generally issued in the last two weeks of December.
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
Only the Foreign Agricultural Service, United States Department of Agriculture, considers license applications on dairy products.
Q6.VII. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Licenses are issued to:
- Historical licensees are issued each year for the same volume of imports from the same supplying countries provided applications are submitted, and the eligibility criteria, license use provisions, and other requirements of the Import Regulation are met;
- Designated licenses are issued annually for certain cheese articles to eligible applicants who are designated by the government of the country of origin as preferred importers;
- Non-historical (lottery) licenses are issued annually through a random lottery system. Licenses received for a specific cheese or non-cheese dairy product are not renewable in the following year. Eligible applicants may apply annually for a license.
Q6.VIII. If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and, if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
Export permits from foreign countries are not required.
Q6.IX. In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Export permits from foreign countries are not required.
Q6.X. In cases where imports are allowed on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Q6.XI. Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?
No.
Q7. Where there is no quantitative limit on importation of a product or on imports from a particular country:
Q7.a. How far in advance of importation must application for a licence be made? Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence (for example, owing to inadvertency)?
Q7.b. Can a licence be granted immediately on request?
Q7.c. Are there any limitations as to the period of the year during which application for licence and/or importation may be made? If so, explain.
Q7.d. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Q8. Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria? Are the reasons for any refusal given to the applicant? Have applicants a right of appeal in the event of refusal to issue a licence and, if so, to what bodies and under what procedures?
The circumstances under which an application for a license may be refused other than failure to meet the ordinary criteria is failure to complete the application electronic form and submit the full documentation requested within the application deadline period. Reasons for refusal to accept an application may be given to applicants upon request. There are no rights of appeal. Failure to receive a license by one applicant does not reduce access to the TRQ amounts, since those amounts will be allocated to other applicants.
Eligibility of Importers to Apply for Licence
Q9. Are all persons, firms and institutions eligible to apply for licences: (If not, is there a system of registration of persons or firms permitted to engage in importation? What persons or firms are eligible? Is there a registration fee? Is there a published list of authorized importers?) a) under restrictive licensing systems? b) under non-restrictive systems?
Importers or manufacturers of dairy products are eligible to apply for import licenses if they meet the performance criteria set forth in the Import Regulation with respect to the quantity of imports entered in a previous 12-month period (1 September-31 August), and, for manufacturers, the specified level of dairy production in a previous 12-month period. In addition, manufacturers must be listed in USDA's "Dairy Plants Surveyed". The required documentation providing proof of importation must be submitted with application forms. Importer license eligibility is established primarily on the basis of proof of importation of the item during a specified representative period. Applicants can also qualify on the basis of exports, in which case licenses will only be issued for non-cheese items.
Documentational and Other Requirements for Application for Licence
Q10. What information is required in applications? Submit a sample form. What documents is the importer required to supply with the application?
The information required in applications is set forth in the Dairy Tariff-Rate Quota Import Licensing Regulation. An electronic application within the FAS ATLAS (Agricultural Trade License Administration System) system is required for importers. Manufacturers must be listed in the USDA Approved Dairy Plants Bulletin. As a part of the 2015 revision to the regulation, the Dairy Import Licensing Authority operates exclusively via an electronic system over the internet and precludes the use of mail and fax. All applications and communications must be done electronically, through the dedicated licensing system, which is available to anyone.
Q11. What documents are required upon actual importation?
At the time of the electronic filing for import entry, a license number must be presented along with the other information required for U.S. Customs import entry. The Licensing Authority may request copies of documents such as the through bill of lading and the invoice.
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
A fee is charged for or associated with the issuance of licenses. For 2024, a fee of US$350.00 per licensee is charged.
Q13. Is there any deposit or advance payment requirement associated with the issue of licences? If so, state the amount or rate, whether it is refundable, the period of retention and the purpose of the requirement.
A fee is charged for or associated with the issuance of licenses. For 2024, a fee of US$350.00 per licensee is charged.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
Licenses are valid from January 1 through December 31. License validity cannot be extended into the next quota year.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
Licensees who anticipate not meeting the 85% utilization requirement may voluntarily surrender unused amounts by 1 October; otherwise that license will be cancelled the following year. For historical licenses, less than 85% utilization will result in permanent loss of that license, with the resulting TRQ quantity being moved to the lottery pool. License quantities that are surrendered are reissued to other licensees who apply for unused license shares following an announcement by the Licensing Authority. Such licenses are issued through a random lottery process. Historical license TRQ quantities can also be reduced if the licensee surrenders 50% or more of their import license for three of the previous five consecutive years. See Federal Register Vol. 80, No. 143, pages 44251-44258 and Vol. 87, No. 167, pages 52851-52852.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Licenses are not transferable between importers. However, USDA may transfer a license, in the event that the company holding such license is sold or conveyed to another company, under conditions provided for in the regulation.
Q17. Are any other conditions attached to the issue of a licence? a) for products subject to quantitative restriction? b) for products not subject to quantitative restriction?
No other conditions are attached to the issuance of a license.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
All food imports are subject to the requirements of the Food, Drug and Cosmetic Act and the Fair Packaging and Labelling Act, including sanitation and labelling requirements, and milk products are subject as well to the Federal Import Milk Act. These requirements are administered by the Food and Drug Administration (FDA). The importation of certain dairy products is regulated by both FDA and the Animal and Plant Health Inspection Service (APHIS). Importers should contact FDA in regard to FDA requirements and APHIS in regard to APHIS requirements.