Sugar
- 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.
Additional U.S. note 5 to Chapter 17 of the Harmonized Tariff Schedule of the United States (HTS) established by Presidential Proclamation 6763 of December 1994 authorizes the Secretary of Agriculture to establish for each fiscal year the quantity of sugars and syrups that may be entered at the lower tariff rates of tariff-rate quotas. The tariff-rate quotas cover sugars and syrups described in HTS subheadings, 1701.12, 1701.13, 1701.14, 1701.91, 1701.99, 1702.90, and 2106.90. This authority was proclaimed to implement the results of the Uruguay Round of multilateral trade negotiations as reflected in the provisions of Schedule XX (United States), annexed to the Agreement Establishing the World Trade Organization.
Under the raw cane sugar tariff-rate quota (TRQ) administration, the Secretary of Agriculture establishes the TRQ quantity that can be entered at the lower tier of import duty rates, and the United States Trade Representative (USTR) currently allocates this quantity among countries based on a representative base period of U.S. sugar imports during 1975-81. Certificates of Quota Eligibility (CQE) are issued to the exporting countries and must be executed and returned with the shipment of sugar in order to receive in-quota tariff treatment. Regulations governing the Certificate of Quota Eligibility program are published in Title 15, Part 2011 of the Code of Federal Regulations.
Separately, and not subject to quota limitations, there is a licensing system to implement the U.S. sugar re-export program under 7 CFR 1530. Licenses are issued to refiners allowing them to import raw sugars to be further processed and: (1) re-exported in refined form, (2) re-exported in refined form in sugar-containing products, or (3) used for the production, other than by distillation, of polyhydric alcohol, except that used as a substitute for sugar in human food.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
The products covered by the raw sugar TRQ are described in HTS 1701.13.10 and 1701.14.10, and the refined sugar TRQ in HTS 1701.12.10, 1701.91.10, 1701.99.10, 1702.90.10, and 2106.90.44. Entry of any sugar allocated to specific countries and areas in the raw and refined sugar TRQs does not require a license, but does require a CQE. A specialty sugar TRQ is also established, which requires a certificate.
There is a licensing system to implement the U.S. sugar re-export program. Licenses are issued to refiners allowing them to import raw sugars under HTS 1701.13.20, 1701.14.20 to be further processed and: (1) re-exported in refined form, (2) re-exported in refined form in sugar-containing products, or (3) used for the production, other than by distillation, of polyhydric alcohol except that used as a substitute for sugar in human food.
Q3. The system applies to goods originating in and coming from which countries?
The CQE system applies to those 40 countries and areas from which sugar is imported under the raw cane sugar TRQ. Certificates for imports of specialty sugars apply to imports from all countries. Licenses to import sugar for refining and re-export (Refined Sugar Re-export Program) or for production of polyhydric alcohol apply to imports from all 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 purpose of the CQE is to provide exporters access to the U.S. domestic market at the low-tier tariff. The purpose of the certificate for specialty sugar is to allow entry of certain refined sugars not widely available in the United States at the low-tier tariff rate. These refined sugars fulfil demand in niche markets. Licenses for quota-exempt sugar are intended to increase the utilization of excess domestic refining capacity and improve employment in refining and related industries.
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 CQEs are issued under 15 CFR 2011, Sub-part A. Certificates for specialty sugar are issued pursuant to 15 CFR 2011, Sub-part B. The regulation may be found at: http://www.ecfr.gov/cgi-bin/text-idx?SID&node=pt15.3.2011&rgn=div5. The regulations governing licenses for the importation of sugar exempt from quota are under 7 CFR 1530. The regulation may be found at: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XV/part-1530. Authority exists to suspend each of these systems whenever it is determined that such action is appropriate. Notice of such suspension shall be published in the Federal Register.
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 United States Trade Representative and the United States Department of Agriculture use the Federal Register, press releases, official reports, and government Internet web sites to provide information about the allocation of TRQ quantities, the issuance of CQEs, and the formalities for filing import license applications.
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?
The sugar TRQ for raw and refined sugar (including specialty sugar) is determined annually by the Secretary of Agriculture and announced before the fiscal year for which the TRQ will be in effect. CQEs are issued by the Secretary of Agriculture to countries to coincide with the applicable TRQ year. Certificates for importing specialty sugars are likewise issued to importers to coincide with the TRQ year. Licenses issued to allow quota-exempt sugar to be imported, refined and re-exported or used in producing polyhydric alcohol are not subject to the TRQ year limitations.
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.)
Governments of countries participating in the CQE system, in turn, execute and issue these certificates to a shipper or consignee of a cargo of sugar destined for the United States. Sugar is allowed entry into the United States at the low-tier tariff rate only if a valid and properly executed CQE is presented at time of entry to the appropriate customs official.
The United States Department of Agriculture, Foreign Agricultural Service issues certificates for importing specialty sugar to importers, who annually apply and provide sufficient evidence that the sugar they intend to import fits the definition of specialty sugar. The certificate is presented to the appropriate customs official at the time of entry.
The Department of Agriculture issues licenses to U.S. sugar refiners to import quota-exempt raw cane sugar. The licenses have no expiration date.
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?
Q6.V. What are the minimum and maximum lengths of time for processing applications?
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
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?
The United States Department of Agriculture administers the licensing and certificate systems.
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?
The certifying authority designated by the participating country issues CQEs to the shipper or consignee of sugar. The maximum quantity of sugar to be shipped with each CQE shall not exceed 10,000 short tonnes. Specialty sugar certificates are issued to importers who satisfy the requirements of 15 CFR 2011, Sub-part B. The specialty sugar certificate may cover more than one type of refined specialty sugar. Issuance of a specialty sugar certificate does not guarantee entry at the low-tier rate if the specialty sugar TRQ is already filled. However, an unlimited number of shipments may enter until the TRQ is fully subscribed.
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?
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?
Under the provisions of the Refined Sugar Re-Export Program licensed refiners may enter raw sugar unrestricted by the quantitative limit established for the raw sugar TRQ or the requirements of CQEs, as long as they export an equivalent quantity of refined sugar or transfer the sugar to a manufacturer licensed to use the sugar in products for export or to manufacture inedible polyhydric alcohol.
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?
There are no provisions for refusing to issue CQEs, specialty sugar certificates, or licenses for importing quota-exempt sugar other than failure to meet the ordinary criteria. A list of companies issued Licenses is published on the FAS Web site: http://apps.fas.usda.gov/sugars/FASSugarsLicensees.aspx. For specialty sugar in-quota and re‑export, program applicants can appeal the denial of a license through the Sugar Import Program, USDA Foreign Agricultural Service. For CQEs to enter in-quota raw sugar, the government of the exporting country may provide an appeal mechanism for refusing a CQE to export in-quota raw sugar.
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?
CQEs for in-quota raw sugar are issued by the government of the exporting country to recipients of their choosing. All importers are eligible to apply for certificates for specialty sugars. There is a list of currently authorized specialty sugar importers and instructions to apply for a certificate at: http://www.fas.usda.gov/programs/sugar-import-program/applying-specialty-sugar-certificate. Only United States refiners can apply for licenses to import quota-exempt sugar.
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?
Each CQE must be numbered and identified by the exporting country and must provide the following information: (1) quantity eligible to be entered; (2) name of shipper; (3) name of vessel; and (4) port of loading. The following information may also be included (if known): the name and address of consignee; expected date of departure; expected date of arrival in the United States; and expected port(s) of arrival in the United States.
Applications for certificates to import specialty sugar(s) must be in writing and must provide the following information: (1) name and address of applicant; (2) anticipated quantity of imports; (3) the appropriate six-digit HTS number; (4) a description of the specialty sugar(s) expected to be imported during the period of the certificate, including the manufacturers' or exporters' usual trade name or designation and use of such specialty sugar; (5) sufficient evidence that it is a specialty sugar(s); (6) anticipated consumers (if known) at time of application; and (7) anticipated date of entry (if known).
Persons wishing to apply for licenses to import sugar for re-export must submit the following in writing to the Licensing Authority: (1) the name and address of the applicant; (2) the address at which the applicant will maintain the required records; and (3) the address(es) of the applicant's processing plant(s). In the case of refined sugar re-exports, the applicant must provide the polarity of the product including the formula for calculating the refined sugar in the product. All applicants must enter into a documentation agreement with the Licensing Authority.
Q11. What documents are required upon actual importation?
TRQ sugar entered from countries that participate in the certificate system must be accompanied by a CQE that has been signed by the certifying authority in the country of origin and affixed with a seal or form of authentication.
A certificate issued by the Department of Agriculture authorizing importation of specialty sugar(s) must be presented to the appropriate customs official at the time of entry.
FAS enters the licenses issued by the Department of Agriculture for entry of sugar exempt from quota for re-export in refined form or for the production of polyhydric alcohol into the U.S. Customs and Border Protection computer system, which automatically accepts or rejects each attempt to enter raw sugar on the license.
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
No.
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 licensee operating under the Refined Sugar Re-export Program may establish a bond or a letter of credit in favour of the U.S. Department of Agriculture to charge program sugar in anticipation of the export or transfer of refined sugar, the export of sugar in sugar containing products, or the production of certain polyhydric alcohols. The bond or letter of credit may cover entries made either during the period of time specified in the bond (a term bond) or for a specified entry (a single-entry bond). The amount of the bond or letter of credit shall be equal to 20 cents per pound of sugar to be entered under the license. If a licensee fails to qualify for credit to a license within the specified time period of the date of export or use of corresponding sugar in an amount sufficient to offset the charge to the license for that corresponding sugar, payment shall be made to the U.S. Treasury. The payment shall be equal to the difference between the Number 11 contract price and the Number 14 contract price (New York Coffee, Sugar and Cocoa Exchange) in effect on the last market day before the date of entry of the sugar or the last market day before the end of the period during which export or use was required, whichever difference is greater. The difference shall be multiplied by the quantity of refined sugar, converted to raw value that should have been exported in compliance with this part.
A bond or letter of credit is not necessary if export credits exceed the quantity of imports charged to the license.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
The CQEs are valid only for the quota period for which they are issued. A certificate for specialty sugar is valid only for the TRQ year in which it is used. Under the Refined Sugar Re-export Program, the licenses may be revoked upon written notice to the license holders by the Licensing Authority.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
There is no penalty for non-utilization.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Licenses issued under the Refined Sugar Re-export Program and Specialty Sugar Import Certificates are not transferable between importers.
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?
There are no other conditions attached to issuing certificates. For CQEs to enter in-quota raw sugar the government of the exporting country may determine conditions attached to the issuance of CQEs. For re-export program, license holders must report all transactions claimed under the license.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
No other procedures are required.