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To apply duty-free treatment with respect to articles exported for purposes of rendering certain geophysical or contracting services abroad and returned.
Summary of the Provision
H.R. 2471, if enacted, would provide permanent duty-free entry of geophysical or contracting services and articles exported and returned and used for the extraction or development of natural resources and having been imported by or for the account of the person who exported them.
Section 1 of H.R. 2471, if enacted, would amend part 1, subpart A of schedule 8 of the Tariff Schedules of the United States (19 U.S.C. 1202) by including a new item 802.50 which would provide for both column 1 MFN and column 2 (communist countries) duty-free treatment of geophysical or contracting services and articles exported and returned and used for the extraction or development of natural resources and having been imported by or for the account of the person who exported them.
Section 2 provides for the effective date of the Act to be on or after the 15th day after the date of enactment of the Act. Background and Justification
Articles covered by this legislation would be foreignmanufactured equipment used for the purposes stated above and which have unique operating and performance characteristics. equipment would be capable of being used in both domestic and foreign operations by U.S. firms for providing geophysical and contracting services in the search for, or development of, natural resources.
Duty-free entry provided by this provision would only be available under this legislation if duty had been previously paid upon importation of the equipment and only if it is reimported by the party or firm who exported, or caused the exportation of, the equipment prior to its reimportation. Thus, the legislation would strive to relieve parties of multiple application of duty but would not affect the requirement for payment of duty upon initial importation.
Comparison With Present Law
Customs law, as set forth in the Tariff Act of 1930, does not provide a general exemption from the assessment of duty on commodities which previously were imported into the United States and for which duty was paid. With the exception of certain narrowly defined categories of commodities, the dutiable status of an article is not affected by the fact of prior entry and U.S. Customs has determined that multiple duties may be collected on foreign-manufactured articles which are repeatedly reexported and then reimported.
The foreign-manufactured articles covered by this legislation are not separately provided for in the TSUS. They are currently provided for in, and account for varying percentages of the value of imports which enter under numerous TSUS item numbers, chiefly in schedule 6 of the TSUS. The rates of duty applicable to such imported equipment vary, but most of the equipment does not enter free of duty. The proposed item 802.50 would allow the subject articles to enter free of duty from all sources, if exported for the specified temporary uses abroad and if the other criteria mentioned above are met.
Effect on Revenue
The amount of customs revenues which would be lost due to the enactment of this legislation cannot be specified with any degree of certainty because the number of articles potentially covered by the proposed tariff item and the total number of times a foreignmanufactured duty-paid article might be exported and returned are unknown.
A best-guess of the amount of revenue which may be lost is anticipated to be less than one million dollars, in any event. Subcommittee Action
The Department of Commerce has no objection to enactment of H.R. 2471.
International Trade Commission submitted an informative report.
On June 27, 1984, the Subcommittee on Trade ordered H.R. 2471 favorably reported to the full Committee on Ways and Means by a voice vote, with minor techinical amendments including a change in the effective date to 15 days after date of enactment.
A companion bill (S.1954) was introduced by Senator Johnston.
SUMMARY OF TESTIMONY ON H.R. 2471
Department of Commerce: No objection to enactment of H.R. 2471.
Statements For The Record
The Honorable Lindy Boggs, M.C.(La.): The objective of the bill is to relieve parties of multiple application of duty on equipment used abroad in conjunction with rendition of geophysical or contracting services in connection with the exploration for or extraction of or development of natural resources provided (1) that the duty previously has been paid upon importation of the equipment, and (2) that the equipment is imported into the United States by the party who caused its exportaion.
Offshore Navigations, Inc.: ONI seeks duty assistance in order to more effectively compete in a highly competitive international market where other companies have a cost advantage by virtue of their location closer to the operating area of the North Sea, the Middle East and Africa.
To suspend until July 1, 1988, the duty on yttrium bearing materials and compounds containing by weight more than 19% but less than 85% yttrium oxide equivalent.
Summary of the Provision
H.R. 2667, if enacted, would provide for the duty-free treatment of all yttrium bearing ores, materials and compounds containing by weight more than 19% but less than 85% yttrium oxide equivalent until the close of June 30, 1988.
Section 1 of H.R. 2667, if enacted, would amend subpart B of part 1 of the Appendix to the Tariff Schedules of the United States (19 U.S.C. 1202) by inserting in numerical sequence a new item 907.21 to provide for the column 1 MFN duty-free treatment of all yttrium bearing ores, materials and compounds containing by weight more than 19% but less than 85% yttrium oxide equivalent (provided for in items 423.00 or 423.96, part 2C, schedule 4, or 603.70, part 1, schedule 6) until the close of June 30, 1988. There will be no change in the column 2 rate of duty.
Section 2 provides for the effective date of the provision to be on or after the fifteenth day after the date of enactment of the Act.
Background and Justification
Yttrium, one of the rare earth elements, is obtained from several ores containing varying concentrations of the element or as a by-product of other metal refining processes. Low concentration ores and by-products are refined and upgraded to produce high purity refined yttrium products. One of the more important products is high-purity yttrium oxide, which has highly significant commercial and national defense applications.
Comparison With Present Law
Yttrium bearing ores (monazite or xenotime) are classifiable in several provisions of the TSUs. Monazite ore is believed to be provided for as thorium ore in TSUS item 601.45. Xenotime ore is believed to be provided for in the residual category for "other metal-bearing ores" in TSUS item 601.66. The column 1 and column 2 rates of duty are free for items 601.45 and 601.66. There is no preferential tariff treatment for LDDCs or under the Generalized