CUSTOMS SIMPLIFICATION FRIDAY, MAY 29, 1953 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met, pursuant to recess, at 10 a. m., in room 1102 House Office Building, Hon. Thomas A. Jenkins presiding. Mr. JENKINS. The committee will be in order. The first witness this morning is Miss Julia Bennett, director of the Washington office of the American Library Association. STATEMENT OF JULIA D. BENNETT, DIRECTOR OF THE WASHINGTON OFFICE OF THE AMERICAN LIBRARY ASSOCIATION Miss BENNETT. Thank you, Mr. Chairman. My name is Julia D. Bennett. I am director of the Washington office of the American Library Association. The American Library Association is a professional organization of 20,000 librarians, trustees, and friends of libraries interested in the development, extension and strengthening of our Nation's library services. Today I shall speak primarily for the college, university and large public libraries interested in securing foreign books for scholarship and research purposes. We appreciate the opportunity to comment on H. R. 5106. Since the conclusion of the war, American libraries have been sadly hampered by antiquated customs regulations affecting the importation of books for college, university and public research libraries. Currently we operate under section 498 of the Tariff Act of 1930 (19 U. S. Code, section 1498) which authorizes the Secretary of the Treasury to prescribe rules and regulations for the declaration and entry of merchandise not exceeding $100 in value. Under this provision of the law, the informal entry has been authorized for libraries on importations not exceeding $100 in value. Two factors have made the $100 limitation unrealistic. First of all, book costs have risen steadily since the war, and a $100 shipment now covers a very few books. Moreover, since the war American research libraries have taken more energetic steps to secure European research books. This was undertaken because of the fact that during the war American research was crippled by the lack of adequate European books in this country. Several governmental research groups strongly complained about this, and as a result the Library of Congress and the other great Federal libraries, working with the Association of Research Libraries, which is an affiliated national association of the American Library Association, have taken a number of steps to be sure that at least one copy of every important European research book is available in this country. Secondly, libraries find the "customs declarations" time-consuming, often resulting in crippling delays in the receipt of books urgently 173 needed for research or teaching, and particularly complicated, since not continuously used. Currently, all books and printed materials imported by libraries are duty free, so that the barrier for libraries is complicated consular invoices necessary on purchases over $100. In addition, "customs declarations" necessitates the services of a broker and additional clerical help which adds considerably to the cost of the books. It is not necessary, I am sure, to remind the committee, that currently, all libraries are suffering budgetwise from the inflated dollar. We are pleased to note in section 17 (d), H. R. 5106 amends section 498 of the Tariff Act of 1930 so as to increase the figure to $250 and further amends section 17 (e) to permit informal entry of merchandise covered by paragraph 1631 of the act without regard to the ceiling in shipments of any value. Books, maps, et cetera, for educational institutions and public libraries are listed under paragraph 1631. We urge the passage of H. R. 5106 with particular reference to section 17 (e) whereby libraries may bring into this country, such merchandise as books, maps, et cetera, not intended for resale, under informal entry without regard to a ceiling of any value on shipments. We know that your committee will consider our problem. We appreciate this opportunity to testify. Thank you, Mr. Chairman. Mr. JENKINS. I would like to ask you one question: I wish you would give us an illustration of what your problem is. In other words, give us an illustration about books being ordered and coming in and so forth, so we can get an idea of a possible fact situation. Miss BENNETT. A public library, a large public library, or college or university library orders a shipment of books. If that shipment is. valued at over $100, it means that they have to fill out a large consular invoice which has to be considered by the customs. Therefore, the shipment cannot come in under informal entry, it must come through the formal customs. In many cases a shipment, particularly for those libraries on the west coast, might come into a New York port. The library on the west coast would, of necessity, have to employ a broker which would get that shipment through the customs, taking care of the entry, the invoices, and so forth; by having to employ a broker plus the increased cost of clerical help in making out the invoices and the bookwork that is necessitated by this formal entry, it means a great deal of cost to each individual library. Also the time that is taken for these shipments of books to go through the formal customs means that that much time is taken away from the use of those books in this country. Mr. JENKINS. I think you recommend a change in the limit of value. Miss BENNETT. That is right. Mr. JENKINS. From what amount to what? MISS BENNETT. We are very pleased to note that that has been done in the bill under this new section 17 (e). Mr. JENKINS. Then you approve the bill? Miss BENNETT. We approve the bill as of that section, particularly that section of the bill. It is the only one which affects us directly. Mr. JENKINS. Are there any other questions? Mr. COOPER. No questions. Mr. UTT. No questions. Mr. JENKINS. If there are no further questions, we are pleased to have had you appear. If you wish to elaborate on your statement, you might. Miss BENNETT. Thank you, Mr. Jenkins. Mr. JENKINS. The next on the list is Mr. Harry Radcliffe. STATEMENT OF HARRY S. RADCLIFFE, EXECUTIVE VICE PRESIDENT, NATIONAL COUNCIL OF AMERICAN IMPORTERS, INC., NEW YORK CITY, N. Y. Mr. RADCLIFFE. Mr. Chairman and members of the committee, my name is Harry S. Radcliffe. I am the executive vice president of the National Council of American Importers, a national organization of United States business firms engaged in importing a wide variety of foreign commodities or in providing necessary services to our import trade. Our organization has its offices at 45 East 17th Street, New York 3. N. Y. Mr. JENKINS. Has your organization been represented by any lawyers heretofore in this hearing? Mr. RADCLIFFE. No, sir. I am the only representative to appear at the current hearing. Mr. JENKINS. All right. Proceed. Mr. RADCLIFFE. We strongly approve H. R. 5106, and earnestly hope that it will receive speedy approval by your committee, and will be passed by the Congress at the present session without any substantial change. It is truly a customs simplification measure and is long overdue. We believe that its prompt passage will have a powerful psychological effect upon our economic relations with the nations of the free world in addition to the practical benefits to the Customs Service and to the import and export trade. Our council has been urging the need for modernization of our customs administrative laws for a great many years. A representative of our organization suggested some of the changes now included in H. R. 5106 as far back as 1937 when the bill that finally became the Customs Administrative Act of 1938 was under consideration. Again, when the Tariff Commission undertook a comprehensive study of administrative provisions of the tariff in 1944, our customs committee devoted several months of intensive study to the problem. One of the most important suggestions that our organization presented to the Commission in May 1945, namely that "foreign value" be eliminated and "export value" be the preferred method, is incorporated in the Jenkins bill. Another suggestion made at that time was that the arbitrary limits on deductions for general expenses and profit in computing "United States value" be replaced by the additions usual in the trade. That is also in the bill. We also suggested that the word "similar" be specifically defined. The bill contains a definition not only of that term, but of many other terms that relate to value. Indeed, we regard the proposed section 15 on value as the most significant single step in the direction of customs simplification in your bill. Öther suggestions made by our organization in 1945 that are reflected in H. R. 5106 include: extension of the time allowed exporters for substitution for drawback from 1 year to 3 years to 5 years, section 12 (a) and (c) of the bill. That the general order period be extended, section 17 (b) of the bill. That the final appraised value prevail if lower than the entered value, section 19 (d) of the.bill. And that the time for segregation of commingled goods under customs supervision be extended from 10 days to 30 days, section 20 of the bill. For many years, our organization has advocated that a time limit be provided for the completion of appraisement. We suggest that the appraiser be required to appraise all merchandise within 120 days after the date of customs entry. Such a provision is not contained in H. R. 5106, and we shall not press for a time limit now because we have hopes that the proposed new methods of valuation will so speed up appraisement that a statutory limit will not be required. Our position now is that the proposed new valuation system deserves a fair trial in practical operation. When I appeared before this committee on behalf of our council in August 1951, in connection with the previous customs simplification bill, I advocated the repeal of the additional duties under the first two paragraphs of section 489, and we are glad that section 19 (b) of the present bill does propose to delete those paragraphs. We are also pleased to see that the previous definition of "freely sold or offered for sale" has been improved so that sales or offers for sales to exclusive distributors will be considered to be at a freely offered price when the price is a normal price rather than a special price between the supplier and his dealer. This is a distinct improvement over the present technical interpretation that there is a restricted market if goods are not actually offered to every purchaser who might wish to buy at the wholesale level. Selective distribution through exclusive dealers in certain territories is an established and effective practice in many lines of business in the United States and should certainly not be considered as unusual in international trade. We wish specifically to approve, in addition to sections 12, 15, 17, 19, and 20 to which reference has been made, several other sections of the bill. Section 17 (c) of the bill is an important change of emphasis in consular invoice requirements which is most welcome, and may lead to international reforms in the use of this document. Section 4 repealing various special marking provisions that have caused difficult problems for both the Government and importers is desirable as the regular marking provisions in section 304 of the tariff are entirely adequate. The proposed improvements to section 308 contained in section 10 of the bill are constructive. Section 11 eliminates the present discrimination between vessels and aircraft with respect to the dutiability of equipment, supplies, and repair parts, and this rectifies an inequity in the present law. Section 21 will permit the correction of errors and mistakes adverse to the importer which may not be corrected under the strict interpretations given to the present law. The provisions of section 22 of the bill will afford a much more satisfactory primary basis for the conversion of foreign currency for customs purposes than the present obsolete "mint par value" system of section 522 of the present tariff, and contains the required flexibility for dealing with special conversion problems. We have but one minor suggestion to improve the bill: Solely for the purpose of clarification in the definition of "constructed value," we suggest that the word "sales" on line 20 of page 29 of the bill be changed to "sales for exportation to the United States." Because of differences in the quantities involved in export transactions to the United States and in transactions to the domestic and other export markets, foreign producers might use a different addition for general expenses and profit to their basic costs of materials and processing. What is sought here is the true value of the merchandise or cost of production undergoing appraisement by taking the cost of materials and of fabrication or other processing of that merchandise and adding to those costs the general expenses and profit usually applied on sales to the United States, as well as the cost of all containers or other packing expenses. Finally, while we believe that there is room for further improvement in our customs administrative laws, we strongly feel that H. R. 5106 is such a great stride in the right direction we shall not bring up further suggestions at this time. We hope that your committee may be willing to consider further simplification proposals on their merits in the future, and that perhaps in the next session of the Congress the very important subject of modernizing our tariff schedules will receive the serious consideration of your committee. Thank you. Mr. JENKINS. I wish to thank you very much, Mr. Radcliffe, principally because you approve of the bill practically in toto. Mr. RADCLIFFE. Right down the line, sir. Mr. JENKINS. And I am glad to hear you say you approve of section 15 and you only have the one proposal. Mr. RADCLIFFE. That is only for constructive value, sir, purely to clarify the meaning. Mr. JENKINS. Personally, I will keep that in mind. I see you are the executive vice president of the National Council of American Importers. Have you had any practical experience with this matter of importation? Mr. RADCLIFFE. I joined the national council as a trade association executive in 1936, sir, and prior to that I was in my own importing business for 16 years. I have had experience under the 1913 Tariff Act, the 1922, and the 1930 Tariff Act put me out of business. Mr. JENKINS. When you were in the importing business, did you import expensive fabrics or general? Mr. RADCLIFFE. Yes, sir. I imported pile fabrics and novelty silks from the European countries, France, Germany, England, and Czechoslovakia. Mr. JENKINS. And you are still in touch with this business of importation? Mr. RADCLIFFE. I am a full-time trade association man now. I have no active interest in any importing enterprise. Mr. JENKINS. Any other questions? Mr. EBERHARTER. Mr. Radcliffe, this simplification is a very broad subject. You give us the impression that the proposals contained in the Jenkins bill are only a small portion of the corrections that should be made? Mr. RADCLIFFE. No, sir. I am sorry if I left that impression. I think it solves most of the problems. There are other minor things that are not of importance to the degree that the provisions in the Jenkins bill. I think the Jenkins bill solves a great majority of the present defects in our customs administrative laws. Mr. EBERHARTER. Thank you very much. |