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I want to introduce also the men who are here with me. Strubinger, Acting Commissioner of Customs, Mr. Johnson, Assistant to the Commissioner of Customs, and Mr. McNeill, Assistant General Counsel of the Treasury, who are here to answer any questions you may have.
Mr. JENKINS. I should say that at any time you wish to use any one of the gentlemen, you feel free to do so, so you can present your case in the best way possible.
Mr. ROSE. Thank you very much.
The bill, which has for its purpose the simplification of customs procedures, incorporates nearly all of the suggestions made by the Treasury Department for legislation to remove from the statutes many obsolete requirements and to make possible the institution of modern procedures in the administration of customs laws.
The principal source of these Treasury recommendations regarding customs simplification is the survey of the customs service conducted 5 years ago by a private firm of management consultants. This survey was made with funds specifically authorized by the 80th Congress in the customs appropriation for the fiscal year 1948. Recommendations for improvements in customs procedures also came from the customs service itself, from other Government departments, and from representatives of importers and other interested groups.
Mr. JENKINS. Will you allow me to make one observation at that point. I think it is the general opinion of those with whom I met on this matter, that something ought to be done toward simplification. Furthermore, the general impression is that this bill with some reasonable amendments will accomplish that.
Mr. ROSE. The Treasury agrees heartily that something does need to be done in the way of simplifying procedures, and that this bill will go a long way toward accomplishing that result.
The law of customs administration and procedure, as distinguished from the rate structure, enacted in the Tariff Act of 1930 has been generally revised only once, by the Customs Administrative Act of 1938. Since that time many changes have occurred in industry and commerce; and the Customs Simplification Act of 1953 will to a large extent modernize the administrative and procedural laws in accordance with the objective of giving improved service to the importing public at the least possible cost to the taxpayer.
The provisions which are most necessary to achieve these purposes are the following (the references are to sections of the Tariff Act of 1930): to simplify and make more equitable the formulas for appraising merchandise for assessment of ad valorem duties (sec. 402); to eliminate "special marking" requirements and to require only such marking as will indicate to the ultimate purchaser the country of origin of imported merchandise, with additional authority for relief in hardship cases; to authorize the institution of a modern program of internal audit (sec. 523); to eliminate time consuming and cumbersome procedures in connection with warehouse transfers (sec. 557 (b)); to repeal the provision for undervaluation penalties (sec. 489); to provide a more modern method for converting amounts in foreign currencies to amounts in United States currency (sec. 522); to permit correction by customs officers of admitted errors without appeal to the courts (sec. 520 (c) (1)); and a number of others of lesser individual importance, but cumulatively of major importance. The bill proposes no
change in the tariff structure. Any change in amounts of duty payable under it will not be large.
It is the opinion of the Treasury Department that these amendments, if adopted, will go far to remove the more serious obstacles to international trade which result from the procedural and administrative complexities of our customs laws. H. R. 5106 will carry out a specific part of the President's program announced in his state of the Union message; and the Treasury Department wholeheartedly favors its enactment.
In view of the committee's familiarity with this subject as the result of its consideration of a similar but not identical customs simplification. bill which passed the House in 1951, I shall, unless the committee desires otherwise, confine my statement to emphasizing the more important sections of H. R. 5106. The summary explanation of H. R. 5106, which was issued by the committee on May 13, 1953, is a factual statement of existing law and the amendments to that law proposed by H. R. 5106 and makes unnecessary a detailed section by section analysis on my part. With the permission of the committee, I should like to offer it for the record, to be included at the end of my
Mr. JENKINS. Without objection it is so ordered. (The document is as follows:)
SUMMARY EXPLANATION OF H. R. 5106, CUSTOMS SIMPLIFICATION ACT OF 1953
(By Committee on Ways and Means, May 13, 1953)
Section 1. Short title and effective date
This section contains a short title, a general provision for an effective date, and a table of contents.
Section 2. Repeal of obsolete accounting provisions
Section 2 (a) of the bill would repeal the following sections of the Revised Statutes, which relate to functions which are either obsolete or are covered by more modern statutes:
(1) Revised Statutes section 2621, as amended (U. S. C., 1946 edition, title 19, sec. 33): This section provides that at ports where there are a collector, comptroller, and surveyor, it shall be the duty of the collector to receive all reports, manifests and documents and to record them, to receive the entries of all ships and of all merchandise imported in them; to estimate the amount of duties payable, to receive all such monies, take bonds, to grant all permits for the unlading and delivery of goods and to provide for the safe keeping of goods.
(2) Revised Statutes section 2622, as amended (U. S. C., 1946 edition, title 19, sec. 34): This section provides that at ports where there are a collector and surveyor only, the collector shall execute all the duties in which the cooperation of the comptroller is requisite.
(3) Revised Statutes section 2623, as amended (U. S. C., 1946 edition, title 19, sec. 35): This section provides that at ports at which there is a collector only, the collector shall execute all the duties prescribed for comptrollers and surveyors.
(4) Revised Statutes section 2626, as amended (U. S. C., 1946 edition, title 19, sec. 39): This section provides that at ports at which there are a collector, comptroller, and surveyor, it shall be the duty of the comptroller to receive copies of all manifests and entries, to estimate, together with the collector, the duties, to keep a separate record of such estimates, and to examine the collector's abstracts of duties and other accounts and certify them as found correct.
(5) Revised Statutes section 2639, as amended (U. S. C., 1946 edition, title 19, sec. 42): This section provides that every collector, comptroller, and surveyor shall keep records of all money received by him and of all expenditures and shall report annually to the General Accounting Office.
(6) Revised Statutes section 2640, as amended (U. S. C., 1946 edition, title 19, sec. 43): This section provides that collectors, comptrollers, and surveyors shall
attend in person at the ports at which their duties are to be performed and shall keep true accounts of all their transactions, shall submit their records to the inspection of persons appointed for that purpose and shall at least monthly transmit their accounts for settlement.
(7) Revised Statutes section 2641, as amended (U. S. C., 1946 edition, title 19, sec. 44): This section provides that every collector, comptroller, and surveyor shall account to the Treasury for all expenses incidental to his office.
(8) Revised Statutes, section 2643, as amended (U. S. C., 1946 edition, title 19, sec. 45): This section provides that every collector, comptroller, and surveyor shall render a list of clerks employed by him, stating the rate of compensation allowed and the duties they perform, together with an account of all sums paid for stationery, fuel and office rent.
Section 2 (b) of the bill would amend section 439 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1439) by deleting references to the comptroller of customs therein and substituting in lieu thereof a designation of any employee that the Secretary of the Treasury shall designate. Under section 439, masters of vessels arriving at port are required to mail or deliver to the comptroller of customs a copy of the manifest.
Subsection (c) would amend section 440 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1440) to delete references to the comptroller of customs and subtitute therefor such employee as the Secretary of the Treasury shall designate. Section 440 requires that the master of the vessel mail or deliver to the comptroller of customs any corrections of the manifest.
Section 2 (d) of the bill would amend section 523 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1523) which provides that comptrollers of customs shall examine the collector's accounts of receipts and disbursements of money and receipts and disposition of merchandise and shall certify these accounts to the Secretary for transmission to the General Accounting Office. It further provides that comptrollers of customs shall verify all assessments of duties and allowances of drawback made by collectors. Subsection (d) would amend section 523 to provide that the Secretary or such officer or employee as he shall designate shall examine the collector's accounts and verify, to the extent the Secretary shall direct, assessments of duties and taxes and allowances of drawback.
Section 3. Effective dates of rates of duty
Section 315 of the Tariff Act (U. S. C., 1946 edition, title 19, sec. 1315) provides that on and after June 18, 1930 all goods, wares and merchandise which are entered shall be subject to the rate of duties imposed by the Tariff Act of 1930. Because of a series of decisions in the customs courts the question of the effective date of rates of duty and when merchandise has been entered, or withdrawn from warehouse, for consumption has become confused. Section 3 of the bill would amend section 315 to provide that merchandise is entered for consumption or withdrawn from warehouse for consumption, within the meaning of the various customs laws, proclamations, and regulations thereunder, when the documents comprising the entry and any estimated or liquidated duties then required to be paid have been deposited with the appropriate customs officers in the form and manner prescribed by regulations of the Secretary of the Treasury and to provide that the applicable rate of duty will be that in effect when the entry or withdrawal has taken place by the performance of those acts. In the case of merchandise entered for transportation in bond under section 552 of the Tariff Act from the port of importation to another port for entry, section 3 provides that the rate of duty will be that in effect when the entry for immediate transportation is accepted by the collector at the port of importation, provided there is no delay in making entry or other factor at the port of destination which requires the collector at that port to take the merchandise into his custody under section 490 of the Tariff Act, and provided the merchandise is not subject to a quota.
Section 3 would also amend section 484 (f) of the Tariff Act (U. S. C., 1946 edition, title 19, sec. 1484 (f)) to provide that in the case of merchandise transported in bond under section 552 and not subject to a quota that the entry may be made for the entire quantity of merchandise covered by the transportation entry after any part of the shipment has arrived at the port of destination. It would also authorize merchandise entered for transportation in bond under section 552 to be transported to any place approved by the collector of customs in charge of the port of destination, with the right to file entry at that port for the entire shipment upon the arrival of any part of the shipment at the place to
which such collector has authorized it to be transported under the immediate transportation entry.
Section 4. Marking
Section 4 (a) of the bill would repeal the special marking provisions contained in paragraphs 28, 354, 355, 357, 358, 359, 360, 361, and 1553 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, see. 1001, pars. 28, 354, 355, 357, 358, 359, 360, 361, and 1553).
Paragraph 28 requires the marking of containers of certain coal-tar products with detailed information as to the contents.
Paragraph 354 provides that penknives, pocketknives, and certain other articles shall have the name of the maker or purchaser and beneath that the name of the country of origin die sunk conspicuously and indelibly on the shank or tang of at
least one of the blades.
Paragraph 355 requires that all table, butcher, carving and other knives, forks, steels, and cleavers enumerated in the paragraph shall have the name of the maker or purchaser and beneath that the name of the country of origin die sunk legibly and indelibly upon the blade in a place that shall not be covered.
Paragraph 357 provides that nail, barbers, and other clippers, shears, and scissors shall have die sunk conspicuously and indelibly the name of the maker or purchaser and beneath that the name of the country of origin to be placed on the outside of the blade, between the screw or rivet and the handle of scissors and shears (except pruning and sheep shears), and on the blade or handle of pruning and sheep shears and clippers.
Paragraph 358 provides that razors or parts thereof shall have the name of the maker or purchaser and beneath that the name of the country of origin die sunk conspicuously and indelibly on the blade or shank or tang of each and every blade and on safety razors and parts thereof.
Paragraph 359 provides that surgical and dental instruments shall have the name of the maker or purchaser and beneath that the name of the country of origin die sunk conspicuously and indelibly on the outside, or if a jointed instrument on the outside when closed.
Paragraph 360 provides that scientific and laboratory instruments, apparatus, and other enumerated items shall have the name of the maker or purchaser and beneath that the name of the country of origin die sunk conspicuously and indelibly on the outside, or if a jointed instrument on the outside when closed. Paragraph 361 provides that pliers, pincers, and nippers shall have the name of the maker or purchaser and beneath that the name of the country of origin die sunk conspicuously and indelibly on the outside of the joint.
Paragraph 1553 provides that thermostatic bottles, jars, and other thermostatic containers shall have the name of the maker or purchaser and beneath that the name of the country of origin legibly, indelibly and conspicuously etched with acid on the glass part, and die stamped on the jacket, casing of metal or other material in a place that shall not be covered. It further provides that each label, wrapper, box, or carton in which such bottles, etc., are wrapped or packaged shall have the name of the maker or purchaser and beneath that the name of the country or origin legibly, indelibly and conspicuously stamped or printed thereon.
Subsection (b) of section 4 would repeal section 2934 of the Revised Statutes which provides that all medicinal preparations shall have the true name of the manufacturer and the place where they are prepared, permanently and legibly affixed to each parcel by stamp, label, or otherwise. visions of the food and drug laws govern the marking for such medicinal preparaMore recently enacted protions.
Subsection (b) would also repeal the obsolete sections 2885 and 2886 of the Revised Statutes (U. S. C., 1946 edition, title 19, secs. 273, 274) which require that imported casks, vessels, and cases containing distilled spirits or wines shall be marked by the officers of inspection with the port of importation, the name of the vessel, the surname of the master, the kinds of spirits or wines for which different rates of duty shall be imposed, the number of gallons in each cask and the date of purchase, the name of the surveyor or chief officer for the port and the date of importation. Section 2886 provides that the casks, vessels, and cases which have been marked as required under section 2885 and which have been emptied of their contents shall have the markings defaced and obliterated in the presence of a customs officer.
The general marking requirement of section 304 of the Tariff Act that all imported articles shall indicate the country of origin will not be changed except that subsection (c) of section 4 would amend section 304 (a) (3) of the Tariff
Act of 1930, as amended (U. S. C., 1946 edition, title 19, sec. 1304 (a) (3)), to authorize the Secretary of the Treasury to exempt from the general marking provisions of the Tariff Act articles which are not properly marked before importation when the failure to mark was not due to any purpose to avoid compliance with the marking provisions and which cannot be marked after importation except at an expense which is economically prohibitive.
Section 5. Transportation of lead-bearing and zinc-bearing ores
Paragraphs 391 and 393 of the Tariff Act, as amended, provide for the transportation of imported lead-bearing and zinc-bearing ores from the ports of entry to properly equipped sampling or smelting establishments for sampling there according to commercial methods under the supervision of Government officers. These paragraphs further provide that the Government officers shall submit the samples thus obtained to a Government assayer who shall make a proper assay of the sample and report the results to the customs officials. Section 5 would repeal these provisions and would permit the promulgation of regulations by the Secretary to cover analyzing and sampling these ores.
Section 6. Repeal of certain obsolete reciprocal provisions
Paragraph 812 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1001, par. 812) provides that any brandy or other spirituous or distilled liquor imported in any sized cask, bottle, etc., of or from any country, dependency, or province under whose laws similar sized casks and other similar packages of liquors put up or filled in the United States are denied entry into such country shall be forfeited to the United States. Subsection (a) of section 6 would repeal that requirement.
Section 320 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1320) provides that the Secretary of the Treasury and the Postmaster General may, on behalf of the United States, enter into a reciprocal agreement with any foreign country to provide for the entry free of duty of circulars, folders, pamphlets, and other advertising material. Subsection (b) of section 6 would repeal this section. Section 7. American goods returned
Paragraph 1615 (f) of the Tariff Act of 1930, as amended (U. S. C., 1946 edition, title 19, sec. 1201, par. 1615 (f)), provides for levy of duty on imported goods which had been previously exported from the United States with the payment of drawback of customs duties or with the refund or remission of internal-revenue tax. The duties so imposed are an amount equal to the sum of any customs drawback allowed upon the exportation of such article from the United States plus the amount of any internal-revenue tax imposed, but in no case in excess of the total duty and internal-revenue tax imposed on the importation of like articles. Section 7 of the bill would add new language to paragraph 1615 (f) to provide that when customs records have been destroyed or for any other reason it is impracticable to determine whether drawback was allowed and if allowed the amount, there shall be assessed on such article an amount of duty equal to the estimated drawback and internal-revenue tax on the basis of the rates of duty and tax applicable at the time of importation. Section 7 would further authorize the Secretary of the Treasury to establish amounts of duty equal to drawback or internal-revenue tax which shall be applied to classes or kinds of articles and to exempt from the assessment of duty articles or classes or kinds of articles where the expense and inconvenience to the Government would be disproportionate to the amount of duty.
Section 8. Free entry provisions for travelers
Paragraph 1798 of the Tariff Act of 1930, as amended (U. S. C.,1946 edition, title 19, sec. 1201, par. 1798), is the free-entry provision for returning residents and other travelers, and it provides as follows:
(1) Persons arriving in the United States, other than returning residents, may bring in free of duty and internal-revenue tax wearing apparel and similar personal effects for their own use. If jewelry or other articles of personal adornment of a value of $300 or more brought in by such nonresident are sold within 3 years after the date of arrival, duty shall be assessed on such jewelry at the rates of duty in effect at the time of the sale.
(2) Returning residents may bring in free of duty and internal-revenue tax all wearing apparel and personal and houshold effects taken by them out of the United States. Individuals returning to the United States may also bring in free professional books, instruments, and tools of trade taken out of the United States by them.