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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.


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 super-vision 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.
Mr. JENKINS. Are there any other questions?

Mr. UTT. I wanted to ask you, Mr. Radcliffe, with reference to the definition of values being changed from the foreign value to the export value, if you do not think there would be a great possibility of rigging the sales so as to defeat the tariff. For instance, using an export value which might be far below the going foreign value with specific reference to wool in Uruguay or Argentina, since they are anxious to get American dollars, that they might make a large sale to an exporter at a value far below the local Uruguay market value for the purpose of export and our tariff would be computed upon the export value rather than upon the foreign value of the merchandise and thus circumvent the protective tariff for the woolgrowers of America.

Mr. RADCLIFFE. I think by and large the export value would reflect the world market value of the merchandise. The trouble with the foreign value is that in many cases the distribution in the home market of goods that are in the world markets has been entirely different, with smaller quantities involved and so on, and you have had abnormally high internal prices for the goods. And they have also been very difficult to ascertain, requiring foreign investigation. I do not believe there is any serious danger of an exporter, under an export value, rigging the market, because if he is going to sell for export at an abnormally high price, he might run into a dumping proposition. Of course, we still have a very adequate Antidumping Act of 1921 on the books that would take care of any possible situation of that kind, sir, in my opinion.

Mr. UTT. Well, even the trading countries could very easily place a fictitious abnormally low value for export purposes and we would actually be bound by that export sale, would we not?

Mr. RADCLIFFE. Not necessarily, because we still have section 500 in the tariff that says that export value cannot be ascertained to the satisfaction of the appraising officer. I think if you had a situation of that kind, sir, he would not consider that a valid export value and would throw it out and would go to one of the other alternative values that are in the Jenkins bill.

Mr. UTT. You made special reference in here to limitation of 120 days for appraisal. Have you had any experience or examples that you could give us of the time that sometimes has been used by appraisers in finally giving you a determination?

Mr. RADCLIFFE. Well, of course the members of our organization are running into that all the time. Really what we would love to have would be a limitation on the final liquidation, rather than the appraisement. But we have suggested a limit on the appraisement. So it would shorten that part of the process so that the liquidation could proceed in a quicker time. It was only yesterday, sir, that I had one of the members of our organization, who is an importer, call me up and say that he had 12 customs entries that he made in 1941 that were liquidated this week. That is a period of 12 years. But I believe that this bill will so simplify the work of the appraising officers because all of the facts that they need for their appraisement can be ascertained in the United States from the importer or from the documents that are presented to him.

Mr. UTT. I think you are absolutely right, because I have knowledge of many cases where the importers have had to wait 3 or 4 years to get an appraisal determination on which to make a settlement. I think

you are right. I wondered if you had any cases that you know of where it had been 2, 3, or 4 years.

Mr. RADCLIFFE. That occurs, and most of those are due to the fact that the foreign value basis often requires a long investigation abroad. We no longer have many Treasury attachés in many parts of the world. We have cut them down considerably. If you throw that burden on the regular officers in the embassies in the different countries, it takes some time before they can get around to make a personal investigation of the situation. That is the reason why you have 3 and 4 years' delay. This bill, I am satisfied, will eliminate much of that delay. Mr. UTT. Are you entirely satisfied with the injury test that is set forth in this bill?"

Mr. RADCLIFFE. I did not hear you.

Mr. UTT. The injury test, whereby the local producer could be injured. There is an injury test set up in the bill. I have forgotten the bill. I do not think you covered that in your statement. That is why I wanted some comment on that. If you do not have it, I can get it from a subsequent witness, I am sure.

Mr. RADCLIFFE. I am not familiar with any injury test.

There was

in the previous simplification bill, I believe perhaps you are referring to the injury test in the antidumping act. That is not touched in this bill, as I understand.

Mr. UTT. It does not change the present injury test?

Mr. RADCLIFFE. No, sir.

Mr. JENKINS. Any other questions?

If there are no other questions, we thank you for your appearance, Mr. RADCLIFFE. Thank you.

Mr. JENKINS. The next on the list is the American Tariff League. They have made a request to submit their statement which, without objection, will be inserted in the record at this point.

(Document submitted by the American Tariff League is as follows:) THE AMERICAN TARIFF LEAGUE, INC., New York 36, N. Y., May 29, 1953.


Chairman, Committee on Ways and Means,

House of Representatives, Washington, D. C.

DEAR CONGRESSMAN REED: As first vice president of the American Tariff League, I should appreciate it and request that on the occasion of the public hearings on H. R. 5106, the customs simplification bill, you accept to introduce the following statement into the record of the proceedings, on behalf of the American Tariff League, Inc., 19 West 44th Street, New York 36, N. Y.

The American Tariff League wishes to reaffirm the statement which it has made in previous testimony on this subject of simplification of customs procedures, titles III and IV of the Tariff Act of 1930, as amended. The league favors such changes in the customs administrative law as will produce true simplification and efficiency of operation. The league does not have day-to-day contact with customs operations as do individuals and groups who actually import goods from abroad. Our interest lies in the possible effect of these administrative changes on Government tariff policy.

We wish to take this opportunity of presenting some comments on this bill which we hope will be helpful and constructive. As to the sections of this bill which we shall not discuss, the League, in general, sees no objection, or does not feel that it knows enough about the technicalities of the provision to make intelligent examination.

We wish to draw the attention of this committee to sections 4, 13, 15, and 22 of the bill, and suggest one additional provision-which we may designate as section 26.

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