Mr. KING. Ladies and gentlemen, this concludes the 2 days of hearings on the legislative proposals to implement the so-called Beirut and Florence agreements. The committee will now adjourn. (Whereupon, at 1 p.m., the committee adjourned.) MATERIAL RECEIVED FOR THE RECORD DEPARTMENT of State, Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives. DEAR MR. CHAIRMAN: At the request of the Canadian Embassy I am submitting to you the enclosed copy of an aide memoire the Embassy left with the Department on May 31. Sincerely, DOUGLAS MACARTHUR II, Assistant Secretary for Congressional Relations. AIDE MEMOIRE On October 4, 1950, the Canadian Government ratified the Agreement for Facilitating the International Circulation of Visual and Auditory Materials of an Educational, Scientific and Cultural Character which had been approved by the General Conference of the United Nations Educational, Scientific and Cultural Organization at Beirut, Lebanon in 1948. Under this Agreement, which came into effect in 1954, provision was made for the duty-free entry of all materials which were certified as falling within this category by the government of the exporting country. In accordance with this Agreement, Canada presently allows, and has in fact allowed since 1942, the duty-free entry of such materials from the United States as educational films, film strips, slides, sound recordings, model, wall charts, maps and posters. Similar duty-free treatment, however, has not been accorded to Canadian educational materials entering the United States. Although, the United States Senate consented to ratify the Agreement in 1960, the enabling legislation was not approved by the House of Representatives. The most recent action taken to remedy this situation was the introduction on October 11, 1965 of House Joint Resolution 688 which called for the implementation of the Agreement and the appropriate amendments to the United States customs tariff. This Resolution was referred to the House Ways and Means Committee where it has since remained. This continued imposition of duties by the United States has had a markedly adverse effect on Canada's export trade in such materials. In recent years, for example, a number of Canadian producers have made films for American sponsors but, because of the duty levied on these films, have not been able to sell the prints in the United States at competitive prices. A number of informal approaches have been made to the United States authorities on this matter during recent years, drawing attention to the lack of reciprocity in this field, and expressing the hope that Congress might take early action to ratify the Agreement. The Canadian authorities would wish to take this present occasion to emphasize their strong interest in such early action and in the appropriate revision of the United States customs tariff. Washington, D.C., May 31, 1966. DEPARTMENT OF STATE, Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, House of Representatives. DEAR MR. CHAIRMAN: Enclosed are an aide-memoire, with an attachment, from the German Embassy and a copy of memorandum, with an attachment, from the British Embassy, both relating to procedures used by their governments in giving effect to provisions of the Florence Agreement. We are happy to submit these communications for inclusion in the record in connection with the considerations by the Ways and Means Committee of legislation for the implementation by the United States of the Florence Agreement. Sincerely yours, Enclosures: 1. Aide-mémoire. DOUGLAS MACARTHUR II, Assistant Secretary for Congressional Relations. 2. Memorandum. GERMAN EMBASSY, WASHINGTON, D.C., AIDE MÉMOIRE WASHINGTON, D.C., June 10, 1966. Reference is made to the Aide Mémoire of the Department of State dated September 7, 1965, in reply to this Embassy's Aide Mémoire of August 16, 1965, relating to H.R. 8664, a bill to implement in the United States the Agreement on the Importation of Educational, Scientific, and Cultural Materials, opened for signature at Lake Success on November 22, 1950. In connection with the recent hearings held before the House Committee on Ways and Means on H.R. 8664 it is thought that the Department of State might be interested in a more detailed information on the methods of implementation of the provisions of the Agreement relating to the domestic protective clause by Germany. As the procedure used by Germany is explained only briefly in the Embassy's aide mémoire of August 16, 1965, a more detailed description provided by the German Minister of Finance is attached hereto. The German Embassy would appreciate it very much if the Department of State could make this additional information available to the House Committee on Ways and Means for further study with a view to simplify the procedure laid down in H.R. 8664. DUTY-FREE ENTRY OF EDUCATIONAL, CULTURAL AND SCIENTIFIC EQUIPMENT IN THE FEDERAL REPUBLIC OF GERMANY I. Section 24. Paragraph 1 No. 1, b of the Tariff Act authorizes the Federal Minister of Finance to order duty-free entry of goods-such as for instance educational, cultural and scientific equipment-which, because of their special dedication, will not or no longer participate in the turnover of commodities and formation of prices. Based on this authority, Section 37, Paragraph 1 AZO (General Customs Regulations) prescribes duty-free entry for such goods as 1. Educational and Cultural Equipment including their spare parts and accessories for public or non-profit institutions or organizations established for scientific or cultural purposes, provided that goods produced within the jurisdiction area of the Law of equivalent educational or cultural value are not available at the time the order is placed, 2. (a) goods intended for research of scientific value, including their spare parts and accessories, provided that goods produced within the jurisdiction area of the Law of equivalent scientific value are not available at the time the order is placed, (b) goods on which research work is to be carried out, for public or non-profit institutions that do research-work mainly for the sake of science. Excluded from duty-free entry according to No. 1 and, No. 2a are common commercial goods for schools, offices and laboratories (for instance sound and picture projecting apparatus, microfilm reading apparatus, typewriters, calculating machines, filing systems, microscopes, centrifugal separators), unless they qualify because of the special nature of these goods-in the case of No. 1 because of the educational or cultural value, in the case of No. 2 the scientific value, or because they were especially made to work in conjunction with goods qualify. ing for duty-free entry in accordance with No. 1 and No. 2a. II. The duty-free entry is granted on the condition that a certificate in accordance with Form 0117 is on file at the Customs House at the time of clearance, which has been issued by the head of the institution or organization, or by his deputy, or by the agency authorized to represent the institution or organization, and which states that the actual requirements for duty-free entry have been met. When such an orderly certificate is on file, the Customs House will clear and release the goods. The certificate on file will not be returned. However, in the case of partial shipments, the recipient may-within six months from the date of the certificate-refer to the certificate already on file; in the case of partial shipments arriving after this period, the conditions for duty-free entry must be met anew by means of a certificate. Should there be any doubt as to meeting the requirements for duty-free entry, the following procedure-subsequent to the release of the goods-will be followed: (a) The Customs House will report to the "Oberfinanzdirektion" and enclose the case papers. (b) Should the "Oberfinanzdirektion" after reviewing the case itself (for instance by inquiry with the recipient) still have grave doubts, it will obtain an expert opinion from the "Max-Planck-Gesellschaft" in Göttingen, Bunsenstr. 10, insofar as the goods are intended for establishments of this organization otherwise in all cases from the "Deutsche Forschungsgemeinschaft", Bad Godesberg, Frankengraben 40. Two copies of the inquiry will be enclosed. (c) The "Oberfinanzdirektion" will use the expert opinion for its judgment of the case, if. within one month of its receipt, it has not received instructions to the contrary from the Minister of Finance (The Federal Minister of Finance, The Federal Minister of Economic Affairs and the Federal Minister for Scientific Research will receive a copy of the expert opinion directly from the organization rendering it). If the "Oberfinanzdirektion" itself has doubts, it will report to the Federal Minister of Finance. III. Imported parts for such educational, cultural and scientific equipment which is yet to be made in the customs area of jurisdiction, is not allowed dutyfree under Section 37 AZO (General Customs Regulations). MEMORANDUM ON PROCEDURE IN THE UNITED KINGDOM FOR DUTY RELIEF ON IMPORTATION OF CERTAIN GOODS Under Section 6 and the Fourth Schedule, Import Duties Act 1958, the Board of Trade have power to recommend to the Treasury that the duty on particular importations of certain goods should be remitted. 2. Paragraph 3 of the Fourth Schedule, under which the United Kingdom's obligations under the UNESCO Agreement are implemented, was originally introduced in 1936 under earlier legislation. It was designed to provide for duty relief on goods imported for research or cultural or other similar purposes. In a sense it anticipated the UNESCO Agreement but it was framed on much more liberal lines. For one thing, it is applicable to any goods required for one of the specified purposes and not only to the classes of goods covered by the Agreement. Moreover, duty relief under this provision is not subject to a statutory condition that similar goods are not procurable in the United Kingdom, although in accordance with a statement made in the House of Commons when this provision was introduced and in response to questions about the loss of tariff protection to United Kingdom manufacturers, it is the Board's practice in dealing with applications to pay some regard to the United Kingdom's supply position. 3. When British made goods similar to those being imported are procurable, they are brought to the attention of applicants who must give satisfactory reasons for requiring or preferring the imported goods before remission of duty on them can be recommended. Apart from technical superiority, other considerations which may be taken into account include appreciable difference in price inclusive of duty, better delivery, greater convenience in use, more versatility and compatibility with existing equipment. 4. On the other hand, duty relief under paragraph 3 is subject to the condition that the goods are not intended to be used for a substantially commercial purpose, and consequently commercial concerns engaging in research are not able to make applications under this provision. In the case of scientific instruments and apparatus they may be able to make applications under another provision of the Fourth Schedule under which there is a strict test on United Kingdom procurability, and considerations such as price etc., are not taken into account. 5. Applications for remissions of duty are not advertised nor, in the case of paragraph 3 applications, are United Kingdom manufacturers consulted. A great deal of information about the procurability of British made goods is on record in the Duty Remission Branch of the Tariff Division of the Board and in the absence of relevant information in a particular case advice is obtained from technical advisers (in the Board or other Government departments) who are in close touch with industry. 6. With the present volume of paragraph 3 applications (nearly 23,000 were received in the last financial year) the average time taken-in the Board and the Treasury-to clear the usual run of straightforward applications is about 4-5 weeks; more complicated cases may take up to 3 months or a little more to resolve. NOTICE BY THE BOARD OF TRADE AND THE COMMISSIONERS OF CUSTOMS AND EXCISE IMPORTATION OF ARTICLES FOR NON-COMMERCIAL USE IN SCIENTIFIC RESEARCH OR IN ADVANCING LEARNING OR ART OR IN PROMOTING SPORT RELIEF BY TREASURY DIRECTION FROM IMPORT DUTY AND/OR PURCHASE TAX Arrangement of Paragraphs 18. Disposal of articles after use for the purpose specified in the direction. 19. Import licences. 20. Further information. Notice No. 342, Sec. 33087, 1965 July, 1965. (10977). Legal provisions. Appendix GENERAL 1. Introduction. Under the Import Duties Act, 1958, import duty is normally chargeable on most imported goods, in order to protect United Kingdom industry. But the Act also provides that relief may be granted from protective duty chargeable under Section 1 of the Act in the case of articles intended for noncommercial use in scientific research or in advancing learning or art or promoting sport. The Purchase Tax Act, 1963, provides for similar relief from purchase tax on articles imported for such purposes. There is no provision for relief from customs duties chargeable under other enactments (e.g. revenue duties). Relief is granted by the Treasury issuing directions covering particular importations of specified articles shown to satisfy all the conditions in paragraph 2: so far as duty is concerned the recommendation of the Board of Trade is required before this is done. Paragraphs 4 to 8 of this Notice describe the means by which directions may be obtained; paragraphs 9 to 17 describe the Customs procedure to be followed. The relevant legal provisions are set out in the Appendix. 2. Eligibility for relief. Directions will be issued only where the following conditions are satisfied: (a) Articles must be shown to be required specifically for use in scientific research or for the advancement of a branch of learning or art or for the promotion of sport, and not intended for general use. Articles intended for personal use must be shown to contribute to the general advancement of one of these purposes; (b) The articles must not be intended for sale by the user; (c) The goods must not have been used commercially in this country prior to purchase by the applicant for the Treasury direction, and any commercial element in the purposes for which the articles are to be used by the applicant must be negligible; (d) Where articles are available from United Kingdom sources which might fulfill the purposes for which the imported goods are to be used, satisfactory reasons for requiring the foreign goods must be given. (So far as purchase tax is concerned, the law specifies that the Treasury must have regard to the fact that tax would be payable if similar goods were acquired in the United Kingdom.) 3. Other conditions of relief. When issuing a direction, the Treasury may impose such conditions as they think fit (e.g. that the goods shall ultimately be re-exported). The Commissioners of Customs and Excise may also impose conditions for the protection of the revenue. Unless the Customs are notified, before the goods are released from Customs control, that the goods are or will be the subject of an application for a direction, they may withhold repayment of some or all of the duty (see paragraph 9). As regards goods supplied from stock see, however, paragraphs 16-17. APPLICATIONS 4. Applications for directions. Applications must be initiated by the intended users of the goods, and not by import agents or other persons. Where the goods are imported by someone other than the user, the importer must also complete appropriate portions of the application form. 5. Form of applications. Applications for directions should be made on form D.F.A.3, obtainable from the Board of Trade, Tariff Division, Duty Remission Branch, Sanctuary Buildings, 20, Great Smith Street, London, S.W.1. This form is designed to elicit all the information necessary to decide whether a case has been made out for recommending the issue of a direction. If unnecessary delay is to be avoided it is particularly important that questions Nos. 6 and 11 in Part I should be answered as fully and precisely as possible. Where the c.i.f. value of the goods is not known, an approximate value will suffice in answer to question No. 4 in Part II. 6. Description of goods. Unless goods specified in a direction can be clearly identified with a particular importation or importations, the Customs will not be able to give effect to the direction. An applicant for a direction should therefore, wherever possible, obtain from his supplier FOUR sets of detailed specifications or descriptions of the goods (including schedules of any parts or accessories) with illustrations or photographs. THREE sets should accompany the application, the fourth being retained for use if necessary at time of importation (see paragraph 10). The applicant should also arrange with his supplier for the invoices, packing lists, etc. relating to the actual shipment to adhere as closely as possible to the specifications, etc., which accompanied the original application, so that there may be no difficulty in identifying the goods imported with those specified in the direction. Where application is made after the goods have been released from Customs control, the description of the goods should follow as closely as possible that given on the import documents (e.g. the invoice) 7. Return of completed applications. Completed forms D.F.A.3 should be sent, as soon as possible. (i) to the address given in paragraph 5 for applications for relief from duty or from duty and purchase tax, or |