Outline of the system
Presidential Proclamation 6763 of December 23, 1994, modified the Harmonized Tariff Schedule of the United States (HTS) in various ways that affected the import system for certain dairy products. The Proclamation terminated quantitative restrictions that had been imposed pursuant to section 22 of the Agricultural Adjustment Act of 1933, as amended (7 U.S.C. 624); proclaimed tariff-rate quotas (TRQs) for such articles pursuant to P.L. 103-465 (the Uruguay Round Agreements Act); and specified which imports of dairy articles may require import licenses issued in accordance with the terms and conditions in regulations issued by the Secretary of Agriculture.
The licensing system covers the following dairy commodities as defined in the Additional U.S. notes to Chapter 4 of the HTS: butter and fresh or sour cream containing over 45 percent by weight of butterfat (note 6); dried skim milk (note 7); dried whole milk (note 8); dried buttermilk and whey (note 12); butter substitutes (note 14); other cheese, NSPF (note 16); blue-mould cheese (note 17); Cheddar cheese (note 18); American cheese other than Cheddar (note 19); Edam and Gouda cheese (note 20); Italian-type cheese (note 21); Gruyere-process cheese (note 22); low-fat cheese (note 23); and Swiss/Emmenthaler cheese (note 25).
Nature of licensing
If Automatic, administrative purpose
If Non-Automatic, description of the notified Non-Automatic Licensing regime
The licensing system was originally implemented as a requirement of Presidential Proclamation 3019 for the purpose of providing for an equitable distribution of trade in dairy products covered by Section 22 quotas among importers, users, and supplying countries. Under a TRQ system, licensing serves the same trade-stabilizing and equity purposes.
Products under restriction as to the quantity or value of imports
The licensing system is an administrative tool that governs the importation of certain dairy products subject to TRQs resulting from entry into force of the Uruguay Round Agreement. Under the TRQ system, the in-quota quantity of imports enters at the low-tier tariff rate, and the over-quota quantity enters at the high-tier tariff rate. Dairy articles subject to licensing cannot enter at the in-quota rate unless such imports are accompanied by a license. An article may be entered only in the name of the licensee, or the licensee's agent acting in the licensee's name under the power of attorney, and the quantity entered must be owned by the licensee on the date of entry, and must be charged against the license in effect. The licensing system was originally implemented as a requirement of Presidential Proclamation 3019 for the purpose of providing for an equitable distribution of trade in dairy products covered by Section 22 quotas among importers, users, and supplying countries. Under a TRQ system, licensing serves the same trade-stabilizing and equity purposes.
Questions for products under restriction as to the quantity or value of imports
See answers 6.1-6.11
The system applies to products originating from which country?
The licensing system applies to dairy products coming from all supplying countries
Expected duration of licensing procedure
Applications for CY quota submitted by mid-October, notice of license issued approximately third-quarter of December.
Is the licensing statutorily required?
The licensing system is a statutory requirement.
Does the legislation leave designation of products to be subject to licensing to administrative discretion?
Is it possible for the government to abolish the system without legislative approval?
The authority to make such allocations was delegated to the Secretary of Agriculture by Presidential Proclamation 3019 of June 8, 1953.
Eligibility of applicants
Is there a system of registration of persons or firms permitted to engage in importation?
What persons or firms are eligible to apply for a licence?
Importers or manufacturers of dairy products are eligible to apply for import licenses if they meet the performance criteria set forth in the Import Regulation with respect to the quantity of imports entered in a previous 12-month period (1 September-31 August), and, for manufacturers, the specified level of dairy production in a previous 12-month period. The required documentation providing proof of importation must be submitted with application forms. Importer license eligibility is established primarily on the basis of proof of importation of the item during a specified representative period. Applicants can also qualify on the basis of exports, in which case licenses will only be issued for non-cheese items.
Is there a registration fee?
Is there a published list of authorized importers?
In addition, manufacturers must be listed in USDA's "Dairy Plants Surveyed".
Contact point for information on eligibility
USDA Foreign Agricultural Service, Office of Trade Programs, Import Policies and Export Reporting Division
1400 Independence Ave, SW, Stop 1021, Washington, DC, 20250
Submission of an application
Administrative body(ies) for submission of an application
Import Policies and Export Reporting Division, Office of Trade Programs, Foreign Agricultural Service (FAS), United States Department of Agriculture (USDA)
What information is required in applications?
The information required in applications is set forth in the Dairy Tariff-Rate Quota Import Licensing Regulation.
What documents is the importer required to supply with the application?
FAS electronic forms 923, 923A and 923B are required to be submitted, including copies of entry and/or export summaries or in the case of manufacturers on being listed in the Dairy Plants Approved Bulletin. As a part of the 2015 revision to the regulation, the Dairy Import Licensing Authority operates exclusively via an electronic system over the internet and precludes the use of mail and fax. All applications and communications must be done electronically, through the dedicated licensing system, which is available to anyone.
Window of submission of an application
How far in advance of importation must application for a licence be made?
For commodities that enter outside the tariff-rate quotas and at the over-TRQ tariff rates, no dairy import licenses are required, and there are no limitations regarding quantity.
Are there any limitations as to the period of the year during which application for licence can be made? If so, explain
Issuing the license
Can a licence be granted immediately on request?
Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence
Which administrative body is responsible for approving application of licences?
Must the applications be passed on to other organs for visa, note or approval?
Are there any other conditions attached to the issue of a licence?
No other conditions are attached to the issuance of a license.
Fees and other administrative charges
Is there any licensing fee or administrative charge?
A fee is charged for or associated with the issuance of licenses.
What is the amount of the fee or charge?
For 2018, a fee of US$300.00 is charged.
Is there any deposit or advance payment required associated with the issue of licences?
A fee is charged for or associated with the issuance of licenses.
Amount or rate?
Is it refundable?
What is the period of retention?
What is the purpose of this requirement?
Refusal of an application
Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria?
The circumstances under which an application for a license may be refused other than failure to meet the ordinary criteria is failure to complete the application electronic form and submit the full documentation requested within the application deadline period.
Are the reasons for any refusal given to applicants?
Reasons for refusal to accept an application may be given to applicants upon request.
Have applicants a right of appeal in the event of refusal to issue a licence?
There are no rights of appeal. Failure to receive a license by one applicant does not reduce access to the TRQ amounts, since those amounts will be allocated to other applicants.
If so, to what bodies and under what procedures?
Are there any limitations as to the period of year during which importation may be made?
What documents are required upon actual importation?
At the time of the electronic filing for import entry, a license number must be presented along with the other information required for U.S. Customs import entry. The Licensing Authority may request copies of documents such as the through bill of lading and the invoice.
Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
All food imports are subject to the requirements of the Food, Drug and Cosmetic Act and the Fair Packaging and Labelling Act, including sanitation and labelling requirements, and milk products are subject as well to the Federal Import Milk Act. These requirements are administered by the Food and Drug Administration (FDA). The importation of certain dairy products is regulated by both FDA and the Animal and Plant Health Inspection Service (APHIS). Importers should contact FDA in regard to FDA requirements and APHIS in regard to APHIS requirements.
Conditions of licensing
What is the period of validity of a licence? Can the validity be extended? How?
Licenses are valid from January 1 through December 31. License validity cannot be extended into the next quota year.
Is there any penalty for the non-utilization of a licence or a portion of a licence?
Licensees who anticipate not meeting the 85 percent utilization requirement may voluntarily surrender unused amounts by October 1; otherwise that license will be cancelled the following year. For historical licenses, less than 85 percent utilization will result in permanent loss of that license, with the resulting TRQ quantity being moved to the lottery pool. License quantities that are surrendered are reissued to other licensees who apply for unused license shares following an announcement by the Licensing Authority. Such licenses are issued through a random lottery process. Historical license TRQ quantities can also be reduced if the licensee surrenders his import license for three consecutive years, although the provisions with respect to the reduction of historical licenses based on surrenders of unused quantities have been suspended until 2022. See Federal Register Vol. 80, No. 143, pages 44251-44258.
Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Licenses are not transferable between importers. However, USDA may transfer a license, in the event that the company holding such license is sold or conveyed to another company, under conditions provided for in the regulation.
Is foreign exchange automatically provided by the banking authorities for goods to be imported?
Is a licence required as a condition to obtaining foreign exchange?
Is foreign exchange always available to cover licences issued?
What formalities must be fulfilled for obtaining the foreign exchange?
The following questions are only for products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally)
Where is information on allocation and formalities for licences published? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
The procedures for submitting license applications, eligibility criteria, license use requirements and other provisions of the regulation are codified in 7 CFR 6.20-6.36. The electronic application forms designated by the Licensing Authority, which are readily available from the Department, provide complete information on the TRQs and allocations by supplying country. Limitations on the size of individual licenses are in the regulation. An Advanced Notice of Proposed Rule-making was published in the Federal Register on June 2, 1994, seeking comments on methods for allocating Uruguay Round TRQs through the year 2000, and comments on updating or improving the existing regulation. On January 6, 1995, and May 2, 1995, notices were published in the Federal Register amending the Import Regulation to implement those U.S. Uruguay Round commitments for 1995. The Department published the final rule on dairy tariff-rate quota licensing in the Federal Register on October 9, 1996. The regulation was modified on October 6, 2004, to accommodate electronic web-based application procedures. On July 27, 2015, a revision to the regulation was published in the Federal Register Vol. 80, No. 143, pages 44251-44258, published after extensive public comment.
Is the size of the quota determined: on yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for a fresh licence on a six-monthly or quarterly basis?
License applications must be submitted annually during the application period specified in the Import Regulation, between September 1 and October 15 of the calendar year preceding importation. Licenses are generally issued during the last two weeks of December. Licenses are valid beginning in January 1 of each year and are valid for 12 months.
Are licences allocated for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate)
Licenses are allocated to importers of dairy products regardless of whether they are producers of like products. Unused allocations may not be added to the allocation of the succeeding year. The Import Regulation requires that licensees must utilize 85% of the licenses issued and have the option to surrender voluntarily unused amounts, which are then reallocated, the same year, to other eligible licensees through an application process. A list of names of licensed importers is published on the FAS website each year. The list can be found on the internet at: http://www.fas.usda.gov/programs/dairy-import-licensing-program.
From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
Applications are processed to determine if the eligibility criteria in the Import Regulations are met. In general, over 500 applications are reviewed, and the application process is completed within six weeks.
What are the minimum and maximum lengths of time for processing applications?
Licenses are issued for use beginning 1 January and generally issued in the last two weeks of December.
How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
Only the Foreign Agricultural Service, United States Department of Agriculture, considers license applications on dairy products.
Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Licenses are issued to:
- Historical licensees are issued each year for the same volume of imports from the same supplying countries provided applications are submitted, and the eligibility criteria, license use provisions, and other requirements of the Import Regulation are met;
- Designated licenses are issued annually for certain cheese articles to eligible applicants who are designated by the government of the country of origin as preferred importers;
- Non-historical (lottery) licenses are issued annually through a random lottery system. Licenses received for a specific cheese or non-cheese dairy product are not renewable in the following year. Eligible applicants may apply annually for a license.
If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
Export permits from foreign countries are not required.
In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Export permits from foreign countries are not required.
In cases where imports are allocated on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?